CN INT DEV CORP (00264) has announced that its non-wholly owned subsidiary, Ganic Success Limited, has been granted a preferential supply right by Shanghai Deheng Data Technology Co., Ltd.
This right pertains to the supply of prefabricated artificial intelligence data center modules to the joint venture company.
The specific supply and procurement of the products will be subject to separate agreements to be negotiated and executed by the parties involved.
The group intends to utilize these modules through the joint venture to develop its AI data center business in Southeast Asia.
Key Terms of the Agreement
Under the preferential supply arrangement, the strategic partner has agreed to give the highest production priority to all valid purchase orders submitted by the joint venture.
This priority applies across all production stages, including scheduling, raw material allocation, equipment deployment, and overall capacity planning, ensuring the joint venture's orders are processed ahead of any others.
Should industry-wide capacity constraints, material shortages, power supply issues, or other disruptions occur, the strategic partner is obligated to treat the joint venture as a core priority client and supply all ordered products and services comprehensively, promptly, and with precedence.
The preferential right became effective on June 2, 2026, and will remain valid for a period of three years.
Strategic Rationale and Market Context
The global surge in artificial intelligence and digital transformation is driving significant expansion in the market for intelligent computing infrastructure, such as AI data centers.
Prefabricated AI data center modules represent a new generation of this infrastructure.
They can be transported in containers or standardized units to overseas locations to meet AI computing demands, with modular deployment shortening delivery times significantly.
Rapid growth in AI infrastructure demand has led to supply shortages and project delays across the industry.
While prefabricated modules are designed to avoid lengthy on-site construction, manufacturers face severe bottlenecks due to shortages of key components and resources.
Securing this preferential supply right marks the beginning of a long-term partnership for the group and positions it to capitalize on AI infrastructure opportunities, enhancing the long-term growth prospects of the joint venture.
Board Assessment and Benefits
The board of directors believes the strategic cooperation agreement aligns with the group's long-term business strategy and offers significant commercial advantages.
These include mitigating risks from global supply chain volatility, which heavily impacts the AI data center industry's reliance on high-specification hardware and specialized equipment.
The preferential right safeguards the group's operations from major shortages and capacity constraints.
It also ensures guaranteed delivery timelines for infrastructure projects by providing the highest production scheduling priority for all valid orders, free from interference by competing third-party orders.
This allows the group to promise its clients reliable and predictable delivery schedules.
After considering these factors, the board concluded that the preferential supply right is beneficial for the group's planned AI data center development business and supports its long-term development goals and business strategy, serving the overall interests of the company and its shareholders.
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