Best Pacific International Holdings Limited announced that its indirect wholly-owned subsidiary, Dongguan New Horizon Elastic Fabric Company Limited (Dongguan NHE), signed two new lease agreements on 31 March 2026 with Chairman and controlling shareholder Mr. Lu Yuguang for continued use of the Baihao Buildings in Houjie Town, Guangdong. The leases cover a total of 17,370 sq m—10,370 sq m for administration offices and production plants and 7,000 sq m for staff dormitories—and run from 1 April 2026 to 31 March 2029.
The 2026 base rent is fixed at RMB16 per sq m, translating to RMB277,920 (approximately HK$0.31 million) per month. Ceiling rents for subsequent years are capped at RMB305,712 for 2027, RMB336,978 for 2028 and RMB369,981 for 2029, with any adjustments to follow prevailing market rates for comparable premises. Dongguan NHE will bear utilities and insurance and must remit rent monthly in cash. Either party may terminate with three months’ notice, and Mr. Lu has granted Dongguan NHE priority renewal rights upon expiry.
Under HKFRS 16, the leases generate an estimated right-of-use asset of RMB10.37 million (approximately HK$11.75 million). Payments will be funded from internal resources. Historical rentals under the expiring agreements totalled RMB1.89 million for 2023 (April–December), RMB3.78 million for 2024, RMB3.78 million for 2025 and RMB0.95 million for the first quarter of 2026, reflecting a lower base rent in the new term.
Because Mr. Lu holds 61.59 % of Best Pacific’s issued shares, the transaction is classified as a connected transaction under Chapter 14A of the Hong Kong Listing Rules. The applicable percentage ratios (other than the profits ratio) fall between 0.1 % and 5 %, triggering reporting and announcement requirements but exempting the deal from independent shareholders’ approval. Mr. Lu, together with executive directors Mr. Wu Shaolun and Mr. Lu Libin, abstained from the board vote approving the leases.
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