China Railway Construction Corporation Limited (CRCC, 01186) has executed two refreshed connected-transaction frameworks with its parent China Railway Construction Corporation Group (CRCCG) and affiliate CRCC Financial Leasing (CRFL) to succeed arrangements expiring on 31 December 2026.
New Property & Land Leasing Framework • CRCC and CRCCG entered a New Property Leasing Framework Agreement, effective 1 January–31 December 2027, covering offices and other premises owned by CRCCG and its associates. • The company will also continue to operate under the 20-year Land Use Rights Leasing Framework Agreement signed in 2007, which remains in force until 5 November 2027. • A single combined annual cap of RMB 200.00 million has been set for lease payments in 2027, reflecting: – Historical spending of RMB 136.21 million in 2024, RMB 152.11 million in 2025, and RMB 81.75 million for the nine months to 30 September 2026. – Expected full-year 2026 lease payments of about RMB 154 million (c. 77 % of the 2026 cap). – Anticipated incremental lease needs and a buffer for market rate movements. • Rentals will be negotiated per specific lease agreements, benchmarked against prevailing market rates, government-guided prices and independent valuations.
New Equipment Purchases, Sales & Leasing Services Framework • CRCC and CRFL signed a New Equipment Purchases and Sales and Leasing Services Agreement running from 1 January 2027 to 31 December 2029. • Annual caps for each of the three years are: 1. Equipment sales by CRCC to CRFL: RMB 1.50 billion. 2. Equipment purchases by CRCC from CRFL: RMB 400.00 million. 3. Leasing services received from CRFL: – Right-of-use assets (leases >1 year): RMB 2.00 billion. – Short-term rentals (<1 year): RMB 1.00 billion. – Sale-and-leaseback assets: RMB 500.00 million. • Pricing must be no less favourable than at least two comparable third-party quotations (for equipment trades) or prevailing domestic financial-institution benchmarks (for leasing services).
Historical Transaction Levels • Equipment sales to CRFL: RMB 394.36 million (Sep–Dec 2024), RMB 599.70 million (2025) and RMB 595.86 million (first nine months 2026). • Equipment purchases from CRFL: RMB 2.32 million (Sep–Dec 2024), RMB 181.24 million (2025) and RMB 186.81 million (first nine months 2026). • Direct lease right-of-use assets recognised: RMB 543.19 million (Sep–Dec 2024), RMB 2.34 billion (2025) and RMB 1.19 billion (first nine months 2026). Short-term rentals were RMB 146.83 million, RMB 343.77 million and RMB 148.26 million over the same periods, respectively.
Regulatory Position All transactions constitute continuing connected transactions under Hong Kong Listing Rules, as CRCCG owns 51.23 % of CRCC and CRFL is its subsidiary. Each percentage ratio falls between 0.1 % and 5 %, subjecting the deals only to reporting, announcement and annual review requirements; circulars and independent shareholders’ approval are not required.
Governance & Pricing Controls CRCC has instituted internal policies requiring: 1) specific lease or equipment contracts under the framework terms; 2) market-based benchmarking using at least two external quotations; 3) periodic reviews by internal audit and external auditors to ensure compliance with annual caps and pricing fairness.
Strategic Rationale CRCC relies on CRCCG properties for ongoing operations and anticipates continued usage in 2027. The equipment arrangements secure supply, provide flexible financing via CRFL’s leasing services and are priced at or below market benchmarks, supporting capital efficiency and business continuity.
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