China Gas Holdings Limited (China Gas) has entered into two three-year continuing connected transactions to advance its biomass energy strategy in Jiangxi Province’s Yichun area, setting combined spending limits of up to RMB 1.97 billion through 31 March 2029.
Key Agreements and Scope 1. Biomass Gas Projects Operations Management Framework Agreement • Parties: China Gas Biomass Energy Technology (Asia) Limited (60%-owned by China Gas) and China Gas Green Energy Brand Operations (Yichun) Co., Ltd. (Yichun Operations). • Term: 23 July 2026 – 31 March 2029. • Services: Production operations, equipment maintenance, safety/environment management, data & records, personnel management and ancillary support for Yichun Biomass Gas Projects. • Pricing: Arm’s-length negotiation referencing market rates and Yichun Operations’ cost structure; to be finalised in supplemental contracts. • Annual caps: – 23 Jul 2026–31 Mar 2027: RMB 320.56 million – FY 2027/28: RMB 442.06 million – FY 2028/29: RMB 717.87 million • No historical transactions were recorded under this framework.
2. Biomass Equipment Procurement Framework Agreement • Parties: China Gas Biomass Energy Technology (Asia) Limited and Zhongran Leihao (Tianjin) Technology Co., Ltd. • Term: 23 July 2026 – 31 March 2029. • Scope: Supply of biomass, coal gasification and gas purification equipment plus related services such as installation, commissioning and maintenance for the Yichun projects. • Pricing: Based on (i) comparable third-party prices, (ii) market quotations, or (iii) cost-plus method for customised items; final terms to be set in individual contracts. • Historical amount (1 Apr 2025 to 23 Jul 2026): RMB 31.98 million. • Caps: – 23 Jul 2026–31 Mar 2027: RMB 214.02 million – FY 2027/28: RMB 98.07 million – FY 2028/29: RMB 180.00 million
Connected-Party Relationships • Yichun Operations is 30% owned by Zhongran Leihao. • Zhongran Leihao is 75% held by China Digital, wholly owned by Ms. Song Ying, who is the spouse of Executive Director Dr. Liu Mingxing. • Both counterparties are therefore associates of Dr. Liu Mingxing and classified as connected persons under Hong Kong Listing Rules. • As the highest applicable percentage ratio for each agreement exceeds 0.1% but is below 5%, the transactions require disclosure and reporting but are exempt from independent shareholder approval.
Internal Control and Pricing Safeguards • For operations management services, China Gas will obtain at least two third-party quotations annually and benchmark fees to ensure terms are no less favorable than market levels. • For equipment procurement, the Group will compare prices and terms against at least two independent suppliers or third-party valuation references. • Utilisation of annual caps will be monitored continuously; external auditors and the Board’s audit committee will conduct yearly reviews.
Strategic Rationale China Gas is accelerating its transition into renewable energy by developing biomass gas projects, underscoring the Group’s commitment to cleaner fuel solutions in China. Leveraging Yichun Operations’ operational expertise and Zhongran Leihao’s manufacturing capabilities is expected to secure reliable services and equipment, support project expansion and uphold operational standards.
Board Approval Executive Director Dr. Liu Mingxing and related directors abstained from voting. The Board, including independent non-executive directors, concluded that the agreements and caps are on normal commercial terms, fair and reasonable, and aligned with the interests of shareholders.
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