Qingling Motors Co., Ltd. Announces Entry into Eight Significant Repurchase Agreements to Accelerate New Energy Vehicle Growth

Key Points for Investors

• Eight Repurchase Agreements Signed: On 16 March 2026, Qingling Motors Co., Ltd. (“the Company”) entered into a total of eight repurchase agreements with Chongqing Transportation Equipment Financial Leasing Co., Ltd. (“Financial Leasing Company”) and several dealers. These agreements are closely related to Qingling’s new energy vehicle (NEV) business.
• Transition to Finance Lease Model: The Company is shifting its NEV business model from traditional vehicle sales to a finance lease model. This is a strategic move aimed at boosting sales, responding to market trends, and addressing changing customer preferences for leasing rather than purchasing NEVs outright.
• Transaction Size and Disclosure: The aggregate maximum repurchase price under these agreements is estimated at RMB 18,522,300. When combined with previous similar agreements over the last 12 months, the transaction size exceeds 5% of applicable percentage ratios, constituting a “discloseable transaction” under Chapter 14 of the Hong Kong Listing Rules. This makes the agreements price-sensitive and important for shareholders.
• Repurchase Mechanism & Safeguards: The Company provides a performance guarantee for its NEV sales by agreeing to repurchase vehicles and associated lease debt rights if dealers default on lease payments. Dealers are required to pay a performance deposit (two months’ rent), and the Company is authorized to monitor vehicles in real-time, reducing default and asset loss risks.
• Potential Share Price Impact: These agreements are structured to enhance sales volume, improve capital liquidity, and expand Qingling’s NEV market share, which could positively influence the Company’s financial performance and share value.

Details of the Repurchase Agreements

Background and Strategic Rationale

Qingling Motors has been proactively exploring innovations in technology and business models for the NEV sector, aligning with national policies and industry trends. The Company aims to foster growth in the NEV industry by integrating its industry, innovation, and capital chains. Despite rapid growth in NEV sales, overall volumes remain modest due to high purchase costs. The shift to leasing aims to overcome this barrier and stimulate broader market adoption.

Transaction Structure

• Parties Involved:
  • Chongqing Transportation Equipment Financial Leasing Co., Ltd. as the lessor
  • Qingling Motors Co., Ltd. as the repurchaser
  • Dealers (A, B, C, D) as lessees
• Repurchase Subjects:
  • 100 new energy vehicles leased by the dealers under finance lease agreements
  • Associated lease debt rights, including overdue and unpaid rents, but excluding certain fees and penalties
• Ownership and Security: The Financial Leasing Company remains the legal owner of the vehicles until the dealers fulfill all obligations or Qingling Motors repurchases the vehicles. Qingling is authorized to install monitoring devices and track vehicle usage, improving asset security.
• Performance Deposit: Dealers must pay a deposit equal to two months’ rent, which can be used by Qingling to offset any outstanding liabilities.

Repurchase Conditions and Pricing

• Trigger Events: The Financial Leasing Company can require Qingling to repurchase vehicles if a dealer misses two consecutive or more than three cumulative rental payments, or fails to properly secure the vehicles as required.
• Repurchase Price: The sum of overdue rent, unpaid rent, and a nominal retention purchase price (RMB 1 per vehicle). Total repurchase price is not tied to the vehicle’s condition or market value on the repurchase date.
• Payment and Delivery: Qingling pays in one lump sum or, if vehicles are undeliverable (e.g., due to damage or seizure), pays an initial 50% installment and the remainder upon recovery. Dealers must cooperate fully in returning vehicles.

Post-Repurchase Disposal and Protections

• After repurchase, Qingling can sell, lease, or otherwise dispose of the vehicles. If proceeds are insufficient, dealers are required to cover the shortfall.
• If Qingling terminates cooperation with a dealer, the Financial Leasing Company assumes all risks for subsequent transactions with that dealer.

Implications for Shareholders

• Financial Impact: The agreements are expected to boost NEV sales, enhance asset liquidity, and provide early receipt of sale proceeds, which may positively influence Qingling’s revenue and cash flow.
• Risk Management: The Company’s ability to monitor vehicles and require deposits mitigates risks associated with defaults and asset losses.
• Market Position: By adopting a finance lease model and providing repurchase guarantees, Qingling aligns with industry best practices and reinforces its competitive position in the growing NEV market.
• Disclosure and Compliance: As a discloseable transaction under Hong Kong Listing Rules, this development is material and price-sensitive, requiring investor attention.

Information on Parties and Independence

• Financial Leasing Company: Principally engaged in financial leasing, majority owned by Chongqing City Transportation Development & Investment Group, ultimately controlled by Chongqing State-owned Assets Supervision and Administration Commission.
• Dealers: All established in the PRC and engaged in vehicle rescue, leasing, and related services. Ownership structures have been disclosed and all parties are independent third parties, not connected to Qingling Motors.

Conclusion

The signing of these eight repurchase agreements marks a significant strategic move for Qingling Motors, positioning the Company to grow its NEV sales through innovative finance lease models. The agreements are structured to minimize risk, enhance cash flow, and expand market reach, with full transparency and compliance with regulatory requirements. Investors should closely monitor the Company’s subsequent financial reports for evidence of the anticipated sales growth and positive financial impact, as this development has the potential to drive the Company’s share price.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research and consult professional advisors before making investment decisions. The author and publisher accept no liability for any losses arising from reliance on this information.

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