AI Energy Engineering Holdings Limited Announces Discloseable Transactions Relating to Major Lease Agreements

Key Points from the Announcement

• Execution of Two Significant Lease Agreements: AI Energy Engineering Holdings Limited (“the Company”, formerly Kingland Group Holdings Limited) entered into two separate tenancy agreements through its indirect wholly-owned subsidiary, Kingland (Sino) Company Limited, for operational premises in Hong Kong.
• First Tenancy Agreement: Signed on 24 April 2025 with King Well Construction Machinery Limited for a three-year lease of approximately 20,000 sq ft in Yuen Long, at a monthly rent of HK\$100,000, totaling around HK\$3.6 million over the term.
• Second Tenancy Agreement: Signed on 18 September 2025 with Easy Stand Limited for a five-year lease of 4,952 sq ft in Kwun Tong, Kowloon, at a monthly rent of HK\$110,000, totaling around HK\$6.6 million over the term.
• Disclosure Requirements Triggered: The lease transactions are classified as discloseable transactions under Chapter 14 of the Hong Kong Listing Rules due to the value of the right-of-use assets recognized (between 5% and 25% of the relevant ratios). The Company is required to make an announcement but is exempted from seeking shareholders’ approval.
• Non-Compliance and Remedial Actions: The Company admitted to an inadvertent delay in compliance with disclosure requirements due to administrative oversight and has outlined steps to strengthen internal controls and ensure future compliance.

Details of the Tenancy Agreements

First Tenancy Agreement

• Date of Agreement: 24 April 2025
• Parties: Kingland (Sino) Company Limited (tenant) and King Well Construction Machinery Limited (landlord, an Independent Third Party wholly owned by Mr. But King Wai)
• Premises: DD126 Lot114,115 RP,203, Yuen Long, Hong Kong
• Floor Area: Approximately 20,000 sq ft
• Lease Term: 16 May 2025 to 15 May 2028 (three years, inclusive)
• Monthly Rent: HK\$100,000 (exclusive of utilities and other outgoings borne by tenant)
• Total Consideration: Approximately HK\$3,600,000 over three years
• Right-of-Use Asset Recognized: Approximately HK\$3.2 million (present value, using a discount rate of 7.7%)
• Purpose: Storage of construction materials to support the Group’s construction and engineering operations.

Second Tenancy Agreement

• Date of Agreement: 18 September 2025
• Parties: Kingland (Sino) Company Limited (tenant) and Easy Stand Limited (landlord, an Independent Third Party wholly owned by Mr. Yuen Se Kit)
• Premises: Flat B, G/F, Fu Hop Factory Building, Nos 209 & 211 Wai Yip Street, Kwun Tong, Kowloon
• Floor Area: 4,952 sq ft
• Lease Term: 16 January 2026 to 15 January 2031 (five years, inclusive)
• Monthly Rent: HK\$110,000 (inclusive of government rates and rent, exclusive of management fee)
• Total Consideration: Approximately HK\$6,600,000 over five years
• Right-of-Use Asset Recognized: Approximately HK\$5.8 million (present value, using a discount rate of 5.0%)
• Purpose: Industrial use to support the Group’s business operations.

Implications under the Listing Rules

• The recognition of right-of-use assets for these leases, as required under HKFRS 16, means the transactions are treated as acquisitions of assets for Listing Rules purposes.
• Because the applicable percentage ratios for each lease are between 5% and 25%, the Company is required to disclose these transactions as “discloseable transactions,” making them subject to reporting and announcement requirements but exempt from shareholders’ approval.

Remedial Actions Following Non-Compliance

• Training: The Board will arrange further training for Directors and senior management on Listing Rules, focusing on discloseable transaction requirements, to be completed by Q2 2026.
• Strengthened Internal Controls: All material lease agreements (one year or longer) must be reviewed by the company secretary and reported to the Board, regardless of transaction value or size test ratios. This takes immediate effect.
• Professional Advice: The Company will seek external legal, accounting, or professional advice for future lease transactions or events as needed. This measure is effective immediately.
• These steps aim to prevent future non-compliance and ensure timely disclosure in accordance with the Listing Rules.

Potential Price-Sensitive Factors for Shareholders

• Operational Expansion: The new leases represent a significant increase in the Group’s operational footprint and suggest active expansion and investment in the future growth of the construction and engineering business.
• Financial Commitment: The aggregate financial commitment for these leases (over HK\$10 million across both agreements) and the corresponding recognition of right-of-use assets will impact the Company’s balance sheet and may affect key financial metrics.
• Internal Control Improvements: The Company’s admission of prior non-compliance and its prompt remedial actions are material for investors following corporate governance and risk management practices.
• No Shareholder Approval Needed: Shareholders should note that while the transactions are discloseable, they do not require a general meeting or approval vote. However, the Company’s transparency and compliance with Listing Rules are critical to market confidence.

Board Composition and Company Information

• Chairman and Executive Director: Mr. Cao Yifan
• Vice-Chairman: Mr. Cheung Shek On
• Other Executive Director: Ms. Pang Xiaoli
• Independent Non-Executive Directors: Mr. Tam Tak Kei Raymond, Ms. Zhang Zhang, Ms. Chen Yunxia
• Company Name: AI Energy Engineering Holdings Limited (formerly Kingland Group Holdings Limited)
• Stock Code: 1751

Conclusion

The execution of these two substantial lease agreements marks an important step in AI Energy Engineering Holdings Limited’s ongoing business development, reflecting increased operational capacity and a commitment to supporting its core construction and engineering activities. The Company’s proactive approach to rectifying administrative oversights and strengthening internal controls further demonstrates its focus on compliance and corporate governance. These developments are material to shareholders and may influence the Company’s market valuation.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors are advised to make their own independent assessment and consult professional advisors before taking any action based on the information provided above. The Company’s share price may be affected by the events discussed herein and other factors beyond the scope of this article.

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