Qingling Motors Announces Discloseable Transaction: Entry into Repurchase Agreement

Key Points for Investors

• Qingling Motors Co. Ltd (Stock Code: 1122) has entered into a new repurchase agreement with Chongqing Transportation Equipment Financial Leasing Co., Ltd. (“Financial Leasing Company”) and Wuhan Xinxiang Anpeng Logistic Co., Ltd. (“Dealer”) on 30 April 2026.
• The transaction forms part of a series of similar repurchase agreements over the past 12 months, all relating to the Group’s new energy vehicle (NEV) business.
• Maximum aggregate repurchase price under the agreement is approximately RMB2,051,314.
• The transaction is classified as a discloseable transaction under Chapter 14 of the Hong Kong Listing Rules, as the applicable percentage ratios exceed 5% but are below 25%.
• The agreement supports the Group’s strategic shift from direct vehicle sales to a finance lease model, aiming to drive NEV sales growth and expand market share.

Details of the Repurchase Agreement

Background and Business Model Change

Qingling Motors is a leading PRC-based manufacturer of light, medium, heavy-duty trucks, pick-up trucks, parts, and accessories. The Group has recently seen increasing sales in its new energy vehicles and, in line with its 2025 annual report and PRC government policies, is accelerating the development of its NEV business.

To further promote NEV sales, Qingling Motors is transitioning from a traditional sales model to a finance lease model as of the first half of 2025. In this structure, financial leasing companies provide leasing services to end customers or dealers, who in turn pay rent to the lessor. Qingling Motors will provide a repurchase guarantee, whereby it undertakes to repurchase the vehicles and the associated debt rights if the lessee defaults.

Principal Terms of the Agreement

• Date Signed: 30 April 2026
• Parties:
  • Qingling Motors Co. Ltd (Repurchaser)
  • Chongqing Transportation Equipment Financial Leasing Co., Ltd. (Lessor)
  • Wuhan Xinxiang Anpeng Logistic Co., Ltd. (Lessee/Dealer)
• Repurchase Subjects:
  • 10 new energy vehicles leased by the Dealer
  • Associated lease debt rights (overdue rent, principal on undue rent, and retention purchase price)
• Performance Deposit: Dealer must deposit an amount equal to two months’ rent with Qingling Motors. This deposit can offset any financial shortfall owed by the Dealer under the agreement.
• Repurchase Conditions: The repurchase obligation is triggered if:
  • The Dealer fails to pay rent for two consecutive installments or more than three cumulative installments during the lease term
  • The Dealer fails to complete required charging procedures for the leased vehicles
• Repurchase Price: The sum of overdue rent, all undue rent, and the nominal retention purchase price (RMB1 per vehicle). The price is not tied to vehicle condition or market value at repurchase date.
• Payment Terms: Full payment is due upon receipt of a repurchase notice. If the vehicles cannot be delivered (e.g., due to damage or seizure), Qingling Motors pays an initial 50% and the balance within 60 days.
• Vehicle Monitoring: Qingling Motors is authorized to install monitoring devices on the leased vehicles for real-time tracking.
• Disposal Rights: After repurchase, Qingling Motors can require the Dealer to buy back the vehicles on an as-is basis, or dispose of them via sale, lease, or other means. The Dealer must cover any shortfall if sale proceeds are insufficient.
• Termination Clauses: Qingling Motors can suspend cooperation at any time. If the Financial Leasing Company continues to cooperate with the Dealer after suspension, it bears all risks and cannot require Qingling Motors to repurchase.

Strategic Significance and Shareholder Implications

• The transaction is part of a systematic shift in Qingling Motors’ business model, which is expected to boost NEV sales and expand market share, supporting long-term revenue and profitability growth.
• The repurchase agreement acts as a performance credit enhancement, which is standard in the auto industry’s finance lease business, and is expected to make NEV purchases more attractive to dealers and customers.
• The Company plans to establish a digital monitoring platform to oversee asset condition, utilization rates, and payment collection, further reducing operational risks.
• The agreement facilitates future growth in second-hand vehicle sales, subleasing, reconditioning, and aftermarket businesses, potentially opening new revenue streams.
• The arrangement ensures Qingling Motors receives the full sale proceeds up front, thereby increasing liquidity and working capital flexibility.

Risk Factors and Price Sensitivity

• The maximum exposure under this agreement is capped at RMB2,051,314, with the carrying value of all the leased vehicles under the agreement being approximately RMB2,051,304.
• The repurchase price is fixed and not affected by the market value or condition of the vehicles at repurchase, which could be a risk if the vehicles’ value declines significantly.
• Any failure by the Dealer to fulfill obligations could expose the Company to recovery and resale risks, but these are mitigated by the performance deposit and the right to dispose of vehicles and recover shortfalls from the Dealer.
• If Qingling Motors suspends cooperation, any subsequent risks are clearly assigned to the Financial Leasing Company.

Counterparty Information

• Financial Leasing Company: 99.2% owned by Chongqing City Transportation Development & Investment (Group) Co., Ltd. (ultimately controlled by Chongqing SASAC, a state-owned assets authority).
• Dealer: Wuhan Xinxiang Anpeng Logistic Co., Ltd., 100% owned by Lv Xiliang, a Chinese merchant.
• Both the Financial Leasing Company and the Dealer are independent third parties with no connection to Qingling Motors or its connected persons.

Conclusion

The entry into this repurchase agreement forms part of a larger, ongoing strategic initiative by Qingling Motors to accelerate its transition to a finance lease model for NEVs. This move supports sales expansion, risk control, liquidity, and future revenue opportunities from the used vehicle market and related businesses. Given the scale of the agreement and its potential to drive future growth and profitability, this announcement is of price-sensitive nature and may impact the Company’s share value.

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

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