Apollo Future Mobility Group Announces Formation of Major EV Joint Venture

Key Highlights of the Discloseable Transaction

• Joint Venture Formation: Apollo Future Mobility Group Limited (“Apollo” or “the Company”, stock code: 860) announced the formation of a joint venture company (JV Company) in Ningbo City, PRC, with two partners: Ningbo Xingtongda Co., Ltd. (“NBXTD”) and Hangzhou Furui Technology Partnership (“HZFTP”).
• Registered Capital and Contributions: The JV Company will have a registered capital of RMB100 million (approx. HK\$112 million). Apollo’s wholly-owned subsidiary, AFM Ningbo, will contribute RMB50 million (HK\$56 million), NBXTD RMB45 million (HK\$50.4 million), and HZFTP RMB5 million (HK\$5.6 million), representing 50%, 45%, and 5% respectively.
• Ownership and Control: AFM Ningbo will be the largest shareholder, owning 50% of the JV Company and having the right to appoint three out of five directors, including the chairman. The JV Company will be consolidated as a subsidiary of Apollo.
• Timeline for Capital Contribution: All parties are required to pay their capital contributions in cash by 30 June 2026.
• Business Scope: The JV Company will focus on sales of new energy vehicles, R&D, manufacturing, retail and wholesale of auto parts, and sales of EV chargers.
• Listing Rules Implications: The formation of the JV Company is a discloseable transaction under Chapter 14 of the Hong Kong Listing Rules, with applicable percentage ratios exceeding 5% but less than 25%. It requires reporting and announcement but is exempt from shareholder approval and circular requirements.

Strategic Rationale and Potential Impact for Investors

Apollo’s Board highlights that the formation of the JV Company is aligned with its business expansion strategy in the rapidly growing electric vehicle (EV) and charging solutions sector. The JV aims to leverage synergies and complementary resources from NBXTD (a subsidiary ultimately controlled by the Ningbo Municipal Government) and HZFTP (owned by experienced industry partners), to enhance Apollo’s Mobility Technology Solutions Business.

Notably, the JV Company will collaborate with established EV manufacturers in China to optimize, modify, and upgrade existing EV models for overseas markets. This strategic move could help Apollo tap into global demand for customized EV solutions, potentially boosting the Company’s revenue and market position.

The Board and independent directors have deemed the JV Agreement fair, reasonable, and in the interests of shareholders, anticipating that the JV will be conducive to Apollo’s future development in the EV sector.

Corporate Structure and Governance Details

• Board Composition: Five directors, with AFM Ningbo nominating three (including chairman) and NBXTD nominating two. Directors serve three-year terms and may be re-elected.
• Management: AFM Ningbo will nominate the general manager and the financial controller (who will be a vice general manager). Other vice general managers are nominated by the parties.
• Material Decisions: Significant corporate matters (e.g., director changes, profit distribution, capital changes, issuance of bonds, mergers, amendments to articles) require approval by two-thirds of shareholder voting rights.
• Dividend Rights: Shareholders will receive dividends and surplus distributions proportional to their paid-up capital.
• Equity Transfer Restrictions: Shareholders have right of first refusal if any party intends to transfer equity to a third party.

Partner Information

• NBXTD: Principally engaged in investment holding, retail and wholesale of traded goods (vehicles, metals, chemical fibre). 100% owned by Ning Shing (Holdings) Company Limited, which is controlled by the Ningbo People’s Government State-owned Assets Supervision and Administration Commission.
• HZFTP: Newly formed partnership for the JV, owned by four individuals with industry backgrounds.
• Independence: Both JV partners and their ultimate owners are Independent Third Parties to Apollo.
• Related Financial Instruments: Ning Shing is holder of Apollo convertible bonds (HK\$300 million principal), indicating financial ties beyond the JV.

Potential Price Sensitive Information for Shareholders

• Large-scale Transaction: The JV represents a substantial capital commitment and strategic expansion in China’s EV sector, potentially impacting Apollo’s growth trajectory and financial results.
• Consolidation: As the JV will be consolidated into Apollo’s financials, its performance may directly affect group revenue, profitability, and valuation.
• Synergy and Market Access: Collaboration with government-backed and industry-experienced partners could accelerate Apollo’s market penetration and technological advancement.
• Convertible Bond Relationship: The financial relationship with NBXTD’s parent (Ning Shing) via convertible bonds may impact future capital structure or dilution risk.

Conclusion

The formation of this JV Company marks a significant strategic move for Apollo Future Mobility Group, providing enhanced access to China’s EV market and potential for international expansion. Investors should monitor developments closely, as successful implementation and performance of the JV could be a catalyst for Apollo’s future growth and share price movement.

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 any investment decisions. The information is based on public announcements and may be subject to change.

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