Hing Yip Holdings Limited Announces Discloseable Finance Lease Transaction

Key Points of the Announcement

• Transaction Date: 25 February 2026
• Transaction Parties: Greengold Leasing (subsidiary of Hing Yip Holdings Limited) as lessor, Liaoning Sanjiang Heating Co., Ltd. as lessee, and three individual guarantors.
• Nature of Transaction: Finance lease involving transfer of ownership and leaseback of designated heat supply equipment and facilities.
• Transaction Amount: Consideration for asset transfer of RMB40,000,000 (approx. HK\$45,440,000); total lease payments over 5 years estimated at RMB48,499,000 (approx. HK\$55,095,000).
• Lease Term: 5 years, quarterly payments of principal and interest.
• Guarantees and Security: Joint and several guarantees by three individuals, pledges on assets, receivables, bank accounts, franchise and derivative rights, and equity pledges covering 100% of the lessee’s shareholding.
• Transaction Classification: Discloseable transaction under HKEX Listing Rules, with percentage ratios between 5% and 25%.
• Business Implications: Transaction aligns with Greengold Leasing’s business strategy and is expected to deliver stable revenue and cash flow.
• Asset Details: Heat supply equipment and facilities located in Benxi City, Liaoning Province, PRC.
• Board Composition: Board of Hing Yip Holdings consists of two executive directors, one non-executive director, and three independent non-executive directors.

Detailed Analysis and Shareholder Implications

Hing Yip Holdings Limited has announced a discloseable finance lease transaction involving its subsidiary, Greengold Leasing. The transaction centers on acquiring ownership of heat supply assets from Liaoning Sanjiang Heating Co., Ltd., followed by leasing those assets back to the lessee for a term of five years.

The transaction value is significant: the asset transfer is priced at RMB40 million (approx. HK\$45.44 million), with a total lease payment amounting to RMB48.499 million (approx. HK\$55.095 million) over five years. The payment structure includes both principal and interest, to be settled quarterly. The terms have been negotiated on an arm’s length basis, reflecting current lending and interest rate environments (prevailing loan prime rate was 3% at transaction date), as well as the asset’s original cost and condition.

Security and Guarantees: To safeguard the interests of Greengold Leasing, the transaction is secured by a comprehensive package:

• Asset pledge agreement: The transferred assets act as security for the lessee’s payment obligations, and the lessee retains usage rights during the lease.
• Receivables pledge: The lessee’s rights under certain heat supply agreements are pledged as additional security.
• Bank accounts and franchise rights pledge: 100% interest in two bank accounts and franchise/derivative rights under supplemental agreements are pledged.
• Equity pledges: Guarantor 1 and Guarantor 3 have pledged 80% and 20% of their shareholding interests in Liaoning Sanjiang Heating, respectively.
• Interest-free deposit: The lessee will pay a deposit of RMB800,000 (approx. HK\$909,000) to secure payment obligations.

Termination Option: The lessee has an option to terminate the lease early, provided all outstanding payments and a compensation equal to 20% of the outstanding lease interest are settled. At the end of the lease (or upon early termination), the lessee may repurchase the assets for a nominal RMB100 (approx. HK\$113.6).

Business Strategy: This transaction is part of Greengold Leasing’s ordinary course of business, focusing on environmental protection projects and is expected to generate stable revenue and cash flow for the group. Hing Yip Holdings’ principal business direction is wellness elderly care, with strategic support from finance leasing, technology, and civil explosives businesses. The group also invests in fast-growing sectors such as electric utilities in the PRC.

Listing Rules Impact: As one of the applicable percentage ratios for the finance lease transaction (standalone or aggregated with a prior lease) exceeds 5% but is less than 25%, this transaction is classified as discloseable under HKEX Listing Rules. This level of materiality means that shareholders should be aware, as such transactions can impact the financial profile and risk exposure of the group.

Potential Share Price Sensitivity: Investors should note that the transaction is expected to provide stable revenue and cash flow, which could positively affect the group’s earnings and financial stability. However, risks include the performance and creditworthiness of the lessee, as well as general market conditions for finance leasing and environmental protection projects. The comprehensive guarantees and security arrangements mitigate payment risk, but shareholders should monitor any developments in the lessee’s business and the PRC heat supply sector.

Board and Management: As of the announcement date, Hing Yip Holdings’ board includes experienced executives and independent directors, ensuring oversight of such material transactions.

Conclusion

The discloseable finance lease transaction represents a strategic move for Hing Yip Holdings Limited, enhancing its revenue base and further entrenching its presence in the finance leasing sector, particularly environmental protection projects. The robust security and guarantee structure reduces risk, and the transaction aligns with the group’s growth strategy. Shareholders should note the potential for positive earnings impact, balanced against sector and counterparty risks.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult professional advisors before making investment decisions. Information is based on public disclosures and may be subject to change.

View HING YIP HLDGS Historical chart here