China Chengtong Development Group Announces Major Sale and Leaseback Transaction Worth RMB200 Million

Date: 29 April 2026
Company: China Chengtong Development Group Limited (Stock Code: 217)

Key Highlights of the Announcement

• China Chengtong Development Group Limited (“the Company”) has announced a major sale and leaseback transaction through its indirect wholly-owned subsidiary, Chengtong Financial Leasing.
• On 29 April 2026, Chengtong Financial Leasing entered into sale and leaseback agreements with Zhoushan Central Fishing Port Development Co., Ltd. (“the Lessee”), a state-owned enterprise in the PRC.
• The transaction involves the purchase of dock and berth equipment, oil and gas facilities, and related equipment (“Leased Assets”) from the Lessee at a purchase price of RMB200 million (approximately HK\$228 million).
• The Leased Assets will then be leased back to the Lessee for a term of three years, with the potential for early termination as specified in the agreements.
• The completion of the transaction is subject to the Lessee providing relevant proof of ownership and obtaining all necessary approvals by 31 December 2026, failing which Chengtong Financial Leasing may unilaterally terminate the agreements.

Detailed Transaction Terms

• Valuation and Pricing:
  • The purchase price of RMB200 million represents approximately 95.02% of the appraised value of RMB210.48 million, as assessed by Beijing Zhonghe Yuan Asset Appraisal Co., Ltd. using the cost method.
  • The cost method factors in replacement costs, depreciation, and the newness rate of the assets, which was evaluated at 88.53% after on-site inspection.
  • The total replacement cost was appraised at RMB237.75 million.
  • The purchase price will be funded by the Group’s general working capital.
• Lease Structure and Payments:
  • Chengtong Financial Leasing will retain legal title to the Leased Assets during the lease term.
  • Total lease payments are estimated at RMB212.35 million (approx. HK\$242.08 million), payable in twelve quarterly instalments over three years.
  • This sum comprises the principal lease amount (the purchase price) and lease interest of approximately RMB12.35 million (approx. HK\$14.08 million).
• Service Fee and Additional Income:
  • The Lessee will also pay a one-off, non-refundable service fee of RMB5 million (approx. HK\$5.70 million) for corporate finance consulting and advisory services provided by Chengtong Financial Leasing.
  • The Group expects to earn a total income of approximately RMB17.35 million (approx. HK\$19.78 million) from this transaction, including both the service fee and lease interest.
• Guarantee and Security:
  • The transaction is secured by an irrevocable and continuing guarantee from Zhoushan Putuo Urban Investment and Development Group Co., Ltd., a state-owned enterprise controlled by the Finance Bureau of Putuo District, Zhoushan, Zhejiang Province.
  • Chengtong Financial Leasing may implement further credit enhancement measures as deemed necessary, including monitoring the financial condition of the Lessee and the Guarantor, and possibly requiring additional security.
• Repurchase Option:
  • Upon full payment of all lease obligations, the Lessee has the right to repurchase the Leased Assets for a nominal consideration of RMB1.00.

Shareholder and Regulatory Considerations

• Major Transaction Classification:
  • The sale and leaseback arrangement constitutes a major transaction under Chapter 14 of the Hong Kong Listing Rules, as the highest applicable percentage ratio exceeds 25% but is less than 100%.
  • The transaction is subject to notification, announcement, circular, and shareholders’ approval requirements.
• Shareholder Approval:
  • No shareholder or their close associates has a material interest in the transaction, so no one is required to abstain from voting.
  • Written approval has been obtained from China Chengtong Hong Kong Company Limited, the controlling shareholder holding approximately 53.14% of the issued shares, in lieu of a general meeting.
  • No general meeting will be convened, and a circular will be sent to all shareholders by 21 May 2026.

Potential Impact on Share Value

• The transaction is expected to be earnings accretive, as it will provide the Group with an additional income of approximately RMB17.35 million over three years.
• The deal strengthens the Group’s leasing business and provides stable, recurring cash flows, while leveraging relationships with state-backed entities in Zhejiang Province.
• The use of independent third parties, state guarantees, and arm’s length negotiations reduces counterparty risk and enhances the transaction’s credibility.
• The transaction demonstrates the Group’s ability to secure major contracts and manage significant financial deals, which could be viewed positively by investors.

Other Important Information

• The Lessee and Guarantor are both ultimately controlled by the Finance Bureau of Putuo District, Zhoushan, Zhejiang Province, and are independent third parties to the Company.
• The Leased Assets are not currently revenue-generating with identifiable income streams, which may affect risk/return profiles.
• The transaction is subject to completion conditions, such as asset ownership proof and required approvals, which, if not met by 31 December 2026, could result in termination of the deal.

Conclusion

This major sale and leaseback transaction is a significant development for China Chengtong Development Group Limited, reflecting its core strengths in financial leasing, its access to state-backed clients, and its ability to generate new income streams. Investors should monitor the completion of the transaction and the subsequent impact on the Company’s financial performance.

Disclaimer

The above article is for informational purposes only and does not constitute investment advice. Investors should exercise caution and refer to the official company announcements and circulars for detailed terms and potential risks associated with the transaction. The share price of China Chengtong Development Group Limited may be affected by various factors, including but not limited to this transaction, general market conditions, and future performance. Past performance is not indicative of future results.

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