香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性
或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部份內容而產生或因倚
賴該等內容而引致的任何損失承擔任何責任。
本公告及上市文件僅供參考，並不構成收購、購買或認購本公告所述證券的邀請或要約。
本公告及上市文件不是、也無意成為在美國或其他地方出售證券的要約或提出購買證券的邀
約。本公告所述的證券既沒有、也不會根據《1933年美國證券法》 （「《證券法》」）或美
（經修訂）
國任何州或其他司法管轄區的證券法登記。本公告所述的證券依據《證券法》的《S規例》（「《S規
例》」）在美國境外發售及出售，除非已獲豁免《證券法》及適用的州或地方證券法的登記規定，
或交易不受制於該等登記規定，否則不得在美國境內（按《證券法》下《S規例》的定義）發售或出
售。在美國進行的任何證券公開發售將以招股章程的方式進行。該招股章程將包含發行公司及
其管理層的詳細資料以及財務報表。本公告、上市文件及本公告所載的資料不得直接或間接分
派於或予美國境內（包括其領地和屬地、美國任何州和哥倫比亞特區）。在美國或任何其他被限
制或禁止公開發售本公告所述證券的司法管轄區，不會且將不會進行該等發售。本公告或其所
載的資料（包括上市文件）不應被視為徵收任何資金、證券或其他對價的邀請，如果發送資金、
證券或任何對價以回應本公告或其所載的資料（包括上市文件），將不被接受。
本公告及其所述的上市文件根據《香港聯合交易所有限公司證券上市規則》刊發，僅供參考，並
不構成出售任何證券的要約或提出購買任何證券的邀約。本公告及其中提及的任何內容（包括
上市文件）均不構成任何合約或承諾的依據。為避免疑問，刊發本公告及其所述的上市文件不
應被視為本公司（定義見下文）或其代表依據《公司（清盤及雜項條文）條例》
（香港法例第32章）
發出的招股章程而提出的證券要約，亦不構成《證券及期貨條例》（香港法例第571章）所指邀請
公眾訂立或提出訂立協議以收購、處置、認購或承銷證券的廣告、邀請或載有該邀請的文件。
香港投資者提示：本公司確認，債券（定義見下文）僅供專業投資者（定義見《香港聯合交易所
有限公司證券上市規則》第三十七章）購買，並已按該基礎於聯交所上市。因此，本公司確認，
債券不適宜作為香港散戶投資者的投資。投資者應審慎考慮所涉及的風險。
刊發發售通函
Zoomlion Heavy Industry Science and Technology Co., Ltd.*
中聯重科股份有限公司
（於中華人民共和國註冊成立的股份有限公司）
（股份代號：1157）
人民幣6,000,000,000元以美元結算
於2031年到期的0.70%可換股債券（「債券」）
（債券股份代號：40078）
聯席全球協調人、聯席賬簿管理人及聯席牽頭經辦人
（按照英文字母順序排列）
本公告乃中聯重科股份有限公司（「本公司」）根據《香港聯合交易所有限公司（「聯
交所」）證券上市規則》
（「《上市規則》」）第37.39A條而作出。
茲提述本公司於2026年2月5日刊發的債券於聯交所上市之通告。請參閱附於本公
告的2026年1月29日關於債券的發售通函（「發售通函」）。發售通函僅以英文刊發。
誠如發售通函所披露，債券旨在僅供專業投資者（定義見《上市規則》第三十七章）
購買，並已按該基礎於聯交所上市。因此，本公司確認，債券不適宜作為香港散
戶投資者的投資。投資者應審慎考慮所涉及的風險。
發售通函不構成向任何司法管轄區的公眾人士要約出售任何證券的招股章程、通
告、通函、宣傳冊或廣告，亦不是向公眾人士提出認購或購買任何證券的邀請，
且亦非供傳閱以邀請公眾人士提出認購或購買任何證券的邀約。
發售通函不應被視為誘使認購或購買本公司任何證券，亦無該誘使意圖。
承董事會命
中聯重科股份有限公司
董事長
詹純新
中國長沙，2026年2月6日
於本公告刊日期，本公司執行董事為詹純新博士及劉小平先生；非執行董事為賀
柳先生及王賢平先生；以及獨立非執行董事為張成虎先生、黃國濱先生、吳寶海
先生及黃珺女士。
* 僅供識別
IMPORTANT NOTICE
NOT FOR DISTRIBUTION TO ANY PERSON OR ADDRESS IN THE UNITED STATES.
IMPORTANT: You must read the following disclaimer before continuing. The following disclaimer applies to the attached
offering circular (the “Offering Circular”) following this page, and you are therefore advised to read this disclaimer carefully before
reading, accessing or making any other use of the Offering Circular. In accessing the attached Offering Circular, you agree to be
bound by the following terms and conditions, including any modifications to them from time to time, each time you receive any
information from the Issuer (as defined in the attached Offering Circular) or from the Joint Lead Managers (as defined in the attached
Offering Circular) as a result of such access.
NOTHING IN THIS ELECTRONIC TRANSMISSION CONSTITUTES AN OFFER OF SECURITIES FOR SALE IN
THE UNITED STATES OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DO SO. THE SECURITIES
DESCRIBED IN THE ATTACHED OFFERING CIRCULAR HAVE NOT BEEN, AND WILL NOT BE, REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933 AS AMENDED (THE “SECURITIES ACT”), OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR OTHER JURISDICTION. THE SECURITIES MAY
NOT BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, WITHIN THE UNITED STATES, EXCEPT PURSUANT TO
AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT AND APPLICABLE STATE OR LOCAL SECURITIES LAWS. THIS OFFERING IS MADE
SOLELY IN OFFSHORE TRANSACTIONS PURSUANT TO THE SECURITIES ACT.
Confirmation of your Representation: In order to be eligible to view the attached Offering Circular or make an investment
decision with respect to the securities, investors must be located outside the United States. The attached Offering Circular is being
sent to you at your request and by accepting the electronic mail and accessing the attached Offering Circular, you shall be deemed
to have represented to the Issuer and the Joint Lead Managers that (1) you are not in the United States and, to the extent you purchase
the securities described in the attached Offering Circular, you will be doing so pursuant to Regulation S under the Securities Act;
(2) the electronic mail address that you gave us and to which this electronic mail has been delivered is not located in the United
States, its territories or possessions; (3) you consent to delivery of the attached Offering Circular and any amendments or
supplements thereto by electronic transmission; (4) you (and any nominee and any person on whose behalf you are subscribing for
the securities to which the attached Offering Circular relates) are not a “connected person” (as defined in the Rules Governing the
Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”)) of the Issuer, which includes but is not
limited to any director, chief executive or substantial shareholder of the Issuer or any of its subsidiaries or any associate of any of
them within the meaning of the Listing Rules; and (5) you (and any nominee and any person on whose behalf you are subscribing
for the securities to which the attached Offering Circular relates) are, and will immediately after completion of the offering of such
securities be, independent of and not acting in concert with, any of such connected persons in relation to the control of the Issuer.
You are reminded that the attached Offering Circular has been delivered to you on the basis that you are a person into whose
possession the attached Offering Circular may be lawfully delivered in accordance with the laws of the jurisdiction in which you are
located and you may not, nor are you authorised to deliver or forward this document, electronically or otherwise, to any other person.
If you have gained access to this transmission contrary to the foregoing restrictions, you are not allowed to purchase any of the
securities described in the attached Offering Circular.
Restrictions: The attached Offering Circular is being furnished in connection with an offering exempt from registration under
the Securities Act solely for the purpose of enabling a prospective investor to consider the purchase of the securities described herein.
The attached Offering Circular has been sent to you in an electronic form. You are reminded that documents transmitted via
this medium may be altered or changed during the process of electronic transmission and consequently, none of the Issuer, the Joint
Lead Managers, the Trustee or the Agents (both as defined in the attached Offering Circular), nor any of their respective directors,
officers, employees, representatives, advisers, affiliates or agents or any person who controls any of them or any of their respective
affiliates, accepts any liability or responsibility whatsoever in respect of any difference between the attached Offering Circular
distributed to you in electronic format and the hard copy version. A hard copy version will be provided to you upon request.
Except with respect to eligible investors in jurisdictions where such offer or invitation is permitted by law, nothing in this
electronic transmission constitutes an offer or an invitation by or on behalf of the Issuer, the Joint Lead Managers, the Trustee or
the Agents or any of their respective directors, officers, employees, representatives, advisers, affiliates or agents or any person who
controls any of them or any of their respective affiliates to subscribe for or purchase any of the securities described therein, and
access has been limited so that it shall not constitute in the United States or elsewhere a directed selling efforts (within the meaning
of Regulation S under the Securities Act). If a jurisdiction requires that the offering be made by a licensed broker or dealer and the
Joint Lead Manager or any affiliate of the Joint Lead Manager is a licensed broker or dealer in that jurisdiction, the offering shall
be deemed to be made by such Joint Lead Manager or such affiliate on behalf of the Issuer in such jurisdiction.
Actions that You May Not Take: If you receive this document by electronic mail, you should not reply by e-mail to this
communication, and you may not purchase any securities by doing so. Any reply e-mail communications, including those you
generate by using the “Reply” function on your e-mail software, will be ignored or rejected.
YOU ACKNOWLEDGE THAT THE ATTACHED OFFERING CIRCULAR AND THE INFORMATION CONTAINED
THEREIN ARE STRICTLY CONFIDENTIAL AND INTENDED FOR YOU ONLY. YOU ARE NOT AUTHORISED TO AND
YOU MAY NOT DELIVER OR FORWARD THE ATTACHED OFFERING CIRCULAR, ELECTRONICALLY OR
OTHERWISE, TO ANY OTHER PERSON OR REPRODUCE SUCH OFFERING CIRCULAR IN ANY MANNER
WHATSOEVER. ANY FORWARDING, DISTRIBUTION OR REPRODUCTION OF THE ATTACHED OFFERING
CIRCULAR IN WHOLE OR IN PART IS UNAUTHORISED. FAILURE TO COMPLY WITH THIS DIRECTIVE MAY
RESULT IN A VIOLATION OF THE SECURITIES ACT OR THE APPLICABLE LAWS OF OTHER JURISDICTIONS.
You are responsible for protecting against viruses and other destructive items. If you receive this document by electronic mail,
your use of this electronic mail is at your own risk and it is your responsibility to take precautions to ensure that it is free from viruses
and other items of a destructive nature.
Zoomlion Heavy Industry Science and Technology Co., Ltd. *
中聯重科股份有限公司
(a joint stock company incorporated in the People ’s Republic of China with limited liability)
(Stock Code: 1157)
RMB6,000,000,000 0.70% U.S. Dollar Settled Convertible Bonds due 2031
convertible into ordinary H shares of
Zoomlion Heavy Industry Science and Technology Co., Ltd.
Issue Price: 100.0 per cent.
The 0.70 per cent. U.S. dollar settled convertible bonds due 2031 in the aggregate principal amount of RMB6,000,000,000 (the “Bonds”) will be issued by Zoomlion Heavy Industry Science
and Technology Co., Ltd. (the “Issuer” or the “Company”) on 5 February 2026 (the “Issue Date”). The issue price will be 100.0 per cent. of the aggregate principal amount of the Bonds. The Bonds
will be constituted by a trust deed entered into between the Issuer and The Hongkong and Shanghai Banking Corporation Limited as trustee (the “Trustee”) dated the Issue Date (the “Trust Deed”).
The Bonds will constitute direct, unsubordinated, unconditional and (subject to the provisions of Condition 3.1 (Negative Pledge) of the terms and conditions of the Bonds (the “Terms and
Conditions” or the “Conditions”)) unsecured obligations of the Issuer and shall at all times rank pari passu and without any preference or priority among themselves. The payment obligations of the
Issuer under the Bonds shall, save for such exceptions as may be provided by mandatory provisions of applicable law and subject to Condition 3.1 (Negative Pledge) of the Terms and Conditions, at all
times rank at least equally with all of its other present and future direct, unsubordinated, unconditional and unsecured obligations.
Subject as provided in the Terms and Conditions, each Bond will, at the option of the holder thereof, be convertible (unless previously redeemed, converted or purchased and cancelled) at any
time on or after the 41st day after the Issue Date up to the close of business (at the place where the certificate evidencing such Bond is deposited for conversion) on the date falling seven working days
prior to 5 February 2031 (the “Maturity Date”) (both days inclusive) into fully paid ordinary H shares of the Issuer (the “H Shares” or the “Shares”) at an initial conversion price of HK$10.02 per H
Share. The conversion price will be subject to adjustment in the circumstances described under “Terms and Conditions of the Bonds – Conversion – Adjustments to Conversion Price” or “Terms and
Conditions of the Bonds – Conversion – Adjustment upon Change of Control.” The Closing Price (as defined in the Terms and Conditions) of the H Shares on The Stock Exchange of Hong Kong Limited
(the “Hong Kong Stock Exchange” or “SEHK”) on 28 January 2026 was HK$8.45 per H Share. The Bonds will bear interest on their outstanding principal amount from and including the Issue Date
at the rate of 0.70 per cent. per annum, payable semi-annually in arrear in equal instalments on 5 February and 5 August in each year at its U.S. Dollar Equivalent (as defined in the Terms and Conditions).
Unless previously redeemed, converted or purchased and cancelled as provided in the Terms and Conditions, the Issuer will redeem each Bond at the U.S. Dollar Equivalent of 105.73 per cent.
of its principal amount, together with the U.S. Dollar Equivalent of accrued and unpaid interest thereon on the Maturity Date. On giving not less than 30 nor more than 60 days’ notice to the Trustee,
the Principal Agent and the Bondholders (which notice shall be irrevocable), the Issuer may redeem all but not some only of the Bonds at the U.S. Dollar Equivalent of the Early Redemption Amount
(as defined in the Terms and Conditions), together with the U.S. Dollar Equivalent of accrued and unpaid interest thereon to but excluding the date fixed for redemption: (i) at any time after 19 February
per cent. of the aggregate principal amount originally issued (including any Bonds issued pursuant to Condition 15 (Further Issues) of the Terms and Conditions). All but not some only of the Bonds
may also be redeemed, at the option of the Issuer, at any time, having given not less than 30 nor more than 60 days’ notice (a “Tax Redemption Notice”) to the Trustee, the Principal Agent and the
Bondholders (which notice shall be irrevocable), on the date specified in the Tax Redemption Notice for such redemption at the U.S. Dollar Equivalent of the Early Redemption Amount, together with
the U.S. Dollar Equivalent of interest accrued and unpaid thereon to but excluding the date fixed for redemption, in the event of certain changes in, or amendment to, the tax laws or regulations of the
PRC or Hong Kong, as further described in the Terms and Conditions, subject to the non-redemption option of each holder after the exercise by the Issuer of its tax redemption option as described in
the Terms and Conditions. The holder of each Bond will also have the right at such holder’s option, to require the Issuer to redeem all or some only of such holder’s Bonds on 5 February 2029 (the “Put
Option Date”) at the U.S. Dollar Equivalent of 103.38 per cent. of their principal amount, together with the U.S. Dollar Equivalent of interest accrued and unpaid to but excluding the Put Option Date.
The holder of each Bond will also have the right at such holder’s option, to require the Issuer to redeem all or some only of such holder’s Bonds on the Relevant Event Put Date (as defined in the Terms
and Conditions) at the U.S. Dollar Equivalent of the Early Redemption Amount, together with the U.S. Dollar Equivalent of interest accrued and unpaid to but excluding the Relevant Event Put Date,
following the occurrence of a Relevant Event (as defined in the Terms and Conditions). See “Terms and Conditions of the Bonds – Redemption, Purchase and Cancellation.”
The Issuer is required to register, or cause to be registered, with the State Administration of Foreign Exchange (“SAFE”) the Bonds pursuant to the Administrative Measures for Foreign Debt
Registration (外債登記管理辦法) and its operating guidelines, effective as of 13 May 2013 and if applicable, the Circular of the People’s Bank of China on Matters relating to the Macro-prudential
Management of Full-covered Cross-border Financing (Yin Fa [2017] No. 9) (中國人民銀行關於全口徑跨境融資宏觀審慎管理有關事宜的通知) (銀發[2017]9號) issued by the People’s Bank of China which
came into effect on 11 January 2017 (the “Foreign Debt Registration”). According to the Measures for the Administration of Cross-Border Capital Centralized Operation of Multinational Corporations
(跨國公司跨境資金集中運營管理規定) issued by SAFE on 15 March 2019, the Circular on Matters Concerning the Integrated RMB and Foreign Currency Capital Pool Operations for Multinational
Corporations (關於跨國公司本外幣一體化資金池業務有關事宜的通知) issued by the People’s Bank of China and SAFE on 24 December 2025 and other applicable regulatory provisions, and based on
the Issuer’s inquiries with local SAFE, the issue of the Bonds shall be administered by reference to the relevant rules on foreign debt and shall consume the foreign debt quota allocated under the Issuer’s
integrated RMB and foreign currency capital pool. Since the Issuer has already completed the one-off foreign debt quota registration in connection with the filing of such integrated capital pool, no
additional foreign debt registration procedure shall be required for the purpose of the issue of the Bonds.
The Issuer has made an application for the pre-issuance registration of the offering of the Bonds with the National Development and Reform Commission (the “NDRC”) in accordance with
the Administrative Measures for the Review and Registration of Medium- and Long-Term Foreign Debt of Enterprises (企業中長期外債審核登記管理辦法(國家發展和改革委員會令第56號)) issued by the
NDRC and effective from 10 February 2023 (“Order 56”), and has obtained a certificate of registration from the NDRC on 26 January 2026 (the “NDRC Pre-issuance Registration Certificate”). The
Issuer undertakes that it will within the relevant prescribed timeframes after the Issue Date file or cause to be filed with the NDRC the requisite information and documents in respect of the Bonds and
comply with other reporting obligations in accordance with the Order 56 and any implementation rules, reports, certificates, approvals or guidelines as issued by the NDRC from time to time, including
but not limited to, the Initial NDRC Post-Issuance Filing (as defined in the Terms and Conditions).
Application will be made to the Hong Kong Stock Exchange for (i) the listing of, and permission to deal in, the Bonds on the Hong Kong Stock Exchange by way of debt issues to professional
investors (as defined in Chapter 37 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited) (“Professional Investors”) only; and (ii) the listing of the H Shares
issuable upon conversion of the Bonds, and such permissions are expected to become effective on 6 February 2026 and when such H Shares are issued, respectively. This Offering Circular is for distribution
to Professional Investors only.
Notice to Hong Kong investors: The Issuer confirms that the Bonds are intended for purchase by Professional Investors only and will be listed on the Hong Kong Stock Exchange
on that basis. Accordingly, the Issuer confirms that the Bonds are not appropriate as an investment for retail investors in Hong Kong. Investors should carefully consider the risks involved.
The Hong Kong Stock Exchange has not reviewed the contents of this document, other than to ensure that the prescribed form disclaimer and responsibility statements, and a statement
limiting distribution of this document to Professional Investors only have been reproduced in this document. Listing of the Bonds on the Hong Kong Stock Exchange is not to be taken as an
indication of the commercial merits or credit quality of the Bonds or the Issuer or the Group (as defined below), or quality of disclosure in this document. Hong Kong Exchanges and Clearing
Limited and the Hong Kong Stock Exchange take no responsibility for the contents of this Offering Circular, make no representation as to its accuracy or completeness and expressly disclaim any liability
whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Offering Circular.
This Offering Circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Issuer and the Group. The Issuer accepts full
responsibility for the accuracy of the information contained in this Offering Circular and confirms, having made all reasonable enquiries, that to the best of its knowledge and belief there are no other
facts the omission of which would make any statement herein misleading.
Investors should be aware that the Bonds are unsecured, that there are risks attached to exercise of Conversion Rights of the Bonds, and that there are various other risks relating
to the Bonds and the Issuer and its subsidiaries, their business and their jurisdictions of operations which investors should familiarize themselves with before making an investment in the Bonds.
See “Risk Factors” beginning on page 15.
The Bonds and the H Shares to be issued upon conversion of the Bonds have not been and will not be registered under the United States Securities Act of 1933, as amended (the
“Securities Act”) and may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities
Act. For a description of these and certain further restrictions on offers and sales of the Bonds and the H Shares to be issued upon conversion of the Bonds and the distribution of this Offering
Circular, see “Subscription and Sale” below.
The Bonds will initially be evidenced by a global certificate (the “Global Certificate”) in registered form, which will be registered in the name of a nominee of, and shall be deposited on or
about the Issue Date with a common depositary on behalf of, Euroclear Bank SA/NV (“Euroclear”) and Clearstream Banking S.A. (“Clearstream”). Beneficial interests in the Global Certificate will
be shown on, and transfer thereof will be effected only through, records maintained by Euroclear and Clearstream. Except as described in the Global Certificate, individual certificates for Bonds will not
be issued in exchange for interests in the Global Certificate. See “Summary of Provisions relating to the Bonds while in Global Form”.
Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers (in alphabetical order)
Huatai International HSBC Morgan Stanley
Offering Circular dated 29 January 2026
* For identification purpose only
NOTICE TO INVESTORS
The Issuer, having made all reasonable enquiries, confirms that (i) this Offering Circular
contains all information (including financial, business conditions and prospects information) with
respect to the Issuer, to the Group, to the Shares and to the Bonds which, as of such date, is material
in the context of the issue and offering of the Bonds (including the information which is required by
applicable laws and regulations according to the particular nature of the Issuer, the Group, the Shares
and the Bonds, is necessary to enable investors and their investment advisers to make an informed
assessment of the assets and liabilities, financial position, profits and losses, and prospects of the
Issuer and the Group, and of the rights attaching to the Shares and the Bonds); (ii) the statements
contained in this Offering Circular (as defined in the Subscription Agreement) relating to the Issuer,
and to the Group, are true and accurate in all material respects and not misleading; (iii) the opinions
and intentions expressed in this Offering Circular (as defined in the Subscription Agreement) with
regard to the Issuer and to the Group are honestly held, have been reached after considering all
relevant circumstances and are based on reasonable assumptions; (iv) all reasonable enquiries have
been made by the Issuer to ascertain such facts in relation to the Issuer, the Group, the Bonds and
the Shares and to verify the accuracy in all material respects of all such information and statements
in relation to the Issuer, the Group, the Bonds and the Shares as contained in this Offering Circular;
and (v) this Offering Circular does not include an untrue statement of a material fact or omit to state
a material fact or other facts in relation to the Issuer, the Group, the Shares or the Bonds, necessary
in order to make the statements therein, in the light of the circumstances under which they were made
or in the context of the issue and offering of the Bonds, not misleading.
The Issuer has prepared this Offering Circular solely for use in connection with the proposed
offering of the Bonds described in this Offering Circular. This Offering Circular does not constitute
an offer of, or an invitation by or on behalf of Huatai Financial Holdings (Hong Kong) Limited, The
Hongkong and Shanghai Banking Corporation Limited and Morgan Stanley Asia Limited (in
alphabetical order) (together, the “Joint Lead Managers”), the Issuer to subscribe for or purchase
any of the Bonds. The distribution of this Offering Circular and the offering of the Bonds in certain
jurisdictions may be restricted by law. Persons into whose possession this Offering Circular comes
are required by the Issuer and the Joint Lead Managers to inform themselves about and to observe
any such restrictions. No action is being taken to permit a public offering of the Bonds or the
distribution of this Offering Circular in any jurisdiction where action would be required for such
purposes. There are restrictions on the offer and sale of the Bonds, and the circulation of documents
relating thereto, in certain jurisdictions including the United States, the United Kingdom, the
European Economic Area, Hong Kong, the PRC, Singapore and Japan and to persons connected
therewith. For a description of further restrictions on offers and sales of the Bonds and distribution
of this Offering Circular, see “Subscription and Sale” below. By purchasing the Bonds, investors are
deemed to have represented and agreed to all of those provisions contained in that section of this
Offering Circular. This Offering Circular is personal to each offeree and does not constitute an offer
to any other person or to the public generally to subscribe for, or otherwise acquire, the Bonds.
Distribution of this Offering Circular to any person other than the prospective investor and any person
retained to advise such prospective investor with respect to its purchase is unauthorised. Each
prospective investor, by accepting delivery of this Offering Circular, is deemed to have agreed to the
foregoing and to make no photocopies of this Offering Circular or any documents referred to in this
Offering Circular.
–i–
No person has been or is authorised to give any information or to make any representation
concerning the Issuer, the Group, or the Bonds, other than as contained herein and, if given or made,
any such other information or representation should not be relied upon as having been authorised by
the Issuer, the Joint Lead Managers, the Trustee or the Agents (as defined in “Terms and Conditions
of the Bonds” below) or their respective directors, officers, employees, agents, representatives,
affiliates or advisers, or any person who controls any of them. Neither the delivery of this Offering
Circular nor any offering, sale or delivery made in connection with the issue of the Bonds shall, under
any circumstances, constitute a representation that there has been no change or development
reasonably likely to involve a change in the affairs of the Issuer, or the Group since the date hereof
or create any implication that the information contained herein is correct as at any date subsequent
to the date hereof. This Offering Circular does not constitute an offer of, or an invitation by or on
behalf of the Issuer, the Joint Lead Managers, the Trustee or the Agents or any of their respective
affiliates, officers, employees, agents, representatives, directors or advisers or any person who
controls any of them to subscribe for or purchase the Bonds and may not be used for the purpose of
an offer to, or a solicitation by, anyone in any jurisdiction or in any circumstances in which such offer
or solicitation is not authorised or is unlawful.
This Offering Circular is being furnished by the Issuer in connection with the offering of the
Bonds and is exempt from registration under the Securities Act solely for the purpose of enabling a
prospective investor to consider purchasing the Bonds. Investors must not use this Offering Circular
for any other purpose, make copies of any part of this Offering Circular or give a copy of it to any
other person, or disclose any information in this Offering Circular to any other person. The
information contained in this Offering Circular has been provided by the Issuer and other sources
identified in this Offering Circular. Any reproduction or distribution of this Offering Circular, in
whole or in part, and any disclosure of its contents or use of any information herein for any purpose
other than the consideration of an investment in the Bonds offered by this Offering Circular is
prohibited. By accepting delivery of this Offering Circular each investor is deemed to have agreed
to these restrictions.
None of the Joint Lead Managers, the Trustee or the Agents or any of their respective affiliates,
officers, employees, agents, representatives, directors or advisers or any person who controls any of
them has independently verified the information contained in this Offering Circular. Nothing
contained in this Offering Circular is, or shall be relied upon as, a promise, representation or warranty
by the Joint Lead Managers, the Trustee or the Agents or any of their respective affiliates, officers,
employees, agents, representatives, directors or advisers. This Offering Circular is not intended to
provide the basis of any credit or other evaluation nor should it be considered as a recommendation
by any of the Issuer, the Joint Lead Managers, the Trustee or the Agents or any of the respective
affiliates, officers, employees, agents, representatives, directors or advisers that any recipient of this
Offering Circular should purchase the Bonds.
Each person receiving this Offering Circular acknowledges that it has not relied on the Joint
Lead Managers, the Trustee or the Agents or any of their respective affiliates, officers, employees,
agents, representatives, directors or advisers or any person who controls any of them in connection
with its investigation of the accuracy of such information or its investment decision, and such person
must rely on its own examination of the Issuer, the Group, and the merits and risks involved in
investing in the Bonds. See “Risk Factors” below for a discussion of certain factors to be considered
in connection with an investment in the Bonds.
– ii –
To the fullest extent permitted by law, none of the Joint Lead Managers, the Trustee or the
Agents or any of their respective affiliates, officers, employees, agents, representatives, directors or
advisers or any person who controls any of them accepts any responsibility for the contents of this
Offering Circular and assumes no responsibility for the contents, accuracy, completeness or
sufficiency of any such information or for any other statement, made or purported to be made by the
Joint Lead Managers, the Trustee or the Agents or any of their respective affiliates, officers,
employees, agents, representatives, directors or advisers or any person who controls any of them or
on their behalf in connection with the Issuer, the Group or the issue and offering of the Bonds or the
H Shares. Each of the Joint Lead Managers, the Trustee and the Agents and their respective affiliates,
officers, employees, agents, representatives, directors and advisers or any person who controls any
of them accordingly disclaims all and any liability, whether arising in tort or contract or otherwise,
which it might otherwise have in respect of this Offering Circular or any such statement. None of the
Joint Lead Managers, the Trustee or the Agents or any of their respective affiliates, officers,
employees, agents, representatives, directors or advisers or any person who controls any of them
undertakes to review the results of operations, financial condition or affairs of the Issuer or the Group
during the life of the arrangements contemplated by this Offering Circular or to advise any investor
or prospective investor in the Bonds of any information coming to the attention of the Joint Lead
Managers, the Trustee or the Agents or any of their respective affiliates, officers, employees, agents,
representatives, directors or advisers or any person who controls any of them.
In connection with the offering of the Bonds, the Joint Lead Managers and/or their respective
affiliates, or affiliates of the Issuer, may act as investors and place orders, receive allocations and
trade the Bonds for their own account and such orders, allocations or trading of the Bonds may be
material. These entities may hold or sell such Bonds or purchase further Bonds for their own account
in the secondary market or deal in any other securities of the Issuer, and therefore, they may offer
or sell the Bonds or other securities otherwise than in connection with the offering of the Bonds.
Accordingly, references herein to the offering of the Bonds should be read as including any offering
of the Bonds to the Joint Lead Managers and/or their respective affiliates, or affiliates of the Issuer
as investors for their own account. Such entities are not expected to disclose such transactions or the
extent of any such investment, otherwise than in accordance with any applicable legal or regulatory
requirements. If such transactions occur, the trading price and liquidity of the Bonds may be
impacted.
Each prospective investor acknowledges that the H Shares are listed on the Hong Kong Stock
Exchange and the Issuer is therefore required to publish certain business and financial information
in accordance with the rules and practices of the Hong Kong Stock Exchange, which includes, among
other things, descriptions of the Group’s principal activities, and the financial statements and other
information relating to the Group which is necessary to enable holders of the H Shares and the public
to appraise the position of the Issuer and the Group, and each prospective investor is able to obtain
or access such information without undue difficulty.
Prospective investors should not construe anything in this Offering Circular as legal, business
or tax advice. Each prospective investor should determine for itself the relevance of the information
contained in this Offering Circular and consult its own legal, business and tax advisers as needed to
make its investment decision and determine whether it is legally able to purchase the Bonds under
applicable laws or regulations.
– iii –
Listing of the Bonds on the Hong Kong Stock Exchange is not to be taken as an indication of
the merits of the Issuer, the Group, the Bonds or the Shares. In making an investment decision,
prospective investors must rely on their examination of the Issuer, the Group and the terms of this
Offering, including the merits and risks involved. The Bonds have not been approved or
recommended by any Hong Kong or other regulatory authority. Furthermore, the contents of this
Offering Circular have not been reviewed by any Hong Kong or other regulatory authority. The
foregoing authorities have not passed upon or endorsed the merits of the offering or confirmed the
accuracy or determined the adequacy of this Offering Circular. Prospective investors should not
construe anything in this Offering Circular as legal, business or tax advice. Each prospective investor
should determine for itself the relevance of the information contained in this Offering Circular and
consult its own legal, business and tax advisers as needed to make its investment decision and
determine whether it is legally able or advisable to purchase the Bonds under applicable laws or
regulations. Hong Kong Exchanges and Clearing Limited and the SEHK take no responsibility for the
contents of this Offering Circular, make no representation as to its accuracy or completeness and
expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon
the whole or any part of the contents of this Offering Circular.
Singapore SFA Product Classification – In connection with Section 309B of the Securities and
Futures Act 2001 of Singapore (the “SFA”) and the Securities and Futures (Capital Markets Products)
Regulations 2018 of Singapore (the “CMP Regulations 2018”), the Issuer has determined, and
hereby notifies all relevant persons (as defined in Section 309A(1) of the SFA), that the Bonds are
‘prescribed capital markets products’ (as defined in the CMP Regulations 2018) and are Excluded
Investment Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale of Investment
Products and MAS Notice FAA-N16: Notice on Recommendations on Investment Products).
PRIIPs REGULATION – PROHIBITION OF SALES TO EEA RETAIL INVESTORS –
The Bonds are not intended to be offered, sold or otherwise made available to and should not be
offered, sold or otherwise made available to any retail investor in the European Economic Area
(“EEA”). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail
client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, “MiFID II”);
(ii) a customer within the meaning of Directive (EU) 2016/97 (as amended, the “Insurance
Distribution Directive”), where that customer would not qualify as a professional client as defined
in point (10) of Article 4(1) of MiFID II. Consequently no key information document required by
Regulation (EU) No 1286/2014 (as amended, the “PRIIPs Regulation”) for offering or selling the
Bonds or otherwise making them available to retail investors in the EEA has been prepared and
therefore offering or selling the Bonds or otherwise making them available to any retail investor in
the EEA may be unlawful under the PRIIPS Regulation.
UK PRIIPs REGULATION – PROHIBITION OF SALES TO UK RETAIL INVESTORS –
The Bonds are not intended to be offered, sold or otherwise made available to and should not be
offered, sold or otherwise made available to any retail investor in the United Kingdom (the “UK”).
For these purposes, a retail investor means a person who is not a professional client, as defined in
point (8) of Article 2(1) of Regulation (EU) No 600/2014 as it forms part of domestic law by virtue
of the European Union (Withdrawal) Act 2018 (“EUWA”). Consequently no key information
document required by the PRIIPs Regulation as it forms part of domestic law by virtue of the EUWA
(the “UK PRIIPs Regulation”) for offering or selling the Bonds or otherwise making them available
to retail investors in the UK has been prepared and therefore offering or selling the Bonds or
otherwise making them available to any retail investor in the UK may be unlawful under the UK
PRIIPs Regulation.
– iv –
Notice to Capital Market Intermediaries and Prospective Investors Pursuant to Paragraph 21
of the Hong Kong SFC Code of Conduct – Important Notice to Prospective Investors
Prospective investors should be aware that certain intermediaries in the context of this offering,
including certain Joint Lead Managers, are “capital market intermediaries” (“CMIs”) subject to
Paragraph 21 of the Code of Conduct for Persons Licensed by or Registered with the Securities and
Futures Commission (the “SFC Code”). This notice to prospective investors is a summary of certain
obligations the SFC Code imposes on such CMIs, which require the attention and cooperation of
prospective investors. Certain CMIs may also be acting as “overall coordinators” (“OCs”) for this
offering and are subject to additional requirements under the SFC Code.
Prospective investors who are the directors, employees or major shareholders of the Issuer, a
CMI or its group companies would be considered under the SFC Code as having an association
(“association”) with the Issuer, the CMI or the relevant group company. Prospective investors
associated with the Issuer or any CMI (including its group companies) should specifically disclose
this when placing an order for the Bonds and should disclose, at the same time, if such orders may
negatively impact the price discovery process in relation to this offering. Prospective investors who
do not disclose their associations are hereby deemed not to be so associated. Where prospective
investors disclose their associations but do not disclose that such order may negatively impact the
price discovery process in relation to this offering, such order is hereby deemed not to negatively
impact the price discovery process in relation to this offering.
Prospective investors should ensure, and by placing an order prospective investors are deemed
to confirm, that orders placed are bona fide, are not inflated and do not constitute duplicated orders
(i.e., two or more corresponding or identical orders placed via two or more CMIs). If a prospective
investor is an asset management arm affiliated with any Joint Lead Manager, such prospective
investor should indicate when placing an order if it is for a fund or portfolio where the Joint Lead
Manager or its group company has more than 50% interest, in which case it will be classified as a
“proprietary order” and subject to appropriate handling by CMIs in accordance with the SFC Code
and should disclose, at the same time, if such “proprietary order” may negatively impact the price
discovery process in relation to this offering. Prospective investors who do not indicate this
information when placing an order are hereby deemed to confirm that their order is not a “proprietary
order.” If a prospective investor is otherwise affiliated with any Joint Lead Manager, such that its
order may be considered to be a “proprietary order” (pursuant to the SFC Code), such prospective
investor should indicate to the relevant Joint Lead Manager when placing such order. Prospective
investors who do not indicate this information when placing an order are hereby deemed to confirm
that their order is not a “proprietary order.” Where prospective investors disclose such information
but do not disclose that such “proprietary order” may negatively impact the price discovery process
in relation to this offering, such “proprietary order” is hereby deemed not to negatively impact the
price discovery process in relation to this offering.
Prospective investors should be aware that certain information may be disclosed by CMIs
(including private banks) which is personal and/or confidential in nature to the prospective investor.
By placing an order, prospective investors are deemed to have understood and consented to the
collection, disclosure, use and transfer of such information by the Joint Lead Managers and/or any
other third parties as may be required by the SFC Code, including to the Issuer, any OCs, relevant
regulators and/or any other third parties as may be required by the SFC Code, it being understood and
agreed that such information shall only be used for the purpose of complying with the SFC Code,
during the book-building process for this offering. Failure to provide such information may result in
that order being rejected.
–v–
Industry and Market Data
Market data and certain information and statistics included in this Offering Circular have been
obtained from both public and private sources, including market research, publicly available
information and industry publications. Although the Issuer believes the information to be reliable, it
has not been independently verified by the Issuer, the Joint Lead Managers, the Trustee or the Agents
or their respective affiliates, directors, officers, employees, agents, advisers or representatives or any
person who controls any of them and none of the Issuer, the Joint Lead Managers, the Trustee or the
Agents or their respective affiliates, directors, officers, employees, agents, advisers or representatives
or any person who controls any of them makes any representation as to the accuracy or completeness
of such information. In addition, third party information providers may have obtained information
from market participants and such information may not have been independently verified. In making
an investment decision, each investor must rely on its own examination of the Issuer, the Group and
the terms of the offering and the Bonds, including the merits and risks involved. Where information
has been sourced from a third party, the Issuer confirms that this information has been accurately
reproduced and that, as far as the Issuer is aware and is able to ascertain from information published
by third parties, no facts have been omitted which would render the reproduced information to be
inaccurate or misleading.
– vi –
CERTAIN DEFINED TERMS AND CONVENTIONS
This Offering Circular has been prepared using a number of conventions, which you should
consider when reading the information herein. The terms the “Company” or the “Issuer” are
referring Zoomlion Heavy Industry Science and Technology Co., Ltd. and the term the “Group” is
referring to the Company and its subsidiaries taken as a whole. The terms “we,” “us,” “our” and
words of similar import are referring to the Company or the Group, as the context requires.
Market data and certain industry forecasts used throughout this Offering Circular have been
obtained by the Group based on internal surveys, market research, publicly available information and
industry publications. Industry publications generally state that the information that they contain has
been obtained from sources believed to be reliable but that the accuracy and completeness of that
information is not guaranteed. Similarly, internal surveys, market research, publicly available
information and industry publications, while believed to be reliable, have not been independently
verified, and neither the Group, any of the Joint Lead Managers, the Trustee, the Agents nor any of
their respective directors, officers, employees, agents, advisers, representatives or affiliates, or any
person who controls any of them or any of their respective affiliates, makes any representation as to
the reliability or accuracy and completeness of that information. In addition, third-party information
providers may have obtained information from market participants and such information may not
have been independently verified. This Offering Circular summarizes certain documents and other
information, and investors should refer to them for a more complete understanding of what is
discussed in those documents. In making an investment decision, each investor must rely on its own
examination of the Issuer and the Group and the terms of the offering and the Bonds, including the
merits and risks involved.
The statistics set forth in this Offering Circular relating to the PRC were taken or derived from
various government and private publications. Neither the Group, any of the Joint Lead Managers, the
Trustee, the Agents nor any of their respective directors, officers, employees, agents, advisers,
representatives or affiliates, or any person who controls any of them or any of their respective
affiliates, makes any representation as to the accuracy of such statistics, which may not be consistent
with other information compiled within or outside the PRC. Due to possibly inconsistent collection
methods and other problems, the statistics herein may be inaccurate and should not be unduly relied
upon.
Unless otherwise specified or the context requires, references herein to “Hong Kong dollars”,
“HK dollars”, “HK$” and “HKD” are to the lawful currency of the Hong Kong Special
Administrative Region of the People’s Republic of China (“Hong Kong”), references herein to
“US$”, “USD” and “U.S. dollars” are to the lawful currency of the United States of America (the
“United States” or the “U.S.”) and references herein to “Renminbi” and “RMB” are to the lawful
currency of the People’s Republic of China (the “PRC” or “China”).
Unless otherwise stated in this Offering Circular, all translations from Renminbi amounts to
U.S. dollars were made at the rate of RMB7.1636 to US$1.00, the exchange rates set forth in the H.10
statistical release of the Board of Governors of the Federal Reserve System on 30 June 2025. All
translations in this Offering Circular are provided solely for the convenience of investors and no
representation is made that the Renminbi amounts referred to herein have been, could have been or
could be converted into U.S. dollars, or vice versa, at any particular rate or at all. For further
information relating to the exchange rates, see “Exchange Rate Information”.
– vii –
References to the “PRC” and “China”, for the purposes of this Offering Circular, except where
the context requires, do not include Hong Kong, the Macau Special Administrative Region of the
People’s Republic of China (“Macau”) and Taiwan. “PRC government” or “State” means the central
government of the PRC, including all political subdivisions (including provincial, municipal and
other regional or local governmental entities) and instrumentalities thereof, or, where the context
requires, any of them.
The English names of PRC nationals, entities, departments, facilities, laws, regulations,
certificates, titles and the like are translations of their Chinese names and are included for
identification purposes only. In the event of any inconsistency, the Chinese name prevails.
In this Offering Circular, unless the context otherwise requires, all references to “affiliate” are
to a person or entity directly or indirectly controlled by, or under the direct or indirect common
control of, another person or entity; all references to “subsidiary” are used with the meaning ascribed
to it in the Listing Rules.
Unless the context otherwise requires, references to “2023” and “2024” in this Offering Circular
are to the Group’s financial years ended 31 December 2023 and 2024, respectively.
– viii –
PRESENTATION AND INCORPORATION OF FINANCIAL INFORMATION
The Company’s consolidated statements of comprehensive income and consolidated statements
of financial position as at and for the years ended 31 December 2022, 2023 and 2024 have been
extracted from the consolidated financial statements of the Company for the years ended 31
December 2023 and 2024 contained in the Company’s 2023 annual report (“2023 Annual Report”)
and the Company’s 2024 annual report (“2024 Annual Report”), respectively, which have been
audited by KPMG, the independent auditors of the Company. Such consolidated financial statements
are prepared in accordance with the IFRS Accounting Standards issued by the International
Accounting Standards Board (“IASB”) (“IFRS Accounting Standards”). See “Summary
Consolidated Financial Data” for details.
The Company’s consolidated statements of comprehensive income for the six months ended 30
June 2024 and 2025 and consolidated statements of financial position as at 30 June 2025 have been
extracted from the consolidated interim financial statements of the Company from the Company’s
the independent auditors of the Company. Such consolidated interim financial statements are
prepared in accordance with the International Accounting Standard (“IAS”) 34 “Interim Financial
Reporting” issued by the IASB. See “Summary Consolidated Financial Data” for details.
The audited consolidated financial statements of the Group (including the related audit reports
and the notes thereto) which are contained in pages 129 to 268 of the 2023 Annual Report and pages
statements of the Group (including the related review reports and the notes thereto) which are
contained in pages 32 to 80 of the 2025 Interim Report are incorporated by reference in this Offering
Circular. Copies of the 2023 Annual Report, the 2024 Annual Report and the 2025 Interim Report are
available and may be downloaded free of charge from the website of the Hong Kong Stock Exchange
at www.hkexnews.hk.
Certain amounts and percentages included in this Offering Circular have been rounded.
Accordingly, in certain instances, the sum of the numbers in a column may not exactly equal the total
figure for that column. Potential investors should not construe any exchange rate translations as
representations that the relevant exchange and amounts could actually be converted into the amounts
expressed.
– ix –
FORWARD-LOOKING STATEMENTS
This Offering Circular includes “forward-looking statements.” All statements contained in this
Offering Circular that are not statements of historical fact constitute “forward-looking statements”.
Some of these statements can be identified by forward-looking terms, such as “anticipate,” “believe,”
“can,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “will” and “would,” or similar words
or the negatives thereof. However, these words are not the exclusive means of identifying
forward-looking statements. All statements regarding our expected financial condition, results of
operations, business plans and prospects are forward-looking statements. These forward-looking
statements include statements as to our business strategies, revenue and profitability, planned projects
and other matters discussed in this Offering Circular regarding matters that are not historical fact.
These forward-looking statements and any other projections contained in this Offering Circular
(whether made by the Group or by any third party) involve known and unknown risks, including those
disclosed under the caption “Risk Factors,” uncertainties and other factors that may cause the actual
results, performance or achievements to be materially different from any future results, performance
or achievements expressed or implied by such forward-looking statements or other projections.
Important factors that could cause our actual results, performance or achievements to differ
materially from those in the forward-looking statements include, among others, the following:
• our business prospects;
• our ability to maintain relationship with, and the actions and developments affecting, our
major customers and suppliers;
• future developments, trends and conditions in the industries and markets in which we
operate;
• general economic, political and business conditions in the markets in which we operate;
• changes to the regulatory environment in the industries and markets in which we operate;
• the ability of third parties to perform in accordance with contractual terms and
specifications;
• our ability to retain senior management and key personnel, and recruit qualified staff;
• our business strategies and plans to achieve these strategies, including our expansion
plans;
• the actions of and developments affecting our competitors;
• our ability to reduce costs and offer competitive prices;
• change or volatility in interest rates, foreign exchange rates, equity prices, trading
volumes, commodity prices and overall market trends;
• capital market developments; and
• other factors beyond our control.
–x–
Additional factors that could cause actual results, performance or achievements to differ
materially include, but are not limited to, those discussed in “Risk Factors” and elsewhere in this
Offering Circular. The Company cautions investors not to place undue reliance on these forward-
looking statements which reflect their management’s view only as at the date of this Offering
Circular. The Company does not have any obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise. In light of these risks,
uncertainties and assumptions, the forward-looking events discussed in this Offering Circular might
not occur.
– xi –
TABLE OF CONTENTS
Page
SUMMARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
THE OFFERING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SUMMARY CONSOLIDATED FINANCIAL DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
EXCHANGE RATE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
MARKET PRICE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
CAPITALISATION AND INDEBTEDNESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
DIVIDENDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
CORPORATE STRUCTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
DESCRIPTION OF THE GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
DIRECTORS AND SENIOR MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
DIRECTORS AND SUBSTANTIAL SHAREHOLDERS’ INTERESTS IN OUR SHARES. . 76
DESCRIPTION OF THE ORDINARY SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
TERMS AND CONDITIONS OF THE BONDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
SUMMARY OF PROVISIONS RELATING TO THE BONDS IN GLOBAL FORM . . . . . . 129
TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
SUBSCRIPTION AND SALE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
– xii –
SUMMARY
This summary does not contain all the information that may be important to you in deciding to
invest in the Bonds. You should read the entire offering circular, including the section entitled “Risk
Factors” and our consolidated financial statements and related notes thereto, before making an
investment decision.
OVERVIEW
Following the core concept of “building up enterprises with Internet thinking and producing
products by pushing everything to the limit”, the Company has unswervingly committed itself to the
goal of high-quality development and worked harder on the three transformation initiatives of
“related diversification, globalization and digitization”. By seeking high-quality development
powered by technological innovation, the Company refreshed its efforts to advance the
transformation and upgrading of digitization, intelligence and green operations. The Company
continued to deepen its traditional strengths while accelerating the cultivation and expansion of
emerging business sectors. Through a comprehensive global market expansion strategy, this has
unlocked new growth opportunities for the Company, enabling it to navigate economic cycles and
achieve robust, sustainable, and high-quality development.
During the six months ended 30 June 2025, the main work carried out by the Company was as
follows:
development of all sectors: the Company accelerated the diversification of its industrial
sectors to seek a pattern of synergistic integration and competitive development where
traditional advantageous industries and emerging industries integrate and thrive together.
The Company further strengthened strategic execution to ensure the effective
implementation of its overall strategy. The traditional advantageous industries have been
improving their competitiveness, laying a solid foundation for development, while the
emerging industries have accelerated to thrive and shape new growth poles.
global markets: The Company has firmly implemented the international development
strategy with Zoomlion’s characteristics, and continued to work on the “end-to-end, digital
and localised” overseas business direct-sale system. Relying on integrated advantages in
corporate culture, operational philosophy, and digital technologies, the Company
accelerates comprehensive localization of all operational elements, including overseas
research and development, manufacturing, supply chains, and sales-service networks to
build enduring competitive advantages in overseas markets and drive sustained, rapid
development of the overseas business.
AI engine: The Company has been comprehensively accelerating the process of digital
transformation to innovate the market operation model with Internet thinking, reshape the
management and business model with the help of digital means, and build a new
development pattern driven by digitalization in all aspects.
–1–
high-quality development of the industry: Holding fast to its “digital, intelligent and
green” development strategy, the Company has accelerated the upgrade of high-end
intelligent manufacturing. Intelligent industrial parks, intelligent plants and intelligent
production lines have been rolled out in succession, while cutting-edge research in
advanced intelligent manufacturing has rapidly converted into commercial applications.
“End-to-end” digital transformation has been deepened across the board, rapidly forging
an industry-leading cluster of intelligent manufacturing. These initiatives have firmly
established the Company as a benchmark for intelligent manufacturing and cemented its
leadership in advantaged intelligent manufacturing sectors and continue to put the industry
on track for high-quality development.
forces through the “digitalisation, intelligentisation and eco-friendliness” technologies:
The Company continued to drive high-quality development through technological
innovation, consistently injecting new momentum into the deep-seated breakthrough of the
global strategy. In the first half of 2025, we launched 141 new products in overseas
markets and had 338 products receive international certifications. As our global product
system continues to improve, the model coverage of the main construction and mining
machinery products in overseas markets has increased by nearly 10%, leading to rapid
growth in our international market share.
strengthened risk control and kept on improving its supply chain, after-sales service and
human resource management level, escorting the high-quality development of the
Company.
For the years ended 31 December 2022, 2023, and 2024, our revenue was RMB41,631 million,
RMB47,075 million and RMB45,478 million, respectively; our gross profit was RMB9,088 million,
RMB12,966 million and RMB12,810 million, respectively; and our profit attributable to equity
shareholders of the Company was RMB2,347 million, RMB3,550 million and RMB3,521 million,
respectively.
For the six months ended 30 June 2024 and 30 June 2025, our revenue was RMB24,535 million
and RMB24,855 million, respectively; our gross profit was RMB6,946 million and RMB6,996
million, respectively; and our profit attributable to equity shareholders of the Company was
RMB2,281 million and RMB2,753 million, respectively.
RECENT DEVELOPMENTS
On 29 August 2025, the board (the “Board”) of directors (the “Director(s)”) of the Company
resolved to recommend an interim dividend of RMB0.2 per share for the six months ended 30 June
general meeting held on 11 December 2025. The interim dividend has been paid on Friday, 9 January
at the close of business on Monday, 22 December 2025 and to holders of A shares whose names
appeared on the Company’s A share register of members at the close of business on Thursday, 8
January 2026.
–2–
On 30 October 2025, pursuant to the new Company Law of the People’s Republic of China (the
“New Company Law”), the Guidelines for the Articles of Association of Listed Companies (the
“Guidelines”) and relevant laws, regulations and normative documents, the Board has determined (i)
that it will dispense with the supervisory board and supervisors, whose functions and powers under
the New Company Law will be assumed by the audit committee of the Board and (ii) to make
corresponding amendments and other housekeeping changes (the “Proposed Amendments”) to the
articles of association of the Company. Please refer to Appendix of the announcement of the
Company dated 30 October 2025 for details of the Proposed Amendments. In view of the Proposed
Amendments, the Company has adopted corresponding changes to the respective terms of reference
of the audit committee, the nomination committee and the remuneration and assessment committee
of the Company. The Proposed Amendments to the Articles have been approved by the shareholders
at our extraordinary general meeting held on 11 December 2025.
On 30 October 2025, the Board announced the unaudited results of the Company for the nine
months ended 30 September 2025 (the “Third Quarterly Report of 2025”). For the nine months
ended 30 September 2025, the Company recorded a slight decline in its domestic revenue but its
overseas revenue experienced a significant increase. The financial data contained in the Third
Quarterly Report of 2025 has been prepared in accordance with China Accounting Standards for
Business Enterprises and is unaudited. Please refer to the announcement of the Company dated 30
October 2025 for details.
On 8 December 2025, the Board announced that the acquisition of 81% in aggregate of the
registered capital of Zoomlion Finance and Leasing (Beijing) Co., Ltd.* (中聯重科融資租賃(北京)有
限公司) (the “Target”) has been approved by the local financial supervision and administration
bureau in Beijing, the PRC and the industrial and commercial registration of the change in ownership
of the Target with the relevant PRC administration of market regulation was completed on 5
December 2025. Following said completion, the Target has become a wholly-owned subsidiary of the
Company, and its results will be consolidated into the Company’s financial statements.
GENERAL INFORMATION
The Company is a joint stock limited company established in accordance with the Company
Law and other relevant laws, administrative regulations and rules of the PRC. The A Shares of the
Issuer were listed on the Shenzhen Stock Exchange on 12 October 2000 and the H Shares of the Issuer
were listed on the Hong Kong Stock Exchange on 23 December 2010. Our registered address and
place of business are located at No. 361 Yinpen South Road, Changsha, Hunan Province, PRC. Our
website is http://www.zoomlion.com/. Information contained on our website does not constitute part
of this Offering Circular.
–3–
THE OFFERING
The following is a brief summary of the terms of this offering and is qualified in its entirety by
the remainder of this Offering Circular. The terms and conditions of the Bonds prevail to the extent
of any inconsistency set forth in this section. This summary is not intended to be complete and does
not contain all of the information that is important to an investor. Words and expressions defined in
“Terms and Conditions of the Bonds” and “Summary of Provisions Relating to the Bonds in Global
Form” shall have the same meanings in this summary. For a more complete description of the terms
of the Bonds, see “Terms and Conditions of the Bonds” in this Offering Circular.
Issuer Zoomlion Heavy Industry Science and Technology Co., Ltd.
Bonds RMB6,000,000,000 in aggregate principal amount of 0.70 per
cent. U.S. dollar settled convertible bonds due 2031 convertible
at the option of the holder thereof into fully paid H Shares of the
Issuer.
A Shares ordinary domestic shares of RMB1.00 each issued by the Issuer
which are traded in Renminbi on the Shenzhen Stock Exchange
(the “A Shares”, together with the H Shares and any fully-paid
and non-assessable shares of any class or classes of the ordinary
shares of the Issuer authorised after the date of the issue of the
Bonds which have no preference in respect of dividends or of
amounts payable in the event of any voluntary or involuntary
liquidation or dissolution of the Issuer, the “Ordinary
Shares”).
H Shares ordinary foreign shares with a par value of RMB1.00 each
issued by the Issuer which are listed on the Hong Kong Stock
Exchange (the “H Shares”).
Issue Price 100.0 per cent. of the principal amount of the Bonds.
Form and Denomination The Bonds will be issued in registered form in the specified
of the Bonds denomination of RMB2,000,000 each and integral multiples of
RMB1,000,000 in excess thereof.
Interest The Bonds bear interest on their outstanding principal amount
from and including the Issue Date at the rate of 0.70 per cent.
per annum, payable semi-annually in arrear in equal instalments
on 5 February and 5 August in each year (each an “Interest
Payment Date”) at its U.S. Dollar Equivalent. See “Terms and
Conditions of the Bonds – Interest”.
Issue Date 5 February 2026.
Maturity Date 5 February 2031.
–4–
Negative Pledge The Bonds will contain a negative pledge provision as further
described in Condition 3.1 (Negative Pledge) of the Terms and
Conditions.
Status of the Bonds The Bonds will constitute direct, unsubordinated, unconditional
and (subject to the provisions of Condition 3.1 (Negative
Pledge) of the Terms and Conditions) unsecured obligations of
the Issuer and shall at all times rank pari passu and without any
preference or priority among themselves. The payment
obligations of the Issuer under the Bonds shall, save for such
exceptions as may be provided by mandatory provisions of
applicable law and subject to Condition 3.1 (Negative Pledge)
of the Terms and Conditions, at all times rank at least equally
with all of its other present and future direct, unsubordinated,
unconditional and unsecured obligations. See “Terms and
Conditions of the Bonds – Status, Form, Denomination and
Title – Status.”
Taxation All payments made by or on behalf of the Issuer in respect of
the Bonds will be made free from any set-off, counterclaim,
restriction or condition and will be made without deduction or
withholding for or on account of any present or future taxes,
duties, assessments or governmental charges of whatever nature
imposed, levied, collected, withheld or assessed by or on behalf
of the PRC or Hong Kong or, in each case, any authority thereof
or therein having power to tax, unless deduction or withholding
of such taxes, duties, assessments or governmental charges is
compelled by law. Where such withholding or deduction is
made by the Issuer by or within the PRC up to and including the
aggregate rate applicable on 28 January 2026, the Issuer will
increase the amounts paid by it to the extent required, so that
the net amount received by Bondholders equals the amounts
which would otherwise have been receivable by them had no
such withholding or deduction been required, except in the
circumstances specified in Condition 8 (Taxation) of the Terms
and Conditions. See “Terms and Conditions of the Bonds –
Taxation.”
–5–
Conversion Right and Period Subject as otherwise provided in the Terms and Conditions,
Bondholders have the right to convert their Bonds into H Shares
credited as fully paid at any time during the Conversion Period
referred to below (the “Conversion Right”).
Subject to and upon compliance with the Terms and Conditions
(including without limitation Condition 5.1.4 (Revival and/or
survival after Default) of the Terms and Conditions), the
Conversion Right attaching to any Bond may be exercised, at
the option of the holder thereof, at any time on or after the 41st
day after the Issue Date up to the close of business (at the place
where the certificate evidencing such Bond is deposited for
conversion) on the date falling seven working days prior to the
Maturity Date (both days inclusive), or if such Bond shall have
been called for redemption by the Issuer before the Maturity
Date, then up to and including the close of business (at the place
aforesaid) on a date no later than seven working days (at the
place aforesaid) prior to the date fixed for redemption thereof;
provided that no Conversion Right may be exercised in respect
of a Bond where the holder shall have exercised its right to
require the Issuer to redeem or repurchase such Bond pursuant
to Condition 7.4 (Redemption at the Option of the Bondholders)
of the Terms and Conditions or Condition 7.5 (Redemption for
Relevant Events) of the Terms and Conditions or during a
Restricted Conversion Period (as defined in the Terms and
Conditions) (both dates inclusive); provided further that the
Conversion Right is exercised subject to any applicable fiscal or
other laws or regulations or as hereafter provided in the Terms
and Conditions (the “Conversion Period”).
See “Terms and Conditions of the Bonds – Conversion –
Conversion Right.”
Conversion Price The price at which H Shares will be issued upon conversion (the
“Conversion Price”) will initially be HK$10.02 per H Share,
but will be subject to adjustment in the manner provided in
Condition 5.3 (Adjustments to Conversion Price) of the Terms
and Conditions or Condition 5.6 (Adjustment upon Change of
Control) of the Terms and Conditions, as applicable.
–6–
Final Redemption Unless previously redeemed, converted or purchased and
cancelled as provided in the Terms and Conditions, the Issuer
will redeem each Bond at the U.S. Dollar Equivalent (as defined
in the Terms and Conditions) of 105.73 per cent. of its principal
amount, together with the U.S. Dollar Equivalent of accrued
and unpaid interest thereon on the Maturity Date. The Issuer
may not redeem the Bonds at its option prior to that date except
as provided in Condition 7.2 (Redemption at the Option of the
Issuer) of the Terms and Conditions or Condition 7.3
(Redemption for Taxation Reasons) of the Terms and Conditions
(but without prejudice to Condition 9 (Events of Default) of the
Terms and Conditions).
See “Terms and Conditions of the Bonds – Redemption,
Purchase and Cancellation – Maturity.”
Redemption for Taxation At any time the Issuer may, having given not less than 30 nor
Reasons more than 60 days’ notice to the Trustee, the Principal Agent
and the Bondholders (which notice shall be irrevocable) redeem
all but not some only of the Bonds at the U.S. Dollar Equivalent
of the Early Redemption Amount, together with the U.S. Dollar
Equivalent of interest accrued and unpaid thereon to but
excluding the date fixed for redemption, if the Issuer satisfies
the Trustee immediately prior to the giving of such notice that
(i) the Issuer has or will become obliged to pay Additional Tax
Amounts as provided or referred to in Condition 8 (Taxation) of
the Terms and Conditions as a result of any change in, or
amendment to, the laws or regulations of the PRC or Hong
Kong or, in each case, any political subdivision or any authority
thereof or therein having power to tax, or any change in the
general application or official interpretation of such laws or
regulations, which change or amendment becomes effective on
or after 28 January 2026, and (ii) such obligation cannot be
avoided by the Issuer taking reasonable measures available to
it, provided that no such notice of redemption shall be given
earlier than 90 days prior to the earliest date on which the Issuer
would be obliged to pay such Additional Tax Amounts were a
payment in respect of the Bonds then due. If the Issuer exercises
its tax redemption right, each Bondholder shall have the right to
elect that its Bonds shall not be redeemed. Upon a Bondholder
electing not to have its Bonds redeemed in such circumstances,
then subject as provided in the Terms and Conditions any
payments due after the relevant date of redemption shall be
made subject to any deduction or withholding of any taxation
required to be deducted or withheld. See “Terms and Conditions
of the Bonds – Redemption, Purchase and Cancellation –
Redemption for Taxation Reasons.”
–7–
Redemption at the Option The Issuer may, having given not less than 30 but not more than
of the Issuer 60 days’ notice (an “Optional Redemption Notice”) to the
Bondholders, the Trustee and the Principal Agent (which notice
will be irrevocable), redeem all but not some only of the Bonds
at the U.S. Dollar Equivalent of the Early Redemption Amount,
together with the U.S. Dollar Equivalent of accrued and unpaid
interest thereon to but excluding the date fixed for redemption
(i) at any time after 19 February 2028 but prior to the Maturity
Date, subject to certain conditions as specified in the Terms and
Conditions; or (ii) if at any time the aggregate principal amount
of the Bonds outstanding, is less than 10 per cent. of the
aggregate principal amount originally issued (including any
Bonds issued pursuant to Condition 15 (Further Issues) of the
Terms and Conditions). See “Terms and Conditions of the
Bonds – Redemption, Purchase and Cancellation – Redemption
at the Option of the Issuer.”
Redemption arising from Following the occurrence of a Relevant Event, the holder of
Relevant Event(s) each Bond will have the right at such holder’s option, to require
the Issuer to redeem all or some only of such holder’s Bonds on
the Relevant Event Put Date at the U.S. Dollar Equivalent of the
Early Redemption Amount together with the U.S. Dollar
Equivalent of interest accrued and unpaid to but excluding the
Relevant Event Put Date.
“Relevant Event” means the occurrence of either (a) a Change
of Control (as defined in the Terms and Conditions); (b) the H
Shares ceasing to be listed or admitted to trading on the Hong
Kong Stock Exchange or the alternative stock exchange (as
defined in the Terms and Conditions) (as the case may be); or
(c) the suspension in trading of the H Shares for a period of 30
consecutive H Share Stock Exchange Business Days (as defined
in the Terms and Conditions). See “Terms and Conditions of the
Bonds – Redemption, Purchase and Cancellation – Redemption
for Relevant Events.”
Redemption at the option The holder of each Bond will have the right at such holder’s
of the Bondholders option, to require the Issuer to redeem all or some only of that
holder’s Bonds on the Put Option Date (as defined in the Terms
and Conditions) at the U.S. Dollar Equivalent of 103.38 per
cent. of their principal amount together with the U.S. Dollar
Equivalent of interest accrued and unpaid to but excluding the
Put Option Date. See “Terms and Conditions of the Bonds –
Redemption, Purchase and Cancellation – Redemption at the
Option of the Bondholders.”
–8–
Lock up The Issuer has undertaken in the Subscription Agreement (as
defined below) that neither the Issuer nor any person acting on
its behalf will: (i) issue, offer, sell, pledge, encumber, contract
to sell or otherwise dispose of or grant options, issue warrants
or offer rights entitling persons to subscribe or purchase any
interest in any Shares or securities of the same class as the
Bonds or the Shares or any securities convertible into,
exchangeable for or which carry rights to subscribe or purchase
the Bonds, the Shares or securities of the same class as the
Bonds, the Shares or other instruments representing interests in
the Bonds, the Shares or other securities of the same class as
them; (ii) enter into any swap or other agreement that transfers,
in whole or in part, any of the economic consequences of the
ownership of the Shares; (iii) enter into any transaction with the
same economic effect as, or which is designed to, or which may
be expected to result in, or agree to do, any of the foregoing,
whether any such transaction of the kind described in (i), (ii) or
(iii) is to be settled by delivery of Shares or other securities, in
cash or otherwise; or (iv) announce or otherwise make public an
intention to do any of the foregoing, in any such case without
the prior written consent of the Joint Lead Managers between
the date of the Subscription Agreement and the date which is 90
days after the Issue Date (both dates inclusive), except for (a)
the Bonds and the H Shares issued on conversion of the Bonds;
or (b) any Shares or other securities (including rights or
options) which are issued, offered, exercised, allotted,
appropriated, modified or granted to, or for the benefit of
employees (including directors) of the Issuer or any of its
subsidiaries pursuant to any employee share scheme or plan
existing as at the date of the Subscription Agreement. For the
purposes of (i)-(iv), “Shares” means (a) H Shares; (b) A Shares;
and (c) any other fully-paid and non-assessable shares of any
class or classes of the ordinary shares of the Issuer authorised
after the date of the Subscription Agreement which have no
preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation or dissolution
of the Issuer.
Events of Default The Bonds will contain events of default as further described in
“Terms and Conditions – Events of Default”.
–9–
Further Issues The Issuer may from time to time, without the consent of the
Bondholders, create and issue further bonds having the same
terms and conditions as the Bonds in all respects (or in all
respects except for the issue date and the timing for complying
with the requirements set out in these Conditions in relation to
the Initial NDRC Post-Issuance Filing (as defined in the Terms
and Conditions) and the CSRC Post-Issuance Filings (as
defined in the Terms and Conditions)) and so that such further
issue shall be consolidated and form a single series with the
Bonds. Such further bonds shall be constituted by a deed
supplemental to the Trust Deed. See “Terms and Conditions –
Further Issues”.
Clearing The Bonds will initially be evidenced by a Global Certificate in
registered form, which will be registered in the name of a
nominee of, and shall be deposited on or about the Issue Date
with a common depositary on behalf of, Euroclear and
Clearstream. Beneficial interests in the Global Certificate will
be shown on, and transfer thereof will be effected only through,
records maintained by Euroclear and Clearstream. Except as
described in this Offering Circular, individual certificates for
Bonds will not be issued in exchange for interests in the Global
Certificate.
Governing Law English law.
Jurisdiction: Exclusive jurisdiction of Hong Kong courts.
Legal Entity Identifier 529900QZ3EMAU0QKFK85
ISIN XS3279617560
Common Code 327961756
Listing and Trading of the Application will be made to the Hong Kong Stock Exchange for
Bonds the listing of, and permission to deal in, the Bonds by way of
debt issues to Professional Investors only and the listing of, and
permission to deal in, the Bonds is expected to become effective
on 6 February 2026.
Listing of H Shares The H Shares are listed on the Hong Kong Stock Exchange.
Application will be made to the Hong Kong Stock Exchange for
the listing of the H Shares issuable upon conversion of the
Bonds.
Trustee The Hongkong and Shanghai Banking Corporation Limited
– 10 –
Registrar The Hongkong and Shanghai Banking Corporation Limited
Principal Paying Agent, The Hongkong and Shanghai Banking Corporation Limited
Principal Conversion Agent
and Transfer Agent
Rating of the Bonds The Bonds are not, and are not expected to be, rated by any
rating agency.
Selling Restrictions The Bonds have not been and will not be registered under the
Securities Act or under any state securities laws of the United
States and will be subject to customary restrictions on transfer
and resale. Subject to certain exceptions, the Bonds may not be
offered or sold within the United States. The Bonds are being
offered only outside the United States in reliance on Regulation
S of the Securities Act. See “Subscription and Sale”.
Use of Proceeds See “Use of Proceeds” for more information.
Risk Factors For a discussion of certain factors that should be considered in
evaluating an investment in the Bonds, see “Risk Factors.”
– 11 –
SUMMARY CONSOLIDATED FINANCIAL DATA
The Company’s consolidated statements of comprehensive income and consolidated statements
of financial position as at and for the years ended 31 December 2022, 2023 and 2024 have been
extracted from the consolidated financial statements of the Company for the years ended 31
December 2023 and 2024 contained in the 2023 Annual Report and the 2024 Annual Report,
respectively, which have been audited by KPMG, the independent auditors of the Company, and
incorporated by reference in this Offering Circular. Such consolidated financial statements are
prepared in accordance with the IFRS Accounting Standards.
The Company’s consolidated statements of comprehensive income for the six months ended 30
June 2024 and 2025 and consolidated statements of financial position as at 30 June 2025 have been
extracted from the consolidated interim financial report of the Company from the 2025 Interim
Report, which have not been audited but reviewed by KPMG, the independent auditors of the
Company, and incorporated by reference in this Offering Circular. Such consolidated interim
financial report is prepared in accordance with the IAS 34 “Interim Financial Reporting” issued by
the IASB.
Potential investors must exercise caution when using such data to evaluate our financial
condition and results of operations. Our audited consolidated financial statements have been prepared
and presented in accordance with the IFRS Accounting Standards, which differ in certain respects
from GAAP in other jurisdictions. The summary financial data below should be read in conjunction
with, and is qualified in its entirety by reference to, our audited consolidated financial statements and
the accompanying notes incorporated by reference in this Offering Circular.
SUMMARY CONSOLIDATED STATEMENT OF PROFIT OR LOSS
For the six months
For the year ended 31 December ended 30 June
(Audited) (Unaudited)
(RMB millions)
Revenue . . . . . . . . . . . . . . . . . . . . 41,631 47,075 45,478 24,535 24,855
Cost of sales and services . . . . . . . . . . (32,543) (34,109) (32,668) (17,589) (17,859)
Gross Profit . . . . . . . . . . . . . . . . . . 9,088 12,966 12,810 6,946 6,996
Other net income . . . . . . . . . . . . . . . 982 935 1,162 930 904
Sales and marketing expenses . . . . . . . (2,635) (3,557) (3,721) (1,902) (2,098)
General and administrative expenses . . . (2,400) (2,274) (2,585) (1,340) (1,284)
Expected credit losses . . . . . . . . . . . . (446) (794) (570) (377) (273)
Research and development expenses . . . (2,507) (3,441) (2,769) (1,306) (1,412)
Profit from operations . . . . . . . . . . . 2,082 3,835 4,327 2,951 2,833
Net finance income/(costs) . . . . . . . . . 300 284 (28) (119) 392
Share of profits less losses of associates . 130 153 84 25 59
Profit before taxation . . . . . . . . . . . . 2,512 4,272 4,383 2,857 3,284
Income tax . . . . . . . . . . . . . . . . . . . (86) (457) (374) (322) (396)
Profit for the year/period . . . . . . . . . 2,426 3,815 4,009 2,535 2,888
Profit attributable to:
Equity shareholders of the Company . . . 2,347 3,550 3,521 2,281 2,753
Non-controlling interests. . . . . . . . . . . 79 265 488 254 135
Earnings per share (RMB)
Basic . . . . . . . . . . . . . . . . . . . . . . 0.28 0.43 0.41 0.28 0.32
Diluted . . . . . . . . . . . . . . . . . . . . . 0.28 0.43 0.41 0.27 0.32
– 12 –
SUMMARY CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at
As at 31 December 30 June
(Audited) (Unaudited)
(RMB millions)
Non-current assets
Property, plant and equipment . . . . . . . . . . . . . 13,903 17,364 20,577 21,688
Right-of-use assets . . . . . . . . . . . . . . . . . . . . 3,995 3,621 3,625 3,054
Investment properties. . . . . . . . . . . . . . . . . . . 161 90 56 56
Intangible assets . . . . . . . . . . . . . . . . . . . . . . 1,926 1,988 2,019 2,235
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . 2,562 2,641 2,580 2,739
Interests in associates . . . . . . . . . . . . . . . . . . 4,476 4,497 4,484 4,451
Other financial assets. . . . . . . . . . . . . . . . . . . 2,263 2,669 2,017 1,809
Trade receivables and contract assets . . . . . . . . . 11,829 10,882 6,828 6,261
Receivables under finance lease . . . . . . . . . . . . 6,456 6,120 3,835 3,216
Loans and advances . . . . . . . . . . . . . . . . . . . 277 568 469 497
Pledged bank deposits . . . . . . . . . . . . . . . . . . 160 76 107 95
Deferred tax assets . . . . . . . . . . . . . . . . . . . . 1,907 2,303 2,637 2,592
Total non-current assets . . . . . . . . . . . . . . . . 49,915 52,819 49,234 48,693
Current assets
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . 14,203 22,504 22,564 23,391
Other current assets. . . . . . . . . . . . . . . . . . . . 1,040 708 565 439
Financial assets at fair value through
profit or loss (“FVPL”) . . . . . . . . . . . . . . . . 4,011 1,767 1,622 1,571
Trade and other receivables and contract assets. . . 33,962 32,033 32,400 38,879
Receivables under finance lease . . . . . . . . . . . . 4,717 4,843 3,328 2,989
Loans and advances . . . . . . . . . . . . . . . . . . . 170 280 279 311
Pledged bank deposits . . . . . . . . . . . . . . . . . . 1,708 2,265 1,565 1,652
Cash and cash equivalents. . . . . . . . . . . . . . . . 13,791 13,606 12,155 11,271
Total current assets . . . . . . . . . . . . . . . . . . . 73,602 78,006 74,478 80,503
Total assets . . . . . . . . . . . . . . . . . . . . . . . . 123,517 130,825 123,712 129,196
Current liabilities
Loans and borrowings . . . . . . . . . . . . . . . . . . 11,018 7,377 10,837 8,734
Financial liabilities at FVPL . . . . . . . . . . . . . . – 9 22 9
Trade and other payables . . . . . . . . . . . . . . . . 35,259 40,513 29,763 33,807
Contract liabilities . . . . . . . . . . . . . . . . . . . . 1,892 1,817 1,901 1,973
Lease liabilities . . . . . . . . . . . . . . . . . . . . . . 117 126 154 143
Income tax payable . . . . . . . . . . . . . . . . . . . . 107 154 310 346
Total current liabilities . . . . . . . . . . . . . . . . . 48,393 49,996 42,987 45,012
Net current assets . . . . . . . . . . . . . . . . . . . . 25,209 28,010 31,491 35,491
Total assets less current liabilities . . . . . . . . . . 75,124 80,829 80,725 84,184
Non-current liabilities
Loans and borrowings . . . . . . . . . . . . . . . . . . 10,962 14,944 15,412 20,355
Lease liabilities . . . . . . . . . . . . . . . . . . . . . . 355 308 362 282
Deferred tax liabilities . . . . . . . . . . . . . . . . . . 842 807 696 777
Other non-current liabilities . . . . . . . . . . . . . . . 6,026 5,639 4,453 3,430
Total non-current liabilities . . . . . . . . . . . . . . 18,185 21,698 20,923 24,844
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . 56,939 59,131 59,802 59,340
– 13 –
As at
As at 31 December 30 June
(Audited) (Unaudited)
(RMB millions)
CAPITAL AND RESERVES
Share capital . . . . . . . . . . . . . . . . . . . . . . . . 8,678 8,678 8,678 8,649
Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . 46,027 47,693 48,423 48,458
Total equity attributable to equity
shareholders of the Company . . . . . . . . . . . 54,705 56,371 57,101 57,107
Non-controlling interests . . . . . . . . . . . . . . . . 2,234 2,760 2,701 2,233
TOTAL EQUITY. . . . . . . . . . . . . . . . . . . . . 56,939 59,131 59,802 59,340
– 14 –
RISK FACTORS
Prospective investors should carefully consider the risks factors set forth below, as well as the
other information contained elsewhere in this Offering Circular. The risks described below are not
the only ones that may affect the Company or the Bonds. Additional risks and uncertainties that we
are not aware of or that we currently believe are immaterial may also adversely affect our financial
condition or results of operations. If any of the possible events described below occur, our financial
condition or results of operations could be materially and adversely affected. In such case, we may
not be able to satisfy our obligations under the Bonds, and investors could lose all or part of their
investment.
RISKS RELATING TO OUR COMPANY
We may be unable to effectively manage the supply and the quality of our raw materials, parts and
components.
Our manufacturing outputs are highly dependent upon reliable and sufficient sources of
high-quality raw materials, parts and components. Although we have acquired domestic parts and
components manufacturers to strengthen our supply chain for hydraulic pumps, cylinders and valves,
our current in-house manufacturing capacity does not meet our production demands. We therefore
have had to source from other third-party suppliers in China, even though such suppliers may not
always be able to produce the components that meet our quality standards, or from overseas
third-party suppliers, whose products are generally more expensive. We procure our raw materials
and certain types of parts and components, including hydraulic pumps, valves and cylinders and
chassis, from both domestic and overseas suppliers.
Although we generally have multiple suppliers for most of our raw materials, parts and
components, certain raw materials, parts and components such as imported high-strength steel and
branded chassis, can only be sourced from a limited number of suppliers. Furthermore, certain parts
and components are manufactured based on each individual product’s specifications and cannot be
used in other products. As a result, our ability to source certain parts and components from alternative
suppliers are further limited. Even if alternative supply sources can be found, their supply may not
be cost-effective and of the same quality. For example, there are a relatively small number of
suppliers in China who are able to provide high quality hydraulic pumps, cylinders and valves, all of
which are key components for many of our products, including our concrete machinery and our crane
machinery. As a result, we are subject to supply shortages for such components from time to time.
A shortage in any of our key raw materials, parts and components may increase our manufacturing
lead time for our products and result in significant strain on our manufacturing outputs and may result
in the decrease of the product quality, which could harm our reputation, reduce our sales or gross
margins, and cause us to lose market share. Any of the above could materially and adversely affect
our business, financial condition and results of operations.
– 15 –
Certain of our products are sold through third-party dealers and the failure to maintain
relationships with our existing dealers, attract additional dealers or effectively manage our dealers
may materially and adversely affect our business.
We typically enter into one-year agreements with our domestic dealers and one- to two-year
agreements with our international dealers. As our existing agreements expire, we may be unable to
renew these agreements with our dealers on favorable terms or at all. Competition for dealers is
intense, as we must compete for dealers in China and internationally with other leading construction
machinery manufacturers. Such competitors may benefit from higher visibility, greater brand
recognition and financial resources and a broader product offering than we do, providing them with
a competitive advantage in securing dealers. Our competitors may also enter into long-term and/or
exclusive agreements that effectively prevent their dealers from selling our products. Consequently,
engaging new dealers, maintaining relationships with existing dealers and replacing dealers can be
difficult, disruptive to our operations and time-consuming. Any disruption to our distribution
network, including a failure on our part to renew our existing agreements with our preferred dealers
or to attract new dealers, could negatively affect our ability to effectively sell our products, provide
adequate and timely aftersales services to our customers, which would materially and adversely affect
our business, financial condition, results of operations and prospects.
We have limited ability to manage and control the activities of those of our dealers who are
independent from us. Such dealers could take certain actions that potentially have a material and
adverse effect on our brands, reputation, business and prospects, such as selling products that
compete with our products, focusing only on the sales of those products that provide them with higher
margins or commissions thus undermining our efforts to maintain a well-balanced portfolio of our
products, selling our products outside their designated territory, failing to adequately promote our
products and to provide proper training and after-sales services to our customers or conducting their
business in violation of the relevant laws or regulations in their respective jurisdictions. Our
reputation, business or prospects could be adversely affected as a result of any improper or illegal
actions taken by our dealers.
We provide our customers with various payment options, including credit sales, installment
payments, financial guarantees and finance lease services, which expose us to additional risks and
uncertainties.
The availability of various payment options are important factors affecting demand for our
products. Over the years, we have provided certain customers with installment payment options,
credit sales or provide financial guarantees for bank loans of such customers that are used to purchase
our products.
These payment options, however, may expose us to additional risks and uncertainties, such as
credit risk resulting from default by customers on the payments under various payment options,
market risk resulting from the fluctuation in interest rates, and liquidity risk resulting from our
reliance on cash flow from factoring of receivables under finance leases, borrowing and loans and
securities offering, as well as a potential inability to obtain suitable and stable capital sources because
of any potential significant negative cash flow from operating activities. Although we have floating
interest rate arrangement in our finance lease contracts in order to minimize our exposure to
fluctuation of market interest rates, there can be no assurance that our exposure to fluctuation of
interest rates can be fully covered.
– 16 –
The risks and uncertainties for various payment options, including credit sales, installment
payments, financial guarantees and finance lease services could become more acute in times of an
economic slowdown or recession and may result in increased delinquencies, foreclosures and losses.
Litigation and servicing costs may also increase as a result. In the event of such delinquencies or
foreclosures, equipment for which the customer defaults on relevant payments is typically
repossessed. However, repossessed equipment may be in poor condition, with a value below that of
the defaulted debts. If we are not able to manage the credit risks, market risks, liquidity risks and
other risks associated with finance lease services and/or other payment options, our financial
condition, results of operation and cash flow may be materially and adversely affected.
In addition, we currently hold licenses and/or permits to provide finance lease services in
various jurisdictions. The withdrawal or suspension of such licenses, permits and approvals, or the
imposition of any penalties, as a result of infringement of any regulatory requirements may have an
adverse impact on our Group’s business and results of operations. Moreover, in markets in which our
Group operates, such as the PRC, licensing requirements are subject to changes. There is no
assurance that we will be able to continue to satisfy the requirements for, or otherwise obtain, such
licenses, permits or approvals for current and future projects. The failure to obtain, maintain or renew
our licenses, permits and approvals from the government in connection with our finance lease
services may impede or hinder our operations and may adversely affect our results of operations and
financial condition.
We face risks associated with our global scale of operations, and if we are unable to effectively
manage these risks, they could impair our ability to maintain our business abroad.
Over the years, we have expanded our scale of operations globally. With manufacturing
facilities and distribution and service network established overseas, we are exposed to a number of
risks, including:
• difficulty in managing multinational operations;
• difficulty with staffing and managing overseas operations, including managing employees
on a global basis and complying with the various labor regulatory requirements of the
different jurisdictions;
• fluctuations in currency exchange rates;
• increased costs associated with maintaining marketing and selling efforts, overseas offices
providing adequate after-sales services and timely delivery of parts and components in
various countries;
• difficulty in maintaining relationships with dealers with strong local presence;
• challenges in providing customer services and support in overseas markets;
• challenges in managing our sales channels and overseas distribution network effectively;
• unexpected transportation delays or interruptions or increases in international
transportation costs;
– 17 –
• difficulties in and costs of exporting products overseas while complying with the different
commercial, legal and regulatory requirements of the overseas markets in which we offer
our products;
• failure to establish appropriate risk management and internal control structures tailored to
overseas operations;
• difficulty in collecting receivables from international customers;
• difficulty in ensuring the compliance of our dealers and customers with the sanctions
imposed by OFAC on various foreign states, organizations and individuals;
• inability to obtain, maintain or enforce intellectual property rights;
• inability to effectively enforce contractual or legal rights or intellectual property rights in
certain jurisdictions under which we operate;
• changes in a specific country or region’s political or economic conditions or policies;
• unanticipated changes in prevailing economic conditions and regulatory requirements; and
• governmental policies favoring domestic companies in certain foreign markets or trade
barriers including export requirements, tariffs, taxes and other restrictions and charges.
These government policies or trade barriers could increase the prices of our products and
make us less competitive in such countries.
If we are unable to effectively manage these risks, our ability to maintain our business abroad
will be impaired, which could have a material and adverse effect on our business, financial condition,
results of operations and prospects.
Our success depends in part on our ability to successfully identify and make strategic acquisitions,
integrate them into our existing business operations and to establish and maintain strategic
relationships. The failure to do so could have a material and adverse effect on our current and
future business operations.
Over the years, we have made strategic acquisitions and we expect to make such strategic
acquisitions in the future. In addition to engaging in strategic acquisitions, we may also make
investments in joint ventures and have established and maintained strategic relationships with third
parties. Through such activities, we gained expertise in the performance of certain manufacturing and
logistical activities, obtained access to raw materials, parts and components, expanded our existing
manufacturing capacity, supported our marketing and sales activities, expanded our product portfolio
or services, or entered into new markets. We cannot assure you, however, that we will be able to
successfully make such strategic acquisitions and investments or maintain strategic relationships with
third parties that will prove to be crucial to our business. Any failure in this regard could have a
material and adverse effect on our market penetration, turnover growth and profitability. In addition,
strategic acquisitions, investments and establishing and maintaining relationships with third parties
could subject us to a number of risks, including disputes and disagreements with joint venture or
strategic relationship partners, as well as defaults and breaches under the relevant joint venture or
shareholders’ agreements.
– 18 –
In addition, the integration of the operations and corporate culture of any acquired business
requires significant efforts, including the integration of accounting and internal control systems,
consolidation of information technology systems, alignment of manufacturing, sales and distribution
networks, and the reallocation of research and development and financial resources. Our efforts to
integrate the operations of any acquired business with our existing operations and our ability to
execute integration plans for an acquired business may be affected and in some cases even limited
by applicable laws and regulations. Successful integration of acquired businesses depends in part on
our ability to manage the combined operations, to realize opportunities for turnover growth presented
by broader product offerings and expanded geographic coverage and to eliminate redundant and
excessive costs. Successful integration also requires us to manage the cultural and language related
differences between various geographic locations and diverse organizational cultures. Furthermore,
the integration of acquired businesses into our operations involves a number of other risks, including,
but not limited to, demands on management and diversion of their attention; unforeseen or hidden
liabilities, including exposure to unforeseen lawsuits or disputes associated with newly acquired
companies or businesses; management of employee relations; and increases in regulatory compliance
costs relating to the acquired businesses. If our integration efforts for any acquired businesses are not
successful, we may not be able to realize the expected business and operational synergies, efficiencies
and other benefits and our competitive position could suffer as a result. In addition, if we do not
realize the expected synergies from our acquisitions or, if for any reason, our acquisitions do not
perform as expected, we may incur unexpected impairment charges, which would have a material and
adverse effect on our financial condition and results of operations.
Our business and long-term competitiveness rely on ongoing investment in research and
development, access to advanced technologies and the development of innovation capabilities.
The construction machinery market is characterized by evolving technologies and the
introduction of upgraded products. Additionally, it is shaped by the continually changing needs of end
customers. We are actively promoting the intelligent capabilities of our products. To enhance our core
competitiveness, we have relied on research and development initiatives and external strategic
partnerships to develop core technologies and produce key parts.
Our competitors may develop construction machinery that is equipped with advanced
technologies to operate more efficiently and cost effectively which, if successful, could reduce the
competitiveness of our products. Our future performance and reputation depend on our ability to
continue developing new products, which in turn depends largely on our research and development
capabilities. We have made and plan to make investments in our research and development of new
technologies and new products. However, there is no assurance that such R&D efforts may yield the
anticipated level of economic benefits. The cost of any unexpected results of our research and
development may not be recovered and may have a negative impact on our financial performance.
Even if our research and development efforts succeed, we might not be able to integrate these newly
developed technologies into products that gain market acceptance, or implement them swiftly enough
to capitalize on market opportunities. Any failure to consistently develop products that align with
evolving customer demand or mainstream industry trends could limit our product competitiveness.
Furthermore, inadequate investment in research and development or delays in project execution
could impede breakthroughs in core technologies and slow down product upgrades, thereby
impacting our business, profitability and long-term development prospects.
– 19 –
Our success depends in part on our ability to enhance our manufacturing capabilities, which is
subject to risks and uncertainties.
Our Group’s continued success over the years is ascribed to our ability to enhance our
manufacturing capabilities, which include expanding our manufacturing capacity, improving our
manufacturing efficiency or modifying our manufacturing lines to meet the varying demands for our
products. If we are unable to do so, we may not be able to achieve the desired level of economies
of scale in our operations, to reduce manufacturing costs to the level that will allow us to compete
effectively or to maintain our pricing and other competitive advantages. Our ability and efforts to
enhance our manufacturing capabilities are subject to significant risks and uncertainties, including:
• our ability to obtain funding for the additional capital expenditures, working capital and
other corporate requirements to be used to enhance our manufacturing capabilities. We
may be unable to obtain such funds in a timely manner or on commercially reasonable
terms or at all;
• unexpected delays and cost overruns resulting from a number of factors, many of which
may be beyond our control. These include increases in the prices of raw materials, parts
and components and utilities, shortages of workers, transportation constraints, disputes
with contractors, engineering firms, construction firms and equipment vendors as well as
equipment malfunctions and breakdowns;
• our ability to obtain the required permits, licenses and approvals from relevant government
authorities;
• availability of the necessary technology or equipment from third parties or our internal
research and development department;
• diversion of management attention and other resources; and
• manufacturing interruptions caused by natural disasters or other unforeseen events.
Our efforts to enhance our manufacturing capabilities may not achieve the expected benefits. We
cannot assure you that the demand for our products will continue to increase, or remain at the current
levels, which is affected by various factors beyond our control, including underlying economic
conditions and market competitiveness. If the demand for our products is weaker than anticipated, we
may experience problems associated with overcapacity and under-utilization of headcount, which
may have an adverse effect on our financial condition, results of operations and business.
Failure to maintain inventory levels in line with the approximate level of demand for our products
could cause us to lose sales or face excess inventory risks and holding costs, either of which could
have a material adverse effect on our business, financial condition and results of operations.
To operate our business successfully and meet our customers’ demands and expectations, we
must maintain a certain level of finished goods inventory for all of our products to ensure immediate
delivery when required. Furthermore, we are required to maintain an appropriate level of inventory
of our raw materials, parts and components for our manufacturing. However, forecasts are inherently
uncertain. If our forecasted demands are lower than actual demands, we may not be able to maintain
– 20 –
an adequate inventory level of our products or manufacture our products in a timely manner, and may
lose sales and market share to our competitors. On the other hand, we may also be exposed to
increased inventory risks due to accumulated excess inventory of our products or raw materials, parts
and components for our products. Excess inventory levels may increase our inventory holding costs,
risk of inventory obsolescence, markdown allowances or write-offs.
Our research and development efforts may not yield the benefits that we expect and we may not
be able to introduce market-leading products and maintain the competitiveness of our product
offerings.
In order to maintain and increase our current competitive position and to continue to grow our
business, we need to continuously introduce market-leading products. The market for our products is
characterized by continuous technological developments and innovation to provide better product
performance and address the increasingly complex market needs. As a result, we have been focusing
on our research and development activities, which require considerable human resources and capital
investments. However, our research and development efforts may not be successful or yield the
anticipated level of economic benefit. In addition, even if our research and development efforts are
successful, we may not be able to apply these newly developed technologies to products that will be
accepted by the market, or we may not be able to apply them in a timely manner to take advantage
of first-mover opportunities in the market. Furthermore, the success of our new products depends on
a number of factors, some of which are beyond our control, such as the prevailing economic
conditions and the inherent uncertainty in market demand forecast. The level of economic benefit that
can be derived from newly developed technologies or products may also be affected by the ability and
promptness of our competitors to replicate these technologies or products or develop more advanced
or cheaper alternatives. If our technologies or products are replicated, replaced or made redundant,
or if the demand for our products is not as anticipated, our turnover associated with such technologies
or products may not offset the costs that we have incurred in developing such new technologies.
Furthermore, if we are unable to anticipate trends in technological or product development and
rapidly develop the new and innovative technologies or products that are required by our customers,
we may not be able to produce sufficiently advanced products at competitive prices, which in turn
may have a material and adverse impact on our business, financial position and results of operations.
We may not be able to protect our patents and non-patented intellectual property rights, or we may
be subject to claims for the infringement of intellectual property rights of others.
Our commercial success depends in part on our ability to obtain and maintain trade secrets,
patents and other intellectual property protection for our products, technologies, designs and
know-how as well as our ability to successfully protect our intellectual properties and to defend
ourselves against third-party challenges. During the financial year ended 31 December 2024, we
applied for 2,054 patents, ranking first in the industry in terms of patent strength of Chinese
enterprises for consecutive years, and the number of invention patents cited more than 10 times
ranked first in the industry. By the end of 2024, the Company had applied for a total of 574 PCT
international patents, and its technical network had covered 28 countries and regions, demonstrating
the Company’s technological influence around the world. On the other hand, the existence of any
particular intellectual property right may not necessarily protect us from competition, as it may be
challenged, invalidated or held to be unenforceable. Competitors may successfully challenge our
patents, produce similar products that do not infringe our patents or produce products in countries
that do not recognize our patents. Our patent priority in the PRC, European Union or other foreign
– 21 –
countries may be defeated by third-party patents issued on a later date but applied for earlier than
ours. Additionally, the existence of a patent does not provide assurance that the manufacturing, sale
or use of our products does not infringe upon others’ patent rights. Third parties may also have
blocking patents that might be used to prevent us from marketing our own patented products or
utilizing our patented technologies or processes. As it may take years for patent applications to be
approved, there may be pending applications, known or unknown to us, that may later result in issued
patents upon which we may infringe. Therefore, we may initiate lawsuits in order to defend our
ownership or proprietary design of our products and trade secrets, or we may be subject to litigation
brought by third parties based on claims that we have infringed upon their intellectual property rights
or that we have misappropriated the trade secrets of others, either of which scenarios will be
time-consuming and costly to defend. We cannot assure you that we can achieve a favorable outcome
in any such litigation. If we are unable to protect our patents, trademarks and other intellectual
property rights or to successfully defend ourselves from infringement claims, our reputation,
financial condition and results of operations may be materially and adversely affected.
Fluctuations in foreign currency exchange rates could adversely affect our business.
Our sales, costs of sales and services, expenses and our borrowings and loans are currently
denominated primarily in Renminbi, Euros, U.S. dollars or Japanese Yen, while our financial
statements are reported in Renminbi. As a result, fluctuations in exchange rates, particularly among
the Renminbi, Euros, U.S. dollars, or the Japanese Yen could, affect our profitability and result in
foreign currency exchange losses of our foreign currency denominated assets and liabilities. We
cannot accurately predict the impact of exchange rate fluctuations on our results of operations and
may incur net foreign currency losses that may have a material and adverse effect on our financial
condition and results of operations.
In addition, an appreciation in the value of the Renminbi against foreign currencies could
increase the prices of certain of our products, thereby making them less appealing to our overseas
customers, which could adversely affect our strategy to further expand the sales of our Zoomlion
product lines in the overseas markets. On the other hand, depreciation in the value of the Renminbi
against foreign currencies could result in an increase in the costs of certain raw materials, parts and
components that are primarily sourced from overseas suppliers, such as branded chassis, which could
in turn adversely affect our profit margin for certain products.
We are subject to product liability exposure which could harm our reputation and materially and
adversely affect our business, financial condition and results of operations.
Our products can expose us to potential product liability claims if they fail to perform as
expected, or are proven to be defective, or if their use causes, results in, or is alleged to have caused
or resulted in personal injuries, project delays or damages or other adverse effects. Any product
liability claim, whether relating to personal injuries or project delays or damages, or related
regulatory actions could prove costly and time-consuming to defend and could potentially harm our
brand reputation. If successful, product liability claims may require us to pay substantial damages.
We currently do not maintain product liability insurance to cover potential product liability arising
from the use of our products and may be unable to obtain sufficient product liability insurance
coverage on commercially reasonable terms, or at all. Furthermore, certain product liability claims
may be the result of defects from parts and components purchased from third party suppliers. Such
third-party suppliers may not indemnify us for defects as to such parts and components or would only
– 22 –
provide us with limited indemnification that is insufficient to cover our damages resulting from the
product liability claim. A product liability claim, with or without merit, may result in significant
negative publicity and thus materially and adversely affect the marketability of our products and our
reputation, as well as our business, financial condition and results of operations.
Moreover, a material design, manufacturing or quality related failure or defect in our automotive
products or other safety issues could each warrant a product recall by us in the PRC and result in
increased product liability claims. If authorities in the jurisdictions in which we sell our products
decide that our products fail to conform to applicable quality and safety requirements and standards,
including the vehicle safety, exhaust and performance standards for certain products of ours, we could
be subject to regulatory actions. For example, in China, violation of PRC product quality and safety
requirements may subject us to the confiscation of related earnings and relevant products, penalties,
an order to cease sales of relevant products, or an order to cease operations pending the required
rectification. Furthermore, if the violation is determined to be serious in nature, our business license
to manufacture or sell relevant products could potentially be suspended or revoked, and in the worst
scenario, we could be subject to criminal liability. In case of defects, we may be required to recall
the defective products and effect any modification to render them safe before they can be distributed
again on the market. Criminal liability can be triggered by violations of the general obligation to offer
safe products or can arise from significant damages caused to the users of any defective products.
If we experience a significant number of warranty claims, our costs might increase substantially,
and our reputation and brand name could suffer.
Our product warranty typically requires us to provide after-sales services that cover parts and
labor for non-maintenance repairs, except that the repairs are caused by operator abuses or improper
uses or negligence and are not attributable to normal wear and tear. Repair and replacement of certain
parts and components of our products are not covered by us but are covered by the manufacturers of
such parts and components, such as the branded chassis used in certain of our products. However, in
the event that such third-party suppliers refuse to perform their warranty obligations or to indemnify
us for providing warranty services to customers to repair such parts and components, we may incur
additional warranty costs or incur costs may not be recovered. We accrue liabilities for potential
warranty claims at the time of sale. Product warranty provisions as at 31 December 2023 and 2024
were RMB127 million, and RMB176 million, respectively. If we experience an increase in warranty
claims or if our repair and replacement costs associated with warranty claims increase significantly,
we may incur greater warranty costs. Moreover, an increase in warranty claims could substantially
increase our costs and may result in a material adverse effect on our reputation, financial condition,
results of operations and prospects.
– 23 –
Our business depends substantially on our senior management’s continuing services and our
ability to maintain a skilled labor force, and our business may be severely disrupted if we were to
lose the services of our management or other key personnel.
Our future success depends substantially on the continued services of our management team. In
particular, it depends on the service of our chairman and chief executive officer Dr. Zhan Chunxin,
who has over 40 years of experience in the construction machinery industry in China and has
successfully led our operations and helped us achieve significant growth in the past decade. Our
ability to retain and attract other skilled professionals, including the members of our research and
development, manufacturing, marketing and sales and after-sales services teams is also crucial to our
future success. Our domestic and international competitors, and companies in industries related to our
industry, compete with us for personnel. Competition for such skilled labor is intense and may require
us to offer higher compensation and other benefits in order to attract and retain them, which could
materially and adversely affect our financial condition and results of operations. We may be unable
to attract or retain the personnel required to achieve our business objectives and the failure to do so
could severely disrupt our business and prospects. In addition, as the process of hiring and training
qualified personnel is often costly in terms of time and money, if our recruitment and retention efforts
are unsuccessful, qualified personnel may not be integrated into our workforce in a timely manner to
meet the needs of our business.
Restrictive covenants in our Group’s credit agreements could limit our financial and operating
flexibility and subject us to other risks.
We and certain of our subsidiaries are subject to affirmative and negative covenants contained
in certain bank credit facilities, to which they are a party. Such covenants include, among others,
financial covenants that require us or such subsidiaries to maintain certain financial ratios and that
place limitations on various aspects of ours and such subsidiaries’ businesses and operations,
including capital expenditures, incurrence of additional indebtedness or liens, acquisitions or
dispositions of assets and distribution of dividends. As at 31 December 2023 and 2024, our long-term
bank loans of RMB16,642 million and RMB24,823 million, respectively, subject us to certain
semi-annual and annual financial covenants. Although our Group was in compliance with those
financial covenants, we cannot assure you that we or any such subsidiary will not be in breach of
these covenants in the future. If we or any such subsidiary breach any of these covenants and if
waivers for the breached covenants cannot be obtained from the relevant financial institutions, some
actions may be taken or enforced against us or such subsidiary, including, among others, the
acceleration of obligations under the credit agreements and enforcement of security interests by
lenders, which may, in turn, have a material and adverse effect on the overall financial condition and
operations of our Group.
Our future liquidity needs are uncertain and we may need to raise additional funds in the future,
which would dilute your equity interest in our Company or increase our debt service obligations.
In the future, we may need to raise additional funds if our expenditures exceed our current
budget. This could occur for a number of reasons, including our decision to engage in strategic
acquisitions or to devote significant amounts of financial resources to expand our manufacturing
capacity to meet any unexpected increases in market demand. The ability of our customers to make
payments for products in a timely manner and subject to the terms of their contracts with us, may also
significantly impact our liquidity.
– 24 –
Our ability to raise additional funds in the future is subject to a variety of uncertainties,
including:
• our future financial condition, results of operations and cash flows;
• general market conditions for and investor sentiment towards capital-raising activities by
China-based companies and/or construction machinery and environmental and sanitation
machinery companies; and
• economic, political and various other conditions in China and elsewhere.
Although we have historically been able to obtain financing on commercially acceptable terms
and in a timely manner, we cannot assure you that such financing will always be available in amounts
or on terms acceptable to us, if at all, when we need to obtain external financing in the future. Without
sufficient liquidity, we may be forced to curtail or delay our operational plans. Our future liquidity
needs or other business requirements could necessitate the offering of additional equity or debt
securities or the obtaining of bank loans. The sale of additional equity or equity-linked securities
could result in additional dilution to our shareholders. The incurrence of additional debt would result
in increased debt service obligations and could result in stricter or additional operating and financing
covenants that would restrict our operations, financial flexibility, or our ability to distribute
dividends.
We require a number of permits, licenses, registrations and certificates in order to carry on our
business and the failure to obtain or maintain these permits, licenses, registrations and certificates
could materially harm our business and prospects.
The manufacturing, export and sale of our products are subject to regulation in China and in
countries where we conduct our business. For example, some of our products and/or businesses
require special licenses or permits from or registrations with the relevant government authorities in
China, such as those required for the manufacturing and/or export of our cranes and automotive
products, as well as the approvals on our provision of finance lease services. Another example is the
need to obtain the relevant CE certificate prior to the sale of our products to European Union
countries, which serves to demonstrate that our products have conformed to the relevant health and
safety requirements set out in the European Directives. Furthermore, our manufacturing facilities will
need to install and maintain sufficient safety equipment and meet certain production safety
requirements and pass safety inspections conducted by relevant government authorities. In addition,
some of these licenses and permits are subject to periodical renewal. Failure to obtain or renew any
of these permits, licenses and registrations could have a material and adverse effect on our business
and prospects.
Noncompliance with environmental regulations both in China and overseas markets may result
in significant monetary damages, fines or even criminal liabilities as well as negative publicity and
damages to our brand name and reputation.
– 25 –
Our manufacturing processes generate noise, waste water, and gaseous and other industrial
wastes and we are subject to national and local environmental regulations applicable to us in
jurisdictions where we operate. In addition, we are required to comply with the relevant emission
standards applicable to certain of our products. In the case of our noncompliance with present or
future environmental regulations, we may be required to pay substantial fines and/or civil damages,
suspend production or cease operations, and the management might even be subject to criminal
liabilities under certain circumstances. We may also be subject to adverse publicity and damages to
our brand name and reputation. Also, if more stringent regulations are adopted in the future, the costs
of compliance with these new regulations could be substantial.
In addition, we currently do not carry any insurance for potential liabilities relating to the
release of hazardous materials. If we are held liable for damages in the event of contamination or
injury, it could have a material and adverse effect on our financial condition and results of operations.
We may continue to engage in certain sales of products to third-party dealers for end use by
countries, governments, entities, or persons targeted by economic sanctions of the United States
government, which may adversely affect our reputation and prevent U.S. persons from purchasing
our H Shares, thereby potentially reducing our share price.
The U.S. government has enacted laws and regulations, including laws and regulations
administered by the OFAC (the “U.S. Economic Sanctions Laws”) that impose restrictions upon US
persons with respect to activities or transactions with certain countries, governments, entities and
individuals that are the subject of U.S. Economic Sanctions Laws (the “Sanctions Targets”). U.S.
persons are also prohibited from facilitating such activities or transactions. We cannot assure you that
we will not make any direct or indirect sales of our products to Sanctions Targets in the future. If such
transactions occur, our reputation could be adversely affected, some of our investors in the United
States may be required to sell their interests in our Company under the laws of certain U.S. states or
under internal investment policies or may decide for reputational reasons to sell such interests, and
some investors in the United States may forgo the purchase of our H Shares, all of which could have
a material and adverse effect on the price of our H Shares and the value of your investment in us.
Our largest shareholder has substantial influence over our Company and its interests may not be
aligned with the interests of our other shareholders.
The State-owned Assets Supervision and Administration Commission of Hunan Provincial
People’s Government (“Hunan SASAC”) has substantial influence over our business, including
decisions regarding investments, mergers, dividend plans, future issuance of securities,
consolidations and the sale or partial sale of all or substantially all of our assets, election of directors
and other significant corporate actions. The interests of Hunan SASAC may not always coincide with
the best interests of our other shareholders or our Company. This concentration of ownership may
discourage, delay or prevent any change in control of our Company, which could deprive our
Shareholders of an opportunity to receive a premium for their shares as part of a sale of our Company
and might negatively impact the price of our H Shares.
– 26 –
We enjoy certain government grants and incentives and the expiration of, or changes to, these
incentives may materially and adversely affect our business, financial position and results of
operations.
We and several of our subsidiaries have enjoyed preferential tax treatments and/or received
government grants relating to the development of construction machinery, such as refund of
value-added tax and subsidy for technological improvement, research and development projects.
Such qualification is subject to periodic review, and we and our subsidiaries may not be able to
continue enjoying the preferential tax rate. If there are any changes in the preferential tax treatment
that we currently enjoy and in the incentives that we currently receive, our financial condition and
results of operations may be materially and adversely affected.
We may incur additional costs, experience manufacturing disruptions or fail to satisfy our
contractual requirements if we were forced to relocate as a result of any disputes over the title or
ownership rights of the properties we own or lease.
Properties owned or leased by our Group primarily comprise manufacturing facilities, offices
and ancillary buildings. We may not obtain such land use right certificates and building ownership
certificates and the timing for obtaining such certificates is beyond our control. Before we get the
land use right certificate of such land and the building ownership certificates of such buildings, our
rights to such properties might not be entirely protected. Any dispute or claim related to the title of
the properties owned or leased by us may result in us relocating our manufacturing facilities or
offices. There is no assurance that we would be able to find alternative properties for our business
on favorable terms or at all. Further, unplanned relocation may cause us to incur additional relocation
costs and interrupt our production schedule. As a result, we may be unable to meet the output
requirements under our sales contracts or otherwise meet our sales targets. All such consequences
could have a material adverse effect on our business, financial condition, results of operations and
prospects.
We may be involved in legal proceedings and commercial disputes, which could have a material
adverse effect on our business, financial condition and results of operations.
We may be subject to claims and various legal and administrative proceedings, and, as a result,
penalties and new claims may arise in the future.
Regardless of the merit of particular claims, legal and administrative proceedings, such as
litigations, injunctions and governmental investigations, may be expensive, time consuming or
disruptive to our operations and distracting to management. In recognition of these considerations,
we may enter into new or further agreements or other arrangements to settle litigation and resolve
such disputes. No assurance can be given that such agreements can be obtained on acceptable terms
or that litigation will not occur. These agreements may also significantly increase our operating
expenses.
Further, if one or more legal or administrative matters were resolved against us or an
indemnified third party for amounts in excess of our management’s expectations or certain
injunctions are granted, our business and financial conditions could be materially and adversely
affected. Such an outcome could result in significant compensatory or punitive monetary damages,
disgorgement of revenue or profits, remedial corporate measures, injunctive relief or specific
performance against us that could materially and adversely affect our financial condition and results
of operations.
– 27 –
RISKS RELATING TO OUR INDUSTRY
The industry in which we operate is highly dependent on the level and scale of construction
activities which are subject to risks, fluctuations and uncertainties beyond our control.
A significant portion of our consolidated turnover is derived from the sales of our concrete
machinery and crane machinery. Our business operations in those two sectors are directly tied to the
prevailing levels of construction activities from industrial production, infrastructure projects and real
estate investments, all of which are sensitive to government monetary and fiscal policies. Many of
our customers depend substantially on government funding for infrastructure projects or municipal
works, and any decrease or delay in such government funding or a decrease in overall government
spending could have an adverse effect on our customers, which in turn may have a material and
adverse effect on our business and results of operations. A substantial portion of the stimulus package
was targeted spending on public infrastructure projects and affordable housing real estate projects.
We cannot assure you that the level of such support from the central government will continue or will
not decrease. Similarly, increases in interest rates affect overall economic growth, the demand for
residential and nonresidential real estate developments, fixed asset investment decisions by our
customers and the availability of financing and leasing options to our customers, which may also have
a material and adverse effect on our business and results of operations. We cannot assure you that the
interest rate will not increase in the future. A downturn in demand will result in excess inventories,
un-utilized manufacturing capacity and reduced prices for new and used equipment. Such downturn
may be prolonged and may result in significant losses to us during affected periods. If any adverse
change occurs, construction activities may be significantly affected, which may decrease the demand
for our products and adversely affect our results of operations.
We are subject to risks associated with volatility in the prices of raw materials, parts and
components.
Increases in the prices of the raw materials, parts, and components for our products may
materially and adversely affect our results of operations. At certain price levels of raw materials, parts
and components, the continued production of certain products may become unprofitable. The
significance and relative impact of factors affecting the prices of raw materials, parts and components
are difficult to predict or quantify. We cannot assure you that the price of such raw materials, parts
and components will not increase significantly again in the future, particularly as the global economy
begins to recover.
We face competition in the industry in which we operate.
We face direct competition both in China and internationally across all product lines and price
ranges. In China, our competitors include domestic Chinese companies, such as XCMG (徐工集團),
Sany Group and other domestic manufacturers that either offer a range of construction machinery and
environmental and sanitation machinery or some specific types of competing products, and
occasionally, certain multinational companies. In the international market, our major competitors
include multinational companies such as Caterpillar Inc., Komatsu Machinery Corporation and
certain domestic Chinese companies. Moreover, the industry is becoming increasingly competitive as
more international companies are currently seeking to enter the PRC market while more domestic
Chinese manufacturers are enhancing their international penetration and competitiveness.
– 28 –
Some of our competitors, especially multinational companies, are larger than we are, which, in
some cases, provides them with a competitive advantage with respect to brand recognition,
economies of scale, access to financing and their ability to purchase raw materials, parts and
components at lower prices. Our competitors may also be able to devote greater resources to research
and development of technology, and design innovation and adapt more quickly to new or emerging
technology and changes in customer demand and requirements. Furthermore, our competitors may be
able to offer more flexible payment options than we do and/or more attractive purchasing terms.
Current and potential competitors have established or may establish financial or strategic
relationships among themselves or with existing or potential customers, suppliers and other third
parties. Accordingly, new competitors or alliances among competitors might emerge and rapidly
acquire significant market share. Our failure to maintain a competitive position with respect to
pricing, product quality, brand name recognition, financial resources and technological advances,
adapt to changing market conditions or otherwise compete successfully against our competitors may
have a material and adverse effect on our business, financial condition, results of operations and
prospects.
Our business is subject to seasonal variations in demand, and our operating results may experience
significant fluctuations from quarter to quarter.
Our business is subject to seasonal variations in demand. Our sales have been, and are expected
to continue to be, affected by the seasonality as construction activities in northern China are curtailed
during the winter, which would lead to a decrease in demand for our major products and in turn, an
adverse effect on our business, financial condition and results of operations. The fluctuation of our
quarterly results could cause the trading price of our H Shares to decline below investor expectations.
You should not rely on our operating results for prior periods as an indication of our future results.
RISKS RELATING TO OUR BUSINESS IN THE PRC
Our business may be affected by regional and global economic and political developments.
Regional and global economic factors may adversely affect the economic growth in regions in
which we do business. For example, a large portion of our businesses, operations and revenues are
located in or derived from our operations in the PRC and, as a result, our business, financial condition
and results of operations may be influenced to a significant degree by the economic, political, social
and regulatory environment in the PRC generally and by continued economic growth in the PRC as
a whole. The PRC economy has experienced slowing investments in the past and may face additional
pressures due to the impact of difficulties in Sino-U.S. relations, including the ongoing trade and
tariff disputes. As a result, our business, financial position and results of operations may be materially
and adversely affected. There can be no assurance that a recession or slower economic growth
globally or in the PRC will not result in reduced demand for our products, lower selling prices of our
products, or a decrease in the confidence of our customers and shareholders.
Furthermore, economic growth in the PRC has, in the past, been accompanied by periods of high
inflation. In response, the PRC government has implemented policies from time to time to control
inflation, such as restricting the availability of credit by imposing tighter bank lending policies or
higher interest rates. The PRC government may take similar measures in response to future
inflationary pressures. Rampant inflation without the PRC government’s mitigation policies would
likely increase our costs, thereby materially reducing our profitability. There can be no assurance that
we will be able to pass any additional costs to our customers. On the other hand, such control
measures may also lead to slower economic activity and we may see reduced demand for our
products.
– 29 –
In addition, our results of operations, financial conditions, business and future growth depend,
to a large extent, on the global economic conditions. Over the past decade, inflation, currency and
interest rate fluctuations, national fiscal and monetary policies, and other factors have adversely
affected many countries and regions in which we operate. Any further severe economic decline in
countries and regions where we operate could adversely affect our results of operations and future
growth.
In addition, the global economic, political and social conditions are also evolving rapidly and
subject to uncertainties. For example, health epidemics have caused significant downward pressure
for the global economy. Geopolitical tension and conflicts, energy crisis, inflation risk, interest rate
fluctuations, and instability in the financial system impose new challenges and uncertainties on the
global economy. It is unclear whether these challenges and uncertainties will be contained or
resolved, and what effects they may have on the regional and global political and economic
conditions in the long term. We are unable to predict all the risks and uncertainties that we may face
as a result of current economic, political, social and regulatory developments, and many of these risks
are beyond our control. All such factors may materially and adversely affect our business and
operations as well as our financial performance.
We may expand our business into other countries and regions, resulting in changes to our risk
profile as it encompasses the risks in each of the countries and regions or businesses which we expand
into. Our results of operations, financial conditions, business performance and prospects may be
materially and adversely affected by risks in these countries and regions, including, but not limited
to, risks relating to adverse economic conditions, political instability, and property market
developments and dynamics.
Bondholders shall pay attention to the characteristics of the PRC legal system.
The Group is subject to laws and regulations of the PRC. The PRC legal system is based on
written statutes. However, since some of the current laws and regulations are relatively new and the
PRC legal system continues to rapidly evolve, the enforcement of these laws, regulations and rules
may also be evolving. These characteristics relating to the PRC laws and regulations may impede the
Group’s ability to enforce contracts that the Group has entered into with its investors, creditors,
customers, suppliers and business partners. The Group cannot predict the effect of future
developments in the PRC legal system or the integration of such developments under the legal
systems of other jurisdictions. This shall be taken into consideration when seeking legal protections
available to or against the Group.
We are a company incorporated under the laws of the PRC and some of our assets and
subsidiaries are located in the PRC. The majority of our Directors and senior management resides
within the PRC. The assets of these directors and senior management also may be located within the
PRC. The PRC does not have treaties providing for the reciprocal recognition and enforcement of
judgments of courts of some other jurisdictions. As a result, recognition and enforcement in the PRC
of judgments of a court in any of these jurisdictions outside the PRC may be difficult. As a result,
it may be difficult and time-consuming to effect service of process upon our directors, and senior
management outside the PRC. In addition, investors may also experience difficulties in seeking
recognition and enforcing foreign judgments in the PRC if there is a lack of reciprocal recognition
and enforcement of judicial rulings and awards of other jurisdictions.
– 30 –
We may be subject to the approval, filing or other requirement of the CSRC or other PRC
governmental authorities in connection with our capital raising activities.
On 17 February 2023, the China Securities Regulatory Commission (中國證券監督管理委員會)
(the “CSRC”) released the Trial Administrative Measures of Overseas Securities Offering and Listing
by Domestic Companies (境內企業境外發行證券和上市管理試行辦法) and supporting guidelines
which became effective on 31 March 2023 (together, the “CSRC Filing Rules”). The CSRC Filing
Rules will regulate both direct and indirect overseas offering and listing of PRC domestic companies’
securities by adopting a filing-based regulatory regime. The CSRC Filing Rules state that, any
post-listing follow-on offering by an issuer in an overseas market, including issuance of shares,
convertible bonds and other similar securities, shall be subject to filing requirement within three
business days after the completion of the offering. The Issuer has been advised that it is required to
go through filing procedures with the CSRC after the completion of this Offering of the Bonds and
for its future offerings and listing of its securities in an overseas market under the CSRC Filing Rules
for this offering. The CSRC Filing Rules provide that an overseas offering and listing, including the
follow-on offering of convertible bonds, is prohibited under any of the following circumstances: if
(i) such securities offering and listing is explicitly prohibited by provisions in laws, administrative
regulations and relevant state rules; (ii) the intended securities offering and listing may endanger
national security as reviewed and determined by competent authorities under the State Council in
accordance with law; (iii) the domestic company intending to make the securities offering and listing,
or its controlling shareholder(s) and the actual controller, have committed relevant crimes such as
corruption, bribery, embezzlement, misappropriation of property or undermining the order of the
socialist market economy during the latest three years; (iv) the domestic company intending to make
the securities offering and listing is currently under investigation for suspicion of criminal offences
or major violations of laws and regulations, and no conclusion has yet been made thereof; or (v) there
are material ownership disputes over equity held by the domestic company’s controlling
shareholder(s) or by other shareholder(s) that are controlled by the controlling shareholder(s) and/or
actual controller (the “Forbidden Circumstances”). In addition, in the process of filing, where the
issuer may be under any of the Forbidden Circumstances, the CSRC may solicit the opinions of the
competent government authorities under the State Council.
The Issuer will undertake to (i) file or cause to be filed with the CSRC within the relevant
prescribed timeframes after the Issue Date the requisite information and documents in respect of the
Bonds in accordance with the CSRC Filing Rules (which term for the avoidance of doubt, includes
the Initial CSRC Post-Issuance Filing (as defined in the Terms and Conditions)), and (ii) comply with
the continuing obligations under the CSRC Filing Rules and any implementation rules as issued by
the CSRC from time to time. However, there can be no assurance that the Issuer will be able to meet
such requirements or complete such filing in a timely manner or at all. In addition, it cannot be
guaranteed that new rules or regulations promulgated in the future will not impose any additional
requirements on the Issuer. If it is determined that the Issuer is subject to any approval, filing, other
governmental authorization or requirements from the CSRC or other PRC government authorities, the
Issuer may fail to obtain such approval or meet such requirements in a timely manner or at all. Such
failure may subject the Issuer to fines, penalties or other sanctions which may have a material adverse
effect on its business, operations and financial condition.
– 31 –
Furthermore, on 24 February 2023, the CSRC and other PRC government authorities released
the Provisions on Strengthening the Confidentiality and Archives Administration Related to the
Overseas Securities Offering and Listing by Domestic Enterprises (《關於加強境內企業境外發行證
券和上市相關保密和檔案管理工作的規定》) (the “Confidentiality Provisions”), which came into
effect on 31 March 2023. Pursuant to the Confidentiality Provisions, any future inspection or
investigation conducted by overseas securities regulator or the relevant competent authorities on our
PRC domestic companies with respect to our overseas issuance and listing shall be carried out in the
manner in compliance with PRC laws and regulations.
We are subject to risks relating to foreign currency exchange rate fluctuations.
The Company is exposed to currency risk primarily through deposits, sales, purchases and
borrowings which give rise to receivables, payables, loans and cash balances that are denominated
in a foreign currency, that is, a currency other than the functional currency of the operations to which
the transactions relate. The currencies giving rise to this risk are primarily US dollars, HK dollars,
Japanese Yen and Euro. It is not possible to predict the effect of future exchange rate fluctuations on
our assets, liabilities, income, cost of sales and margins. In addition, some of the currencies used by
us may not be readily convertible or exchangeable or may be subject to exchange controls. Therefore,
fluctuations in currency exchange rates could adversely affect our reported financial results. The
foreign exchange gains or losses we recorded in various line items in our profit and loss statements
result from the settlement of foreign currency translations, which are translated into the functional
currency of RMB using prevailing foreign exchange rates at the dates of the relevant transactions or
valuation where items are re-measured, and from the translation at the year-end foreign exchange
rates of the monetary assets and liabilities denominated in foreign currencies. Any future fluctuations
in currency exchange rates could materially adversely affect our business, financial condition and
results of operations.
Any failure to complete the relevant filings under Order 56 and the relevant registration with
SAFE within the prescribed time frame following the completion of the issue of the Bonds may
have adverse consequences for the Issuer and/or the investors of the Bonds.
Effective from 10 February 2023, the NDRC issued Measures for the Administration of
Examination, Approval and Registration of Enterprises’ Medium and Long-Term External Debt (企
業中長期外債審核登記管理辦法) Order 56, which has superseded the Notice on Promoting the
Reform of the Filing and Registration System for Issuance of Foreign Debt by Corporates (國家發
展改革委關於推進企業發行外債備案登記制管理改革的通知). Under Order 56, the Issuer shall (i)
obtain a Certificate of Review and Registration of Enterprise Borrowing of Foreign Debt from the
NDRC (the “NDRC Certificate”), (ii) file or report or cause to be filed or reported with the NDRC
the requisite information and documents within ten PRC business days after each foreign debt
issuance and the expiration of the NDRC Certificate in accordance with Order 56, (iii) file or report
or cause to be filed or reported with the NDRC status of utilisation of foreign debt funds, the status
of and the plan for repayment of principal, key operating indicators, etc. within five PRC business
days before the end of January and the end of July each year, (iv) file or report or cause to be filed
or reported the requisite information and documents upon the occurrence of any material event that
may affect the enterprise’s due performance of its debt obligations and comply with other obligations
under Order 56.
– 32 –
The Issuer obtained an NDRC Pre-issuance Registration Certificate from the NDRC on 26
January 2026 in accordance with Order 56, which is in full force and effect and has not been revoked
by NDRC or any other relevant regulator as of the date of this Offering Circular. Failure to comply
with the NDRC post-issue and continuing obligations (such as post-issue reporting, pre-issuance
approval expiration reporting, periodical reporting and major event reporting, etc.) under articles 24
and 26 of Order 56 may result in the relevant entities being ordered to make corrections within a time
limit, and in the case of aggravating circumstances or in the case that such corrections are not made
within the prescribed time limit, relevant entities and their main person-in-charge will be warned. The
aforesaid regulatory violations committed by enterprises shall be publicised on the “Credit China”
website and the national enterprise credit information publicity system, among others.
The Issuer undertakes that it will within the relevant prescribed timeframes after the Issue Date
file or cause to be filed with the NDRC the requisite information and documents in respect of the
Bonds and comply with other reporting obligations in accordance with the Order 56 and any
implementation rules, reports, certificates, approvals or guidelines as issued by the NDRC from time
to time, including but not limited to, the Initial NDRC Post-Issuance Filing (as defined in the Terms
and Conditions).
In accordance with the Foreign Debt Registration Measures (外債登記管理辦法) issued by
SAFE on 28 April 2013, which came into effect on 13 May 2013 and as amended from time to time
(the “Foreign Debt Registration Measures”) and the Circular of the People’s Bank of China on
Issues Concerning the Overall Macro Prudential Management System for Cross-border Financing (中
國人民銀行關於全口徑跨境融資宏觀審慎管理有關事宜的通知) (the “Cross-Border Financing
Circular”), the Issuer shall complete foreign debt registration in respect of the issue of the Bonds
with the local branches of SAFE in accordance with relevant laws and regulations. According to the
Measures for the Administration of Cross-Border Capital Centralized Operation of Multinational
Corporations (跨國公司跨境資金集中運營管理規定) issued by SAFE on 15 March 2019, the Circular
on Matters Concerning the Integrated RMB and Foreign Currency Capital Pool Operations for
Multinational Corporations (關於跨國公司本外幣一體化資金池業務有關事宜的通知) issued by the
People’s Bank of China and SAFE on 24 December 2025 and other applicable regulatory provisions,
and based on the Issuer’s inquiries with local SAFE, the issue of the Bonds shall be administered by
reference to the relevant rules on foreign debt and shall consume the foreign debt quota allocated
under the Issuer’s integrated RMB and foreign currency capital pool. Since the Issuer has already
completed the one-off foreign debt quota registration in connection with the filing of such integrated
capital pool, no additional foreign debt registration procedure shall be required for the purpose of the
issue of the Bonds. In the event of changes to regulatory rules or SAFE’s regulatory interpretation,
rendering the Issuer unable to complete the foreign debt registration or the existing registration
failing to meet the applicable regulatory requirements, the Issuer may have difficulty in remitting
funds offshore to service payments in respect of the Bonds and investors may encounter difficulties
in enforcing judgments obtained in the Hong Kong courts with respect to the Bonds and the Trust
Deed in the PRC. In such circumstances, the value and secondary market price of the Bonds may also
be materially and adversely affected.
– 33 –
Governmental regulation of currency conversion may limit our ability to make payments and other
obligations, and affect the value of your investment.
The PRC government imposes regulations on the convertibility of Renminbi into foreign
currencies and, in certain cases, the remittance of currency out of the PRC requires approval or
registration in accordance with regulatory requirements. We conduct our businesses mainly in
mainland China, while we also operate certain businesses in other countries and regions worldwide,
and may need to convert a portion of our cash and cash equivalents from Renminbi into other
currencies in the future to meet our foreign currency obligations, including payments on the Bonds.
Shortages in the availability of foreign currency may restrict the ability of the Group to remit
sufficient foreign currency to satisfy their foreign currency denominated obligations.
Under existing PRC foreign exchange regulations, payments of current account items, including
profit distributions, interest payments and trade and service-related foreign exchange transactions,
can be made in foreign currencies without prior SAFE approval by complying with certain procedural
requirements. However, approval from or registration with competent government authorities is
required where Renminbi is to be converted into foreign currency and remitted out of the PRC to pay
capital expenses such as the repayment of loans denominated in foreign currencies, or to remit funds
offshore to make overseas investments. For example, for our funds repatriated to the PRC from
overseas financing activities, we will need to complete certain filing or approval procedures to remit
the funds out of the PRC for investment, acquisition or other capital account purposes. Any failure
to complete these procedures may adversely impact our ability to carry out our overseas expansion.
We cannot guarantee that additional regulatory requirements on the convertibility of the RMB into
foreign currencies will not be imposed in the future, such as requirements due to foreign exchange
policy adjustments in response to changes in global economic conditions. If the foreign exchange
control system in the PRC prevents us from obtaining sufficient foreign currencies to satisfy our
foreign currency demands, we may not be able to make payments in foreign currencies. Further, there
is no assurance that new regulations will not be promulgated in the future that would have the effect
of further restricting the remittance of Renminbi into or out of the PRC.
Increasing focus with respect to environmental, social and governance matters may impose
additional costs on us or expose us to additional risks.
The PRC government and public advocacy groups have been increasingly focused on
environment, social and governance, or ESG, issues in recent years, making our business more
sensitive to ESG issues and changes in governmental policies and laws and regulations associated
with environment protection and other ESG-related matters. Investor advocacy groups, certain
institutional investors, investment funds, and other influential investors are also increasingly focused
on ESG practices and in recent years have placed increasing importance on the implications and
social cost of their investments. Regardless of the industry, increased focus from investors and the
PRC government on ESG and similar matters may hinder access to capital, as investors may decide
to reallocate capital or to not commit capital as a result of their assessment of a company’s ESG
practices. Any ESG concern or issue could increase our regulatory compliance costs. If we do not
adapt to or comply with the evolving expectations and standards on ESG matters from investors and
the PRC government or are perceived to have not responded appropriately to the growing concern for
ESG issues, regardless of whether there is a legal requirement to do so, we may suffer from
reputational damage and our business and financial condition could be materially and adversely
effected.
– 34 –
We may be subject to complex and evolving laws and regulations and governmental policies
regarding cybersecurity, privacy and data protection. Actual or alleged failure to comply with such
laws and regulations could damage our reputation, deter current and potential customers from
accessing our products and services and subject us to risks of litigation or administrative penalties
or other significant legal, financial and operational consequences.
In recent years, cybersecurity, privacy and data protection have become an increasing regulatory
focus of government authorities across the world. The PRC government has enacted a series of laws,
regulations and governmental policies on cybersecurity, privacy and data protection in the past few
years, to which our business may be subject.
As the regulatory requirements on privacy and data protection are relatively new and complex,
and may therefore continue to evolve, we cannot assure you that our privacy and data protection
measures are, and will be, always considered sufficient under applicable laws and regulations. In
addition, some provisions under certain laws and regulations still remain at the principal level and
lack specific interpretation up to date, especially to a specific case scenario. Additionally, the
effectiveness of our privacy and data protection measures is also subject to system failures,
interruptions, inadequacy, security breaches or cyberattacks. Any failure or perceived failure by us
to comply with applicable laws and regulations on cybersecurity, privacy and data protection may
result in governmental investigations, inquiries, enforcement actions and prosecutions, private claims
and litigation, fines and penalties, adverse publicity or potential loss of business, which could damage
our reputation, deter current and potential customers from accessing or using our products or
services, lead to suspension of our non-compliant operations, and revocation of relevant business
permits or licenses or otherwise subject us to significant legal, financial and operational
consequences.
We expect that there may continue to be newly proposed laws, regulations, rules and industry
standards concerning cybersecurity, privacy and data protection. The relevant developments in
regulatory requirements and standards may increase our costs of compliance, delay or reduce demand
for our products and services, and affect the way in which we operate, any of which could harm our
business, financial condition and results of operations.
RISKS RELATING TO THE BONDS, THE H SHARES AND THE OFFERING
The Bonds will be unsecured obligations.
The Bonds will constitute direct, unsubordinated, unconditional and (subject to the provisions
of Condition 3.1 (Negative Pledge) of the Terms and Conditions) unsecured obligations of the Issuer
and shall at all times rank pari passu and without any preference or priority among themselves. The
payment obligations of the Issuer under the Bonds shall, save for such exceptions as may be provided
by mandatory provisions of applicable law and subject to Condition 3.1 (Negative Pledge) of the
Terms and Conditions, at all times rank at least equally with all of its other present and future direct,
unsubordinated, unconditional and unsecured obligations. The repayment of the Bonds may be
compromised if:
• the Issuer enters into bankruptcy, liquidation, reorganisation or other winding-up
proceedings;
• there is a default in payment under Issuer’s future secured indebtedness or other unsecured
indebtedness; or
• there is an acceleration of any of the Issuer’s indebtedness.
– 35 –
If any of the above events occurs, the Issuer’s assets and any amounts received from the sale
of such assets may not be sufficient to pay amounts due on the Bonds.
The Bonds may not be a suitable investment for all investors.
The Bonds are complex financial instruments and may be purchased as a way to reduce risk or
enhance yield with a measured and appropriate addition of risk to the investor’s overall portfolios.
A potential investor should not invest in the Bonds unless they have the expertise (either alone or with
the help of a financial adviser) to evaluate how the Bonds will perform under changing conditions,
the resulting effects on the value of such Bonds and the impact this investment will have on the
potential investor’s overall investment portfolio.
Additionally, the investment activities of certain investors are subject to legal investment laws
and regulations, or review or regulation by certain authorities. Each potential investor should consult
its legal advisers to determine whether and to what extent (a) the Bonds are legal investments for it,
(b) the Bonds can be used as collateral for various types of borrowing and (c) other restrictions apply
to its purchase of any Bonds. Financial institution investors should consult their legal advisers or the
appropriate regulators to determine the appropriate treatment of Bonds under any applicable
risk-based capital or similar rules.
Each potential investor in the Bonds must determine the suitability of that investment in light
of its own circumstances. In particular, each potential investor should:
• have sufficient knowledge and experience to make a meaningful evaluation of the Bonds,
the merits and risks of investing in the Bonds and the information contained or
incorporated by reference in this Offering Circular or any applicable supplement;
• have access to, and knowledge of, appropriate analytical tools to evaluate, in the context
of its particular financial situation, an investment in the Bonds and the impact such
investment will have on its overall investment portfolio;
• have sufficient financial resources and liquidity to bear all of the risks of an investment
in the Bonds;
• understand thoroughly the terms of the Bonds and be familiar with the behaviour of any
relevant indices and financial markets; and
• be able to evaluate (either alone or with the help of a financial adviser) possible economic
scenarios, such as interest rate and other factors which may affect its investment and the
ability to bear the applicable risks.
– 36 –
Additionally, the investment activities of certain investors are subject to investment laws and
regulations that impose an approval requirement on or restrict certain investments. Each potential
investor should consult its legal advisers to determine whether and to what extent (a) it is legally
permitted to invest in the Bonds, (b) the Bonds can be used as collateral for applicable types of
borrowing and (c) other restrictions apply to its purchase of any Bonds. Financial institution investors
should consult their legal advisers or the appropriate regulators to determine the appropriate
treatment of Bonds under any applicable risk-based capital or similar rules.
For example, on 28 October 2024, the U.S. Department of Treasury issued the Provisions
Pertaining to U.S. Investments in Certain National Security Technologies and Products in Countries
of Concern to implement the Executive Order 14105, which came into effect on 2 January 2025 (the
“Final Rules”). U.S. persons (as defined under the Final Rules) are prohibited from knowingly
engaging in, or are required to notify the U.S. Treasury (i.e., “prohibited transaction” and “notifiable
transaction” as such terms are defined in the Final Rules) regarding, a broad range of investment
transactions in entities in “countries of concern” (presently limited to mainland China, Hong Kong,
and Macau) that are engaged in activities related to semiconductors and microelectronics, quantum
information technologies, and artificial intelligence systems (together, “Covered Activities”).
Investments by U.S. persons that are affected by the Final Rules include, among others, acquisition
of an equity interest or contingent equity interest in a “Covered Foreign Person” (as defined in the
Final Rules) and conversion of a contingent equity interest into an equity interest in a Covered
Foreign Person, such as an investment in convertible securities of an entity engaging in a Covered
Activity and the subsequent conversion of the securities. There are however certain exceptions to the
requirements applying to U.S. persons which have been set forth in the Final Rules and clarified by
guidance issued by the U.S. Treasury.
In addition, on 21 February 2025, U.S. President Donald J. Trump issued a memo entitled the
“America First Investment Policy” (the “America First Memo”). The America First Memo states
that Executive Order 14105 is under review by the Administration and that the review will consider
new or expanded restrictions on United States outbound investment in China in sectors such as
semiconductors, artificial intelligence, quantum, biotechnology, hypersonics, aerospace, advanced
manufacturing, directed energy, and other areas implicated by China’s national Military-Civil Fusion
strategy. The America First Memo also states that the review will consider applying restrictions on
investment types including private equity, venture capital, greenfield investments, corporate
expansions, and investments in publicly traded securities, from sources including pension funds,
university endowments, and other limited-partner investors.
We note that the National Defense Authorization Act for Fiscal Year 2026, and the
Comprehensive Outbound Investment National Security Act (“COINS Act”) therein, was signed into
law by the U.S. President on 18 December 2025. The COINS Act directs the U.S. Treasury to issue
relevant regulations within 450 days of its enactment, which may result in the U.S. Treasury taking
steps to “amend, terminate, supersede, revoke, or streamline existing requirements” the Final Rules.
In the meantime, the U.S. Treasury has advised that until it issues regulations pursuant to the COINS
Act, the current regulations in relation to the Final Rules remain in effect.
As of the date of this Offering Circular, the Issuer believes that it is not a “Covered Foreign
Person” and the investments in the Bonds will not constitute a “notifiable transaction” or a
“prohibited transaction”. However, the Final Rules became effective relatively recently and are only
accompanied by limited guidance from the U.S. Treasury. There can be no assurances that the U.S.
Treasury will take the same view as the Issuer. If the Issuer is found to be a Covered Foreign Person
and no applicable exception applies, a U.S. person investor may need to assess its obligations under
the Final Rules, for example, making a post-transaction report to the U.S. Treasury.
– 37 –
In addition, evolving national security-related concerns, technological developments, and
geopolitical events could impact implementation of, result in enactment of additional laws and
regulations, and give rise to changes to the Final Rules and/or other regulations, which could take
place during the life of the Bonds. Such changes could result in potential impacts on the Group’s
operations and transactions that it enters into in the future. They could also impact the exercise of the
conversion rights of the Bonds by investors, which in turn affect the liquidity and value of the Bonds.
Investors should exercise caution on any potential investment restrictions or compliance obligations
that may result from such changes in the future. In addition, if the Issuer becomes a Covered Foreign
Person as a result of its business expansion during the life of the Bonds and no exceptions are
available under the applicable laws and regulations, conversion of the Bonds by U.S. persons may be
subject to the notification requirement or prohibited under the Final Rules.
Pursuant to guidance issued by the U.S. Treasury, at present, it is expected that a U.S. person
would be able to rely on the “publicly traded securities exception” in connection with an investment
in the Bonds, which would except a U.S. person from any notification requirements or prohibitions
under the Final Rule even if the Issuer was found to be a Covered Foreign Person. However, the
exercise of conversion rights in respect of the Bonds is a separate transaction under the Final Rules
and will need to be assessed independently at the time of such exercise. Investors seeking to rely on
the publicly traded securities exception must make their own determinations as to their obligations
under the Final Rule, and they should consult their own counsel if they have questions.
An active trading market for the Bonds may not develop.
The Bonds are a new issue of securities for which there is currently no trading market. Although
an application will be made to the Hong Kong Stock Exchange for the listing of, and permission to
deal in, the Bonds on the Hong Kong Stock Exchange, no assurance can be given that such
application will be approved, or even if the Bonds become so listed, an active trading market for the
Bonds will develop or be sustained. No assurance can be given as to the ability of holders to sell their
Bonds or the price at which holders will be able to sell their Bonds or that a liquid market will
develop. The liquidity of the Bonds will be adversely affected if the Bonds are held or allocated to
limited investors. Bondholders should note that they may need to hold their Bonds until maturity as
there may not be an active secondary market for the Bonds. None of the Joint Lead Managers is
obligated to make a market in the Bonds, and if the Joint Lead Managers do so, they may discontinue
such market making activity at any time at their sole discretion. In addition, the Bonds are being
offered pursuant to exemptions from registration under the Securities Act and, as a result, holders will
only be able to resell their Bonds in transactions that have been registered under the Securities Act
or in transactions not subject to, or exempt from, registration under the Securities Act.
Investors in the Bonds may be subject to foreign exchange risks.
The Bonds are U.S. dollar-settled debt instruments. An investor who measures investment
returns by reference to a currency other than U.S. dollar would be subject to foreign exchange risks
by virtue of an investment in the Bonds, due to, among other things, economic, political and other
factors over which the Group has no control. Depreciation of the Renminbi against such currency
could cause a decrease in the effective yield of the Bonds below their stated coupon rates and could
result in a loss when the return on the Bonds is translated into such currency. In addition, there may
be tax consequences for investors as a result of any foreign currency gains resulting from any
investment in the Bonds.
– 38 –
The U.S. dollar return on the Bonds may be adversely affected by changes in the exchange rates
between the Renminbi and the U.S. dollar.
The U.S. dollar return on the Bonds may be adversely affected by changes in the exchange rates
between the Renminbi and the U.S. dollar. The Bonds are U.S. dollar-settled debt instruments.
Bondholders are required to pay the subscription money for the Bonds in U.S. dollar based on the
exchange rate between Renminbi and the U.S. dollar fixed on the pricing date of the Bonds. In
addition, all amounts due from the Issuer under the Bonds, including the redemption price, premium
and/or default interest of the Bonds, will be settled in U.S. dollar at the spot rate between Renminbi
and the U.S. dollar prior to the time of payment. Accordingly, the U.S. dollar return on the Bonds will
depend on the principal amount, the premium and/or default interest converted into U.S. dollar at the
spot rate. Any volatility of the exchange rate between Renminbi and the U.S. dollar during the term
of the Bonds will affect the return on the Bonds in U.S. dollar. In particular, any devaluation of the
Renminbi against the U.S. dollar during the term of the Bonds will decrease the U.S. dollar return
on the Bonds, which is calculated in Renminbi. In the event of a material devaluation of the Renminbi
against the U.S. dollar, Bondholders may not receive the full U.S. dollar subscription money upon
redemption of the Bonds.
Changes in market interest rates may adversely affect the value of the Bonds.
The Bondholders may suffer unforeseen losses due to fluctuations in interest rates. Generally,
a rise in interest rates may cause a fall in the prices of the Bonds, resulting in a capital loss for the
Bondholders. However, the Bondholders may reinvest the interest payments at higher prevailing
interest rates. Conversely, when interest rates fall, the prices of the Bonds may rise. The Bondholders
may enjoy a capital gain but interest payments received may be reinvested at lower prevailing interest
rates.
The Bonds will carry a fixed interest rate. Consequently, investment in the Bonds involves the
risk that subsequent changes in market interest rates may adversely affect the value of the Bonds. If
Bondholders sell the Bonds they hold before the maturity of such Bonds, they may receive an offer
less than their investment.
The liquidity and price of the Bonds following the offering may be volatile.
The price and trading volume of the Bonds may be highly volatile. Factors such as variations
in the Group’s turnover, earnings and cash flows, proposals for new investments, strategic alliances
and/or acquisitions, changes in interest rates, fluctuations in price for comparable companies,
changes in government regulations and changes in general economic conditions nationally or
internationally could cause the price of the Bonds to change. Any such developments may result in
large and sudden changes in the trading volume and price of the Bonds. There is no assurance that
these developments will not occur in the future.
Developments in other markets may adversely affect the market price of the Bonds.
The market price of the Bonds may be adversely affected by declines in the international
financial markets and world economic conditions. The market for the Bonds is, to varying degrees,
influenced by economic and market conditions in other markets, especially those in Asia. Although
economic conditions are different in each country, investors’ reactions to developments in one
country can affect the securities markets and the securities of issuer in other countries, including the
PRC. Since the global financial crisis in 2008 and 2009, the international financial markets have
experienced significant volatility. If similar developments occur in the international financial markets
in the future, the market price of the Bonds could be adversely affected.
– 39 –
The Trustee may request the Bondholders to provide an indemnity and/or security and/or
prefunding to its satisfaction before taking action on behalf of Bondholders.
Where the Trustee is under the provisions of the Trust Deed bound to take steps and/or actions
and/or institute proceedings to enforce payment or otherwise act at the request or direction of the
Bondholders, the Trustee shall nevertheless not be so bound unless first indemnified and/or provided
with security and/or pre-funded to its satisfaction against all actions, proceedings, claims and
demands to which it may render itself liable and all costs, charges, damages, expenses and liabilities
which it may incur by so doing. Negotiating and agreeing to an indemnity and/or security and/or
pre-funding can be a lengthy process and may impact on when such actions can be taken. The Trustee
may not be able to take steps and/or actions and/or institute proceedings, notwithstanding the
provision of an indemnity or security or pre-funding, in breach of the terms of the Trust Deed or the
Terms and Conditions and in circumstances where there is uncertainty or dispute as to the applicable
laws or regulations and, to the extent permitted by the agreements and the applicable law, it will be
for the holders of the Bonds to take such actions directly.
Bondholders will have no rights as holders of the H Shares prior to conversion of the Bonds, but
are subject to changes made with respect to the H Shares.
Unless and until the Bondholders acquire the H Shares upon conversion of the Bonds,
Bondholders have no rights with respect to the H Shares, including any voting rights or rights to
receive any regular dividends or other distributions with respect to the H Shares. Upon conversion
of the Bonds, these holders would be entitled to exercise the rights of holders of the H Shares only
as to actions for which the applicable record date occurs after the date of conversion.
However, such Bondholders are subject to all changes affecting the H Shares. For example, in
the event that an amendment is proposed to the Issuer’s articles requiring shareholder approval, and
the record date for determining the shareholders of record entitled to vote on the amendment occurs
prior to the date of conversion of the Bonds for such H Shares and (as applicable) the date of
registration by the relevant Bondholder as the holder thereof, that Bondholder would not be entitled
to vote on the amendment but would nevertheless be subject to any resulting changes in the powers,
preferences or special rights that affect the H Shares after conversion.
Securities law restrictions on the resale and conversion of the Bonds may limit Bondholders’ ability
to sell the Bonds in the United States.
The Bonds and the H Shares into which the Bonds are convertible have not been and will not
be registered under the Securities Act, any state securities laws or the securities laws of any other
jurisdiction. Unless and until they are registered, the Bonds and the H Shares issuable upon
conversion may not be offered, sold or resold except pursuant to an exemption from registration
under the Securities Act and applicable state laws or in a transaction not subject to such laws. The
Bonds are being offered and sold outside the U.S. in reliance on Regulation S. Hence, future resales
of the Bonds and the H Shares into which the Bonds are convertible may only be made pursuant to
an exemption from registration under the Securities Act and applicable state laws or in a transaction
not subject to such laws.
– 40 –
The Issuer will follow the applicable corporate disclosure standards for debt securities listed on the
Hong Kong Stock Exchange, which may be different from those applicable to companies in certain
other countries.
The Issuer will be subject to reporting obligations in respect of the Bonds to be listed on the
Hong Kong Stock Exchange. The disclosure standards imposed by the Hong Kong Stock Exchange
may be different from those imposed by securities exchanges in other countries or regions. As a
result, the level of information that is available may not correspond to what investors in the Bonds
are accustomed to or may expect.
The Bondholders may be subject to tax on their income or gain from the Bonds.
Prospective purchasers of the Bonds are advised to consult their own tax advisers concerning
the overall tax consequences of the acquisition, ownership or disposition (including upon conversion
of the Bonds) of the Bonds or the H Shares. Please refer to “Taxation” for a discussion of tax
consequences in certain jurisdictions.
Decisions that may be made on behalf of all holders of the Bonds may be adverse to the interests of
individual holders of the Bonds. Modifications and waivers may be made in respect of the Terms and
Conditions, the Trust Deed or the Agency Agreement by the Trustee or less than all of the holders of
the Bonds.
The Terms and Conditions of the Bonds contain provisions for calling meetings of holders of
the Bonds to consider matters affecting their interests generally. These provisions permit defined
majorities to bind all holders of the Bonds including holders who did not attend and vote at the
relevant meeting and holders who voted in a manner contrary to the majority. Furthermore, there is
a risk that the decision of the majority of the holders of the Bonds may be adverse to the interests
of the individuals.
The Terms and Conditions will also provide that the Trustee may (but shall not be obliged to)
agree, without the consent of the Bondholders, to (i) any modification (except as mentioned in the
Trust Deed) to, or the waiver or authorisation of any breach or proposed breach of, the Bonds, the
Agency Agreement or the Trust Deed which is not, in the opinion of the Trustee, materially
prejudicial to the interests of the Bondholders or (ii) any modification to the Bonds, the Agency
Agreement or the Trust Deed which, in the Trustee’s opinion, is of a formal, minor or technical nature
or to correct a manifest error or to comply with mandatory provisions of law.
Claims by holders of the Bonds are structurally subordinated to creditors of the Company’s
subsidiaries.
The Issuer’s ability to make payments in respect of the Bonds depends largely upon the receipt
of dividends, distributions, interest of advances from its subsidiaries. The ability of the Issuer’s
subsidiaries to pay dividends and other amounts to the Issuer may be subject to such subsidiaries’
profitability and applicable laws. Payments under the Bonds are structurally subordinated to all
existing and future liabilities and obligations of each of the Issuer’s subsidiaries. Claims of creditors
of such companies will have priority as to the assets of such companies over the Issuer and its
creditors, including holders of the Bonds.
– 41 –
The Issuer’s subsidiaries, jointly controlled entities and associated companies are subject to
restrictions on the payment of dividends and the repayment of intercompany loans or advances to
the Issuer, its jointly controlled entities and associated companies.
The Issuer depends on the receipt of dividends and the interest and principal payments on
intercompany loans or advances from its subsidiaries, jointly controlled entities and associated
companies to satisfy its obligations, including its obligations under the Bonds. The ability of the
Issuer’s subsidiaries, jointly controlled entities and associated companies to pay dividends and make
payments on intercompany loans or advances to their shareholders is subject to, among other things,
distributable earnings, cash flow conditions, restrictions contained in the articles of association of
these companies, applicable laws and restrictions contained in the debt instruments of such
companies. The Issuer cannot assure that its subsidiaries, jointly controlled entities and associated
companies will have distributable earnings or will be permitted to distribute their distributable
earnings to it as it anticipates, or at all. In addition, dividends payable to it by these companies are
limited by the percentage of its equity ownership in these companies. Further, if any of these
companies raises capital by issuing equity securities to third parties, dividends declared and paid with
respect to such shares would not be available to the Issuer to make payments on the Bonds. These
factors could reduce the payments that the Issuer receives from its subsidiaries, jointly controlled
entities and associated companies, which would restrict its ability to meet its payment obligations
under the Bonds.
PRC laws and regulations permit payment of dividends only out of accumulated profits as
determined in accordance with PRC accounting standards and regulations. The PRC subsidiaries,
jointly controlled entities and associated companies of the Issuer are also required to set aside a
portion of their post-tax profits according to PRC accounting standards and regulations to fund
certain reserves that are not distributable as cash dividends.
If the Company or any of its subsidiaries is unable to comply with the restrictions and covenants
in its debt agreements, there could be a default under the terms of these agreements, which could
cause repayment of its debt to be accelerated.
If the Company or any of its subsidiaries is unable to comply with the restrictions and covenants
or its current or future debt obligations and other agreements, there could be a default under the terms
of these agreements. In the event of a default under these agreements, the holders of the debt could
terminate their commitments to lend, accelerate repayment of the debt and declare all outstanding
amounts due and payable or terminate the agreements, as the case may be. As a result, a default under
one debt agreement may cause the acceleration of repayment of not only such debt but also other
debt, including the Bonds, or result in a default under the Company’s or such subsidiary’s other debt
agreements. If any of these events occur, there is no assurance that the Company would have
sufficient assets and cash flow to repay in full all of its indebtedness, or that the Company would be
able to find alternative financing. Even if the Company could obtain alternative financing, it could
not guarantee such financing will be on terms that are favourable or acceptable to the Company.
The Company may be unable to obtain and remit foreign currencies out of China.
The Company’s ability to satisfy its obligations under the Bonds will be affected by its ability
to obtain and remit sufficient foreign currency. The Company must present certain documents to
SAFE, its authorized branch, or the designated foreign exchange bank. If the Company for any reason
fails to satisfy any of the PRC legal requirements for remitting foreign currency payments, it may
affect the Company’s ability to satisfy its obligations under the Bonds in a timely manner.
– 42 –
Legal investment considerations may restrict certain investments.
The investment activities of certain investors are subject to legal investment laws and
regulations, or review or regulation by certain authorities. Each potential investor should consult its
legal advisers to determine whether and to what extent:
• the Bonds are legal investments for it;
• the Bonds can be used as collateral for various types of borrowing; and
• any other restrictions apply to its purchase or pledge of the Bonds.
Financial institutions should consult their legal advisers or the appropriate regulators to
determine the appropriate treatment of the Bonds under any applicable risk-based capital or similar
rules.
The insolvency laws of the PRC and other local insolvency laws may differ from those of other
jurisdictions with which the holders of the Bonds are familiar.
The Company is incorporated under the laws of the PRC. The Company conducts substantially
all of its business operations through PRC-incorporated subsidiaries in the PRC and through
subsidiaries incorporated in over 170 overseas locations, including Europe, America, Middle East and
Southeast Asia. As such, the Company’s subsidiaries are subject to the bankruptcy and insolvency
laws of the PRC, Europe, America, Middle East and Southeast Asia. The PRC, Europe, America,
Middle East and Southeast Asia laws and regulations relating to bankruptcy and insolvency and the
legal proceedings in that regard may significantly differ from those of other jurisdictions with which
the holders of the Bonds are familiar. There is no assurance that investors in the Bonds will be able
to receive the same protection under the insolvency laws of the PRC as those in their respective home
jurisdictions.
Bondholders have limited anti-dilution protection.
The Conversion Price of the Bonds will be adjusted only in the situations and only to the extent
provided in “Terms and Conditions of the Bonds – Conversion – Adjustments to Conversion Price”
and “Terms and Conditions of the Bonds – Conversion – Adjustment upon Change of Control”. There
is no requirement that there should be an adjustment for every corporate or other event that may affect
the value of the H Shares or the Ordinary Shares. Events in respect of which no adjustment is made
may adversely affect the value of the H Shares or the Ordinary Shares and therefore, adversely affect
the value of the Bonds.
The conversion of some or all of the Bonds will dilute the ownership interests of existing
Shareholders.
The conversion of some or all of the Bonds will dilute the ownership interests of existing
Shareholders. Any sales in the public market of the H Shares issuable upon such conversion could
affect prevailing market prices for the H Shares. In addition, the existence of the Bonds may
encourage short selling by market participants because the conversion of the Bonds could depress the
market price of the Shares.
– 43 –
Enforcement of shareholder rights.
Currently, the primary sources of shareholder rights are the Issuer’s articles of association, the
PRC Company Law, the PRC regulations and the listing rules of the Hong Kong Stock Exchange and
the Shenzhen Stock Exchange, which, among other things, impose certain standards of conduct,
fairness and disclosure on the Issuer, its directors and its substantial shareholders. Given the
differences in legal system, in general, these rights may differ from those applicable to companies
incorporated in the United States, the United Kingdom and many European countries. Being under
different legal systems, it is possible that the Issuer’s shareholders may not enjoy the full protections
to which they may be entitled in a different jurisdiction. China does not have treaties providing for
the reciprocal recognition and enforcement of judgments of courts with the United States, the United
Kingdom or most European countries, and therefore recognition and enforcement in China of
judgments of a court in any of these jurisdictions in relation to any matter not subject to a binding
arbitration provision may not be assured.
The Company may not have the ability to redeem the Bonds.
Bondholders may require the Company, subject to certain conditions, to redeem for cash some
or all of their Bonds at the option of the Bondholders upon the occurrence of a Relevant Event as
described under “Terms and Conditions of the Bonds – Redemption, Purchase and Cancellation –
Redemption for Relevant Events.” The Company may not have sufficient funds or other financial
resources to make the required redemption in cash at such time or the ability to arrange necessary
financing on acceptable terms, or at all. The Company’s ability to redeem the Bonds in such event
may also be limited by the terms of other debt instruments. Failure to repay, repurchase or redeem
tendered Bonds by the Company would constitute an event of default under the Bonds, which may
also constitute a default under the terms of other indebtedness held by the Company.
There are risks attached to the exercise of Conversion Rights.
At any point when the Bonds are outstanding, depending on the performance of the H Shares,
the value of the H Shares may be substantially lower than when the Bonds were initially purchased.
In addition, because there will be a delay between when Conversion Rights are exercised and when
H Shares are delivered, the value of the H Shares to be delivered may vary substantially between the
date on which Conversion Rights are exercised and the date on which such H Shares are delivered.
There is a limited period during which the Bondholders may convert their Bonds.
Subject to and upon compliance with the Terms and Conditions (including without limitation
Condition 5.1.4 (Revival and/or survival after Default) of the Terms and Conditions), the Conversion
Right attaching to any Bond may be exercised, at the option of the holder thereof, at any time on or
after the 41st day after the Issue Date up to the close of business (at the place where the certificate
evidencing such Bond is deposited for conversion) on the date falling seven working days prior to
the Maturity Date (both days inclusive) or if such Bond shall have been called for redemption by the
Issuer before the Maturity Date, then up to and including the close of business (at the place aforesaid)
on a date no later than seven working days (at the place aforesaid) prior to the date fixed for
redemption thereof; provided that no Conversion Right may be exercised in respect of a Bond where
the holder shall have exercised its right to require the Issuer to redeem or repurchase such Bond
pursuant to Condition 7.4 (Redemption at the Option of the Bondholders) of the Terms and Conditions
– 44 –
or Condition 7.5 (Redemption for Relevant Events) of the Terms and Conditions or during a Restricted
Conversion Period (both dates inclusive); provided further that the Conversion Right is exercised
subject to any applicable fiscal or other laws or regulations or as hereafter provided in these
Conditions.
If the Conversion Rights are not exercised by Bondholders during the Conversion Period, the
Bonds will be redeemed at the U.S. Dollar Equivalent of 105.73 per cent. of their principal amount
on the Maturity Date unless the Bonds are previously purchased and cancelled or redeemed in
accordance with the Terms and Conditions.
The Bonds may be early redeemed at the Company’s option, which may adversely affect the trading
price and liquidity of the Bonds.
The Company may, on giving not less than 30 days’ nor more than 60 days’ notice, redeem the
Bonds in whole, but not in part, on the date specified in the Optional Redemption Notice at the U.S.
Dollar Equivalent of the Early Redemption Amount, together with the U.S. Dollar Equivalent of
accrued and unpaid interest thereon to but excluding the date fixed for redemption, (i) at any time
after 19 February 2026 but prior to the Maturity Date, provided that no such redemption may be made
unless the Closing Price of an H Share, translated into Renminbi at the prevailing rate applicable to
each H Share Stock Exchange Business Day, for any 15 H Share Stock Exchange Business Days
within a period of 30 consecutive H Share Stock Exchange Business Days, the last of such H Share
Stock Exchange Business Day shall occur not more than 10 days prior to the date upon which notice
of such redemption is given, was, for each such 15 H Share Stock Exchange Business Days, at least
effect. If there shall occur an event giving rise to a change in the Conversion Price during any such
relevant days approved by an independent financial advisor shall be made for the purpose of
calculating the Closing Price of the H Shares for such days; or (ii) if at any time the aggregate
principal amount of the Bonds outstanding, is less than 10 per cent. of the aggregate principal amount
originally issued (including any Bonds issued pursuant to Condition 15 (Further Issues) of the Terms
and Conditions). See “Terms and Conditions of the Bonds – Redemption, Purchase and Cancellation
– Redemption at the Option of the Issuer”. In addition, the Bonds may be redeemed at the option of
the Company in whole but not some only, on giving not less than 30 days’ nor more than 60 days’
notice, at the U.S. Dollar Equivalent of the Early Redemption Amount, together with the U.S. Dollar
Equivalent of interest accrued and unpaid thereon to but excluding the date fixed for redemption, if
the Company becomes obliged to pay Additional Tax Amounts (as defined in the Terms and
Conditions) as a result of certain events set out in the Terms and Conditions and such obligation
cannot be avoided by the Company taking reasonable measures available to it. See “Terms and
Conditions of the Bonds – Redemption, Purchase and Cancellation – Redemption for Taxation
Reasons”. As a result, the trading price of the Bonds may be affected when the redemption options
of the Company become exercisable. Accordingly, Bondholders may not be able to sell their Bonds
at an attractive price, thereby having a material adverse effect on the trading price and liquidity of
the Bonds.
– 45 –
Bondholders will bear the risk of fluctuations in the price of H Shares.
The market price of the Bonds at any time will be affected by fluctuations in the price of the
H Shares. The H Shares are currently primary listed on the Hong Kong Stock Exchange. There can
be no certainty as to the effect, if any, that future issues or sales of H Shares, or the availability of
such H Shares for future issue or sale, would have on the market price of the H Shares prevailing from
time to time and therefore on the market price of the Bonds. Sales of substantial numbers of H Shares
in the public market, or a perception in the market that such sales could occur, could adversely affect
the prevailing market price of the H Shares and the Bonds. The market price of the H Shares will also
be influenced by the Group’s operational results (which in turn are subject to the various risks to
which the Group’s businesses and operations are subject) and by other factors such as changes in the
regulatory environment that may affect the markets in which the Group operates and the capital
markets in general. Corporate events such as reorganizations, takeovers or share buy-backs may also
adversely affect the market price of the H Shares. Any decline in the market price of the H Shares
could adversely affect the market price of the Bonds.
Short selling of the H Shares by Bondholders could materially and adversely affect the market
price of the H Shares.
The issuance of the Bonds may result in downward pressure on the market price of the H Shares.
Investors in convertible securities may seek to hedge their exposure in the underlying equity
securities, often through short selling of the underlying equity securities or similar transactions. Any
short selling and similar hedging activity could place significant downward pressure on the market
price of the H Shares, thereby having a material adverse effect on the market value of the H Shares
owned by an investor as well as on the trading price of the Bonds.
Future issuances of H Shares or equity-related securities may depress the trading price of the H
Shares.
Any issuance of the Company’s equity securities after the offering of the Bonds could dilute the
interest of its existing shareholders and could substantially decrease the trading price of the H Shares.
The Company may issue equity securities in the future for a number of reasons, including to finance
its operations and business strategies (including in connection with acquisitions, strategic
collaborations or other transactions), to adjust its debt-to-equity ratio, to satisfy its obligations upon
the exercise of outstanding warrants, options or other convertible bonds or for other reasons. Sales
of a substantial number of H Shares or other equity-related securities in the public market (or the
perception that such sales may occur) could depress the market price of the H Shares and impair its
ability to raise capital through the sale of additional equity securities. The Company cannot predict
the effect that future sales of the H Shares or other equity-related securities would have on the market
price of the H Shares. In addition, the price of the H Shares could be affected by possible sales of
the H Shares by investors who view the Bonds as a more attractive means of obtaining equity
participation in the Company and by hedging or engaging in arbitrage trading activity involving the
Bonds.
– 46 –
The Bonds will initially be represented by a Global Certificate and holders of a beneficial interest
in the Global Certificate must rely on the procedures of the relevant Clearing System.
The Bonds will initially be represented by a Global Certificate. Such Global Certificate will be
deposited with a common depositary for Euroclear and Clearstream. Except in the circumstances
described in the Global Certificate, investors will not be entitled to receive definitive Bonds.
Euroclear and Clearstream will maintain records of the beneficial interests in the Global Certificate.
While the Bonds are represented by the Global Certificate, investors will be able to trade their
beneficial interests only through Euroclear and Clearstream. While the Bonds are represented by the
Global Certificate, the Issuer will discharge its payment obligations under the Bonds by making
payments to the common depositary for Euroclear and Clearstream for distribution to their account
holders. A holder of a beneficial interest in a Global Certificate must rely on the procedures of
Euroclear and Clearstream to receive payments under the Bonds. The Issuer has no responsibility or
liability for the records relating to, or payments made in respect of, beneficial interests in the Global
Certificate.
Holders of beneficial interests in a Global Certificate will not have a direct right to vote in
respect of the Bonds. Instead, such holders will be permitted to act only to the extent that they are
enabled by Euroclear and Clearstream to appoint appropriate proxies.
A change in English law which will govern the Bonds may adversely affect Bondholders.
The Terms and Conditions will be governed by English law. No assurance can be given as to the
impact of any possible judicial decision or change to English law or administrative practice after the
date of issue of the Bonds.
It may be difficult to effect service of legal process or enforce judgments obtained from non-PRC
courts against the Group and its management who reside in the PRC.
The Terms and Conditions and the transaction documents will be governed by English law and
the Issuer will submit to the exclusive jurisdiction of the Hong Kong courts. However, a majority of
the Group’s assets are located in China, and most of its directors and senior management reside in
China. Therefore, there is no assurance that investors will be able to effect service of process outside
of China upon the Group or its management.
Moreover, due to the difference in legal systems, you may experience difficulties in effecting
service of legal process and enforcing foreign judgments in the PRC, as the case in many other
jurisdictions. The PRC has not entered into treaties or arrangements providing for the recognition and
enforcement of judgments made by the courts in most other jurisdictions. Therefore, recognition and
enforcement in the PRC of judgments of a court in any of these non-PRC jurisdictions, as the case
in many other jurisdictions, may be difficult.
– 47 –
On 18 January 2019, the Supreme People’s Court of the PRC and the Hong Kong government
signed the Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and
Commercial Matters by the Courts of the Mainland and the Hong Kong Special Administrative
Region (關於內地與香港特別行政區法院相互認可和執行民商事案件判決的安排) (the “2019
Arrangement”). The 2019 Arrangement has been implemented in Hong Kong by the Mainland
Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance (Cap. 645), which
came into operation on 29 January 2024. In the PRC, the Supreme People’s Court promulgated a
judicial interpretation to implement the 2019 Arrangement on 26 January 2024 (the “Judicial
Interpretation”). The 2019 Arrangement applies to judgments made on or after 29 January 2024.
Unlike other bonds issued in the international capital markets where holders of such bonds
would typically not be required to submit to an exclusive jurisdiction, the Bondholders will be
deemed to have submitted to the exclusive jurisdiction of the Hong Kong courts. Thus, the
Bondholders’ ability to initiate a claim outside Hong Kong will be limited.
Under the 2019 Arrangement, where the Hong Kong court has given a legally effective judgment
in a civil and commercial matter, any party concerned may apply to the relevant People’s Court of
the PRC for recognition and enforcement of the judgement, subject to the provisions, limits,
procedures and other terms and requirements of the 2019 Arrangement and the Judicial Interpretation.
The recognition and enforcement of a Hong Kong court judgment could be refused if the relevant
People’s Court of the PRC consider that the enforcement of such judgment is contrary to the basic
principles of laws of the PRC or the social and public interests of the PRC. While it is expected that
the relevant People’s Courts of the PRC will recognize and enforce a judgment given by a Hong Kong
court and governed by English law, there can be no assurance that such courts will do so for all such
judgments, as it may remain subject to the specific circumstances of the case related to the judgment.
Compared to other similar debt securities issuances in the international capital markets where the
relevant holders of the debt securities would not typically be required to submit to an exclusive
jurisdiction, the holders of the Bonds will be deemed to have submitted to the exclusive jurisdiction
of the Hong Kong courts, and thus the ability of the holders of the Bonds to initiate a claim outside
of Hong Kong will be limited.
The risks described above do not necessarily comprise all those faced by the Group and are
not intended to be presented in any assumed order of priority.
The investment referred to in this Offering Circular may not be suitable for all of its
recipients. Investors are accordingly advised to consult an investment adviser before making a
decision to subscribe for the Bonds.
– 48 –
USE OF PROCEEDS
The proceeds raised from the offering of the Bonds, after deducting all related expenses and
expenses, will be allocated as follows: (i) 50% of the net proceeds will be used to support the
implementation of the Company’s global development strategies, including the construction of
overseas manufacturing bases, warehousing and logistics systems, R&D centres, marketing systems,
after-sales service systems and other projects in foreign countries including those in Europe, West
Asia, Southeast Asia, Africa, the Americas and Oceania, and (ii) 50% of the net proceeds will be used
to support the implementation of the Company’s innovation-driven and high-quality product
development strategies, including R&D and application of advanced technologies such as robots, new
energy and intelligentisation (i.e. development of numerous new products such as new energy
agricultural machinery, new energy mining machinery, humanoid intelligent robots and related core
components). For details, please refer to the circular of the Company dated 25 November 2025.
– 49 –
EXCHANGE RATE INFORMATION
The PRC
The PBOC sets and publishes daily a base exchange rate with reference primarily to the supply
and demand of Renminbi against a basket of currencies in the market during the prior day. The PBOC
also takes into account other factors, such as the general conditions existing in the international
foreign exchange markets. From 1994 to 20 July 2005, the conversion of Renminbi into foreign
currencies, including Hong Kong dollars and U.S. dollars, was based on rates set daily by the PBOC.
During this period, the official exchange rate for the conversion of Renminbi to U.S. dollars remained
generally stable. Although the PRC government introduced policies in 1996 to reduce restrictions on
the convertibility of Renminbi into foreign currencies for current account items, conversion of
Renminbi into foreign currencies for capital items, such as foreign direct investment, loan principals
and securities trading, still requires the approval of SAFE and other relevant authorities. On 21 July
of the Renminbi to fluctuate within a regulated band based on market supply and demand and by
reference to a basket of currencies. On the same day, the value of the Renminbi appreciated by
approximately 2% against the U.S. dollar. The PRC government has since made and in the future may
make further adjustments to the exchange rate system.
On 18 May 2007, the PBOC enlarged the floating band for the trading prices in the inter-bank
foreign exchange market of the Renminbi against the U.S. dollar from 0.3% to 0.5% around the
central parity rate, effective on 21 May 2007. This allows the Renminbi to fluctuate against the U.S.
dollar by up to 0.5% above or below the central parity rate published by the PBOC. The floating band
was further widened to 1.0% on 16 April 2012 and 2.0% on 17 March 2014. The PBOC announces
the closing price of a foreign currency traded against the Renminbi in the inter-bank foreign exchange
market after the closing of the market on each working day, and makes it the central parity for trading
against the Renminbi on the following working day. Effective since 11 August 2015, market makers
are required to quote their central parity rates for Renminbi against U.S. dollar to the China Foreign
Exchange Trade System daily before the market opens by reference to the closing rate of the PRC
inter-bank foreign exchange market on the previous trading day in conjunction with the demand and
supply conditions in the foreign exchange markets and exchange rate movements of major currencies.
The PBOC has further authorised the China Foreign Exchange Trade System to announce its central
parity rate for Renminbi against the U.S. dollar through a weighted averaging of the quotes from the
market makers after removing the highest quote and the lowest quote. The PRC government may
adopt further reforms of its exchange rate system, including but not limited to making the Renminbi
freely convertible in the future.
– 50 –
The table below sets forth the noon buying rate for U.S. dollars in New York City for cable
transfer in Renminbi as certified for customs purposes by the Federal Reserve Bank of New York for
the periods indicated:
Noon buying rate
Period Period end Average (1) High Low
(RMB per US$1.00)
January . . . . . . . . . . . . . . . . . . . . . . . 7.2422 7.2957 7.3326 7.2422
February . . . . . . . . . . . . . . . . . . . . . . 7.2828 7.2734 7.3088 7.2422
March . . . . . . . . . . . . . . . . . . . . . . . . 7.2567 7.2493 7.2843 7.2273
April . . . . . . . . . . . . . . . . . . . . . . . . . 7.2706 7.2968 7.3499 7.2675
May . . . . . . . . . . . . . . . . . . . . . . . . . 7.1991 7.2166 7.2706 7.1798
June . . . . . . . . . . . . . . . . . . . . . . . . . 7.1636 7.1804 7.1975 7.1636
July . . . . . . . . . . . . . . . . . . . . . . . . . 7.2002 7.1741 7.2002 7.1541
August. . . . . . . . . . . . . . . . . . . . . . . . 7.1304 7.1727 7.2116 7.1304
September . . . . . . . . . . . . . . . . . . . . . 7.1190 7.1235 7.1415 7.1033
October . . . . . . . . . . . . . . . . . . . . . . . 7.1169 7.1200 7.1384 7.0980
November. . . . . . . . . . . . . . . . . . . . . . 7.0751 7.1069 7.1295 7.0751
December . . . . . . . . . . . . . . . . . . . . . . 6.9931 7.0432 7.0717 6.9931
January (through 9 January) . . . . . . . . . . 6.9772 6.9861 6.9965 6.9772
Source: Federal Reserve H.10 Statistical Release
Note:
(1) Determined by averaging the rates on the last business day of each month during the relevant year, except for
the monthly average rate which is determined by averaging the daily rates during the month.
– 51 –
MARKET PRICE INFORMATION
Our H shares have been listed on the Hong Kong Stock Exchange (Stock Code: 1157) since 23
December 2010. Prior to that time, there was no public market for our H Shares. Our publicly traded
domestic shares, or A Shares, have been listed on the Shenzhen Stock Exchange (Stock Code:
The table below sets forth, for the periods indicated, the low and high closing prices per H
Share, as reported on the Hong Kong Stock Exchange, and per A Share, as reported on the Shenzhen
Stock Exchange:
Closing Share Price
H Share A Share
Period Low High Low High
(HK$) (RMB)
First quarter ended 31 March 2024 . . . . . . 3.84 5.38 6.57 8.26
Second quarter ended 30 June 2024 . . . . . . 5.00 6.35 7.54 9.35
Third quarter ended 30 September 2024 . . . 3.68 5.71 5.75 7.80
Fourth quarter ended 31 December 2024 . . . 4.56 6.14 6.72 7.66
First quarter ended 31 March 2025 . . . . . . 5.30 6.65 6.61 8.39
Second quarter ended 30 June 2025 . . . . . . 4.94 6.24 6.80 7.70
Third quarter ended 30 September 2025 . . . 5.78 7.29 7.23 8.39
Fourth quarter ended 31 December 2025 . . . 7.07 8.02 7.82 8.67
– 52 –
CAPITALISATION AND INDEBTEDNESS
The following table sets forth our capitalisation and indebtedness as at 30 June 2025 on an
actual basis and on an adjusted basis after giving effect to the issuance of the Bonds in this offering
before deducting the underwriting discounts and commissions payable by us in connection with this
offering. The table should be read in conjunction with the financial statements and the accompanying
notes incorporated by reference in this Offering Circular.
As at 30 June 2025
Actual As adjusted(1)
RMB US$ (2) RMB US$ (2)
(millions) (millions) (millions) (millions)
Current indebtedness
Current loans and borrowings . . . . . . . . . 8,734 1,219 8,734 1,219
Current lease liabilities . . . . . . . . . . . . . 143 20 143 20
Total current indebtedness . . . . . . . . . . 8,877 1,239 8,877 1,239
Non-current indebtedness
Non-current loans and borrowings . . . . . . . 20,355 2,841 20,355 2,841
Non-current lease liabilities . . . . . . . . . . . 282 39 282 39
Bonds to be issued . . . . . . . . . . . . . . . . – – 6,000 838
Total non-current indebtedness. . . . . . . . 20,637 2,881 26,637 3,718
Total indebtedness . . . . . . . . . . . . . . . . 29,514 4,120 35,514 4,957
Total equity . . . . . . . . . . . . . . . . . . . . 59,340 8,284 59,340 8,284
(3)
Total capitalisation . . . . . . . . . . . . . . 88,854 12,404 94,854 13,241
Notes:
(1) As adjusted as at 30 June 2025 to give effect to the issue of the Bonds and the proceeds we are expecting to
receive from the issue of the Bonds (before deducting underwriting commissions and certain estimated offering
expenses). In accordance with International Accounting Standards 32, Financial Instruments: Presentation, a
convertible bond that can be converted to equity share capital at the option of the holder which is accounted
for as compound financial instruments contains both a liability component and an equity component. For
illustrative purpose, the aggregate proceeds we are expecting to receive from the issue of the Bonds (before
deducting underwriting commissions and certain estimated offering expenses) will be assumed as the liability
component and no allocation to the equity component will be made.
(2) Calculated at the exchange rate of RMB7.1636 to US$1.00 on 30 June 2025 as set forth in the H.10 statistical
release of the Board of Governors of the Federal Reserve System. No comment is made as to the appropriateness
of such rate or whether the RMB was, could have been, or could be, converted into US$ at that rate.
(3) Total capitalisation equals total indebtedness plus total equity.
In our ordinary course of business, we may consider various financing opportunities and incur
additional debt, including, among others, bank borrowings and domestic or offshore bonds or other
securities issuances, to finance our business developments or for general corporate purposes. Other
than as disclosed above, there has been no material adverse change in our capitalisation and
indebtedness since 30 June 2025.
– 53 –
DIVIDENDS
Subject to the laws of the PRC and the Articles of Association, the Issuer normally distribute
dividends to shareholders on a yearly basis in a specific proportion out of the distributable profit
realised. The Issuer may distribute dividends in cash or in shares. Under favourable circumstances,
the Issuer may distribute interim dividends in accordance with PRC tax laws.
Dividends or other distributions of the Issuer shall be declared and calculated in Renminbi.
Where the Company makes payment to holders of foreign investment shares in foreign currency, the
foreign currency shall be arranged in accordance with the relevant state foreign exchange regulations.
On 29 August 2025, the Board resolved to recommend an interim dividend of RMB0.2 per share
for the six months ended 30 June 2025, totalling RMB1,730 million, which was approved by the
shareholders at our extraordinary general meeting held on 11 December 2025. The interim dividend
has been paid on Friday, 9 January 2026 to holders of H shares whose names appeared on the
Company’s H share register of members at the close of business on Monday, 22 December 2025 and
to holders of A shares whose names appeared on the Company’s A share register of members at the
close of business on Thursday, 8 January 2026.
– 54 –
CORPORATE STRUCTURE
The following chart sets forth a simplified overview of our organisational structure indicating certain key subsidiaries as at the date of this Offering
Circular:
Zoomlion Heavy
Industry Science and
Technology Co., Ltd.
Hunan Zoomlion Intelligent
Hunan Zoomlion International Hunan Zoomlion Crawling Hunan Zoomlion Intelligent Changsha Zoomlion Zoomlion Agricultural Zoomlion Construction and
Hunan Teli Hydraulic Aerial Work Machinery Zoomlion Earthmoving Zoomlion Group
Trade Co., Ltd.* Crane Co., Ltd.* Technology Co., Ltd.* Auto Parts Co., Ltd.* Machinery Co., Ltd.* Crane Machinery Co., Ltd.*
Co., Ltd.* Co., Ltd.* Machinery Co., Ltd.* Finance Co., Ltd.*
(湖南中聯國際貿易 (湖南中聯重科履帶起重機 (湖南中聯重科 (長沙中聯汽車零部件 (中聯農業機械 (中聯重科建築起重機械
(湖南特力液壓有限公司) (湖南中聯重科智慧 (中聯重科土方機械有限公司) (中聯重科集團財務有限公司)
有限責任公司) 有限公司) 智慧技術有限公司) 有限公司) 股份有限公司) 有限責任公司)
高空作業機械有限公司)
Shaanxi Zoomlion West
Changsha Zoomlion
Earthmoving Machinery
Agricultural Equipment
Co., Ltd.*
Co., Ltd.*
(陝西中聯西部
(長沙中聯農業裝備有限公司)
土方機械有限公司)
– 55 –
DESCRIPTION OF THE GROUP
OVERVIEW
Following the core concept of “building up enterprises with Internet thinking and producing
products by pushing everything to the limit”, the Company has unswervingly committed itself to the
goal of high-quality development, and worked harder on the three transformation initiatives of
“related diversification, globalization and digitization”. By seeking high-quality development
powered by technological innovation, the Company refreshed its efforts to advance the
transformation and upgrading of digitization, intelligence and green operations. The Company
continued to deepen its traditional strengths while accelerating the cultivation and expansion of
emerging business sectors. Through a comprehensive global market expansion strategy, this has
unlocked new growth opportunities for the Company, enabling it to navigate economic cycles and
achieve robust, sustainable, and high-quality development.
For the years ended 31 December 2022, 2023, and 2024, our revenue was RMB41,631 million,
RMB47,075 million and RMB45,478 million, respectively; our gross profit was RMB9,088 million,
RMB12,966 million and RMB12,810 million, respectively; and our profit attributable to equity
shareholders of the Company was RMB2,347 million, RMB3,550 million and RMB3,521 million,
respectively.
For the six months ended 30 June 2024 and 30 June 2025, our revenue was RMB24,535 million
and RMB24,855 million, respectively; our gross profit was RMB6,946 million and RMB6,996
million, respectively; and our profit attributable to equity shareholders of the Company was
RMB2,281 million and RMB2,753 million, respectively.
RECENT DEVELOPMENTS
On 29 August 2025, the board (the “Board”) of directors (the “Director(s)”) of the Company
resolved to recommend an interim dividend of RMB0.2 per share for the six months ended 30 June
general meeting held on 11 December 2025. The interim dividend has been paid on Friday, 9 January
at the close of business on Monday, 22 December 2025 and to holders of A shares whose names
appeared on the Company’s A share register of members at the close of business on Thursday, 8
January 2026.
On 30 October 2025, pursuant to the new Company Law of the People’s Republic of China (the
“New Company Law”), the Guidelines for the Articles of Association of Listed Companies (the
“Guidelines”) and relevant laws, regulations and normative documents, the Board has determined (i)
that it will dispense with the supervisory board and supervisors, whose functions and powers under
the New Company Law will be assumed by the audit committee of the Board and (ii) to make
corresponding amendments and other housekeeping changes (the “Proposed Amendments”) to the
articles of association of the Company. Please refer to Appendix of the announcement of the
Company dated 30 October 2025 for details of the Proposed Amendments. In view of the Proposed
Amendments, the Company has adopted corresponding changes to the respective terms of reference
of the audit committee, the nomination committee and the remuneration and assessment committee
of the Company. The Proposed Amendments to the Articles have been approved by the shareholders
at our extraordinary general meeting held on 11 December 2025.
– 56 –
On 30 October 2025, the Board announced the unaudited results of the Company for the nine
months ended 30 September 2025 (the “Third Quarterly Report of 2025”). For the nine months
ended 30 September 2025, the Company recorded a slight decline in its domestic revenue but its
overseas revenue experienced a significant increase. The financial data contained in the Third
Quarterly Report of 2025 has been prepared in accordance with China Accounting Standards for
Business Enterprises and is unaudited. Please refer to the announcement of the Company dated 30
October 2025 for details.
On 8 December 2025, the Board announced that the acquisition of 81% in aggregate of the
registered capital of Zoomlion Finance and Leasing (Beijing) Co., Ltd.* (中聯重科融資租賃(北京)有
限公司) (the “Target”) has been approved by the local financial supervision and administration
bureau in Beijing, the PRC and the industrial and commercial registration of the change in ownership
of the Target with the relevant PRC administration of market regulation was completed on 5
December 2025. Following said completion, the Target has become a wholly-owned subsidiary of the
Company, and its results will be consolidated into the Company’s financial statements.
COMPETITIVE STRENGTHS
development of all sectors
During the six months ended 30 June 2025, the Group accelerated the diversification of its
industrial sectors to seek a pattern of synergistic integration and competitive development where
traditional advantageous industries and emerging industries integrate and thrive together. The Group
further strengthened strategic execution to ensure the effective implementation of its overall strategy.
The traditional advantageous industries have been improving their competitiveness, laying a solid
foundation for development, while the emerging industries have accelerated to thrive and shape new
growth poles.
(i) Leading products remained solid in the market
The Group is a leading China-based construction machinery manufacturer with diversified
product offerings, offering a wide variety of models of machinery and equipment covering
different product types across product lines. A steady development strategy was adopted for the
Group’s product lines of the three key traditional competitive products (concrete machinery,
engineering cranes and construction cranes). The Group took a holistic approach to global
resource allocation to advance overseas transformation in an all-round way and deepened its
“pin-shaped” management model. By rigorously controlling risks in both domestic and
international markets and elevating operational management quality across the board, the Group
has built new momentum to drive its high-quality development. All three major product lines
maintained a solid position in the domestic market, with sales of new energy mixers and crawler
cranes doubling their growth. The scale of overseas business and market position continued to
increase, with a year-on-year growth of the export sales for the three major product lines
exceeding 13%.
– 57 –
(ii) Earth working machinery-built edges in a full-scenario product matrix and achieved a
dual growth in domestic and overseas markets
In terms of earth working machinery, the Group expanded the product spectrum of
micro-excavation, enhanced the performance of medium and large excavation across the board
and pioneered green mining technologies for ultra-large-tonnage equipment. The Group has
built the full-scenario product matrix with industry-leading competitiveness. In the domestic
market, the Group has transitioned its sales model to a distributor model, continuously
optimized its product mix, and achieved an industry-leading market share in medium and large
excavators. In the overseas market, the Group deepened its global footprint by efficiently
introducing the “pin-shaped” management model and the “ground forces + air forces”
collaboration framework, while continuously optimizing its worldwide service and parts
network, achieving dual growth in sales volume and market share. During the six months ended
over 33%, leading the industry.
(iii) Aerial machinery led the development of global high-end markets
Powered by sustained technological innovation, the Group has established solid core
competitive advantages and gained global pricing power in the superhigh work heights. Notably,
the boom lift products with superhigh work heights rank first in the global market share, and the
world’s tallest 82-meter superhigh straight-boom lift has obtained the EU CE certification. The
ZA32J articulated boom lift with high work heights tops the global market share. At present, the
Group’s products with high work heights have achieved large-scale export to Europe, the
Americas, and the Asia-Pacific regions, demonstrating remarkable technological leadership and
product competitiveness. For industrial layout, the Group works on its worldwide footprint and
local presence. The Hungarian factory is constructed as scheduled, and domestic production
competitiveness continues to strengthen. This multi-dimensional approach is already unlocking
new growth drivers for future development, laying a solid foundation for its cemented global
leadership in the field of aerial machinery.
(iv) Agricultural machinery advanced strategic restructuring and lean development
transformation
Aligned with the “High-end, International, and New Energy” core development strategies,
the Group has driven comprehensive upgrades across its product portfolio, R&D, marketing,
production, and human resource systems. The Group focused on agricultural machinery for
large-scale cultivation of key crops, building an integrated industrial ecosystem that synergizes
complete machines with core components. In its seven priority markets, the Group has had in
place elite teams to strengthen end-user penetration. Through systematic integration of factory
manufacturing resources, the Group has enabled a global lean manufacturing network. By
consolidating resources and restructuring operational frameworks, the Group has enhanced its
input-output efficiency to achieve lean development on all fronts. During the six months ended
products achieved growth against headwinds during the industrial adjustment, and the business
mix accelerated its transformation to high-value-added areas, laying a solid foundation for
high-quality development.
– 58 –
(v) Dual breakthroughs in both competitiveness and market performance in mining
machinery
Prioritizing the “Green, Large-Scale, and Intelligent” initiative for mining machinery, the
Group is committed to developing high-end full-process mining equipment, achieving industry-
leading comprehensive product competitiveness. Manufacturing capacity has leaped forward,
tripling since the beginning of the year. Domestic business grew against the market headwinds,
securing a firm foothold with central and State-owned enterprises in the energy sector.
Overseas, the Group notched successive breakthroughs, gaining full access to the global
high-end mining market. During the six months ended 30 June 2025, sales increased by over
(vi) R&D Acceleration of embodied intelligent robots
The Group has developed three new humanoid robots, including one wheeled humanoid
robot and two bipedal humanoid robots. Dozens of them have entered factory operation and are
being piloted in mechanical processing, logistics, assembly, quality inspection and other links
to accelerate industrialization. By developing a complete set of tool chain for data collection,
data labeling, and model training, the Group has built a 120-station embodied intelligent
training ground and an embodied intelligent operation center, establishing a closed-loop
mechanism for the entire process of “data collection – model training – application iteration”
and initially forming a data flywheel to promote the evolution of the Group’s humanoid robot
embodied intelligent large-scale model.
(vii) Emerging business thrived
Relying on its platform and brand advantages, the Group has rapidly expanded the product
portfolios of its emerging businesses, like emergency equipment, foundation construction
machinery and industrial vehicles, to continuously refine its market presence and steadily
elevate its industry standing.
Driven by technological innovation, for the emergency equipment, the Group stayed
committed to shaping internationally competitive emergency vehicles, overseas products, and
electric-construction machinery, forging an industrial layout that is “domestically leading and
globally expanding.” The Group continued to deepen its presence in the domestic market while
securing new breakthroughs overseas, with both revenue and profit recording new highs. During
the six months ended 30 June 2025, sales increased by over 54% year on year.
Following the “Stabilize Fundamentals, Pursue Growth, Address Weaknesses, and Develop
Flagship Products” approach, the Group has established global market coverage through its
“High-end Product Platform + Global Regional Market Portfolio” model. Meanwhile, the Group
worked on digitalization and intelligence transformation and successfully developed the
Ma’anshan industrial park into a green, intelligent modern plant. During the six months ended
with better operational quality across the board. Notably, the export sales increased by over 85%
year on year.
– 59 –
The Group has firmly implemented the international development strategy with the Group’s
characteristics, and continued to work on the “end-to-end, digital and localised” overseas business
direct-sale system. Relying on integrated advantages in corporate culture, operational philosophy, and
digital technologies, the Group accelerates comprehensive localization of all operational elements,
including overseas R&D, manufacturing, supply chains, and sales-service networks to build enduring
competitive advantages in overseas markets and drive sustained, rapid development of the overseas
business.
(i) Diversified market footprints
Diversified market footprints strongly underpinned the robust development of the overseas
business. In the first half of 2025, the Group’s overseas revenue continued its growth of more
than 14% year on year. With the deepening of the globalization process, the overseas markets
have demonstrated multi-dimensional growth momentum. The sales in the African market
increased over 179% year on year. Middle East, Southeast Asia, Australia, and New Zealand
markets continued their fast-growing sales. Emerging markets contributed 39% of total overseas
sales. The Group has deepened cross-regional synergies and optimized its sales structure,
entering a high-quality development stage characterized by “Structural Optimization + Local
Market Deep Cultivation”.
(ii) A refined direct sales system to empower sustainable overseas business growth
By deeply advancing its “Airports + Ground Troops + Flying Squadrons” end-to-end
operating model, the Group achieved comprehensive penetration through a refined direct sales
system to empower sustainable overseas business growth. Firstly, the Group has established an
integrated management system that makes overseas operations flatter, streamlined, standardized
and systematic. The “pin-shaped” management model has been deepened, and a red/yellow-card
mechanism has been introduced to tighten process management, ensuring every task is assigned
to a named individual and every risk is kept in check. Secondly, the Group has forged a
three-tier defense in sales, risk management, and legal affairs to safeguard the steady expansion
of its overseas business by developing differentiated risk-control models, diversifying collateral
and guarantee structures, introducing local financial resources, and reinforcing business
guardrails. Thirdly, focusing on the three core segments of business, logistics and service, the
Group has been on track for “standardization, digitization and automation” across the board.
Leveraging AI to optimize end-to-end process efficiency and building and expanding the
application of its digital remote-collaboration platform, the Group has seen better market
response and service performance to underpin its global business growth.
(iii) Pushing forward the layout of outlets by extending the outlet construction to lower-tier
markets to empower airports to transform and upgrade their operational systems for a
more efficient global sales and service network
The Group has further optimized its outlet layout. The Group stepped up investment in
high-potential markets. While consolidating the core functions of its primary airports, the Group
pressed ahead with the expansion and build-out of 55 secondary outlets. In its traditional key
markets, the Group accelerated the “airports in lower-tier markets” strategy by establishing 47
– 60 –
secondary outlets and developing nodes in surrounding cities and reinforced a star-shaped
service structure of “one central warehouse + N satellite warehouses.” Concurrently, the Group
has completed site selection and construction of 24 specialized service outlets, materially
improving service responsiveness and market coverage depth.
The operational efficiency has been significantly improved. The Group has systematically
optimized the utilization and reasonability of its global outlet warehousing by consolidating
resources at key market centers and refining the layout of service and repair zones to improve
overall operational efficiency of outlets. At present, relying on more than 30 primary business
airports and more than 430 secondary and tertiary outlets established globally, the Group is
promoting the extension of outlet construction from regional centers to important cities to build
a more efficient global sales and service network. With a total of approximately 5,000 overseas
localized employees, the Group’s products are widely offered in more than 170 countries and
regions thanks to its well-established sales and service networks.
(iv) Continued expansion and upgrading of overseas R&D and manufacturing bases
The Group continued to deepen its Europe localization strategy to reinforce its market
competitiveness in the region and establish a high-end equipment manufacturing base. The
Group has expanded and upgraded the German Wilbert plant, transforming it into a
comprehensive production base. The Group has built a new aerial platform plant in Hungary to
further accelerate its business growth through localized production, setting an example for
China-Hungary industrial cooperation. By simultaneously upgrading capacity in its German
base and expanding business in its Hungarian base, the Group has completed a European
manufacturing network that spans multiple categories of high-end equipment, enhancing local
supply efficiency and market responsiveness to fully underpin its global development strategy.
AI engine
The Group has been comprehensively accelerating the process of digital transformation to
innovate the market operation model with Internet thinking, reshape the management and business
model with the help of digital means, and build a new development pattern driven by digitalization
in all aspects.
Digital efforts empowered the efficient operation of overseas business. The Group has deepened
its “pin-shaped” management system by fully applying a global marketing & service process
diagnosis tool and a performance-management platform that deliver real-time visibility of frontline
team’s indicators and link them directly to bonus incentives, energizing the team’s force; accelerated
efforts in the “last-mile” localization overseas by facilitating the integration of local e-ecosystems
and piloting e-contracts in key markets to raise the efficiency of localized contracting and archiving;
continued to optimize its overseas service platform and deepen its parts-order dispatch system. The
system has already covered 9 product lines in more than 30 countries and regions. The system has
enabled precise control of service costs, real-time shortage tracking and zero service downtime,
significantly enhancing customer experience and service efficiency.
– 61 –
Digital efforts empowered the refined management and control of production, sales and storage.
The Group took a holistic approach to inventory management and control, intelligent manufacturing
and supply-chain platform building to refine the production-sales coordination mechanism for a fully
digital monitoring system that spans the entire value chain from “opportunity insight to value
realization”. By integrating cutting-edge technologies such as artificial intelligence, the Group has
achieved end-to-end, high-efficiency collaboration, reshaping its operating model into one that is
“demand-driven and lean in supply.” This enables us to respond to market needs with an optimal cost
structure, thereby reducing inventory levels and improving capital turnover.
high-quality development of the industry
Holding fast to its “digital, intelligent and green” development strategy, the Group has
accelerated the upgrade of high-end intelligent manufacturing. Intelligent industrial parks, intelligent
plants and intelligent production lines have been rolled out in succession, while cutting-edge research
in advanced intelligent manufacturing has rapidly converted into commercial applications.
“End-to-end” digital transformation has been deepened across the board, rapidly forging an
industry-leading cluster of intelligent manufacturing. These initiatives have firmly established the
Group as a benchmark for intelligent manufacturing and cemented its leadership in advantaged
intelligent manufacturing sectors and continue to put the industry on track for high-quality
development.
(i) Intelligent manufacturing industry clusters continued to thrive
The Group made fruitful progress in promoting the construction of intelligent factories,
laying a solid foundation for its high-quality development. With Zoomlion Smart Industrial City
as the core, the Group has promoted the construction of intelligent factories for high-end
equipment from mainframes to parts. The 4 intelligent mainframe plants and the key part center
of With Zoomlion Smart Industrial City have been built and put into production, and more than
machinery plant, have been built and put into production. To date, the Group has globally built
and put into production 17 intelligent factories and more than 370 intelligent production lines,
helping to build an important national advanced manufacturing highland on all fronts.
(ii) Rapid transformation and application of advanced intelligent manufacturing technology
research
The Group deeply integrated artificial intelligence, the industrial internet, intelligent
manufacturing technology, and intelligent equipment to create digital, intelligent, and green
production lines. The Group also innovatively developed intelligent control algorithms and
digital systems to build flexible, efficient, and interconnected intelligent factories. The Group
continued to promote the application research of over 270 independently developed, industry-
leading, full-process sets of intelligent manufacturing technologies, and has made
breakthroughs in nearly 250 key technologies related to quality improvement, cost reduction,
and efficiency enhancement, which have been applied in intelligent production lines, with over
leadership in the overall process technology for the main product lines, demonstrating the
Group’s strong intelligent manufacturing technology strength and cutting-edge leading
advantages, accelerating the empowerment of production and manufacturing intelligent
upgrades, and continuously promoting the Group’s intelligent manufacturing to lead the
development of the industry.
– 62 –
(iii) Comprehensive acceleration of digital transformation across the entire manufacturing
and supply chain
By deeply integrating technologies like AI Agents, big data and digital twins, the Group
advanced the in-depth deployment and global empowerment of intelligent manufacturing
platform, drove the entire business flow to achieve self-perception, self-decision-making, and
self-optimizing collaboration, and continuously enhanced the production efficiency and product
quality of all manufacturing bases.
The Group built an intelligent collaborative architecture and continued to promote full
coverage of intelligent manufacturing platform. By enabling deep linkage between cloud
intelligence, edge computing, and terminal execution, the Group empowered efficient human-
machine integration and accelerated the in-depth practice of intelligent manufacturing. This has
significantly enhanced flexible manufacturing capabilities, enabling precise insight into and
efficient response to diverse and dynamic market demands. The Group has efficiently
coordinated domestic and overseas main production plans, and the planning and scheduling
systems for engineering cranes, pump machinery, and aerial machinery have been rolled out,
improving planning accuracy by 15%. The Group has connected end-to-end production
processes by launching the manufacturing execution systems for engineering cranes, foundation
construction machinery, and Teli Hydraulic, boosting production efficiency by 15%. The Group
has fully deployed the “E-Code” system for main machines and the WMS for parts warehouses,
creating a digital management network for global machine and spare parts inventory, and further
improving the warehouse management efficiency of physical inventory by 20%.
The Group integrated technologies like AI Agents and digital twins to create a
self-adaptive decision-making hub that is “extremely responsive, holistically insightful, and
precisely executable”. Leveraging AI and intelligent control technology, the Group has
upgraded automated debugging and optimization to enable intelligent fault diagnosis for
equipment, improving the fault response efficiency by 40% and diagnostic accuracy by 18%.
The Group has established quality early warning and quality “fuse” models for components, and
piloted in engineering cranes, aerial machinery, and the intelligent company, with component
traceability accuracy increased to 99.94%, and accuracy in determining responsibility for
market quality increased to 99.84%. The PCM system with raw material big data model enables
dynamic price linkage with online raw material prices and intelligent progress monitoring,
improving price verification efficiency by 25%. The multi-agent intelligent picking system,
based on the AIGC-PaaS platform, achieves optimal scheduling decisions for WES, RCS, and
embodied robots.
forces through the “digitalisation, intelligentisation and eco-friendliness” technologies
The Group continued to drive high-quality development through technological innovation,
consistently injecting new momentum into the deep-seated breakthrough of the global strategy. In the
first half of 2025, the Group launched 141 new products in overseas markets and had 338 products
receive international certifications. As the Group’s global product system continues to improve, the
model coverage of the main construction and mining machinery products in overseas markets has
increased by nearly 10%, leading to rapid growth in the Group’s international market share.
– 63 –
During the six months ended 30 June 2025, we had 1,755 R&D projects in progress, nearly 300
of which focused on new “digitalisation, intelligentisation and eco-friendliness” technologies. In the
same period, we launched 206 new machine models, including 76 high-end 4.0 series products and
marking the Group’s global leadership in ultra-large all-terrain crane technology. In addition, the
Company has created new industry-leading products such as the world’s tallest 216-meter wind power
luffing jib tower crane and the world’s longest five-axle compliant steel boom pump truck with a
vertical reach of 76 metres. Focusing on the needs of overseas business, the Company has accelerated
the R&D of key components to precisely meet the demands of different regional markets, completing
the development and application of 56 key components, including intelligent controllers, hydraulic
parts, displays, and “three-electric” systems. The main innovation achievements are as follows:
(i) Continuous application of “digitalisation, intelligentisation and eco-friendliness” new
technologies significantly enhances product competitiveness
In terms of digitalisation, the Group initiated 61 projects, 19 of which have achieved batch
application. The Group has further leveraged digitalisation to drive ultimate product
enhancement, achieving significant breakthroughs in product operation & maintenance and
full-lifecycle health management. Key applications include a crane fault diagnosis system and
typical fault Q&A robot, an integrated management system for mixing plants and pump trucks,
a global spare parts mall for aerial work platform, a parameter management platform for tower
cranes, a multi-dimensional database for tractors, a digital management platform for power
construction products, and a thermal load analysis technology for excavators. These digital
technologies have strongly supported product quality upgrades and full-lifecycle value creation.
In terms of intelligentisation, we initiated 100 projects, 22 of which have achieved batch
application. The Group deeply promoted the engineering and productization of intelligent
technology achievements, continuously enhancing the products’ full-process autonomous
operation capabilities and collaborative technology levels. L2-level autonomous boom
operation technology for pump trucks, one-key horizontal push control technology for
front-shovel excavators, drive-by-wire chassis control technology for autonomous
mining trucks, and an auxiliary driving system for agricultural machinery have all been
deployed in batches. Leveraging the Group’s innovative consortium for intelligent
construction with engineering machinery, we successfully created an overall smart
mining solution. This solution achieves unmanned operation for the entire
“excavation-loading-transportation-unloading-return” process, reducing mining and stripping
personnel by about 90% and increasing operational efficiency by 10%. This solution is now
being applied on a large scale in mining areas in Inner Mongolia.
In terms of eco-friendliness, the Group initiated 78 projects, with 23 completing prototype
verification and 14 achieving small-batch or batch application. The Group has independently
overcome a series of green product technology challenges, such as energy consumption
optimization for mixer trucks based on operational data, energy recovery from regenerative
braking for electric loaders, energy-saving closed-loop hydraulic systems for the main winch of
rotary drilling rigs, and extended-range hybrid energy control for high-horsepower tractors,
continuously promoting energy conservation and emission reduction in the Group’s products.
The Group has also innovatively developed a range of green safety technologies, including
collision detection and safety control around crane booms, a vision-based walking safety
– 64 –
warning system for aerial work platform, an AI safety supervision system for tower crane
jacking, a fatigue monitoring and warning system for excavator operators, and a single-pedal
combined braking system for wide-body trucks, ensuring that the Group’s products’ safety
performance remains at the forefront of the industry.
(ii) Comprehensive expansion of new energy main products and accelerated
industrialization of key components
In the first half of 2025, the Group launched 20 new energy main products, including the
world’s first pure electric port tire crane, the world’s first five-axle right-hand drive new energy
mixer truck, the world’s first 5-axle 38-ton pure electric knuckle-boom truck-mounted crane, a
horsepower CVT four-wheel-drive hybrid tractor, and other innovative products. In terms of
market penetration, the electrification rate of mixer trucks increased from 36.6% in 2024 to
significantly accelerating the electric transformation of mixer trucks and wide-body trucks in
the domestic market. In terms of “three-electric” components, the Group has built differentiated
competitive advantages for agricultural machinery and mining truck products. The Group has
launched a 6kWh high-rate battery pack for agricultural machinery, a 120kW compact and
efficient flat-wire motor specifically for agricultural machinery, as well as a 397kWh
energy-type and a 134kWh high-rate battery pack for mining trucks. These products have been
applied in batches with main machines in both domestic and international markets. In terms of
hydrogen energy equipment, we are rapidly entering the hydrogen energy sector. The Group has
launched a new generation of 45MPa/70MPa/90MPa hydrogen liquid-driven piston compressors
suitable for transportation and energy systems. The Group has also developed 2-10Nm3
channel-type PEM electrolyzers and a 300kW fuel cell power station, helping cities build a new
economic ecosystem that integrates clean energy, hydrogen-powered transportation, and green
manufacturing.
(iii) Accelerating research breakthroughs in key core technologies and products for
agricultural machinery to create a series of state-of-the-art agricultural machinery
In the first half of 2025, the Group launched four flagship products: the N-series
mechanical-shift tractor, the TK100MAX grain harvester, the PL80 rice harvester, and a 30-ton
grain dryer. These products feature significant improvements in performance, appearance, and
user comfort. In terms of technological innovation, we developed the industry’s first distributed
direct-drive motor technology and launched the first DV4004 electric continuously variable
transmission (CVT) tractor. It can couple and decouple its dual-motor coaxial system in
response to working conditions and load, achieving an 8% fuel saving under heavy load and a
controllable, ultimate intelligent control system has been deployed. It integrates three core
modules – electrical monitoring and control, intelligent driving, and ISOBUS implement
collaborative control – to create an ultimate experience, making field operations more precise
and efficient.
– 65 –
(iv) Global layout of intellectual property and standards to support the Group’s overseas
strategy
During the six months ended 30 June 2025, the Group filed 683 new patent applications
and were granted 555 patents, including 172 invention patents. Guided by the principles of
creating high-value intellectual property, establishing multi-layered protection, and developing
a global layout, the Group continued to strengthen its patent fortress around core competitive
technologies. The cumulative number of patents for “digitalisation, intelligentisation and
eco-friendliness” new technologies reached 5,974, and the cumulative number of patent
applications in the agricultural machinery technology reached 2,371. The cumulative number of
overseas PCT applications and national phase entries reached 974. By accelerating the patent
layout in key overseas countries, the Group provides strong support for the advancement of the
Group’s overseas strategy.
During the six months ended 30 June 2025, the Group successfully hosted the 2025 annual
meeting of the International Organization for Standardization’s Technical Committee for Cranes
(ISO/TC 96), with over 120 renowned industry experts from 14 countries in attendance. During
the meeting, four international crane standard projects led by the Group made substantial
progress. Among them, ISO/TR 25201 “Cranes – Special wind field conditions” was approved
for development, and ISO 4302 “Cranes – Wind load assessment” is scheduled for publication
within the year. Work on “digitalisation, intelligentisation and eco-friendliness” standards
continued to advance. Five standards led by the Group were successfully approved for
development, including the national standard “Intelligent System of Cranes – Obstacle
Avoidance Technology”, the industry standard “Specification for Automated Data Collection
and Transmission in Field Crop Cultivation”, and the group standard “Hybrid Corn Harvester”.
The Group also published 10 national, industry, and group standards, including “Cranes – Wind
load calculation”, “Terminology for physical asset leasing”, “Wireless remote control devices
for tower cranes”, and “Intelligent classification of large-scale farms”.
During the six months ended 30 June 2025, the Group strengthened risk control and kept on
improving its supply chain, after-sales service and human resource management level, escorting the
high-quality development of the Group.
(i) Comprehensively strengthening risk control
The Group has always prioritized risk control as the primary guarantee for its operations,
resolutely implemented end-to-end business management and consistently improved a
preventative, end-to-end risk control system. This enables terminal overdue monitoring down to
each customer, order, and piece of equipment, ensuring risks are fully visible and controlled.
During the six months ended 30 June 2025, we upgraded risk control capabilities in multiple
dimensions. We focused on high-quality business and strengthened red-line controls for new
business entry. We enhanced synergy in risk collection, building an integrated system of
“centralized coordination + decentralized execution”. We adopted a category-based approach to
improve disposal efficiency and promoted a “sales-service-risk control” integrated collection
model for all staff. We also strengthened backend “Tripartite” management to achieve
closed-loop risk handling, comprehensively enhancing the effectiveness of the Group’s risk
control.
– 66 –
(ii) Strengthening construction of a supply chain system
The Group continued to promote the consolidated and centralized procurement of bulk and
general materials, strengthening cost control to support ultimate cost reduction and optimize
supplier ecosystem. We accelerated digital transformation, having completed the full-process
integration of the supply chain management platform across 21 business units, with plans for
coverage across the Group in the second half of the year. Simultaneously, we consistently
implemented an ultimate cost accounting system to comprehensively improve the efficiency of
procurement price verification and achieve lifecycle cost management.
(iii) Strengthening the full-process inventory management system
The Group focused on promoting a digital inventory control project. This system uses
business opportunities to drive production and budgets to control inventory, enabling a
closed-loop management from opportunity to delivery. It achieves visualized and intelligent
control across the entire “opportunity-plan-production-procurement-sales-inventory” chain.
During the six months ended 30 June 2025, the first phase of the digital production-sales-
inventory monitoring platform went live, enabling real-time monitoring and early warning of
anomalies in production, sales, and inventory data. The Group’s inventory scale has
significantly decreased as a result.
(iv) Deepening the development of ultimate service capability
The Group focused on advancing the development of a hub-based service system,
continuously strengthening three core capabilities: service management, service teams, and
service support. This involves fully implementing end-to-end and fine-grained management in
service operations. Concurrently, we optimized the global service resource layout and
accelerated the localization of service operations, with the service localization rate reaching
efficiency and quality, effectively promoting the conversion of service value.
(v) Tackling challenges to empower a globalized human resources system
In line with the Group’s all-out transformation toward an overseas strategy, we have
optimized organizational structure and conducted targeted recruitment to strengthen the Group’s
teams. Focusing on building global capabilities, the Group has deepened talent training and
competency enhancement to create a team with “high identification, high standards, and high
caliber”. We explored global talent incentive mechanism by upgrading performance
management, improving the compensation system, and optimizing value assessment and
distribution to motivate employees. We also advanced global digital transformation to empower
improvement in both management efficiency and service quality.
BUSINESS STRATEGIES
Following the core concept of “building up enterprises with Internet thinking and producing
products by pushing everything to the limit”, the Group has unswervingly committed itself to the goal
of high-quality development, and worked harder on the three transformation initiatives of “related
diversification, globalization and digitization”. By seeking high-quality development powered by
technological innovation, the Group refreshed its efforts to advance the transformation and upgrading
of digitization, intelligence and green operations.
– 67 –
The Group will further promote the synergistic integration and competitive development of
traditional advantageous industries and emerging industries and further strengthen the
implementation of strategies to demonstrate the results of the overall strategy. The traditional
advantageous industries will continue to forge sustainable competitiveness in the process of steady
improvement; the emerging industries will continue to contribute new growth poles in the process of
development and growth. First, in terms of concrete machinery, engineering cranes, and construction
cranes, the Group will consistently pursue its goal of global leadership. For domestic operations, the
Group will strive to achieve a quality growth by controlling the risk, stabilizing the scale and
boosting the efficiency, so as to consolidate and strengthen the Group’s position in the domestic
market. For overseas operations, the Group will strive to achieve a leapfrog growth in its global
business by increasing the scale, boosting the profit and controlling the risk, so as to have the Group’s
products and services widely recognized globally.
In connection with earthmovers and mining machinery, the Group will promote an in-depth
integration, consistently improve the type spectrum of products and technical reserves, optimize its
marketing systems for the domestic and overseas markets and strengthen the talent cultivation, so as
to achieve a comprehensive breakthrough in scale and efficiency.
In connection with aerial machinery, the Group will increase efforts for overseas market
expansion to improve its global industrial layout, upgrade its product, service and market systems,
accelerate the end-to-end digital transformation to boost operating efficiency across the board, so as
to form an absolute advantage of competitiveness in technology, quality, cost and service and ensure
that a remarkable breakthrough into the RMB10 billion scale could be achieved.
In connection with agricultural machinery, the Group will closely follow the “10,000 Plan” (萬
台計劃), uphold the core goal of creating market-leading products, increase the output and improve
the quality with intelligent manufacturing technologies, build a sound domestic and overseas
marketing system with the Group’s characteristics, so as to achieve a breakthrough in scale and a
comprehensive growth.
In connection with emerging businesses such as emergency equipment, foundation construction
machinery, industrial vehicles and the Group’s new materials, the Group will, based on technology
and products, make the most of the advantages of the Group’s platform and brand to make the
Group’s business bigger and stronger rapidly.
BUSINESS
The Group is principally engaged in three main operating segments, including (i) research,
development, manufacturing and sale of construction machinery; (ii) research, development,
manufacturing and sale of agricultural machinery; and (iii) finance lease services.
(i) Construction machinery segment consists of the following sub-segments:
Concrete machinery sub-segment primarily researches, develops, manufactures and sells
various concrete machineries, including truck-mounted concrete pumps, trailer-mounted
concrete pumps, dry mortar products, concrete placing booms, concrete mixing plants,
truck-mounted concrete mixers, truck-mounted line concrete pumps and self-propelled
boom concrete pumps.
– 68 –
Crane machinery sub-segment primarily researches, develops, manufactures and sells a
variety of cranes, including truck cranes, all-terrain truck cranes, crawler cranes and
various types of tower cranes.
Aerial machinery sub-segment primarily researches, develops, manufactures and sells a
variety of aerial work vehicles.
Earth working machinery sub-segment primarily researches, develops, manufactures and
sells a variety of earth working machineries, including loaders, bulldozer and various types
of excavators.
Others primarily research, develop, manufacture and sell of other machinery products,
including road construction and pile foundation machinery, material handling machinery
and systems, specialised vehicles and vehicle axles.
(ii) Agricultural machinery segment primarily researches, develops, manufactures and sells a
wide range of agricultural machineries, including tractors, grain harvesters and drying
machines.
(iii) Financial services segment primarily provides finance lease services to customers for
purchasing machinery products of the Group and from other vendors.
The following table sets forth the breakdown of our consolidated turnover by our operating
segments:
For the six months ended
For the year ended 31 December 30 June
(Audited) (Unaudited)
(RMB millions)
Revenue from contracts with
customers within the scope of
IFRS 15
Disaggregated by major products
of service lines
Construction machinery
– Concrete machinery . . . . . . 8,432 8,571 8,004 4,210 4,866
– Crane machinery . . . . . . . . 18,859 19,175 14,691 8,228 8,331
– Aerial machinery . . . . . . . . 4,593 5,701 6,830 3,953 2,591
– Earth working machinery . . . 3,511 6,647 6,666 3,516 4,288
– Others . . . . . . . . . . . . . . . 3,415 4,208 4,012 2,032 2,486
Agricultural machinery . . . . . . . 2,133 2,089 4,646 2,341 1,987
Revenue from other sources
Rental income . . . . . . . . . . . . 186 187 157 48 75
Financial services . . . . . . . . . . 502 497 472 207 231
For further information, please refer to the 2023 Annual Report, 2024 Annual Report and 2025
Interim Report of the Company.
– 69 –
ENVIRONMENT
Under the guidance of “Safe Development, Green Development and High-quality
Development”, adhering to the principle of “people oriented and green manufacturing” and to achieve
the goals of “carbon and pollution reduction and green development”, the Group remains highly
attentive to the possible impacts of machinery manufacturing on the environment, and consider
energy conservation and environmental protection a paramount issue in our production and business
operation. In recent years, the Group firmly grasped the transformation and upgrading of smart
manufacturing opportunities and actively responded to national policies by using water-based paint
and by adopting efficient, energy-saving, and low pollution dry spraying technology and advanced
terminal pollution treatment facilities, as well as by installing an intelligent and environmental
protection DCS monitoring system and environmental protection access control system, aimed at
achieving full-chain green management and rapidly improving environmental protection
performance.
EMPLOYEES
As at 30 June 2025, the Company had employed a total of 34,572 employees. Details of the
Company’s staff costs are enclosed in note 5(b) to the 2025 Interim Report.
LEGAL PROCEEDINGS
From time to time, the Company may be involved in litigation or other disputes that arise in the
ordinary course of business. However, the Company is not currently involved in any litigation,
disputes or arbitration proceedings which it believes are material in the context of the Bonds, and the
Company is not aware of any material litigation, disputes or arbitration proceedings that are currently
pending or threatened.
CORPORATE GOVERNANCE
The Company has established and improved the structure of its corporate governance to regulate
its operation strictly in accordance with the Company Law, Securities Law, and the relevant
regulations of the CSRC and SEHK. The Company has improved its internal control, the regulations
of shareholders’ meeting and board meeting so as to ensure effective operation and safeguard the
interests of all shareholders and itself. The corporate governance of the Company is substantially the
same as required by the regulatory requirements of the CSRC and SEHK on listed companies. The
Company will consolidate the efforts of the corporate governance of listed companies by further
enhancing corporate governance and internal control of listed companies and their subsidiaries. The
accountability mechanism and information disclosure system will be improved to ensure true,
accurate, complete, timely and fair disclosure of information. The Company also strictly implemented
the management system for insider information and external information user formulated by the
Board of Directors.
– 70 –
during the six months ended 30 June 2025
The Board has adopted all code provisions in Part 2 of the Corporate Governance Code (the
“Code”) set out in Appendix C1 to the Listing Rules as the code of the Company. During the six
months ended 30 June 2025, the Company has complied with all the applicable code provisions set
out in Part 2 of the Code, save and except the only deviation from code provision C.2.1 of the Code,
namely, the roles of the chairman and chief executive officer have not been separated. Dr. Zhan
Chunxin is currently the chairman of the Board and chief executive officer of the Company. The
Board is of the view that vesting of these two roles in Dr. Zhan Chunxin can facilitate efficient
planning and implementation of business strategies of the Company, and that through the supervision
of the Board and its independent non-executive directors as well as the internal effective
check-and-balance system, the balance of power and authority between the Board and management
of the Company will not be affected. The Board believes that this arrangement is in the interests of
the Company and its business.
during the six months ended 30 June 2025
The Company has adopted the rules governing the securities transactions by directors set out in
the Model Code for Securities Transactions by Directors of Listed Issuers (the “Model Code”) as set
out in Appendix C3 to the Listing Rules. The Company has made specific enquiry to all its directors
and supervisors, and all of its directors and supervisors have confirmed that they have fully complied
with the Model Code throughout the six months ended 30 June 2025. The Company has not identified
any non-compliance with the Model Code by any of its directors or supervisors.
The audit committee of the Company has discussed the accounting principles and practices
adopted by the Company with the management and reviewed this report, including the interim
financial report of the Group for the six months ended 30 June 2025 prepared in accordance with the
International Accounting Standard No. 34.
– 71 –
DIRECTORS AND SENIOR MANAGEMENT
DIRECTORS
Our Board is responsible and has general powers for the management and conduct of our
business. The table below shows certain information in respect of the members of our board as at the
date of this Offering Circular:
Name Age Position
Dr. Zhan Chunxin (詹純新) 70 Chairman of the Board, CEO and Executive Director
Mr. Liu Xiaoping (劉小平) 62 Executive Director, Employee Representative Director
Mr. He Liu (賀柳) 55 Non-executive Director
Mr. Wang Xianping (王賢平) 42 Non-executive Director
Mr. Zhang Chenghu (張成虎) 67 Independent Non-executive Director
Mr. Huang Guobin (黃國濱) 57 Independent Non-executive Director
Mr. Wu Baohai (吳寳海) 50 Independent Non-executive Director
Ms. Huang Jun (黃珺) 49 Independent Non-executive Director
Executive Directors
Dr. ZHAN Chunxin (詹純新), born in 1955, is the Chairman and Chief Executive Officer of our
Company. Dr. Zhan has served as an engineer, senior engineer, a researcher-level senior engineer,
deputy head and head of former Construction Machinery Research Institute of Changsha. As the
founder of the Company, Dr. Zhan led the entrepreneurial team to establish Zoomlion Construction
Machinery Industry Co., Ltd. in 1992, and has been appointed as a director of Zoomlion Heavy
Industry Science and Technology Co., Ltd. since 1999, and as the Chairman since 2001. Currently,
Dr. Zhan also serves as the chairman of various subsidiaries of our Company, including Zoomlion
Finance Co., Ltd. and Hunan Zhicheng Finance Guarantee Co., Ltd., and as a director of various
subsidiaries of our Company, including Zoomlion H.K. Holding Co., Ltd., Zoomlion International
Trading (H.K.) Co., Limited and Zoomlion Capital (H.K.) Co., Limited. Dr. Zhan has been serving
various public functions. He was a representative at the 16th, 17th and 19th National Congress of the
Communist Party of China, the 10th and 12th National People’s Congress, a member of the 13th
CPPCC National Committee, a member of the 8th, 9th and 10th National Congress of the Communist
Party of China in Hunan Province and a member of the 10th session of CPC Hunan Provincial
Committee. Currently, Dr. Zhan also serves as the deputy chairman of China Enterprise
Confederation, China Entrepreneurs Association, China Association for Public Companies and China
Construction Machinery Association. Dr. Zhan has received various titles and awards, mainly
including special government subsidy granted by the State Council, National Outstanding Worker,
Expert Consultant Member of the professional service centre of the Ministry of Personnel, Review
Expert for the National Science and Technology Progress Award, Yuan Baohua Enterprises
Management Gold Award (the most distinguished award for corporate executives in China), Leonardo
Award in Italy, CCTV Chinese Economic Annual Figure and the China Outstanding Quality Model.
Dr. Zhan graduated from Northwestern Polytechnical University in 1978 and obtained a master’s
degree in aeronautical engineering from Northwestern Polytechnical University in 2000 and a
doctorate degree in system engineering from Northwestern Polytechnical University in 2005.
– 72 –
Mr. LIU Xiaoping (劉小平), born in 1963, is an employee representative director and a senior
engineer of the Company. Since joining the Company in 1995, Mr. Liu has served as (i) the director
of the Guangdong office of the Company; (ii) the general manager and manager of the engineering
and development department of Zoomlion Heavy Industry Science and Technology Siwei Company*
(a subsidiary of the Company); (iii) the general manager, director of the brand management centre,
deputy director of the marketing department, assistant to the chairman and director of the brand
promotion department, assistant to the general manager of the heavy machinery division and director
of the engineering machinery centre of, Zoomlion Heavy Industry Science and Technology
Zhongchen Company* (a subsidiary of the Company); and (iv) a supervisor of the Company. He was
also engaged by the PRC Ministry of Industry and Information Technology as the first batch of
branding experts of industrial enterprises in May 2012. Mr. Liu graduated from the Hunan University
in 1984, specialising in mechanical manufacturing. In August 2006, he completed the professional
program for CEO at Tsinghua University’s major course of innovation administration (MIA). In
March 2012, he completed the professional course for CEO in the program of Executive Master of
Business Administration at Shanghai Jiao Tong University.
Non-executive Directors
Mr. HE Liu (賀柳), born in 1970, has acted as a non-executive director of our Company since
deputy general manager, deputy secretary to CPC committee, deputy chairman, the general manager,
secretary to CPC committee and chairman of Hunan Xing Xiang Investment Holding Group Co., Ltd.
since August 2006. Mr. He was head of audit and legal department of Hunan Nonferrous Metals
Holding Group Company Limited from August 2005 to September 2005, and supervisor and head of
human resources of Hunan Nonferrous Metals Corporation Limited from September 2005 to August
September 2022, and chairman and legal representative of Hunan Xingxiang Assets Operation Co.,
Ltd. from August 2019 to July 2020. Mr. He served as the chairman of Power Metallurgy Research
Centre of Central South University Company Limited from July 2020 to November 2024 (and
secretary to CPC committee from September 2020 to November 2024), and chairman of Hunan
Boyun New Materials Co., Ltd. from August 2020 to November 2024 (and secretary to CPC
committee from November 2020 to November 2024). Mr. He Liu obtained a bachelor’s degree in
economics from the College of Finance and Statistics of Hunan University (formerly known as Hunan
University of Finance and Economics) and a master’s degree in business administration from
Changsha University of Science and Technology.
Mr. WANG Xianping (王賢平), born in 1983, has acted as a non-executive director of our
Company since 2023. Mr. Wang has worked at CoStone Asset Management Co., Ltd. since 2019 and
is currently a managing director of the Beijing Department. He served as general manager of Xiufeng
Cornerstone (Shandong) Private Equity Fund Management Co., Ltd. from August 2021 to November
Management Co., Ltd. since April 2022. Mr. Wang Xianping worked at CITIC Securities Co., Ltd.
from 2008 to 2018, during which time he served as vice president of the investment banking
committee, and senior vice president of CITIC M&A Fund and Goldstone Investment respectively.
He worked at Galaxy Asset Management Co., Ltd. from 2018 to 2019, where he served as deputy
director of research and development department. Mr. Wang graduated from Wuhan University with
a bachelor’s degree in management and law and a master’s degree in management.
– 73 –
Independent Non-executive Directors
Mr. ZHANG Chenghu (張成虎), born in 1958, has acted as an independent director of our
Company since 2023. He is a holder of doctor of philosophy (“PhD”) in management, a second-level
professor and a PhD supervisor at the School of Economics and Finance of Xi’an Jiaotong University,
an expert entitled to special government subsidy granted by the State Council, a director of the
Research Center for Financial Business Intelligence and Anti-Money Laundering of Xi’an Jiaotong
University, and president of Xi’an Jiaotong University – Hithink RoyalFlush Fintech Research
Institute. Mr. Zhang Chenghu graduated from Xi’an Jiaotong University with a PhD degree in
business Administration. He has hosted two projects for the National Natural Science Foundation of
China, one key project for the National Financial Informatization Research Project, one major project
for the National Social Science Foundation, one key project for the National Social Science
Foundation, and one planning project for the National Social Science Foundation. He has hosted more
than 20 provincial and ministerial projects, including those for the PRC Ministry of Education, the
China Banking Regulatory Commission and Shaanxi Province. Mr. Zhang has received first, second
and third prizes in provincial and ministerial teaching and scientific research on many occasions,
published 10 academic publications, edited five textbooks, and published more than 150 academic
papers.
Mr. HUANG Guobin (黃國濱), born in 1968, has acted as an independent director of our
Company since 2023. He is currently the Chairman of PEC International Group Limited. Mr. Huang
Guobin worked in CICC from 1999 to 2011, responsible for CICC’s key clients and major project
financing and investment banking business, and served as head of human resources committee, head
of business development committee, head of European investment banking department and a member
of the investment bank operation committee of CICC. He was head of the China Industrials Group
for Goldman Sachs from 2011 to 2015. He served as chief executive officer of global investment
banking for China of J.P. Morgan between 2015 and 2022, and as legal representative, chief executive
officer and head of investment banking of J.P. Morgan Securities (China) Co., Ltd and as senior
consultant at J.P. Morgan Securities (Asia Pacific) Limited from 2022 to 2023. Mr. Huang Guobin
graduated from Tongji University with a bachelor’s degree in engineering in 1991 and received a
master’s degree in business administration from the Management School of Lancaster University in
the United Kingdom in 1997. Mr. Huang Guobin was awarded the Shanghai Overseas Golden Talent
and is a member of the council of Tongji University in the PRC.
Mr. WU Baohai (吳寳海), born in 1975, has acted as an independent director of our Company
since 2023. He is a professor and PhD supervisor at the School of Mechanical Engineering of
Northwestern Polytechnical University, and the director of the Engineering Research Center of
Advanced Manufacturing Technology of Aero-Engine. He has long been engaged in the research of
computer-aided design and manufacturing, five-axis computer numerical control machining and
intelligent manufacturing technology. Mr. Wu Baohai graduated from Xi’an Jiaotong University, and
then was engaged in postdoctoral research at the School of Mechanical Engineering of Northwestern
Polytechnical University, and has continued to teach thereafter. Mr. Wu has also hosted or taken part
as the key participant in more than 10 national projects, such as national major science and
technology projects, Programme 973 and the National Natural Science Foundation of China, and
more than 20 provincial and ministerial level cooperation projects and enterprise cooperation
projects. He received a second prize of National Defense Science and Technology Progress and owns
than 100 papers. He also serves as the director of the Professional Committee of Intelligent
Manufacturing of Shaanxi Computer Society, the director of Shaanxi Industrial Engineering and
Management Society, and member of the Professional Committee of Intelligent Manufacturing of
Chinese Association of Artificial Intelligence.
– 74 –
Ms. HUANG Jun (黃珺), born in 1976, has acted as an independent director of our Company
since 2023. She is a PhD at Shanghai Jiaotong University and a Chinese certified public accountant.
She is currently a professor and PhD supervisor at Hunan University, a fellow member of the
Accounting Society of China, a director of the Financial Cost Branch of the Accounting Society of
China, a director of the Finance Society of Hunan Province, and an expert reviewer for senior
professional titles in accounting industry of Hunan Province. She has been a lecturer and associate
professor at Hunan University and a visiting scholar sponsored by China Scholarship Council at
Durham University Business School in the United Kingdom.
– 75 –
DIRECTORS AND SUBSTANTIAL SHAREHOLDERS’ INTERESTS IN OUR SHARES
DIRECTORS, SUPERVISORS AND CHIEF EXECUTIVE’S INTERESTS IN SHARES OR
DEBENTURES OF THE COMPANY
As at 30 June 2025, the directors, chief executive, supervisors and senior management of the
Company who have interest or a short position in the Shares, underlying shares or debentures of the
Company or associated corporation (as defined in Part XV of the Securities and Futures Ordinance
(the “SFO”) as recorded in the register required to be kept by the Company pursuant to Section 352
of the SFO or otherwise notified to the Company and SEHK under the Model Code were as follows:
Percentage of the
Name of director/ Number of total share capital
supervisor Nature of interest Type of shares shares(1) of the same type
Zhan Chunxin . . . . . . . Beneficial owner A Share 10,929,076 (L) 0.1540%
Interest in a H Share 5,250,000 (L) 0.3382%
controlled
corporation (2)
Xiong Yanming . . . . . . Beneficiary owner A share 2,991,051 (L) 0.0422%
Liu Xiaoping . . . . . . . . Beneficiary owner A share 326,840 (L) 0.0046%
Notes:
(1) L represents long position.
(2) Such interest is held by Fair Sun (Hong Kong) Holdings Limited, a wholly-owned subsidiary of Hunan
Fangsheng Company Limited which, in turn, is controlled by Zhan Chunxin.
As at 30 June 2025, save as disclosed in this report, none of the directors, supervisors or chief
executive of the Company nor any other persons has any interest or short positions in the shares,
underlying shares or debentures of the Company or (in the case of directors, supervisors and chief
executive) any of its associated corporations within the meaning of Part XV of the SFO as recorded
in the registers required to be kept pursuant to Sections 336 and 352 of the SFO or otherwise notified
to the Company and SEHK pursuant to the Model Code.
As at 30 June 2025, none of the directors, supervisors, or chief executive officers or their
respective spouse or children under 18 years of age has any rights to acquire the shares or debentures
of the Company or any of its associated corporations nor exercise any of these rights.
– 76 –
Substantial Shareholders’ interests in the shares and underlying shares of the Company
As at 30 June 2025, so far as the Company’s directors and chief executive were aware, the
following persons (other than the Company’s directors, supervisors and chief executive) had an
interest or short position in the Company’s shares or underlying shares which would fall to be
disclosed to the Company pursuant to Divisions 2 and 3 of Part XV of the SFO or as recorded in the
register required to be kept by the Company pursuant to Section 336 of SFO:
Percentage of Percentage of
type of shares total issued
Name Nature of interest Type of shares Number of shares(1) issued shares
(%) (%)
State-owned Assets Interest in a controlled A Share 1,256,337,046 (L) 17.70 14.53
Supervision and corporation
Administration
Commission of Hunan
Provincial People’s
Government(2) . . . . . .
Changsha Zoomlion and Beneficial owner A Share 682,201,864 (L) 9.61 7.89
Yisheng Investment
Partnership (LLP)(3) . . .
Zoomlion Heavy Industry Beneficial owner A Share 423,956,781 (L) 5.97 4.90
Science and Technology
Co., Ltd. – Employee
Stock Ownership Plan
(Phase II)(4) . . . . . . .
Zoomlion Heavy Industry Beneficial owner A Share 294,926,276 (L) 4.16 3.41
Science and Technology
Co., Ltd. – Employee
Stock Ownership Plan
(Phase I)(5) . . . . . . . .
Changsha Hesheng Science Interest in a controlled H Share 193,757,462 (L) 12.48 2.23
and Technology corporation
Investment Co., Ltd.(6) . .
Notes:
(1) L represents long position.
(2) Such interest is held by the State-owned Assets Supervision and Administration Commission of Hunan
Provincial People’s Government via its wholly-owned subsidiary, Hunan Xing Xiang Investment Holding Group
Co., Ltd.
(3) Changsha Zoomlion and Yisheng Investment Partnership (LLP) is an investment entity controlled and owned
by the Group’s management.
(4) Zoomlion Heavy Industry Science and Technology Co., Ltd. – Employee Stock Ownership Plan (Phase II) is a
stock ownership plan for core management adopted by the Company on 27 September 2023.
(5) Zoomlion Heavy Industry Science and Technology Co., Ltd. – Employee Stock Ownership Plan (Phase I) is a
stock ownership plan for core management adopted by the Company on 6 January 2020.
(6) Changsha Hesheng Science and Technology Investment Co., Ltd. is an investment entity controlled and owned
by the Group’s management. Such interest is held by Changsha Hesheng Science and Technology Investment
Co., Ltd. via its wholly-owned subsidiary, Cherry Sun (HK) Investment Management Limited.
Save as disclosed above, as at 30 June 2025, so far as the Company’s directors and chief
executive were aware, no persons (other than the Company’s directors, supervisors and chief
executive) had an interest or short position in the Company’s shares or underlying shares which
would fall to be disclosed to the Company pursuant to Divisions 2 and 3 of Part XV of the SFO or
as recorded in the register required to be kept by the Company pursuant to Section 336 of SFO.
– 77 –
DESCRIPTION OF THE ORDINARY SHARES
The following information is a summary of certain provisions of the articles of association of
the Issuer (the “Articles”) and certain other information concerning the Issuer. These statements are
only a summary and qualified in their entirety by reference to the full Articles and Company Law of
the People’s Republic of China. Any provision of the Articles may be varied by special resolution
passed at a general meeting of shareholders of the Issuer as approved by the relevant competent
authority according to the applicable laws and rules. For the complete and full version of the
Articles, please refer to the Articles available on the website of the Hong Kong Stock Exchange.
INTRODUCTION
The Company is a joint stock limited company established in accordance with the Company
Law and other relevant laws, administrative regulations and rules of the PRC. The A Shares of the
Issuer were listed on the Shenzhen Stock Exchange on 12 October 2000 and the H Shares of the Issuer
were listed on the Hong Kong Stock Exchange on 23 December 2010.
SHARE CAPITAL
As at 30 June 2025, the total share capital of the Issuer was 8,648,535,236 shares with a par
value of RMB1.00 each, which can be categorised as follows:
Percentage of the
Nature of shares Number of shares total share capital
I. . . Shares subject to sales restriction 25,610,325 0.30%
II.. . Shares not subject to sales restriction 8,622,924,911 99.70%
Ordinary shares denominated in RMB 7,070,417,363 81.75%
Overseas listed foreign invested shares 1,552,507,548 17.95%
Total number of shares 8,648,535,236 100.00%
RANKING
Holders of A Shares and H Shares are both holders of ordinary shares of the Issuer and have the
same rights and obligations.
ISSUE OF SHARES
The Issuer may increase its capital for its business operation and development requirements by
the following means in accordance with the Articles, laws and regulations subject to resolutions of
shareholders at shareholders’ meetings:
(i) issuance of shares to unspecified targets;
(ii) issuance of shares to specified targets;
(iii) issue of bonus shares to existing shareholders;
(iv) capitalisation of capital reserve;
(v) other means permitted by laws, administrative regulations and the relevant competent
authorities.
– 78 –
DIVIDENDS
Dividends can be paid by way of cash, shares or a combination of cash and shares where priority
shall be given to distribution of profits in cash. The Company may make interim and annual profit
distribution. The Company shall make cash distribution if the profit for the current year and
accumulative retained profit are positive and it has no major investment plan or significant cash
expenditure. The total profit distributed in cash in the past three years shall not be less than 30% of
the average annual distributable profit of the past three years. According to the profit and liquidity
of the Company, the Company may distribute dividend in shares, provided that a minimum cash
dividend has been made and that the capital size and structure shall not be adversely affected.
The profit distribution of the Company shall be proposed by the board of directors in accordance
with the Articles and the operating condition of the Company. The board of directors shall carefully
consider the views of independent directors when determining the profit distribution proposal. The
profit distribution proposal shall provide continuous, stable and reasonable return to all shareholders,
which shall be considered and approved by the board of directors before it is submitted to the a
shareholders’ meeting for approval.
The distribution of dividends (or shares) shall be completed within two months after the
resolution regarding profit distribution is passed at a shareholders’ meeting or a specific plan is
formulated by the board of directors based on the conditions for and maximum limit of interim
dividend distribution for the forthcoming year passed at the shareholders’ meeting.
Cash dividends and other payments payable by the Company to holders of A Shares shall be paid
in RMB. Cash dividends and other payments payable by the Company to holders of H Shares shall
be declared in RMB and paid in HK dollars. Foreign currency required by the Company for payment
of cash dividends and other distribution to holders of H shares shall be obtained in accordance with
the relevant regulations on foreign exchange of the PRC.
When distributing dividends to shareholders, the Company shall withhold and pay on behalf of
the shareholders the taxes payable on the dividends in accordance with the provisions of the PRC tax
law.
SHAREHOLDERS’ MEETINGS
Shareholders’ meetings include annual shareholders’ meetings and extraordinary shareholders’
meetings. An annual shareholders’ meeting shall be convened once every financial year and held
within six months after the end of the previous accounting year.
Under any of the following circumstances, the board of directors shall convene an extraordinary
shareholders’ meeting within two months since the date of occurrence:
(i) the number of directors is less than the minimum number required by the Company Law
or less than two thirds of the number required by the Articles;
(ii) the uncovered losses of our Company reach one-third of its total share capital;
(iii) the shareholder(s) individually or together holding 10% or more of the total outstanding
shares of the Company with voting power request to convene an extraordinary
shareholders’ meeting in writing;
– 79 –
(iv) the board of directors considers it necessary;
(v) half or more of the independent directors jointly proposes;
(vi) the audit committee proposes;
(vii) other circumstances specified under laws, administrative regulations, departmental rules or
the Articles of Association.
Shareholders who hold 10% or more of the shares of the Company individually or together shall
have the right to request the board of directors to convene an extraordinary shareholders’ meeting or
a class meeting and the request shall be made in writing. The board of directors shall within ten days
after receipt of the request provide a written reply, pursuant to the laws, administrative regulations
and the Articles, stating its agreement or disagreement to convene the extraordinary shareholders’
meeting or the class meeting.
Where the Company convenes a shareholders’ meeting, the board of directors, the audit
committee and shareholder(s) individually or together holding 1% or more of the shares of the
Company shall have the right to propose new motions to the Company. The Company shall include
such proposed motions on the agenda of such shareholders’ meeting if they are matters falling within
the functions and powers of the shareholders’ meetings.
– 80 –
TERMS AND CONDITIONS OF THE BONDS
The following, subject to completion and amendment and other than the words in italics, is the text
of the Terms and Conditions of the Bonds which will appear on the reverse of each of the definitive
certificates evidencing the Bonds:
The issue of RMB6,000,000,000 in aggregate principal amount of 0.70 per cent. U.S. dollar settled
convertible bonds due 2031 (the “Bonds”, which term shall include, unless the context requires
otherwise, any further bonds issued in accordance with Condition 15 (Further Issues) and
consolidated and forming a single series therewith) of Zoomlion Heavy Industry Science and
Technology Co., Ltd. (the “Issuer”) and the right of conversion into H Shares (as defined in
Condition 5.1.5 (Meaning of “Shares”)) of the Issuer were authorised by resolutions of the board of
directors of the Issuer passed on 30 October 2025 and resolutions of the shareholders of the Issuer
passed at the extraordinary general meeting and the class meetings on 11 December 2025. The Bonds
are constituted by a trust deed (as amended and/or supplemented from time to time, the “Trust
Deed”) dated 5 February 2026 (the “Issue Date”) and made between the Issuer and The Hongkong
and Shanghai Banking Corporation Limited (the “Trustee”, which term shall, where the context so
permits, include all other persons for the time being acting as trustee or trustees under the Trust Deed)
as trustee for the holders of the Bonds. The Issuer has entered into a paying, conversion and transfer
agency agreement (as amended and/or supplemented from time to time, the “Agency Agreement”)
dated 5 February 2026 with the Trustee, The Hongkong and Shanghai Banking Corporation Limited
as principal paying agent, principal conversion agent (collectively in such capacities, the “Principal
Agent”, which expression shall include any successor principal agent appointed from time to time in
connection with the Bonds) and as registrar (the “Registrar”, which expression shall include any
successor registrar appointed from time to time in connection with the Bonds) and transfer agent (the
“Transfer Agent”, which expression shall include any successor transfer agent appointed from time
to time in connection with the Bonds), and the other paying agents, transfer agents and conversion
agents appointed under it (each a “Paying Agent”, a “Transfer Agent” or a “Conversion Agent” (as
applicable) and together with the Registrar and the Principal Agent, the “Agents”) relating to the
Bonds. For the avoidance of doubt, references to the “Paying Agents”, the “Transfer Agents” or, as
the case may be, the “Conversion Agents” each include the Principal Agent. References to the
“Principal Agent”, the “Registrar” and the “Agents” below are references to the principal agent, the
registrar and the agents for the time being for the Bonds. These terms and conditions (the
“Conditions”) include summaries of, and are subject to, the detailed provisions of the Trust Deed.
Copies of the Trust Deed and of the Agency Agreement (i) are available for inspection at all
reasonable times during usual business hours (being between 9:00 a.m. (Hong Kong time) and 3:00
p.m. (Hong Kong time). Monday to Friday except for public holidays) at the principal office of the
Trustee, being at the date of the Trust Deed at Level 26, HSBC Main Building, 1 Queen’s Road
Central, Hong Kong and (ii) may be provided by email from the Principal Agent to any Bondholder,
in each case, following prior written request and proof of holding and identity to the satisfaction of
the Trustee or the Principal Agent, as the case may be. The Bondholders (as defined in Condition 1.3
(Title)) are entitled to the benefit of, are bound by, and are deemed to have notice of, all the provisions
of the Trust Deed and are deemed to have notice of those provisions of the Agency Agreement
applicable to them.
All capitalised terms that are not defined in these Conditions will have the meanings given to them
in the Trust Deed.
– 81 –
The Bonds constitute direct, unsubordinated, unconditional and (subject to the provisions of
Condition 3.1 (Negative Pledge)) unsecured obligations of the Issuer and shall at all times rank
pari passu and without any preference or priority among themselves. The payment obligations
of the Issuer under the Bonds shall, save for such exceptions as may be provided by mandatory
provisions of applicable law and subject to Condition 3.1 (Negative Pledge), at all times rank
at least equally with all of its other present and future direct, unsubordinated, unconditional and
unsecured obligations.
The Bonds are issued in registered form in the specified denomination of RMB2,000,000 each
and integral multiples of RMB1,000,000 in excess thereof (each, an “Authorised
Denomination”). A bond certificate (each a “Certificate”) will be issued to each Bondholder
in respect of its registered holding of Bonds. Each Certificate will be numbered serially with an
identifying number which will be recorded on the relevant Certificate and in the register of
Bondholders (the “Register”) which the Issuer will procure to be kept by the Registrar.
Upon issue, the Bonds will be represented by a global certificate (the “Global Certificate”)
registered in the name of a nominee of, and deposited with, a common depositary for Euroclear
Bank SA/NV (“Euroclear”) and Clearstream Banking S.A. (“Clearstream”). The Conditions
are modified by certain provisions contained in the Global Certificate.
Except in the limited circumstances described in the Global Certificate, owners of interests in
Bonds represented by the Global Certificate will not be entitled to receive definitive Certificates
in respect of their individual holdings of Bonds. The Bonds are not issuable in bearer form.
Title to the Bonds passes only by transfer and registration in the Register as described in
Condition 2 (Registration and Transfers of Bonds; Issue of Certificates). The holder of any
Bond will (except as otherwise required by law or as ordered by a court of competent
jurisdiction) be treated as its absolute owner for all purposes (whether or not it is overdue and
regardless of any notice of ownership, trust or any interest in it or any writing on, or the theft
or loss of, the Certificate issued in respect of it) and no person will be liable for so treating the
holder. In these Conditions, “Bondholder” and (in relation to a Bond) “holder” means the
person in whose name a Bond is registered.
The Issuer will cause the Register to be kept at the specified office of the Registrar outside the
United Kingdom and in accordance with the terms of the Agency Agreement on which shall be
entered the names and addresses of the holders of the Bonds and the particulars of the Bonds
held by them and of all transfers, redemptions and conversions of the Bonds. Each Bondholder
shall be entitled to receive only one Certificate in respect of its entire holding of Bonds.
– 82 –
Subject to Conditions 2.5 (Restricted Transfer Periods) and 2.6 (Regulations) and the terms of
the Agency Agreement, a Bond may be transferred in whole or in part in an Authorised
Denomination by delivery of the Certificate issued in respect of that Bond, with the form of
transfer on the back duly completed and signed by the holder or his attorney duly authorised in
writing, to the specified office of the Registrar or of any of the Transfer Agents. No transfer of
a Bond will be valid or effective unless and until entered on the Register. A Bond may be
registered only in the name of, and transferred only to, a named person.
Transfers of interests in the Bonds evidenced by the Global Certificate will be effected in
accordance with the rules and procedures of the relevant clearing systems.
of receipt by the Registrar or, as the case may be, any Transfer Agent of the original
Certificate and the form of transfer duly completed and signed, be made available for
collection at the specified office of the Registrar or such Transfer Agent or, if so requested
in the form of transfer, be mailed by uninsured mail at the risk of the holder entitled to the
Bonds (but free of charge to the holder and at the Issuer’s expense) to the address specified
in the form of transfer. The form of transfer is available at the specified office of the
Registrar and each Transfer Agent.
Except in the limited circumstances described in the Global Certificate, the Bonds will
only be issued to the Bondholders in book-entry form and owners of interests in the Bonds
will not be entitled to receive physical delivery of Certificates.
respect of which a Certificate is issued is to be transferred, converted, redeemed or
repurchased, a new Certificate in respect of the Bonds not so transferred, converted,
redeemed or repurchased will, within seven business days of delivery of the original
Certificate to the Registrar or any Transfer Agent, be made available for collection at the
specified office of the Registrar or such Transfer Agent or, if so requested in the form of
transfer, be mailed by uninsured mail at the risk of the holder of the Bonds not so
transferred, converted, redeemed or repurchased (but free of charge to the holder and at the
Issuer’s expense) to the address of such holder appearing on the Register.
mean a day other than a Saturday or Sunday or public holiday on which commercial banks
are generally open for business in the city in which the specified office of the Registrar (if
a Certificate is deposited with it in connection with a transfer or conversion) or the Agent
with whom a Certificate is deposited in connection with a transfer or conversion, is
located.
– 83 –
Registration of a transfer of Bonds and issuance of new Certificates will be effected without
charge subject to (i) the person making such application for transfer paying or procuring the
payment of any taxes, duties and other governmental charges in connection therewith, (ii) the
Registrar or the relevant Transfer Agent (as the case may be) being satisfied with the documents
of title and/or identity of the person making the application and (iii) the Registrar or the relevant
Transfer Agent (as the case may be) being satisfied that the Regulations (as defined in Condition
No Bondholder may require the transfer of a Bond to be registered (i) during the period of seven
days ending on (and including) the dates for payment of any amount pursuant to these
Conditions (including any date of redemption pursuant to Condition 7.2 (Redemption at the
Option of the Issuer) and Condition 7.3 (Redemption for Taxation Reasons)); (ii) after a
Conversion Notice (as defined in Condition 5.2.1 (Conversion Notice)) has been delivered with
respect to such Bond; (iii) after a Put Option Notice (as defined in Condition 7.4 (Redemption
at the Option of the Bondholders)) has been deposited in respect of such Bond; (iv) after a
Relevant Event Put Exercise Notice (as defined in Condition 7.5 (Redemption for Relevant
Events)) has been deposited in respect of such Bond; or (v) during the period of seven days
ending on (and including) any Interest Record Date (as defined in Condition 6.1 (Method of
Payment)), each such period being a “Restricted Transfer Period”.
All transfers of Bonds and entries on the Register will be made subject to the detailed
regulations concerning transfer of Bonds, the initial form of which is scheduled to the Agency
Agreement (the “Regulations”). The Regulations may be changed by the Issuer, with the prior
written approval of the Trustee and the Registrar, or by the Registrar, with the prior written
approval of the Trustee. A copy of the current Regulations will be made available (free of charge
to the Bondholder and at the Issuer’s expense) by the Registrar to any Bondholder following
written request and satisfactory proof of holding and identity and is available for inspection
following written request and proof of holding and identity satisfactory to the Registrar at all
reasonable times during usual business hours at the specified office of the Registrar.
So long as any Bond remains outstanding (as defined in the Trust Deed), the Issuer will not
create or permit to subsist, and the Issuer will procure that none of its Subsidiaries (as defined
below) will create or permit to subsist, any mortgage, charge, pledge, lien or other form of
encumbrance or security interest (other than a security interest arising by operation of law) upon
the whole or any part of its undertaking, assets or revenues (including any uncalled capital),
present or future, to secure any Relevant Indebtedness (as defined below) or to secure any
guarantee of or indemnity in respect of any Relevant Indebtedness unless, at the same time or
prior thereto according to the Bonds the same security as is created or subsisting to secure any
such Relevant Indebtedness, guarantee or indemnity or such other security as shall be approved
by an Extraordinary Resolution (as defined in the Trust Deed) of the Bondholders.
– 84 –
The Issuer undertakes that it will within the relevant prescribed timeframes after the Issue Date
file or cause to be filed with the NDRC the requisite information and documents in respect of
the Bonds and comply with other reporting obligations in accordance with the Administrative
Measures for the Review and Registration of Medium- and Long-Term Foreign Debts of
Enterprises (企業中長期外債審核登記管理辦法(國家發展和改革委員會令第56號)) (“Order
reports, certificates, approvals or guidelines as issued by the NDRC from time to time, including
but not limited to, the Initial NDRC Post-Issuance Filing (as defined below).
The Issuer undertakes to file or cause to be filed with the CSRC (as defined below) within the
relevant prescribed timeframes after the Issue Date the requisite information and documents in
respect of the Bonds in accordance with the CSRC Filing Rules (as defined below) (the “CSRC
Post-Issuance Filings”, which term for the avoidance of doubt, includes the Initial CSRC
Post-Issuance Filing (as defined below)) and comply with the continuing obligations under the
CSRC Filing Rules and any implementation rules as issued by the CSRC from time to time.
CSRC Post-Issuance Filing
The Issuer shall:
competent local counterpart of the information and documents relating to the issue of the
Bonds that are required to be filed in accordance with Order 56 within ten Registration
Business Days after the Issue Date (the “Initial NDRC Post-Issuance Filing”) and (ii) the
CSRC Filing Report and other requisite information and documents in respect of the Bonds
that are required to be filed with the CSRC within three Registration Business Days after
the Issue Date in accordance with the CSRC Filing Rules (the “Initial CSRC Post-
Issuance Filing”); and
latest of (i) the submission of the Initial NDRC Post-Issuance Filing and (ii) the
submission of the Initial CSRC Post-Issuance Filing, provide the Trustee with (A) a
certificate (substantially in the form scheduled to the Trust Deed) in English signed by an
Authorised Signatory (as defined in the Trust Deed) confirming the submission of the
Initial NDRC Post-Issuance Filing and the Initial CSRC Post-Issuance Filing; and (B)
copies of the relevant documents evidencing the submission of the Initial NDRC
Post-Issuance Filing and the Initial CSRC Post-Issuance Filing, each certified in English
as a true and complete copy of the original by an Authorised Signatory of the Issuer (the
items specified in (A) and (B) together, the “Registration Documents”). In addition, the
Issuer shall, within ten Registration Business Days after the Registration Documents are
delivered to the Trustee, give notice to the Bondholders (in accordance with Condition 16
(Notices)) confirming the submission of the Initial NDRC Post-Issuance Filing and the
Initial CSRC Post-Issuance Filing.
– 85 –
The Trustee may rely conclusively on the Registration Documents and shall have no obligation
or duty to monitor or assist with or ensure the Initial NDRC Post-Issuance Filing or the Initial
CSRC Post-Issuance Filing is submitted or completed within the timeframe specified in
Condition 3.2 (Notification to NDRC) and Condition 3.3 (CSRC Post-Issuance Filings),
respectively, or to verify the accuracy, content, completeness, validity and/or genuineness of
any documents in relation to or in connection with the Initial NDRC Post-Issuance Filing and/or
the Initial CSRC Post-Issuance Filing and/or the Registration Documents or to translate or
procure the translation into English of the documents in relation to or in connection with the
Initial NDRC Post-Issuance Filing or the Initial CSRC Post-Issuance Filing or to give notice to
the Bondholders confirming the completion of the Initial NDRC Post-Issuance Filing and the
Initial CSRC Post-Issuance Filing, and the Trustee shall not be liable to Bondholders or any
other person for not doing so.
For the purposes of these Conditions:
“CSRC” means the China Securities Regulatory Commission;
“CSRC Filing Rules” means the Trial Administrative Measures of Overseas Securities Offering
and Listing by Domestic Companies (境內企業境外發行證券和上市管理試行辦法) and
supporting guidelines issued by the CSRC on 17 February 2023 and became effective on 31
March 2023, as amended, supplemented or otherwise modified from time to time;
“CSRC Filing Report” means the filing report of the Issuer in relation to the issuance of the
Bonds which will be submitted to the CSRC within three Registration Business Days after the
Issue Date pursuant to Articles 13 and 16 of the CSRC Filing Rules;
“Hong Kong” means the Hong Kong Special Administrative Region of the People’s Republic
of China;
“NDRC” means the National Development and Reform Commission of the PRC;
“person” means any individual, corporation, partnership, limited liability company, joint
venture, trust, unincorporated organisation or government or any agency or political subdivision
thereof;
“PRC” means the People’s Republic of China, which shall for the purpose of these Conditions
only, exclude Hong Kong, the Macau Special Administrative Region of the People’s Republic
of China and Taiwan;
“Relevant Indebtedness” means any present or future indebtedness having a maturity of not
less than one year incurred outside the PRC in the form of, or represented by, bonds, debentures,
notes, loan stock, bearer participation certificates, depositary receipts, certificates of deposit or
other investment securities which represent indebtedness and are for the time being, or are
intended to be or capable of being, quoted, listed, ordinarily dealt in or traded on any stock
exchange or over-the-counter or other securities market, but shall not include any financing of
the acquisition of assets if by the terms of such financing it is expressly provided that the
– 86 –
holders of the resulting indebtedness shall look to the assets financed and the revenues to be
generated by the operation of, or loss of or damage to, such assets as the sole source of
repayment for the moneys advanced and payment of interest thereon. For the avoidance of
doubt, Relevant Indebtedness shall not include indebtedness under any transferable bank loan
facilities or agreements, bilateral loans or syndicated bank loans obtained by the Issuer or its
Subsidiaries, or drawing down of any credit lines or facilities of the Issuer or any of its
Subsidiaries;
“Registration Business Day” means a day, other than a Saturday, Sunday or public holiday, on
which commercial banks are generally open for business in Beijing;
“Registration Deadline” means the day falling 90 Registration Business Days after the Issue
Date; and
“Subsidiary” or “subsidiary” means in relation to any person, (i) any company or other
business entity of which that person owns or controls (either directly or through one or more
other Subsidiaries) more than 50 per cent. of the registered share capital or issued share capital
or other ownership interest having ordinary voting power to elect directors, managers or trustees
of such company or other business entity or (ii) any company or other business entity which at
any time has its accounts consolidated with those of that person or which, under the laws of
Hong Kong or the PRC, or in accordance with generally accepted accounting principles
applicable in the PRC from time to time, should have its accounts consolidated with those of
that person.
The Bonds bear interest on their outstanding principal amount from and including the Issue Date
at the rate of 0.70 per cent. per annum, payable semi-annually in arrear in equal instalments on
Equivalent (as defined below).
Each Bond will cease to bear interest:
(a) (subject to Condition 5.2.4 (Interest Accrual)) where the Conversion Right (as defined in
Condition 5.1.1 (Conversion Right and Conversion Period)) attached to it shall have been
exercised by a Bondholder, from and including the Interest Payment Date immediately
preceding the relevant Conversion Date (as defined in Condition 5.2.1 (Conversion
Notice)), or if none, the Issue Date; or
(b) where such Bond is redeemed or repaid pursuant to Condition 7 (Redemption, Purchase
and Cancellation) or Condition 9 (Events of Default), from the due date for redemption or
repayment thereof,
unless, upon due presentation thereof, payment of the amount due is improperly withheld or
refused. In such event, such unpaid amount shall bear interest at the rate of 3.80 per cent. per
annum (both before and after judgment) until whichever is the earlier of (A) the day on which
all sums due in respect of such Bond up to that day are received by or on behalf of the relevant
holder and (B) the day falling seven days after the Trustee or the Principal Agent has notified
Bondholders of receipt of all sums due in respect of all the Bonds up to that seventh day (except
to the extent that there is failure in the subsequent payment to the relevant holders under these
Conditions).
– 87 –
Interest in respect of any Bond shall be calculated per RMB1,000,000 in principal amount of the
Bonds (the “Calculation Amount”). The amount of interest payable per Calculation Amount for
any period shall, save as provided above in relation to equal instalments, be equal to the product
of the relevant annual rate of interest, the Calculation Amount and the day-count fraction for the
relevant period, rounding the resulting figure to the nearest cent (half a cent being rounded
upwards). If interest is required to be calculated for a period of less than a complete Interest
Period (as defined below), the relevant day-count fraction will be determined on the basis of a
month, the number of days elapsed.
In these Conditions, the period beginning on and including the Issue Date and ending on but
excluding the first Interest Payment Date and each successive period beginning on and including
an Interest Payment Date and ending on but excluding the next succeeding Interest Payment
Date is called an “Interest Period”.
Bondholders have the right to convert their Bonds into H Shares credited as fully paid at
any time during the Conversion Period referred to below.
Subject to and upon compliance with these Conditions, the right of a Bondholder to
convert any Bond into H Shares is called the “Conversion Right”. The number of H
Shares to be issued on conversion of a Bond will be determined by dividing the principal
amount of the Bond to be converted (translated into HK dollars at the fixed rate of
RMB0.8895 = HK$1.00) (the “Fixed Exchange Rate”) by the Conversion Price (as
defined in Condition 5.1.3 (Conversion Price)) in effect on the relevant Conversion Date.
A Conversion Right may only be exercised in respect of an Authorised Denomination for
one or more Bonds. If more than one Bond held by the same holder is converted at any one
time by the same holder, the number of H Shares to be issued upon such conversion will
be calculated on the basis of the aggregate principal amount of the Bonds to be converted.
Subject to and upon compliance with these Conditions (including without limitation
Condition 5.1.4 (Revival and/or survival after Default)), the Conversion Right attaching to
any Bond may be exercised, at the option of the holder thereof, at any time on or after the
evidencing such Bond is deposited for conversion) on the date falling seven working days
prior to the Maturity Date (as defined in Condition 7.1 (Maturity)) (both days inclusive)
or if such Bond shall have been called for redemption by the Issuer before the Maturity
Date, then up to and including the close of business (at the place aforesaid) on a date no
later than seven working days (at the place aforesaid) prior to the date fixed for redemption
thereof; provided that no Conversion Right may be exercised in respect of a Bond where
the holder shall have exercised its right to require the Issuer to redeem or repurchase such
Bond pursuant to Condition 7.4 (Redemption at the Option of the Bondholders) or
Condition 7.5 (Redemption for Relevant Events) or during a Restricted Conversion Period
(both dates inclusive) (as defined below); provided further that the Conversion Right is
exercised subject to any applicable fiscal or other laws or regulations or as hereafter
provided in these Conditions (the “Conversion Period”).
– 88 –
In accordance with and subject to the below paragraphs, the Conversion Date in respect of
the exercise of any Conversion Right in relation to any Bond may not fall during the period
(i) commencing on the later of (x) for a shareholders’ annual general meeting, the date
falling 21 days prior to that meeting, or for a shareholders’ extraordinary general meeting,
the date falling 15 days prior to that meeting, or (y) the date on which notice of meeting
is given, and in either case, ending on the date of that meeting; or (ii) commencing on the
date falling five working days prior to the record date set by the Issuer for the purpose of
distribution of any dividend and ending on such record date; or (iii) commencing on such
date and for such period as determined by applicable law from time to time that the Issuer
is required to close its register (a “Restricted Conversion Period”). The Issuer will give
notice of any such Restricted Conversion Period to the Bondholders, the Trustee and
Agents not less than two working days prior to the commencement of any such Restricted
Conversion Period.
If the Conversion Date in respect of a Bond would otherwise fall during a Restricted
Conversion Period, such Conversion Date shall be postponed to the first H Share Stock
Exchange Business Day (as defined in Condition 5.8 (Definitions)) following the expiry of
such Restricted Conversion Period.
If the Conversion Date in respect of the exercise of any Conversion Right is postponed as
a result of the foregoing provision to a date that falls after the expiry of the Conversion
Period or after the relevant redemption date, such Conversion Date shall be deemed to be the
final day of such Conversion Period or the relevant redemption date, as the case may be.
For the purpose of this Condition 5.1.1 (Conversion Right and Conversion Period),
“working day” means a day other than a Saturday, Sunday or a public holiday on which
commercial banks and foreign exchange markets are generally open for business in the city
which the specified office of each of the Principal Agent and the Registrar is located,
respectively.
payments or other adjustments will be made in lieu thereof. However, if the Conversion
Right in respect of more than one Bond is exercised at any one time such that H Shares
to be issued on conversion are to be registered in the same name, the number of such H
Shares to be issued in respect thereof shall be calculated on the basis of the aggregate
principal amount of such Bonds being so converted and rounded down to the nearest whole
number of H Shares. Notwithstanding the foregoing, in the event of a consolidation or
re-classification of H Shares by operation of law or otherwise occurring after 28 January
of Bonds pay in cash in U.S. dollars (by transfer to a U.S. dollar account maintained by
the payee in accordance with instructions given by the relevant Bondholder in the
Conversion Notice) a sum equal to such portion of the principal amount of the Bond or
Bonds evidenced by the Certificate deposited in connection with the exercise of
Conversion Rights, aggregated as provided in Condition 5.1.1 (Conversion Right and
Conversion Period), as corresponds to any fraction of an H Share not issued as a result of
such consolidation or re-classification aforesaid if such sum exceeds U.S.$10.00 (which
shall be determined using the Prevailing Rate on the Conversion Date).
– 89 –
“Conversion Price”) will initially be HK$10.02 per H Share but will be subject to
adjustment in the manner provided in Condition 5.3 (Adjustments to Conversion Price) or
Condition 5.6 (Adjustment upon Change of Control), as applicable.
(Conversion Right and Conversion Period), if (i) the Issuer shall default in making
payment in full in respect of any Bond which shall have been called or put for redemption
on the date fixed for redemption thereof, (ii) any Bond has become due and payable prior
to the Maturity Date by reason of the occurrence of any of the events referred to in
Condition 9 (Events of Default) or (iii) any Bond is not redeemed on the Maturity Date in
accordance with Condition 7.1 (Maturity), the Conversion Right attaching to such Bond
will revive and/or will continue to be exercisable up to, and including, the close of
business (at the place where the Certificate evidencing such Bond is deposited for
conversion) on the date upon which the full amount of the moneys payable in respect of
such Bond has been duly received by the Principal Agent or the Trustee and notice of such
receipt has been duly given to the Bondholders in accordance with Condition 16 (Notices)
and, notwithstanding the provisions of Condition 5.1.1 (Conversion Right and Conversion
Period), any Bond in respect of which the Certificate and Conversion Notice are deposited
for conversion prior to such date shall be converted on the relevant Conversion Date
notwithstanding that the full amount of the moneys payable in respect of such Bond shall
have been received by the Principal Agent or the Trustee before such Conversion Date or
that the Conversion Period may have expired before such Conversion Date.
ordinary foreign shares with a par value of RMB1.00 each issued by the Issuer (ISIN:
CNE100000X85) which are listed on the Hong Kong Stock Exchange; (ii) “A Shares”
means ordinary domestic shares of RMB1.00 each issued by the Issuer which are traded
in Renminbi on the Shenzhen Stock Exchange; and (iii) “Ordinary Shares” means the H
Shares, the A Shares and any fully-paid and non-assessable shares of any class or classes
of the ordinary shares of the Issuer authorised after the date of the issue of the Bonds
which have no preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation or dissolution of the Issuer. For the purpose of this
Condition 5 only, (a) references to the “issue” of A Shares, H Shares or Ordinary Shares
or, A Shares, H Shares or Ordinary Shares being “issued” shall include the delivery or sale
of A Shares, H Shares or Ordinary Shares, as the case may be, whether newly issued and
allotted or previously existing or held by or on behalf of the Issuer or any of its
Subsidiaries, and (b) A Shares, H Shares or Ordinary Shares, as the case may be, held by
or on behalf of the Issuer or any of its Subsidiaries (and which, in the case of Conditions
considered as or treated as “in issue” or “issued”.
Conversion Rights may be exercised by a Bondholder during the Conversion Period by
delivering the relevant Certificate to the specified office of any Conversion Agent during
its usual business hours (being 9:00 a.m. (Hong Kong time) to 3:00 p.m. (Hong Kong
– 90 –
time), Monday to Friday except for public holidays on which commercial banks are
generally open for business in the city of the specified office of the Conversion Agent)
accompanied by a duly completed and signed notice of conversion (a “Conversion
Notice”) in the form (for the time being current and being substantially in the form
scheduled to the Agency Agreement) obtainable from any Conversion Agent, together with
(i) the relevant Certificate; and (ii) certification by the Bondholder, in the form obtainable
from any Conversion Agent, as may be required under the laws of the PRC, Hong Kong
or any jurisdiction in which the specified office of such Conversion Agent is located.
Conversion Rights shall be exercised subject in each case to any applicable fiscal or other
laws or regulations applicable in the jurisdiction in which the specified office of the
Conversion Agent to whom the relevant Conversion Notice is delivered is located.
If such delivery is made after 3:00 p.m. (Hong Kong time) on any business day or on a day
which is not a business day, in each case in the place of the specified office of the
Conversion Agent, such delivery shall be deemed for all purposes of these Conditions to
have been made on the next business day following such day. If such delivery is made
during a Restricted Conversion Period, such delivery shall be deemed for all purposes of
these Conditions to have been made on the H Share Stock Exchange Business Day
following (in the place of the specified office of the Conversion Agent) the last day of such
Restricted Conversion Period unless such date shall fall outside the Conversion Period.
Any determination as to whether any Conversion Notice has been duly completed and
properly delivered shall be made by the relevant Conversion Agent and shall, save in the
case of manifest error, be conclusive and binding on the Issuer, the Trustee, the Agents and
the relevant Bondholder.
A Conversion Notice, once delivered, shall be irrevocable and may not be withdrawn
without the Issuer’s consent.
The conversion date in respect of a Bond (the “Conversion Date”) shall be deemed to be
the H Share Stock Exchange Business Day immediately following the date of the surrender
of the Certificate in respect of such Bond and delivery of such Conversion Notice and, if
applicable, any such certificate and/or any payment to be made or indemnity given under
these Conditions in connection with the exercise of such Conversion Right.
must pay directly to the relevant authorities or party any taxes and duties, including
capital, stamp, issue, excise, transfer, registration and other similar taxes and duties and
transfer costs (“Duties”) in any applicable jurisdiction arising on conversion (other than
any Duties payable in the PRC or Hong Kong or, if relevant, in the place of the Alternative
Stock Exchange, by the Issuer in respect of the allotment and issue of H Shares and listing
of the H Shares on the Hong Kong Stock Exchange or the Alternative Stock Exchange (as
the case may be) on conversion, such Duties being the “Issuer Duties”) (such Duties and
Issuer Duties are collectively known as “Taxes”). The Issuer will pay all other expenses
arising from the issue of H Shares on conversion of the Bonds and all charges (together,
the “Conversion Expenses”) of the Agents and the share transfer agent for the H Shares.
The Bondholder (and, if different, the person to whom the H Shares are to be issued) must
declare in the relevant Conversion Notice that any amounts payable to the relevant tax
authorities or party in settlement of Duties (other than the Issuer Duties) payable pursuant
to this Condition 5.2.2 (Stamp Duty etc.) have been paid.
– 91 –
If the Issuer fails to pay any Issuer Duties or Conversion Expenses, the relevant holder
shall be entitled to tender and pay the same and the Issuer, as a separate and independent
stipulation, covenants to reimburse and indemnify each Bondholder in respect of any
payment thereof and any penalties payable in respect thereof.
Such Bondholder must also pay all, if any, Duties (other than Issuer Duties) imposed on
it and arising by reference to any disposal or deemed disposal of a Bond or interest therein
in connection with the exercise of Conversion Rights by it.
Neither the Trustee nor the Agents shall be responsible for determining whether such Taxes
or Conversion Expenses are payable or the amount thereof and none of them shall be
responsible or liable for any failure by the Issuer or any Bondholder to pay any such
amount.
(i) As soon as practicable, and in any event not later than seven H Share Stock Exchange
Business Days (excluding any H Share Stock Exchange Business Days that fall
within a Restricted Conversion Period) after the Conversion Date, the Issuer will, in
the case of Bonds converted on exercise of the Conversion Right and in respect of
which a duly completed Conversion Notice has been delivered and the relevant
Certificate and certification and amounts payable by the relevant Bondholder
deposited or paid as required by Conditions 5.2.1 (Conversion Notice) and 5.2.2
(Stamp Duty etc.), register the person or persons designated for the purpose in the
Conversion Notice as holder(s) of the relevant number of H Shares in the Issuer’s H
share register and will, if the Bondholder has also requested in the Conversion Notice
and to the extent permitted under applicable law and the rules and procedures of the
Central Clearing and Settlement System of Hong Kong (“CCASS”), take all action
reasonably necessary to enable the H Shares to be delivered through CCASS for so
long as the H Shares are listed on the Hong Kong Stock Exchange; or will make such
certificate or certificates available for collection at the office of the Issuer’s share
registrar in Hong Kong (currently at Shops 1712-1716, 17th Floor, Hopewell Centre,
with Condition 16 (Notices) or, if so requested in the relevant Conversion Notice,
cause its share registrar to mail (at the risk, and, if sent at the request of such person
otherwise than by ordinary mail, at the expense, of the person to whom such
certificate or certificates are sent) such certificate or certificates to the person and at
the place specified in the Conversion Notice, together (in either case) with any other
securities, property or cash required to be delivered upon conversion and such
assignments and other documents (if any) as may be required by law to effect the
transfer thereof.
(ii) The delivery of the H Shares to the converting Bondholder (or such person or persons
designated in the relevant Conversion Notice) in the manner contemplated in
Condition 5.2.3(i) will be deemed to satisfy the Issuer’s obligation to pay any
amounts under such converted Bonds. The person or persons designated in the
Conversion Notice will become the holder of record of the number of H Shares
issuable upon conversion with effect from the date he is or they are registered as such
in the Issuer’s register of members for H shares (the “Registration Date”). The H
– 92 –
Shares issued upon exercise of the Conversion Rights will be fully paid up and will
in all respects rank pari passu with, and within the same class as, the H Shares in
issue on the relevant Registration Date except for any right excluded by mandatory
provisions of applicable law. Save as set out in these Conditions, a holder of H Shares
issued on exercise of the Conversion Rights shall not be entitled to any rights,
distributions or other payments the record date or due date for the establishment of
entitlement for which precedes the relevant Registration Date.
(iii) If (A) the Registration Date in relation to any Bond shall be on or after the record date
for any issue, distribution, grant, offer or other event that gives rise to the adjustment
of the Conversion Price pursuant to Condition 5.3 (Adjustments to Conversion Price)
or Condition 5.6 (Adjustment upon Change of Control), as applicable, and (B) the
Conversion Date in relation to such exercise shall be before the date on which such
adjustment to the Conversion Price becomes effective under the relevant Condition
(any such adjustment, a “Retroactive Adjustment”), upon the relevant adjustment to
the Conversion Price becoming effective under the relevant Condition, the Issuer
shall procure the issue to the converting Bondholder (in accordance with the
instructions contained in the Conversion Notice (subject to any applicable laws or
regulations)), such additional number of H Shares (“Additional H Shares”) as,
together with the H Shares issued or to be issued on conversion of the relevant Bond,
is equal to the number of H Shares which would have been required to be issued on
conversion of such Bond if the relevant adjustment to the Conversion Price under the
relevant Condition had been made and become effective on or immediately prior to
the relevant Conversion Date and in such event and in respect of such Additional H
Shares, references in this Condition 5.2.3(iii) to the Conversion Date shall be deemed
to refer to the date upon which the Retroactive Adjustment becomes effective
(notwithstanding that the date upon which it becomes effective falls after the end of
the Conversion Period).
If any notice requiring the redemption of any Bonds is given pursuant to Condition 7.2
(Redemption at the Option of the Issuer) or Condition 7.3 (Redemption for Taxation
Reasons) on or after the 15th Hong Kong business day prior to a record date which has
occurred since the last Interest Payment Date (or in the case of the first Interest Period,
since the Issue Date) in respect of any dividend or distribution payable in respect of the
H Shares where such notice specifies a date for redemption falling on or prior to the date
which is 14 days after the Interest Payment Date immediately following such record date,
interest shall (subject as hereinafter provided) accrue on Bonds in respect of which
Conversion Rights shall have been exercised and in respect of which the Conversion Date
falls after such record date and on or prior to the Interest Payment Date immediately
following such record date in each case from and including the preceding Interest Payment
Date (or, if such Conversion Date falls before the first Interest Payment Date, from, and
including, the Issue Date) to, but excluding, such Conversion Date; provided that no such
interest shall accrue on any Bond in the event that the H Shares issued on conversion
thereof shall carry an entitlement to receive such dividend or distribution. Any such
interest shall be paid not later than 14 days after the relevant Conversion Date directly by
the Issuer by transfer to a U.S. dollar account maintained by the payee, in accordance with
instructions given by the relevant Bondholder in the Conversion Notice.
– 93 –
Upon the occurrence of any of the following events described below, the Conversion Price will
be adjusted as follows:
alteration to the nominal value of the H Shares as a result of consolidation, subdivision or
re-classification, the Conversion Price shall be adjusted by multiplying the Conversion
Price in force immediately before such alteration by the following fraction:
A
B
Where:
A is the nominal amount of one H Share immediately after such alteration; and
B is the nominal amount of one H Share immediately before such alteration.
Such adjustment shall become effective on the date the alteration takes effect.
(i) If and whenever the Issuer shall issue Ordinary Shares of any class credited as fully
paid to the holders of such Ordinary Shares (“Ordinary Shareholders”) by way of
capitalisation of profits or reserves, including Ordinary Shares of such class paid up
out of distributable profits or reserves and/or share premium account (except any
Scrip Dividend) and which would not have constituted a Capital Distribution, the
Conversion Price shall be adjusted by multiplying the Conversion Price in force
immediately before such issue by the following fraction:
A
B
Where:
A is the aggregate nominal amount of the issued Ordinary Shares immediately
before such issue; and
B is the aggregate nominal amount of the issued Ordinary Shares immediately
after such issue.
Such adjustment shall become effective on the date of issue of such Ordinary Shares
or if a record date is fixed therefor, immediately after such record date; provided that
if there are different effective dates for different classes of Ordinary Shares, the
effective date of the H Shares shall prevail.
– 94 –
(ii) In the case of an issue of H Shares by way of a Scrip Dividend where the aggregate
value of such H Shares by way of a Scrip Dividend as determined by reference to the
Current Market Price on the date of announcement of the terms of such Scrip
Dividend multiplied by the number of such H Shares issued exceeds 105 per cent. of
the amount of the Relevant Cash Dividend or the relevant part thereof (in respect of
the H Shares) and which would not have constituted a Capital Distribution, the
Conversion Price shall be adjusted by multiplying the Conversion Price in force
immediately before the issue of such Scrip Dividend by the following fraction:
A+B
A+C
Where:
A is the aggregate nominal amount of the issued H Shares immediately before
such issue;
B is the aggregate nominal amount of such Scrip Dividend multiplied by a fraction
of which (i) the numerator is the amount of the whole, or the relevant part, of
the Relevant Cash Dividend in respect of the H Shares and (ii) the denominator
is such aggregate Current Market Price of the Scrip Dividend issued in lieu of
the whole, or the relevant part, of the Relevant Cash Dividend in respect of the
H Shares; and
C is the aggregate nominal amount of such H Shares issued by way of such Scrip
Dividend,
or by making such other adjustment as an Independent Financial Advisor shall certify
to the Trustee is fair and reasonable.
Such adjustment shall become effective on the date of issue of such H Shares or if
a record date is fixed therefor, immediately after such record date.
Distribution to the holders of H Shares (except to the extent that the Conversion Price falls
to be adjusted under Condition 5.3.2 (Capitalisation of Profits or Reserves) above), the
Conversion Price shall be adjusted by multiplying the Conversion Price in force
immediately before such Capital Distribution by the following fraction:
A-B
A
Where:
A is the Current Market Price per H Share on the date on which the Capital Distribution
is first publicly announced; and
B is the Fair Market Value of the portion of Capital Distribution attributable to one H
Share.
– 95 –
Such adjustment shall become effective on the date that such Capital Distribution is
actually made or, if a record date is fixed therefor, immediately after such record date. For
the purpose of the above, Fair Market Value shall (subject as provided in the definition of
“Fair Market Value” (as defined in Condition 5.8 (Definitions))) be determined as at the
date on which the Capital Distribution is first publicly announced or, if later, the first date
on which the Fair Market Value of the relevant Capital Distribution is capable of being
determined as provided herein.
In making any calculation pursuant to this Condition 5.3.3 (Capital Distributions), such
adjustments (if any) shall be made as an Independent Financial Advisor may consider
appropriate to reflect (i) any consolidation or subdivision of the H Shares, (ii) issues of H
Shares by way of capitalisation of profits or reserves, or any like or similar event, (iii) the
modification of any rights to dividends of H Shares or (iv) any change in the fiscal year
of the Issuer.
Ordinary Shares of one or more classes to all or substantially all Ordinary Shareholders of
such classes by way of rights, or issue or grant to all or substantially all Ordinary
Shareholders of such classes by way of rights, options, warrants or other rights to
subscribe for, purchase or otherwise acquire any Ordinary Shares of such classes, in each
case at a consideration less than 95 per cent. of the Current Market Price per H Share on
the date of the first public announcement of the terms of the issues or grants, the
Conversion Price shall be adjusted by multiplying the Conversion Price in force
immediately before such issues or grants by the following fraction:
A + B1 + B2
A + C1 + C2
Where:
A is the aggregate number of Ordinary Shares of all classes in issue immediately before
such announcement;
B1 is the number of Ordinary Shares of one class which the aggregate consideration (if
any) receivable for the Ordinary Shares of such class issued by way of rights or for
the options or warrants or other rights issued or granted by way of rights and for the
total number of Ordinary Shares of such class comprised therein would subscribe for,
purchase or otherwise acquire at such Current Market Price per Ordinary Share of the
class;
B2 where applicable, is the number of Ordinary Shares of a second class which the
aggregate consideration (if any) receivable for the Ordinary Shares of such class
issued by way of rights or for the options or warrants or other rights issued or granted
by way of rights and for the total number of Ordinary Shares of such class comprised
therein would subscribe for, purchase or otherwise acquire at such Current Market
Price per Ordinary Share of the class;
C1 is the aggregate number of Ordinary Shares of one class issued or, as the case may
be, comprised in the issue or grant; and
– 96 –
C2 where applicable, is the aggregate number of Ordinary Shares of a second class
issued or, as the case may be, comprised in the issue or grant.
Such adjustment shall become effective on the date of issue of such Ordinary Shares or
issue or grant of such options, warrants or other rights (as the case may be) or where a
record date is set, the first date on which the Ordinary Shares are traded ex-rights,
ex-options or ex-warrants, as the case may be; provided that if there are different effective
dates for different classes of Ordinary Shares, the effective date of H Shares shall prevail.
whenever the Issuer shall issue any securities (other than Ordinary Shares or options,
warrants or other rights to subscribe for, purchase or otherwise acquire Ordinary Shares)
to all or substantially all Ordinary Shareholders of such class by way of rights, or issue or
grant to all or substantially all Ordinary Shareholders of such class by way of rights,
options, warrants or other rights to subscribe for, purchase or otherwise acquire any
securities (other than Ordinary Shares or options, warrants or other rights to subscribe for,
purchase or otherwise acquire Ordinary Shares), the Conversion Price shall be adjusted by
multiplying the Conversion Price in force immediately before such issue or grant by the
following fraction:
A-B
A
Where:
A is the aggregate Ordinary Shares of all classes in issue multiplied by their respective
Current Market Price per Ordinary Share on the date on which the terms of such issue
or grant are publicly announced; and
B is the Fair Market Value of the aggregate securities, rights, options or warrants (as the
case may be) attributable to the Ordinary Shares.
Such adjustment shall become effective on the date of issue of the securities or the issue
or grant of such rights, options or warrants (as the case may be) or where a record date is
set, the first date on which the Ordinary Shares are traded ex-rights, ex-options or
ex-warrants, as the case may be, provided that if there are different effective dates for
different classes of Ordinary Shares, the effective date of the H Shares shall prevail. For
the purpose of the above, Fair Market Value shall (subject as provided in the definition of
“Fair Market Value” (as defined in Condition 5.8 (Definitions))) be determined as at the
date on which the terms of such issue or grant is first publicly announced, or if later, the
first date on which the Fair Market Value of the aggregate rights attributable to the
Ordinary Shares in relation to such issue or grant is capable of being determined as
provided herein.
– 97 –
(otherwise than as mentioned in Condition 5.3.4 (Rights Issues of Shares or Options over
Shares) above) any Ordinary Shares (other than H Shares issued on the exercise of
Conversion Rights or on the exercise of any other rights of conversion into, or exchange
or subscription for, Ordinary Shares) or issue or grant (otherwise than as mentioned in
Condition 5.3.4 (Rights Issues of Shares or Options over Shares) above) options, warrants
or other rights to subscribe for, purchase or otherwise acquire Ordinary Shares of one or
more classes, in each case at a consideration which is less than 95 per cent. of the Current
Market Price per H Share on the date of announcement of the terms of such issues, the
Conversion Price shall be adjusted by multiplying the Conversion Price in force
immediately before such issues by the following fraction:
A + B1 + B2
A + C1 + C2
Where:
A is the aggregate number of Ordinary Shares of all classes in issue immediately before
the issue of such additional Ordinary Shares of such class or the grant of such
options, warrants or other rights to subscribe for, purchase or otherwise acquire any
Ordinary Shares of such class;
B1 is the number of Ordinary Shares of one class which the aggregate consideration (if
any) receivable for the issue of such additional Ordinary Shares of such class would
purchase at the Current Market Price per Ordinary Share of such class;
B2 where applicable, is the number of Ordinary Shares of a second class which the
aggregate consideration (if any) receivable for the issue of such additional Ordinary
Shares of such class would purchase at the Current Market Price per Ordinary Share
of such class;
C1 is the aggregate number of Ordinary Shares of one class issued, or as the case may
be, the maximum number of Ordinary Shares of such class to be issued on the
exercise of such options, warrants or other rights at the initial exercise price or rate;
and
C2 where applicable, is the aggregate number of Ordinary Shares of a second class
issued, or as the case may be, the maximum number of Ordinary Shares of such class
to be issued on the exercise of such options, warrants or other rights at the initial
exercise price or rate.
References to additional Ordinary Shares in the above formula shall, in the case of an issue
by the Issuer of options, warrants or other rights to subscribe or purchase Ordinary Shares,
mean such Ordinary Shares to be issued assuming that such options, warrants or other
rights are exercised in full at the initial exercise price or rate on the date of issue or grant
of such options, warrants or other rights.
Such adjustment shall become effective on the date of issue of such additional Ordinary
Shares or, as the case may be, the issue or grant of such options, warrants or other rights;
provided that if there are different effective dates for different classes of Ordinary Shares,
the effective date of the H Shares shall prevail.
– 98 –
arising from a conversion or exchange of other securities in accordance with the terms
applicable to such securities themselves falling within this Condition 5.3.7 (Other Issues
at less than Current Market Price), if and whenever the Issuer or any of its Subsidiaries
(otherwise than as mentioned in Condition 5.3.4 (Rights Issues of Shares or Options over
Shares), Condition 5.3.5 (Rights Issues of Other Securities) or Condition 5.3.6 (Issues at
Less than Current Market Price)), or (at the direction or request of or pursuant to any
arrangements with the Issuer or any of its Subsidiaries) any other company, person or
entity shall issue any securities (other than the Bonds, which shall be deemed to exclude
any further bonds issued pursuant to Condition 15 (Further Issues)) which by their terms
of issues carry rights of conversion into, or exchange or subscription for, Ordinary Shares
of one or more classes to be issued by the Issuer upon conversion, exchange or
subscription, in each case at a consideration which is less than 95 per cent. of the Current
Market Price per H Share on the date of announcement of the terms of issues of such
securities, the Conversion Price shall be adjusted by multiplying the Conversion Price in
force immediately before such issues by the following fraction:
A + B1 + B2
A + C1 + C2
Where:
A is the aggregate number of Ordinary Shares of all classes in issue immediately before
such issue;
B1 is the number of Ordinary Shares of one class which the aggregate consideration
receivable by the Issuer for the Ordinary Shares of such class to be issued on
conversion or exchange or on exercise of the right of subscription attached to such
securities would purchase at such Current Market Price per Ordinary Share of such
class;
B2 where applicable, is the number of Ordinary Shares of a second class which the
aggregate consideration receivable by the Issuer for the Ordinary Shares of such class
to be issued on conversion or exchange or on exercise of the right of subscription
attached to such securities would purchase at such Current Market Price per Ordinary
Share of such class;
C1 is the maximum number of Ordinary Shares of one class to be issued on conversion
or exchange of such securities or on the exercise of such rights of subscription
attached thereto at the initial conversion, exchange or subscription price or rate; and
C2 where applicable, is the maximum number of Ordinary Shares of a second class to be
issued on conversion or exchange of such securities or on the exercise of such rights
of subscription attached thereto at the initial conversion, exchange or subscription
price or rate.
Such adjustment shall become effective on the date of issue of such securities.
– 99 –
modification of the rights of conversion, exchange, subscription, purchase or acquisition
attaching to any such securities as are mentioned in Condition 5.3.7 (Other Issues at less
than Current Market Price) (other than in accordance with the terms of such securities) so
that the consideration per Ordinary Share of one or more classes (for the number of
Ordinary Shares of such classes available on conversion, exchange, subscription, purchase
or acquisition following the modification) is reduced and, in each case, is less than 95 per
cent. of the Current Market Price per H Share on the date of announcement of the proposals
for such modifications, the Conversion Price shall be adjusted by multiplying the
Conversion Price in force immediately before such modifications by the following
fraction:
A + B1 + B2
A + C1 + C2
Where:
A is the aggregate number of Ordinary Shares of all classes in issue immediately before
such modification;
B1 is the number of Ordinary Shares of one class which the aggregate consideration
receivable by the Issuer for the Ordinary Shares of such class to be issued on
conversion or exchange or on exercise of the right of subscription, purchase or
acquisition attached to the securities so modified would purchase at the Current
Market Price per Ordinary Share of such class or, if lower, the existing conversion,
exchange subscription, purchase or acquisition price of such securities;
B2 where applicable, is the number of Ordinary Shares of a second class which the
aggregate consideration receivable by the Issuer for the Ordinary Shares of such class
to be issued on conversion or exchange or on exercise of the right of subscription,
purchase or acquisition attached to the securities so modified would purchase at the
Current Market Price per Ordinary Share of such class or, if lower, the existing
conversion, exchange subscription, purchase or acquisition price of such securities;
C1 is the maximum number of Ordinary Shares of one class to be issued on conversion
or exchange of such securities or on the exercise of such rights of subscription,
purchase or acquisition attached thereto at the modified conversion, exchange,
subscription, purchase or acquisition price or rate but giving credit in such manner
as an Independent Financial Advisor considers appropriate (if at all) for any previous
adjustment under this Condition 5.3.8 (Modification of Rights of Conversion etc.) or
Condition 5.3.7 (Other Issues at less than Current Market Price); and
C2 where applicable, is the maximum number of Ordinary Shares of a second class to be
issued on conversion or exchange of such securities or on the exercise of such rights
of subscription, purchase or acquisition attached thereto at the modified conversion,
exchange, subscription, purchase or acquisition price or rate but giving credit in such
manner as an Independent Financial Advisor considers appropriate (if at all) for any
previous adjustment under this Condition 5.3.8 (Modification of Rights of Conversion
etc.) or Condition 5.3.7 (Other Issues at less than Current Market Price).
Such adjustment shall become effective on the date of modification of the rights of
conversion, exchange, subscription, purchase or acquisition attaching to such securities.
– 100 –
or any of its Subsidiaries or (at the direction or request of or pursuant to any arrangements
with the Issuer or any of its Subsidiaries) any other company, person or entity issues, sells
or distributes any securities in connection with an offer pursuant to which the holders of
H Shares generally are entitled to participate in arrangements whereby such securities may
be acquired by them (except where the Conversion Price falls to be adjusted under
Condition 5.3.4 (Rights Issues of Shares or Options over Shares), Condition 5.3.5 (Rights
Issues of Other Securities), Condition 5.3.6 (Issues at Less than Current Market Price) or
Condition 5.3.7 (Other Issues at less than Current Market Price)), the Conversion Price
shall be adjusted by multiplying the Conversion Price in force immediately before such
issue by the following fraction:
A-B
A
Where:
A is the Current Market Price per H Share on the date on which the terms of such issue,
sale or distribution of securities are first publicly announced; and
B is the Fair Market Value of the portion of the rights attributable to one H Share.
Such adjustment shall become effective on the date of issue, sale or distribution of the
securities or, if a record date is fixed therefor, immediately after such record date or if
later, the first date upon which the Fair Market Value of the relevant securities is capable
of being determined as provided herein. For the purpose of the above, Fair Market Value
shall (subject as provided in the definition of “Fair Market Value” (as defined in
Condition 5.8 (Definitions))) be determined as at the date on which the terms of such issue,
sale or distribution of securities are first publicly announced or, if later, the first date on
which the Fair Market Value of the portion of the aggregate rights attributable to the
Ordinary Shares is capable of being determined as provided herein.
made to the Conversion Price as a result of one or more events or circumstances not
referred to in this Condition 5.3 (Adjustments to Conversion Price), the Issuer shall, at its
own expense, consult an Independent Financial Advisor to determine as soon as
practicable what adjustment (if any) to the Conversion Price is fair and reasonable to take
account thereof, if the adjustment would result in a reduction in the Conversion Price, and
the date on which such adjustment should take effect and upon such determination by the
Independent Financial Advisor such adjustment (if any) shall be made and shall take effect
in accordance with such determination, provided that where the events or circumstances
giving rise to any adjustment pursuant to this Condition 5.3 (Adjustments to Conversion
Price) have already resulted or will result in an adjustment to the Conversion Price or
where the events or circumstances giving rise to any adjustment arise by virtue of events
or circumstances which have already given rise or will give rise to an adjustment to the
Conversion Price, such modification (if any) shall be made to the operation of the
provisions of this Condition 5.3 (Adjustments to Conversion Price) as may be advised by
the Independent Financial Advisor to be in its opinion appropriate to give the intended
result. Notwithstanding the foregoing, the per Ordinary Share value of any such
adjustment shall not exceed the per Ordinary Share value of the dilution in the Ordinary
Shareholders’ interest in the Issuer’s equity caused by such events or circumstances.
– 101 –
classes of Ordinary Shares outstanding at any time, the formulae set out in this Condition
classes of Ordinary Shares so that “B 1 + B 2” and “C 1 + C 2” shall become “B 1 + B 2 + B 3”
and “C 1 + C 2 + C 3” and “B 3” and “C 3” shall have the same meaning as “B 1” and “C 1”,
respectively, but by reference to a third class of Ordinary Shares and so on.
outstanding, save with the approval of an Extraordinary Resolution (as defined in the Trust
Deed) of the Bondholders:
(i) it will use all commercially reasonable endeavours (a) to maintain a listing for the H
Shares on the Hong Kong Stock Exchange, (b) to obtain and maintain a listing for all
the H Shares issued on the exercise of the Conversion Rights attaching to the Bonds
on the Hong Kong Stock Exchange and (c) if the Issuer, having used such
endeavours, is unable to obtain or maintain such listing, to instead use all
commercially reasonable endeavours to obtain and maintain a listing for all the
issued H Shares on such Alternative Stock Exchange as the Issuer may from time to
time determine, and will forthwith give notice to the Bondholders in accordance with
Condition 16 (Notices) of the listing or delisting of the H Shares (as a class) by any
of such stock exchange;
(ii) it will pay the expenses of the issue and delivery of, and all expenses of obtaining
listing for, H Shares arising on conversion of the Bonds (save for the Duties to be
borne by any Bondholder as described in Condition 5.2.2 (Stamp Duty etc.));
(iii) it will not make any reduction of its registered share capital or any uncalled liability
in respect thereof or of any share premium account or capital redemption reserve fund
(except, in each case, as permitted by law (including but not limited to repurchase or
cancellation of its shares (i) pursuant to any share incentive or share option schemes
of the Issuer; (ii) as a result of its shareholders’ dissent to the Issuer’s merger or
segregation in a shareholders’ meeting and request the Issuer to repurchase its shares;
(iii) for the protection of the interests of the Issuer’s shareholders; and (iv) as
permitted by laws and regulations and the Issuer’s articles of association) provided
that all or any part of the corporate action(s) comprising the reduction results in an
adjustment to the Conversion Price then in effect) or would otherwise be taken into
account for the purposes of determining whether such an adjustment should be made
pursuant to this Condition 5; and
(iv) it will use all commercially reasonable endeavours to maintain the listing of the
Bonds on the Hong Kong Stock Exchange. If the Issuer, having used such
endeavours, is unable to maintain such listing or the maintenance of such listing is
unduly onerous, the Issuer undertakes to use all commercially reasonable endeavours
promptly to obtain and thereafter maintain a listing for the Bonds on such other stock
exchange, as is commonly used for the quotation or listing of debt securities as it may
reasonably determine, and the Issuer will forthwith give notice to the Bondholders in
accordance with Condition 16 (Notices) of such change in listing.
– 102 –
any Bond remains outstanding, save with the approval of an Extraordinary Resolution of
the Bondholders:
(i) it will issue H Shares to Bondholders on exercise of Conversion Rights and ensure
that it has the ability to issue free from pre-emptive or other similar rights such
number of H Shares on exercise of any Conversion Right as would enable the
Conversion Rights and all other rights of subscription and exchange for and
conversion into H Shares to be satisfied in full and will ensure that all H Shares
delivered upon conversion of the Bonds will be duly and validly issued as fully-paid
and not subject to call for further funds; and
(ii) it will not make any offer, issue or distribution or take any action the effect of which
would be to reduce the Conversion Price below the par value of the H Shares of the
Issuer provided always that the Issuer shall not be prohibited from purchasing its H
Shares to the extent permitted by law.
of the Conversion Rights.
The Issuer shall give notice to the Trustee and each Conversion Agent in writing and to the
Bondholders in accordance with Condition 16 (Notices) of any change in the Conversion Price.
Any such notice relating to a change in the Conversion Price shall set forth the event giving rise
to the adjustment, the Conversion Price prior to such adjustment, the adjusted Conversion Price
and the effective date of such adjustment.
If a Change of Control (as defined in Condition 7.5.5(ii)) shall have occurred, the Issuer shall
give notice of that fact to the Bondholders (the “Change of Control Notice”) in accordance
with Condition 16 (Notices) and to the Trustee and the Agents in writing within 14 days after
it becomes aware of such Change of Control. Following the giving of a Change of Control
Notice, upon any exercise of Conversion Rights such that the relevant Conversion Date falls
within the period of 30 days following the later of (i) the occurrence of the relevant Change of
Control and (ii) the date on which the Change of Control Notice is given to Bondholders (such
period, the “Change of Control Conversion Period”), the Conversion Price shall be adjusted
in accordance with the following formula:
NCP = OCP/(1 + (CP x c/t))
Where:
NCP = the Conversion Price after such adjustment;
OCP = the Conversion Price before such adjustment. For the avoidance of doubt, OCP for
the purposes of this Condition 5.6 (Adjustment upon Change of Control) shall be the
Conversion Price applicable on the relevant Conversion Date in respect of any
conversion pursuant to this Condition 5.6 (Adjustment upon Change of Control);
– 103 –
Conversion Premium (“CP”) = 18.58 per cent. expressed as a fraction;
c = the number of days from and including the first day of the Change of Control
Conversion Period to but excluding the Maturity Date; and
t = the number of days from and including the Issue Date to but excluding the Maturity
Date,
provided that the Conversion Price shall not be reduced pursuant to this Condition 5.6
(Adjustment upon Change of Control) below the level permitted by applicable laws and
regulations from time to time (if any).
If the last day of a Change of Control Conversion Period shall fall during a Restricted Transfer
Period or a Restricted Conversion Period, as the case may be, the Change of Control Conversion
Period shall be extended such that its last day will be the fifteenth day following the last day
of the Restricted Transfer Period or the Restricted Conversion Period, as the case may be.
On the H Share Stock Exchange Business Day immediately following the last day of the Change
of Control Conversion Period, the Conversion Price shall be re-adjusted to the Conversion Price
in force immediately before the adjustment to the Conversion Price during the Change of
Control Conversion Period.
multiple of one Hong Kong cent, shall be rounded down to the nearest Hong Kong cent.
No adjustment shall be made to the Conversion Price if such adjustment (rounded down
if applicable) would be less than one per cent. of the Conversion Price then in effect. Any
adjustment not required to be made, and/or any amount by which the Conversion Price has
been rounded down, shall be carried forward and taken into account in any subsequent
adjustment, and such subsequent adjustment shall be made on the basis that the adjustment
not required to be made had been made at the relevant time and/or, as the case may be, that
the relevant rounding down had not been made. Notice of any adjustment shall be given
by the Issuer to the Bondholders in accordance with Condition 16 (Notices) and to the
Trustee and the Agents in writing, in each case promptly after the determination thereof.
adjustment falls to be made to the Conversion Price or as to how an adjustment to the
Conversion Price under Condition 5.3 (Adjustments to Conversion Price) or Condition 5.6
(Adjustment upon Change of Control) should be made, and following consultation between
the Issuer and an Independent Financial Advisor, a written opinion of such Independent
Financial Advisor in respect thereof shall be conclusive and binding on the Issuer, the
Bondholders and the Trustee, save in the case of manifest error. Notwithstanding the
foregoing, the per H Share value of any such adjustment shall not exceed the per H Share
value of the dilution in the shareholders’ interest in the Issuer’s equity caused by such
events or circumstances.
– 104 –
(Conversion), the Issuer undertakes that: (i) the Conversion Price shall not in any event be
reduced to below the nominal or par value of the H Shares as a result of any adjustment
hereunder unless under applicable law then in effect the Bonds may be converted at such
reduced Conversion Price into legally issued, fully paid and non-assessable H Shares; and
(ii) it shall not take any action, and shall procure that no action is taken, that would
otherwise result in an adjustment to the Conversion Price to below such nominal or par
value or any minimum level permitted by applicable laws or regulations.
shall, where the consideration is originally expressed by reference to a formula which
cannot be expressed as an actual cash amount until a later date, be construed as a reference
to the first day on which such actual cash amount can be ascertained.
to the Conversion Price occurs within such a short period of time that, in the opinion of
an Independent Financial Advisor, the foregoing provisions would need to be operated
subject to some modification in order to give the intended result, such modification shall
be made to the operation of the foregoing provisions as may be advised by such
Independent Financial Advisor to be in its opinion appropriate in order to give such
intended result.
Price will be made, except in the case of a consolidation or re-classification of the H
Shares as referred to in Condition 5.3.1 (Consolidation, Subdivision or Re-classification).
The Issuer may at any time and for a specified period of time only, following notice being
given to the Trustee in writing and to the Bondholders in accordance with Condition 16
(Notices), reduce the Conversion Price, subject to Condition 5.7.3 (Minimum Conversion
Price).
shall be under any duty to monitor whether any event or circumstance has happened or
exists which may require an adjustment to be made to the Conversion Price or to make any
calculation or determination (or verification thereof) in connection with the Conversion
Price and/or any adjustments to it, or any determinations, advice or opinions made or given
in connection therewith and none of them will be responsible or liable to Bondholders or
any other person for any loss arising from any failure by it to do so or for any delay by
the Issuer or any Independent Financial Advisor in making any calculation or
determination or any erroneous calculation or determination in connection with the
Conversion Price.
when Ordinary Shares or other securities (including rights or options) are issued, offered,
exercised, allotted, appropriated, modified or granted to, or for the benefit of, employees
(including directors) of the Issuer or any of its Subsidiaries pursuant to any employee share
scheme or plan (and which employee share scheme or plan is in compliance with, if
applicable, the Rules Governing the Listing of Securities on the Hong Kong Stock
Exchange or, if applicable, the Stock Listing Rules of the Shenzhen Stock Exchange or, if
relevant, the listing rules of the Alternative Stock Exchange) (“Share Scheme Options”)
unless any issue or grant of Share Scheme Options (which, but for this provision, would
have required adjustment pursuant to Condition 5 (Conversion)) would result in the total
number of Ordinary Shares which may be issued upon exercise of all Share Scheme
Options granted during the 12-month period up to and including the date of such issue or
grant representing, in aggregate, more than 1.0 per cent. of the average of the issued and
– 105 –
outstanding Ordinary Shares during such 12-month period. For the avoidance of doubt, any
Ordinary Shares issued in excess thereof, and only such Ordinary Shares issued in excess
thereof, shall be subject to adjustment to the Conversion Price and taken into account in
determining such adjustment as set out in Condition 5.3 (Adjustments to Conversion
Price).
receivable or price pursuant to Condition 5.3.4 (Rights Issues of Shares or Options over
Shares), Condition 5.3.6 (Issues at Less than Current Market Price), Condition 5.3.7
(Other Issues at less than Current Market Price) and Condition 5.3.8 (Modification of
Rights of Conversion etc.), the following provisions shall apply:
(i) the aggregate consideration receivable or price for Ordinary Shares of a class issued
for cash shall be the amount of such cash;
(ii) (a) the aggregate consideration receivable for Ordinary Shares of a class to be issued
on the conversion, exercise or exchange of any options, warrants or other rights or
securities (or following any modification thereof) shall be deemed to be the
consideration received or receivable by the Issuer for any such options, warrants or
other rights or securities (or following any modification thereof); (b) the aggregate
consideration receivable for Ordinary Shares of a class to be issued on the exercise
of rights of subscription attached to any such securities (or following any
modification thereof) shall be deemed to be that part (which may be the whole) of the
consideration received or receivable by the Issuer for such securities (or following
any modification thereof) which is attributed by the Issuer to such rights of
subscription or, if no part of such consideration is so attributed, to the Fair Market
Value of such rights of subscription as at the date of the announcement of the terms
of issue or modification of such securities, plus in the case of each of (a) and (b)
above, the additional minimum consideration (if any) to be received by the Issuer on
the conversion, exercise or exchange of such options, warrants or other rights or
securities (or following any modification thereof), or on the exercise of such rights
of subscription; and (c) the consideration per Ordinary Share of a class receivable by
the Issuer on the conversion, exercise or exchange of, or on the exercise of such
rights of subscription attached to, such options, warrants or other rights or securities
(or following any modification thereof) shall be the aggregate consideration referred
to in (a) or (b) above (as the case may be) divided by the number of Ordinary Shares
of such class to be issued on such conversion or exchange or exercise at the initial
conversion, exchange or subscription price or rate;
(iii) if the consideration or price determined pursuant to (i) or (ii) above of this Condition
currency other than HK dollars, it shall be converted into HK dollars at the Prevailing
Rate on the relevant date;
(iv) in determining the consideration or price pursuant to the above, no deduction shall be
made for any commissions or fees (howsoever described) or any expenses paid or
incurred for any underwriting, placing or management of the issue of the relevant
Ordinary Shares of a class or securities or options, warrants or rights, or otherwise
in connection therewith;
(v) the consideration or price shall be determined as provided above on the basis of the
consideration or price received, receivable, paid or payable, regardless of whether all
or part thereof is received, receivable, paid or payable by or to the Issuer or another
entity;
– 106 –
(vi) if as part of the same transaction, Ordinary Shares of a class shall be issued or
issuable for a consideration receivable in more than one or in different currencies
then the consideration receivable per Share shall be determined by dividing the
aggregate consideration (determined as aforesaid and converted if and to the extent
not in HK dollars, into HK dollars at the Prevailing Rate as aforesaid) by the
aggregate number of Ordinary Shares so issued; and
(vii) none of the Trustee or the Agents shall be under any duty to determine, calculate or
verify any entitlement of any Bondholder to any amount payable upon or following
the exercise of any Conversion Right and none of them will be responsible or liable
to any Bondholder or any other person for any loss arising from any failure to do so.
For the purposes of these Conditions:
“Alternative Stock Exchange” means, at any time, in the case of the H Shares, if they are not
at that time listed and traded on the Hong Kong Stock Exchange, the principal stock exchange
or securities market on which such H Shares are then listed or quoted or dealt in;
“Closing Price” means, in respect of an Ordinary Share of a class for any Trading Day, the
closing market price quoted by the principal stock exchange or securities market on which the
Ordinary Shares of such class are then listed, admitted to trading or quoted or dealt in and, in
the case of the A Shares, shall (unless otherwise determined at the relevant time) mean the
Shenzhen Stock Exchange and, in the case of the H Shares, shall (unless otherwise determined
at the relevant time) mean the Hong Kong Stock Exchange;
“Current Market Price” means, in respect of an Ordinary Share of a class on a particular date,
the average of the daily Closing Price on each of the 20 consecutive Trading Days ending on
and including the Trading Day immediately preceding such date and (if necessary) translated
into HK dollars at the Prevailing Rate as at the relevant date; provided that:
(A) for the purposes of determining the Current Market Price pursuant to Conditions 5.3.4
(Rights Issues of Shares or Options over Shares) or 5.3.6 (Issues at Less than Current
Market Price) in circumstances where the relevant event relates to an issue of Ordinary
Shares, if at any time during the said 20 Trading Day-period (which may be on each of
such 20 Trading Days) the Ordinary Shares of such class shall have been quoted
ex-dividend (or ex- any other entitlement) and/or during some other part of that period
(which may be on each of such 20 Trading Days) the Ordinary Shares of such class shall
have been quoted cum-dividend (or cum- any other entitlement) then:
(i) if the Ordinary Shares of such class to be issued or transferred and delivered do not
rank for the dividend (or entitlement) in question, the Closing Price on the dates on
which the Ordinary Shares of such class shall have been based on a price
cum-dividend (or cum-any other entitlement) shall for the purpose of this definition
be deemed to be the amount thereof reduced by an amount equal to the Fair Market
Value of any such dividend or entitlement per Ordinary Shares of such class; or
(ii) if the Ordinary Shares of such class to be issued or transferred and delivered rank for
the dividend or entitlement in question, the Closing Price on the dates on which the
Ordinary Shares of such class shall have been based on a price ex-dividend (or ex-any
other entitlement) shall for the purpose of this definition be deemed to be the amount
thereof increased by the Fair Market Value of any such dividend or entitlement per
Ordinary Shares of such class,
– 107 –
(B) for the purpose of determining the Current Market Price of any Ordinary Shares of any
class which are to be issued or may be issued pursuant to a Scrip Dividend pursuant to
Condition 5.3.2(ii), if on any day during the said 20 Trading Day-period the Volume
Weighted Average Price of the Ordinary Shares of such class shall have been based (A) on
a price cum the Relevant Cash Dividend (and/or any other dividend or other entitlement
which the Ordinary Shares of such class that may be issued pursuant to terms of such Scrip
Dividend do not rank for), the Volume Weighted Average Price of an Ordinary Share of
such class on any such day shall for the purposes of this definition be deemed to be the
amount thereof reduced by an amount equal to the Fair Market Value of the Relevant Cash
Dividend (and/or such other dividend or other entitlement) (as at the date of first public
announcement of the terms of such Relevant Cash Dividend) per Ordinary Share of such
class entitled to the Relevant Cash Dividend (and/or such other dividend or other
entitlement) or (B) on a price ex- the Relevant Cash Dividend, the Volume Weighted
Average Price of an Ordinary Share of such class on any such day shall for the purposes
of this definition be deemed to be the amount thereof (x) multiplied by the sum of one and
the number of Ordinary Shares of such class which are to be issued or may be issued
pursuant to such Scrip Dividend per Ordinary Share of such class entitled to the Relevant
Cash Dividend and (y) reduced by the Fair Market Value of the Relevant Cash Dividend
(as at the date of first public announcement of the terms of such Relevant Cash Dividend)
per Ordinary Share of such class entitled to the Relevant Cash Dividend; and
(C) for any other purpose, if any day during the said 20 Trading Day-period was the ex-date
in relation to any dividend (or any other entitlement) the Volume Weighted Average Prices
that shall have been based on a price cum- such dividend (or cum- such entitlement) shall
for the purpose of this definition be deemed to be the amount thereof reduced by an amount
equal to the Fair Market Value of any such dividend (or other entitlement) per Ordinary
Share of such class as at the date of first public announcement of the terms of such
dividend (or other entitlement);
“Capital Distribution” means, on a per Ordinary Share basis,
(i) any distribution of assets in specie by the Issuer for any financial period whenever paid or
made and however described (and for these purposes a distribution of assets in specie
includes, without limitation, an issue of Ordinary Shares or other securities credited as
fully or partly paid by way of capitalisation of reserves, but excludes any Ordinary Shares
credited as fully paid to the extent an adjustment to the Conversion Price is made in respect
thereof under Condition 5.3.2(i) and a Scrip Dividend adjusted for under Condition
(ii) any cash dividend or distribution on a gross basis (including, without limitation, the
relevant cash amount of a Scrip Dividend) of any kind by the Issuer for any financial
period (whenever paid and however described), translated into HK dollars at the Prevailing
Rate as at the effective date of the relevant adjustment to the Conversion Price,
provided that a purchase or redemption of Ordinary Shares by or on behalf of the Issuer
(or a purchase of Ordinary Shares by or on behalf of a Subsidiary of the Issuer) shall not
constitute a Capital Distribution, unless the weighted average price (before expenses) on
any one day in respect of such purchases exceeds the Current Market Price of the Ordinary
Shares by more than five per cent. either (a) on that date, or (b) where an announcement
has been made of the intention to purchase Ordinary Shares at some future date at a
specified price, on the Trading Day immediately preceding the date of such announcement
and, if in the case of either (a) or (b) of this definition, the relevant day is not a Trading
Day, the immediately preceding Trading Day, in which case such purchase or redemption
shall be deemed to constitute a Capital Distribution in an amount equal to the amount by
– 108 –
which the aggregate consideration paid (before expenses) in respect of such Ordinary
Shares purchased or redeemed exceeds the product of 105 per cent. of such Current Market
Price and the number of Ordinary Shares so purchased or redeemed;
“Fair Market Value” means, with respect to any asset, security, option, warrant or other right
on any date, the fair market value of that asset, security, option, warrant or other right as
determined by an Independent Financial Advisor on the basis of commonly accepted market
valuation method and taking into account such factors as it considers appropriate, provided that
an Independent Financial Advisor will not be required to determine the fair market value where
(i) the Capital Distribution is paid in cash, in which case the fair market value of such cash
Capital Distribution per Ordinary Share of the relevant class shall be the amount of such cash
Capital Distribution per Ordinary Share of such class determined as at the date of announcement
of such cash Capital Distribution and (ii) any other amounts are paid in cash, in which case the
fair market value of such cash amount shall be the amount of cash, and (iii) options, warrants
or other rights or securities are or will upon issuance be publicly traded in a market of adequate
liquidity (as determined by such Independent Financial Advisor), the fair market value of such
options, warrants or other rights or securities shall equal the arithmetic mean of the daily closing
prices of such options, warrants or other rights or securities during the period of five trading
days on the relevant market commencing on the first such trading day such options, warrants or
other rights or securities are publicly traded. Such amounts, if expressed in a currency other than
HK dollars shall be translated into HK dollars (a) in the case of any cash Capital Distribution,
at the average benchmark exchange rate between Renminbi and HK dollars expressed to be used
in respect of such cash Capital Distribution and (b) in any other case at the Prevailing Rate on
such date. In addition, in the case of provisos (i) and (ii) above of this definition, the Fair Market
Value shall be determined on a gross basis and disregarding any withholding or deduction
required to be made for or on account of tax and disregarding any associated tax credit;
“Hong Kong Stock Exchange” means The Stock Exchange of Hong Kong Limited or any
successor thereto;
“H Share Stock Exchange Business Day” means any day (other than a Saturday or Sunday) on
which the Hong Kong Stock Exchange or the Alternative Stock Exchange (as the case may be)
is open for the business of dealing in securities;
“Independent Financial Advisor” means an independent investment bank or licensed financial
advisor or institution of international repute (acting as an expert) selected and appointed at its
own cost by the Issuer and notified in writing to the Trustee. The Trustee shall not be
responsible for or under any obligation to appoint an Independent Financial Advisor and shall
have no responsibility or liability for verifying any calculation, determination, certification,
advice or opinion made, given or reached by it;
“Prevailing Rate” means, in respect of any currency on any day, the spot exchange rate between
the relevant currencies prevailing as at or about 12:00 noon (Hong Kong time) on that date as
appearing on or derived from the Relevant Page or, if such a rate cannot be determined at such
time, the rate prevailing as at or about 12:00 noon (Hong Kong time) on the immediately
preceding day on which such rate can be so determined, provided that in the case of any cash
Capital Distribution in respect of the H Shares, the “Prevailing Rate” shall be deemed to be the
average benchmark exchange rate between Renminbi and HK dollars, calculated in the manner
as announced by the Issuer on the Hong Kong Stock Exchange from time to time;
“Relevant Cash Dividend” means the aggregate cash dividend or distribution declared by the
Issuer, including any cash dividend in respect of which there is any Scrip Dividend;
“Relevant Page” means the relevant Bloomberg BFIX page (or its successor page) or, if there
is no such page, on the relevant Reuters HKDFIX page (or its successor page) or such other
information service provider that displays the relevant information;
– 109 –
“Scrip Dividend” means Ordinary Shares of any class issued in lieu of the whole or any part
of any Relevant Cash Dividend being a dividend which the Ordinary Shareholders concerned
would or could otherwise have received and which would not have constituted a Capital
Distribution (and for the avoidance of doubt, no adjustment is to be made under Condition 5.3.3
(Capital Distributions) in respect of the amount by which the Current Market Price of the
Ordinary Shares exceeds the Relevant Cash Dividend or the relevant part thereof but without
prejudice to any adjustment required in such circumstances to be made under Condition 5.3.2
(Capitalisation of Profits or Reserves));
“Shenzhen Stock Exchange” means The Shenzhen Stock Exchange;
“Trading Day” means in respect of an Ordinary Share of a class, a day when the principal stock
exchange of such Ordinary Share is open for dealing business and, in the case of the A Shares,
shall (unless otherwise determined at the relevant time) mean the Shenzhen Stock Exchange
and, in the case of the H Shares, shall (unless otherwise determined at the relevant time) mean
the Hong Kong Stock Exchange; provided that for the purposes of any calculation where a
Closing Price is required, if no Closing Price is reported for one or more consecutive dealing
days, such day or days will be disregarded in any relevant calculation and shall be deemed not
to have been dealing days when ascertaining any period of dealing days; and
“Volume Weighted Average Price” means, in relation to an H Share for any H Share Stock
Exchange Business Day, the order book volume-weighted average price of an H Share for such
H Share Stock Exchange Business Day appearing on or derived from Bloomberg screen page
“1157 HK Equity VAP” (or its successor page) or, if not available on any of such screens, from
such other source as shall be determined in good faith and in a commercially reasonable manner,
using a volume-weighted average method, to be appropriate by an Independent Financial
Advisor, provided that for any H Share Stock Exchange Business Day where such price is not
available or cannot otherwise be determined as provided above, the Volume Weighted Average
Price of an H Share in respect of such H Share Stock Exchange Business Day shall be the
Volume Weighted Average Price, determined as provided above, on the immediately preceding
H Share Stock Exchange Business Day on which the same can be so determined.
References to any issue or offer or grant to Ordinary Shareholders “as a class” or “by way of
rights” shall be taken to be references to an issue or offer or grant to all or substantially all
Ordinary Shareholders, other than Ordinary Shareholders by reason of the laws of any territory
or requirements of any recognised regulatory body or any other stock exchange or securities
market in any territory or in connection with fractional entitlements, it is determined not to
make such issue or offer or grant.
All amounts due under, and all claims arising out of or pursuant to, the Bonds and/or the Trust
Deed from or against the Issuer shall be payable and settled in U.S. dollars only.
For the purposes of these Conditions, “U.S. Dollar Equivalent” means, in respect of a
Renminbi-denominated amount that, but for this Condition 6.1, would be due under the Bonds
in Renminbi, the Renminbi amount converted into U.S. dollars using the Spot Rate for the
relevant Rate Calculation Date (as defined below) as determined by the Issuer. The Issuer shall
notify the Trustee and the Principal Agent such U.S. Dollar Equivalent immediately after
determination and in any event by no later than 5:00 p.m. (Hong Kong time) on the relevant Rate
Calculation Date.
– 110 –
For the purpose of this Condition 6.1:
“Business Day” means a day (other than a Saturday or a Sunday or a public holiday) on which
banks are open for business in Hong Kong and New York;
“Rate Calculation Date” means the day which is two Business Days before the due date of the
relevant amount under these Conditions;
“Reference Dealers” means four leading dealers engaged in the foreign exchange market of the
relevant currency selected by the Issuer;
“Spot Rate” means, for each Rate Calculation Date, a rate determined by the Issuer as follows:
(a) in respect of the US dollar and Renminbi, the USD/CNH spot mid-rate of exchange,
expressed as the amount of Renminbi per one U.S. dollar, reported by the Hong Kong
Treasury Markets Association, which appears on the Bloomberg page “BFIX” at
approximately 12:00 p.m. (Hong Kong time) on the Rate Calculation Date, or any such
other source as the Issuer may determine which displays such rate;
(b) if no such rate is available under sub-paragraphs (a) of this definition, the Spot Rate
determined by the Issuer on the basis of quotations provided by the Reference Dealers of
the specified exchange rate for the Rate Calculation Date as obtained in accordance with
the provisions below, or if fewer than two quotations are provided, the exchange rate for
the Rate Calculation Date as shall be determined by an Independent Financial Advisor in
good faith.
In determining the Spot Rate under sub-paragraph (b) of this definition, the Issuer shall request
the Hong Kong office of each of the Reference Dealers to provide a quotation of what the
specified screen rate would have been had it been published, reported or available for the Rate
Calculation Date, based upon each Reference Dealer’s experience in the foreign exchange
market for Renminbi and general activity in such market on the Rate Calculation Date. The
quotations used to determine the Spot Rate under sub-paragraph (a) of this definition for a Rate
Calculation Date will be determined in each case for such Rate Calculation Date, and will be
requested on such Rate Calculation Date or as soon as practicable after it is determined that the
specified screen rate was not available.
If four quotations are provided, the rate for a Rate Calculation Date will be the arithmetic mean
of the rates, without regard to the rates having the highest and lowest value. For this purpose,
if more than one quotation has the same highest value or lowest value, then the rate of only one
of such quotations shall be disregarded. If two or three quotations are provided, the rate for a
Rate Calculation Date will be the arithmetic mean of the rates provided.
All notifications, opinions, determinations, certificates, calculations, quotations and decisions
given, expressed, made or obtained for the purposes of the provisions of this Condition 6,
whether by the Reference Dealers (or any of them), the Issuer or the Independent Financial
Advisor, will be binding on the Issuer, the Trustee, the Agents and the Bondholders, save in the
case of manifest error.
– 111 –
Payment of principal, Early Redemption Amount (as defined below), premium (if any) and
interest will be made by transfer to the registered account of the Bondholder except in the case
of any amount payable by the Issuer pursuant to Condition 5 (Conversion), where any amounts
payable to a Bondholder will be made by transfer to a U.S. dollar account maintained by the
payee, in either case in accordance with instructions given by the relevant Bondholder in the
Conversion Notice. Such payment will only be made after surrender of the relevant Certificate
at the specified office of any of the Agents.
Interest on Bonds due on an Interest Payment Date will be paid on the due date for the payment
of interest to the holder shown on the Register at the close of business on the fifteenth day
before the due date for the payment of interest (the “Interest Record Date”). Payments of
interest on each Bond will be made by transfer to the registered account of the Bondholder.
If an amount which is due on the Bonds is not paid in full, the Registrar will annotate the
Register with a record of the amount (if any) in fact paid.
So long as the Bonds are represented by the Global Certificate and the Global Certificate is held
on behalf of Euroclear or Clearstream (each, a “relevant clearing system”), each payment in
respect of the Global Certificate will be made to the person shown as the holder thereof in the
Register at the close of business (in the relevant clearing system) on the Clearing System
Business Day before the due date for such payment, where “Clearing System Business Day”
means a weekday (Monday to Friday, inclusive) except 25 December and 1 January.
For the purposes of this Condition 6 (Payments), a Bondholder’s registered account means the
U.S. dollar account maintained by or on behalf of it with a bank that processes payments in U.S.
dollars, details of which appear on the Register at the close of business on the second Payment
Business Day (as defined in Condition 6.7 (Payment Business Day)) before the due date for
payment, and a Bondholder’s registered address means its address appearing on the Register at
that time.
All payments are subject in all cases to (i) any applicable fiscal or other laws and regulations
in the place of payment, but without prejudice to the provisions of Condition 8 (Taxation) and
(ii) any withholding or deduction required pursuant to an agreement described in Section
imposed pursuant to Sections 1471 through 1474 of the Code, any regulations or agreements
thereunder, any official interpretations thereof, or (without prejudice to the provisions of
Condition 8 (Taxation)) any law implementing an intergovernmental approach thereto. No
commissions or expenses shall be charged to the Bondholders in respect of such payments.
Payment instructions (for value on the due date or, if that is not a Payment Business Day, for
value on the first following day which is a Payment Business Day) will be initiated on the due
date for payment (or, if it is not a Payment Business Day, the immediately following Payment
Business Day) or, in the case of a payment of principal, if later, on the Payment Business Day
on which the relevant Certificate is surrendered at the specified office of an Agent.
Bondholders will not be entitled to any interest or other payment for any delay after the due date
in receiving the amount due if the due date is not a Payment Business Day or if the Bondholder
is late in surrendering its Certificate (if required to do so).
– 112 –
In this Condition 6 (Payments), “Payment Business Day” means a day other than a Saturday,
Sunday or public holiday on which commercial banks and foreign exchange markets are open
for business in New York City and the city in which the specified office of the Principal Agent
is located and, in the case of the surrender of a Certificate, in the place where the Certificate
is surrendered.
When making payments to Bondholders, fraction of one cent will be rounded to the nearest cent
(half a cent being rounded upwards).
The initial Agents and their initial specified offices are listed below. The Issuer reserves the
right at any time, with the prior written approval of the Trustee, to vary or terminate the
appointment of any Agent and appoint additional or replacement Agents provided that the Issuer
shall at all times maintain (i) a Principal Agent, (ii) a Registrar, (iii) a Transfer Agent, (iv) a
Conversion Agent and (v) such other agents as may be required by the stock exchange on which
the Bonds may be listed, in each case, as approved in writing by the Trustee.
Notice of any changes in any Agent or their specified offices will promptly be given by the
Issuer to the Bondholders in accordance with Condition 16 (Notices).
Unless previously redeemed, converted or purchased and cancelled as provided herein, the
Issuer will redeem each Bond at the U.S. Dollar Equivalent of 105.73 per cent. of its principal
amount, together with the U.S. Dollar Equivalent of accrued and unpaid interest thereon on 5
February 2031 (the “Maturity Date”). The Issuer may not redeem the Bonds at its option prior
to that date except as provided in Condition 7.2 (Redemption at the Option of the Issuer) or
Condition 7.3 (Redemption for Taxation Reasons) below (but without prejudice to Condition 9
(Events of Default)).
“Optional Redemption Notice”) to the Bondholders, the Trustee and the Principal Agent
(which notice will be irrevocable), redeem all but not some only of the Bonds at the U.S.
Dollar Equivalent of the Early Redemption Amount, together with the U.S. Dollar
Equivalent of accrued and unpaid interest thereon to but excluding the date fixed for
redemption:
(i) at any time after 19 February 2028 but prior to the Maturity Date, provided that no
such redemption may be made unless the Closing Price of an H Share, translated into
Renminbi at the Prevailing Rate applicable to each H Share Stock Exchange Business
Day, for any 15 H Share Stock Exchange Business Days within a period of 30
consecutive H Share Stock Exchange Business Days, the last of such H Share Stock
Exchange Business Day shall occur not more than 10 days prior to the date upon
which notice of such redemption is given, was, for each such 15 H Share Stock
– 113 –
Exchange Business Days, at least 130 per cent. of the Conversion Price (translated
into Renminbi at the Fixed Exchange Rate) then in effect. If there shall occur an
event giving rise to a change in the Conversion Price during any such 30 consecutive
H Share Stock Exchange Business Day period, appropriate adjustments for the
relevant days approved by an Independent Financial Advisor shall be made for the
purpose of calculating the Closing Price of the H Shares for such days;
(ii) if at any time the aggregate principal amount of the Bonds outstanding, is less than
issued pursuant to Condition 15 (Further Issues)).
Upon the expiry of the Optional Redemption Notice, the Issuer will be bound to redeem
the relevant Bonds at the U.S. Dollar Equivalent of the Early Redemption Amount together
with the U.S. Dollar Equivalent of accrued and unpaid interest thereon to but excluding the
date fixed for redemption.
occur within seven days of the end of a Restricted Transfer Period but otherwise may occur
when the Conversion Right is expressed in these Conditions to be exercisable.
giving rise to a right for the Issuer to redeem under this Condition 7.2 (Redemption at the
Option of the Issuer) have in any case arisen and shall not be liable to the Bondholders or
any parties for not doing so.
to the Trustee, the Principal Agent and the Bondholders (which notice shall be irrevocable)
redeem all but not some only of the Bonds at the U.S. Dollar Equivalent of the Early
Redemption Amount (the “Tax Redemption Date”), together with the U.S. Dollar
Equivalent of interest accrued and unpaid thereon to but excluding the date fixed for
redemption, if the Issuer satisfies the Trustee immediately prior to the giving of such
notice that (i) the Issuer has or will become obliged to pay Additional Tax Amounts as
provided or referred to in Condition 8 (Taxation) as a result of any change in, or
amendment to, the laws or regulations of the PRC or Hong Kong or, in each case, any
political subdivision or any authority thereof or therein having power to tax, or any change
in the general application or official interpretation of such laws or regulations, which
change or amendment becomes effective on or after 28 January 2026, and (ii) such
obligation cannot be avoided by the Issuer taking reasonable measures available to it,
provided that no such notice of redemption shall be given earlier than 90 days prior to the
earliest date on which the Issuer would be obliged to pay such Additional Tax Amounts
were a payment in respect of the Bonds then due. Prior to the publication of any notice of
redemption pursuant to this Condition 7.3.1, the Issuer shall deliver to the Trustee (a) a
certificate signed by two directors of the Issuer, each of whom are also Authorised
Signatories of the Issuer, stating that the obligation referred to in (i) above of this
Condition 7.3.1 cannot be avoided by the Issuer having taken reasonable measures
available to it and (b) an opinion of independent legal or tax advisors of recognised
standing to the effect that such change or amendment has occurred (irrespective of whether
such amendment or change is then effective) and stating, in form and substance
satisfactory to the Trustee, that the Issuer has or will become obliged to pay such
Additional Tax Amounts as a result of such change or amendment, and the Trustee shall
be entitled to accept such certificate and opinion as sufficient evidence thereof, in which
event the same shall be conclusive and binding on the Bondholders.
– 114 –
Equivalent of the Early Redemption Amount together with the U.S. Dollar Equivalent of
interest accrued and unpaid to but excluding the Tax Redemption Date, provided that
redemption under this Condition 7.3 (Redemption for Taxation Reasons) may not occur
within seven days of the end of a Restricted Transfer Period, but otherwise may occur
when the Conversion Right is expressed in these Conditions to be exercisable.
Taxation Reasons), each Bondholder will have the right to elect that his Bond(s) shall not
be redeemed and that the provisions of Condition 8 (Taxation) shall not apply in respect
of any payment of principal or interest to be made in respect of such Bond(s) which falls
due after the relevant Tax Redemption Date whereupon no Additional Tax Amounts shall
be payable in respect thereof pursuant to Condition 8 (Taxation) and payment of all
amounts shall be made subject to the deduction or withholding of the taxation required to
be withheld or deducted by the government of the PRC or Hong Kong or, in each case, any
political subdivision or any authority thereof or therein having power to tax. For the
avoidance of doubt, any Additional Tax Amounts which had been payable in respect of the
Bonds as a result of the laws or regulations of the government of the PRC or Hong Kong
or, in each case, any authority thereof or therein having power to tax prior to 28 January
of the relevant Bond must complete, sign and deposit at the specified office of any Paying
Agent during usual business hours (being between 9:00 a.m. (Hong Kong time) and 3:00
p.m. (Hong Kong time) Monday to Friday except for public holidays) a duly completed
and signed notice of election, in the form for the time being current, obtainable from the
specified office of any Paying Agent, together with the Certificate evidencing the Bonds
on or before the day falling 10 days prior to the Tax Redemption Date. Such notice of
election, once delivered, shall be irrevocable and may not be withdrawn without the
Issuer’s consent.
The holder of each Bond will have the right at such holder’s option, to require the Issuer to
redeem all or some only of that holder’s Bonds on 5 February 2029 (the “Put Option Date”)
at the U.S. Dollar Equivalent of 103.38 per cent. of their principal amount, together with the
U.S. Dollar Equivalent of interest accrued and unpaid to but excluding the Put Option Date. To
exercise such right, the holder of the relevant Bond must complete, sign and deposit at the
specified office of any Paying Agent during usual business hours (being between 9:00 a.m.
(Hong Kong time) and 3:00 p.m. (Hong Kong time) Monday to Friday except for public
holidays) a duly completed and signed notice (the “Put Option Notice”), substantially in the
form scheduled to the Agency Agreement, obtainable from the specified office of any Paying
Agent, together with the Certificate evidencing the Bonds to be redeemed not earlier than 60
days and not later than 30 days prior to the Put Option Date.
A Put Option Notice, once delivered, shall be irrevocable (and may not be withdrawn unless the
Issuer consents to such withdrawal) and the Issuer shall redeem the Bonds the subject of a Put
Option Notice delivered as aforesaid on the Put Option Date.
– 115 –
holder of each Bond will have the right at such holder’s option, to require the Issuer to
redeem all or some only of such holder’s Bonds on the Relevant Event Put Date (as defined
below) at the U.S. Dollar Equivalent of the Early Redemption Amount together with the
U.S. Dollar Equivalent of interest accrued and unpaid to but excluding the Relevant Event
Put Date. To exercise such right, the holder of the relevant Bond must complete, sign and
deposit at the specified office of any Paying Agent during usual business hours (being
between 9:00 a.m. (Hong Kong time) and 3:00 p.m. (Hong Kong time) Monday to Friday
except for public holidays) a duly completed and signed notice of redemption,
substantially in the form scheduled to the Agency Agreement, obtainable from the
specified office of any Paying Agent (a “Relevant Event Put Exercise Notice”) together
with the Certificate evidencing the Bonds to be redeemed by not later than 30 days
following a Relevant Event, or, if later, 30 days following the date upon which notice
thereof is given to Bondholders by the Issuer in accordance with Condition 16 (Notices).
The “Relevant Event Put Date” shall be the fourteenth day after the expiry of such period
of 30 days as referred to above in this Condition 7.5.1.
be withdrawn without the Issuer’s consent. The Issuer shall redeem the Bonds which form
the subject of the Relevant Event Put Exercise Notices delivered as aforesaid (subject to
delivery of the relevant Certificates) on the Relevant Event Put Date.
whether a Relevant Event or any event which could lead to the occurrence of a Relevant
Event has occurred and none of them shall be liable to Bondholders or any other person
for not doing so.
that notice regarding the Relevant Event shall be delivered to Bondholders (in accordance
with Condition 16 (Notices)) and to the Trustee and the Principal Agent in writing stating:
(i) the Relevant Event Put Date;
(ii) the date of such Relevant Event and, briefly, the events causing such Relevant Event;
(iii) the date by which the Relevant Event Put Exercise Notice must be given;
(iv) the redemption amount and the method by which such amount will be paid;
(v) the names and addresses of all Paying Agents;
(vi) briefly, the Conversion Right and the then current Conversion Price;
(vii) the procedures that Bondholders must follow and the requirements that Bondholders
must satisfy in order to exercise their rights under this Condition 7.5 (Redemption for
Relevant Events) or their Conversion Right; and
(viii) that a Relevant Event Put Exercise Notice, once validly given, may not be withdrawn
without the Issuer’s consent.
– 116 –
(i) “control” means, in respect of a person (where applicable):
(a) the ownership, acquisition or control of more than 50 per cent. of the voting
rights of the issued share capital of such person; or
(b) the right to appoint and/or remove all or the majority of the members of such
person’s board of directors or other governing body, whether obtained directly
or indirectly, and whether obtained by ownership of share capital, the
possession of voting rights, contract or otherwise; or
(c) the possession, directly or indirectly, of the power to direct or cause the
direction of the management policies of a person,
and the terms “controlling” and “controlled” have meanings correlative to the
foregoing;
(ii) a “Change of Control” occurs when:
(a) any person or persons, acting together acquires control of the Issuer; or
(b) the Issuer consolidates with or merges into or sells or transfers all or
substantially all of its assets to any other person or persons acting together,
unless the consolidation, merger, sale or transfer will not result in any person
acquiring control over the Issuer or the successor entity.
(iii) a “Delisting” occurs when the H Shares cease to be listed or admitted to trading on
the Hong Kong Stock Exchange or the Alternative Stock Exchange (as the case may
be);
(iv) “Early Redemption Amount” of a Bond, for each RMB1,000,000 principal amount
of the Bonds, is the amount determined to represent for the Bondholder on the
relevant date for determination of the Early Redemption Amount (the
“Determination Date”) a gross yield of 1.80 per cent. per annum calculated on a
semi-annual basis. The applicable Early Redemption Amount for each
RMB1,000,000 principal amount of Bonds is calculated in accordance with the
following formula, rounded (if necessary) to two decimal places with 0.005 being
rounded upwards (provided that if the date fixed for redemption is a Semi-annual
Date (as set out below), such Early Redemption Amount shall be as set out in the
table below in respect of such Semi-annual Date):
Early Redemption Amount = Previous Redemption Amount x (1 + r/2) d/p — AI,
where
– 117 –
Previous Redemption Amount = the Early Redemption Amount for each
RMB1,000,000 principal amount on the Semi-annual Date immediately preceding the
date fixed for redemption as set out below (or if the Bonds are to be redeemed prior
to the first Interest Payment Date, RMB1,000,000):
Early
Redemption
Semi-annual Date Amount
(RMB)
r = 1.80 per cent. expressed as a fraction.
d = number of days from and including the immediately preceding Semi-
annual Date (or if the Bonds are to be redeemed on or before the first
Interest Payment Date, from and including the Issue Date) to, but
excluding, the date fixed for redemption, calculated on the basis of a
an incomplete month, the number of days elapsed.
p = 180.
AI = the accrued interest on the principal amount of RMB1,000,000 of a Bond
determined in accordance with and pursuant to Condition 4 from and
including the immediately preceding Interest Payment Date (or if the
Determination Date is before the first Interest Payment Date, from and
including the Issue Date) to but excluding the Determination Date.
(v) an “H Share Suspension in Trading” means the suspension in trading of the H
Shares for a period of 30 consecutive H Share Stock Exchange Business Days;
(vi) a “person” includes any individual, company, corporation, firm, partnership, joint
venture, undertaking, association, organisation, trust, state or agency of a state (in
each case whether or not being a separate legal entity);
(vii) a “Relevant Event” means the occurrence of either (a) a Change of Control; (b) a
Delisting or (c) an H Share Suspension in Trading; and
(viii) “voting rights” means the right generally to vote at general meetings of shareholders
of a person (irrespective of whether or not, at the time, stock of any other class or
classes shall have, or might have, voting power by reason of the happening of any
contingency).
– 118 –
The Issuer or any of its Subsidiaries may, subject to applicable laws and regulations, at any time
and from time to time purchase Bonds at any price in the open market or otherwise. The Bonds
so acquired, while held by or on behalf of the Issuer or any such Subsidiary, shall not entitle
them to convert the Bonds in accordance with these Conditions nor shall such Bonds be deemed
to be outstanding for the purposes of, among other things, calculating quorums at meetings of
the Bondholders and exercising any voting rights with respect to such Bonds and Conditions 9
(Events of Default), 11 (Meetings of Bondholders, Modification and Waiver) and 13
(Enforcement).
All Bonds which are repurchased, redeemed or converted or purchased by or on behalf of the
Issuer or its Subsidiaries will forthwith be cancelled. Certificates in respect of all Bonds
cancelled will be forwarded to or to the order of the Registrar and such Bonds may not be
reissued or resold. For the avoidance of doubt, all or any Bonds which are purchased by or on
behalf of the Issuer’s Subsidiaries may be resold in any manner and at any price in compliance
with relevant laws and regulations (including any applicable rules of the relevant stock
exchange).
All notices to Bondholders given by or on behalf of the Issuer pursuant to this Condition 7
(Redemption, Purchase and Cancellation) will be irrevocable and will be given in accordance
with Condition 16 (Notices) specifying: (i) the Conversion Price as at the date of the relevant
notice; (ii) the last day on which Conversion Rights may be exercised; (iii) the principal and/or
premium (if any) together with accrued and unpaid interest up to but excluding the relevant
redemption date payable; (iv) the date fixed for redemption; (v) the manner in which redemption
will be effected; and (vi) the aggregate principal amount of the Bonds outstanding as at the latest
practicable date prior to the publication of the notice.
If more than one notice of redemption is given (being a notice given by either the Issuer or a
Bondholder pursuant to these Conditions), the first in time shall prevail.
Neither the Trustee nor any of the Agents shall be responsible for calculating or verifying the
calculations of any amount payable on redemption of the Bonds pursuant to this Condition 7
(Redemption, Purchase and Cancellation) or have any duty to verify the accuracy, content,
completeness, validity and/or genuineness of any certificates, confirmations or documents in
relation to or in connection to any such redemption or the exercise of any right of redemption
or to require redemption and none of them shall be liable to the Bondholders or any other person
for not doing so.
any set-off, counterclaim, restriction or condition and will be made without deduction or
withholding for or on account of any present or future taxes, duties, assessments or
governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or
on behalf of the PRC or Hong Kong or, in each case, any authority thereof or therein having
power to tax, unless deduction or withholding of such taxes, duties, assessments or
governmental charges is compelled by law. Where such withholding or deduction is made by the
Issuer by or within the PRC up to and including the aggregate rate applicable on 28 January
– 119 –
required, so that the net amount received by Bondholders equals the amounts which would
otherwise have been receivable by them had no such withholding or deduction been required.
If the Issuer is required to make a deduction or withholding in respect of PRC tax in excess of
the Applicable Rate, or any Hong Kong deduction or withholding is required, in such event the
Issuer shall pay such additional amounts (“Additional Tax Amounts”) as will result in receipt
by the Bondholders of such amounts as would have been received by them had no such
withholding or deduction been required, except that no Additional Tax Amounts shall be payable
in respect of any Bond:
assessments or governmental charges in respect of such Bond by reason of his having some
connection with the PRC or Hong Kong, as the case may be, otherwise than merely by
holding the Bond or by the receipt of amounts in respect of the Bond or where the
withholding or deduction could be avoided by the holder making a declaration of
non-residence or other similar claim for exemption to the appropriate authority which such
holder is legally capable and competent of making but fails to do so; or
making a declaration of non-residence or other similar claim for exemption to the
appropriate authority or any other person which such holder is legally capable and
competent of making but fails to do so; or
surrendered more than 30 days after the Relevant Date except to the extent that the holder
would have been entitled to such additional amount on surrendering the relevant
Certificate for payment on the last day of such period of 30 days.
becomes due and (ii) if the full amount payable has not been received by the Trustee or the
Principal Agent on or prior to such due date, the date on which, the full amount having been so
received, notice to that effect shall have been given to the Bondholders and payment made.
to any additional amounts or premiums which may be payable under these Conditions or any
undertaking or covenant given in addition thereto or in substitution therefor pursuant to the
Trust Deed.
withholding or other payment referred to in this Condition 8 (Taxation) or for determining
whether such amounts are payable or the amount thereof, and none of them shall be responsible
or liable for any failure by the Issuer, any Bondholder or any third party to pay such tax, duty,
charges, withholding or other payment in any jurisdiction or to provide any notice or
information to the Trustee or any Agent that would permit, enable or facilitate the payment of
any principal, premium (if any), interest or other amount under or in respect of the Bonds
without deduction or withholding for or on account of any tax, duty, charge, withholding or
other payment imposed by or in any jurisdiction.
– 120 –
The Trustee at its discretion may, and if so requested in writing by the holders of not less than
an Extraordinary Resolution shall (subject in any such case to being indemnified and/or secured
and/or pre-funded to its satisfaction), give notice to the Issuer that the Bonds are, and they shall
accordingly thereby become, immediately due and repayable at the U.S. Dollar Equivalent of
the Early Redemption Amount together with the U.S. Dollar Equivalent of any accrued and
unpaid interest up to but excluding the date of payment (subject as provided below and without
prejudice to the right of Bondholders to exercise the Conversion Right in respect of their Bonds
in accordance with Condition 5 (Conversion)) if any of the following events (each an “Event
of Default”) has occurred:
Bonds when due and such failure continues for a period of five H Share Stock Exchange
Business Days; or
Bond; or
other obligations in the Bonds or the Trust Deed which default is, in the opinion of the Trustee,
incapable of remedy or, if capable of remedy in the opinion of the Trustee, is not remedied
within 30 days after written notice of such default shall have been given to the Issuer by the
Trustee; or
to be) insolvent or bankrupt or unable to pay its debts, stops, suspends or threatens to stop or
suspend payment of all or a substantial part of (or of a particular type of) its debts, proposes or
makes any agreement for the deferral, rescheduling or other readjustment of all or a substantial
part of (or of a particular type of) its debts, proposes or makes a general assignment or an
arrangement or composition with or for the benefit of the relevant creditors in respect of any of
such debts or a moratorium is agreed or declared in respect of or affecting all or any part of (or
of a particular type of) the debts of the Issuer or any Principal Subsidiary; or
for or in respect of moneys borrowed or raised becomes due and payable prior to its stated
maturity by reason of any actual or potential default, event of default or the like (howsoever
described), or (ii) any such indebtedness is not paid when due or, as the case may be, within any
applicable grace period and in each case, such default continues for more than 10 days after the
expiration of any grace period or extension of time for payment applicable thereto; provided that
any such Event of Default shall be deemed cured and not continuing upon payment of such
indebtedness, rescission of such declaration of acceleration, or waiver or with consent of the
applicable lender, or (iii) the Issuer or any of its Subsidiaries fails to pay when due any amount
payable by it under any present or future guarantee for, or indemnity in respect of, any present
or future indebtedness in respect of moneys borrowed or raised, provided that the aggregate
amount of the relevant indebtedness, guarantees and indemnities in respect of which one or
more of the events mentioned above in this Condition 9.5 (Cross-acceleration) have occurred
equals or exceeds U.S.$30,000,000 or its equivalent (as determined on the basis of the middle
spot rate for the relevant currency against the U.S. dollar as quoted by any leading bank on the
day on which such indebtedness become due and payable or is not paid or any such amount
become due and payable or is not paid under any such guarantee or indemnity); or
– 121 –
enforced or sued out on or against any material part of the property, assets or revenues of the
Issuer or any of its Principal Subsidiaries and is not discharged or stayed within 45 days; or
dissolution, judicial management or administration of the Issuer or any Principal Subsidiary, or
the Issuer or any Principal Subsidiary ceases or threatens to cease to carry on all or substantially
all of its business or operations (other than, in the case of a Principal Subsidiary, for the
purposes of or pursuant to a reconstruction, amalgamation, reorganisation, merger or
consolidation whilst solvent or as a result of disposal on arm’s length terms or as approved by
an Extraordinary Resolution of the Bondholders); or
created or assumed by the Issuer or any of its Principal Subsidiaries on any material part of their
respective property, assets or revenues becomes enforceable and any step is taken to enforce it
(including the taking of possession or the appointment of a receiver, manager or other similar
person) and is not discharged within 45 days; or
of its obligations under any of the Bonds or the Trust Deed; or
of any necessary consent, approval, authorisation, exemption, filing, licence, order, recording or
registration) at any time required to be taken, fulfilled or done by the Issuer in order (i) to enable
the Issuer lawfully to enter into, exercise its rights and perform and comply with its obligations
under the Bonds and the Trust Deed, (ii) to ensure that those obligations are legally binding and
enforceable and (iii) to make the Bonds and the Trust Deed admissible in evidence in the courts
of the PRC or Hong Kong is not taken, fulfilled or done; or
view to the seizure, compulsory acquisition, expropriation or nationalisation of all or a
substantial part of the assets of the Issuer or any Principal Subsidiary; or
analogous effect to any of the events referred to in any of Conditions 9.6 (Enforcement
Proceedings) to 9.8 (Security Enforced) (both inclusive) or Condition 9.11 (Nationalisation).
The Trustee and the Agents shall not be bound to take any steps to ascertain whether any Event
of Default or any condition, event or act which with the giving of notice and/or the lapse of time
and/or fulfilment of any other conditions and/or the making of any determination would
constitute an Event of Default has happened and none of them shall be responsible or liable to
Bondholders or any other person for not doing so.
– 122 –
Subsidiary of the Issuer:
(i) whose total revenue (consolidated in the case of a Subsidiary which itself has Subsidiaries)
as shown by its latest audited income statement is at least five per cent. of the consolidated
total revenue as shown by the latest published audited income statement of the Issuer and
its consolidated Subsidiaries; or
(ii) whose total net profit (consolidated in the case of a Subsidiary which itself has
Subsidiaries) as shown by its latest audited income statement is at least five per cent. of
the consolidated total net profit as shown by the latest published audited income statement
of the Issuer and its consolidated Subsidiaries; or
(iii) whose total assets (consolidated in the case of a Subsidiary which itself has Subsidiaries)
as shown by its latest audited balance sheet are at least five per cent. of the consolidated
total assets of the Issuer and its Subsidiaries as shown by the latest published audited
consolidated balance sheet of the Issuer and its Subsidiaries, including the investment of
the Issuer and its consolidated Subsidiaries in each Subsidiary whose accounts are not
consolidated with the consolidated audited accounts of the Issuer and of associated
companies and after adjustment for minority interests;
provided that, in relation to paragraphs (i), (ii) and (iii) above of this definition:
(a) in the case of a corporation or other business entity becoming a Subsidiary after the
end of the financial period to which the latest consolidated audited accounts of the
Issuer relate, the reference to the then latest consolidated audited accounts of the
Issuer and its Subsidiaries for the purposes of the calculation above shall, until
consolidated audited accounts of the Issuer for the financial period in which the
relevant corporation or other business entity becomes a Subsidiary are published, be
deemed to be a reference to the then latest consolidated audited accounts of the Issuer
and its Subsidiaries adjusted to consolidate the latest audited accounts (consolidated
in the case of a Subsidiary which itself has Subsidiaries) of such Subsidiary in such
accounts;
(b) if at any relevant time in relation to the Issuer or any Subsidiary which itself has
Subsidiaries, no consolidated accounts are prepared and audited, total revenue, total
net profit or total assets of the Issuer and/or any such Subsidiary shall be determined
on the basis of pro forma consolidated accounts prepared for this purpose by or on
behalf of the Issuer;
(c) if at any relevant time in relation to any Subsidiary, no accounts are audited, its total
assets (consolidated, if appropriate) shall be determined on the basis of pro forma
accounts (consolidated, if appropriate) of the relevant Subsidiary prepared for this
purpose by or on behalf of the Issuer; and
(d) if the accounts of any Subsidiary (not being a Subsidiary referred to in proviso (i)
above) are not consolidated with those of the Issuer, then the determination of
whether or not such Subsidiary is a Principal Subsidiary shall be based on a pro forma
consolidation of its accounts (consolidated, if appropriate) with the consolidated
accounts (determined on the basis of the foregoing) of the Issuer; or
(iv) to which is transferred the whole or substantially the whole of the assets of a Subsidiary
which immediately prior to such transfer was a Principal Subsidiary, whereupon the
Principal Subsidiary which so transfers its assets shall forthwith upon such transfer cease
– 123 –
to be a Principal Subsidiary and the Subsidiary to which the assets are so transferred shall
immediately become a Principal Subsidiary, provided that on or after the date on which the
first published audited accounts (consolidated, if appropriate) of the Issuer prepared as of
a date later than such transfer are issued, whether or not such transferor Subsidiary or
transferee Subsidiary would continue to be a Principal Subsidiary shall be determined on
the basis of such accounts by virtue of the provisions of (i), (ii) or (iii) above;
A certificate in English signed by an Authorised Signatory of the Issuer stating that, in their
opinion, a Subsidiary is or is not, or was or was not, a Principal Subsidiary shall, in the absence
of manifest error, be conclusive and binding on all parties, and the Trustee shall be entitled to
rely conclusively upon such certificate without further investigation or query and without
liability to the Bondholders or any other person.
Claims in respect of amounts due in respect of the Bonds will become prescribed and void
unless made within 10 years (in the case of principal) and five years (in the case of interest)
from the Relevant Date in respect thereof.
The Trust Deed contains provisions for convening meetings of Bondholders to consider any
matter affecting their interests, including the sanctioning by Extraordinary Resolution of a
modification of the Bonds or the provisions of the Trust Deed and/or the Agency Agreement.
Such a meeting may be convened by the Issuer or the Trustee and shall be convened by the
Trustee if requested in writing to do so by Bondholders holding not less than 10 per cent. in
aggregate principal amount of the Bonds for the time being outstanding and if it is indemnified
and/or secured and/or pre-funded to its satisfaction against all costs and expenses. The quorum
at any such meeting for passing an Extraordinary Resolution will be two or more persons
holding or representing over 50 per cent. in aggregate principal amount of the Bonds for the
time being outstanding or, at any adjournment of such meeting, two or more persons being or
representing Bondholders whatever the principal amount of the Bonds so held or represented
unless the business of such meeting includes consideration of proposals, inter alia, (i) to modify
the due date for any payment in respect of the Bonds or the dates on which interest is payable
in respect of the Bonds, (ii) to reduce or cancel the amount of principal, premium, interest, or
any other amount payable in respect of the Bonds or to change the method of calculation of
interest, (iii) to change the currency of payment of the Bonds, (iv) to modify or cancel the
Conversion Rights (except by unilateral and unconditional reduction in the Conversion Price)
or the put options specified in Condition 7 (Redemption, Purchase and Cancellation) or (v) to
modify the provisions concerning the quorum required at any meeting of the Bondholders or the
majority required to pass an Extraordinary Resolution including this proviso, in which case the
necessary quorum for passing an Extraordinary Resolution will be two or more persons holding
or representing not less than 75 per cent., or at any adjourned such meeting not less than 25 per
cent., in aggregate principal amount of the Bonds for the time being outstanding. An
Extraordinary Resolution passed at any meeting of Bondholders will be binding on all
Bondholders, whether or not they are present at the meeting. The Trust Deed provides that a
written resolution signed by or on behalf of the holders of not less than 90 per cent. of the
aggregate principal amount of Bonds outstanding and/or an Electronic Consent (as defined in
the Trust Deed) shall be as valid and effective as a duly passed Extraordinary Resolution.
– 124 –
The Trustee may (but shall not be obliged to) agree, without the consent of the Bondholders, to
(i) any modification (except as mentioned in the Trust Deed) to, or the waiver or authorisation
of any breach or proposed breach of, the Bonds, the Agency Agreement or the Trust Deed which
is not, in the opinion of the Trustee, materially prejudicial to the interests of the Bondholders
or (ii) any modification to the Bonds, the Agency Agreement or the Trust Deed which, in the
Trustee’s opinion, is of a formal, minor or technical nature or to correct a manifest error or to
comply with mandatory provisions of law. Any such modification, waiver or authorisation will
be binding on the Bondholders and, unless the Trustee agrees otherwise, any such modification,
waiver or authorisation will be notified by the Issuer to the Bondholders as soon as practicable
thereafter.
In connection with the exercise of its functions, rights, powers and discretions (including but not
limited to those in relation to any proposed modification, authorisation or, waiver) the Trustee
shall have regard to the interests of the Bondholders as a class and shall not have regard to the
consequences of such exercise for individual Bondholders and the Trustee shall not be entitled
to require on behalf of any Bondholder, nor shall any Bondholder be entitled to claim, from the
Issuer or the Trustee any indemnification or payment in respect of any tax consequences of any
such exercise upon individual Bondholders except to the extent provided for in Condition 8
(Taxation) and/or any undertakings given in addition thereto or in substitution therefor pursuant
to the Trust Deed.
If any Certificate is mutilated, defaced, destroyed, stolen or lost, it may be replaced at the
specified office of the Registrar or any Transfer Agent, subject to all applicable laws and stock
exchange requirements, upon payment by the claimant of such costs as may be incurred in
connection therewith and on such terms as to evidence and such indemnity and/or security as
the Issuer and/or such Agent may require. Mutilated or defaced Certificates must be surrendered
before replacements will be issued.
At any time when the Bonds become due and payable, the Trustee may, at its discretion and
without further notice, take such steps and/or actions and/or institute such proceedings against
the Issuer as it may think fit to enforce the terms of the Trust Deed, the Agency Agreement and
the Bonds, but it need not take any such steps and/or actions and/or institute any such
proceedings unless (i) it shall have been so directed by an Extraordinary Resolution or shall
have been so requested in writing by the holders of not less than 25 per cent. in principal amount
of the Bonds then outstanding and (ii) it shall have been indemnified and/or secured and/or
pre-funded to its satisfaction. No Bondholder may proceed directly against the Issuer unless the
Trustee, having become bound so to proceed, fails to do so within a reasonable period and such
failure is continuing.
– 125 –
The Trust Deed contains provisions for the indemnification of the Trustee and for its relief from
responsibility including without limitation from taking steps and/or actions and/or instituting
proceedings to enforce payment unless indemnified and/or secured and/or prefunded of its
satisfaction and entitling the Trustee to be paid or reimbursed for any fees, costs, expenses,
indemnity payments and for liabilities incurred by it, in priority to the claims of the
Bondholders. The Trustee and its affiliates are entitled to enter into business transactions with
the Issuer and any entity related (directly or indirectly) to the Issuer without accounting for any
profit.
The Trustee may rely without liability to Bondholders or any other person on any report,
confirmation or certificate from or any advice or opinion of any legal counsel, accountants,
financial advisers, financial institution or any other expert, whether or not obtained by or
addressed to it and whether their liability in relation thereto is limited (by its terms or by any
engagement letter relating thereto entered into by the Trustee or any other person or in any other
manner) by reference to a monetary cap, methodology or otherwise. The Trustee may accept and
shall be entitled to rely conclusively on any such report, confirmation, certificate, advice or
opinion, in which case such report, confirmation, certificate, advice or opinion shall be binding
on the Issuer and the Bondholders.
Whenever the Trustee is required or entitled by the terms of the Trust Deed or these Conditions
to exercise any discretion or power, take any action, make any decision or give any direction,
the Trustee is entitled, prior to exercising any such discretion or power, taking any such action,
making any such decision or giving any such direction, to seek directions or clarifications of any
directions from the Bondholders by way of Extraordinary Resolution, and the Trustee shall not
be responsible for any loss or liability incurred by the Issuer, the Bondholders or any other
person as a result of any delay in it exercising such discretion or power, taking such action,
making such decision or giving such direction or clarifications of any directions as a result of
seeking such direction from the Bondholders or in the event that no direction is given to the
Trustee by the Bondholders.
None of the Trustee or any of the Agents shall be responsible for the performance by the Issuer
and any other person appointed by the Issuer in relation to the Bonds of the duties and
obligations on their part expressed in respect of the same and, unless it has written notice from
the Issuer to the contrary, the Trustee and each Agent shall be entitled to assume that the same
are being duly performed. None of the Trustee or any Agent shall be liable to any Bondholder
or any other person for any action taken by the Trustee or such Agent in accordance with the
instructions of the Bondholders. The Trustee shall be entitled to rely on any direction, request
or resolution of Bondholders given by holders of the requisite principal amount of Bonds
outstanding or passed at a meeting of Bondholders convened and held in accordance with the
Trust Deed. Neither the Trustee nor any of the Agents shall be under any obligation to ascertain
whether any Relevant Event, Event of Default or Potential Event of Default has occurred or
monitor compliance by the Issuer with the provisions of the Trust Deed, the Agency Agreement
or these Conditions and none of them shall be responsible or liable to the Issuer, the
Bondholders or any other person for not doing so. Each of the Trustee and the Agents shall be
entitled to assume that no Relevant Event, Event of Default or Potential Event of Default has
occurred until it has received written notice to the contrary from the Issuer.
– 126 –
Each Bondholder shall be solely responsible for making and continuing to make its own
independent appraisal and investigation into the financial condition, creditworthiness,
condition, affairs, status and nature of the Issuer and its Subsidiaries, and the Trustee shall not
at any time have any responsibility for the same and each Bondholder shall not rely on the
Trustee in respect thereof.
The Issuer may from time to time, without the consent of the Bondholders, create and issue
further bonds having the same terms and conditions as the Bonds in all respects (or in all
respects except for the issue date and the timing for complying with the requirements set out in
these Conditions in relation to the Initial NDRC Post-Issuance Filing and the CSRC
Post-Issuance Filings) and so that such further issue shall be consolidated and form a single
series with the Bonds. Such further bonds shall be constituted by a deed supplemental to the
Trust Deed.
All notices to Bondholders shall be validly given if mailed to them at their respective addresses
in the register of Bondholders maintained by the Registrar or published in a leading newspaper
having general circulation in Asia. Any such notice shall be deemed to have been given on the
later of the date of such publication and the seventh day after being so mailed, as the case may
be.
As long as the Bonds are represented by the Global Certificate and the Global Certificate is held
on behalf of Euroclear or Clearstream or an alternative clearing system, notices to Bondholders
may be given by delivery of the relevant notice to Euroclear or Clearstream or the alternative
clearing system, for communication by it to entitled accountholders in substitution for
notification as required by the Conditions and such delivery shall be deemed to have been given
on the date of delivery to such clearing system. For the avoidance of doubt, no Agent shall be
obliged to publish any notice other than via the Euroclear and/or Clearstream.
No person shall have any right to enforce any term or condition of the Bonds under the
Contracts (Rights of Third Parties) Act 1999 but this is without prejudice to the rights of
Bondholders as contemplated in Condition 13 (Enforcement).
The Bonds, the Trust Deed and the Agency Agreement and any non-contractual obligations
arising out of or in connection with them are governed by, and shall be construed in accordance
with, English law.
The courts of Hong Kong are to have exclusive jurisdiction to settle any disputes which may
arise out of or in connection with the Bonds, the Trust Deed and the Agency Agreement and
accordingly any legal action or proceedings arising out of or in connection with the Bonds, the
Agency Agreement and/or the Trust Deed (“Proceedings”) may be brought in such courts.
Pursuant to the Trust Deed, the Issuer has irrevocably submitted to the jurisdiction of such
courts.
– 127 –
The Issuer has waived any right to claim sovereign or other immunity from jurisdiction or
execution and any similar defence, and has irrevocably consented to the giving of any relief or
the issue of any process, including, without limitation, the making, enforcement or execution
against any property whatsoever (irrespective of its use or intended use) of any order or
judgment made or given in connection with any Proceedings.
– 128 –
SUMMARY OF PROVISIONS RELATING TO THE BONDS IN GLOBAL FORM
The Global Certificate will contain provisions which apply to the Bonds in respect of which the
Global Certificate is issued, some of which modify the effect of the Terms and Conditions set out in
this Offering Circular. Terms defined in the Terms and Conditions have the same meaning in the
paragraphs below. The following is a summary of those provisions.
The Bonds will be evidenced by a Global Certificate registered in the name of a nominee of, and
deposited with, a common depositary for Euroclear and Clearstream.
Promise to Pay
Under the Global Certificate, the Issuer promises to pay such principal, interest and such other
sums and additional amounts (if any) as may be payable under the Terms and Conditions on the Bonds
to the holder of the Bonds on such date or dates as the same may become payable in accordance with
the Terms and Conditions.
Each payment will be made to, or to the order of, the person whose name is entered on the
Register at the close of business on the Clearing System Business Day immediately prior to the due
date for payment, where “Clearing System Business Day” means a weekday (Monday to Friday,
inclusive) except for 25 December and 1 January.
Calculation of Interest
So long as the Bonds are represented by the Global Certificate and such Global Certificate is
held on behalf of a clearing system, the Issuer has promised, inter alia, to pay interest in respect of
such Bonds from and including the Issue Date in arrear at the rates, on the dates for payment, and
in accordance with the method of calculation provided for in the Terms and Conditions, save that the
calculation is made in respect of the total aggregate amount of the Bonds represented by such Global
Certificate.
Exchange of Bonds Evidenced by Global Certificates
Owners of interests in the Bonds in respect of which the Global Certificate is issued will be
entitled to have title to the Bonds registered in their names and to receive individual definitive
Certificates if either Euroclear or Clearstream or any other clearing system selected by the Issuer and
approved in writing by the Trustee, the Principal Agent and the Registrar (an “Alternative Clearing
System”) through which the Bonds are held is closed for business for a continuous period of 14 days
(other than by reason of holidays, statutory or otherwise) or announces an intention permanently to
cease business or does in fact do so. In such circumstances, the Issuer at its own expense will cause
sufficient individual definitive Certificates to be executed and delivered to the Registrar for
completion, authentication and despatch to the relevant holders of the Bonds. A person with an
interest in the Bonds in respect of which the Global Certificate is issued must provide the Registrar
not less than 30 days’ notice at its specified office of such holder’s intention to effect such exchange
and a written order containing instructions and such other information as the Issuer and the Registrar
may require to complete, execute and deliver such individual definitive Certificates.
– 129 –
Meetings
For the purposes of any meeting of Bondholders, each holder of the Bonds represented by the
Global Certificate shall (unless the Global Certificate represents only one Bond) be treated as two
persons for the purposes of any quorum requirements of a meeting of Bondholders and as being
entitled to one vote in respect of each RMB1,000,000 in principal amount of the Bonds.
Conversion
Subject to the requirements of Euroclear and Clearstream (or, as the case may be, any
Alternative Clearing System), the Conversion Rights attaching to the Bonds in respect of which the
Global Certificate is issued may be exercised by the presentation thereof to or to the order of the
Principal Agent of one or more Conversion Notices duly completed by or on behalf of a holder of a
book-entry interest in such Bonds. Deposit of this Global Certificate with the Principal Agent
together with the relevant Conversion Notice(s) shall not be required. The exercise of the Conversion
Right shall be notified by the Principal Agent to the Registrar and the holder of this Global
Certificate.
Notices
So long as the Bonds are evidenced by the Global Certificate and the Global Certificate is held
on behalf of Euroclear and Clearstream or any Alternative Clearing System, notices to holders of the
Bonds may be given by their being delivered to Euroclear and Clearstream or, as the case may be,
any Alternative Clearing System, for communication by it to accountholders entitled to an interest in
the Bonds rather than by publication as required by the Terms and Conditions and shall be deemed
to have been given on the date of delivery to Euroclear and Clearstream or, as the case may be, any
Alternative Clearing System.
Issuer’s Redemption
Any option of the Issuer provided for in the Terms and Conditions shall be exercised by the
Issuer giving notice to the Bondholders and to Euroclear and Clearstream (or, as the case may be, any
Alternative Clearing System) (or procuring that such notice is given on its behalf) within the time
limits set out in and containing the information required by the Terms and Conditions.
Bondholder’s Redemption
The Bondholder’s redemption options in Conditions 7.4 (Redemption at the Option of the
Bondholders) of the Terms and Conditions and 7.5 (Redemption for Relevant Event) of the Terms and
Conditions may be exercised by the holder of the Global Certificate giving notice to any Paying
Agent of the principal amount of Bonds in respect of which the relevant option is exercised and
presenting the Global Certificate for endorsement or exercise within the time limits specified in the
Terms and Conditions.
Notice of exercise received within the time limits specified in the Terms and Conditions by the
relevant Paying Agent from or on behalf of a holder of a book-entry interest in the relevant Bonds
will be accepted by the Issuer as having been given by the holder as to the principal amount of Bonds
in respect of which it is given (but without double counting), and whether or not the Global
– 130 –
Certificate is presented for endorsement therewith. Following the exercise of any such option, the
Issuer shall procure that the principal amount of the Bonds recorded in the records of Euroclear or
Clearstream (or, as the case may be, any Alternative Clearing System) and represented by the Global
Certificate shall be reduced accordingly.
Transfers
Transfers of beneficial interests in the Bonds will be effected through the records of Euroclear
and Clearstream (or any Alternative Clearing System) and their respective participants in accordance
with the rules and procedures of Euroclear and Clearstream (or any Alternative Clearing System) and
their respective direct and indirect participants.
Cancellation
On cancellation of any Bond represented by the Global Certificate that is required by the Terms
and Conditions to be cancelled (other than upon its redemption), the Issuer acknowledges that details
of such cancellation shall be entered in the records of the relevant Clearing Systems in accordance
with the rules and procedures of Euroclear and Clearstream (or any Alternative Clearing System, as
the case may be) and, upon any such entry being made, the principal amount of the Bonds recorded
in the records of the relevant Clearing Systems and represented by the Global Certificate shall be
reduced by the aggregate principal amount of the Bonds so cancelled.
Trustee’s Powers
In considering the interests of the Bondholders while the Global Certificate is registered in the
name of a nominee for a clearing system or clearing systems, the Trustee may, to the extent it
considers it appropriate to do so in the circumstances, but without being obligated to do so, (a) have
regard to any information as may have been made available to it by or on behalf of the relevant
clearing system or its operator as to the identity of its accountholders (either individually or by way
of category) with entitlements in respect of the Bonds and (b) consider such interests on the basis that
such accountholders were the holders of the Bonds in respect of which the Global Certificate is
issued.
The Global Certificate shall not become valid for any purpose until authenticated by or on
behalf of the Registrar.
– 131 –
TAXATION
The following summary of certain PRC and Hong Kong S.A.R tax consequences of the purchase,
ownership and disposition of the Bonds is based upon applicable laws, regulations, rulings and
decisions in effect as at the date of this Offering Circular, all of which are subject to change (possibly
with retroactive effect). This summary does not purport to be a comprehensive description of all the
tax considerations that may be relevant to a decision to purchase, own or dispose of the Bonds and
does not purport to deal with consequences applicable to all categories of investors, some of which
may be subject to special rules. Neither these statements nor any other statements in this Offering
Circular are to be regarded as advice on the tax position of any holder of the Bonds or any person
acquiring, selling or otherwise dealing in the Bonds or on any tax implications arising from the
acquisition, sale or other dealings in respect of the Bonds. Persons considering the purchase of the
Bonds should consult their own tax advisors concerning the tax consequences of the purchase,
ownership and disposition of the Bonds.
PRC
The following summary of certain PRC tax consequences of the purchase, ownership and
disposition of Bonds is based upon applicable laws, rules and regulations in effect as of the date of
this Offering Circular, all of which are subject to change (possibly with retroactive effect). This
discussion does not purport to be a comprehensive description of all the tax considerations that may
be relevant to a decision to purchase, own or dispose of the Bonds and does not purport to deal with
consequences applicable to all categories of investors, some of which may be subject to special rules.
Persons considering the purchase of Bonds should consult their own tax advisors concerning the tax
consequences of the purchase, ownership and disposition of Bonds, including such possible
consequences under the laws of their country of citizenship, residence or domicile.
Income Tax
According to the PRC Enterprise Income Tax Law (《中華人民共和國企業所得稅法》) (“PRC
EIT Law”) promulgated by the National People’s Congress of the PRC (中華人民共和國全國人民代
表大會) on March 16, 2007, and most recently amended on 29 December 2018 and effective from the
same date and the Enterprise Income Tax Implementation Regulations of the PRC (《中華人民共和
國企業所得稅法實施條例》) promulgated by the State Council on December 6, 2007, and most
recently amended on 6 December 2024 and effective from 20 January 2025, enterprises are classified
as either “resident enterprises” and “non-resident enterprises”. Resident enterprises are enterprises
incorporated in China under the PRC law, or enterprises incorporated under the law of a foreign
country (region) but are with its de facto management located within China. Non-resident enterprises
are enterprises which are incorporated in accordance with the law of a foreign country (region) with
its actual management located outside China, but which either maintains an office or place of
business in China, or derives China-sourced income despite having no such office or place of
business in China. Resident enterprises are subject to a standard enterprise income tax rate of 25%
on their global income. Duly recognized key advanced and new technology enterprises are eligible
for a preferential enterprise income tax rate of 15%. The Issuer is a high-tech enterprise provided for
by the state, considered a PRC tax resident enterprise for the purpose of the PRC EIT Law and is
subject to enterprise income tax at a rate of 15% on its income sourced from both within and outside
the PRC.
– 132 –
According to the PRC EIT Law, the PRC Individual Income Tax Law (《中華人民共和國個人
所得稅法》) (“PRC IIT Law”) promulgated by Order No. 11 of the Chairman of the Standing
Committee of the National People’s Congress (全國人大常委會委員長令第11號) on 10 September
implementation rules, any non-PRC enterprise without an establishment within the PRC or whose
income has no actual connection to its establishment inside the PRC or any non-PRC resident
individual who is not residing in the PRC or who has resided in the PRC for less than 183 days with
a tax year, must pay income tax on the PRC-sourced income, unless a preferential rate is provided
by tax treaties or arrangements entered into between the country or region where the non-resident is
established or tax resided and the PRC, and such income tax must be withheld at source by the PRC
payer. Accordingly, the Issuer must withhold income tax from the payments of redemption premium
(if any) and interest (if any) on the Bonds to any non-PRC resident enterprise Holder at the rate of
treaty or arrangement that reduces or exempts such income tax.
According to the PRC EIT Law and its implementation rules, any gains realised on the transfer
of the Bonds by non-PRC resident enterprise holders may be subject to PRC enterprise income tax
if such gains are regarded as PRC-sourced income. If the gains derived from the disposal of the Bonds
issued by a PRC enterprise and held by non-PRC resident enterprise holders are regarded as
PRC-sourced income, such gain will be subject to PRC enterprise income tax. However, whether the
gains realised on the transfer of the Bonds are PRC-sourced income is subject to determination by
the PRC tax authorities. Therefore, there is uncertainty as to whether gains realised on the transfer
of the Bonds by non-PRC resident enterprise holders will be subject to PRC enterprise income tax.
According to the PRC IIT Law, individuals who do not have a domicile in the PRC and have
not resided in the PRC, or individuals who do not have a domicile in the PRC but have resided in
the PRC for less than 183 days cumulatively within a tax year, shall be deemed as non-resident
individuals. Income derived by non-resident individuals from China shall be subject to individual
income tax pursuant to the provisions of the PRC IIT Law. There is uncertainty as to whether gains
realised on the transfer of the Bonds by individual holders who are not PRC citizens or residents will
be subject to PRC individual income tax arising within the territory of the PRC.
Any PRC tax on interest (if any), redemption premium or transfers of Bonds will apply at a rate
of 10 per cent. in the case of non-PRC enterprises without an establishment within the PRC or whose
income has no actual connection to its establishment inside the PRC and at a rate of 20 per cent. in
the case of non-PRC individuals, unless there is an applicable tax treaty or arrangement that reduces
or exempts such income tax.
– 133 –
Value-Added Tax
On 23 March 2016, the Ministry of Finance and the State Taxation Administration promulgated
the Circular of Taxation on Implementing the Pilot Program of Replacing Business Tax with
Value-Added Tax in an All-round Manner, or Circular 36, which was further revised in 2017 and
nationwide basis. On 25 December 2024, the 13th meeting of the Standing Committee of the 14th
National People’s Congress passed the Value-Added Tax Law of the People’s Republic of China (《中
華人民共和國增值稅法》), which became effective on 1 January 2026.
Pursuant to Circular 36 and other regulations, provision of services within the PRC is subject
to VAT, and income derived from the usage and borrowing of funds, including interest income derived
during the holding (including maturity) of financial products, is subject to VAT under the category
of “lending services.” VAT applies to lending services where the taxable turnover is the gross amount
of the interest income and any income in the nature of interest. The transfer of financial products,
including transfer of the ownership of marketable securities, is subject to VAT on the taxable turnover
which is the balance of the sales price less the purchase price. With respect to the taxable items
mentioned above, for a general VAT taxpayer, output VAT shall be calculated at 6% of the taxable
turnover and VAT payable shall be the difference between output VAT and input VAT in the same
taxable period. In practice, the Bonds will generally be treated as a type of loan by the PRC tax
authorities and, therefore, the holders of the Bonds are likely to be treated as providing lending
services to us. The Issuer, which is the service recipient, is a PRC corporation. The PRC tax
authorities may take the view that the holders of the Bonds are providing lending services within the
PRC, the interest payable by us to the holders of the Bonds may be subject to VAT at a current rate
of 6%. Where the holders of the Bonds who are located outside of the PRC resell the Bonds to an
entity or individual located outside of the PRC, VAT is unlikely to be applicable to such transfer.
However, there is uncertainty as to whether gains derived from a sale or exchange of Bonds
consummated outside of the PRC between non-PRC resident Bondholders will be subject to VAT.
VAT is unlikely to be applicable to any transfer of Bonds between entities or individuals located
outside of the PRC and therefore unlikely to be applicable to gains realised upon such transfers of
Bonds, but there is uncertainty as to the applicability of VAT if either the seller or buyer of Bonds
is located inside the PRC. Circular 36 together with other laws and regulations pertaining to VAT are
relatively new, and the interpretation and enforcement of such laws and regulations involve
uncertainties.
The above statements may be subject to further change upon the issuance of further clarification
rules and/or different interpretation by the PRC tax authorities. There is uncertainty as to the
application of Circular 36. Potential holders should consult their tax advisors with regard to the
application of PRC tax laws to their particular situations as well as any tax consequences arising
under the laws of any other tax jurisdiction.
Stamp Duty
No PRC stamp duty will be chargeable upon the issue or transfer of the Bonds or H Shares (if
the register of the Holders is maintained outside the PRC and the issue or transfer of the Bonds or
H Shares are made outside of the PRC).
– 134 –
HONG KONG
Withholding tax
No withholding tax is payable in Hong Kong in respect of payments of principal or interest on
the Bonds or in respect of any capital gains arising from the sale of the Bonds.
Profits tax
Hong Kong profits tax is chargeable on every person carrying on a trade, profession or business
in Hong Kong in respect of profits arising in or derived from Hong Kong from such trade, profession
or business (excluding profits arising from the sale of capital assets).
Interest on the Bonds may be deemed to be profits arising in or derived from Hong Kong from
a trade, profession or business carried on in Hong Kong in the following circumstances:
(i) interest on the Bonds is derived from Hong Kong and is received by or accrues to a
corporation carrying on a trade, profession or business in Hong Kong;
(ii) interest on the Bonds is derived from Hong Kong and is received by or accrues to a person,
other than a corporation, carrying on a trade, profession or business in Hong Kong and is
in respect of the funds of that trade, profession or business;
(iii) interest on the Bonds is received by or accrues to a financial institution (as defined in the
Inland Revenue Ordinance (Cap. 112) of Hong Kong (the “IRO”)) and arises through or
from the carrying on by the financial institution of its business in Hong Kong; or
(iv) interest on the Bonds is received by or accrues to a corporation, other than a financial
institution, and arises through or from the carrying on in Hong Kong by the corporation
of its intra-group financing business (within the meaning of section 16(3) of the IRO).
Sums received by or accrued to a financial institution by way of gains or profits arising through
or from the carrying on by the financial institution of its business in Hong Kong from the sale,
disposal or redemption of Bonds will be subject to Hong Kong profits tax. Sums received by or
accrued to a corporation, other than a financial institution, by way of gains or profits arising through
or from the carrying on in Hong Kong by the corporation of its intra-group financing business (within
the meaning of section 16(3) of the IRO) from the sale, disposal or other redemption of Bonds will
be subject to Hong Kong profits tax.
Sums derived from the sale, disposal or redemption of Bonds will be subject to Hong Kong
profits tax where received by or accrued to a person, other than a financial institution, who carries
on a trade, profession or business in Hong Kong and the sum has a Hong Kong source unless
otherwise exempted. The source of such sums will generally be determined by having regard to the
manner in which the Bonds are acquired and disposed of.
– 135 –
In addition, with effect from 1 January 2024, pursuant to various foreign-sourced income
exemption legislation in Hong Kong (the “FSIE Amendments”), certain specified foreign-sourced
income (including interest, dividend, disposal gain or intellectual property income, in each case,
arising in or derived from a territory outside Hong Kong) accrued to an MNE entity (as defined in
the FSIE Amendments) carrying on a trade, profession or business in Hong Kong is regarded as
arising in or derived from Hong Kong and subject to Hong Kong profits tax when it is received in
Hong Kong. The FSIE Amendments also provide for relief against double taxation in respect of
certain foreign-sourced income and transitional matters.
In certain circumstances, Hong Kong profits tax exemptions (such as concessionary tax rates)
may be available. Investors are advised to consult their own tax advisors to ascertain the applicability
of any exemptions to their individual position.
Stamp duty
No Hong Kong stamp duty will be chargeable upon the issue or transfer of a Bond.
– 136 –
SUBSCRIPTION AND SALE
The Issuer has entered into a subscription agreement with the Joint Lead Managers dated
conditions contained in the Subscription Agreement, the Issuer has agreed to sell to the Joint Lead
Managers, and the Joint Lead Managers have agreed to severally, but not jointly, subscribe and pay
for the aggregate principal amount of the Bonds set forth opposite its name below:
Principal amount
of the Bonds to
Joint Lead Manager be subscribed
Huatai Financial Holdings (Hong Kong) Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . RMB2,000,000,000
The Hongkong and Shanghai Banking Corporation Limited . . . . . . . . . . . . . . . . . . . . . RMB2,000,000,000
Morgan Stanley Asia Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RMB2,000,000,000
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RMB6,000,000,000
The Subscription Agreement provides that the Issuer will indemnify the Joint Lead Managers
and their affiliates against certain liabilities in connection with the offer and sale of the Bonds. The
Subscription Agreement provides that the obligations of the Joint Lead Managers are subject to
certain conditions precedent and entitles the Joint Lead Managers to terminate it in certain
circumstances prior to payment being made to the Issuer.
The Joint Lead Managers or their respective affiliates may purchase the Bonds or the H Shares
for their own account and enter into transactions, including, without limitation, credit derivatives,
including asset swaps, repackaging and credit default swaps relating to the Bonds or the H Shares at
the same time as the offer and sale of the Bonds or in secondary market transactions. Such
transactions would be carried out as bilateral trades with selected counterparties and separately from
any existing sale or resale of the Bonds or the H Shares to which this Offering Circular relates
(notwithstanding that such selected counterparties may also be purchaser of the Bonds). The Joint
Lead Managers or their respective affiliates have engaged in, and may in the future engage in,
investment banking and other commercial dealings in the ordinary course of business with the Issuer
or its subsidiaries or affiliates from time to time. The Joint Lead Managers may receive customary
fees and commissions for these transactions. The Joint Lead Managers or certain of their respective
affiliates may purchase Bonds or the H Shares and be allocated Bonds or the H Shares for asset
management and/or proprietary purposes but not with a view to distribution. In addition to the
transactions noted above, the Joint Lead Managers and their respective affiliates may, from time to
time, engage in other transactions with, and perform services for, the Issuer or its subsidiaries or
affiliates in the ordinary course of their business. In addition, the Joint Lead Managers and certain
of their respective subsidiaries and affiliates may hold shares or other securities in the Issuer as
beneficial owners, on behalf of clients or in the capacity of investment advisers.
Furthermore, it is possible that a significant proportion of the Bonds may be initially allocated
to, and subsequently held by, a limited number of investors. If this is the case, the trading price and
liquidity of trading in the Bonds may be constrained. The Issuer and the Joint Lead Managers are
under no obligation to disclose the extent of the distribution of the Bonds amongst individual
investors, otherwise than in accordance with any applicable legal or regulatory requirements.
– 137 –
The Issuer has undertaken in the Subscription Agreement (as defined below) that neither the
Issuer nor any person acting on its behalf will: (i) issue, offer, sell, pledge, encumber, contract to sell
or otherwise dispose of or grant options, issue warrants or offer rights entitling persons to subscribe
or purchase any interest in any Shares or securities of the same class as the Bonds or the Shares or
any securities convertible into, exchangeable for or which carry rights to subscribe or purchase the
Bonds, the Shares or securities of the same class as the Bonds, the Shares or other instruments
representing interests in the Bonds, the Shares or other securities of the same class as them; (ii) enter
into any swap or other agreement that transfers, in whole or in part, any of the economic
consequences of the ownership of the Shares; (iii) enter into any transaction with the same economic
effect as, or which is designed to, or which may be expected to result in, or agree to do, any of the
foregoing, whether any such transaction of the kind described in (i), (ii) or (iii) is to be settled by
delivery of Shares or other securities, in cash or otherwise; or (iv) announce or otherwise make public
an intention to do any of the foregoing, in any such case without the prior written consent of the Joint
Lead Managers between the date of the Subscription Agreement and the date which is 90 days after
the Issue Date (both dates inclusive), except for (a) the Bonds and the H Shares issued on conversion
of the Bonds; or (b) any Shares or other securities (including rights or options) which are issued,
offered, exercised, allotted, appropriated, modified or granted to, or for the benefit of employees
(including directors) of the Issuer or any of its subsidiaries pursuant to any employee share scheme
or plan existing as at the date of the Subscription Agreement. For the purposes of (i)-(iv), “Shares”
means (a) H Shares; (b) A Shares; and (c) any other fully-paid and non-assessable shares of any class
or classes of the ordinary shares of the Issuer authorised after the date of the Subscription Agreement
which have no preference in respect of dividends or of amounts payable in the event of any voluntary
or involuntary liquidation or dissolution of the Issuer.
Notice to capital market intermediaries and prospective investors pursuant to paragraph
banks): This notice to CMIs (including private banks) is a summary of certain obligations the SFC
Code imposes on CMIs, which require the attention and cooperation of other CMIs (including private
banks). Certain CMIs may also be acting as OCs for this offering and are subject to additional
requirements under the SFC Code.
Prospective investors who are the directors, employees or major shareholders of the Issuer, a
CMI or its group companies would be considered under the SFC Code as having an Association with
the Issuer, the CMI or the relevant group company. CMIs should specifically disclose whether their
investor clients have any Association when submitting orders for the Bonds. In addition, private
banks should take all reasonable steps to identify whether their investor clients may have any
Associations with the Issuer, or any CMI (including its group companies) and inform the Joint Lead
Managers accordingly.
CMIs are informed that the marketing and investor targeting strategy for this offering includes
institutional investors, sovereign wealth funds, pension funds, hedge funds, family offices and high
net worth individuals, in each case, subject to the selling restrictions set out elsewhere in this
Offering Circular.
CMIs should ensure that orders placed are bona fide, are not inflated and do not constitute
duplicated orders (i.e. two or more corresponding or identical orders placed via two or more CMIs).
CMIs should enquire with their investor clients regarding any orders which appear unusual or
irregular. CMIs should disclose the identities of all investors when submitting orders for the Bonds
– 138 –
(except for omnibus orders where underlying investor information may need to be provided to any
OCs when submitting orders). Failure to provide underlying investor information for omnibus orders,
where required to do so, may result in that order being rejected. CMIs should not place “X-orders”
into the order book.
CMIs should segregate and clearly identify their own proprietary orders (and those of their
group companies, including private banks as the case may be) in the order book and book messages.
CMIs (including private banks) should not offer any rebates to prospective investors or pass on
any rebates provided by the Issuer. In addition, CMIs (including private banks) should not enter into
arrangements which may result in prospective investors paying different prices for the Bonds.
The SFC Code requires that a CMI disclose complete and accurate information in a timely
manner on the status of the order book and other relevant information it receives to targeted investors
for them to make an informed decision. In order to do this, those Joint Lead Managers in control of
the order book should consider disclosing order book updates to all CMIs.
When placing an order for the Bonds, private banks should disclose, at the same time, if such
order is placed other than on a “principal” basis (whereby it is deploying its own balance sheet for
onward selling to investors). Private banks who do not provide such disclosure are hereby deemed
to be placing their order on such a “principal” basis. Otherwise, such order may be considered to be
an omnibus order pursuant to the SFC Code.
In relation to omnibus orders, when submitting such orders, CMIs (including private banks) that
are subject to the SFC Code should disclose underlying investor information in respect of each order
constituting the relevant omnibus order (failure to provide such information may result in that order
being rejected). Underlying investor information in relation to omnibus orders should consist of:
• The name of each underlying investor;
• A unique identification number for each investor;
• Whether an underlying investor has any “Associations” (as used in the SFC Code);
• Whether any underlying investor order is a “Proprietary Order” (as used in the SFC Code);
• Whether any underlying investor order is a duplicate order.
Underlying investor information in relation to omnibus order should be sent to:
projectcreation@htsc.com, creation2025@hsbc.com.hk, pj_creation_wg@morganstanley.com
To the extent information being disclosed by CMIs and investors is personal and/or confidential
in nature, CMIs (including private banks) agree and warrant: (A) to take appropriate steps to
safeguard the transmission of such information to any OCs; and (B) that they have obtained the
necessary consents from the underlying investors to disclose such information to any OCs. By
submitting an order and providing such information to any OCs, each CMI (including private banks)
further warrants that it and the underlying investors have understood and consented to the collection,
disclosure, use and transfer of such information by any OCs and/or any other third parties as may be
– 139 –
required by the SFC Code, including to the Issuer, relevant regulators and/or any other third parties
as may be required by the SFC Code, for the purpose of complying with the SFC Code, during the
bookbuilding process for this offering. CMIs that receive such underlying investor information are
reminded that such information should be used only for submitting orders in this offering. The Joint
Lead Managers may be asked to demonstrate compliance with their obligations under the SFC Code,
and may request other CMIs (including private banks) to provide evidence showing compliance with
the obligations above (in particular, that the necessary consents have been obtained). In such event,
other CMIs (including private banks) are required to provide the relevant Joint lead Manager with
such evidence within the timeline requested.
GENERAL
The distribution of this Offering Circular or any offering material and the offering, sale or
delivery of the Bonds is restricted by law in certain jurisdictions. Therefore, persons who may come
into possession of this Offering Circular or any offering material are advised to consult with their own
legal advisers as to what restrictions may be applicable to them and to observe such restrictions. This
Offering Circular may not be used for the purpose of an offer or invitation in any circumstances in
which such offer or invitation is not authorised. No action has been taken or will be taken in any
jurisdiction that would permit a public offering of the Bonds, or possession or distribution of this
Offering Circular or any amendment or supplement thereto or any other offering or publicity material
relating to the Bonds, in any country or jurisdiction where action for that purpose is required.
UNITED STATES
The Bonds and the Shares to be issued upon conversion of the Bonds have not been and will
not be registered under the Securities Act and, subject to certain exceptions, may not be offered or
sold within the United States.
The Bonds and the Shares to be issued upon conversion of the Bonds are being offered and sold
outside of the United States in reliance on Regulation S.
In addition, until 40 days after the commencement of the offering of the Bonds, an offer or sale
of the Bonds or the Shares to be issued upon conversion of the Bonds within the United States by any
dealer (whether or not participating in the offering) may violate the registration requirements of the
Securities Act.
PROHIBITION OF SALES TO THE EEA RETAIL INVESTORS
Each Joint Lead Manager has represented and agreed that it has not offered, sold or otherwise
made available and will not offer, sell or otherwise make available any Bonds to any retail investor
in the European Economic Area. For the purposes of this provision, the expression “retail investor”
means a person who is one (or more) of the following:
(i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended,
“MiFID II”); or
(ii) a customer within the meaning of Directive (EU) 2016/97 (as amended, the “Insurance
Distribution Directive”), where that customer would not qualify as a professional client
as defined in point (10) of Article 4(1) of MiFID II.
– 140 –
PROHIBITION OF SALES TO UK RETAIL INVESTORS
Each Joint Lead Manager has represented and agreed that it has not offered, sold or otherwise
made available and will not offer, sell or otherwise make available any Bonds to any retail investor
in the United Kingdom. For the purposes of this provision, the expression “retail investor” means
a person who is not a professional client, as defined in point (8) of Article 2(1) of Regulation (EU)
No 600/2014 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act
UNITED KINGDOM
Each Joint Lead Manager has represented and agreed that:
(i) it has only communicated or caused to be communicated, and will only communicate or
cause to be communicated an invitation or inducement to engage in investment activity
(within the meaning of the FSMA) received by it in connection with the issue or sale of
the Bonds in circumstances in which section 21(1) of the FSMA does not apply to the
Issuer; and
(ii) it has complied and will comply with all applicable provisions of the FSMA with respect
to anything done by it in relation to the Bonds in, from or otherwise involving the United
Kingdom.
HONG KONG
Each Joint Lead Manager has represented and agreed that:
(i) it has not offered or sold and will not offer or sell in Hong Kong, by means of any
document, any Bonds other than (a) to “professional investors” as defined in the
Securities and Futures Ordinance (Cap. 571) of Hong Kong (the “SFO”) and any rules
made under the SFO; or (b) in other circumstances which do not result in the document
being a “prospectus” as defined in the Companies (Winding Up and Miscellaneous
Provisions) Ordinance (Cap. 32) of Hong Kong (the “C(WUMP)O”) or which do not
constitute an offer to the public within the meaning of the C(WUMP)O; and
(ii) it has not issued or had in its possession for the purposes of issue, and will not issue or
have in its possession for the purposes of issue, whether in Hong Kong or elsewhere, any
advertisement, invitation or document relating to the Bonds, which is directed at, or the
contents of which are likely to be accessed or read by, the public of Hong Kong (except
if permitted to do so under the securities laws of Hong Kong) other than with respect to
Bonds which are or are intended to be disposed of only to persons outside Hong Kong or
only to “professional investors” as defined in the SFO and any rules made under the SFO.
PRC
Each Joint Lead Manager has represented and agreed that the Bonds are not being offered or
sold and may not be offered or sold, directly or indirectly, in the People’s Republic of China (for such
purposes, not including the Hong Kong and Macau Special Administrative Regions or Taiwan
Region), except as permitted by applicable laws of the People’s Republic of China.
– 141 –
SINGAPORE
Each Joint Lead Manager has acknowledged that this Offering Circular has not been registered
as a prospectus with the Monetary Authority of Singapore. Accordingly, each Joint Lead Manager has
represented and agreed that it has not offered or sold any Bonds or caused the Bonds to be made the
subject of an invitation for subscription or purchase and will not offer or sell any Bonds or cause the
Bonds to be made the subject of an invitation for subscription or purchase, and has not circulated or
distributed, nor will it circulate or distribute, this Offering Circular or any other document or material
in connection with the offer or sale, or invitation for subscription or purchase, of the Bonds, whether
directly or indirectly, to any person in Singapore other than (i) to an institutional investor (as defined
in Section 4A of the Securities and Futures Act 2001 of Singapore, as modified or amended from time
to time (the “SFA”)) pursuant to Section 274 of the SFA or (ii) to an accredited investor (as defined
in Section 4A of the SFA) pursuant to and in accordance with the conditions specified in Section 275
of the SFA.
JAPAN
The Bonds have not been and will not be registered under the Financial Instruments and
Exchange Act of Japan (Act No. 25 of 1948, as amended, the “Financial Instruments and Exchange
Act”). Accordingly, each Joint Lead Manager has represented and agreed that it has not, directly or
indirectly, offered or sold and will not, directly or indirectly, offer or sell any Bonds in Japan or to,
or for the benefit of, any resident of Japan (which term as used herein means any person resident in
Japan, including any corporation or other entity organized under the laws of Japan) or to others for
re-offering or re-sale, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan
except pursuant to an exemption from the registration requirements of, and otherwise in compliance
with, the Financial Instruments and Exchange Act and other relevant laws and regulations of Japan.
– 142 –
GENERAL INFORMATION
CONSENTS
The Issuer has obtained all necessary consents, approvals and authorisations in connection with
the issue and performance of its obligations under the Bonds. The issue of the Bonds and the right
of conversion into H Shares was authorised by resolutions of the board of directors of the Issuer
passed on 30 October 2025 and resolutions of the shareholders of the Issuer passed at the
extraordinary general meeting and the class meetings on 11 December 2025. The Issuer will execute
and deliver each of the Trust Deed and the Agency Agreement and perform its obligations thereunder,
and to issue, sell and deliver the Bonds as contemplated under the Subscription Agreement.
LITIGATION
From time to time, the Issuer may be involved in litigation or other disputes that arise in the
ordinary course of business. However, the Issuer is not currently involved in any litigation, disputes
or arbitration proceedings which it believes are material in the context of the Bonds, and the Issuer
is not aware of any material litigation, disputes or arbitration proceedings that are currently pending
or threatened.
NO MATERIAL ADVERSE CHANGE
Except as otherwise disclosed in this Offering Circular, there has been no adverse change, or
any development reasonably likely to involve an adverse change, in the condition (financial or
otherwise) of the general affairs of the Issuer and the Group since 30 June 2025 that is material in
the context of the issue of the Bonds.
AUDITED AND REVIEWED FINANCIAL STATEMENTS
The consolidated financial statements of the Issuer for the years ended 31 December 2022, 2023
and 2024 are incorporated by reference in this Offering Circular, and have been audited by KPMG,
the independent auditors of the Issuer, as stated in their reports appearing therein.
The consolidated interim statements of the Issuer for the six months ended 30 June 2025 are
incorporated by reference in this Offering Circular, and have been reviewed by KPMG, the
independent auditors of the Issuer, as stated in their reports appearing therein.
DOCUMENTS AVAILABLE
Copies of the Company’s Articles of Association, the 2023 Annual Report, 2024 Annual Report
and 2025 Interim Report of the Company may be downloaded free of charge from the website of the
Hong Kong Stock Exchange (www.hkexnews.hk).
Copies of the Trust Deed and of the Agency Agreement (i) are available for inspection from the
Issue Date at all reasonable times during usual business hours (being between 9:00 a.m. (Hong Kong
time) and 3:00 p.m. (Hong Kong time) Monday to Friday except for public holidays) at the principal
office of the Trustee, being at the Issue Date at Level 26, HSBC Main Building, 1 Queen’s Road
Central, Hong Kong and (ii) may be provided by email from the Principal Agent to any Bondholder,
in each case, following prior written request and proof of holding and identity satisfactory to the
Trustee or the Principal Agent, as the case may be, so long as any of the Bonds is outstanding.
– 143 –
CLEARING SYSTEMS
The Bonds have been accepted for clearance through Euroclear and Clearstream under Common
Code Number 327961756, and the International Securities Identification Number for the Bonds is
XS3279617560.
LISTING OF BONDS
Application will be made to the Hong Kong Stock Exchange for the listing of, and permission
to deal in, the Bonds on the Hong Kong Stock Exchange by way of debt issues to Professional
Investors only and such permission is expected to become effective on 6 February 2026.
LISTING OF H SHARES
Application will be made to the Hong Kong Stock Exchange for the listing of the H Shares
arising on conversion of the Bonds. It is expected that permission to deal in, and listing of, such H
Shares on the Hong Kong Stock Exchange will commence when they are issued.
– 144 –
THE COMPANY
Zoomlion Heavy Industry Science and Technology Co., Ltd.
Registered address and place of business of the Issuer
No. 361 Yinpen South Road, Changsha
Hunan Province, PRC
TRUSTEE PRINCIPAL PAYING AGENT AND PRINCIPAL
CONVERSION AGENT
The Hongkong and Shanghai Banking The Hongkong and Shanghai Banking
Corporation Limited Corporation Limited
Level 26, HSBC Main Building Level 26, HSBC Main Building
Hong Kong Hong Kong
REGISTRAR AND TRANSFER AGENT
The Hongkong and Shanghai Banking Corporation Limited
Level 26, HSBC Main Building
Hong Kong
LEGAL ADVISORS TO THE ISSUER
As to English and Hong Kong law As to PRC law
Norton Rose Fulbright Hong Kong Fangda Partners
Central, Hong Kong 288 Shi Men Yi Road
Shanghai, PRC
LEGAL ADVISORS TO THE JOINT LEAD MANAGERS
As to English and Hong Kong law As to PRC law
Linklaters Haiwen & Partners
Chater Road 5 Dong San Huan Road
Central, Hong Kong Chaoyang District, Beijing, PRC
LEGAL ADVISORS TO THE TRUSTEE
As to English and Hong Kong law
Linklaters
Chater Road
Central, Hong Kong
INDEPENDENT AUDITOR OF THE ISSUER
KPMG
Certified Public Accountants
Public Interest Entity Auditor registered in accordance with
the Accounting and Financial Reporting Council Ordinance
