Geely Automobile Holdings Limited (Geely Auto, 00175) has signed four framework agreements that will redefine its connected-party activity from 1 January 2027 to 31 December 2029. Two of the agreements require independent shareholder approval, while the other two fall within reporting-only thresholds.
Key Non-Exempt Agreements (shareholder vote required) 1. Automobile Components Sales and Purchase Agreement • Sales by Geely Auto to connected purchasers capped at RMB 9.91 billion, RMB 10.19 billion and RMB 10.54 billion for 2027-2029, respectively. • Purchases by Geely Auto from connected suppliers capped at RMB 55.91 billion, RMB 63.99 billion and RMB 73.14 billion. • Lower outbound sales caps reflect the full consolidation of ZEEKR and LYNK & CO, whose intra-group trades no longer count as connected transactions. Higher inbound purchase caps mirror the anticipated expansion of battery, electric-drive and intelligent hardware procurement to support the company’s electrification strategy.
2. Powertrain Products Purchase Agreement with Aurobay Group • Annual purchase caps set at RMB 37.07 billion, RMB 37.69 billion and RMB 39.07 billion for 2027-2029. • Increased limits accommodate expected volume growth in hybrid and plug-in hybrid models, whose powertrain units carry higher unit values.
Key Exempt Agreements (reporting and announcement only) 3. Operation Services Agreement • Services provided by Geely Auto: caps of RMB 4.15 billion, RMB 4.26 billion and RMB 4.28 billion. • Services procured: caps of RMB 3.06 billion annually over the period. • Lower caps versus the current framework reflect the consolidation of ZEEKR and LYNK & CO and a more conservative demand outlook.
4. Automobile Financing Services Agreement (Genius AFC with Geely Holding, smart, Lotus and Livan brands) • Aggregate financing caps of RMB 1.62 billion, RMB 1.84 billion and RMB 1.97 billion for 2027-2029. • Reduced limits mirror historically low utilisation and the exclusion of now-consolidated brands.
Regulatory and Governance Notes • The component and powertrain frameworks each exceed the 5 % Listing Rules thresholds; hence they require reporting, annual review, announcement, circular and independent shareholder approval at an upcoming EGM. • The operation-service and financing agreements fall below the 5 % threshold (but above 0.1 %), necessitating only reporting, annual review and announcement. • Three executive directors—Chairman An Cong Hui, Daniel Li Dong Hui and CEO Gan Jia Yue—abstained from board voting due to interests in Geely Holding or its affiliates. • An Independent Board Committee and Ballas Capital have been appointed to advise minority shareholders; a circular will be dispatched by 16 November 2026.
Internal Controls and Pricing Geely Auto will apply arm’s-length pricing based on market benchmarks or cost-plus margins derived from independent transfer-pricing studies. Dedicated finance teams will monitor transaction terms, quarterly utilisation, and annual cap adherence, with escalation protocols if caps approach prescribed limits. External auditors will perform annual reviews, and any revision of caps will follow Listing Rules procedures.
Strategic Rationale The agreements are designed to: • Secure economies of scale in component manufacturing and ensure stable supply for Geely-brand, ZEEKR and LYNK & CO models. • Maintain long-term access to Aurobay’s powertrain technologies, supporting hybrid expansion. • Streamline shared services and logistics to reduce costs and enhance operational efficiency. • Broaden Genius AFC’s wholesale and retail financing reach while supporting vehicle sales.
The company cautions shareholders that the two non-exempt agreements remain subject to approval at the forthcoming EGM.