Tat Hong clarifies tower crane purchase and payment arrangements

Tat Hong Equipment Service Co., Ltd. has clarified details of its purchase agreement with China Nuclear Industry Huaxing Construction Co., Ltd. The company states that machines acquired under the agreement, dated August 15, 2025, are for fulfilling project requirements of other clients, not for leaseback to China Nuclear Industry. These machines will support the group's ordinary course of business by providing tower crane solutions.

The payment arrangement, where the amount is "offset by lease service fees," is based on an existing business cooperation relationship. Ongoing projects with China Nuclear Industry are valued at approximately RMB350 million, expected to generate RMB350 million in additional accounts receivable for the group. Of this, machinery rental fees (lease service fees) constitute approximately 40%, or RMB140 million. Through arm's length negotiation, 30% of these lease service fees receivable, amounting to RMB42 million, will specifically offset the equipment purchase payment.

The total purchase agreement value is RMB53.17 million. The initial offset amount from current projects is RMB42 million, leaving an RMB11.17 million balance. This remaining sum will be offset against future service fees from new projects secured from China Nuclear Industry. Equipment delivery and offset payment mechanisms commence no later than December 31, 2025, with offsets occurring over the next four to five years. The board anticipates sufficient recurring service fee income from new projects to cover the payment.