Lotus subsidiary secures RMB200m deal for accelerated computing push

Lotus Holdings' subsidiary, Zhejiang Lotus Zixing Smart Computing Technology Co., Ltd. (Lotus Zixing), has signed a product sales contract with EXII Company. The contract is for the procurement of 4,000 accelerator cards and related services, totaling RMB200 million, at a per-unit price of RMB50,000. Lotus Zixing has already paid an initial installment of RMB120 million, representing 60% of the total contract value, though the products have not yet been delivered.

The transaction, approved by Lotus Holdings' board, aims to enhance Lotus Zixing's market competitiveness in smart computing services. However, the announcement highlights several risks, including uncertainty over recovering the significant prepaid amount if the contract cannot be performed due to various issues. Additionally, as of the announcement date, Lotus Zixing has not yet secured any corresponding computing power leasing contracts, raising questions about its ability to lease out the purchased products.

According to the contract, Lotus Zixing faces a penalty of 30% of the order value if it cancels, suspends, or rejects the goods. Conversely, if EXII Company fails to deliver products as agreed, cumulative liquidated damages will not exceed 5% of the overdue delivery amount.