MicroPort-B (02160.HK): Wholly-Owned Subsidiaries Enter Two Five-Year Lease Agreements; Combined Right-of-Use Assets at Approximately RMB119 Million
NewTimeSpace News: MicroPort CardioFlow Medtech Corporation (stock code: 2160) announced that on 31 July 2026 (after market close), its wholly-owned subsidiary Shanghai MicroPort CardioFlow Medical Technology Co., Ltd. ("Shanghai MicroPort CardioFlow") entered into Lease Agreement I with the landlord, and on the same day, another wholly-owned subsidiary, CardioLead Rhythm Management Medical Device (Shanghai) Co., Ltd. ("CardioLead Rhythm"), entered into Lease Agreement II with the landlord.
According to the announcement, under Lease Agreement I, Shanghai MicroPort CardioFlow will lease Property I with an area of approximately 9,042.09 square meters for a term of five years from 1 August 2026 to 31 July 2031 (inclusive). The property will be used for the production of the company's heart valve products and related supporting facilities. The total rent payable over the entire term of Lease Agreement I is approximately RMB 90.76 million, determined through arm's length negotiation with reference to prevailing market rents for comparable properties. As the landlord designed and constructed Property I according to the company's operational requirements, the group shall pay a security deposit equivalent to one year's rent, totaling approximately RMB 18.15 million. Given that Shanghai MicroPort CardioFlow had already paid a security deposit of RMB 28.70 million under the 2021 lease agreement, the difference of RMB 10.54 million will be returned to the group through rent offset. The security deposit will be refunded without interest upon lease expiry or termination.
Under Lease Agreement II, CardioLead Rhythm will lease Property II with an area of approximately 4,634.95 square meters for a term of five years from 1 August 2026 to 31 July 2031 (inclusive). The property will be used for the production of the company's cardiac rhythm management products and related supporting facilities. The total rent payable over the entire term of Lease Agreement II is approximately RMB 46.52 million, determined through arm's length negotiation with reference to prevailing market rents for comparable properties. As the landlord designed and constructed Property II according to the company's operational requirements, a security deposit equivalent to one year's rent, totaling approximately RMB 9.30 million, shall be paid. Given that CardioLead Rhythm had already paid a security deposit of RMB 15.21 million under the previous agreement (which expired before Lease Agreement II took effect), the difference of RMB 5.91 million will be returned to the group through rent offset. The security deposit will be refunded without interest upon lease expiry or termination.
The announcement disclosed that both Property I and Property II form part of industrial facilities specifically constructed by the landlord, located in the China (Shanghai) Pilot Free Trade Zone. Under HKFRS 16 "Leases," the group is required to recognize right-of-use assets in the statement of financial position for these property leases. Based on the company's preliminary estimates, the right-of-use assets to be recognized under Lease Agreement I and Lease Agreement II are approximately RMB 78.47 million and RMB 40.23 million respectively, calculated primarily based on the present value of the total base rent payable over the lease terms. As the highest applicable percentage ratio calculated with reference to the combined right-of-use assets recognized under HKFRS 16 exceeds 5% but is less than 25%, the lease agreements constitute a discloseable transaction under Chapter 14 of the Listing Rules and are subject to reporting and announcement requirements.
The landlord is Shanghai Huiqingcheng Investment Management Co., Ltd. (formerly known as Shanghai MicroPort Investment Management Co., Ltd.), an independent third party incorporated in China principally engaged in investment management, investment consulting, precision machinery, production and sales of biomedical intermediates (excluding pharmaceuticals), high-tech product R&D and related technical services, import and export of goods and technologies, non-residential property leasing, and property management. It is an indirect subsidiary of Qiuzhen Wushi Fund Limited ("Qiuzhen Wushi"), an independent third party. To the company's knowledge, Qiuzhen Wushi is a company limited by guarantee without share capital incorporated in Hong Kong, operating as a charitable foundation dedicated to advancing science and education, with no beneficial owner or ultimate controller. Qiuzhen Wushi has directly invested in certain subsidiaries and equity-accounted investees of MicroPort® Scientific Corporation through its subsidiaries, and also holds less than 2.2% of the company's issued share capital.
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