SINOPEC KANTONS (00934.HK): Terminates Original IT Framework Agreement and Enters into Digital Intelligence Information System Services Framework Agreement, Also Signs Equipment Maintenance Services Framework Agreement

NewTimeSpace News: On 17 August 2026, Sinopec Kantons Holdings Limited (stock code: 00934) announced that, following fair negotiation, the company and Sinopec Yinko terminated the original IT project framework master agreement with effect from the effective date of the digital intelligence information system services framework agreement; prior to such effective date, the original framework master agreement remains valid and in full force. On the same day, the company entered into a digital intelligence information system services framework agreement with Sinopec Yinko and the Shared Services Company, with the service term from the date of signing to 31 December 2028.

Under the digital intelligence information system services framework agreement, the Sinopec Yinko Group will provide the group with digital intelligence information system services, including shared application and system operation and maintenance services (daily operations and maintenance, software and software licences), special implementation services (construction of company websites, application system development and implementation), IT infrastructure (cloud platforms and traditional resource pool informatisation software, hardware and technical support) and other services (information security, industrial internet, domestic substitution and other external applicable software licence fee collection); the Shared Services Group will provide shared services including finance, human resources, business travel and information technology sharing. Pricing will be determined by fair negotiation on normal commercial terms with reference to prevailing market prices, with IT equipment procurement priced by tender or market inquiry and comparison, system construction and maintenance priced at cost plus reasonable profit, and shared services priced at reasonable cost plus reasonable profit (with profit margin controlled within 6%, calculated on an FTE basis).

The annual caps for transactions under the digital intelligence information system services framework agreement for each of the three years ending 31 December 2026, 2027 and 2028 are RMB 15 million. In determining the annual caps, the board considered historical transaction amounts, the estimated additional demand of approximately RMB 3 million after the consolidation of Caofeidian Shihua, estimated demand of approximately RMB 4 million per year over the next three years, and reserved a reasonable buffer of approximately 15% on top of the estimated transaction amounts.

In addition, the company's wholly-owned subsidiary Huade Petrochemical entered into an equipment maintenance services framework agreement with Sinopec Guangzhou Branch on the same day, under which Sinopec Guangzhou Branch agrees to provide daily equipment and instrument maintenance services to Huade Petrochemical, with a service term from 17 August 2026 to 31 December 2028 and pricing limited to a profit margin not exceeding 6% and no less favourable than independent third-party price levels. The annual caps under this agreement for the three years ending 31 December 2026, 2027 and 2028 are RMB 3,000,000, RMB 3,100,000 and RMB 3,200,000 respectively.

In terms of Listing Rules implications, Sinopec Yinko is a non-wholly-owned subsidiary of Sinopec, the controlling shareholder; the Shared Services Company is a wholly-owned subsidiary of Sinopec Group Company; and Sinopec Guangzhou Branch is a branch of Sinopec; all are connected persons of the company, and the transactions under the above agreements constitute continuing connected transactions. As the applicable percentage ratios exceed 0.1% but are all below 5%, the transactions are subject to reporting, announcement and annual review requirements, but are exempt from independent shareholders' approval and circular requirements. Executive directors Mr. Chung Fu Leung, Mr. Yang Yanfei, Mr. Ren Jiajun, Mr. Zou Wenzhi and Mr. Mo Zhenglin, being deemed to have material interests due to their other executive positions in the Sinopec Group, have abstained from voting on the relevant board resolutions.

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