SHENZHEN INT'L (00152.HK): Longshen International Property signs RMB 683 million construction contract with China Construction Eighth Engineering Division for Phase 1 retained land

NewTimeSpace News: On 25 August 2026, Shenzhen International Holdings Limited (stock code: 00152) announced that, following the selection of the winning bidder through a standard tender process, its wholly owned subsidiary Longshen International Property entered into a construction contract with China Construction Eighth Engineering Division Corp., Ltd. on the same day for the construction works of the Phase 1 retained land under the South China Transformation Project, at a contract price of RMB 683,276,016.27. As the highest applicable percentage ratio under the construction contract exceeds 5% but is below 25%, the entering into of the construction contract constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules, subject to the notification and announcement requirements but exempt from the shareholders' approval requirement.

The announcement stated that the project has a total site area of 21,967.48 square meters and a total prescribed gross floor area of 126,520 square meters (including 120,540 square meters of residential and 5,700 square meters of kindergarten, among others), with the scope of works including, among others, main structure works, decoration works, roofing and waterproofing works, water supply and drainage works, fire services works, ventilation and air-conditioning works, electrical works, intelligent building works and energy-saving works, and a total construction period of not more than 900 calendar days from the notice to commence. Approximately 91.8% of the contract price will be paid by the employer in cash, and approximately 8.2% (approximately RMB 56 million, based on an average price of approximately RMB 7,000 per square meter) will be paid through the set-off of properties; the contract price may be adjusted in accordance with the terms of the construction contract, including adjustments to the scope of works, fluctuations in prices of labor, raw materials and fuel, and changes in relevant laws and government policies.

In terms of financial arrangements, the cash portion of the contract price is expected to be funded by the Group's internal resources and/or bank borrowings. The set-off properties comprise certain unrenovated apartment units with a total value of RMB 56 million in Building 1 of the Shenzhen International · Zhengding Smart Port Project (Phase 1), with a carrying amount (including completion costs) of RMB 53,574,220 as of 31 July 2026; an independent property valuer, Shenzhen Tongzhicheng Asset Appraisal Real Estate Valuation Consulting Co., Ltd., assessed the apartment project at RMB 6,500 per square meter as of the valuation date of 12 May 2026 using the market approach. The difference between the value of the set-off properties and their carrying amount plus relevant tax liabilities will be recognized in profit or loss, with no material gain or loss expected and no net proceeds expected from the set-off arrangement.

The Group signed the land use rights grant contract for the Phase 1 retained land of the South China Transformation Project in July 2025, and the directors believe that entering into the construction contract is crucial to advancing the project's development, helping to commence the main works as planned and ensure timely delivery, while the set-off arrangement reduces the Group's immediate cash outflows. China Construction Eighth Engineering Division, selected as the contractor through an open tender process, is a wholly owned subsidiary of China State Construction Engineering Corporation (601668.SH), whose ultimate beneficial owner is the State-owned Assets Supervision and Administration Commission of the State Council.

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