XXF (02473) announced on August 4, 2026, a plan to acquire all issued shares of PAGAC NTS Limited from Jiarui Development (Hong Kong) Co., Ltd. for approximately HK$150 million. The consideration will be settled by issuing 380 million consideration shares to the vendor at completion, priced at HK$0.3947 per share, representing a 21.8% discount to the closing price of HK$0.505 per share on the Stock Exchange on the date of the sale and purchase agreement. The consideration shares account for approximately 16.99% of the enlarged share capital.
The target company directly holds all issued shares of NTS, which in turn directly owns about 85.45% of New Concept Auto Services (currently equivalent to 94.94% of economic and voting rights). Following the completion of the vendor sale and purchase agreement, particularly after the capital reduction of Shanghai Yiru, NTS's effective stake in New Concept Auto Services will increase to approximately 94.94%. New Concept Auto Services primarily operates in China's comprehensive auto aftermarket services, covering vehicle-related needs such as repair and maintenance, beauty and customization, tires and wheels, and auto insurance. Headquartered in Shanghai, New Concept Auto Services runs 24 directly operated stores nationwide as of May 31, 2026, including seven in Shanghai, nine in Fujian, six in Nanjing (including one not yet opened), and two in Suzhou.
The company views the proposed acquisition as a strategic opportunity to expand its business scope from auto finance into the auto aftermarket services sector, enhancing long-term competitiveness. XXF currently engages in (i) auto retail and financing businesses, primarily selling non-luxury vehicles through direct finance leases; (ii) auto-related businesses, offering operating lease services and other vehicle-related services; and (iii) direct auto retail, selling vehicles on a one-time payment basis. Through this acquisition, the group will gain control of the target company and its main operating subsidiary, New Concept Auto Services, an auto service chain in China focused on repair, maintenance, and related services.
This move will enable XXF to build a platform combining auto finance with downstream vehicle services, extending its reach into broader parts of the automotive value chain. The company believes integrating auto finance and services can foster a more comprehensive auto ecosystem covering vehicle purchase, financing, usage, maintenance, and eventual resale or trade-in. Auto aftermarket services, particularly maintenance and tire replacements, feature recurring demand and high service frequency. By accessing the independent auto aftermarket through New Concept Auto Services' service points, the group can diversify revenue streams, enhancing business model resilience and generating additional recurring income from end-user customers.
Additionally, the proposed acquisition creates cross-selling opportunities. New Concept Auto Services serves passenger car owners across multiple Chinese cities, with regular customer visits for maintenance and service needs. This customer channel provides XXF with more touchpoints to promote auto financing products, installment plans, and other vehicle-related financial services. Integrating services and financing solutions can improve customer acquisition efficiency, strengthen retention, and enhance overall customer lifetime value. Furthermore, vehicle service data may help refine the group's credit assessment, asset monitoring, and residual value management processes for financed vehicles, potentially bolstering risk management capabilities.