China ZhengTong Auto Services Holdings Limited (ZhengTong Auto) has announced plans to conduct a bulk-commodity derivatives hedging business aimed at stabilising input costs for key non-ferrous metals used in automotive manufacturing.

The initiative targets copper, aluminium, zinc and lead—materials whose demand is rising alongside China’s new-energy vehicle sector. To manage price volatility, the Group will hedge futures on the Shanghai Futures Exchange and the London Metal Exchange through large, reputable futures brokers or other qualified financial institutions.

Key parameters of the programme include: • Contract cap: aggregate notional value limited to RMB400.00 million per trading day. • Margin usage: security deposits capped at RMB100.00 million per trading day, excluding physical-delivery outlays. • Tenor: each futures position will align with ZhengTong Auto’s operating cycle and not exceed six months. • Funding: entirely from internal resources; no derivative proceeds will be redeployed. • Authorisation: valid until the earlier of one year after shareholder approval or the next annual general meeting addressing hedging matters.

Management expects the hedging framework to mitigate commodity-price swings, support expansion into bulk-commodity trading within the automotive value chain, and reinforce partnerships with original equipment manufacturers. Directors, including independent non-executive members, deem the terms fair, reasonable and in the interests of shareholders.

The proposed hedging business does not meet the thresholds for discloseable or connected transactions under Chapters 14 and 14A of the Hong Kong Listing Rules and therefore requires no immediate statutory disclosure. Nevertheless, the plan will be submitted to shareholders for approval at an upcoming extraordinary general meeting, with a detailed circular to be dispatched in due course.