QINGLING MOTORS (01122) intends to acquire all approximately 30.43% equity interest in Isuzu Engines held by Qingling Group.

QINGLING MOTORS (01122) announces that on March 20, 2026, the Company, Qingling Group, Isuzu, and Isuzu Engines entered into a targeted capital reduction agreement, pursuant to which Isuzu reduced its equity interest in Isuzu Engines by an amount of USD 3,955,970. The registered capital of Isuzu Engines was reduced from USD 324 million to USD 320 million, with a capital reduction consideration of RMB 26,484,300. After the capital reduction, the respective contribution ratios of Isuzu Engines changed from 50.61%, 30.06%, and 19.33% held by Isuzu, Qingling Group, and the Company, respectively, to 50%, 30.43%, and 19.57%. As of the date of this announcement, Isuzu Engines is held as to 50% equity interest by Isuzu, 30.43% by Qingling Group, and 19.57% by the Company. On October 9, 2026, the Company (as transferee) and Qingling Group (as transferor) entered into an equity transfer agreement, subject to the terms and conditions set out therein, pursuant to which Qingling Group has conditionally agreed to sell, and the Company has conditionally agreed to acquire, all of Qingling Group's approximately 30.43% equity interest in Isuzu Engines, at a consideration of approximately RMB 659.9 million. Isuzu Engines is an enterprise specializing in the production and sale of high-technology, high-quality Isuzu diesel and gasoline engines and core components, with an annual production capacity of 141,000 units/sets for its machining production lines and an annual production capacity of 100,000 engine assemblies. Isuzu Engines has introduced 35 machining, heat treatment, assembly, and testing production lines from Japan, the United Kingdom, the United States, and other countries, equipped with more than 500 sets of advanced equipment. Isuzu Engines has rollingly introduced Isuzu's cutting-edge products, manufacturing processes, and management technologies, accumulated manufacturing and technical management experience for nearly 1 million Isuzu engines, and established a professional technical management team; it has successively passed ISO9001, TS16949, IATF16949:2016, and Isuzu engineering audits and other quality system certifications, and has been rated as a high-tech enterprise, an enterprise technology center, and a sample enterprise of China's Foreign Trade Export Leading Index, with a good market quality reputation. Isuzu Engines' products serve both international and domestic markets, with core 5C components sold back to Isuzu in batches. In the domestic market, Isuzu Engines supplies engine assemblies with power ranging from 95 horsepower to 380 horsepower and emission standards of China VI or above for Qingling's high-quality Isuzu commercial vehicles, and also supplies high-quality engine assemblies to high-value-added modified vehicles and construction machinery; in the international market, Isuzu Engines has entered Isuzu's global procurement system and continuously exports engine assemblies and core machined components to Isuzu in batches. In 2025, Isuzu Engines achieved operating revenue of RMB 881 million and net profit of RMB 32.594 million. Isuzu Engines continuously innovates on the basis of introducing, digesting, and absorbing Isuzu engine assembly and component technologies, vigorously promotes localized development of engine assemblies and localization of components, and achieves localized R&D and supporting in China. At present, Isuzu Engines' 4J/4K/4H series engine assemblies have achieved localized development, with a component localization rate of 100%; 6H/6U/6W engine assemblies have 100% achieved localized development in China, with a localization rate of over 70%. This drives the joint progress of supporting domestic component materials technology and manufacturing technology. After completion of the acquisition, the Company will hold 50% equity interest in Isuzu Engines and will exercise joint control over Isuzu Engines together with Isuzu. The acquisition will help the Company strengthen its management and control capabilities over Isuzu Engines, promote synergistic integration between the two parties in technical R&D, resource allocation, and market development, continuously enhance overall R&D strength and core competitiveness, and promote the high-quality development of the Group. Isuzu Engines has been deeply engaged in the commercial vehicle engine field for many years, with a solid operating foundation, a relatively low asset-liability ratio, abundant monetary funds, good cash flow conditions, strong risk resistance, and a good profitability level and stable market supporting foundation. After completion of the acquisition, the Company can recognize corresponding investment income according to its shareholding ratio, which is conducive to optimizing the Company's financial condition and enhancing the Company's operating performance.