Qingling Motor Co., Ltd. (01122) plans to acquire approximately 30.43% of all shares in Isuzu engines owned by the Qingling Group

According to the Zhitong Finance App, Qingling Auto Co., Ltd. (01122) announced that on March 20, 2026, the company, Qingling Group, Isuzu and Isuzu Engine signed a targeted capital reduction agreement. Isuzu reduced its shares in Isuzu engines, amounting to US$3,95597 million. The registered capital of Isuzu engines was reduced from US$324 million to US$320 million, and the consideration for the reduction was RMB 26.4843 million. After the capital reduction, the investment ratio of Isuzu engines was changed from 50.61%, 30.06% and 19.33% of Isuzu Group and the Company to 50%, 30.43% and 19.57%, respectively. As of the date of this announcement, Isuzu holds 50% of Isuzu Engine's shares, Qingling Group holds 30.43% of the shares, and the Company holds 19.57% of the shares.

On October 9, 2026, the Company (as the transferee) and Qingling Group (as the transferor) entered into an equity transfer agreement. Subject to the terms and conditions contained therein, Qingling Group conditionally agreed to sell and the Company conditionally agreed to acquire about 30.43% of the shares in Isuzu engines held by the Qingling Group, at a cost of approximately RMB 659.9 billion.

Isuzu Engine is an enterprise specializing in the production and sale of high-tech, high-quality Isuzu diesel and gasoline engines and core components. The machine processing production line has an annual production capacity of 141,000 units, and the total annual production capacity of engines is 100,000 units. Isuzu engines have introduced 35 machining, heat treatment, assembly and testing production lines in Japan, the United Kingdom, and the United States, and are equipped with more than 500 sets of advanced equipment. Isuzu engines have introduced cutting-edge Isuzu products, manufacturing processes and management technology on a rolling basis, accumulated manufacturing and technical management experience of nearly 1 million Isuzu engines, and formed a professional technical management team; they have successively passed quality system certifications such as ISO9001, TS16949, IATF 16949:2016, and Isuzu engineering inspection, and have been awarded as a high-tech enterprise, enterprise technology center, and China's leading foreign trade export index sample enterprise. The market quality reputation is good. Isuzu engine products target both international and domestic markets, and core 5C components are sold back to Isuzu in batches. In the domestic market, Isuzu engines provide Qingling's high-quality Isuzu commercial vehicles with engine assemblies with 95 horsepower to 380 horsepower, and at the same time provide high-quality engine assemblies for high-value-added modified vehicles and construction machinery; in the international market, Isuzu engines have entered the Isuzu global procurement system and continue to export engine assemblies and core engine parts to Isuzu in batches.

In 2025, Isuzu Engine achieved operating revenue of RMB 881 million and net profit of RMB 32.594 million. Isuzu engines continue to innovate on the basis of the introduction, digestion, and absorption of Isuzu engine assembly and component technology, vigorously promote local language development of engine assemblies and localization of components, and achieve local language development and support in China. Currently, the Isuzu engine 4J/4K/4H series engine assembly has achieved local language development, and the component localization rate has reached 100%; the 6H/6U/6W engine assembly has achieved 100% local language development in China, and the localization rate has reached more than 70%. Drive joint progress in supporting domestic component material technology and manufacturing technology.

After the acquisition is completed, the Company will hold 50% of the shares in Isuzu engines and will jointly control Isuzu engines with Isuzu. The acquisition will help the company strengthen its ability to control Isuzu engines, promote collaboration and integration between the two parties at the level of technology research and development, resource allocation and market development, continuously enhance overall R&D strength and core competitiveness, and promote the Group's high-quality development.

Isuzu Engine has been deeply involved in the commercial vehicle engine field for many years. It has a stable operating base, low balance ratio, abundant monetary capital, good cash flow, strong resilience to risks, and has a good level of profit and a stable market support base. After the acquisition is completed, the company can confirm the corresponding investment income according to the shareholding ratio, which is conducive to optimizing the company's financial situation and enhancing the company's operating performance.