China Merchants Securities Co., Ltd. (CMSC) has more than doubled the spending limits on its Administrative Procurement Framework Agreement with controlling shareholder China Merchants Group (CMG), citing higher needs for canteen services and office renovations.

Key changes • Annual cap for 2026 raised to RMB254.00 million from RMB132.00 million. • Annual cap for 2027 lifted to RMB300.00 million from RMB132.00 million. • All other terms of the 2024-2027 framework agreement, signed on 18 December 2024, remain unchanged.

Drivers of the adjustment • Additional canteen operation services: incremental costs projected at RMB25 million in 2026 and RMB41 million in 2027. • Planned office renovation and upgrade projects: extra construction management and renovation expenses estimated at RMB97 million in 2026 and RMB127 million in 2027.

Historical utilisation • 2025 procurement spending: RMB127.58 million (96.59 % of the RMB132.00 million cap). • 1H 2026 spending: RMB71.76 million, keeping within the original 2026 cap of RMB132.00 million.

Regulatory status CMG holds an aggregate 44.17 % stake in CMSC, classifying the transactions as continuing connected transactions under Chapter 14A of the Hong Kong Listing Rules. As the highest applicable percentage ratio for the revised caps exceeds 0.1 % but remains below 5 %, the revisions are subject to reporting, announcement and annual review requirements only; no independent shareholders’ approval is required.

Governance considerations The board approved the new caps on 25 August 2026; CMG-affiliated directors abstained from voting. Independent non-executive directors concurred that the revised caps and transaction terms remain fair, conducted on normal commercial terms and in the ordinary course of business.

Internal controls CMSC will continue to apply market-based pricing, competitive tendering and layered approval procedures to ensure that procurement from CMG and its associates remains on terms no less favourable than those offered by independent suppliers. Annual reviews by the company’s auditors and independent non-executive directors will monitor compliance.

Background CMSC is a Shenzhen-headquartered securities firm listed in Shanghai and Hong Kong, with operations spanning brokerage and wealth management, institutional services, investment banking, asset management, and investment and trading. CMG is a state-owned conglomerate under SASAC, engaged in transportation & logistics, integrated finance, urban development and emerging industries.