Sichuan Expressway Group Company Limited (Sichuan Expressway) plans to launch a Quasi-REIT on the Shanghai Stock Exchange in September 2026, targeting proceeds of up to RMB12.00 billion. CITIC Securities will act as plan manager.

A new limited partnership with registered capital of RMB15.00 billion will be formed to house the assets. Sichuan Expressway and its wholly-owned Chengyu Investment will contribute RMB3.00 billion for a 20 % combined stake, while the Class A limited partner will initially subscribe the remaining RMB12.00 billion and subsequently transfer its interests to the Quasi-REIT.

The Quasi-REIT will issue an AAAsf-rated senior tranche of RMB11.999 billion at a fixed rate estimated between 1.80 % and 2.50 %, and a RMB1.00 million subordinated tranche to be held by Sichuan Expressway or its designee. Cash flows will be distributed annually under a “3 + 3 + …” structure aligned with asset tenor.

Proceeds will finance a RMB11.20 billion shareholder loan to the Target Company—Sichuan Rongcheng Second Ring Expressway Development Co., Ltd.—enabling repayment of RMB9.49 billion in existing debt (including RMB0.45 billion owed to Sichuan Expressway) and providing up to RMB1.72 billion of working capital. Remaining RMB3.79 billion will settle the purchase of 63.75 % of the Target Company by the partnership, constituting a major disposal under Hong Kong Listing Rules.

Valuations support the transaction: the Target Company’s equity was appraised at RMB5.95 billion, an 86.86 % uplift to book value, while the broader asset portfolio—principally the West Section of Chengdu Second Ring Expressway—was valued at RMB15.83 billion, 21.25 % above carrying amount.

For FY 2025 the Target Company reported revenue of RMB889.27 million and net profit of RMB194.62 million, with total assets of RMB13.15 billion and net assets of RMB3.13 billion.

Following completion, the partnership will be consolidated by Sichuan Expressway, and the Target Company will remain a subsidiary. Management expects lower financing costs and no material impact on 2026 consolidated earnings.

Shareholders will vote on the Quasi-REIT issuance and associated transactions at an extraordinary general meeting; the deal also requires SSE approval.