- China ITS Holdings, via Tibet Intelligent Aviation, has made multiple redemptions from a Guangzhou Zhuoyi-managed private equity fund since late 2022, realizing about RMB6.95 million in gains and estimating a further RMB4.52 million on a proposed redemption.
- The latest planned redemption of about 5.26 million units, when aggregated with prior redemptions within 12 months with the same counterparty, is classified as a discloseable transaction under HKEX Listing Rules.
- Under HKEX Chapter 14, a transaction is discloseable when any percentage ratio is at least 5% but below 25%, and related deals may be aggregated under Rules 14.22-14.23.
- The proceeds are modest versus China ITS’s size but improve liquidity and reduce exposure to illiquid private equity fund risk.
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The recent series of redemptions by China ITS Holdings (via Tibet Intelligent Aviation) from a private equity fund managed by Guangzhou Zhuoyi reflects a strategic partial exit from a previously illiquid investment. Specifically, initial subscription of RMB20 million in late 2022 was followed by redemptions of 7,883,948 units on 12 November 2025 (realizing RMB2.67 million profit), then 2,627,983 units on 25 December 2025 (RMB1.87 million), and a notice on 23 January 2026 to redeem further 5,255,966 units for an estimated gain of RMB4.52 million. Aggregated, these constitute a “discloseable transaction” under Hong Kong’s Main Board Listing Rules because the counterparty is the same and the cumulative action falls within a 12-month window in which a single percentage ratio exceeds the 5% disclosure threshold.
Chapter 14 of the HKEX Listing Rules sets clear criteria for classifying transactions: the “percentage ratios” (assets, profits, revenue, consideration, equity capital) must be calculated; if any one is between 5% and 25%, the transaction is “discloseable.” Transactions below 5% are share transactions or exempt; above 25% become major transaction etc. Rules 14.22 and 14.23 cover aggregation of related transactions including those with same counterparties over 12 months.
Strategic implications: while the monetary benefit is modest relative to China ITS’s market cap (~HK$447.2 million as in the report), the action reduces exposure to illiquid fund investments—enhancing financial flexibility. It may also send a signal to the market about the company’s prudence in realizing gains and managing portfolio risk. On corporate governance, the disclosure under HKEX rules ensures transparency, but the impact on earnings or cash flows is likely minor (<~RMB10M) in the near term.
Open questions include: what is the remaining portion of the RMB20 million originally invested, and whether further redemptions are planned; how these gains compare to internal hurdle rates; whether there are tax or regulatory costs; and whether this move is part of broader shift in investment strategy away from private equity or illiquid instruments.
Supporting Notes
- China ITS subscribed RMB20 million in a private equity fund managed by Guangzhou Zhuoyi via Tibet Intelligent Aviation in late 2022.
- On 12 November 2025, redeemed 7,883,948 units, gain ~RMB2.67 million; on 25 December 2025, redeemed 2,627,983 units, gain ~RMB1.87 million.
- On 23 January 2026, issued notice to redeem 5,255,966 further units, expected gain ~RMB4.52 million.
- Under HKEX Listing Rules, aggregation of transactions within 12 months with same counterparty triggers classification as a “discloseable transaction” if percentage ratio ≥5% but <25%.
- Transaction qualifies because aggregated redemptions with same counterparty exceed 5% threshold; triggers disclosure and announcement requirements but not shareholder approval.
- China ITS’s market cap is ~HK$447.2 million; these gains, while real, are small relative to size.
- Listing Rule 14.06 defines discloseable transaction category; Rule 14.22-14.23 require aggregation of transactions under certain criteria.