Sinomax Group (01418) has announced that, effective June 12, 2024, as an extension of the existing U.S. property leasing agreement, the company's indirect wholly-owned subsidiary, Sinomax East (as lessee), has entered into a U.S. property leasing extension agreement with Ashley Interchange (as landlord) to lease the extended premises (130 rooms in the building located at 1714 Heil Quaker Blvd, LaVergne, TN 37086, U.S.A.), with a total area of approximately 167,800 square feet. The fixed term is five years and three months, from August 1, 2024 to October 31, 2029, with the initial monthly rent (excluding utility fees and related expenses) of $111,300 (equivalent to approximately HK$868,400), which can be increased at a rate of about 4% per year.

Considering the expected increase in customer demand for the Group's products in the United States; and the fact that the Group currently leases such properties located in the building, entering into an extension agreement of the U.S. property leasing will promote and expand the Group's operations in those properties and in the United States, enabling the Group to cope with the growing customer demand in the United States. The board of directors (including independent non-executive directors) believes that the terms of the U.S. property leasing extension agreement have been negotiated on a fair basis and entered into on normal commercial terms, and are fair and reasonable, and have been entered into in the ordinary and daily course of the Group's business processes, and therefore are in the overall interests of the Company and its shareholders based on the net rent payable by Sinomax East under the U.S. property leasing extension agreement, which is comparable to the prevailing market level of comparable properties in the vicinity.