SHD(SH:600630) Zheng Quan Zhi Xing·2025-05-30 10:19Core Viewpoint - Shanghai Longtou (Group) Co., Ltd. plans to engage in financial derivatives trading in 2025 to hedge against foreign exchange risks, with a maximum single transaction amount of $5 million and an annual cumulative contract amount not exceeding $150 million [1][2]. Summary by Sections 1. Transaction Overview - The purpose of the trading is to mitigate operational risks arising from foreign exchange fluctuations, focusing on the company's actual business needs without engaging in speculative or arbitrage trading [2]. - The planned transaction amount will not exceed the company's foreign currency payment and receipt amounts, with a maximum single transaction of $5 million and an annual cumulative contract amount of $150 million [2]. - The funding for these transactions will come from the company's own funds, without involving raised capital [2]. - The types of financial derivatives to be used include forward foreign exchange contracts, foreign exchange swaps, and foreign exchange options [2]. 2. Transaction Duration and Authorization - The validity of the trading authorization will last for 12 months from the date of approval by the shareholders' meeting, allowing for the recycling of funds within the approved limits [3]. - The board of directors will be authorized to make investment decisions and sign relevant contracts within the approved limits, pending shareholder approval [3]. 3. Risk Analysis and Control Measures - The company acknowledges potential risks associated with financial derivatives trading, including market risk, credit risk, operational risk, and internal control risk [4]. - To mitigate these risks, the company will adhere to a strict risk management principle, ensuring that trading activities do not affect normal operations and are limited to low-risk financial products [4]. - The company will implement a regular reporting mechanism for its business activities and establish clear internal risk management procedures [4]. 4. Impact on the Company - The proposed financial derivatives trading is expected to enhance the company's financial stability by hedging against foreign exchange fluctuations, aligning with the long-term interests of the company and its shareholders [4]. - The accounting treatment for these transactions will comply with relevant accounting standards, ensuring proper recognition and measurement of financial instruments [4].