FREEWON(SH:688678) Zheng Quan Zhi Xing·2025-07-16 11:11Core Viewpoint - The company intends to conduct foreign exchange hedging activities to mitigate risks associated with currency fluctuations, with a maximum amount of $30 million or equivalent foreign currency for a period of 12 months [1][2][3] Summary by Sections 1. Necessity of Conducting Foreign Exchange Hedging - The company primarily conducts export business in foreign currencies such as USD and EUR, making it susceptible to exchange rate fluctuations that could negatively impact its financial performance. The hedging activities aim to enhance the efficiency of foreign currency usage and reduce financial costs [2][3] 2. Overview of Proposed Hedging Activities - The hedging activities will be limited to currencies used in the company's operations, specifically USD and EUR. The types of hedging products include but are not limited to forward foreign exchange contracts, foreign exchange swaps, and options [2][3] 3. Business Scale and Funding Source - The maximum amount for the hedging activities is set at $30 million or equivalent foreign currency, with the ability to roll over within this limit for a duration of 12 months. The funding will come from the company's own funds and will not involve raised capital [3] 4. Authorization and Duration - The board of directors has authorized the general manager to approve daily hedging plans and sign relevant contracts within the authorized limit. The finance department will manage the execution of these activities, with the authorization valid for 12 months from the board's approval [3] 5. Trading Counterparties - The company will engage with banks and financial institutions that have the necessary qualifications for conducting foreign exchange hedging activities, as approved by relevant government authorities [3] 6. Accounting Treatment - The company will adhere to the accounting standards set by the Ministry of Finance of the People's Republic of China regarding financial instruments and hedging accounting, with final accounting treatment confirmed by annual audits [3] 7. Risk Analysis - The company acknowledges potential risks associated with exchange rate and interest rate fluctuations, internal control weaknesses, counterparty defaults, customer payment delays, and legal risks due to regulatory changes [4][5] 8. Risk Control Measures - The company has established a management system for foreign exchange hedging that outlines limits, product types, approval authority, and internal review processes. The finance department will oversee the management of market risks, while the internal audit department will monitor compliance with risk management policies [5] 9. Review Procedures - The board of directors approved the hedging proposal during a meeting on July 16, 2025, confirming that the activities are necessary for mitigating exchange rate risks and enhancing financial stability. The proposal does not require shareholder approval [6][7] 10. Sponsor's Opinion - The sponsor, CITIC Securities, has verified that the company has followed necessary legal procedures for the hedging activities and has established an internal control system for managing these operations [7]