Zheng Quan Zhi Xing·2025-07-16 11:19Core Viewpoint - The company intends to conduct foreign exchange hedging activities to mitigate the risks associated with currency fluctuations that could adversely affect its operating performance [1][6]. Group 1: Necessity and Overview of Hedging Activities - The company primarily conducts its export business in foreign currencies such as USD and EUR, making it vulnerable to exchange rate fluctuations that can impact its financial results [1]. - The proposed hedging activities will include forward foreign exchange contracts, foreign exchange spot transactions, options, and combinations of these products, limited to the currencies used in its operations [2]. Group 2: Business Scale and Funding Sources - The total amount for the foreign exchange hedging activities is capped at USD 30 million or its equivalent in other currencies, with a validity period of 12 months from the board's approval [2]. - The funding for these activities will come from the company's own funds and will not involve raised capital [2]. Group 3: Authorization and Execution - The board of directors has authorized the general manager to approve daily hedging plans and sign relevant contracts within the approved limits, with the finance department responsible for execution [2]. - The authorization is valid for 12 months from the date of board approval [2]. Group 4: Risk Analysis and Control Measures - The company has identified several risks associated with the hedging activities, including market risks from exchange rate and interest rate fluctuations, internal control risks, and counterparty risks [3][4]. - To mitigate these risks, the company has established a comprehensive management system for foreign exchange hedging, which includes clear guidelines on limits, product types, approval processes, and internal audits [4][5]. - The finance department will continuously monitor market conditions and assess the risks associated with hedging activities, ensuring compliance with established procedures [5]. Group 5: Approval Process - The audit committee reviewed and approved the proposal for foreign exchange hedging, confirming that it aligns with the company's operational needs and enhances financial stability [5]. - The board of directors subsequently approved the proposal, affirming that it falls within their authority and does not require shareholder approval [5]. Group 6: Sponsor's Opinion - The sponsor, CITIC Securities, has confirmed that the company has followed necessary legal procedures and established an internal control system for the hedging activities [6].