Zheng Quan Zhi Xing·2025-08-21 10:19Core Viewpoint - The company intends to conduct foreign exchange hedging to mitigate risks associated with currency fluctuations that could impact its financial performance [1][4]. Summary by Sections Overview of Foreign Exchange Hedging - The purpose of the hedging is to reduce the impact of exchange rate fluctuations on the company's operating results, as its export business primarily uses foreign currencies like USD for settlement [1]. - The company plans to use its own funds for hedging activities, with a maximum balance of $6 million at any time, and the collateral and premiums will not exceed 50% of the latest audited net profit [1][2]. - The hedging activities will include various instruments such as forward foreign exchange contracts, foreign exchange swaps, and options [2]. Approval Process - The company's board of directors approved the hedging proposal during a meeting on August 21, 2025, and this matter does not require shareholder approval according to relevant regulations [2][3]. Risk Analysis and Control Measures - The company acknowledges inherent risks in foreign exchange hedging, including market judgment risks and potential operational risks due to inadequate internal controls [3][4]. - To mitigate these risks, the company will implement strict internal controls, professional training for staff, and a reporting system for unusual situations [4]. Impact on the Company and Accounting Treatment - Engaging in foreign exchange hedging is expected to enhance the company's ability to manage currency risk, thereby protecting profits and shareholder equity [4]. - The company will follow relevant accounting standards for the recognition and measurement of financial instruments related to the hedging activities [4]. Sponsor Institution's Review Opinion - The sponsor institution believes that the proposed hedging activities align with the company's operational needs and that adequate risk management measures are in place [5].