Zheng Quan Zhi Xing·2025-08-22 10:18Core Viewpoint - The company intends to conduct forward foreign exchange trading to mitigate the risks associated with currency fluctuations that could adversely affect its operating performance [1][2]. Group 1: Overview of Forward Foreign Exchange Trading - The company has overseas procurement and sales, primarily using USD and JPY for settlements, and aims to stabilize foreign earnings and reduce financial costs through forward foreign exchange trading [1]. - The proposed foreign exchange trading will be limited to the currencies used in the company's production and operations [2]. Group 2: Business Scale and Feasibility Analysis - The trading amount will not exceed USD 80 million and will be within 50% of the company's audited net assets from the previous year, with a duration of 12 months from the board's approval [2]. - Engaging in forward foreign exchange trading is deemed feasible as it helps lock in exchange rates, thereby reducing the impact of currency fluctuations on the company's profitability [2]. Group 3: Risk and Control Measures - The company acknowledges the risks associated with forward foreign exchange trading, including potential losses if the exchange rate is unfavorable compared to customer quotes [3]. - A comprehensive internal control system has been established to manage risks effectively, ensuring that the trading activities align with the company's operational needs [3][4]. Group 4: Accounting Policies - The company will adhere to relevant accounting standards for financial instruments and hedge accounting to accurately reflect the impact of forward foreign exchange transactions on its financial statements [5][6]. Group 5: Board and Sponsor Opinions - The board approved the forward foreign exchange trading proposal on August 22, 2025, confirming that the process complied with legal and regulatory requirements [6]. - The sponsor believes that the trading activities will help mitigate foreign exchange market risks and that the company is only engaging in low-risk transactions, ensuring that risks remain manageable [6].