Zheng Quan Zhi Xing·2025-08-26 16:35Core Viewpoint - The company, Jiangxi Hongbo New Materials Co., Ltd., is planning to conduct foreign exchange hedging activities to mitigate risks associated with currency fluctuations, particularly due to its significant foreign sales and reliance on currencies like USD and EUR [1][2]. Summary by Sections Overview of Foreign Exchange Hedging Activities - The company generates a substantial portion of its revenue from foreign sales, primarily in USD and EUR, making it vulnerable to exchange rate fluctuations. The hedging activities will be based on normal business operations and not for speculative purposes [1]. Proposed Hedging Amount and Terms - The total amount for the foreign exchange hedging activities will not exceed USD 8 million, with a maximum trading margin and premium of RMB 25 million, sourced from the company's own funds. The hedging will include various instruments such as forward foreign exchange contracts, swaps, futures, and options [2][3]. Approval Process - The company's board approved the hedging proposal on August 26, 2025, and it will be submitted for shareholder approval. The authorization for the hedging activities will last for 12 months from the date of approval [3]. Risk Analysis and Control Measures - The hedging activities are expected to stabilize profit levels despite exchange rate volatility. However, risks include exchange rate fluctuations, customer default, and operational risks. The company has established a management system for derivatives trading to mitigate these risks [4][5]. Accounting Policies and Principles - The company will follow relevant accounting standards for financial instruments and hedge accounting to ensure proper financial reporting of the hedging activities [6]. Sponsor's Review Opinion - The sponsor, CITIC Securities, has reviewed the hedging proposal and found it compliant with legal and regulatory requirements, stating that it does not harm the interests of the company or its shareholders [6].