Zheng Quan Zhi Xing·2025-08-26 16:35Core Viewpoint - The company intends to conduct foreign exchange hedging activities to mitigate risks associated with currency fluctuations, thereby protecting its operational performance and improving the efficiency of foreign exchange fund utilization [1][6]. Group 1: Necessity of Foreign Exchange Hedging - The company primarily conducts its export business in foreign currencies such as USD, making it susceptible to exchange rate fluctuations that can adversely affect its financial performance [1]. - The foreign exchange hedging activities are aimed at risk avoidance and are not intended for speculative or arbitrage purposes [1]. Group 2: Overview of Hedging Activities - The company plans to engage in financial derivative hedging activities, including forward foreign exchange contracts, foreign exchange swaps, and other foreign exchange derivatives [2]. - The total amount for the hedging activities will not exceed $50 million or its equivalent in other currencies, with a maximum transaction margin and premium of $500,000 [2]. - The funding for these activities will come from the company's own funds and will not involve raised capital [2]. Group 3: Risk Analysis - The company acknowledges potential market risks due to unpredictable economic conditions that may lead to significant currency fluctuations [3]. - Operational risks may arise from the complexity of forward foreign exchange transactions, including misjudgment of currency trends and procedural errors [3]. - There is a risk of default from financial institutions involved in the forward foreign exchange transactions, which could prevent the company from executing contracts at agreed prices [3]. Group 4: Risk Control Measures - The hedging activities will be based on normal business operations and will focus on risk avoidance rather than speculative trading [4]. - The finance department will continuously monitor market information and assess the risk exposure of hedging activities, providing timely risk analysis reports for decision-making [4]. - The company has established a management regulation for foreign exchange hedging, detailing management structures, approval authorities, operational processes, and risk controls [4]. Group 5: Review Procedures and Opinions - The board of directors has authorized the chairman to make decisions and sign relevant legal documents within the approved limits and timeframe for the hedging activities [5]. - The supervisory board supports the hedging activities as they align with the company's operational needs and have established effective approval and risk control systems [5]. - The company has complied with legal procedures for the hedging activities, ensuring no harm to the interests of the company or its shareholders [5]. Group 6: Sponsor's Review Opinion - The sponsor believes that the foreign exchange hedging activities are necessary for the company to mitigate risks from currency fluctuations and improve financial efficiency [6]. - The company has developed necessary risk control measures and has received approval from the board and supervisory board for the hedging activities [6].