Core Viewpoint - Yantai Zhongchong Food Co., Ltd. has established an internal control system for financial derivatives trading to regulate trading behavior and mitigate associated risks, ensuring compliance with relevant laws and regulations [2][3][4]. Group 1: Regulatory Framework - The internal control system is based on the Company Law, Securities Law, and relevant regulations from the Shenzhen Stock Exchange, aiming to standardize financial derivatives trading within the company and its subsidiaries [2][3]. - Financial derivatives include products such as forwards, swaps, and options, which can be traded on-exchange or over-the-counter, and may involve various underlying assets [2][3]. Group 2: Trading Principles - The company and its subsidiaries are prohibited from engaging in purely profit-driven financial derivatives trading; all transactions must be grounded in normal business operations and aimed at hedging against currency and interest rate risks [3][4]. - Transactions must only be conducted with qualified financial institutions approved by regulatory authorities, ensuring compliance with national laws and internal regulations [4][5]. Group 3: Approval and Management - The Board of Directors or the Shareholders' Meeting is responsible for approving financial derivatives trading activities, with specific limits set based on the company's audited net assets [4][5]. - The financial department is tasked with proposing trading plans based on market analysis, while the audit department oversees compliance and the securities department handles necessary disclosures [6][7]. Group 4: Risk Management - The financial department must monitor market prices and assess risk exposure, ensuring timely delivery and managing counterparty credit risks [8][9]. - A risk analysis report is required monthly, detailing trading activities, risk assessments, and compliance with stop-loss limits [9]. Group 5: Information Disclosure - The company is obligated to disclose information regarding financial derivatives trading in accordance with regulatory requirements, particularly when losses exceed a certain threshold [9][10]. - Any significant risks or losses must be reported to the stock exchange within two trading days if they meet specified criteria [9][10].

Core Insights - The continuous advancement of the "Belt and Road" initiative has significantly enhanced economic and financial cooperation between China and partner countries, particularly in cross-border RMB transactions [2][3] Group 1: Cross-Border RMB Transactions - In Q1 of this year, the cross-border RMB transaction amount between China and Malaysia reached 102 billion yuan, a year-on-year increase of 27% [2] - The cross-border RMB transaction amount with Cambodia was 5 billion yuan, growing by 45% year-on-year, with goods trade transactions amounting to 1.3 billion yuan, up 23% [2] - In the previous year, the total cross-border RMB transaction amount between China and Malaysia exceeded 300 billion yuan, ranking second among ASEAN countries, with a year-on-year growth rate of 29% [3] Group 2: Policy and Institutional Support - The People's Bank of China and Bank Negara Malaysia have closely collaborated to create a favorable policy environment for bilateral currency settlement, including signing a bilateral currency swap agreement in 2009 [2][3] - In 2023, a memorandum was signed to establish RMB clearing arrangements in Cambodia, with the Bank of China in Phnom Penh designated as the clearing bank [3][4] Group 3: Financial Services and Product Development - Bank of China (Malaysia) has expanded its service offerings, providing a comprehensive range of financial services, including credit, international settlement, trade financing, and cash management, to support Chinese enterprises in market expansion [3] - The Bank of China in Phnom Penh has launched new products, including direct exchange between RMB and Cambodian riel, enhancing settlement options and reducing currency exchange costs [4][5] Group 4: Future Outlook - The use of RMB in cross-border trade and investment is expected to broaden and deepen as China's foreign trade becomes increasingly diversified [5] - The People's Bank of China plans to continue improving policies for cross-border RMB usage, facilitating a more favorable environment for businesses engaging in cross-border trade and investment [5]