CITIC Securities Co., Ltd.
Review Opinion on Hangzhou Fuen Co., Ltd.'s Foreign Exchange Hedging Business
CITIC Securities Co., Ltd. (hereinafter referred to as "CITIC Securities" or "the Sponsor") is the sponsor for the initial public offering of shares of Hangzhou Fuen Co., Ltd. (hereinafter referred to as "Fuen Shares" or "the Company") on the Main Board and its ongoing supervision. In accordance with the "Administrative Measures for Securities Issuance and Listing Sponsorship Business," the "Main Board Listed Company Normative Operation Guide No. 1 of the Shenzhen Stock Exchange," "Main Board Listed Company Supervision Guide No. 13 of the Shenzhen Stock Exchange - Sponsorship Business," and other relevant laws, regulations, and normative documents, CITIC Securities has reviewed the matter of Fuen Shares conducting foreign exchange hedging business. The review findings and opinions are as follows:
I. Overview of the Transaction
(I) Purpose of the Transaction The Company's actual export business primarily uses foreign currencies such as USD for settlement. Therefore, when exchange rates fluctuate significantly, exchange gains and losses will have a certain impact on the Company's operating performance. To effectively hedge against foreign exchange market risks, prevent adverse impacts of exchange rate fluctuations on the Company's operating performance, improve the efficiency of foreign currency fund utilization, and reasonably reduce financial expenses, the Company plans to engage in foreign exchange hedging business with banks. The Company's foreign exchange hedging business is based on normal production and operation, aims to hedge and prevent exchange rate risks, and does not involve speculative or arbitrage transactions solely for profit.