Rongbei Aviation Technology Co., Ltd.
Analysis Report on the Feasibility of Engaging in Foreign Exchange Derivative Transactions
I. Background and Objectives of the Company's Engagement in Foreign Exchange Derivative Transactions
In recent years, Rongbei Aviation Technology Co., Ltd. (hereinafter referred to as "the Company") has seen its globalization level continuously improve. The Company's product procurement and sales involve foreign currency transactions, primarily denominated in US dollars. Due to the significant uncertainty in exchange rate fluctuations, influenced by various domestic and international political and economic factors, any substantial appreciation or depreciation of the RMB against the US dollar in the future could adversely affect the Company's operating results. To mitigate the impact of exchange rate fluctuations on profits and effectively hedge and prevent foreign exchange market risks, the Company plans to engage in foreign exchange derivative transactions with domestic and foreign commercial banks and other financial institutions.
The primary objective of the Company's engagement in foreign exchange derivative transactions is to fully utilize foreign exchange tools to reduce the impact of exchange rate fluctuations on the Company, thereby maintaining a stable profit level even during significant exchange rate volatility. The Company will not engage in speculative or arbitrage trading activities.