Guangdong Jingyi Metal Co., Ltd. Feasibility Analysis Report on Using Own Funds for Foreign Exchange Derivative Transactions
I. Background of the Company's Foreign Exchange Derivative Transactions
With the advancement of the trade business layout of Guangdong Jingyi Metal Co., Ltd. (hereinafter referred to as "the Company") and its consolidated subsidiaries (hereinafter referred to as "subsidiaries"), the Company and its subsidiaries are involved in foreign currency settlement in their daily operations. In recent years, affected by international political and economic factors, exchange rate volatility has increased, and the risk of the foreign exchange market has significantly increased. The Company and its subsidiaries must conduct reasonable and effective risk management to ensure the stable development of actual business.
II. Overview of the Company's Foreign Exchange Derivative Transactions
The foreign exchange derivative transactions to be conducted by the Company and its subsidiaries mainly include, but are not limited to, forward foreign exchange settlement and sales, foreign exchange options, and interest rate swaps, with underlying assets including exchange rates, interest rates, and currencies. The foreign exchange derivative transactions that the Company and its subsidiaries plan to conduct are based on hedging and risk aversion of exchange rate risks, with the objective of reducing the risks caused by significant exchange rate fluctuations.
III. Necessity and Feasibility of the Company's Foreign Exchange Derivative Transactions