Shenzhen New Nan Shan Holding (Group) Co., Ltd.
Feasibility Analysis Report on Carrying Out Foreign Exchange Hedging Business
I. Background of Carrying Out Foreign Exchange Hedging Business
Shenzhen New Nan Shan Holding (Group) Co., Ltd. and its subsidiaries (hereinafter referred to as "the Company") are continuously expanding their international market presence, leading to an increasing scale of export sales. Consequently, significant exchange rate fluctuations can impact the Company's operating performance through exchange gains and losses. Currently, the Company's export settlements are primarily denominated in major foreign currencies such as USD, JPY, and EUR. To effectively mitigate the adverse effects of exchange rate volatility and improve the efficiency of foreign exchange fund utilization, the Company intends to engage in foreign exchange hedging. This will help hedge the risk exposure from fluctuations in forward exchange rates for incoming payments, ensuring export order profits. The overall transaction scale will be closely aligned with the Company's actual business scale.
II. Overview of the Proposed Foreign Exchange Hedging Business
1. Transaction Amount
Based on the current scale of the Company's export business, payment and receipt arrangements, and the capital required for normal production and operation, it is estimated that the maximum contract value held on any trading day within the approval period for the hedging business will not exceed RMB 400 million or its equivalent in foreign currency. The estimated margin and premium to be utilized will not exceed RMB 40 million or its equivalent in foreign currency.