Feasibility Analysis Report on the Company and its Subsidiaries Conducting Foreign Exchange Hedging Business in 2026
I. Purpose of Conducting Foreign Exchange Hedging Business
With the development of Guangdong Chaohongji Industrial Co., Ltd. (hereinafter referred to as the "Company") and its subsidiaries' business, to reduce the adverse impact of exchange rate fluctuations on the Company's operations and based on strategic needs, the Company and its subsidiaries plan to conduct foreign exchange hedging business to reduce the impact of exchange rate fluctuations on the Company's performance.
II. Types of Foreign Exchange Hedging Business
The foreign exchange hedging business to be conducted by the Company and its subsidiaries involves transactions with banking financial institutions approved by regulatory authorities and possessing foreign exchange hedging business qualifications. The business types include, but are not limited to, forward foreign exchange, foreign exchange swaps, foreign exchange options, options, and related combination products.
III. Authorization Limit and Implementation Method for Foreign Exchange Hedging Business
Based on the Company's actual business development, the Company and its subsidiaries plan to conduct foreign exchange hedging business within the limit of the total amount of foreign exchange receipts and payments generated by actual business operations. The transaction amount on any trading day within the authorization period shall not exceed RMB 1 billion or its equivalent in foreign currency. The transaction limit can be used on a revolving basis within the authorization period. If the term of a single transaction exceeds the authorization period, the authorization period shall be automatically extended until the termination of that transaction.