Hangzhou Zhongheng Electric Co., Ltd.
Analysis Report on the Feasibility of Foreign Exchange Hedging Business
I. Background of Developing Foreign Exchange Hedging Business
With the continuous expansion of the company's international business and the steady growth of overseas income, coupled with the increasing volatility of the foreign exchange market, the company plans to carry out foreign exchange hedging business to effectively prevent and resolve the risk of significant exchange rate fluctuations. The company's foreign exchange hedging business is based on its normal production and operation, aiming to hedge and avoid exchange rate risks. By locking in exchange rates, it can reduce exchange rate fluctuation risks, minimize capital losses, and arrange capital usage more reasonably, without affecting the development of the company's main business.
II. Overview of the Foreign Exchange Hedging Business Planned by the Company
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Main Business Products Involved The company will conduct foreign exchange hedging business with financial institutions approved by regulatory authorities and possessing foreign exchange derivative trading qualifications. The foreign exchange hedging business products undertaken by the company include forward foreign exchange settlement and sales, foreign exchange swaps, foreign exchange options, or a combination of the above products, corresponding to underlying assets including exchange rates, interest rates, currencies, or a combination of the above assets.
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Funding Scale and Sources The funds for the foreign exchange hedging business of the company and its subsidiaries will come from their own funds, and will not involve raised funds. The transaction amount will not exceed USD 20 million or its equivalent in other currencies.