Hunan Baiyin Co., Ltd.
Feasibility Analysis Report on the Company's Commodity Futures Hedging Business
I. Purpose of Conducting Commodity Futures Hedging Business
Hunan Baiyin Co., Ltd. (hereinafter referred to as the "Company") primarily produces precious metals such as gold, silver, and lead. As the prices of precious metals like gold, silver, and lead are significantly affected by market price fluctuations, the Company's commodity futures hedging business aims to reduce the impact of raw material market price volatility on production and operating costs. By fully utilizing the hedging function of the futures market, it can effectively control the risk of raw material price fluctuations, which is conducive to enhancing the Company's overall risk resistance capabilities and strengthening operational stability.
II. Business Basic Situation
The Company's Board of Directors has authorized the Company's management to exercise relevant decision-making powers and sign necessary legal documents. In accordance with the "Hunan Baiyin Co., Ltd. Hedging Business Management Measures (Trial)" formulated by the Company, the Company will carry out hedging business operations and management according to the relevant regulations and procedures.
(1) Transaction Methods The Company's futures and options business is limited to raw material varieties related to the Company's production and operation. The trading venue shall be a financial institution approved by the regulatory authorities and possessing the corresponding business qualifications.
(2) Transaction Amount The margin amount for the Company's hedging business shall not exceed RMB 500 million.