Stone Pharmaceutical Co., Ltd.
Feasibility Analysis Report on Carrying Out Foreign Exchange Hedging Business
I. Purpose of Carrying Out Foreign Exchange Hedging Business
Stone Pharmaceutical Co., Ltd. (hereinafter referred to as "the Company") aims to effectively hedge against foreign exchange market risks, prevent adverse impacts from significant exchange rate fluctuations, and improve the efficiency of foreign exchange fund utilization and financial stability. The Company and its subsidiaries plan to engage in foreign exchange hedging business with banks and other financial institutions that possess relevant business qualifications. The Company and its subsidiaries will arrange funds reasonably based on actual operating conditions. Engaging in foreign exchange hedging business will not affect the development of the Company's main business.
II. Basic Situation of Foreign Exchange Hedging Business
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Main currencies and business types involved: The foreign exchange hedging business that the Company and its subsidiaries plan to carry out is limited to currencies that are the same as the main settlement currencies used in the Company's actual business operations, including but not limited to USD. The specific methods or products for the foreign exchange hedging business that the Company plans to carry out this time include, but are not limited to, forward foreign exchange settlement and sales, foreign exchange swaps, foreign exchange options, or other foreign exchange derivative businesses.
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Business scale and source of funds: Based on the Company's actual operating needs, the Company plans to use no more than USD 220 million or its equivalent in foreign currency to carry out foreign exchange hedging business. Within the aforementioned limit, the business can be carried out on a revolving basis. The funds will come from the Company's and its subsidiaries' own funds.