Guotou Securities Co., Ltd.
Review Opinion on Suzhou Langwei Electronic Machinery Co., Ltd.'s Foreign Exchange Hedging Business
Guotou Securities Co., Ltd. (hereinafter referred to as "Guotou Securities" or "Sponsor") as the sponsor for the initial public offering and continuous supervision of Suzhou Langwei Electronic Machinery Co., Ltd. (hereinafter referred to as "Langwei Shares" or "the Company") on the ChiNext market, in accordance with the "Administrative Measures for Securities Issuance and Listing Sponsorship Business," "Shenzhen Stock Exchange Listed Company Self-Regulatory Management Guidelines No. 2 - Norms for ChiNext Listed Companies," and "Shenzhen Stock Exchange ChiNext Stock Listing Rules," has reviewed the matter of Langwei Shares conducting foreign exchange hedging business. The details are as follows:
I. Overview of Foreign Exchange Hedging Business
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Transaction Purpose With the development of the Company's overseas business, foreign exchange settlement needs are continuously increasing. To control foreign exchange market risks and effectively prevent and control the impact of exchange rate fluctuations on the Company's operating performance, the Company and its subsidiaries plan to use their own funds to conduct foreign exchange hedging business to better hedge and prevent foreign exchange rate risks, reduce exchange rate losses, and mitigate the adverse effects of exchange rate fluctuations, thereby enhancing the Company's financial stability.
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Transaction Amount The foreign exchange hedging business that the Company and its subsidiaries plan to conduct shall not exceed USD 30 million or the equivalent in RMB at any point in time within the approval validity period (including the amount related to re-trading of profits from the aforementioned transactions).
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Transaction Methods The foreign exchange hedging business that the Company and its subsidiaries plan to conduct is limited to currencies arising from actual business operations, primarily USD. The transaction types mainly include forward foreign exchange settlement and sales, foreign exchange swaps, foreign exchange options, interest rate swaps, interest rate futures, interest rate options, and combinations of the above products.
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Transaction Period The authorization period for the transaction shall be valid for 12 months from the date of approval by the Board of Directors. If the remaining period of a single transaction contract exceeds the authorization period, the authorization period shall be automatically extended until the expiration of that transaction contract.
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Transaction Counterparties Banks and other financial institutions approved by relevant government departments and possessing foreign exchange hedging business qualifications.