Important Content Reminder:
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Purpose of the Transaction: In the context of fluctuating RMB exchange rates and market interest rates, Yili Chuaning Biotechnology Co., Ltd. (hereinafter referred to as "the Company") and its subsidiaries intend to engage in foreign exchange hedging to effectively manage risks associated with import and export operations. This initiative aims to enhance the financial stability of the Company and mitigate adverse effects of exchange rate fluctuations on profits and shareholder equity. The business will not impact the development of the Company's main operations, allowing for optimized currency structure and reduced financial losses.
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Types of Transactions: The foreign exchange hedging transactions planned by the Company and its subsidiaries include but are not limited to forward foreign exchange contracts, foreign exchange swaps, foreign exchange forwards, foreign exchange options, interest rate swaps, interest rate forwards, interest rate options, and other financial derivatives or combinations thereof. The underlying assets for these hedging transactions include exchange rates, interest rates, currencies, commodities, and other targets; both physical delivery and cash settlement options are available. Transactions may involve leveraged trading with margin or guarantees, as well as unsecured credit trading.
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Transaction Amount: The total amount for the foreign exchange hedging business conducted by the Company and its subsidiaries will not exceed RMB 300 million or its equivalent in foreign currency. At any given time, the transaction amount (including related amounts from reinvested earnings) will not exceed this limit. Funds within this limit can be rolled over within 12 months.
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Special Risk Warning: The Company will conduct foreign exchange hedging in a legal, prudent, safe, and effective manner, avoiding speculative or arbitrage operations. However, due to uncertainties related to investment targets and market conditions, investors are advised to pay attention to investment risks. On March 27, 2026, the Company held its 14th meeting of the second board of directors, which approved the proposal regarding the guarantee of truthful, accurate, and complete information disclosure by the Company and all board members, without false records, misleading statements, or significant omissions.
I. Purpose of Foreign Exchange Hedging
The Company and its subsidiaries engage in a certain volume of foreign currency business in their daily operations. Given the fluctuations in the RMB exchange rate and domestic and international interest rates, the impact on the Company's operational results is increasing. To reduce risks from exchange rate and interest rate fluctuations, enhance the Company's ability to manage foreign exchange risks, and improve the efficiency of foreign exchange fund usage, the Company and its subsidiaries plan to conduct foreign exchange hedging.