Guangdong Feinan Resource Utilization Co., Ltd. (hereinafter referred to as the "Company") and all members of the Board of Directors guarantee that the content of the information disclosure is true, accurate, and complete, without false records, misleading statements, or major omissions.
Important Content Reminder:
- To mitigate the risk of price fluctuations in the metal market and achieve stable operational goals, the Company intends to use futures contracts for price risk management of certain inventory metals based on spot needs. The margin balance will be adjusted from no more than 300 million yuan to no more than 500 million yuan. The trading varieties include standardized futures contracts for metals such as copper, nickel, tin, gold, and silver, which are related to the Company's actual production, and no over-the-counter trading will be conducted. The duration is 12 months from the date of approval by the shareholders' meeting, and the amount can be used in a rolling manner within the approval period.
- This matter has been approved by the sixth meeting of the third Board of Directors of the Company and is subject to submission for shareholder approval.
- The Company's futures hedging business is not for speculative purposes but primarily to avoid risks arising from significant fluctuations in metal market prices. Transactions will strictly adhere to the principles of legality, compliance, prudence, and safety, but certain risks will still exist, including market risk, funding risk, technical risk, operational risk, and policy risk.
I. Overview of Investment Situation
- Investment Purpose
The Company mainly engages in the disposal of hazardous waste from non-ferrous metals and the recycling of renewable resources. The raw materials and finished products are rich in various metals, and the purchase and sale prices are determined based on the market prices of the contained metals with discounts. Typically, raw materials have low metal content and high impurity content, resulting in low discount coefficients; after enrichment and refining for resource recovery, finished products have high metal content and low impurity content, leading to high discount coefficients. The profit margin of the Company's recycled products is the price difference of the aforementioned metals, which is influenced by the discount coefficients and market prices of metals. Metal prices are subject to significant fluctuations due to changes in domestic and international economic and political environments, financial market conditions, and supply-demand structures. To mitigate the risk of price fluctuations in the metal market and achieve stable operational goals, the Company finds it necessary to manage price risks for certain inventory metals based on production scale, raw material stocking cycles, and production cycles to ensure relative stability in operational performance.