Important Content Reminder:
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Business Overview: With the deepening expansion of Shantou Ultrasonic Instrument Research Institute Co., Ltd. (hereinafter referred to as "the Company") in overseas markets, the impact of foreign exchange market fluctuations on the Company's performance has become increasingly significant. To effectively hedge against exchange rate risks and enhance financial stability, the Company intends to use its own funds to conduct foreign exchange derivative trading, with the maximum contract value held on any trading day not exceeding $200 million (or equivalent in other currencies). The trading amount at any point during the trading period will not exceed this limit; the expected maximum margin and premium (including the value of collateral provided for trading, anticipated credit limits from financial institutions, and reserved margin for emergency measures) will not exceed 10% of the maximum contract value held on any trading day. This limit can be used in a revolving manner.
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Review Procedures: The proposal on conducting foreign exchange derivative trading has been approved by the ninth meeting of the Audit Committee of the second Board of Directors and the twelfth meeting of the second Board of Directors. This proposal must be submitted for review at the 2025 Annual General Meeting of Shareholders.
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Risk Warning: The Company's foreign exchange derivative trading business is based on normal production and operations, relying on specific business activities to reduce and prevent exchange rate risks, and does not engage in speculative or arbitrage trading. However, there are still market risks, exchange rate fluctuation risks, and performance risks associated with foreign exchange derivative trading, and investors are advised to be aware of investment risks.
I. Overview of Foreign Exchange Derivative Trading
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Investment Purpose: The Company has a high proportion of export business in its sales revenue, primarily settled in foreign currencies such as the US dollar. Therefore, significant fluctuations in exchange rates can greatly impact the Company's operating performance. The foreign exchange derivative trading conducted by the Company is premised on daily operational needs and aims to mitigate the impact of exchange rate fluctuations on profits, avoid exchange losses, and reduce financial costs. The foreign exchange derivative trading is intended for hedging against foreign exchange risks related to import and export operations and does not engage in purely profit-driven speculative or arbitrage trading, ensuring no significant impact on the Company's main business development or fund utilization.
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Investment Types: The Company plans to engage in foreign exchange derivative investments including but not limited to forward foreign exchange contracts, RMB foreign exchange swaps, foreign exchange swaps, options, and other foreign exchange derivative instruments recognized by regulatory authorities that meet the Company's risk management needs. The trading counterparties will be banks and financial institutions approved by relevant government departments with qualifications for foreign exchange derivative trading. The trading counterparties for this foreign exchange derivative trading business do not involve related parties.