InnoVal significantly increases foreign exchange hedging limit to $300 million to strengthen exchange rate risk management

MaticHoleFiller

2026-03-29 13:16:09

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(News) Yingluohua Technology Co., Ltd. (Stock Code: 000795) announced on the evening of March 20 that the company’s board of directors has reviewed and approved the proposal to adjust the quota for foreign exchange derivative hedging business for the year 2026, planning to significantly raise the original quota from no more than 1.3 billion yuan or equivalent foreign currency to no more than 300 million US dollars or other equivalent foreign currency, in order to further strengthen the ability to manage exchange rate risks. This proposal still needs to be submitted to the company’s 2025 annual shareholders’ meeting for review.

Specifics of the Quota Adjustment

The adjustment of Yingluohua’s quota is significant, with specific changes as follows:

Adjustment Item
Before Adjustment
After Adjustment
—
Limit on Transaction Balance
No more than 1.3 billion yuan or equivalent foreign currency
No more than 300 million US dollars or other equivalent foreign currency
Validity Period
12 months from the date of board approval
12 months from the date of approval by the 2025 annual shareholders’ meeting
Fund Usage Method
Cyclic rolling use
Cyclic rolling use

Background and Purpose of the Adjustment

The announcement shows that Yingluohua’s export business mainly uses foreign currencies such as US dollars, euros, and British pounds for settlement, and exchange rate fluctuations have a direct impact on the company’s operating performance. The company stated that in order to effectively prevent foreign exchange market risks, reduce the impact of exchange rate fluctuations on production and operations, and enhance financial stability, it has decided to adjust the quota for foreign exchange derivative hedging business.

It is understood that the company’s previous quota for foreign exchange derivative hedging business was only approved at the 16th meeting of the 10th board of directors on March 4, and this significant adjustment comes just 15 days later, indicating that the company has significantly increased its emphasis on foreign exchange risk management.

Business Conduct Method

After this adjustment, Yingluohua’s foreign exchange derivative business will cover foreign exchange forward transactions, foreign exchange swaps, currency swaps, options, and combinations of the aforementioned products, with transactions conducted through financial institutions that have been approved by relevant regulatory agencies and possess the qualifications for foreign exchange derivative hedging business. All transactions will be based on the company’s real operating business background, and will not involve speculative and arbitrage trading purely for profit.

In terms of funding sources, the company has clearly stated that it will use its own funds to conduct related businesses, without involving raised funds.

Risk Control Measures

In response to potential market risks, operational risks, customer default risks, and other risks associated with foreign exchange derivative business, Yingluohua has established multiple risk control measures:

Select large financial institutions with high credit ratings as trading counterparts to reduce credit risk
Strictly adhere to hedging principles and avoid speculative trading
Establish standardized business operation processes and authorization management systems, equipped with professional personnel
Strengthen accounts receivable management to prevent delivery delay risks
Monitor changes in the international market environment in real-time and adjust strategies as needed

The company will handle the accounting for foreign exchange derivative business in accordance with the relevant provisions of the Ministry of Finance’s “Enterprise Accounting Standards.”

This quota adjustment still needs to be submitted to the company’s 2025 annual shareholders’ meeting for review and can only be implemented after approval.

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