Taijia Co., Ltd. plans to carry out foreign exchange hedging business with a maximum contract value of no more than 150 million yuan.

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On March 20, Hunan Taijia New Material Technology Co., Ltd. (stock code: 002843, stock short name: Taijia Co., Ltd.) announced that its sixth board of directors’ twenty-second meeting reviewed and approved the “Proposal to Conduct Foreign Exchange Hedging Business,” agreeing that the company and its consolidated subsidiaries will conduct foreign exchange hedging business to effectively avoid risks from exchange rate fluctuations.

According to the announcement, as the company’s overseas business continues to expand, the demand for foreign currency settlements is increasing, and the impact of exchange rate fluctuations on the company’s operational performance is becoming increasingly evident. To prevent potential risks from significant exchange rate fluctuations, Taijia Co., Ltd. intends to engage in foreign exchange hedging business with banks and other financial institutions. The currencies involved in the transactions include the U.S. dollar, euro, Thai baht, Hong Kong dollar, and other currencies related to actual business, with trading instruments covering forward foreign exchange contracts, foreign exchange swaps, foreign exchange options, interest rate swaps, and other foreign exchange derivatives or their combinations.

Regarding the trading scale, the company stipulates that the maximum contract value held on any trading day will not exceed 150 million RMB (or equivalent foreign currency), and the expected maximum trading margin and option premiums will not exceed 20 million RMB (or equivalent foreign currency). This limit is valid for one year from the date of approval by the board of directors, and funds can be used in a rolling manner within the authorized period.

Taijia Co., Ltd. emphasizes that the foreign exchange hedging business conducted this time aims to avoid risks and does not engage in speculative derivative trading. The company has formulated the “Foreign Exchange Hedging Business Management System,” which clearly stipulates the business operation processes, approval procedures, and risk control measures, and will effectively control market risks, performance risks, operational risks, and legal risks through measures such as selecting financially sound financial institutions as trading partners, closely monitoring market trends, and establishing a tiered management mechanism.

The announcement also disclosed that this matter is within the decision-making authority of the board of directors and does not require submission to the company’s shareholders’ meeting for approval. The company will account for this business according to the relevant accounting standards of the Ministry of Finance and will fulfill its information disclosure obligations in a timely manner as required.

The implementation of this foreign exchange hedging business will help Taijia Co., Ltd. better cope with operational risks brought about by exchange rate fluctuations, ensure the stable development of the company’s overseas business, and further enhance the company’s overall risk resistance capabilities.

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Editor: Xiaolang Express