Jiansheng Group Plans to Conduct USD 150 Million Foreign Exchange Hedging Business to Address Foreign Exchange Rate Volatility Risk

[Finance News] On March 13, Zhejiang Jiansheng Group Co., Ltd. (Stock Code: 603558, Stock Name: Jiansheng Group) announced that to address the impact of foreign exchange rate fluctuations on the company’s operating performance, the company and its subsidiaries plan to engage in foreign exchange hedging activities, with a transaction amount not exceeding $150 million or other equivalent foreign currencies.

The announcement shows that export business accounts for a high proportion of Jiansheng Group’s sales revenue, mainly settled in US dollars and other foreign currencies. Due to uncertainties in international politics and economics, foreign exchange rate fluctuations have had some impact on the company’s performance. To reduce the adverse effects of exchange rate volatility on operations and cost control, effectively hedge foreign exchange market risks, and maintain stable profit levels, the company has decided to carry out foreign exchange hedging activities.

This foreign exchange hedging is based on genuine import and export transactions, selecting foreign exchange trading varieties and instruments that match the company’s business methods and cycles. Specific trading varieties include but are not limited to US dollars and other currencies, with trading instruments including forward purchase and sale of foreign exchange, foreign exchange swaps, and other foreign exchange derivatives. Transactions will be conducted through compliant major banks and financial institutions.

According to the announcement, the total amount of this activity will not exceed $150 million or other equivalent foreign currencies. The limit can be reused within the approval period, and funds will come from the company’s own resources, not involving fundraising. The company’s board of directors proposes to authorize the CEO to exercise approval rights within this limit, with the transaction and authorization period lasting from the date of approval by the shareholders’ meeting until the next year’s shareholders’ meeting.

Regarding approval procedures, this matter has been approved by the company’s Audit Committee of the Board of Directors at its first meeting in 2026 and the 25th meeting of the sixth Board of Directors held on March 11, 2026. It still needs to be submitted for review at the company’s 2025 annual shareholders’ meeting.

The announcement also notes that although the company’s foreign exchange hedging activities follow principles of legality, prudence, safety, and effectiveness, and are not for speculative purposes, there are still risks such as exchange rate fluctuations and transaction default risks. To mitigate these, the company has implemented multiple risk control measures, including: conducting transactions strictly according to forecasted collection and payment periods and amounts; only working with large, qualified financial institutions; establishing the “Foreign Exchange Hedging Business Management System” to standardize operations; sales departments quoting prices based on bank hedging rates provided by finance; and ensuring foreign currency receipts are budgeted and implemented to prevent delays in hedge settlement.

The company states that the purpose of engaging in foreign exchange hedging is to avoid and prevent risks from exchange rate fluctuations, and that it is conducted around the company’s specific business operations, not for speculative or arbitrage trading. This move aims to improve the company’s ability to cope with foreign exchange risks and strengthen financial stability.

In terms of accounting treatment, the company will follow relevant regulations and guidelines from the “Enterprise Accounting Standards No. 22 - Recognition and Measurement of Financial Instruments,” “Enterprise Accounting Standards No. 23 - Transfer of Financial Assets,” “Enterprise Accounting Standards No. 24 - Hedge Accounting,” and “Enterprise Accounting Standards No. 37 - Financial Instruments Disclosure” to account for and disclose its foreign exchange hedging activities.

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