Huasheng Biotech (688639) Approved to Conduct Foreign Exchange Hedging Business with Maximum Contract Value Not Exceeding 500 Million Yuan

On March 17, Anhui Huaheng Biotechnology Co., Ltd. (Stock Code: 688639, Stock Abbreviation: Huaheng Biotech) announced that the company’s Fifth Board of Directors approved the proposal to authorize management to conduct foreign exchange derivatives trading. The company and its subsidiaries are permitted to engage in foreign exchange hedging to manage exchange rate fluctuation risks.

The announcement states that the main purpose of Huaheng Biotech’s foreign exchange hedging activities is to address the increased foreign exchange settlement volume resulting from the company’s and its subsidiaries’ overseas expansion, aiming to prevent the impact of exchange rate fluctuations of major settlement currencies such as the US dollar and euro on operational performance, and to improve the efficiency of foreign exchange fund utilization. This activity will strictly follow hedging principles and will not involve speculative trading.

According to the disclosure, the company’s planned foreign exchange hedging limit does not exceed 500 million yuan (or equivalent foreign currency). The maximum margin and premium used are expected not to exceed 50 million yuan, and the maximum contract value held on any trading day is expected not to exceed 500 million yuan. The business is valid for 12 months from the date of Board approval and the limit can be rolled over.

The company states that the foreign exchange hedging activities will match actual import and export operations, with transaction amounts and durations aligned with foreign exchange risk exposure. Counterparties will be selected from financial institutions qualified to conduct foreign exchange hedging and with good credit.

Regarding risk control, Huaheng Biotech has established the “Foreign Exchange Hedging Business Management System,” which covers operational principles, approval authority, internal processes, and risk reporting, forming a comprehensive risk management framework. The company will mitigate market, liquidity, credit, and operational risks by choosing simple derivatives aligned with core business, prudently reviewing contract terms, monitoring market prices, and strengthening internal audits.

The announcement also reminds investors that, although the company’s foreign exchange hedging activities are based on normal production and operation needs, there are still market risks from exchange rate and interest rate fluctuations, as well as liquidity and operational risks. Investors should be aware of these risks.

In terms of financial accounting, the company will follow relevant standards such as “Accounting Standard for Financial Instruments No. 22 — Recognition and Measurement” and “Accounting Standard for Financial Instruments No. 37 — Disclosure,” with related gains and losses reflected in the balance sheet and income statement. Final accounting treatment will be subject to the annual audit results of the accounting firm.

This foreign exchange hedging matter falls within the decision-making authority of the Board of Directors and does not require approval from the shareholders’ meeting.

Click here to view the original announcement >>

Disclaimer: The market carries risks; investment should be cautious. This article is automatically published by an AI model based on third-party databases and does not represent Sina Finance’s views. All information herein is for reference only and does not constitute personal investment advice. Please refer to the actual announcement for accuracy. If you have questions, contact biz@staff.sina.com.cn.