Zhonghong Pulin Medical Products Co.Ltd(300981)
Feasibility analysis report on carrying out foreign exchange derivatives trading business in 2022 I. background of the company's carrying out foreign exchange derivatives trading
The import and export business of Zhonghong Pulin Medical Products Co.Ltd(300981) (hereinafter referred to as "the company") accounts for a relatively high proportion, in which the main currency of foreign exchange settlement and sales is US dollars, and some transactions in other currencies such as euro, Hong Kong dollar and Japanese yen. The foreign exchange derivatives transactions carried out by the company and its holding subsidiaries are based on the needs of daily operation and the prevention of interest rate and exchange rate risks. The purpose is to reduce the impact of interest rate and exchange rate fluctuations on the company's profits, reduce exchange losses and reduce financial expenses, which is conducive to the development of the company's import and export business.
In order to effectively avoid foreign exchange market risks and prevent the adverse impact of large exchange rate fluctuations on the company, the company and its holding subsidiaries plan to carry out foreign exchange derivatives trading business in 2022 without affecting the development of the company's main business.
2、 Overview of the company's foreign exchange derivatives transactions
The company's foreign exchange derivatives trading business is based on normal production and operation, relies on specific business operations, aims to avoid and prevent exchange rate risks, and does not carry out derivatives trading for the purpose of speculation. The details are as follows: (I) investment mode
1. Types of trading business: the types of foreign exchange derivatives trading to be carried out by the company include but are not limited to foreign exchange forward trading, foreign exchange swap trading, foreign exchange option trading, RMB foreign exchange forward trading, RMB foreign exchange currency swap, RMB foreign exchange option trading, RMB to foreign exchange option combination and other products or combinations of the above products. The basic objects of foreign exchange derivatives include exchange rate, interest rate, currency and other objects.
2. Counterparty: banks, futures companies and other financial institutions (non related party institutions)
3. Liquidity arrangement: foreign exchange derivatives transactions are based on the normal domestic and foreign currency revenue and expenditure business, based on specific business operations, and the investment amount and investment period match the actual business needs, so as to reasonably arrange the use of funds. (II) trading quota and investment term
In 2022, the company and its holding subsidiaries will carry out foreign exchange derivatives trading business, and the balance at any time point will not exceed US $500 million. The above trading quota can be recycled and rolled; The board of directors requests the general meeting of shareholders to authorize the general manager to act as the general person in charge of foreign exchange derivatives investment business, which shall examine and approve the foreign exchange derivatives investment business within the limit, and authorize and handle relevant matters for the specific person in charge of the foreign exchange derivatives investment business of the company and its holding subsidiaries.
(III) source of funds
In the process of signing credit agreements with subsidiaries or stock holding companies, it is not necessary to pay a certain proportion of the margin for the use of the funds raised by subsidiaries or stock holding companies in the process of credit granting.
(IV) information disclosure
The company will disclose the company's foreign exchange derivatives trading in accordance with the relevant requirements of Shenzhen Stock Exchange GEM Listing Rules (revised in 2022), Shenzhen Stock Exchange listed companies self regulatory guidelines No. 2 - standardized operation of GEM listed companies, etc, Disclose the relevant progress and implementation of foreign exchange derivatives transactions in the regular report.
3、 The necessity and feasibility of the company's foreign exchange derivatives trading
With the continuous change of overseas financial market environment, the fluctuation of foreign exchange rate is becoming more and more frequent, and the uncertainty of foreign exchange market is becoming more and more prominent. The company's import and export business will still account for a high proportion in 2022. In order to effectively avoid foreign exchange market risks and prevent the adverse impact of large exchange rate fluctuations on the company, the company and its holding subsidiaries carry out foreign exchange derivatives trading business without affecting the development of the company's main business. By carrying out foreign exchange derivatives trading business, the company can reduce the risk of exchange rate or interest rate fluctuations and enhance the company's financial stability.
The company's foreign exchange derivatives trading this time complies with the provisions of relevant laws and regulations. The company has formulated the derivatives investment management system, which clearly stipulates the risk control, approval procedures, practical operation management, follow-up management and information disclosure, file management and information confidentiality of foreign exchange derivatives trading business, so as to control the transaction risk; It shall be carried out by specialized personnel with rich experience and clear division of labor. Therefore, it is feasible for the company to carry out foreign exchange derivatives transactions.
4、 Risk analysis of the company's foreign exchange derivatives trading business
The company follows the principles of legality, prudence, safety and effectiveness in carrying out foreign exchange derivatives trading, and does not engage in speculative trading operations, but there are still certain risks in foreign exchange derivatives trading operations.
1. Market risk: the difference between the exchange rate and interest rate of foreign exchange derivatives trading contract and the actual exchange rate and interest rate on the maturity date will produce trading profits and losses; During the duration of foreign exchange derivatives, revaluation gains and losses will occur in each accounting period, and the cumulative value of revaluation gains and losses to the maturity date is equal to transaction gains and losses.
2. Liquidity risk: the risk that the transaction cannot be completed due to insufficient market liquidity.
3. Performance risk: there is a risk of default caused by failure to perform the contract when the contract expires.
4. Other risks: when conducting transactions, if the operators fail to conduct foreign exchange derivatives transactions according to the specified procedures or fail to fully understand the derivatives information, operational risks will be brought; If the terms of the transaction contract are not clear, it may face legal risks.
5、 Risk control measures for the company to carry out foreign exchange derivatives trading business
1. Clarify the trading principles of foreign exchange derivatives: the company does not conduct foreign exchange derivatives trading solely for the purpose of profit. The trading activities of foreign exchange derivatives carried out by the company are based on normal production and operation, based on specific business operations, and for the purpose of hedging, avoiding and preventing exchange rate risk and interest rate risk.
2. System and talent construction: the company has formulated the derivatives investment management system, which clearly stipulates the risk control, approval procedures, practical operation management, follow-up management and information disclosure, file management and information confidentiality of foreign exchange derivatives trading business, so as to control the trading risk; It shall be carried out by specialized personnel with rich experience and clear division of labor. 3. Transaction management: the company will carefully review the contract terms signed with the bank and strictly implement the risk management system to prevent legal risks.
4. Risk early warning management: the financial management department of the company will continue to track the changes in the open market price or fair value of foreign exchange derivatives, timely evaluate the changes in the risk exposure of foreign exchange derivatives transactions, timely report abnormal conditions to the management, prompt risks and implement emergency measures.
5. Internal control management: the internal control audit department of the company shall supervise and inspect the compliance of the decision-making, management and execution of foreign exchange derivatives transactions.
6、 Feasibility analysis conclusion of foreign exchange derivatives transactions carried out by the company
The company's foreign exchange derivatives trading business is based on normal production and operation, relies on specific business operations, aims to avoid and prevent exchange rate risks, and does not carry out transactions for the purpose of speculation. In 2022, the company and its holding subsidiaries carried out appropriate foreign exchange derivatives trading business, which can prevent the adverse impact of large exchange rate fluctuations on the company and help to enhance the company's financial stability. The company has formulated the derivatives investment management system in accordance with the requirements of relevant laws and regulations, and formulated specific operating procedures for the company's foreign exchange derivatives trading business by strengthening internal control and implementing risk prevention measures. Therefore, it is feasible for the company to carry out foreign exchange derivatives trading business in 2022.
Zhonghong Pulin Medical Products Co.Ltd(300981) board of directors February 23, 2022
