Tianhua New Energy Approved to Conduct $500 Million Foreign Exchange Derivatives Trading, Focusing on Exchange Rate Risk Management

【Financial News】Suzhou Tianhua New Energy Technology Co., Ltd. (Stock Code: 300390, Stock Abbreviation: Tianhua New Energy) announced on March 19th that the company’s seventh board of directors approved the proposal to carry out foreign exchange derivatives trading business. The company and its controlling subsidiaries are authorized to conduct foreign exchange derivatives transactions with a total limit of no more than $500 million USD, valid for 12 months from the date of approval by the board, with the limit available for rolling over during this period.

Locking in Exchange Rate Fluctuation Risks Focused on Core Business Needs

The announcement states that the main purpose of Tianhua New Energy’s foreign exchange derivatives trading is to respond to the current international political and economic situation, where exchange rate and interest rate volatility are intensifying. By using financial instruments to lock in costs and hedge risks, the company aims to reasonably reduce financial expenses, increase foreign exchange gains, and stabilize operational expectations. The company explicitly states that this trading activity will be strictly limited to foreign exchange operations related to daily business needs and will not involve any speculative or arbitrage transactions.

According to the announcement, the company and its controlling subsidiaries will mainly trade in the primary settlement currencies used in daily operations, including forward exchange contracts, options, and currency swaps. All funds used will come from the company’s own resources, with no involvement of raised funds or related-party transactions.

Trading Limits and Authorization Mechanism

Multiple Risk Control Measures to Ensure Business Compliance

To address potential market risks, internal control risks, customer default risks, and repayment forecast risks associated with foreign exchange derivatives trading, Tianhua New Energy has established a series of risk control measures:

1. Establish a strict “Foreign Exchange Derivatives Trading Business Management System,” clarifying operational principles, approval authority, and internal procedures.
2. Carefully review bank contract terms to prevent legal risks.
3. The finance department will continuously monitor market price fluctuations, regularly assess risk exposure, and report to management.
4. The audit department will supervise and inspect the compliance of the entire trading process.

The company’s board emphasizes that engaging in foreign exchange derivatives trading aims to serve the development of core business operations. Through professional risk management mechanisms, it will effectively hedge the potential impact of exchange rate fluctuations on the company’s performance, aligning with the long-term interests of the company and all shareholders. According to the “Shenzhen Stock Exchange ChiNext Listing Rules” and the company’s articles of association, this matter falls within the board’s approval authority and does not require shareholder approval.

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