Xidamen Plans to Launch Foreign Exchange Hedging Business with Maximum Contract Value Not Exceeding 500 Million Yuan

[Finance News] On March 20, Zhejiang Xidamen New Materials Co., Ltd. (Stock Code: 605155, Stock Abbreviation: Xidamen) announced that in order to effectively hedge foreign exchange market risks and prevent the adverse impact of exchange rate fluctuations on the company’s operating performance, the company plans to carry out foreign exchange hedging activities. According to the announcement, the company expects that on any trading day, the maximum contract value held will not exceed 500 million yuan or other equivalent foreign currencies, with the margin and premium used not exceeding 50 million yuan.

The announcement shows that the types of foreign exchange hedging transactions include forward foreign exchange contracts, foreign exchange swaps, foreign exchange options, or a combination of these products. The trading currencies are the main settlement currencies used in the company’s operations, including but not limited to US dollars. The funds will come from the company’s own resources and do not involve raised funds or bank credit. The business period is valid within 12 months from the date of approval by the board of directors, from March 19, 2026, to March 18, 2027.

The company stated that the purpose of conducting foreign exchange hedging is to stabilize foreign exchange exposure risks, reasonably reduce financial costs, and enhance financial stability. All activities are based on normal trade backgrounds and do not involve speculative arbitrage transactions. To control risks, the company has established a comprehensive operational process, with the finance department centrally managing the foreign exchange hedging activities, strengthening accounts receivable risk management, continuously monitoring foreign exchange market price changes, and timely assessing risk exposure variations.

Regarding approval procedures, this proposal was reviewed and approved at the sixth meeting of the fourth board of directors on March 19, with a voting result of 9 votes in favor, 0 against, and 0 abstentions. Previously, the company’s Audit Committee of the fourth board had reviewed and approved this proposal for submission to the board of directors. The Audit Committee believes that the company’s foreign exchange hedging activities comply with relevant laws and regulations, help avoid exchange rate risks, and do not harm the interests of the company or all shareholders.

The announcement also reminds investors that although the company’s foreign exchange hedging activities are for risk avoidance, there are still risks such as exchange rate fluctuations and transaction default risks. Please be aware of investment risks. Regarding accounting treatment, the company states that this hedging activity complies with the “Enterprise Accounting Standard No. 24 — Hedging Accounting” and plans to adopt hedge accounting for recognition and measurement.

As a company focused on new materials, Xidamen’s foreign exchange hedging activity will help stabilize the company’s operational expectations amid the current complex international exchange rate environment, improve financial stability, and provide strong support for the company’s sustained and healthy development.

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