Shengdun Mining Plans to Conduct Foreign Exchange Hedging Business with Annual Transaction Balance Cap Not Exceeding 20% of Annual Revenue

[Finance.com News] On March 20, Shengtun Mining (Rights Protection) Group Co., Ltd. (Stock Code: 600711, Stock Abbreviation: Shengtun Mining) announced that the company held the 26th meeting of the 11th Board of Directors on March 18, 2026, during which it approved the proposal for conducting foreign exchange hedging business in 2026. To effectively mitigate exchange rate and interest rate risks faced by import-export operations and overseas investment projects, the company plans to carry out foreign exchange hedging activities in 2026, with a transaction cap not exceeding 20% of the audited operating revenue of the previous year.

The announcement shows that Shengtun Mining’s foreign exchange hedging products include forward foreign exchange contracts, swaps of RMB and other foreign currencies, forward foreign exchange buying and selling, foreign exchange swaps, foreign exchange options, interest rate swaps, interest rate swaps, and interest rate options. These cover underlying assets such as exchange rates, interest rates, and currencies, and can be settled through physical delivery or cash settlement. The company supports margin guarantee leveraged trading and unsecured credit trading.

According to the announcement, the authorization for this business quota is valid from the date of approval by the company’s 2025 annual shareholders’ meeting until the date of the 2026 annual shareholders’ meeting. The settlement period will match the company’s foreign exchange income and expenditure cycle. The company emphasizes that all foreign exchange hedging activities are based on normal production and operation, relying on specific business needs, and do not involve speculative trading.

To control related risks, Shengtun Mining has established the “Foreign Exchange Hedging Business Management System,” which clearly stipulates operational principles, approval authority, internal review procedures, and risk handling processes. The company will only engage with large financial institutions with legitimate qualifications and will implement measures such as tracking foreign exchange fund receipts and payments and monthly fair value measurement to prevent market risk, internal control risk, customer default risk, and legal risk.

In terms of financial accounting, the company will recognize and measure related transactions according to the “Enterprise Accounting Standard No. 22 — Recognition and Measurement of Financial Instruments” and “Enterprise Accounting Standard No. 37 — Financial Instruments Disclosure.” The fair value will mainly be determined based on prices provided by banking and Reuters pricing services.

Shengtun Mining states that the purpose of engaging in foreign exchange hedging is to lock in exchange rate and interest rate costs, reduce financial risks associated with import-export and overseas investments, and improve overall operational stability.

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