CIMC Group plans to carry out derivative hedging in 2026, with a foreign exchange hedging limit of $7.5 billion.

[Shenzhen News] China International Marine Containers (Group) Co., Ltd. (Stock code: 000039.SZ / 02039.HK, hereinafter “CIMC Group”) announced on March 26 that to address risks from exchange rate, interest rate, and steel price fluctuations, the company plans to continue derivative hedging activities in 2026. The maximum position for currency derivatives will not exceed the equivalent of $7.5 billion, interest rate derivatives will not exceed the equivalent of $1 billion or 7 billion RMB, and steel derivatives margin will not exceed 20 million RMB. The proposal has been approved by the board of directors and is subject to shareholder approval.

The announcement states that CIMC Group conducts derivative trading strictly in accordance with hedging principles, prohibiting speculative trading, aiming to smooth operational risks through a negative correlation hedging mechanism. The company’s business spans globally, facing multiple market risks. This hedging plan will cover two core risk areas: exchange and interest rates, and raw material prices.

Hedging Business Scale and Structure

In 2026, CIMC Group’s derivative hedging will mainly involve two categories: currency derivatives and steel derivatives, with specific trading details as follows:

| Trading Scale |
| — | — | — |
| Maximum currency derivative position not exceeding the equivalent of $7.5 billion; maximum interest rate derivative position not exceeding the equivalent of $1 billion or 7 billion RMB | Margin for futures contracts not exceeding 20 million RMB |

| Trading Instruments |
| — | — | — |
| Forwards, swaps, options, futures | Steel-related futures contracts (such as hot-rolled coil futures) |

| Trading Venues |
| — | — | — |
| Domestic/overseas banks, securities firms, or futures exchanges | Domestic futures exchanges |

| Trading Duration |
| — | — | — |
| Currency derivatives generally not exceeding 12 months (long-term projects not exceeding project duration); interest rate derivatives matched with financing terms, generally not exceeding 5 years | Matched with operational cycle, generally not exceeding 6 months |

| Funding Sources |
| — | — | — |
| Own funds (not involving raised funds) | Own funds (not involving raised funds) |

Risk Management System

The company’s announcement details potential market, liquidity, and credit risks associated with derivative trading, and has established multi-level risk management measures:

For currency and interest rate derivatives, CIMC has established systems such as the “CIMC Group Financial Derivatives Trading Management System” and the “CIMC Group Foreign Exchange Risk Management Measures,” with the finance management department overseeing unified control, strictly implementing internal controls like segregation of duties, approval authorization, and stop-loss rules.

For steel derivatives, CIMC has formulated the “Steel Futures Hedging Management System,” implementing position management strategies aligned with production and operations, establishing margin warning mechanisms and trading stop-loss procedures to ensure futures positions precisely match physical contracts in quantity and timing.

The announcement emphasizes that all derivative transactions are based on real business needs, strictly prohibiting speculative trading. Counterparties are selected from creditworthy banking financial institutions, securities firms, and futures companies to control credit risk.

Accounting Treatment and Approval Procedures

According to the announcement, CIMC’s derivative transactions will be accounted for in accordance with relevant standards such as “Accounting Standard for Financial Instruments No. 22 - Recognition and Measurement” and “Accounting Standard for Hedging No. 24.”

The proposal was approved at the 4th meeting of the 11th Board of Directors on March 26, 2026, and will be submitted for shareholder approval. Market analysts note that as a leading global provider of logistics and energy equipment, CIMC’s large-scale hedging plan will help stabilize operational expectations and enhance the company’s ability to respond to market fluctuations.

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