Dawei Co., Ltd. plans to conduct foreign exchange derivatives trading of no more than $50 million, focusing on exchange rate risk management.

【Shenzhen News】Shenzhen Dawei Innovation Technology Co., Ltd. (Stock Code: 002213, Stock Abbreviation: Dawei Co.) announced on March 17th that to hedge against foreign exchange market volatility risks, the company plans to engage in foreign exchange derivatives trading with a total amount not exceeding $50 million (or other equivalent foreign currencies). This matter has been approved by the board of directors and is subject to approval at the company’s 2026 first extraordinary general meeting.

The announcement shows that some of the company’s and its controlling subsidiaries’ businesses involve import and export foreign exchange receipts and payments. In recent years, affected by international exchange rate fluctuations, foreign exchange risk exposure has increased. The purpose of this foreign exchange derivatives trading is to lock in exchange rates through financial instruments, improve financial stability, and reduce the potential impact of exchange rate fluctuations on the company’s operating performance.

According to the announcement, the types of foreign exchange derivatives trading planned by the company include forward foreign exchange contracts, foreign exchange swaps, foreign exchange options, interest rate swaps, interest rate options, or a combination of these products. The counterparties are financial institutions approved by the State Administration of Foreign Exchange and the People’s Bank of China. The trading limit is valid for 12 months from the date of approval by the shareholders’ meeting, and funds can be reused within the limit. All transactions will be conducted using the company’s own funds and do not involve fundraising.

The company emphasizes that this foreign exchange derivatives trading will strictly follow the principle of “locking in exchange rates and risk prevention,” and will not engage in speculative trading. To control risks, the company has established the “Foreign Exchange Derivatives Trading Business Management System,” which includes multi-dimensional risk control measures such as authorization approval, risk monitoring, and internal audits. The finance department will closely monitor market price changes and regularly assess risk exposure.

The announcement also reminds that, despite multiple risk control measures, foreign exchange derivatives trading may still face market risk, liquidity risk, performance risk, and operational risk. The company will minimize these risks by matching the actual foreign exchange receipts and payments’ maturities and selecting financially sound institutions as counterparties.

According to accounting standards, the company will account for these foreign exchange derivatives transactions accordingly, and related fair value changes will be reflected truthfully in the financial statements. Market analysts point out that for companies engaged in import and export, properly using foreign exchange derivatives can help smooth the impact of exchange rate fluctuations on performance and enhance the company’s risk resistance.

This trading limit does not constitute a material transaction based on the company’s latest audited net assets and does not qualify as related-party transactions or major asset restructuring. The date of the company’s 2026 first extraordinary general meeting will be announced separately.

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