Decoli plans to conduct 200 million yuan in forward foreign exchange settlement and sales to hedge against exchange rate fluctuation risks

On March 31, Wuxi Dekoli Optoelectronics Technology Co., Ltd. (Securities Code: 688205; Securities Abbreviation: Dekoli) announced that in order to prevent adverse impacts of exchange rate fluctuations on the company’s operating performance, the company plans to continue carrying out forward foreign exchange spot and settlement (forward FX) business. The total business amount will not exceed RMB 200 million. The funds will come from the company’s own funds and do not involve raised funds.

The announcement shows that Dekoli has overseas procurement and overseas sales businesses, and the settlement currencies are mainly denominated in U.S. dollars. When exchange rates experience significant fluctuations, foreign exchange gains and losses will have a certain impact on the company’s operating performance. To effectively mitigate foreign exchange fluctuation risk, the company plans to conduct forward FX business with banks. This business will strictly follow the principle of locking in exchange-rate risk and will not engage in speculative trading.

Specific details of the business

The forward FX business the company plans to carry out is limited to the main settlement currencies used for production and operations (such as U.S. dollars). Within 12 months from the date the matter is approved by the shareholders’ meeting, the total business amount will not exceed RMB 200 million. Within this limit, the business may be used on a revolving and rolling basis. The term of each single transaction shall not exceed one year. The company’s finance department will be responsible for handling the specific matters within the above period and within the above quota.

Deliberation procedures and risk control

The company convened the Audit Committee’s 2026 second meeting on March 24, 2026, and convened the second session of the Board of Directors’ 20th meeting on March 30, 2026, both of which considered and approved the “Proposal on Continuing to Carry Out Forward FX Business.” This proposal is still subject to submission for approval at the company’s 2025 annual shareholders’ meeting.

With regard to the exchange-rate fluctuation risks, internal control risks, and risks related to forecast of receipt and payment that may be faced by the forward FX business, the company has formulated corresponding risk control measures: strengthen exchange-rate research and analysis; establish and improve an internal control system; prudently forecast and conduct business based on foreign-currency receipt and payment plans; and ensure that the scale of the business is controlled within the approved quota.

The Audit Committee believes that the company’s continued conduct of forward FX business is based on actual operating needs, which is conducive to enhancing the stability of the company’s profitability, and to safeguarding operating results. The company has established a comprehensive risk control mechanism, the decision-making procedures are lawful and compliant, and no situations have been found that would harm the interests of the company and all its shareholders.

Impact on the company

Dekoli stated that conducting forward FX business helps improve the company’s ability to respond to foreign exchange fluctuation risk, prevent adverse impacts of exchange-rate fluctuations on the company’s profits and shareholders’ equity, and is conducive to enhancing the company’s financial soundness. The company will conduct corresponding accounting and treatment for the forward FX business in accordance with the relevant corporate accounting standards.

Market analysts noted that for listed companies with overseas businesses, the rational use of financial instruments such as forward FX to hedge exchange-rate risk is an important measure to enhance financial soundness. Dekoli’s undertaking of forward FX business this time will help the company better cope with international exchange-rate fluctuations and ensure the stability of its operating performance.

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