Stetwe intends to carry out 2.6 billion yuan in foreign exchange derivatives trading, focusing on exchange rate risk management.

【Shanghai, March 27, 2026】A notice released today by SmartMore (Shanghai) Electronic Technology Co., Ltd. (Securities Code: 688213, “SmartMore” for short) states that, in order to address risks arising from foreign exchange rate fluctuations, the Company and its wholly-owned subsidiaries within the consolidated scope are planning to carry out foreign exchange derivative trading business with a total amount not exceeding RMB 2.6 billion (or the equivalent in other currencies). The transaction额度 will be valid for 12 months starting from July 1, 2026, and can be used on a rolling basis during the validity period.

The announcement shows that the Company’s main purpose for carrying out this foreign exchange derivative trading business is to hedge risk (rather than to obtain investment returns). The trading instruments include foreign exchange forwards, foreign exchange swaps, foreign exchange options, structured forwards, and other foreign exchange derivative products or product combinations. The trading currencies are mainly U.S. dollars, which are the主要 settlement currencies used for the Company’s production and operations.

The Company emphasizes that all foreign exchange derivative trading business conducted this time is based on actual import and export business, follows the principle of soundness, and does not conduct foreign exchange transactions for the purpose of speculation. The transactions will select foreign exchange derivative instruments that are relatively simple and transparent, have strong liquidity, and have risks that can be assessed. The Company will not engage in complex embedded transactions, or transactions tied to uncontrollable factors.

With respect to the review procedures, this matter has been approved by the Company’s 11th meeting of the Second Session of the Board of Directors and the 1st meeting in 2026 of the Audit Committee of the Second Session of the Board of Directors, and therefore does not need to be submitted to the shareholders’ meeting for review. The sponsor, China Jianyin Investment Securities, has issued a verification opinion, stating that the matter is necessary, has fulfilled the required review procedures, and there is no situation that would harm the interests of the Company and its shareholders.

The announcement also highlights seven major risks, including exchange rate fluctuation risk, internal control risk, customer default risk, payment collection forecast risk, liquidity risk, performance risk, and legal risk. To address the above risks, the Company will take multiple risk-control measures, including selecting simple and controllable trading instruments, continuously tracking and monitoring market price changes, only trading with large, compliant financial institutions, and conducting regular compliance oversight and inspection.

Regarding accounting treatment, the Company states that this hedging business does not meet the application conditions of “Accounting Standards for Business Enterprises No. 24—Hedge Accounting,” and will perform accounting and bookkeeping treatment in accordance with relevant provisions such as “Accounting Standards for Business Enterprises No. 22—Recognition and Measurement of Financial Instruments.”

SmartMore states that this foreign exchange derivative trading business is intended to reduce the impact of exchange rate volatility on the Company’s operating performance, strengthen financial resilience, and will not affect the development of the Company’s主营业务. The foreign exchange derivative trading额度 approved for the Company for fiscal year 2025 will expire starting from July 1, 2026.

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