Yifan Pharmaceutical: Announcement on Carrying out Foreign Exchange Hedging Business
Securities code: 002019 Securities abbreviation: Yifan Pharmaceutical Announcement number: 2026-022
Yifan Pharmaceutical Co., Ltd.
Announcement on Carrying out Foreign Exchange Hedging Business
The company and all members of the board of directors guarantee that the information disclosed is true, accurate and complete, and contains no false records, misleading statements or major omissions.
Important content reminder:
Basic situation: In order to improve the company's ability to deal with foreign exchange fluctuation risks, better avoid and prevent the risks of foreign exchange exchange rate fluctuations faced by the company, enhance the company's financial stability, and prevent exchange rate fluctuations from adversely affecting the company's profits and shareholders' equity, the company and its subsidiaries within the consolidated scope and banks and other financial institutions will carry out foreign exchange hedging business with banks and other financial institutions based on the asset size and business needs. The cumulative transaction amount at any point in time shall not exceed RMB 1 billion or other equivalent currencies. Within this amount, it can be used on a rolling basis. This hedging business mainly includes interest rate swaps, foreign exchange swaps, foreign exchange forwards, currency swaps, buying options, selling options and a combination of the above businesses.
Review procedures that have been performed: It has been reviewed and approved at the third meeting of the company’s audit committee in 2026 and the fourth meeting of the ninth board of directors, and does not need to be submitted to the company’s shareholders’ meeting for review.
Risk warning: The company conducts foreign exchange hedging business in compliance with the principles of legality, prudence, safety and effectiveness, and does not engage in speculative or arbitrage trading operations. However, foreign exchange hedging business operations still involve certain market risks, liquidity risks, performance risks, customer default risks and other risks. Investors are advised to pay attention to investment risks.
1. Overview of investment situation
- Purpose of investment: Since Yifan Pharmaceutical Co., Ltd. (hereinafter referred to as the "Company") raw materials and polymer material products are mainly exported to Europe and the United States, coupled with the in-depth advancement of the global pharmaceutical business layout, a large amount of foreign currency settlement is involved in daily operations. Therefore, when exchange rates fluctuate greatly, exchange gains and losses will have an impact on the operating performance of the company and its holding subsidiaries. In order to improve the company's ability to deal with foreign exchange fluctuation risks, better avoid and prevent the foreign exchange exchange rate fluctuation risks faced by the company, enhance the company's financial stability, and prevent exchange rate fluctuations from adversely affecting the company's profits and shareholders' equity, the company plans to appropriately carry out foreign exchange hedging business based on specific circumstances to strengthen the company's foreign exchange risk management.
The company carries out foreign exchange hedging business to lock in costs and avoid exchange rate risks. The company selects simple foreign exchange derivatives that are closely related to its main business operations, and the derivatives match the variety, scale, direction, and term of the business background, and are in line with the company's prudent and steady risk management principles.
- Transaction amount: The company and its subsidiaries within the scope of consolidation plan to carry out foreign exchange hedging business with a total amount not exceeding RMB 1 billion. Within the aforementioned maximum amount, the cumulative transaction amount at any time shall not exceed RMB 1 billion or other equivalent currencies.
Estimated transaction margin and premium: Foreign exchange hedging transactions mainly use the company's comprehensive credit line in cooperative financial institutions, and generally no margin is required.
Transaction methods: The foreign exchange hedging transactions planned by the company include interest rate swaps, foreign exchange swaps, foreign exchange forwards, currency swaps, buying options, selling options and the above business combinations, etc. The contract period matches the basic transaction period. If the duration of a single transaction exceeds the authorization period, the authorization period will automatically be extended until the transaction is terminated. The counterparties are domestic and foreign financial institutions such as banks that have been approved by regulatory agencies such as the State Administration of Foreign Exchange and the People's Bank of China and have the qualifications to operate foreign exchange derivatives transactions, and the risk level is relatively low.
Transaction period: The period is within 12 months from the date of review and approval at the fourth meeting of the ninth board of directors.
Source of funds: The company's own funds, not involving the use of raised funds or bank credit funds.
2. Review procedure
At the third meeting of the company's audit committee in 2026 and the fourth meeting of the ninth board of directors, the "Proposal on the Feasibility Analysis and Application for Transaction Quotas for Carrying out Foreign Exchange Hedging Business" was reviewed and approved, and the company and its subsidiaries within the scope of consolidated statements were agreed to carry out foreign exchange hedging business. The cumulative transaction amount at any time shall not exceed RMB 1 billion or other equivalent currencies, and the validity period will be one year from the date of review and approval at the fourth meeting of the company's ninth board of directors. This matter is within the scope of the board of directors' approval authority, does not involve related transactions, and does not require review by the shareholders' meeting.
3. Transaction risk analysis and risk control measures
(1) Transaction risk analysis
The company's foreign exchange hedging business follows the principle of locking exchange rates and interest rate risks, and does not engage in speculative or arbitrage trading operations. However, there are still certain risks in the foreign exchange hedging business:
Market risk: The difference between the contract exchange rate and interest rate of the foreign exchange hedging business and the actual exchange rate and interest rate on the maturity date will generate transaction profits and losses; during the duration of the foreign exchange hedging, revaluation profits and losses will occur in each accounting period, and the cumulative value of the revaluation profits and losses by the maturity date is equal to the transaction profits and losses.
Liquidity risk: The foreign exchange hedging business is based on the company's foreign exchange assets and liabilities, and matches the actual foreign exchange receipts and expenditures to ensure that there are sufficient funds for settlement at the time of delivery, or choose net delivery derivatives to reduce the demand for funds on the maturity date.
Performance risk: The company's foreign exchange hedging targets are all banks with good credit and which have established long-term business relationships with the company, so the performance risk is low.
Customer default risk: Customer accounts receivable are overdue and the payment cannot be recovered within the predicted recovery period, which will cause delayed delivery and cause losses to the company.
Other risks: When conducting transactions, if operators fail to perform foreign exchange hedging operations according to prescribed procedures or fail to fully understand hedging information, operational risks will arise; if the terms of the transaction contract are unclear, they may face legal risks. When conducting transactions overseas, you may face risks arising from the political and economic situation and local laws of the relevant countries and regions.
(2) Risk control measures
Clarify the trading principles of foreign exchange hedging products: The foreign exchange hedging business is based on the principle of value preservation, to avoid risks caused by exchange rate fluctuations to the greatest extent, and in combination with market conditions, timely adjustment of operating strategies to improve the value preservation effect.
System construction: The company has established the "Securities Investment and Derivatives Transaction Management System", which clearly stipulates the scope of authorization, approval procedures, operational points, risk management and information disclosure of derivatives transactions, which can effectively regulate foreign exchange derivatives trading behavior and control foreign exchange derivatives trading risks.
Product selection: Before conducting foreign exchange hedging business, conduct comparative analysis between multiple counterparties and multiple products, and select financial derivatives that are most suitable for the company's business background, strong liquidity, and controllable risks to carry out business.
Counterparty management: Carefully select counterparties engaged in foreign exchange hedging business. The company only conducts financial derivatives transactions with financial institutions such as large commercial banks with legal qualifications to avoid possible legal risks.
Dedicated person responsible: Representatives of the company's management, the company's financial management center, the audit department and other relevant departments will set up a special working group to be responsible for risk assessment before foreign exchange hedging transactions, timely assessment of changes in risk exposure of foreign exchange hedging business, and analysis of the feasibility and necessity of the transaction. The financial management center is responsible for the specific operation of the transaction, and when major changes occur in the market, it will promptly report the changes in risk assessment and propose feasible emergency stop-loss measures.
4. The impact of the transaction on the company and related accounting treatments
The foreign exchange hedging business planned to be carried out by the company is closely related to daily operations. Focusing on the company's foreign currency assets, liabilities and foreign exchange receipts and payments, a certain proportion of foreign exchange hedging business will be matched based on the real transaction background to cope with the foreign exchange risks brought by foreign exchange fluctuations to the company, enhance the company's financial stability, and meet the company's requirements for stable operations.
In accordance with the Ministry of Finance's "Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments", "Accounting Standards for Business Enterprises No. 24 - Hedge Accounting", "Accounting Standards for Business Enterprises No. 37 - Presentation of Financial Instruments" and other relevant regulations and guidelines, the company conducts corresponding accounting and accounting treatment for the proposed foreign exchange derivatives trading business, which is reflected in relevant items on the balance sheet and profit and loss statement.
5. Documents for reference
(1) "Resolution of the Third Meeting of the Audit Committee in 2026"
(2) "Resolution of the Fourth Meeting of the Ninth Board of Directors"
(3) "Feasibility Analysis Report on Carrying out Foreign Exchange Hedging Business"
Announcement is hereby made.
Board of Directors of Yifan Pharmaceutical Co., Ltd.
April 24, 2026