Xianju Pharmaceutical: Announcement on continuing to carry out foreign exchange hedging business
Securities code: 002332 Securities abbreviation: Xianju Pharmaceutical Announcement number: 2026-012
Zhejiang Xianju Pharmaceutical Co., Ltd.
Announcement on continuing to carry 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 that there are no false records, misleading statements or major omissions.
Zhejiang Xianju Pharmaceutical Co., Ltd. (hereinafter referred to as the "Company") held the second meeting of the ninth board of directors on April 21, 2026, and reviewed and approved the "Proposal on Continuing to Carry out Foreign Exchange Hedging Business", agreeing that the company will carry out foreign exchange hedging business with a cumulative amount of no more than 20 million U.S. dollars or the equivalent in foreign currencies at any time within 12 months from the date of review and approval by the board of directors. The relevant information is now announced as follows:
1. The purpose of the company’s foreign exchange hedging business
Since the company's self-operated export income of raw materials and related products accounts for a certain proportion of the company's total operating income, and is mainly settled in foreign currencies such as US dollars and euros, when the exchange rate fluctuates greatly, exchange gains and losses will have a certain impact on the company's operating performance. In order to reduce the impact of exchange rate fluctuations on the company's profits, the company plans to carry out foreign exchange hedging business with banks and other financial institutions, including forward foreign exchange settlement and sales transactions, RMB and foreign exchange swap transactions, RMB to foreign exchange option portfolio business, etc. By locking the forward foreign exchange settlement and sales exchange rate and exchange rate range, in the case of two-way fluctuations in the RMB exchange rate against foreign currencies, the impact on the company's operating profits will be reduced.
The company's foreign exchange hedging business is for the purpose of avoiding exchange rate risks. It does not speculate or conduct foreign exchange transactions solely for the purpose of profit.
2. Foreign exchange hedging business period, business scale and investment capital
Based on the scale of the company's export business, it plans to carry out foreign exchange hedging business with a cumulative amount of no more than US$20 million or its equivalent in foreign currency at any point within 12 months from the date of review and approval by the board of directors. To carry out foreign exchange hedging business, the company does not need to invest other funds except paying a certain proportion of margin according to the agreement signed with the bank. The margin will be used the company's own funds, and the proportion of margin paid is determined according to specific agreements signed with different banks.
3. Accounting principles for foreign exchange hedging business
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", "Accounting Standards for Business Enterprises No. 39 - Fair Value Measurement" and other relevant regulations and guidelines, the company conducts corresponding accounting treatment for the proposed foreign exchange hedging business and correctly presents it in the financial report.
4. Feasibility analysis of foreign exchange hedging business
The company's foreign exchange hedging business is carried out around the company's business, based on normal production and operations, relying on specific operating businesses, and using hedging as a means to help avoid and prevent the risk of exchange rate fluctuations and reduce the impact of exchange rate fluctuations on the company's operating performance. The company has formulated the "Foreign Exchange Hedging Business Management System" and improved the relevant internal control processes. The targeted risk control measures adopted by the company are feasible and effective; at the same time, the margin for the foreign exchange hedging business planned to be carried out by the company will use its own funds and will not involve raised funds. Therefore, it is necessary and feasible for the company to carry out foreign exchange hedging business, which can effectively reduce the risk of exchange rate fluctuations.
5. Risk analysis of foreign exchange hedging business
The company's foreign exchange hedging business follows the principles of locking in exchange rate risks and hedging, and does not engage in speculative or arbitrage trading operations. When signing contracts, transactions are carried out in strict accordance with the company's predicted payment period and amount.
Although foreign exchange hedging business can reduce the impact of exchange rate fluctuations on the company through effective operations when the exchange rate fluctuates significantly, this business still involves certain risks:
Exchange rate fluctuation risk: Exchange rate fluctuations are bidirectional. In the forward exchange rate trend, the locked price of the forward foreign exchange transaction exchange rate may be lower than the company's accounting exchange rate in the current period of foreign exchange collection, resulting in the company's exchange losses.
Internal control risk: Foreign exchange hedging business is highly professional and complex, and may cause risks due to imperfect internal control systems.
Customer default risk: Customer accounts receivable are overdue and the payment cannot be collected within the predicted payment period, which will cause delayed delivery and cause losses to the company.
Payment forecast risk: The company makes payment forecasts based on customer orders and expected orders. During the actual execution process, customers may adjust orders, causing the company's payment forecast to be inaccurate, leading to the risk of delayed delivery.
6. Risk control measures taken by the company
The company's business department will use the bank's forward exchange rate to quote customers, so that after the order is confirmed, the company can lock in the exchange rate quoted to the customer; when the exchange rate fluctuates greatly, if the forward exchange rate is far lower than the exchange rate quoted to the customer, the company will request and negotiate with the customer to adjust the price.
The company has formulated the "Foreign Exchange Hedging Business Management System", which clearly stipulates the operating principles, approval authority and scope of responsibilities, internal operating procedures, internal risk reporting system and risk handling procedures, information isolation measures, information disclosure and file management of the foreign exchange hedging business. The company will arrange and use professionals in strict accordance with the system, establish a strict authorization and job control mechanism, and continue to strengthen the business capabilities and professional ethics education of relevant personnel to improve the overall quality of relevant personnel.
In order to prevent delayed delivery of forward settlement, the company will attach great importance to the management of accounts receivable and actively collect accounts receivable to avoid overdue accounts receivable.
The company’s foreign exchange hedging business must be strictly based on forecasts of foreign currency receipts.
The company’s audit department is responsible for regularly reviewing and supervising the actual operation of the foreign exchange hedging business, the use of funds, and profits and losses, etc., and reporting the review status to the Audit Committee of the Board of Directors.
7. Documents for reference
- Resolution of the second meeting of the ninth board of directors
Announcement is hereby made.
Zhejiang Xianju Pharmaceutical Co., Ltd.
board of directors
April 23, 2026