Avoid price fluctuation risks Fenglin Group conducts futures hedging

Beijing Business Daily reported (reporter 翟枫瑞) On March 30, Guangxi Fenglin Wood Industry Group Co., Ltd. (hereinafter referred to as “Fenglin Group”) issued an announcement regarding the launch of futures hedging business, stating that the sales price of fiberboard in its main products and the purchase prices of methanol (i.e., the main raw material for formaldehyde), urea, and other major raw materials are subject to fluctuations that have a significant impact on the company’s production and operations. The company plans to make full use of the hedging functions of futures to carry out futures hedging business, in order to hedge risks such as price fluctuations of major raw materials and products, and will not use it as a tool for profit-making.

Fenglin Group stated that the futures hedging business being carried out this time is to reasonably hedge risks arising from price fluctuations of raw materials and finished products, lock in the company’s product gross margin, and effectively prevent market risks caused by price changes. The maximum amount of margin for the futures hedging business shall not exceed RMB 20 million (excluding the full margin paid for positions held in the delivery period). The funds will be reused on a rolling basis during the effective period. The funding source is the company’s own funds, and it does not involve any proceeds raised through fundraising.