Yishi Tong (688733) Approved to Conduct Futures Hedging Business with Maximum Contract Value of 41.6 Million Yuan

On March 24, Anhui Yishitong Material Technology Co., Ltd. (Stock Code: 688733, Stock Abbreviation: Yishitong) announced that the company has approved a plan to conduct futures hedging business in 2026. The purpose is to hedge against raw material price fluctuations using futures instruments to ensure stable operations. According to the announcement, the company will use its own funds to carry out the related business, with an estimated maximum contract value held on any trading day not exceeding 41.6 million yuan, and the maximum margin and premium balance not exceeding 5 million yuan.

Business Overview: Focus on Raw Material Price Risk Management

Yishitong stated that the core goal of engaging in futures hedging is to reduce the potential impact of raw material market price volatility on the company’s production and operations. By leveraging the risk management functions of the futures market, the company aims to enhance financial stability. The announcement clarifies that this business is limited to commodity futures related to the company’s production and operation, specifically aluminum oxide futures, traded on futures exchanges approved and qualified by regulatory authorities.

The business term is valid for 12 months from the date of board approval, and the above-mentioned funds can be used in a rolling manner within this period. The funding source is the company’s own funds, with no involvement of raised funds.

Risk Control: Multiple Measures to Prevent Potential Risks

Although the hedging business centers on risk management, Yishitong also highlighted six potential risks in the announcement, including price fluctuation risk, capital risk, internal control risk, market liquidity risk, counterparty default risk, and policy and regulatory risk. In response, the company has formulated targeted risk control measures:

• Systematic Safeguards: Strict compliance with relevant laws and regulations, clear operational principles, approval authority, and business procedures;
• Scale Control: Ensuring the scale of hedging matches operational needs, trading only futures related to production;
• Account and Fund Management: Opening trading accounts in the company’s name, using self-owned funds, and strictly controlling margin levels;
• Systems and Supervision: Establishing professional trading facilities, with the audit department regularly reviewing business execution to prevent operational risks.

Financial Impact: Hedge Accounting Does Not Affect Main Business

The announcement states that this hedging activity does not involve speculative trading and will not impact the company’s main business operations. In terms of accounting treatment, the company will follow relevant standards such as “Enterprise Accounting Standard No. 22” and “Enterprise Accounting Standard No. 24” for recognition, with the final results subject to the annual audit firm’s confirmation.

Yishitong 2026 Futures Hedging Business Key Parameters

The company’s board emphasizes that this business will strictly adhere to the principles of “legality, prudence, safety, and effectiveness,” and will not engage in speculative operations. Investors should be aware of the risks associated with market fluctuations in futures trading and make rational judgments regarding the company’s investment value.

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