Year-to-Date A-Share Companies' Hedging-Related Announcements Surge 70% Year-over-Year

Since the beginning of this year, A-share companies have shown an increased demand for risk management. Wind Information statistics indicate that as of March 19, there have been 470 announcements related to participation in hedging by A-share companies this year, a 70.29% increase compared to the same period last year.

Yang Yinghui, Deputy General Manager of COFCO Futures, told Securities Daily that since the beginning of this year, the price volatility in the commodities market has significantly increased, with faster commodity cycle shifts. Uncertainties in raw material procurement costs, inventory valuation, and order pricing have grown, leading to a higher demand for risk management among real economy enterprises.

Wu Qichong, senior industry analyst at Dongzheng Derivatives Research Institute, told reporters that the sharp increase in hedging announcements by A-share companies this year is mainly due to enhanced risk management awareness and deeper understanding of derivative tools among real economy enterprises. “Currently, there is an urgent need for hedging among these companies, and proactive risk management has become a consensus for many A-share firms. Some leading companies have even significantly increased their hedging capacity.”

Looking at the industries involved in hedging this year, sectors such as non-ferrous metals, chemicals, and energy are prominent. For example, Yifan Transmission announced that their hedging products are not limited to copper and aluminum but mainly involve bulk raw materials related to their production and operations. Zhongman Petroleum announced that to effectively prevent and resolve risks related to oil and gas exploration, development, and international trade, the company conducts futures and derivative hedging business, not for speculation or arbitrage purposes.

Additionally, many A-share companies participating in hedging are showing features of institutionalization and standardization. For example, Yongxing Materials issued a feasibility announcement for hedging participation; China Salt Chemical released management measures for hedging activities; Hehe Information published verification opinions from CICC regarding foreign exchange hedging business. Overall, the institutional framework for hedging among A-share companies is becoming increasingly完善.

“The deepening functions and innovative tools of futures and derivatives markets are gradually becoming vital for risk management in real economy enterprises,” Yang Yinghui said. Compared to traditional risk management tools, derivative instruments offer high hedging efficiency and flexible capital use, effectively compensating for limitations in traditional tools under extreme market conditions and better matching personalized needs. Currently, the futures market covers major industrial chains, with continuous enrichment of tools such as on-exchange options and over-the-counter derivatives. Coupled with regulatory guidance, liquidity and pricing efficiency are continuously optimized, providing strong support for enterprises to hedge price risks.

In recent years, the futures market has continuously improved its制度 and increased the variety of innovative tools, offering enterprises more refined risk management options. Wu Qichong stated that as the domestic futures and options markets continue to develop, providing richer risk management tools for real economy enterprises, and with active regulatory guidance encouraging standardized hedging practices, industry companies are becoming increasingly proactive in using derivative tools.

Regarding how the futures market can better serve real economy enterprises in the future, experts believe that the market should focus on serving the real economy, exerting efforts from both demand and supply sides. On the demand side, more differentiated hedging solutions should be provided, closely aligned with national strategic development directions to help enterprises stabilize operations during capacity planning and green transformation. On the supply side, continuous introduction of innovative tools that fit industry realities is necessary.