Furande plans to invest 30 million yuan in futures hedging business to control the risk of raw material price fluctuations.

On March 23, Furen De Co., Ltd. (Stock Code: 605050, Stock Abbreviation: Furen De) announced the resolution of the 23rd meeting of the third board of directors, approving the proposal to carry out futures hedging business and related management systems. The company plans to invest no more than 30 million yuan of its own funds to conduct hedging for hot-rolled coil futures to manage raw material price fluctuation risks.

The announcement shows that the main purpose of Furen De’s futures hedging business is to effectively control the risk of price fluctuations in hot-rolled coil futures related to the company’s production and operation, enhance the company’s risk resistance, reasonably avoid adverse impacts caused by raw material price volatility, improve operational efficiency, and ensure healthy and sustainable business development.

According to the proposal, the total margin and premium for the company’s futures hedging business will not exceed 30 million yuan, and the maximum contract value held on any trading day will not exceed 300 million yuan. This guarantee amount can be used on a rolling basis within the authorized period, which is valid for 12 months from the date the board of directors approves it. The company’s board of directors also authorizes the chairman or its authorized personnel to exercise decision-making power and handle related matters within the above limits.

In addition, to standardize the development of the hedging business, the board also approved the proposal to formulate the “Management System for Futures and Derivatives Hedging Business,” which will provide clear guidelines and risk control framework for the company’s hedging operations.

The meeting was held on March 23, 2026, at the company’s conference room through a combination of on-site and remote communication. Seven directors were expected to attend, and all seven attended in person. All senior management personnel were present. Both proposals were approved unanimously (7 votes in favor, 0 against, 0 abstentions) and had been reviewed and approved in advance by the company’s Audit Committee.

Market analysts stated that as a company related to metal materials, fluctuations in raw material prices directly impact its production costs and profitability. By engaging in futures hedging, the company can lock in raw material procurement costs and stabilize operational expectations. This measure helps improve the company’s ability to respond to market risks and ensures long-term stable development.

The company reminds investors that while futures hedging can offset price fluctuation risks, it also involves certain market, operational, and liquidity risks. The company will strictly operate in accordance with relevant management systems, strengthen risk control, and ensure the business is conducted in compliance and in an orderly manner. For detailed information about this hedging business, investors can refer to the company’s announcement on the same day titled “Announcement on Conducting Futures Hedging Business” (Announcement No.: 2026-010) and the “Feasibility Analysis Report on Conducting Hedging Business.”

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