Hong Kong IPO disclosure precedents · 7 companies, 7 items
Disclosures of hedging or other risk management arrangements (e.g. futures or forwards on LME metals) to manage exposure to commodity price fluctuations.
Our raw material costs, which primarily consisted of costs of copper materials, accounted for 96.5%, 96.0%, 95.2%, 94.9% and 95.3% of our total cost of revenue in 2023, 2024, 2025 and the five months ended May 31, 2025 and 2026, respectively.
Business · p. 144
Hedging positions covered approximately 90% of our net copper exposure, measured at each month-end or quarter-end, during the Track Record Period.
Business · p. 144
Our profitability, cash flow, and working capital management are sensitive to fluctuations in raw material prices, in particular, copper price.
In 2026 going forward, prices of silver powder are expected to remain relatively volatile following a massive surge in the broader silver market from 2023 to 2025, driven by persistent industrial demand.
Summary · p. 13
We typically lock in the price of silver powder with upstream suppliers at the time when customers place orders.
Business · p. 145
For the portion of such silver powder inventory without confirmed purchase orders, we further employ forward futures contracts as a derivative instrument to mitigate the adverse impact of potential silver price movements.
For 2025, the Board has approved that the margin to be deployed for the proposed futures hedging activities would not exceed RMB80.0 million, and the maximum contract value held on any single trading day would not exceed RMB400.0 million.
Business · p. 179
For the years ended December 31, 2024 and 2025, we recorded gains of approximately RMB17.4 million and RMB90.7 million from hedging activities, respectively.
Business · p. 180
Our engagement in futures hedging activities is solely for the purpose of mitigating risks associated with price fluctuations of underlying commodities, and not for arbitrage or speculation purpose.
In 2022, 2023, 2024 and the nine months ended September 30, 2024 and 2025, we used future contracts, foreign exchange forward contracts and interest rate swap contracts to hedge risks, we also used bank wealth management products to reallocate short-term idle capital.
Business · p. 272
Since the launch of hog futures in China in January 2021, we were among the first companies in China to establish hog futures delivery warehouses and participate in the delivery of the initial batch of futures contracts.
Business · p. 272
To mitigate our risk exposure, we mostly entered into futures and options products, which enable us to sell hog products at a fixed price to hedge against price dropping of our hog products.
During the Track Record Period, the selling price of our copper products fluctuated in line with market changes.
Summary · p. 5
According to Frost & Sullivan, the copper price quoted on the London Metal Exchange increased from RMB42,600 per tonne in 2020 to RMB66,500 per tonne in 2024 at a CAGR of 11.8%.
Financial Information · p. 287
Financial liabilities at FVTPL represented the non-ferrous futures contracts we held to hedge against price volatility of metals.
The total costs of raw materials accounted for 90.3%, 91.2%, 92.5%, 91.4% and 93.0% of the total cost of sales for FY2022, FY2023, FY2024, 5M2024 and 5M2025, respectively, whilst gold being the primary raw material used in our production, accounted for over 80% of the total cost of raw materials during the Track Record Period.
Financial Information · p. 482
Assuming our selling price and other factors remained unchanged, the following sensitivity analysis illustrates the impact of hypothetical fluctuations of our cost of raw materials from our cost of sales on our profit before tax during the Track Record Period.
Financial Information · p. 483
During the Track Record Period, we did not utilise hedging instruments to hedge against gold price fluctuations, but we had taken out gold loans from time to time primarily for the purpose of hedging against risks associated with gold price fluctuations.
The material costs of gold for the years ended December 31, 2021, 2022 and 2023 and the six months ended June 30, 2024 constituted 99.0%, 99.2%, 99.5% and 99.6% of our material cost during the respective year/period.
Financial Information · p. 438
We use gold loans and Au (T+D) contracts to hedge against the financial impact of gold price fluctuations.
Financial Information · p. 438
For the six months ended June 30, 2024, we recorded an increase in net realised loss on Au (T+D) contracts in the sum of RMB140.5 million, representing a period-to-period increase of approximately 88.9% when compared to the corresponding period in 2023.