At the beginning of 2021, in the face of the substantial price shock of raw materials such as copper, aluminium, strip steel and other bulk materials market, Junhe set up the “Hedging Working Group” at the first time to actively pay attention to the price dynamics of the raw materials market, discuss the plan to reduce the cost variations caused by the fluctuation of raw materials prices, investigate the hedging business permitted by laws and regulations and so on. Various work. At the same time, the “Hedging Working Group” of Jungho Consulted relevant professionals on the risk of hedging business, the current and future forecast of the market, formulated the relevant management system and carried out the corresponding simulation transactions.
In April 2021, Junhe passed the resolution of Board of Directors and Supervisory Committee meeting for this business and formally issued the “Announcement on Raw Material Futures Hedging Business in 2021”, and formally obtained the authorisation of 80 million RMB for the business transaction after the consideration and approval of the shareholders’ general meeting. As of 31 December 2021, Junhe will carry out futures hedging business of RMB30 million for copper and other major raw materials, which is the first time for Junhe to carry out hedging business.
Junhe insists to take shareholders’ interests as the centre, actively discusses to carry out risk avoidance mechanism in business operation, price discovery under business order, avoid risk fluctuation, profit locking function, and always maintains the interests of the company and shareholders on the basis of laws and regulations.
