Shandong Xinhua Pharmaceutical (00719) has announced that its board approved a proposal to engage in derivative hedging transactions during its 12th board meeting held on August 25, 2026. The initiative is designed exclusively for hedging purposes and achieving currency neutrality, with all derivative products closely matched to the company's foreign exchange and interest rate risk exposures arising from its export operations.

The derivatives, including standardized instruments such as forwards and options, are intended to lock in forward exchange rates for settlement and purchase, thereby mitigating fluctuations in foreign currency receipts and payments. This approach is expected to effectively cushion the impact of exchange rate volatility and enhance the company's overall financial stability.

The company emphasized that these transactions are strictly aligned with its export-related risk profile, establishing a natural economic hedge relationship that supports prudent risk management practices.