CHINA EAST AIR (00670) has announced its intention to carry out hedging activities in 2026 to mitigate the adverse effects of exchange rate fluctuations. The company plans to engage in US dollar exchange rate hedging transactions and US dollar cash flow hedging transactions to hedge against related foreign exchange risks. As jet fuel cost constitutes one of the company's largest operational expenses, its price volatility significantly impacts the company's profitability. Consequently, the company also intends to implement jet fuel hedging management in 2026 to partially offset the negative impact of oil price fluctuations on its operations. For the 2026 fiscal year, the company has set a maximum position limit of no more than $1 billion for US dollar exchange rate hedging; a maximum position limit of no more than $1.2 billion for US dollar cash flow hedging; and a total jet fuel hedging volume not exceeding 20% of the company's average projected jet fuel consumption for the three-year period from 2026 to 2028 (equivalent to 14.25 million barrels). Furthermore, the actual delivery volume in any single month during this period shall not exceed 1.19 million barrels. It is estimated that the maximum contract value held for the company's 2026 exchange rate and jet fuel hedging transactions on any single trading day will be less than 50% of the audited net assets from the company's most recent fiscal year (equivalent to RMB 20.266 billion or its foreign currency equivalent). The estimated upper limit for the transaction margin and premium to be utilized is expected to be less than 50% of the absolute value of the audited net profit from the company's most recent fiscal year (equivalent to RMB 2.113 billion or its foreign currency equivalent).
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