Jiangsu HSC New Energy Materials Co., Ltd. – Foreign‑Exchange Derivatives and Market Performance (2025–12)
Jiangsu HSC New Energy Materials Co., Ltd. (ticker 688353), listed on the Shanghai Stock Exchange, announced on 29 December 2025 that it intends to enter into foreign‑exchange derivatives transactions. The company stated that the purpose of these transactions is to hedge foreign‑exchange risk associated with its export business, to improve the efficiency of foreign‑exchange utilisation, and to reduce financial costs. The planned derivatives exposure is capped at 25 million USD (or the equivalent in other currencies). The instruments to be used include forward contracts, swaps, option purchases, option sales and option combinations. The transactions will be conducted through banks and other financial institutions. The board approved the plan in its third meeting on 26 December 2025; no shareholder vote was required.
Key points of the announcement
| Item | Detail |
|---|---|
| Purpose | Risk hedging for export foreign‑exchange receipts, not speculative trading |
| Maximum exposure | 25 million USD |
| Instruments | Forward, swap, option purchase, option sale, option combination |
| Execution venue | Banks/financial institutions |
| Approval | Board decision on 26 Dec 2025 |
| Risk management | Consistent with the company’s risk‑management policy; linked to actual foreign‑exchange cash flows |
The announcement was made in the context of the company’s 2025 trading results, where the share price closed at 113.7 CNY on 30 December 2025, against a 52‑week high of 155 CNY reached in mid‑November and a 52‑week low of 17.61 CNY in early April. The company’s market capitalisation stands at approximately 18.1 billion CNY, while its price‑to‑earnings ratio is negative (‑149.55), reflecting ongoing investment and operating losses typical of many new‑energy firms.
Market Reaction – Battery and Organic‑Silicon Sectors
The day after the derivatives announcement, the broader battery‑related concept index experienced a mild decline, while the organic‑silicon sector fell 0.99 %. Key stocks within the battery space moved in a mixed pattern:
- HSC New Energy Materials (688353) closed lower, following a broader trend in the battery supply chain.
- Other battery‑related stocks that fell included Tianji Shares (Tianji), Penghui Energy, Haike New Source, Enjie Co., Tianci Materials, and Jinyuan Shares.
- Stocks that rallied in the battery space were Funi Shares (which hit the daily limit), Yaha Group, Huayou Cobalt, Tianhua New Energy, and Zhongkuang Resources.
In contrast, the organic‑silicon concept, which had 37 stocks experiencing net outflows of institutional capital, saw HSC New Energy Materials among those that dropped. The outflows totaled more than 3 million CNY for five stocks, with the largest outflow recorded at Dongyue Silicon Materials (≈55 million CNY).
Summary of price movements on 30 December 2025
| Stock | Movement |
|---|---|
| HSC New Energy Materials | ↓ (exact percentage not disclosed) |
| Tianji Shares | ↓ (limit‑down) |
| Haike New Source | ↓ |
| Enjie Co. | ↓ |
| Tianci Materials | ↓ |
| Funi Shares | ↑ (limit‑up) |
| Yaha Group | ↑ (limit‑up) |
| Huayou Cobalt | ↑ |
| Tianhua New Energy | ↑ |
| Dongyue Silicon Materials | ↓ |
The day‑to‑day volatility of the battery sector, combined with the company’s hedging announcement, may have contributed to the mixed performance observed for HSC New Energy Materials.
Strategic Implications
Risk Management Enhancement The company’s commitment to limiting foreign‑exchange exposure to 25 million USD demonstrates an emphasis on stabilising earnings against currency fluctuations, which is crucial for a firm with a high proportion of foreign‑exchange receipts from exports.
Operational Focus The board’s statement that the derivatives activity is “based on normal production and operations” suggests that the company is not seeking speculative profits but rather protecting its cash‑flow base.
Investor Perception Despite the hedging announcement, the share price decline on the following day indicates that market participants viewed the move as a routine risk‑management measure, not a signal of underlying operational weakness. However, the concurrent decline in the battery sector and the broader negative sentiment in the organic‑silicon concept may have amplified the sell‑pressure on HSC New Energy Materials.
Capital Structure With a negative P/E ratio and a market cap of roughly 18 billion CNY, the company remains in an investment‑stage profile. The hedging activity may be perceived positively as a step toward operational maturity.
Outlook
- Short‑Term: The company’s share price is likely to continue to be influenced by broader sectoral trends in battery materials and organic‑silicon products.
- Mid‑Term: Successful implementation of the hedging strategy may reduce volatility in earnings attributable to currency swings, potentially improving investor confidence.
- Long‑Term: Continued focus on risk management and operational efficiency will be key to moving from a negative P/E profile toward profitability, aligning with the company’s long‑term growth objectives in the new‑energy materials space.
Note: All figures and events are sourced from official announcements and market reports dated 29–30 December 2025.
