Bangze Chuangke Exchange Rate Risk Analysis: Exchange Rate Exposure and Response Strategies for Overseas Revenue Accounting for Over 95%

According to public information found,

does have a significant exchange rate exposure issue, with its overseas revenue accounting for over 95% [1].

According to the Beijing Stock Exchange IPO inquiry materials, Bangze Chuangke’s overseas sales proportion shows a continuous upward trend:

• 2022
  : Overseas sales revenue was 1.019 billion yuan, accounting for
  95.34%
  of main business revenue
• 2023
  : Overseas sales revenue was 1.118 billion yuan, accounting for
  96.43%
  of main business revenue
• 2024
  : Overseas sales revenue was 1.456 billion yuan, accounting for
  96.98%
  of main business revenue [1]

The company’s products are mainly sold to North America, Europe, China and other countries and regions, with customers including international retailers like Amazon. In 2024, revenue from the company’s largest customer Amazon increased by 371.62% year-on-year [1].

Since almost all of the company’s revenue comes from overseas and is denominated in foreign currencies such as USD, fluctuations in the RMB exchange rate will directly affect the company’s revenue and profits. When the USD/CNY exchange rate changes, the company’s sales revenue denominated in foreign currencies will change when converted into RMB.

From the data disclosed in the prospectus, it can be seen that exchange rate fluctuations have a significant impact on the company’s gross margin:

• In 2023, the company’s gross margin increased by
  10.59 percentage points
  , one of the main factors being “the rise in the USD/CNY exchange rate” [1]
• Overseas gross margin increased significantly from 28.58% in 2022 to 40.43% in 2024 [1]

According to public information, the company has realized the existence of exchange rate risk and taken relevant response measures:

• Respond to exchange rate fluctuations by adjusting sales pricing strategies
• Shorten the validity period of quotes during periods of severe exchange rate fluctuations to reduce exposure [2]

1. Policy Risk
   : Global trade frictions and changes in tariff policies may affect export business [1]
2. Exchange Rate Fluctuation Risk
   : RMB appreciation will directly compress profit margins
3. Customer Concentration Risk
   : High dependence on major customers like Amazon

1. Foreign Exchange Hedging Tools
   : Use financial tools such as forward foreign exchange contracts and foreign exchange options for hedging
2. Pricing Mechanism Adjustment
   : Establish an exchange rate-linked pricing mechanism with customers to share exchange rate risks
3. Business Diversification
   : Moderately develop the domestic market to reduce dependence on overseas revenue
4. Cost Control
   : Optimize supply chain management to enhance cost absorption capacity

[1] Eastmoney.com - “IPO Radar | Bangze Chuangke’s Overseas Revenue ‘Supports’ 97% of Revenue, Core Suppliers Have 0 Insured Employees” (https://finance.eastmoney.com/a/202507103453700555.html)

[2] Atlantis Press - “Chinese Multinational Corporations: Foreign Exchange Risk” (https://www.atlantis-press.com/article/125990010.pdf)

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: For companies like Bangze Chuangke with a high proportion of overseas revenue, investors should focus on their exchange rate risk management capabilities, including whether a sound foreign exchange hedging policy has been established, sensitivity analysis of exchange rate fluctuations on performance, and whether the management’s hedging strategy for exchange rate risk is effective.