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Item 3. Quantitative and Qualitative Disclosures About Market Risk

2024-08-12 compared with 2024-05-10 · 17 added, 16 removed, 1 unchanged (97% of the section changed)

Quantitative and Qualitative

Disclosures about Market Risk.

Quantitative and Qualitative Disclosures about Market Risk.

Foreign Exchange Risk

reporting currency is the US dollar, almost all of our consolidated revenues and consolidated costs and expenses are denominated in RMB.

All of our assets are denominated in RMB except for some cash and cash equivalents and accounts receivables.

As a result, we are exposed

to foreign exchange risks as our revenues and results of operations may be affected by fluctuations in the exchange rate between US dollar

If the RMB depreciates against the US dollar, the value of our RMB revenues, earnings and assets as expressed in our US dollar

financial statements will decline.

We have not entered into any hedging transactions in an effort to reduce our exposure to foreign exchange

Although we are generally able to

pass along minor incremental cost inflation to our customers, inflation such as increases in the costs of our products and overhead costs

may adversely affect our operating results.

We do not believe that inflation in China has had a material impact on our financial position

or results of operations to date, however, a high rate of inflation in the future may have an adverse effect on our ability to maintain

current levels of gross margin and selling and distribution, general and administrative expenses as a percentage of net revenues if the

selling prices of our products do not increase in line with the increased costs.

While our reporting currency

is the US dollar, almost all of our consolidated revenues and consolidated costs and expenses are denominated in RMB.

All of our assets

are denominated in RMB except for some cash and cash equivalents and accounts receivables.

As a result, we are exposed to foreign exchange

risks as our revenues and results of operations may be affected by fluctuations in the exchange rate between US dollar and RMB.

RMB depreciates against the US dollar, the value of our RMB revenues, earnings and assets as expressed in our US dollar financial statements

will decline.

We have not entered into any hedging transactions in an effort to reduce our exposure to foreign exchange risk.

Although we are generally able to pass along minor

incremental cost inflation to our customers, inflation such as increases in the costs of our products and overhead costs may adversely

affect our operating results.

We do not believe that inflation in China has had a material impact on our financial position or results

of operations to date, however, a high rate of inflation in the future may have an adverse effect on our ability to maintain current levels

of gross margin and selling and distribution, general and administrative expenses as a percentage of net revenues if the selling prices

of our products do not increase in line with the increased costs.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 3. Quantitative and Qualitative Disclosures About Market Risk