Eternal Asia plans extensive 2026 credit guarantees, hedging for subsidiaries

Eternal Asia Supply Chain Management has approved an extensive RMB 3,888,800 million credit guarantee for its controlled subsidiaries for 2026, aiming to meet operational funding needs and facilitate stable development. This move is part of the company’s strategic financial support, though it notes that 27 of the guaranteed entities have a debt-to-asset ratio exceeding 70%, underscoring a key risk factor for investors. The board also approved an RMB 398,144.96 million guarantee for various associate companies for 2026. These guarantee forecasts await shareholder approval.

In parallel, Eternal Asia and its subsidiaries plan to engage in derivative and commodity hedging transactions for 2026, with a maximum contract value of $4.5 bn and a total transaction volume not exceeding $16 bn. This strategy focuses on risk-neutral hedging to mitigate currency and interest rate fluctuations, as well as commodity price volatility. The company's Hong Kong subsidiaries will also seek up to $800 m in credit facilities from 31 banks, supported by Eternal Asia’s guarantees.

As of the announcement date, Eternal Asia’s total external guarantees, including those to controlled and associate companies, exceed 100% of its latest audited net assets. The company emphasizes robust internal controls to manage associated risks.