Fuda Alloy’s shares hit the daily limit-down level during trading on June 9 and later closed at 89.2 yuan per share, down 0.89%.
According to Jin10, the company said it issued a risk reminder announcement the previous evening and noted that its share price was influenced by multiple factors.
Responding to investor concerns about how silver prices affect performance volatility, Fuda Alloy said fluctuations in silver prices do affect profit, but the impact is limited.
The company said its pricing model is based on the market price of silver plus a processing fee. It added that when customers place orders, it simultaneously places orders with suppliers and purchases at prevailing market prices.
As a result, the company said a large portion of its risk exposure is already covered, and only the remaining exposure affects profit.
Fuda Alloy also said that when silver prices pull back, it may strategically stock some inventory, but the overall scale is not large because silver is a precious metal and holding more inventory would tie up significant capital.