CITIC Securities Highlights Impact of Exchange Rates on A-Share Overseas Income

CITIC Securities has released a report indicating that while A-share companies are experiencing rapid growth in overseas income, stable foreign income does not necessarily translate to stable profits in RMB. According to Jin10, the report explains that exchange rates affect financial statements through income, costs, exchange gains or losses, derivatives, and other comprehensive income (OCI). The report advises investors to incorporate exchange rate considerations into profit analysis. It suggests focusing on companies with high overseas exposure but low exchange rate sensitivity for stable profits, while being cautious of those with high foreign currency debt, significant net exposure, and insufficient hedging.