{"url_path":"/sec/efty/10-k/2026/item-11","section_key":"item-11","section_title":"Item 11 Quantitative and Qualitative Disclosures About Market Risk**","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-05-14","source_url":"https://www.sec.gov/Archives/edgar/data/2058349/0001213900-26-056086-index.html","accession_number":"0001213900-26-056086","cik":"0002058349","ticker":"EFTY","issuer_name":"ETOILES CAPITAL GROUP CO., LTD","edgar_url":"https://www.sec.gov/Archives/edgar/data/2058349/0001213900-26-056086-index.html","primary_entity_key":"0002058349","primary_entity_name":"ETOILES CAPITAL GROUP CO., LTD"},"word_count":433,"has_tables":true,"body_markdown":"**Item\n11. Quantitative and Qualitative Disclosures About Market Risk**   \n\n** **\n\n**Credit\nRisk**\n\n \n\nCredit\nrisk is controlled by the application of credit approvals, limits and monitoring procedures. We manage credit risk through in-house research\nand analysis of the Hong Kong economy and the underlying obligors and transaction structures. We identify credit risk collectively\nbased on industry, geography and customer type. In measuring the credit risk of our sales to our customers, we mainly reflect the “probability\nof default” by the customer on its contractual obligations and consider the current financial position of the customer and the\ncurrent and likely future exposures to the customer.\n\n** **\n\n**Liquidity\nRisk**\n\n \n\nWe\nare also exposed to liquidity risk which is the risk that we will be unable to provide sufficient capital resources and liquidity to\nmeet our commitments and business needs. Liquidity risk is controlled by the application of financial position analysis and monitoring\nprocedures. When necessary, we will turn to financial institutions and related parties to obtain short-term funding to cover any liquidity\nshortage.\n\n** **\n\n**Inflation\nrisk**\n\n \n\nInflationary\nfactors, such as increases in the cost of revenue, selling expenses and general and administrative expenses, could impair our operating\nresults. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date,\na high rate of inflation in the future may have an adverse effect on our ability to maintain current levels of gross margin and operating\nexpenses as a percentage of sales revenue if the revenues from our products do not increase with such increased costs.\n\n** **\n\n**Interest\nrate risk**\n\n \n\nOur\nexposure to interest rate risk primarily relates to the interest rate that our deposited cash can earn, on the other hand, interest-earning\ninstruments carry a degree of interest rate risk. In addition, we are exposed to variable interest rate risk principally from our existing\nHong Kong dollars denominated bank borrowings. An increase will raise the cost of those debts.\n\n \n\n**Foreign\nExchange Risk**\n\n \n\nWhile\nour reporting currency is the U.S. dollar, the majority of our consolidated revenues, costs, and expenses are denominated in Hong Kong\ndollars. Most of our assets are also held in Hong Kong dollars. As a result, we are exposed to foreign exchange risk, as fluctuations\nin the exchange rates between the U.S. dollar and Hong Kong dollar can impact our revenues and operating results. If the Hong Kong\ndollar depreciates against the U.S. dollar, the value of our revenues, earnings, and assets, as expressed in our U.S. dollar\nfinancial statements, will decline. Currently, we have not entered into any hedging transactions to mitigate this foreign exchange risk."}