{"url_path":"/sec/fedu/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":"2026-06-17","source_url":"https://www.sec.gov/Archives/edgar/data/1709819/0001193125-26-273350-index.html","accession_number":"0001193125-26-273350","cik":"0001709819","ticker":"FEDU","issuer_name":"Four Seasons Education (Cayman) Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1709819/0001193125-26-273350-index.html","primary_entity_key":"0001709819","primary_entity_name":"Four Seasons Education (Cayman) Inc."},"word_count":493,"has_tables":true,"body_markdown":"ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK\n\nForeign Exchange Risk\n\nForeign currency risk arises from future commercial transactions and recognized assets and liabilities. A significant portion of our revenue-generating transactions and expense-related transactions are denominated in Renminbi, which is the functional currency of our subsidiaries and VIEs in China. We do not hedge against currency risk.\n\nThe change in value of the Renminbi against the U.S. dollar and other currencies is affected by various factors such as changes in political and economic conditions in the PRC. On July 21, 2005, the PRC government changed its decade-old policy of pegging the value of the Renminbi to the U.S. dollar, and the Renminbi appreciated more than 20% against the U.S. dollar over the following three years. Between July 2008 and June 2010, this appreciation halted and the exchange rate between the Renminbi and the U.S. dollar remained within a narrow band. Since June 2010, the Renminbi has fluctuated against the U.S. dollar, at times significantly and unpredictably. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the Renminbi and the U.S. dollar in the future.\n\nTo the extent that we need to convert U.S. dollars into Renminbi for our operations, appreciation of Renminbi against the U.S. dollar would reduce the Renminbi amount we receive from the conversion. Conversely, if we decide to convert Renminbi into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or ADSs, servicing our outstanding debt, or for other business purposes, appreciation of the U.S. dollar against the Renminbi would reduce the U.S. dollar amounts available to us.\n\nAs of February 28, 2026, we had Renminbi-denominated cash and cash equivalents and restricted cash of RMB102.1 million (US$14.9 million). A 10% depreciation of the Renminbi against the U.S. dollar based on the foreign exchange rate on February 28, 2026, would result in a decrease of US$1.5 million in cash and cash equivalents and restricted cash.\n\n \n\n148\n\n \n\n[Table of Contents](#toc_page)\n\n \n\n \n\nInterest Risk\n\nOur exposure to interest rate risk primarily relates to the interest income generated by our excess cash, which is mostly held in interest-bearing bank deposits. Interest-earning instruments carry a degree of interest rate risk. We have not been exposed to material risks due to changes in interest rates, and we have not used any derivative financial instruments to manage our interest risk exposure. However, our future interest income may fall short of expectations due to changes in market interest rates.\n\nInflation Risk\n\nTo date, inflation in China has not materially impacted our results of operations. According to the National Bureau of Statistics of China, the year-over-year percent changes in the consumer price index for December 2023, 2024 and 2025 were increases of -0.3%, -0.1% and 0.8%, respectively. Although we have not been materially affected by inflation in the past, we may be affected if China experiences higher rates of inflation in the future."}