Core Viewpoint - Suzhou Ailong Technology Co., Ltd. is responding to regulatory inquiries regarding its related party transactions, specifically the termination of a second transaction and the initiation of a third transaction for purchasing factory assets, emphasizing the strategic necessity and commercial rationale behind these decisions [1][2][3]. Group 1: Transaction Details - The company plans to terminate the second transaction to purchase Factory 1 for 13.5 million yuan due to legal issues affecting the asset, and will initiate a third transaction to purchase Factory 16 for no more than 19.8 million yuan [1][3]. - The third transaction involves acquiring Factory 16, which aligns with the company's strategic goals of enhancing its industrial chain and supporting its precision processing and traditional Chinese medicine technology applications [3][6]. Group 2: Rationale for Transactions - The decision to switch transaction targets is based on the need for suitable facilities to support the company's strategic layout and operational requirements, particularly for its subsidiary, Yigu Research Institute [3][6]. - The company believes that purchasing rather than leasing the factory is more cost-effective in the long term, with significant savings compared to rental costs [11][12]. Group 3: Pricing and Valuation - The pricing for the three transactions varies significantly, with the first transaction priced at 4,300 yuan per square meter, the second at 1,685.24 yuan per square meter, and the third at 2,946.32 yuan per square meter, with justifications based on construction costs and market comparisons [17][19]. - The company asserts that the pricing for the third transaction is fair and reasonable, based on asset evaluations and market conditions, and that it will adhere to the principle of "whichever is lower, the evaluation price or the provisional price" for final pricing [20][23]. Group 4: Financial Health of Related Party - As of September 30, 2025, the related party, Chuzhou Zhuyitai, has total assets of 352 million yuan and total liabilities of 214 million yuan, indicating a debt ratio of 60.70% [27][36]. - The company has provided financial guarantees and support to Chuzhou Zhuyitai, which is currently operating at a loss but has plans to improve its financial situation through strategic measures [28][31].