Core Viewpoint - Tianma Technology (603668) responded to the Shanghai Stock Exchange's inquiry regarding its rapidly growing "consumable biological assets," particularly focusing on its eel assets, which total over 2.8 billion yuan and have not shown signs of impairment [1][2]. Group 1: Financial Performance and Asset Valuation - As of June 30, 2025, Tianma Technology reported a total inventory value of 3.593 billion yuan, with consumable biological assets valued at 2.844 billion yuan, representing a 27.76% increase from the end of 2024 and accounting for 59.21% of current assets [1]. - The company explained that the increase in consumable biological assets was primarily due to its strategic shift towards Japanese eel seedlings, with a total investment of 812 million yuan in eel seedlings during the first half of 2025, compared to only 166 million yuan for the entire year of 2024 [2]. - The company provided detailed calculations indicating that as of June 30, 2025, the cost of the eels in stock was 2.836 billion yuan, while the net realizable value was significantly higher at 5.822 billion yuan, suggesting no overall impairment [2]. Group 2: Customer and Supplier Relationships - Tianma Technology confirmed the existence of overlapping relationships between its customers and suppliers, particularly highlighting "Customer 1," which was the largest customer in both the eel farming and food business segments, with transaction amounts of 417 million yuan in 2024 and 349 million yuan in the first half of 2025 [3][4]. - The company disclosed that "Supplier 21" was the fourth largest supplier in its raw material business, with a transaction amount of 355 million yuan, indicating a significant reliance on this supplier for essential raw materials [3][4]. - Additionally, three other suppliers (Supplier 12, Supplier 15, Supplier 16) were identified as both customers and suppliers, involved in the feed business and live eel supply [5].

Core Viewpoint - The company reported significant financial challenges in 2024, with a revenue of 602 million yuan, a net loss of 334 million yuan, and a cumulative loss of 823 million yuan over the past three years, indicating ongoing operational difficulties and a need for strategic reassessment [2][4]. Financial Performance - The company achieved a revenue of 602 million yuan in 2024, representing a 144.46% increase year-on-year, but incurred a net loss of 334 million yuan, worsening from the previous year [2][4]. - The gross margin for 2024 was -9.50%, with total operating costs amounting to 659 million yuan [2][4]. - Quarterly revenue breakdown for 2024 showed fluctuations: 53 million yuan, 248 million yuan, 193 million yuan, and 108 million yuan, with corresponding gross margins of -5.49%, -4.38%, -0.35%, and -39.44% [2][4]. Container Floor Business - The container floor segment generated 493 million yuan in revenue for 2024, a substantial increase of 301.37% compared to the previous year, but also reported a gross margin of -9.40% [5][6]. - Production for container floors was 20,800 cubic meters, while sales reached 119,000 cubic meters, indicating a high sales volume relative to production [6][11]. - The company faced high customer and supplier concentration, with the top five customers accounting for 79.96% of sales and the top five suppliers for 71.52% of purchases [6][10]. Operational Challenges - The significant loss in Q4 2024 was attributed to various factors, including depreciation of 74.5 million yuan and inventory impairment losses of approximately 52.6 million yuan [3][4]. - The company terminated recognition of deferred tax assets amounting to 55.2 million yuan, contributing to the increased losses in Q4 [4][11]. - The operational strategy included a shift towards OEM (Original Equipment Manufacturer) partnerships to meet rising demand, with OEM sales accounting for 73% of total container floor sales in 2024 [11][12]. Customer and Supplier Dynamics - The company reported changes in its major customers, with new additions such as Zhejiang Fanyang Special Equipment Co., Ltd. and China Ocean Shipping Group, while traditional customers like Xinhua Chang Group remained significant [9][10]. - The top five suppliers included Feixian Zongseng Board Factory and Shandong Shengdeze New Materials Co., Ltd., with a focus on maintaining stable supply chains amid market fluctuations [10][12]. OEM Business Model - The OEM business model was adopted to address the inability to meet large-scale production demands, with a focus on quality control and supplier management [11][12]. - The company emphasized that it does not engage in direct trading of finished products from suppliers to customers, maintaining control over the production and quality assurance processes [12][14]. - The OEM revenue accounted for approximately 60% of total revenue in 2024, highlighting the strategic pivot towards outsourcing production to meet market demands [12][13].