Tomato Paste Industry Price Downturn: Chalki Health Exits ST, Clears Inventory

## Chalki Health Resumes Trading After ST Removal: Stock Abbreviation Changed from *ST to Chalki Health On June 29, Chalki Health resumed trading after removing the delisting risk warning, with the stock abbreviation changed from "*ST Chalki" to "Chalki Health." On the first day of resumption, as of press time, the share price was RMB 3.29 per share. The company, located in Wujiaqu, Xinjiang, mainly produces tomato products, with the majority of revenue from bulk tomato paste sold to B-end customers. ## Cleared Financial Hurdles in 2025 but Profitability Not Restored In 2025, the company crossed the two financial thresholds for removing the delisting risk warning: - Net assets attributable to shareholders turned positive, reaching RMB 26.12 million at year-end - Deducted revenue reached RMB 488 million But core profitability remains unrepaired: net profit attributable to parent lost RMB 46.23 million in 2025, and deducted net profit lost RMB 293 million. ## De-stocking Supports Revenue: Sales Up, Production Down, Inventory Down The key to crossing the revenue line was "de-stocking": production shrank, inventory fell, and sales increased. Annual report shows: - Bulk tomato paste revenue: RMB 448 million, accounting for 91.12% of total revenue - Bulk tomato paste sales volume: 132,100 tons, up 249.47% YoY - Production volume: 7,500 tons, down 95.61% YoY - Inventory: 91,000 tons, down 57.80% YoY ## Sell More, Lose More: Bulk Tomato Paste Gross Margin Negative According to corrected data, 2025 bulk tomato paste gross margin was -20.41%, and overall company gross margin was -15.66%. This means over 90% of revenue from the main business was already in a state of negative gross margin. ## Two Main Pressures Explain "Selling at a Loss": Price Decline and Shelf Life Pressure In the annual report and reply to inquiry letters, the company gave two core reasons: ### Price: Export Average Price Declined, Industry Inventory High Worsened Downturn - China's export average price for tomato paste above 5kg in 2025 was US$675/ton, down 32.5% from US$1,000/ton in 2024 - Domestic bulk tomato paste prices remained low, with some companies dumping further worsening the price decline Company disclosed sales unit price trend: - 2023: RMB 7,857.91/ton - 2024: RMB 5,866.22/ton - 2025: RMB 3,395.43/ton Company said "product sales price decline exceeded cost decline," leading to "sell more, lose more." ### Shelf Life: 720 Days Causes Near-Expiration Price to Drop Non-Linearly The company disclosed bulk paste shelf life is 720 days (two years). With sharp decline in international orders, near-saturation in the domestic market, and increasing shelf life pressure: - Product price shows non-linear decline with remaining shelf life - Near-expiration products see even sharper price drops Thus, the company is described as having to increase sales while facing negative gross margin. ## ST Removal Does Not Mean Risk Cleared: High Debt Ratio and Pre-Reorganization Despite removing ST, risks remain: - 2025 debt ratio: 97.79% - Company and its wholly-owned subsidiary Red Tomato have entered pre-reorganization procedures Disclosure shows: - In July 2025, Zhongxingcai Guanghua Certified Public Accountants (special general partnership) applied to the court for reorganization and pre-reorganization of the company - On the same day, Xinjiang Hengyuan Water Co., Ltd. applied for reorganization and pre-reorganization of Red Tomato Company said it is advancing debt review, audit, and evaluation matters. Pre-reorganization does not mean the court will accept it. If the court accepts reorganization, it may trigger a delisting risk warning; if reorganization fails and bankruptcy is declared, there is risk of delisting. ## Still Loss in Q1 2026: Net Assets Continue to Shrink Q1 2026: - Revenue: RMB 54.82 million, down 30.33% YoY - Net profit attributable to parent: loss of RMB 19.63 million - Deducted net profit: loss of RMB 20.50 million - Net assets attributable to parent at end of Q1: RMB 6.49 million, down 75.14% from RMB 26.12 million at end of 2025 ## Conclusion: After De-stocking, How to Profit Remains the Key Question For Chalki Health, resumption is only a temporary exit from "*ST." The core question: when 90% of revenue comes from bulk tomato paste with negative gross margin, what will the company rely on to make money after de-stocking?