In-Depth Analysis Report on Tiancheng New Materials (300169.SZ)’s 6 Consecutive Years of Losses

Tiancheng New Materials (Changzhou Tiancheng New Materials Group Co., Ltd.) was listed on the ChiNext Board of the Shenzhen Stock Exchange in January 2011, and is a high-tech enterprise specializing in the R&D, production and sales of polymer foam materials[0]. The company’s main products include flexible foam materials, PVC structural foam materials, etc., which are widely used in fields such as wind power generation, rail transit, shipbuilding, energy-efficient buildings, etc.[1]

According to public financial data, Tiancheng New Materials has been in loss for 6 consecutive years from 2019 to 2024, with accumulated losses exceeding CNY 1.1 billion[1]:

Tiancheng New Materials’ core product, PVC structural foam materials, is mainly used in the wind turbine blade manufacturing sector. Since 2020, affected by the withdrawal of domestic wind power national subsidy policies, competition in the wind power market has intensified, leading to a significant decline in sales volume and gross profit margin of PET structural core materials[2]. Peer comparable companies (such as Lianyang New Materials, Shanghai Yueke) have seen declining operating performance since 2020, which is overall similar to Tiancheng New Materials’ performance trend[2].

The company’s main raw materials are petrochemical products such as polyethylene, PVC paste resin, ethylene-vinyl acetate copolymer, styrene-butadiene rubber, neoprene, etc.[2]. Fluctuations in raw material prices and rising energy prices directly compress the company’s profit margin.

With the development of the industry and expansion of market scale, the company faces a market environment with intensified competition, including rapid capacity expansion, price declines caused by vicious market competition, etc.[3].

The company’s gross profit margin has continued to decline from 25.3% in 2019 to 12.5% in 2024, with a decline of over 50%[0]. The operating profit margin has even deteriorated from -15.2% to -35.8%, indicating that the main business has completely lost profitability[0].

• Foam Materials and Applied Products
  : Overall revenue declined due to low sales prices or fierce competition, resulting in failure to obtain orders or inability to accept orders due to excessively low gross profit margin[4]
• Rigid Foam Materials
  : Some orders cannot be accepted due to excessively low prices, leading to sales decline
• Flexible Foam Materials
  : Some indirectly exported products lost customers due to more cost-effective production in Southeast Asian countries
• Financial Services
  : The scale of overseas bond issuance dropped sharply due to changes in bond issuance scale and competition

In 2019, the company accrued a goodwill impairment provision of approximately CNY 101 million for “Xinguang Environmental Protection”, and an inventory write-down provision of approximately CNY 75.5 million for “Tiancheng Composite”[5]. This “big bath” behavior has raised market doubts about the authenticity of the company’s financial statements.

The company’s asset-liability ratio has risen from 64.26% at the end of 2020 to 104.52% at the end of Q3 2025, resulting in serious insolvency[1]. This out-of-control financial leverage reflects a vicious cycle where the company relies on debt to maintain operations.

• The current ratio is only 0.40, and the quick ratio is only 0.32, indicating a serious shortage of short-term solvency[0]
• Free cash flow has remained negative, with the latest FCF approximately CNY -88.26 million[0]
• As of the end of September 2025, the book value of accounts receivable was still CNY 137 million, accounting for 41.08% of the same period’s operating revenue[3]

In December 2025, the company lost the first-instance lawsuit and needs to pay CNY 43.65 million in capital contribution and overdue interest to the plaintiff, China Railway Rail Transit Equipment Co., Ltd.[1].

The company admits that “updates to new technologies and new products cannot keep up with the rapid pace of the general environment”. Some business segments are still continuously carrying out technological innovation and developing new products, including improving product quality or performance, in the hope of expanding new markets and new customers[4].

The company is accelerating the expansion of overseas markets and promoting the pace of international development, but overseas operations are greatly affected by factors such as geopolitics, local policies, international talent training, and management capabilities[3].

The company has introduced strategic investors multiple times in its history. It introduced Qingdao Ronghai Asset Management (with state-owned background) in 2020, and plans to change the controlling shareholder to Beijing Rongsheng Zhirui Holdings in 2026[1][5]. Frequent changes in control rights increase operational uncertainty.

Data Source: [2]

Peer comparable companies have all seen declining operating performance since 2020, reflecting the common issue of reduced industry prosperity in the PET structural core material sector[2].

Tiancheng New Materials’ 6 consecutive years of losses are the result of the combined effect of deteriorating external environment and internal operational difficulties:

1. Root Cause
   : Demand contraction caused by the retreat of downstream wind power industry policies, and loss of pricing power due to intensified industry competition
2. Direct Cause
   : Continuous decline in gross profit margin, frequent asset impairments, and high financial costs caused by high-leverage operations
3. In-Depth Issues
   : Lagging technological innovation, insufficient competitiveness of main business, and liquidity exhaustion

The company’s asset-liability ratio has now exceeded 100%, and its going-concern ability faces significant uncertainty[1]. A new controlling shareholder is proposed to take over in January 2026, which may bring a turning point for the company, but whether it can reverse the difficult situation remains to be observed[1].

[0] Jinling AI Financial Database - Company Profile and Financial Data of Tiancheng New Materials (300169.SZ)

[1] Shenzhen Business News “Trading Suspended Tomorrow! Tiancheng New Materials’ Control Rights May Change, 6 Consecutive Years of Losses, Asset-Liability Ratio Nears 105%” (https://q.stock.sohu.com/cn/news.html?textId=966260229)

[2] Jiangsu Huaxin Asset Appraisal Co., Ltd. “Asset Appraisal Report on the Value of Shareholders’ Partial Equity Involved in Nanjing Chemical Fiber Co., Ltd.'s Proposed Acquisition of 51.91% Equity of Shanghai Yueke New Materials Co., Ltd.” (https://static.sse.com.cn/stock/disclosure/announcement/c/202512/600889_20251222_0BFE.pdf)

[3] Tiancheng New Materials “2026 Private Placement of Shares Preplan” (http://file.finance.sina.com.cn/211.154.219.97:9494/MRGG/CNSESZ_STOCK/2026/2026-1/2026-01-16/11918938.PDF)

[4] Tiancheng New Materials “Reply to the Annual Report Inquiry Letter from Shenzhen Stock Exchange” (https://pdf.dfcfw.com/pdf/H2_AN202406071635892236_1.pdf)

[5] Jiemian News “Tiancheng New Materials Welcomes State-Owned ‘Savior’, Doubts Remain Over Goodwill and Inventory ‘Big Bath’” (https://m.jiemian.com/article/4567071.html)