Tatwah Smartech Co., Ltd. (stock code: 002512) mainly operates in the satellite internet and internet TV industry. In the field of satellite internet, the company actively responds to national strategies and is committed to the development and application of high-throughput broadband satellites, serving the needs of marine information communication, emergency communication, and remote areas, and supporting the development of the marine economy and the Belt and Road Initiative. With Fujian as the center, the company radiates across the country and Southeast Asia, promoting new infrastructure of satellite internet and promoting regional informationization. In the internet TV sector, Tatwah Smartech focuses on the research and development and production of products such as smart screens, digital screens, and smart TV. The company uses smart TV as an open hardware platform, supporting multiple operating systems and accessories, meeting the needs of home and commercial use. With the development of 5G, AI and internet of things technologies, smart large screens have become the evolution of smart TV, promoting the development of home and commercial smart interactive terminals. With its advantages in the research and development of smart display main boards, Tatwah Smartech provides highly customized screen display terminals and smart cloud screen systems to meet diversified market demands.

As of the end of the first quarter of 2024, Tatwah Smartech's total assets amounted to RMB 4.379 billion, a decrease of 0.89% from the beginning of the period. Total liabilities amounted to RMB 3.236 billion, a decrease of 1.02% from the beginning of the period. The asset-liability ratio slightly decreased from 73.98% at the beginning of the period to 73.89% at the end of the period. The goodwill remained unchanged with a year-end balance of RMB 278 million. Although the asset-liability ratio slightly decreased, it still remained at a high level, indicating that the company still needs to further optimize its debt management.

In terms of profitability, Tatwah Smartech's operating revenue in the first quarter of 2024 was RMB 401 million, a year-on-year decrease of 40.83%. Operating costs amounted to RMB 344 million, a year-on-year decrease of 42.35%. Although the gross profit margin increased from 11.93% in the same period of the previous year to 14.19%, the net profit margin decreased from 0.12% in the same period of the previous year to -1.49%. Operating profit was negative RMB 97.8 million, a significant decrease from RMB 69.1 million in the same period of the previous year. The net profit was negative RMB 59.8 million, compared with RMB 8.063 million in the same period of the previous year. The return on equity (ROE) decreased from 0.05% at the beginning of the period to -0.52%. These data indicate that the company faces significant challenges in income and cost control and needs to further improve its profitability.

In terms of cash flow, the net cash inflow from operating activities for the first quarter of 2024 was RMB 344 million, a year-on-year decrease of 35.07%. The net cash outflow from operating activities was RMB 482 million, a year-on-year decrease of 11.80%. The net cash flow from operating activities was negative RMB 138 million, a significant decrease of 753.77% compared with the same period in the previous year. This is mainly due to the reduction in payment of procurement and advance receipts. The company needs to strengthen its cash flow management to ensure the stability of operating cash flow.

Overall, Tatwah Smartech faced significant financial pressure in the first quarter of 2024. Although the company has improved its gross profit margin, both operating revenue and net profit have decreased significantly, and operating cash flow has also deteriorated significantly. The company needs to further optimize its asset-liability structure, strengthen cost control and cash flow management to improve its overall financial health.