Working capital: receivables, prepayments and cash cycle
Hong Kong IPO disclosure precedents · 547 companies, 635 items
high or rising trade receivables, long turnover days, overdue balances, subsequent settlement, impairment; large or rising prepayments; a long cash conversion cycle
Our trade and bills receivables increased from RMB2,390.2 million as of December 31, 2023 to RMB3,339.4 million as of December 31, 2024, mainly in line with the growth in our revenue.
Financial Information · p. 216
During the Track Record Period, our net impairment losses on trade receivables were RMB22.2 million, RMB23.6 million and RMB69.5 million in 2023, 2024 and 2025, respectively, and amounts written off as uncollectible were RMB0.4 million, RMB1.5 million and RMB1.0 million, respectively.
Financial Information · p. 216
Our trade and bills receivables turnover days then increased to 84 days in 2025, which was primarily due to the increase in the proportion of revenue from smart power distribution segment, for which the relevant delivery, acceptance and revenue recognition cycles, and the corresponding collection cycles, are typically longer.
Our trade and bills receivables further increased by 96.0% to RMB4,616.5 million as of December 31, 2025, primarily due to increased sales of lithium-ion battery copper foil driven by production capacity expansion and strong demand from the energy storage system industry.
Financial Information · p. 207
Our trade and bills receivables turnover days increased from 123 days in 2023 to 141 days in 2024, primarily due to longer credit periods granted to certain major customers to strengthen long-term business relationships.
Financial Information · p. 208
Our impairment losses on financial assets increased significantly by 92.6% from RMB13.2 million in 2024 to RMB25.4 million in 2025, primarily due to an increase in impairment losses on trade receivables as increased sales led to higher receivable balances and corresponding impairment provisions in accordance with our expected credit loss rates.
Our trade and notes receivables increased significantly from RMB19.8 million as at 31 December 2023 to RMB145.7 million as at 31 December 2024, primarily due to the improvement in our sales performance during the relevant year.
Financial Information · p. 228
The increase in trade receivables turnover days from 60 days in FY2024 to 95 days in FY2025 was mainly due to some customers with an aggregate amount of approximately RMB67.9 million, which accounted for 34.7% of our trade and notes receivables as at 31 December 2025, were late settling our invoices.
Financial Information · p. 228
As at 30 April 2026, RMB41.8 million, or 61.5% of our overdue trade and notes receivables of RMB67.9 million as at 31 December 2025, had been settled.
The high level of prepayments as at 31 December 2025 was attributable to prepayments of an aggregated amount of approximately RMB146.9 million to four of our suppliers as at 31 December 2025.
Financial Information · p. 229
Despite we were given a credit period by these suppliers, we made prepayments to these suppliers in order to secure a stable and timely supply of equipment, including primarily high-performance computing (HPC) servers, which have recently been in high demand for the use in the provision of our Multispectral AI Large Model Services and Multispectral AI Perception Terminals.
Financial Information · p. 229
As at 30 April 2026, RMB89.5 million, or 55.8% of our prepayments and other receivables as at 31 December 2025, had been utilised or settled.
Our trade and bills receivables increased from RMB197.8 million as of 31 December 2023 to RMB247.4 million as of 31 December 2024, and further to RMB267.3 million as of 31 December 2025, generally in line with our sales growth during the same periods.
Financial Information · p. 219
In 2023, 2024 and 2025, we recorded impairment loss allowance for trade receivables in the amount of RMB3.4 million, RMB4.5 million and RMB6.0 million, respectively.
Financial Information · p. 220
As of 30 April 2026, RMB216.8 million, or 79.3%, of our trade and bills receivables as of 31 December 2025 had been subsequently settled.
Our trade receivables increased from RMB90.9 million as of December 31, 2023 to RMB150.1 million as of December 31, 2024, and further increased to RMB168.2 million as of December 31, 2025, primarily due to the expansion of our business and the increase in our revenue from AI cloud computing services.
Financial Information · p. 236
For the years ended December 31, 2023, 2024 and 2025, considering no historical debtor default events occurred and the minimal impact of the looking-forward adjustment, we believe that the expected loss rate and expected credit losses are minimal.
Financial Information · p. 236
Our trade receivables turnover days decreased from 83 days in 2023 to 79 days in 2024, as we maintained strict control over our trade receivables and enhanced our effort to settle such receivables within the credit terms we grant our customers.
Our trade and other receivables significantly increased to RMB290.1 million as of December 31, 2025, primarily due to the fact that a large portion of the sales occur in the fourth quarter of 2025 and payment has not yet been received.
Financial Information · p. 238
Our trade and bills receivables turnover days were 142 days, 122 days, and 140 days in 2023, 2024 and 2025 respectively.
Financial Information · p. 238
At December 31, 2023, 2024 and 2025, 57.2%, 73.0% and 67.2% of the total trade and bills receivables and contract assets was due from our five largest customer respectively, and 7.7%, 32.1% and 34.9% of the total trade and bills receivables and contract assets, respectively, was due from our largest customers.
Our trade and notes receivables increased from RMB92.2 million as of December 31, 2023 to RMB108.0 million as of December 31, 2024, and further increased to RMB169.1 million as of December 31, 2025, which was generally in line with the increase in our revenue for the same years.
Financial Information · p. 207
The increase in our trade and notes receivables turnover days in 2024 compared to 2023 was mainly because certain of our existing large customers had relatively longer payment cycles than other customers while we derived more revenue from them than from other customers in 2024.
Financial Information · p. 208
We closely monitor development of our outstanding receivable and take proactive measures to minimize credit risks, as well as liquidity risks associated therein.
Our cash conversion cycle, calculated as inventory turnover days in each period plus the trade receivable turnover days in the respective period minus the trade payables turnover days in the respective period, was 314 days, 217 days and 260 days in 2023, 2024 and 2025, respectively, which was largely driven by our inventory turnover days for the same periods.
Financial Information · p. 237
Our trade receivables turnover days increased to 92 days in 2025, primarily due to the higher trade receivables balance as of December 31, 2025 as discussed above.
Financial Information · p. 238
As of April 30, 2026, RMB133.2 million, or 83.2%, of our trade receivables as of December 31, 2025 had been settled.
Our trade receivables increased from RMB898.8 million as at 31 December 2023 to RMB929.7 million as at 31 December 2024 and further to RMB967.4 million, primarily attributable to the increase in revenue.
Financial Information · p. 236
Our average turnover days of trade receivables decreased from 138 days in FY2023 to 95 days in FY2024, primarily due to the relatively higher trade receivables balance as at 31 December 2022.
Financial Information · p. 237
As at 30 April 2026, all of our trade receivables outstanding as at 31 December 2025 were settled.
Our trade and other receivables increased from RMB292.5 million as of December 31, 2023 to RMB542.9 million as of December 31, 2024, and further to RMB1,364.6 million as of December 31, 2025, primarily due to the increase in trade receivables and bills receivables, which was in line with our revenue growth and business expansion.
Financial Information · p. 207
Our trade receivables turnover days decreased from 147 days in 2024 to 61 days in 2025, primarily due to our strengthened bargaining position following the increase in sales scale of NEV domain-controlled electric drive solutions, resulting in shorter payment terms from customers.
Financial Information · p. 208
As of April 30, 2026, RMB1,184.2 million, or 86.8% of our trade and other receivables as of December 31, 2025, had been settled.
As of December 31, 2023, 2024, 2025 and March 31, 2026, our trade and note receivables amounted to RMB2,693.4 million, RMB4,043.7 million, RMB5,507.2 million and RMB6,476.4 million, respectively.
Financial Information · p. 206
We recorded net impairment losses on financial assets of RMB16.6 million, RMB43.5 million and RMB4.1 million in 2024, 2025 and the three months ended March 31, 2025, respectively.
Financial Information · p. 196
As of April 30, 2026, RMB2,068.7 million, or 31.5%, of our trade receivables as of March 31, 2026, had been settled.
Our prepayments, deposits and other receivables (current portion) increased significantly by 153.6% from RMB25.2 million as of December 31, 2024 to RMB63.8 million as of December 31, 2025, primarily due to (1) an increase of prepayment of RMB31.4 million, mainly as a result of our strategic stocking of storage chips in response to the price surge in 2025, in particular for our SCCUs and other new products, which resulted in higher advance payments to suppliers, and (2) an increase in value-added tax recoverable of RMB8.3 million, primarily due to higher VAT incurred on increased procurement activities and the new VAT favorable policy.
Financial Information · p. 211
Our trade and bill receivables increased significantly from RMB5.7 million as of December 31, 2024 to RMB12.2 million as of December 31, 2025, primarily due to (1) the growth of our revenue in 2025, and (2) the trade and bill receivables in relation to the newly launched SCCUs in 2025.
Our trade and other receivables increased from RMB17.9 million as of December 31, 2024 to RMB64.6 million as of December 31, 2025, primarily due to an increase of RMB37.8 million in our trade receivables, mainly as a result of the increase in our revenue during the period and certain of our customers fully utilizing the credit periods granted to them under their contracts during 2025 in response to the prevailing market environment.
Financial Information · p. 214
The turnover days of our trade receivables increased from 40 days in 2023 and 2024 to 73 days in 2025, primarily due to certain of our customers fully utilizing the credit periods granted to them under their contracts during 2025 in response to the prevailing market environment and the delayed payment by certain of our customers, primarily our small customers and medium customers, which we believe was a result of their own cash flow and procurement budget constraints.
Financial Information · p. 215
As of April 30, 2026, RMB26.8 million, or 49.0% of our trade receivables outstanding as of December 31, 2025 had been subsequently settled.
Our trade and bills receivables increased from RMB80.5 million as of December 31, 2023 to RMB162.9 million as of December 31, 2024, primarily because our customers normally stock up in anticipation of surging sales before the Chinese New Year, which occurred earlier in 2025 compared to the previous year.
Financial Information · p. 189
The relatively high amount of our trade receivables aged over one year as of December 31, 2024 is primarily attributable to certain historical payments that remain unsettled with two renowned retail groups.
Financial Information · p. 190
Our trade and bills receivables turnover days increased from 28.9 days in 2024 to 42.7 days in 2025, primarily due to the increased sales to certain major retail customers, to whom we typically granted longer credit terms.
Our trade receivables turnover days decrease from 80 days in 2023 to 72 days in 2024, and decreased to 61 days in 2025, primarily due to our prudent sales procedures.
Financial Information · p. 222
As of December 31, 2023, 2024 and 2025, overdue receivables from distributors amounted to RMB125.8 million, RMB117.1 million and RMB60.4 million, respectively.
Financial Information · p. 222
The prolonged settlement was primarily due to (i) customers whose payment obligations are contractually scheduled upon the achievement of specific milestones, which results in settlement cycles extending beyond six months while remaining within the agreed credit terms, and (ii) mutually agreed extensions of credit periods with certain long-term customers through supplemental agreements.
Our current portion of our prepayments, other receivables and other assets increased from RMB69.3 million as of December 31, 2023 to RMB115.2 million as of December 31, 2024, primarily due to (i) an increase in prepayment to suppliers for raw materials, (ii) an increase in deposits for participation in land auctions and (iii) an increase in other receivables in relation to government grants and subsidies.
Financial Information · p. 187
The non-current portion of our prepayments, other receivables and other assets decreased, representing the prepayment for land in relation to the expansion and upgrading of our production facilities, as well as the construction of our R&D and sales and marketing centers, amounted to RMB12.3 million, RMB32.1 million and RMB66.9 million in 2023, 2024 and 2025, respectively.
Financial Information · p. 187
As of April 30, 2026, RMB86.8 million, or 47.2% of our prepayments, other receivables and other assets as of December 31, 2025 had been settled.
Our trade receivables turnover days were 93.0 days, 160.2 days and 169.4 days in 2023, 2024 and 2025, respectively.
Financial Information · p. 192
The increases were primarily attributable to (i) the slower settlement by certain customers of trade receivables that had been outstanding for a prolonged period, and (ii) a change in our revenue mix toward later-stage projects, which generally involve larger contract values and correspondingly longer payment cycles.
Financial Information · p. 192
As of April 30, 2026, RMB136.6 million, or 53.8%, of our trade receivables as of December 31, 2025 had been subsequently settled.
Our trade receivables increased significantly from RMB18.4 million as of December 31, 2024 to RMB41.6 million as of December 31, 2025, primarily attributed to an increase in receivables from several key customers mainly because certain orders placed by our key customers remained within the granted credit terms and had not been paid as of December 31, 2025.
Financial Information · p. 220
Our trade receivables turnover days increased from 7.3 days in 2024 to 10.6 days in 2025, primarily because certain orders placed by our key customers remained within the granted credit term and had not been paid as of December 31, 2025, resulting in the increased outstanding trade receivables balance.
Financial Information · p. 221
As of April 30, 2026, approximately RMB42.0 million or 99.9% of our trade receivables as of December 31, 2025 had been settled.
The increase in balance of trade and bills receivables from December 31, 2023 to December 31, 2024 of 12.7% outpaced the increase in our revenue of 5.2% during the same periods.
Financial Information · p. 239
Our trade receivables turnover days increased from 125 days in 2023 to 146 days in 2024, mainly because we offered more flexible payment terms as part of our customer acquisitions strategies as mentioned above.
Financial Information · p. 240
We recorded allowance for impairment losses on trade receivables of RMB4.9 million, RMB9.5 million and RMB12.0 million as of December 31, 2023, 2024 and 2025, respectively.