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 RMB69.2 million as of December 31, 2023 to RMB90.3 million as of December 31, 2024, primarily due to the increase in revenue year to year and the corresponding growth in sales volume resulting from our business expansion, and further increased from RMB90.3 million as of December 31, 2024 to RMB194.2 million as of December 31, 2025, primarily due to the continued increase in revenue year to year and corresponding growth in sales volume resulting from our continued business expansion.
Financial Information · p. 213
Our average trade and bills receivables turnover days increase from 78 days in 2024 to 97 days in 2025, primarily due to an increasing share of orders coming from top-tier battery customers who typically rely on bank acceptance bills or commercial acceptance bills which lengthens our collection period.
Financial Information · p. 214
As of March 31, 2026, approximately RMB25.2 million, or 32.6%, of our trade receivables outstanding as of December 31, 2025 had been settled.
Our trade and bills receivables increased from RMB231.2 million as of December 31, 2023 to RMB275.3 million as of December 31, 2024, and further increased to RMB359.0 million as of December 31, 2025, in line with our revenue growth.
Financial Information · p. 142
Our trade and bills receivables turnover days increased from 50 days in 2023 to 62 days in 2024, and further increased to 65 days in 2025, primarily due to an increase in sales to certain customers with relatively longer credit terms and extended settlement cycles amid our business growth.
Financial Information · p. 142
As of March 31, 2026, 95.9% of our total trade receivables as of December 31, 2025, or RMB362.5 million, were settled.
Our trade and bills receivable increased from RMB38.4 million as of December 31, 2023 to RMB90.8 million as of December 31, 2024, and further increased to RMB142.7 million as of December 31, 2025, primarily due to our business expansion and revenue growth.
Financial Information · p. 221
Our trade receivables turnover days increased from 76 days in 2024 to 80 days in 2025, which was in line with our business expansion and corresponding increase in the balance of trade receivables.
Financial Information · p. 222
The balance of impairment loss on trade receivables continued to increase as of the end of respective years primarily because of our rapid revenue growth, which resulted in higher balance of trade receivables.
Our trade and bills receivables increased by 50.0% from RMB854.1 million as of December 31, 2023 to RMB1,280.8 million as of December 31, 2024, primarily because we granted relatively long credit terms to certain customers.
Financial Information · p. 211
Our trade and bills receivables turnover days increased from 122 days in 2023 to 128 days in 2024, primarily as we granted relatively long credit terms to certain new customers.
Financial Information · p. 212
As of March 31, 2026, RMB591.5 million, or 40.9% of our trade and bills receivables as of December 31, 2025 had been settled.
Our trade and bills receivables increased to RMB430.4 million as of December 31, 2025, primarily due to the increase in trade receivables from overseas customers as a result of increased sales volume.
Financial Information · p. 177
Our trade and bills receivables turnover days increased from 53 days in 2023 to 55 days in 2024, primarily due to extended credit terms for overseas customers and longer collection periods for domestic real estate customers.
Financial Information · p. 177
(Impairment loss)/reversal of impairment loss on financial assets and contract assets, net increased by 34.7% from RMB27.2 million in 2023 to RMB36.6 million in 2024, primarily due to individual provisions made based on changes in our credit assessment of certain real estate developer customer.
Our prepayments and other receivables increased by 10.2% from RMB1,102.9 million as of December 31, 2023 to RMB1,215.7 million as of December 31, 2024, and further increased by 42.0% from to RMB1,726.7 million as of December 31, 2025, primarily due to an increase in prepayments for commodities in inventory, in line with our commodity sales business growth.
Financial Information · p. 235
As of March 31, 2026, RMB1298.9 million, or 65.3% of our prepayments and other receivables as of December 31, 2025, had been settled.
Our trade receivables turnover days were 108 days, 159 days and 171 days in 2023, 2024 and 2025, respectively.
Financial Information · p. 245
Our impairment losses increased by 38.9% from RMB13.1 million in 2023 to RMB18.2 million in 2024, primarily due to an increase in the impairment losses in relation to the trade receivables from an OEM which faced operating difficulties in 2024.
Financial Information · p. 240
Our Directors consider that there is no material recoverability issue with respect to the outstanding trade receivables and that our impairment provision was adequate in light of the prevailing circumstances as of the Latest Practicable Date, based on (i) our periodic assessment to closely monitor our credit exposure and identify significant increases in credit risks and, where applicable, make timely allowance for expected credit losses, (ii) the stringent internal measures we have taken to enhance the management and collection of trade receivables, and (iii) the reliability and track record of settlement from our customers, which are mainly established companies well-known in the industry.
Our trade receivable turnover days increased significantly from 20 days in 2024 to 285 days in 2025, which was affected by the smaller revenue recorded in 2025 and the trade receivables due from Fosun Pharmaceutical Industrial.
Financial Information · p. 258
Our trade receivable decreased from RMB26.4 million as of December 31, 2024 to RMB12.1 million as of December 31, 2025, primarily attributable to settlement from Fosun Pharmaceutical Industrial.
Financial Information · p. 258
Our senior management regularly review the balances of our trade receivable and overdue amount, and we follow up with customers with overdue trade receivables.
Due to operational difficulties, Customer Group F experienced multiple debt defaults and cash flow shortages in 2023, which resulted in its inability to repay outstanding amounts owed to the Company.
Financial Information · p. 241
We have now established a comprehensive internal control system to enhance management of trade receivables for our digital marketing business.
Financial Information · p. 241
As of March 31, 2026, RMB3,436.0 million, or 51.6%, of our trade receivables as of December 31, 2025 had been subsequently settled.
The increase in turnover days in 2024 was mainly driven by a slight decrease in revenue from 2023 to 2024, and the higher concentration of sales in the fourth quarter of each year, which tends to increase outstanding balances at year-end.
Financial Information · p. 217
Proactively managing our working capital and following industry norm, we also seek to align supplier payment terms with those of our customers through back-to-back arrangements, thereby reducing the timing mismatch between payables and receivables.
Financial Information · p. 200
Our prepayments, deposits and other receivables increased from RMB348.4 million as of December 31, 2023 to RMB584.0 million as of December 31, 2024, primarily due to higher amounts due from subcontractors as we ramped up manufacturing and outsourced more production tasks as well as higher deferred expenses associated with our business expansion and R&D and product development activities.
Our prepayments and other receivables increased from RMB725.8 million as of December 31, 2024 to RMB744.3 million as of December 31, 2025, primarily due to (i) an increase of RMB49.3 million in prepayment for procurement of media resources driven by the substantial increase in our procurement of media resources under the prepayment model on leading social and digital media platforms, and (ii) an increase of RMB23.1 million in deposits and warranties driven by the increased bidding deposits related to the acquisition of specific natural resource, alongside higher warrants for media resources, partially offset by a decrease of RMB49.1 million in prepayment for raw materials in line with the revenue fluctuation of our pump and pumping system business.
Financial Information · p. 250
As of March 31, 2026, RMB492.9 million, or 60.4% of our prepayments and other receivables as of December 31, 2025, had been settled.
We granted credit period of 60 days to new major direct sales customers for DRAM modules in 2024.
Financial Information · p. 246
We implemented such measures in early 2025 which are effective as demonstrated by a decrease in our trade receivables turnover days of 44 days in 2025 compared to 60 days in 2024, notwithstanding our business growth in 2025.
Financial Information · p. 247
As of March 31, 2026, RMB147.7 million, or 95.5% of our trade receivables before impairment as of December 31, 2025, had been subsequently settled.
Our trade and bills receivables were RMB48.8 million, RMB82.4 million and RMB115.9 million as of December 31, 2023, 2024 and 2025, respectively.
Financial Information · p. 224
Our average trade and bills receivables turnover days increased from 16 days for the year ended December 31, 2023 to 20 days for the year ended December 31, 2024 and further increased to 24 days for the year ended December 31, 2025 as growth of our trade and bills receivables outpaced the growth of our revenue, partially driven by slight delays in payment cycles for some customers for the years ended December 31, 2024 and 2025.
Financial Information · p. 225
As of March 31, 2026, RMB106.3 million, or 86.2% of our trade and bills receivables as of December 31, 2025 was settled.
Our trade and other receivables increased from RMB10.6 million as of December 31, 2023 to RMB72.4 million as of December 31, 2024 and further to RMB130.2 million as of December 31, 2025, primarily reflecting the overall growth of our business and increased sales activities.
Financial Information · p. 211
Our trade receivables turnover days further increased to 37 days in 2025, primarily attributable to a timing effect, as we received a significantly higher volume of orders in November and December 2025 compared to prior months, resulting in a higher outstanding balance at year-end, with the growth rate of trade receivables being much higher than that of revenue.
Financial Information · p. 212
As of April 30, 2026, RMB67.7 million, or approximately 65.3%, of our trade and bills receivables as of December 31, 2025 had been subsequently collected.
Our trade and other receivables primarily consisted of (i) advance payments on behalf of suppliers which are platform fees we paid to e-commerce platforms or outsourcing service fees we paid to third-party vendors which are going to be claimed from our brand owners later, (ii) rebate receivable from suppliers as incentives paid by brand owners to us based on pre-defined performance metrics, (iii) trade receivables from contracts with customers, and (iv) prepaid expenses which are primarily deposits with platforms like Alimama for future advertisement placement.
Financial Information · p. 216
The increase in trade and other receivables from 2023 to 2024 primarily resulted from collaborations with additional brand owners and sales channels, which created more business scenarios that required advances we paid on behalf of brand owners recorded as trade receivables.
Financial Information · p. 217
RMB47.2 million, or 90.6%, of our trade receivables as of 31 December 2025 had been settled as of 30 April 2026.
Our prepayments, other receivables and other assets increased by 13.7% from RMB105.9 million as of December 31, 2023 to RMB120.4 million as of December 31, 2024, which was primarily due to (i) an increase in prepayment for materials from RMB20.2 million as of December 31, 2023 to RMB66.4 million as of December 31, 2024 mainly as a result of our expansion of upstream supply channels and increased procurement of raw materials; and (ii) an increase in other long term assets from nil as of December 31, 2023 to RMB11.8 million as of December 31, 2024 mainly as a result of the commissioning of the hydrometallurgy production line at our Jiangmen Base, partially offset by (i) a decrease in value-added tax recoverable mainly as a result of the utilization of input VAT carried forward from 2023 to offset output VAT arising from sales in 2024; (ii) a decrease in prepayment for equipment and construction mainly as a result of the completion of the construction project of our Jiangmen Base; and (iii) a decrease in deposits mainly as a result of the release of project deposits upon the completion and settlement of the infrastructure works for our Jiangmen Base.
Financial Information · p. 225
Our prepayments, other receivables and other assets decreased from RMB120.4 million as of December 31, 2024 to RMB115.6 million as of December 31, 2025, primarily due to a decrease in prepayment for materials from RMB66.4 million as of December 31, 2024 to RMB59.9 million as of December 31, 2025 mainly as a result of our negotiation with suppliers for more favorable payment arrangements.
Our trade and bills receivables increased from RMB18.7 million as of December 31, 2023 to RMB167.3 million as of December 31, 2024, and further increased to RMB263.7 million as of December 31, 2025, primarily due to the increase in trade receivables in line with our strong sales growth during the Track Record Period.
Financial Information · p. 221
Our turnover days increased to 136 days in 2025, primarily because we have experienced a significant increase in product sales in 2025.
Financial Information · p. 222
As of April 30, 2026, RMB230.9 million, or approximately 85.1% of our trade and bills receivables as of December 31, 2025, had been subsequently settled.
Our prepayments, deposits and other receivables increased to RMB269.0 million as of December 31, 2025, primarily due to (i) an increase in prepayments for construction costs and equipment in connection with new capacity expansion projects, and (ii) an increase in value-added tax recoverable arising from higher deductible tax associated with raw material procurement and capital expenditure during our early ramp-up stage.
Our trade and other receivables and prepayment increased by 227.4% from RMB110.8 million as of December 31, 2023 to RMB362.7 million as of December 31, 2024, primarily due to an increase in trade receivables, net of allowance for credit losses from RMB88.7 million to RMB340.8 million.
Financial Information · p. 213
Our trade receivable turnover days exceeded our trade payable turnover days of 197 days in 2025, resulting in a cash conversion cycle gap of 103 days.
Financial Information · p. 214
As of March 31, 2026, RMB46.2 million, or 8.4% of our trade receivables as of December 31, 2025 had been subsequently settled.
Our trade and bills receivables turnover days, calculated as the average of the beginning and ending balance of trade and bills receivables for the year divided by the revenue for that year and multiplied by 365 days, amounted to 155 days, 161 days and 83 days in 2023, 2024 and 2025, respectively.
Financial Information · p. 241
This was caused by delays in the acceptance and payment process for our domestic sales of wind power products, which are generally contingent upon the successful trial operation of the entire wind farm.
Financial Information · p. 235
Our trade and bills receivables turnover days decreased to 83 days in 2025, primarily attributable to (i) our enhanced collection efforts for domestic orders, which accelerated the receipt of payments from our domestic customers, and (ii) the increased contribution of revenue from products delivered to overseas markets, which typically features better payment terms.