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 current portion of prepayments and other receivables increased from RMB879.6 million as of December 31, 2024 to RMB1,127.1 million as of December 31, 2025 mainly due to an increase of RMB365.5 million in other tax receivables as we had more value-added input tax receivables.
Financial Information · p. 242
Our non-current portion of prepayments and other receivables increased from RMB114.0 million as of December 31, 2023 to RMB206.5 million as of December 31, 2024, and further to RMB537.1 million as of December 31, 2025, primarily attributable to the increased prepayments for equipment procurement and related expenditures resulting from our shipbuilding activities and construction of production facilities.
Financial Information · p. 242
As of March 31, 2026, RMB743.4 million, or 44.7% of our prepayments and other receivables as of December 31, 2025 had been settled.
Our prepayments, deposits and other receivables then increased from RMB666.5 million as of December 31, 2024 to RMB958.7 million as of December 31, 2025, in relation to (i) an increase of RMB224.2 million in other receivables primarily attributable to receivables arising from the exit of certain investment projects; and (ii) an increase of RMB71.4 million in other prepayments in relation to increased prepayments for medical consumables and supplies to support our business growth.
Financial Information · p. 239
As of March 31, 2026, RMB414.2 million, or approximately 43.2% of our prepayments, deposits and other receivables as of December 31, 2025 had been subsequently settled.
Our trade and bills receivables increased from RMB884.6 million as of December 31, 2023 to RMB1.31 billion as of December 31, 2024, primarily due to the increase in trade receivables of RMB468.5 million as a result of extended credit terms granted to certain major domestic customers.
Financial Information · p. 182
Our trade and bills receivable turnover days increased during the Track Record Period, primarily due to the extended credit terms that we provided to our major customers in China.
Financial Information · p. 183
As of April 30, 2026, RMB872.3 million, or 62.7% of our trade and bills receivables as of December 31, 2025, had been subsequently settled.
Our trade and notes receivables turnover days decreased from 96 days for the year ended December 31, 2023 to 57 days for the year ended December 31, 2024, primarily because the settlement of certain outstanding trade receivables from customers, and increased to 66 days for the year ended December 31, 2025, primarily because the relatively longer credit terms granted by VYTEC Thailand.
Financial Information · p. 237
As of April 8, 2026, approximately RMB346.4 million, or 83.3% of our trade receivables as of December 31, 2025, had been settled.
Financial Information · p. 237
Our prepayments, other receivables and other assets further increased by 76.0% from RMB99.0 million as of December 31, 2024 to RMB174.2 million as of December 31, 2025, primarily attributable to (i) an increase in advance payments to suppliers of RMB15.0 million because of increased prepayments for raw materials, service fees, promotion fees as a result of our business expansion and prepayment for royalty fees pursuant to the requirements under the relevant licensing agreement; and (ii) an increase in export tax refund of RMB14.1 million primarily attributable to the increase in export sales at the end of the year.
Given the relatively high unit price of this product and its multiple specifications, we adopted a payment arrangement for this product under which certain distributors may make partial prepayments with the remaining balance settled within a credit period of 90 days, resulting in an increase in trade receivables.
Financial Information · p. 211
During the Track Record Period, our trade receivables turnover remained efficient, with relatively short turnover days of 16 days, 7 days and 11 days in 2023, 2024 and 2025, respectively.
Financial Information · p. 211
As of March 31, 2026, RMB22.5 million, or 89.6% of our trade receivables as of December 31, 2025, had been settled.
Our trade and bills receivable turnover days increased from 211 days in 2023 to 273 days in 2024, primarily due to (i) an increasing proportion of receivables being contributed by state-owned utility customers, which are granted longer credit terms of approximately one year or more, and (2) certain newly acquired entity having a higher level of trade receivables.
Financial Information · p. 184
In order to enhance the collection of trade and bills receivables, we have implemented a series of measures.
Financial Information · p. 183
As of March 31, 2026, RMB337.1 million, or 22.9%, of our trade and bills receivables as of December 31, 2025 had been subsequently settled.
Our trade and notes receivables increased from RMB497.9 million as of December 31, 2023 to RMB735.6 million as of December 31, 2024, and further to RMB752.8 million as of December 31, 2025 primarily due to our overall business growth.
Financial Information · p. 254
Our trade and notes receivables turnover days increased from 145 days in 2023 to 173 days in 2024, which was primarily due to our overall strong business growth and a stronger seasonality effect in 2024 compared to 2023.
Financial Information · p. 254
As of March 31, 2026, RMB648.8 million, or 81.5% of our trade receivables as of December 31, 2025 had been subsequently settled.
Our trade and bills receivables increased from RMB2.9 million as of December 31, 2023 to RMB41.5 million as of December 31, 2024, mainly due to the increase in trade receivables from RMB3.0 million as of December 31, 2023 to RMB42.2 million as of December 31, 2024.
Financial Information · p. 256
Our trade and bills receivables turnover days were 2.3 days, 14.4 days and 26.4 days for the years ended December 31, 2023, 2024 and 2025, respectively.
Financial Information · p. 257
In accordance with prudent financial management, we have recognized a 10% provision against these receivables to provide an additional buffer for any potential uncertainties.
In particular, certain large cross-border e-commerce third-party platforms experienced payment delays in 2024, which extended the ageing of their outstanding balances and resulted in an increase in the expected credit loss allowance recognized on such receivables in accordance with our ECL model.
Financial Information · p. 197
Our trade receivables turnover days increased from 25 days in 2023 to 53 days in 2024, primarily due to prolonged settlement with certain cross-border e-commerce third-party platforms.
Financial Information · p. 203
As of April 30, 2026, RMB302.7 million, or approximately 86.6% of our trade receivables as of December 31, 2025 were subsequently settled.
Our trade and bills receivables further increased to approximately RMB350.2 million as at 31 December 2025, primarily attributable to orders receved around the year end of FY2025.
Financial Information · p. 190
We typically grant customer credit term between 30 days to 180 days, our trade receivables turnover days were approximately at 101 days, 94 days, and 109 days in FY2022, FY2023 and FY2024, respectively, which was generally within our credit terms granted.
Financial Information · p. 191
As at 31 March 2026, approximately RMB160.8 million, or 61.0% of our trade receivables outstanding as at 31 December 2025, had been settled.
Our other receivables and prepayments increased from RMB86.1 million as of December 31, 2023 to RMB147.3 million as of December 31, 2024, primarily due to an increase in amounts due from related parties, mainly driven by (1) increased loans to our managed medical institutions to support their facility renovation and refurbishment, and (2) increased loans to Puxiang Ren’ai in connection with our Contractual Arrangements for its acquisition of the minority interests in our VIE Hospitals and to fund their operations.
Financial Information · p. 238
The loans to third parties bear an interest rate of 6% to 9% per annum, which we believe is consistent with market practice, and are repayable on demand.
Financial Information · p. 239
We believe that the amounts due from managed medical institutions and third-party medical institutions are recoverable, considering that (1) we have established and implemented loan management measures including determination of loan amount ceilings, internal loan approval process, and ongoing credit risk assessments and monitoring of loan recoverability;
Our trade receivables turnover days increased from 73 days in 2024 to 137 days in 2025, primarily due to (i) a lengthening of the collection cycle from certain customers, which was attributable to delays in their receipt of payments from hospitals and other medical institutions as a result of a longer settlement cycle for basic medical insurance reimbursements and (ii) a decrease in revenue in 2025.
Financial Information · p. 224
Our trade receivables management policy focuses on maintaining prudent credit control and timely collection.
Financial Information · p. 224
As of March 31, 2026, RMB419.7 million, or 76.0% of our trade receivables as of December 31, 2025, had been settled, indicating an improvement in our collection efficiency.
Our trade and bills receivables increased from RMB454.7 million as of December 31, 2023 to RMB497.4 million as of December 31, 2024, primarily due to the expansion of our business with pharmacy chains and regional sales partners, which operated under longer credit terms, along with the launch of our new subsidiaries extending credit to clients.
Financial Information · p. 238
As of the date of this Document, RMB431.2 million, or 87.8%, of our trade receivables as of December 31, 2025 had been subsequently settled and the remaining proportion were overdue.
Financial Information · p. 239
Taking into account the financial resources available to us, including our cash and cash equivalents on hand and loan and credit facilities and the estimated net [REDACTED] from the [REDACTED], our Directors are of the view, and the Sole Sponsor concurs, that we have sufficient working capital to meet our present needs and for the next 12 months from the date of this document
Our trade and notes receivables increased by 56.3% from RMB2,646.1 million as of December 31, 2023, to RMB4,135.7 million as of December 31, 2024, generally in line with our sales growth.
Financial Information · p. 194
The credit period that we granted to customers generally ranged from 30 to 90 days during the Track Record Period.
Financial Information · p. 195
As of March 31, 2026, RMB3,175.1 million or 74.2% of our trade and notes receivables as of December 31, 2025 had been subsequently settled.
Our trade receivables increased by 58.5% from RMB146.7 million as of December 31, 2023 to RMB232.5 million as of December 31, 2024 and further increased by 21.1% to RMB281.6 million as of December 31, 2025, primarily attributable to increased balances due from telecom operators arising from our deepened partnerships with key account customers.
Financial Information · p. 219
As of December 31, 2023, 2024 and 2025, 56.8%, 77.4% and 62.5% of our total trade receivables was due from Customer A, a leading telecom operator.
Financial Information · p. 220
Our trade receivables turnover days increased from 70 days in 2023 to 106 days in 2024, and further increased to 119 days in 2025, primarily attributable to the increase in the balance of trade receivables, in line with the expansion of our business scale.
During the Track Record Period, we usually grant our customers credit terms of up to 180 days. For certain projects, we have provided longer credit terms or installment-based payment arrangements for certain key customers.
Financial Information · p. 219
Our trade receivables turnover days remained relatively stable in the Track Record Period, which were 128.9, 133.1 and 134.1 in the respective years.
Financial Information · p. 220
As of March 31, 2026, RMB251.4 million, or 72.0% of our trade receivables as of December 31, 2025, had been settled subsequent to December 31, 2025.
Our trade and bills receivables increased by 24.3% from RMB161.1 million as of December 31, 2023 to RMB200.4 million as of December 31, 2024, and further increased by 27.5% to RMB255.5 million as of December 31, 2025, in line with the growth of our business.
Financial Information · p. 218
Our net impairment losses on financial and contract assets increased by 57.8% from RMB6.2 million for 2023 to RMB9.9 million for 2024, primarily due to (i) an increase in our gross trade receivable balances, from RMB176.1 million as of December 31, 2023 to RMB208.8 million as of December 31, 2024 in line with our revenue growth; and (ii) the lengthening of the aging profile of our trade receivables as of December 31, 2024, as certain longer-aged receivables were not collected on a timely basis, resulting in a higher proportion of receivables falling into longer overdue periods with correspondingly higher expected credit loss rates, which in turn led to an increase in the overall impairment allowance.
Financial Information · p. 212
As of March 31, 2026, RMB97.5 million or 37.4% of the outstanding balance of our trade receivables as of December 31, 2025 had been settled.
Our trade receivables remained relatively stable at HKD105.1 million and HKD102.6 million as of December 31, 2023 and 2024, respectively, and then increased to HKD129.7 million as of December 31, 2025.
Financial Information · p. 179
Such customer failed to settle the outstanding amounts which were HKD5.3 million as of December 31, 2025 and we commenced legal proceedings against such customer to recover the overdue receivables.
Financial Information · p. 179
Our Directors consider that the impairment provision was adequate and in accordance with our expected credit loss assessment under the applicable accounting standards, and such provision did not have a material adverse impact on our financial position or results of operations.
Our trade and bills receivables increased by 150.5% from RMB112.5 million as of December 31, 2023 to RMB281.9 million as of December 31, 2024, and further increased by 13.0% to RMB318.6 million in 2025, primarily due to the revenue growth during the years.
Financial Information · p. 213
Our trade and bills receivables turnover days, which is calculated by dividing the arithmetic mean of the opening and closing balances of trade and bills receivables for the relevant period by revenue and multiplying by 365 days, increased from 71 days in 2023 to 109 days in 2024, and further to 155 days in 2025, reflecting the timing of project delivery and customer acceptance as well as a higher proportion of telecommunication customers which typically have longer payment cycles.
Financial Information · p. 213
Our impairment losses on financial and contract assets, net, increased by 28.8% from RMB7.3 million in 2024 to RMB9.4 million in 2025, primarily due to an increase in impairment losses on trade receivables.
We had trade and bills receivables of RMB5,461.3 million, RMB5,978.4 million and RMB5,618.4 million as of December 31, 2023, 2024 and 2025, respectively.
Financial Information · p. 239
Our trade and bills receivables turnover days increased to 239 days in 2025, primarily due to (i) an increase in credit terms we granted to customers with good creditworthiness; and (ii) an increase in overseas sales where we granted longer credit terms.
Financial Information · p. 240
Our impairment losses (including reversal of impairment losses or impairment gains) on financial assets increased significantly from RMB27.3 million in 2023 to RMB154.3 million in 2024, primarily due to an increase in provisions for impairment of trade receivables and other receivables driven by (i) an increase in trade receivable balance; and (ii) the long credit periods to certain customers which triggered impairment.