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 receivables turnover days increased from 58 days in 2023 to 94 days in 2024 and further to 136 days in 2025 as we granted relatively favorable payment terms to certain customers as part of our customer acquisition efforts, aiming to strengthen our market presence and secure long-term growth opportunities.
Financial Information · p. 215
Our trade and other receivables further increased by 36.8% to RMB84.1 million as of December 31, 2025, primarily due to (i) an increase in trade receivables, mainly attributable to (a) the continued expansion of our business scale, and (b) we granted relatively favorable payment terms to certain high-potential customers
Financial Information · p. 214
As of April 6, 2026, RMB27.4 million or 36.6% of our trade receivables as of December 31, 2025, was subsequently settled.
Our trade and bills receivables increased by 41.2% from RMB808.1 million as of December 31, 2024 to RMB1,140.7 million as of December 31, 2025, primarily due to an RMB363.7 million increase in trade receivables generally in line with our revenue growth.
Financial Information · p. 148
As of February 28, 2026, RMB767.6 million, or 67.3%, of our trade and bills receivables as of December 31, 2025 had subsequently been settled.
Our net trade and bills receivables increased significantly from RMB252.0 million as of December 31, 2023 to RMB789.7 million as of December 31, 2024.
Financial Information · p. 205
The turnover days for our trade receivables (excluding trade receivables relating to AI computing technical services business) increased from 209 days in 2023 to 270 days in 2024, primarily due to a decrease in the relevant revenues resulting from our shift in strategic focus towards our AI computing technical services business since 2023, while certain trade receivables remained outstanding due to the relatively long settlement cycle of relevant customers.
Financial Information · p. 206
As of February 28, 2026, RMB107.0 million (or 66.0%) of the trade receivables as of December 31, 2025 had been subsequently settled.
This accounting treatment has resulted in a substantial increase in prepayments to suppliers in 2023 and 2024, as we launched this business line in 2023.
Financial Information · p. 210
Our prepayments to suppliers increased from RMB211.8 million as of December 31, 2023 to RMB259.1 million as of December 31, 2024, primarily reflecting the growth of our AI computing technical services business.
Financial Information · p. 210
Our prepayments to suppliers decreased from RMB259.1 million as of December 31, 2024 to RMB22.0 million as of December 31, 2025, primarily because we no longer provided procurement agency service under our AI computing technical services business, and recorded no such prepayments since 2025.
In 2023, 2024 and 2025, our impairment losses under expected credit loss model amounted to RMB14.9 million, RMB8.7 million and RMB18.4 million, respectively.
Financial Information · p. 196
Our impairment losses under expected credit loss model increased significantly from RMB8.7 million in 2024 to RMB18.4 million in 2025, which was primarily attributable to increased impairment losses on trade and bills receivables as a result of impairment provisions recognized for certain AI vertical industry application projects that were overdue.
Financial Information · p. 199
Such decrease was primarily due to the non-recurring impairment recognized in 2023 on our prepayment to a supplier in connection with our dispute with the supplier regarding its non-performance of contractual obligations. We have initiated legal proceedings against such supplier to recover our prepayment.
Our trade and bills receivables, net of allowance, increased by 161.0% from RMB29.9 million as of December 31, 2023 to RMB77.9 million as of December 31, 2024 and further increased by 98.2% to RMB154.5 million as of December 31, 2025, primarily in line with increased sales to direct wholesale customers and distributors.
Financial Information · p. 236
Our trade and bills receivables turnover days increased from 2.7 days in 2023 to 6.1 days in 2024, and further increased to 11.2 days in 2025, primarily in line with increased sales to direct wholesale customers and distributors.
Financial Information · p. 236
As of February 28, 2026, approximately RMB98.4 million, or 63.7% of our trade and bills receivables as of December 31, 2025, had been settled.
The turnover days of our trade and notes receivables increased from 69 days in 2023, further to 81 days in 2024, and further to 90 days, primarily due to the increase in our trade and notes receivables further due to a long payment process by certain research institution customers as some research institution customers have longer payment approval process and longer project cycles.
Financial Information · p. 251
We normally allow a credit period of 30 to 60 days to our major customers.
Financial Information · p. 251
We believe that we have made sufficient provision for our trade receivables during the Track Record Period.
The net carrying amount of our trade and bill receivables increased from RMB20.3 million as of December 31, 2023 to RMB357.6 million as of December 31, 2024, and further to RMB3,162.6 million as of December 31, 2025.
Financial Information · p. 237
Our trade and bills receivables turnover days were 63 days, 51 days and 70 days in 2023, 2024 and 2025, respectively, primarily as we only began commercial sales in May 2023, therefore we did not record sales to calculate trade and bills receivables turnover days over a full 360-day period for 2023, and accordingly we believe that our trade and bills receivables turnover days for 2023 is not a meaningful financial indicator for such year.
Financial Information · p. 238
As of February 28, 2026, RMB1,764.2 million, or 54.1% of our trade and bills receivables outstanding as of December 31, 2025 had been subsequently settled.
Our trade and bills receivables increased from RMB250.8 million as of December 31, 2023 to RMB343.7 million as of December 31, 2024, and increased further to RMB474.8 million as of December 31, 2025, primarily due to the growth in our sales revenue.
Financial Information · p. 230
Our trade receivable turnover days decreased from 378 days in 2023 to 247 days in 2024, and further to 141 days in 2025, primarily due to (i) our enhanced collection efforts which accelerated the receipt of payments from our customers and (ii) the optimization of our customer base driven by the increase in the revenue from automotive OEMs who generally have better payment policies.
Financial Information · p. 231
As of February 28, 2026, RMB60.8 million, or 10.5% of our trade receivable as of December 31, 2025, has been subsequently settled.
Our other receivables increased from RMB111.0 million as of December 31, 2023 to RMB209.8 million as of December 31, 2024, and further increased to RMB371.0 million as of December 31, 2025, primarily due to a continued increase in VAT recoverable driven by increased procurement of equipment, materials and construction services, as well as an increase in advances to suppliers, as we scaled up our production capacity.
Our trade receivables increased from RMB0.9 million as of December 31, 2024 to RMB6.7 million as of December 31, 2025, primarily due to the increase in sales and we granted longer credit term to our new major customers in 2025.
Financial Information · p. 239
Our trade receivable turnover days increased from 42 days in 2024 to 101 days in 2025, primarily because we granted longer credit term to our new major customers in 2025 and we had more sales to major customers that have longer credit term, for example KingMed Medical.
Financial Information · p. 239
As of February 28, 2026, RMB1.1 million, or 14.6% of our trade receivables as of December 31, 2025, had been subsequently settled.
Our trade and bills receivables increased significantly from RMB162.4 million as of December 31, 2024 to RMB587.3 million as of December 31, 2025, primarily due to an increase in trade receivables arising from delayed consideration payment under certain high-value contracts.
Financial Information · p. 199
Our impairment losses on financial assets at amortized cost, net increased significantly from RMB1.3 million in 2024 to RMB8.6 million in 2025, primarily due to an increase in expected credit losses recognized on certain trade receivables.
Financial Information · p. 191
As of February 28, 2026, approximately RMB66.1 million or 11.3% of our trade and bills receivables had been settled.
Our net trade receivables increased from RMB286.3 million as at 31 December 2023 to RMB363.7 million as at 31 December 2024, and further increased to RMB669.9 million as at 31 December 2025.
Financial Information · p. 241
Our average turnover days of trade receivables was 17 days, 18 days and 20 days for FY2023, FY2024 and FY2025, respectively, which was in line with our credit policy.
Financial Information · p. 242
As at 28 February 2026, RMB464.2 million or 66.3% of our trade receivables outstanding as at 31 December 2025 were settled.
Our prepayments and other receivables increased by 101.5% from RMB180.1 million as of December 31, 2024 to RMB361.0 million as of December 31, 2025, primarily due to (i) an increase in prepayments, primarily due to an increase in procurement, and (ii) an increase in deposits, primarily due to an increase in our payments of tender guarantee and performance guarantee to a customer with the bid guarantee subsequently recovered in February 2026, partially offset by a decrease in deductible value-added tax due to the cross-period offset of input VAT credits.
Financial Information · p. 201
As of February 28, 2026, approximately RMB125.1 million or 34.8% of our prepayments and other receivables as of December 31, 2025 had been settled.
Our trade and bills receivables at amortized cost increased from RMB116.5 million as of December 31, 2023 to RMB190.5 million as of December 31, 2024, and further increased RMB208.0 million as of December 31, 2025, generally in line with the growth of our revenue.
Financial Information · p. 242
We seek to maintain strict control over our trade and bills receivables at amortized cost and overdue balances are reviewed monthly by senior management.
Financial Information · p. 242
As of February 28, 2026, approximately RMB129.9 million, or 59.3% of our trade and bills receivables at amortized cost as of December 31, 2025, had been subsequently settled.
Our trade receivables increased by 38.8% from RMB32.2 million as of December 31, 2023 to RMB44.7 million as of December 31, 2024, and further increased by 126.0% to RMB101.0 million as of December 31, 2025, primarily due to the growth of our revenue during the Track Record Period.
Financial Information · p. 217
Our trade receivables turnover days increased from 19 days in 2024 to 29 days in 2025, primarily because we extended credit terms to key customers amid their increased revenue contribution to strengthen our strategic partnerships.
Financial Information · p. 218
As of February 28, 2026, approximately RMB90.1 million, or 80.3% of our trade receivables as of December 31, 2025 had been subsequently settled.
Our trade receivables turnover days increased from 27 days for the year ended December 31, 2023 to 84 days for the year ended December 31, 2024, and further increased to 115 days for the year ended December 31, 2025, primarily due to relatively large sales of smart terminal products and AIoT products in the forth quarter of 2024 and 2025.
Financial Information · p. 204
Although the credit period we granted to our customers remained relatively stable during the Track Record Period, our trade receivables turnover days increased to 115 days in 2025, primarily due to a decrease in our revenue.
Financial Information · p. 204
As of February 28, 2026, RMB298.7 million, or 93.4%, of our trade receivables as of December 31, 2025 had been subsequently settled.
Our prepayments, deposits and other receivables decreased from RMB277.2 million as of December 31, 2023 to RMB242.1 million as of December 31, 2024, primarily due to (i) the decrease in prepayments of RMB18.3 million as a result of our enhanced supply chain management capabilities and strengthened bargaining power, which led to lower advance payment requirements from suppliers and (ii) the decrease in receivables from CassMall platform service of RMB14.4 million reflecting normal variations in CassMall platform's daily settlement volumes resulting from operating activities.
Financial Information · p. 219
Our prepayments, deposits and other receivables decreased from RMB242.1 million as of December 31, 2024 to RMB225.3 million as of December 31, 2025, primarily due to (i) the decrease in receivables from CassMall platform service of RMB16.1 million reflecting normal variations in CassMall platform's daily settlement volumes resulting from operating activities and (ii) an increase of allowance for impairment of other receivables of RMB5.6 million, as a result of increased transaction volume on the CassMall Platform and the corresponding proportional impairment provision, partially offset by an increase in prepayment for auto parts of RMB5.0 million, as a result of an increase in procurement transactions that require advance payments amid our overall business growth.
We then recorded impairment losses of RMB57.4 million and RMB122.8 million in 2024 and 2025, respectively.
Financial Information · p. 177
Our impairment losses on financial and contract assets, net, increased from RMB57.4 million in 2024 to RMB122.8 million in 2025, primarily attributable to impairment on other receivables based on ECL model.
Financial Information · p. 181
As of February 28, 2026, RMB742.3 million, or approximately 97.5%, of our trade and bills receivables as of December 31, 2025 had been subsequently collected.
For the years ended December 31, 2023, 2024 and 2025, our trade receivable turnover days, calculated by dividing the arithmetic mean of the opening and ending balance of trade receivables by revenue for the relevant year and then multiplying by number of days for that year (365 days for 2023, 2024 and 2025), amounted to 63 days, 148 days and 143 days.
Financial Information · p. 229
Our trade and other receivables increased from RMB260.3 million as of December 31, 2023 to RMB358.2 million as of December 31, 2024, primarily due to an increase in trade receivables driven by higher sales of Xiweina in the second half of 2024 compared to the same period in 2023.
Financial Information · p. 229
As of February 28, 2026, 63.5%, or RMB134.9 million of our trade receivables as of December 31, 2025 had been subsequently settled.