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 prepayments, other receivables and other assets then increased to RMB2,033.4 million as of December 31, 2025, primarily attributable to the rise in lithium compound prices at the time, as we procured more lithium concentrate for inventory stocking purposes, thereby resulting in higher prepayments.
Financial Information · p. 189
Our prepayments, other receivables and other assets primarily consisted of (i) prepayments mainly for our procurement of lithium concentrate, (ii) prepaid value-added tax, (iii) deductible input value-added tax and (iv) deposits.
Our trade and bills receivables increased by 12.8% from RMB422.5 million to RMB476.4 million as of December 31, 2024, and further increased by 39.7% to RMB665.4 million as of December 31, 2025, primarily due to an increase in trade receivables along with our revenue growth.
Financial Information · p. 237
Our trade receivables turnover days increased from 72 days in 2024 to 83 days in 2025, primarily due to the Disposal of Ruiming Sciences, which previously had shorter trade receivables turnover days, as its business was characterized by short production cycles and credit terms, resulting in faster collection of trade receivables.
Financial Information · p. 238
As of February 28, 2026, RMB212.8 million, or 30.1%, of our trade receivables as of December 31, 2025, had been settled.
Trade, bill and other receivables and prepayments increased to RMB1,906.9 million as of December 31, 2025, primarily due to an increase in trade receivables due from third parties from RMB1,278.0 million to RMB1,471.0 million, due to the significant growth in our revenue during the year, particularly in the latter half, which resulted in a higher balance of receivables outstanding at year-end.
Financial Information · p. 179
In 2023, 2024 and 2025, our impairment of losses under ECL model, net reversal, amounted to RMB125.5 million, RMB43.6 million and RMB27.1 million, representing 5.4%, 1.9% and 0.9% of our total revenue, respectively.
Financial Information · p. 166
As of February 28, 2026, 26.9% of our total trade receivables as of December 31, 2025, or RMB324.0 million, were settled.
Our trade and bills receivables (current and non-current) increased by 38.7% from RMB218.2 million in 2023 to RMB302.6 million in 2024, and further increased by 26.4% to RMB382.6 million in 2025, in line with our business growth.
Financial Information · p. 176
Our trade and bills receivables turnover days decreased from 232.5 days in 2023 to 199.7 days in 2024, and further decreased to 163.7 days in 2025, primarily due to (i) our proactive management and collection of trade and bills receivables; and (ii) increased sales to overseas customers through distributors, to whom generally shorter payment terms were applied compared to domestic direct sales customers.
Financial Information · p. 177
As of February 28, 2026, RMB149.5 million, or approximately 39.1%, of our trade and bills receivables as of December 31, 2025 had been settled.
Our prepayments, trade and other receivables increased from RMB1,096.9 million as of December 31, 2023 to RMB1,870.0 million as of December 31, 2024, and further increased to RMB2,871.6 million as of December 31, 2025, primarily due to increases in trade receivables during the periods, mainly attributable to a higher proportion of credit sales of lithium-ion battery-related materials as part of our market expansion strategy.
Financial Information · p. 164
Our trade and bills receivables turnover days increased from 54.9 days in 2023 to 75.5 days in 2024, and further increased to 111.3 days in 2025, primarily due to a higher proportion of credit sales of lithium-ion battery-related materials as part of our market expansion strategy.
Financial Information · p. 165
As of February 28, 2026, RMB1,008.7 million, or 40.9% of our trade and bills receivables outstanding as of December 31, 2025 had been subsequently collected.
Our trade and bills receivables increased from RMB324.5 million as of December 31, 2023 to RMB789.3 million as of December 31, 2024, primarily driven by the increase in revenue base in 2023 and 2024.
Financial Information · p. 248
Our trade receivables turnover days increased from 37 days in 2023 to 54 days in 2024, primarily due to the general increase in our trade and bills receivable as a result of our deepening cooperation with key customers and credit periods granted to newly acquired key brand customers along with business expansion.
Financial Information · p. 249
As of February 28, 2026, RMB95.7 million or 68.7% of our trade receivables outstanding as of December 31, 2025, was subsequently settled.
Our trade and bills receivables further increased significantly to RMB339.2 million as of December 31, 2025, primarily (i) due to the acceptance of certain projects in relation to intelligent manufacturing software solutions in 2025 for which payment had not yet been received, attributable to the respective customers’ prolonged settlement cycle; (ii) due to an increase in trade receivables from operating management solutions as we granted certain large customers longer credit term; and (iii) because some projects were completed in the fourth quarter of 2025 and had not reached the payment due date as of December 31, 2025.
Financial Information · p. 231
Our trade and bills receivables (before net of impairment) turnover days increased from 74 days in 2023 to 102 days in 2024 and further increased to 135 days in 2025, primarily because (i) we granted major customers longer credit terms, as a result of the intensified competition in the industrial software solutions market; (ii) we had a higher balance of trade and bills receivables, resulting from the acceptance of certain Large Value Projects and our increased involvement in providing operations management software solutions, which had a longer payment cycle of typically three months to six months.
Financial Information · p. 233
We have reasonably estimated the credit impairment loss rate and made corresponding provisions for impairment losses on trade and bills receivables.
As of December 31, 2023, 2024 and 2025, the balance of our trade and bills receivables were RMB51.0 million, RMB146.9 million and RMB247.4 million, respectively.
Financial Information · p. 248
Our trade and bills receivables turnover days increased from 139.7 days in 2024 to 208.9 days in 2025.
Financial Information · p. 248
During the Track Record Period, our trade and bills receivables turnover days were longer than the contractual credit terms ranging from 30 to 120 days that we generally granted to our customers during the same period.
Our trade and note receivables increased from RMB6,600.7 million as of December 31, 2023 to RMB9,110.0 million as of December 31, 2024, and further increased to RMB12,170.5 million as of December 31, 2025, which was in line with our revenue growth.
Financial Information · p. 204
Our trade and note receivable turnover days decreased from 116 days in 2023 to 108 days in 2024, primarily due to increase in proportion of revenue from customers with relatively short credit terms.
Financial Information · p. 205
primarily attributable to a decrease of RMB116.0 million in impairment loss of trade receivables primarily due to a one-time impairment provision of all receivables from certain customers in 2023 arising from deterioration of such customers’ financial conditions.
Our trade receivables, net of loss allowances, was approximately RMB105.3 million as at 31 December 2023, then decreased to approximately RMB68.1 million as at 31 December 2024, and increased to approximately RMB175.5 million as at 31 December 2025.
Financial Information · p. 238
The gradual increase in trade receivables turnover days during the Track Record Period was primarily due to the increasing revenue contribution of our Branded Product Business, the customers of which were generally granted credit periods of up to 90 days.
Financial Information · p. 239
As at the 23 March 2026, approximately 86.3% of our trade receivables as at 31 December 2025 have been subsequently settled.
Our current trade and other receivables increased from RMB228.6 million as of December 31, 2023 to RMB334.3 million as of December 31, 2024 and further to RMB484.0 million as of December 31, 2025, primarily due to our business growth.
Financial Information · p. 249
Our trade receivable turnover days decreased from 36.4 days for the year ended December 31, 2024 to 26.9 days for the year ended December 31, 2025, primarily due to continued growth across all sales channels in 2025, especially the increase in sales without credit terms, which further contributed to the reduction in trade receivable turnover days.
Financial Information · p. 249
As of February 28, 2026, RMB254.8 million, or 83.4%, of our trade receivables as of December 31, 2025, had been settled.
Our total prepayments, deposits and other receivables then significantly increased to RMB1,280.8 million as of December 31, 2025, primarily attributable to (i) an increase of RMB366.1 million in VAT recoverable primarily arising from our procurement of equipment in 2025, and (ii) an increase of RMB129.5 million in prepayments made to third-party suppliers primarily attributable to increase in our prepayments for certain raw materials, which was in line with our business expansion.
The increase in prepayments to suppliers from approximately RMB2.2 million as at 31 December 2023 to approximately RMB40.2 million as at 31 December 2024 was primarily attributable to the expansion of our production volume to meet increased demand for baby care and feminine care products.
Financial Information · p. 241
The Directors confirm that all prepayments as at 31 December 2024 were fully utilised or offset against deliveries on or before 30 June 2025, and there were no long-term outstanding or unutilised balances.
Financial Information · p. 241
Our prepayment arrangements are consistent with our standard procurement practices and industry norms and did not involve any unusual or extended settlement period.
Our prepayments and other receivables mainly consist of (i) prepayments for inventories and services, (ii) prepayments for costs incurred in connection with the Company’s A share listing attempt, (iii) prepayments for costs incurred in connection with [REDACTED] of the Company’s H share, (iv) advance payments on behalf of brand partners, (v) rebate receivable from brand partners, (vi) deposits, and (vii) deductible input VAT.
Financial Information · p. 194
Our prepayments and other receivables further increased to RMB270.4 million as of December 31, 2025, primarily due to (i) an increase in prepayments for inventories and services of RMB44.6 million, mainly attributable to higher prepayments for procurement related to our overseas e-commerce brand operations, (ii) an increase in deposits of RMB27.0 million paid to brand partners, partially offset by a decrease in advance payments on behalf of brand partners of RMB14.1 million.
Financial Information · p. 195
As of January 31, 2026, RMB66.9 million, or 24.7%, of our prepayments and other receivables as of December 31, 2025 had been subsequently settled.
Our trade and notes receivables increased from RMB386.5 million as of December 31, 2023, to RMB615.1 million as of December 31, 2024, primarily driven by our rapid business expansion and substantial growth in revenue over the period.
Financial Information · p. 223
Our trade receivables turnover days increased from 229 days in 2023, to 319 days in 2024.
Financial Information · p. 223
We believe that there is no material recoverability issue for our trade receivables, and based on our subsequent settlement status, sufficient provision has been made.
Our trade receivables, prepayment and other receivables increased by 2.9% from RMB124.8 million as of December 31, 2023 to RMB128.5 million as of December 31, 2024, and further increased by 9.8% to RMB141.0 million as of December 31, 2025, primarily reflecting our growth in revenue.
Financial Information · p. 225
Our trade receivables turnover days are 98 days in 2023, 94 days in 2024 and 94 days in 2025, which remains relatively stable.
Financial Information · p. 227
As of February 28, 2026, RMB74.8 million, or 58.1% of our trade receivables as of December 31, 2025, had been settled.
Our trade receivables turnover days increased from 89 days in 2023 to 123 days in 2024, mainly because of the prolonged payment periods of our customers due to market slowdown in downstream sectors.
Financial Information · p. 237
As of February 28, 2026, RMB101.1 million, or 78.1% of our trade receivables as of December 31, 2025 had been settled.
Financial Information · p. 237
For the year ended December 31, 2025, our bills receivables turnover days increased to 41 days, mainly due to the relaxation of credit terms.
Our trade and bills receivables (other than bills receivables measured at FVOCI) aged seven to twelve months increased from RMB2.7 million as of December 31, 2023 to RMB5.6 million as of December 31, 2024, and further to RMB7.6 million as of December 31, 2025, which was primarily due to delayed settlement by a customer, which led to certain receivables remaining outstanding for longer periods.
Financial Information · p. 205
In order to support sales growth and deepen customer relationships, we extended more flexible payment terms to a broader customer base.
Financial Information · p. 205
As of January 31, 2026, RMB130.0 million, or 56.6% of our trade and bills receivables as of December 31, 2025 had been subsequently settled.
Our other receivables less loss allowance increased from RMB375.9 million as of December 31, 2023 to RMB1,202.8 million as of December 31, 2024 and further to RMB1,751.3 million as of December 31, 2025, which was primarily driven by the expansion of our snack and beverage retail business and the corresponding increases in prepayments to suppliers.
Financial Information · p. 243
As of December 31, 2023, 2024 and 2025, the increases of our inventories were generally in line with our business expansion over time driven by our snack and beverage retail business.
Our prepayments, other receivables, and other assets increased from RMB142.5 million as of December 31, 2023 to RMB178.8 million as of December 31, 2024, primarily due to the increase in prepayments to certain suppliers for the procurement of chips and wafers to support projects in 2024, partially offset by a decrease in certificates of deposit from RMB20.1 million as of December 31, 2023 to nil as of December 31, 2024.
Financial Information · p. 181
As of February 28, 2026, RMB17.8 million, or 16.0% of our prepayments to suppliers as of December 31, 2025 had been subsequently recognized.