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 over 365 days increased significantly as of December 31, 2024 as compared to 2023, primarily due to a delay in settlement of a substantial receivable due from one of our key customers.
Financial Information · p. 252
For the years ended December 31, 2023, 2024 and 2025, our trade receivables turnover days were 183.3 days, 187.7 days and 196.7 days, respectively.
Financial Information · p. 253
We have reviewed the recoverability of our trade and bills receivables, including those aged over one year, and concluded that there are no material impairment or recoverability issues.
Our trade and bills receivables increased from RMB3,827.6 million as of December 31, 2023 to RMB4,493.2 million as of December 31, 2024 a, primarily due to an increase in trade receivables resulting from longer settlement cycles of certain customers of our new energy battery key materials.
Financial Information · p. 208
Our trade and bills receivables turnover days increased from 97 days in 2023 to 113 days in 2024, primarily due to longer payment settlement cycle resulting from (i) longer payment settlement cycles of our downstream customers amid intensified market competition in the new energy battery industry and (ii) our relatively flexible credit terms granted for certain key strategic customers to maintain long-term cooperation.
Financial Information · p. 209
Our net impairment losses on financial and contract assets increased significantly from RMB7.2 million in 2023 to RMB36.9 million in 2024, primarily due to an increase in impairment losses on trade receivables (i) an increase in our trade receivables in line with our sales growth and (ii) extended settlement cycle of our certain customers amid intensified market competition.
Our trade receivables turnover days increased from 103.5 days in 2023 to 140.5 days in 2024, primarily due to (i) the relatively longer payment cycle of certain customers upon the negotiations given the market volatility and their strong market presence, and (ii) the delay of payment from certain customers.
Financial Information · p. 399
To mitigate the extended trade receivable cycle from our OEM customers, we have adopted or plan to adopt certain strategies, including (i) standardizing credit terms to a shortened period across all existing or new customers through active negotiations, (ii) implementing weekly reviews of settlements, invoicing and collections to strengthen financial controls, and (iii) deploying an automated tiered credit management system with real-time monitoring of credit limits and payment deadlines.
Financial Information · p. 399
As of January 31, 2026, RMB197.8 million, or 95.9% of our trade receivables as of September 30, 2025, had been settled subsequent to September 30, 2025.
Our trade and notes receivables significantly increased from RMB270.4 million as of December 31, 2023 to RMB532.6 million as of December 31, 2024, and subsequently further increased to RMB743.8 million as of December 31, 2025, primarily attributable to our increased sales and the timing of collection from customers.
Financial Information · p. 190
The turnover period was primarily attributable to our relatively early stage of commercialization, the nature of our customers’ payment processes, which typically require inspection and confirmation of product conditions and the completion of services prior to payment, and the higher concentration of sales in the third and fourth quarter of each year, which tends to increase outstanding trade and notes receivables balances at year-end.
Financial Information · p. 191
As of January 31, 2026, RMB71.9 million, or 9.7% of our trade and notes receivables outstanding as of December 31, 2025, had been subsequently settled.
As of December 31, 2022, 2023 and 2024 and September 30, 2025, our trade and bills receivables aged over one year amounted to RMB103.5 million, RMB119.5 million, RMB60.7 million and RMB57.0 million, representing approximately 34.9%, 48.0%, 25.0% and 19.5% of our total trade and bills receivables, respectively.
Financial Information · p. 251
Our trade and bills receivables turnover days increased from 162 days for the year ended December 31, 2022 to 181 days for the year ended December 31, 2023, primarily attributed to the greater difficulties in collections amid challenging macroeconomic conditions, and decreased to 124 days for the year ended December 31, 2024, which was in line with our intensified efforts to accelerate receivables recovery during the year.
Financial Information · p. 252
Our relatively extended trade receivables turnover days and inventory days, compared to our trade payables turnover days, reflect the timing of our project cycles and milestone payments in light of our project-based business model.
We had other receivables of approximately RMB769.6 million, RMB523.2 million and RMB527.4 million as at 31 December 2023, 2024 and 2025, respectively.
Financial Information · p. 293
Our other receivables increased from approximately RMB523.2 million as at 31 December 2024 to approximately RMB527.4 million as at 31 December 2025, primarily due to the increase in advance payment made on behalf of customers from approximately RMB483.0 million as at 31 December 2024 to approximately RMB516.6 million as at 31 December 2025, as we had provided advanced payment of VAT of approximately RMB33.6 million to one of our key account customers, Customer Y
Financial Information · p. 294
As at 31 January 2026, approximately RMB497.3 million, or 93.2% of our other receivables as at 31 December 2025, had been settled.
Our trade receivables turnover days were 117.3 days, 180.1 days and 206.0 days for FY2023, FY2024 and FY2025, respectively.
Financial Information · p. 241
Such significant increase in trade receivables turnover days during FY2024 and FY2025 was mainly due to the pursuit of new strategic customers in the second half of 2024, namely Customer Group H, Customer I, and Customer J, who were granted longer credit periods ranging from 158 to 180 days for advertising marketing services.
Financial Information · p. 241
As the Latest Practicable Date, approximately RMB68.3 million, RMB179.8 million, RMB46.4 million, or 99.7%, 99.9% and 29.1%, respectively of trade receivables as at 31 December 2023, 2024 and 2025 was settled.
Our trade receivables, net of allowance for credit losses, increased from RMB217.8 million as of December 31, 2022 to RMB233.1 million as of December 31, 2023, to RMB247.6 million as of December 31, 2024, and further to RMB325.9 million as of September 30, 2025 primarily due to the increase in our sales volume of products and services.
Financial Information · p. 206
As of January 31, 2026, RMB264.7 million or 81.2% of our trade receivables (less credit loss allowance) as of September 30, 2025 had been subsequently settled.
Financial Information · p. 207
We also intend to strengthen the internal policy to control the trade receivables in various aspects, including, among others, monitoring of the progress of receivables collection and negotiating with customers regarding the delayed payment.
Our balance of trade and bills receivables increased by 25.8% from RMB704.7 million as of December 31, 2022 to RMB886.7 million as of December 31, 2023 and further increased by 45.8% to RMB1,293.0 million as of December 31, 2024, and further increased to RMB1,731.4 million as of September 30, 2025 generally in line with our revenue growth during the Track Record Period, which was primarily driven by the increasing customer demand for our server PCBs and others.
Financial Information · p. 206
Our trade receivables turnover days remained relatively stable at 103 days, 102 days, 102 days and 103 days in 2022, 2023, 2024 and the nine months ended September 30, 2025, respectively.
Financial Information · p. 207
As of January 31, 2026, RMB1,550.8 million, or 90.9% of our total trade receivables as of September 30, 2025, had been settled.
Our prepayments increased significantly from RMB10.2 million as of December 31, 2023 to RMB73.5 million as of December 31, 2024, mainly due to the significant increase in prepayments for equipment procurement and construction projects for our manufacturing facilities in Thailand and the technical upgrade project at our Guangzhou facility.
Financial Information · p. 208
As of January 31, 2026, RMB84.3 million, or 75.1% of our total prepayments, deposits and other receivables as of September 30, 2025, had been subsequently settled.
Trade and notes receivables increased from RMB383.5 million as of December 31, 2022 to RMB433.7 million as of December 31, 2023, and further to RMB577.5 million as of December 31, 2024, generally in line with our sales growth during the same periods.
Financial Information · p. 250
Our trade receivables turnover days increased from 111 days in 2022 to 124 days in 2023, primarily due to the increased sales of our automotive products, as the relevant customers typically have a longer payment period in line with their industry practice.
Financial Information · p. 251
As of January 15, 2026, approximately RMB434.6 million, or 80.0%, of our trade receivables as of September 30, 2025 had been settled.
Our trade receivables turnover days during the Track Record Period were notably longer than the general credit period granted to our customers, which typically ranged from 30 to 90 days.
Financial Information · p. 348
Additionally, some of our larger customers had prolonged payment approval process, which further extended the overall time required to collect payments, resulting in an increase in our trade receivables turnover days.
Financial Information · p. 348
As of January 31, 2026, RMB275.4 million, or 88.5%, of our trade receivables as of August 31, 2025 had been settled.
Our trade receivables increased by 19.3% from RMB46.0 million as of December 31, 2024 to RMB54.8 million as of September 30, 2025, primarily due to the increase in sales volume of Sangbo'en.
Financial Information · p. 243
During the Track Record Period, we did not experience any significant losses associated with our trade receivables and the increase in our trade receivables did not have any material adverse impact on our liquidity or cash flows.
Financial Information · p. 244
As of January 31, 2026, approximately RMB54.9 million, or 99.9% of our total trade receivables as of September 30, 2025, had been settled.
Our trade and bills receivables increased from RMB152.7 million as of December 31, 2023 to RMB161.9 million as of December 31, 2024, and further increased to RMB207.3 million as of September 30, 2025, primarily due to an increase in trade receivables from third-party online payment platform for overseas micro drama business.
Financial Information · p. 221
The increase from 2023 to 2024 is primarily due to a strategic shift in our business model from to-C to to-B across our online literature and micro drama businesses, which inherently lengthens the collection cycle as payments from corporate partners involve extended credit terms compared to consumer transactions.
Financial Information · p. 222
As of January 31, 2026, RMB184.1 million or 80.4% of our trade and bills receivables outstanding as of September 30, 2025 were settled.
Our trade and bills receivables increased by 56.9% from RMB420.3 million as of December 31, 2022 to RMB659.4 million as of December 31, 2023, and further increased by 54.1% to RMB1,016.1 million as of December 31, 2024, primarily due to an increase in trade receivables as a result of an increase in revenue generated from some of our customers to whom we generally granted longer credit terms.
Financial Information · p. 327
Our trade receivables turnover days increased from 58.7 days in 2022 to 91.8 days in 2023, and further increased to 104.0 days in 2024, primarily due to an increased proportion of revenue generated from some of our customers to whom we generally granted longer credit terms.
Financial Information · p. 329
With respect to three of these customers and the trade and bills receivables over five years from which accounted for a substantial portion of the trade and bills receivables aged over five years in 2024, we have initiated legal proceedings to recover the overdue amounts and our claim for the principal, interest, and associated proceeding costs has received substantial support from the court.
The increase was primarily attributable to (i) our revenue growth and business expansion; and (ii) the slower payment by certain customers in the explosion-proof and industrial electric drive solutions sectors.
Financial Information · p. 222
Impairment losses under the ECL model increased by approximately 38.3%, from RMB32.2 million for the nine months ended September 30, 2024, to RMB44.5 million for the nine months ended September 30, 2025, primarily attributable to an increase in trade receivables, which led to an additional impairment of approximately RMB10.3 million.
Our trade receivables increased from RMB22.5 million as of December 31, 2023 to RMB27.3 million as of December 31, 2024, primarily because we offered longer credit terms to certain creditworthy customers to foster long-term partnerships.
Financial Information · p. 236
Our trade receivables turnover days remained relatively stable at 22 days, 23 days and 25 days in 2023, 2024 and 2025, respectively.
Financial Information · p. 237
As of January 31, 2026, 60.8%, or RMB18.4 million of our trade receivables as of December 31, 2025 had been subsequently settled.
During the Track Record Period, as part of the supplier’s pricing strategy, it offered procurement rebates to us based on market condition and supply arrangement in accordance with our rebate agreements.
Financial Information · p. 331
Our current prepayments, other receivables and other assets increased by 78.7% from RMB254.1 million as of December 31, 2024 to RMB454.0 million as of September 30, 2025, primarily due to (i) an increase in value-added tax recoverable as we increased our inventory of raw materials; (ii) an increase in rebate receivable from Supplier A as we increased our procurement from Supplier A; and (iii) an increase in our prepayments for the procurement from Supplier A.
Financial Information · p. 332
As of January 31, 2026, the settlement of rebate receivable from Supplier A was RMB62.8 million, accounting for 25.5% of rebate receivable as of September 30, 2025.
Our trade and bill receivables turnover days increased from 135 days in 2022 to 160 days in 2023, and further to 215 days in 2024, as the growth in trade and bill receivables outpaced the increase in revenue, which was primarily attributable to (i) our decision to offer more favorable credit terms to key account customers as part of our strategy to enhance market penetration; and (ii) the prolonged payment cycles of certain customers, particularly those in the photovoltaic industry.
Financial Information · p. 362
As of December 31, 2025, approximately RMB818.0 million, or 38.9% of our trade receivables as of September 30, 2025, had been settled.
Financial Information · p. 362
The notable increase in our provision for impairment loss on trade receivables and contract assets from 2023 to 2024 was primarily driven by the increased revenue contribution from certain key account customers, whose payment cycles are generally longer.