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 increased by 93.19% from RMB39.46 million as at 31 December 2022 to RMB76.23 million as at 31 December 2023 mainly attributable to the increase in prepayments for site occupancy fee due to the expansion of POS network in 2023.
Financial Information · p. 352
We actively promote the POS network expansion policy, negotiate and obtain more suitable terms for site occupancy with Site Managers by prepayment of site occupancy fee.
Financial Information · p. 352
Prepayments of site occupancy fee mainly consists of site occupancy fee prepaid to the Site Managers for securing the POS sites.
Our trade receivables turnover days during the Track Record Period were slightly longer than our industry peers, which, according to CIC, average approximately 90 days among other capacitor film manufacturers.
Financial Information · p. 278
One of our major customers, a well-known leading NEV company in China, usually settle their balance with us through commercial acceptance bills that mature in six months, which results in longer trade receivable turnover days; and
Financial Information · p. 278
As of September 30, 2025, RMB126.3 million, or 78.0% of our total trade receivables as of May 31, 2025, had been settled.
Our total trade receivables, net balances as of December 31, 2022, 2023 and December 31, 2024 and May 31, 2025 were RMB258.2 million, RMB443.3 million, RMB638.4 million and RMB743.8 million, respectively.
Financial Information · p. 289
For the years ended December 31, 2022, 2023 and 2024 and for the five months ended May 31, 2025, our trade receivables turnover days was 157 days, 242 days, 199 days and 254 days, respectively.
Financial Information · p. 290
As of the Latest Practicable Date, RMB243.0 million, representing 32.2%, of our trade receivables as of May 31, 2025 has been subsequently settled.
During our initial cooperation with certain merchandise suppliers, we entered into prepayment arrangements to reduce cash flow pressure for them in order to bring them quickly on board.
Business · p. 163
As our cooperation matured, we were able to modify our agreements to forego prepayments.
Business · p. 163
As of the Latest Practicable Date, we had only one merchandise supplier which is a well-known platform operator which typically has prepayment requirements for their partners, according to Frost & Sullivan.
Our prepayments and other receivables increased significantly from RMB181.7 million as of December 31, 2023 to RMB826.1 million as of December 31, 2024, primarily due to (i) an increase in prepayments to suppliers from RMB95.3 million as of December 31, 2023 to RMB644.6 million as of December 31, 2024, mainly because we further increased prepayments to alumina and coal suppliers to (a) prepare for the pilot production of the new production line for aluminum hydroxide that commenced in December 2024; and (b) secure a stable supply of coal;
Financial Information · p. 383
The prepayment on the acquisition of power generation facilities will be refunded before December 31, 2025.
Financial Information · p. 383
As of September 30, 2025, approximately RMB493.9 million, or 49.9% of our prepayments and other receivables as of May 31, 2025, had been settled.
The decrease in our trade and other receivables as of December 2023 was partially offset by an increase in prepayments to suppliers from RMB29.8 million as of December 31, 2022 to RMB57.2 million as of December 31, 2023, as we increased prepayments to our supplier clinical sites and CROs in line with increasing number of and advancement of R&D projects for the innovative drug business.
Financial Information · p. 583
In 2022, 2023 and 2024 and the six months ended June 30, 2025, our trade receivables turnover days were 87 days, 107 days, 77 days and 97 days, respectively.
Financial Information · p. 584
As of September 30, 2025, RMB48.7 million, or approximately 61.8% of our trade receivables as of June 30, 2025 had been subsequently settled.
Our trade and bills receivables increased from RMB5,105.8 million as of December 31, 2024 to RMB5,659.4 million as of June 30, 2025, primarily due to an increase in trade receivables of RMB856.9 million, primarily attributable to the increase in our sales of new energy metal products.
Financial Information · p. 320
In 2023, 2024 and the six months ended June 30, 2025, we factored trade receivables of RMB453.9 million, RMB1,347.7 million and RMB0.8 million, respectively.
Financial Information · p. 320
As of September 30, 2025, 88.3% of our total trade and bills receivables as of June 30, 2025, or RMB4,995.3 million, were settled.
Our prepayments, deposits and other receivables increased from RMB2,639.6 million as of December 31, 2022 to RMB5,335.8 million as of December 31, 2023, primarily due to (i) an increase in prepayments of RMB1,097.6 million primarily attributable to an increase in procurement of nickel intermediates, which typically require prepayment, (ii) an increase in deposits and other receivables of RMB620.2 million primarily attributable to an increase in loans to our affiliates for establishment of overseas production bases, and (iii) an increase in tax recoverable of RMB1,005.3 million primarily attributable to an increase in input tax associated with our construction and establishment of overseas production bases.
Financial Information · p. 322
Our prepayments, deposits and other receivables increased from RMB5,436.6 million as of December 31, 2024 to RMB6,226.2 million as of June 30, 2025, primarily due to (i) an increase in prepayments of RMB229.9 million, primarily attributable to an increase in procurement of raw materials, and (ii) an increase in deposits and other receivables of RMB474.1 million primarily attributable to an increase in loans to our affiliates for establishment of overseas production bases.
During the Track Record Period, the current and non-current portion of our contract costs and others continued to increase, primarily because (i) our customer orders increased; and (ii) we engaged in more joint development projects with OEM customers to secure design-wins, for which there is a relatively long period of time from design-win to mass production, resulting in contract fulfillment costs being recognized during this period of time.
Financial Information · p. 413
As of August 31, 2025, approximately RMB1,121.6 million, or 26.8% of our prepayments and others assets as of April 30, 2025 had been settled.
Our trade receivables turnover days increased from 96 days in 2022 to 249 days in 2023, as we continued to grow our customer base and granted credit periods to accommodate customers' payment practices.
Financial Information · p. 456
As of December 31, 2022, 2023, and 2024 and June 30, 2025, we recorded loss allowances for trade receivables of RMB10.3 million, RMB35.5 million, RMB65.4 million (US$9.1 million) and RMB63.4 million (US$8.9 million), respectively.
Financial Information · p. 457
As of August 31, 2025, RMB73.7 million (US$10.3 million), or 29.4% of our trade receivables and amounts due from related parties as of June 30, 2025, had been settled.
Our accounts receivable turnover days increased from 70 days in 2022 to 147 days in 2023, mainly due to a significant increase in the average of the beginning and ending balances of accounts receivable in 2023, as compared to such average in 2022.
Financial Information · p. 531
As of August 31, 2025, US$9.4 million, representing 34.8% of accounts receivable, net as of June 30, 2025 were subsequently settled.
Financial Information · p. 532
Accounts receivable aged more than one year as of June 30, 2025 that remained unsettled as of August 31, 2025 are primarily from customers with sound credit profiles and no record of default in the past.
Our trade and other receivables turnover days increased from 33 days in 2022 to 45 days in 2023, primarily because of foreign exchange collection affected by the letter of credit not yet expired as export sales increase.
Financial Information · p. 348
As of August 31, 2025, RMB2,496.9 million, or 45.9% of our trade and other receivables outstanding as of June 30, 2025, had been subsequently settled.
Financial Information · p. 348
We believe there are not any recoverability issue for trade and other receivables, primarily due to the subsequent settlements of trade and other receivables are still increasing and there have been no significant changes in the credit risk of our major customers.
Although we generally specify a credit period of one month extending up to five months for major customers, in practice, some clients are provided with more flexible payment terms (typically within one year).
Financial Information · p. 406
The increase in trade and bills receivable turnover days from 2023 to 2024 was primarily due to the relatively lower revenue recognized in 2024, partially affected by the longer recovery period of certain clients in industry solutions business, in relation to the complex process and budget constraint of these clients.
Financial Information · p. 407
In the years ended December 31, 2022, 2023 and 2024 and the six months ended June 30, 2024 and 2025, we recorded net impairment losses on financial assets and contract assets of RMB26.5 million, RMB16.5 million, RMB24.3 million, RMB10.4 million and RMB17.4 million, respectively.
Our trade and bills receivables increased by RMB122.5 million to RMB1,238.1 million as of December 31, 2024, and RMB1,580.2 million as of June 30, 2025, primarily due to the sales of our products.
Financial Information · p. 357
Our trade and bills receivables turnover days increased from 144 days in 2022 to 159 days in 2023, and decreased to 116 days in 2024, primarily due to a temporary extension of credit terms to certain customers in 2023 in consideration of our strategic cooperation with these customers.
Financial Information · p. 358
As of December 31, 2022, 2023, and 2024, and June 30, 2025, in terms of gross carrying amounts, 39.1%, 28.2%, 42.6%, and 38.5% of the total trade receivables was due from our Group’s largest customer, and 62.7%, 69.3%, 68.8%, and 67.4% of the total trade receivables were due from the Group’s top five customers.
Our trade and bills receivables increased by 81.2% from RMB41.0 million as of December 31, 2022, to RMB74.4 million as of December 31, 2023, and further significantly increased to RMB166.2 million as of December 31, 2024, primarily driven by the growth of our business during the Track Record Period.
Financial Information · p. 367
Our trade and bills receivables turnover days increased from 146 days in 2022 to 181 days in 2023, and further increased to 199 days in 2024, primarily because (i) the balance of our trade and bills receivables increased along with our revenue growth, and (ii) we served more KA customers with relatively longer credit terms to rapidly expand our business.
Financial Information · p. 369
We seek to maintain strict control over our outstanding receivables and our credit control department is responsible for minimizing credit risks.
We had trade and bills receivables of RMB31,841.4 million, RMB29,423.9 million, RMB31,256.8 million and RMB33,984.6 million as of December 31, 2022, 2023 and 2024 and April 30, 2025, respectively.
Financial Information · p. 435
The increase in impairment of trade and bills receivables during the Track Record Period was primarily due to the rise in the balance of trade and bills receivables, driven by the significant increase in overseas revenue contribution, as overseas sales were mainly settled through credit sales.
Financial Information · p. 436
Our trade and bills receivables turnover days increased from 133 days in 2022 to 151 days in 2023, primarily due to an increase in overseas sales, which typically involve more installment payment arrangements.
Our receivables under finance lease represented receivables from our finance lease services, which comprised gross investments by us less unearned finance income.
Financial Information · p. 432
Our receivables under finance lease increased by 32.7% from RMB12,083.3 million as of December 31, 2022 to RMB16,032.1 million as of December 31, 2023, primarily due to an increased adoption of finance lease as a payment method by our customers, despite a decline in overall sales.
Our trade receivables turnover days decreased from 107.1 days in 2022 to 97.7 days in 2023, primarily due to (i) our active collection of trade receivables; and (ii) the relatively higher increase in revenue as compared to the increase in trade receivables, given that the Acquisition of Rolling was in November 2022, which resulted in consolidation of the revenue of Shenzhen Rolling for only two months in 2022, as compared to a full year in 2023.
Financial Information · p. 310
Our trade receivables turnover days increased from 86.6 days in 2024 to 97.3 days in the four months ended April 30, 2025, primarily due to an increase in trade receivables as a result of our business growth.
Financial Information · p. 310
During the Track Record Period, we did not experience any significant losses associated with our trade receivables, and the fluctuation in our trade receivables did not have any material adverse impact on our liquidity or cash flows.
The receivables due from e-commerce platforms increased from RMB71.6 million as of December 31, 2022 to RMB81.5 million as of December 31, 2023, further increased to RMB173.6 million as of December 31, 2024, and subsequently increased to RMB214.3 million as of June 30, 2025, primarily because the authorization fees on account increased as customer orders for our products increased, driven by the growth of our business scale.
Financial Information · p. 332
Our prepayments increased from RMB81.8 million as of December 31, 2022 to RMB103.2 million as of December 31, 2023, further increased to RMB121.7 million as of December 31, 2024, primarily due to the increase in prepayments for cloud server fees.
Financial Information · p. 331
As of August 31, 2025, RMB217.6 million, or 90.8%, of our trade and other receivables as of June 30, 2025 had been subsequently settled.
Our trade receivables significantly increased from RMB16.5 million as of December 31, 2023 to RMB61.2 million as of December 31, 2024, which was generally in line with the expansion of our business operations.
Financial Information · p. 454
Our trade receivable turnover days increased to 97 days in the first five months of 2025, primarily due to the higher revenue contribution from distributors aligning with our strategic transition from a direct sales approach to a robust distribution model to improve our selling and marketing efficiency, to which we generally grant longer credit terms compared to our direct sale customers considering the bulk purchase volumes and good credit profile of distributors.
Financial Information · p. 455
The rising expected loss rates mainly reflected the slowing cash collections and aging deterioration of certain trade receivables.