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
In 2022, 2023, 2024, and the three months ended March 31, 2025, our average trade receivable turnover days were 194, 248, 231 and 163 days, respectively.
Financial Information · p. 420
The increase of provision for impairment from December 31, 2023 to December 31, 2024 was primarily due to a default by a single customer, resulting in noncollectable accounts receivable.
Financial Information · p. 419
Our overall cash conversion cycle is 96 days, 130 days, 127 days and 81 days as of December 31, 2022, 2023, 2024, and March 31, 2025.
Our net trade receivables increased significantly from approximately HK$19.7 million as at 31 March 2024 to approximately HK$30.3 million as at 31 March 2025.
Financial Information · p. 294
Despite the credit period we granted to our customers, which generally ranges from 0 to 60 days, certain customers had not settled our trade receivables within the specified timeframe due to their prolonged internal settlement processes, resulting in delays in payments made to our Group.
Financial Information · p. 296
As at 31 July 2025 (being the latest practicable date for this information), approximately HK$26.3 million, or 85.3%, of our gross trade receivables as at 31 March 2025 were subsequently settled.
As of December 31, 2022, 2023 and 2024 and March 31, 2025, our trade receivables amounted to RMB8.9 million, RMB2.9 million, RMB27.1 million and RMB47.7 million.
Financial Information · p. 416
As of March 31, 2025, our trade receivables accounted for 35.1% of our revenue for the three months ended March 31, 2025, mainly due to changes in distributor delivery policies, which resulted in longer credit terms and an extended collection period for our major products.
Financial Information · p. 416
As of August 31, 2025, 85.3%, or RMB40.7 million of our trade receivables as of March 31, 2025 had been subsequently settled.
Our trade receivables further increased to RMB1,125.0 million as of December 31, 2024 primarily due to an increase of RMB131.9 million in our trade receivables due within 91 to 180 days, because we agreed to a settlement arrangement longer than the credit term with one significant customer to promote our collaboration with this client.
Financial Information · p. 403
During the Track Record Period, we had long turnover days because our overall trade receivables turnover days had been affected by our slower collection of trade receivables due from several major OEM customers whose payment practices caused the time of their actual payments to be longer than credit terms.
Financial Information · p. 405
As of July 31, 2025, RMB285.4 million, or 34.1% of our trade receivables as of May 31, 2025, had been subsequently settled.
The increase in trade receivables as at 31 May 2025 was primarily attributable to (i) the relatively higher sales volume near the end of 5M2025; and (ii) our temporary deferred resource allocation for receivables recovery due to administrative reasons, which was reflected in the increase in trade receivables aged over 90 days.
Financial Information · p. 548
As at 31 May 2025, our trade receivables aged from 91 to 180 days was relatively higher at RMB17.1 million.
Financial Information · p. 549
Up to the Latest Practicable Date, RMB116.2 million or 99.7% of our trade receivables outstanding as at 31 May 2025 were settled.
Our trade receivables increased from RMB9,521 million as of December 31, 2022 to RMB11,268 million as of December 31, 2023, further increased to RMB17,423 million as of December 31, 2024, and further to RMB21,270 million as of March 31, 2025, primarily due to the increase in the sales of our products.
Financial Information · p. 402
In 2022, 2023 and 2024, our trade receivables turnover days were 35.8 days, 26.2 days and 21.0 days, respectively. The decrease in our trade receivables turnover days was primarily because we stepped up our efforts in the management and collection of trade receivables.
Financial Information · p. 403
As of July 31, 2025, RMB17,905 million (or 80.2%) of our trade receivables as of March 31, 2025, had been subsequently settled.
Our trade and other receivables further increased to RMB100.6 million as of June 30, 2025, mainly due to a significant increase in trade receivables from RMB31.4 million as of December 31, 2024 to RMB71.5 million as of June 30, 2025, resulting from sales growth during the mid-year promotional campaign.
Financial Information · p. 360
Our trade receivables turnover days remained stable, which was eight days in 2022, 2023 and 2024 and increased to 13 days in the six months ended June 30, 2025, mainly due to the sales growth to e-commerce platforms, which have relatively longer credit terms compared to other types of customers, during mid-year sales promotions.
Financial Information · p. 361
As of August 31, 2025, approximately RMB69.5 million, or 97.3% of trade and other receivables outstanding as of June 30, 2025 had been subsequently settled.
Our trade receivables increased from RMB72.4 million as of December 31, 2023 to RMB109.2 million as of December 31, 2024 and decreased to RMB97.5 million as of April 30, 2025, generally in line with the research and development activities of our collaborators in relation to the out-license and collaboration programs, as well as the milestones achieved within such periods.
Financial Information · p. 532
As of April 30, 2025, approximately 92.6% of the trade receivables were due from Innovent, arising from the licensing and collaboration agreements.
Financial Information · p. 532
Innovent is a limited liability company listed on the Hong Kong Stock Exchange. Based on the financial information disclosed in its latest annual report, there are no indications of concerns regarding its ability to meet repayment obligations.
Our net trade receivables further increased by 44.9% from RMB117.8 million as of December 31, 2023 to RMB170.7 million as of December 31, 2024, primarily due to our wholesale of pharmaceutical and healthcare products, as well as digital hospital solutions during this period.
Financial Information · p. 479
Our trade receivables turnover days significantly increased to 85 days in 2024, primarily due to an increase in the average trade receivables balance despite a slight decrease in revenue during the same period.
Financial Information · p. 480
To mitigate the impact, we have strengthened our credit management by tightening credit controls, stepping up collection efforts, and adjusting credit terms for certain customers.
Our accounts receivable, net of allowance, further increased to RMB765.0 million as of December 31, 2024 and to RMB957.6 million (US$132.0 million) as of March 31, 2025, primarily due to increased sales and longer credit term granted to certain OEM customers.
Financial Information · p. 374
The substantial increase from RMB6.2 million as of December 31, 2022 to RMB49.1 million as of December 31, 2023 was primarily due to expected credit losses of RMB35.6 million recognized in relation to accounts receivable from an OEM customer in China that faced operational difficulties and subsequently entered into bankruptcy proceedings.
Financial Information · p. 374
Furthermore, as of July 31, 2025, 79.9% of our accounts receivable as of March 31, 2025 had subsequently been settled.
Our trade receivables aged over 90 days increased from RMB4.8 million as of December 31, 2022 to RMB16.4 million as of December 31, 2023, primarily due to the reclassification of amounts due from DNA from amounts due from related parties to trade receivables as it ceased to be a related party of our Company after Dr. Hon completed the disposal of his interest in DNA in February 2023.
Financial Information · p. 269
The trade receivables due from DNA has been past due 90 days or more and is not considered as in default since our Directors are of the opinion that the balances are still considered recoverable due to the management’s historical experience on the settlement pattern from DNA.
Financial Information · p. 269
Considering the combining effect of amounts due from and due to the overseas OEM supplier (RMB4.9 million and RMB5.5 million respectively) on our consolidated financial statements as of April 30, 2025, we believe that the aforesaid timing difference in settlement has no impact on our working capital position.
Our trade and bills receivables increased from RMB1,427.5 million as of December 31, 2022 to RMB1,944.9 million as of December 31, 2023, increased to RMB3,003.4 million as of December 31, 2024, and further increased to RMB4,764.6 million as of March 31, 2025, mainly because of our increased overseas sales, which typically have a longer credit period.
Financial Information · p. 340
Our trade and bills receivables turnover days increased from 24.8 days in 2023 to 30.3 days in 2024, and further increased to 37.4 days for the three months ended March 31, 2025, primarily because of the increased overseas sales.
Financial Information · p. 342
As of July 31, 2025, RMB3,465.7 million, or 87.0% of our trade receivables as of March 31, 2025 had been settled.
The trade and bills receivables turnover days further increased to 189.0 days in the five months ended May 31, 2025, primarily due to (i) relatively low revenue during the first five months of the year, which inflated the turnover ratio, and (ii) delayed payments from certain customers.
Financial Information · p. 376
As of July 31, 2025, RMB613.5 million, or 25.7%, of trade and bills receivables as of May 31, 2025 had been subsequently settled.
Financial Information · p. 378
To mitigate delays in collecting trade and bills receivables, we have implemented a range of targeted measures to address the root causes of payment delays and improve receivables management efficiency.
Our trade receivables and other receivables increased from RMB176.3 million as of December 31, 2022 to RMB393.2 million as of December 31, 2023, and further increased to RMB575.8 million as of December 31, 2024, primarily as a result of the increase in trade receivables, which is attributable to our strong sales growth.
Financial Information · p. 339
Our trade receivables turnover days increased from 65.2 days in 2023 to 85.6 days in 2024 and further increased to 115.8 days in the three months ended March 31, 2025, primarily because we granted longer credit terms to customers with relatively stronger credit records, and the proportion of such customers has grown.
Financial Information · p. 340
As of June 15, 2025, RMB275.6 million, or approximately 52.0% of our trade receivables as of March 31, 2025 had been settled.
Our trade receivables increased from RMB73.6 million as of December 31, 2023 to RMB284.9 million as of December 31, 2024, generally in line with the increase in our revenue and the seasonal nature of vaccine sales, which tend to be more concentrated between July and September.
Financial Information · p. 400
Our trade receivables turnover days for the year ended December 31, 2024 were 252.1 days.
Business · p. 321
We believe sufficient provisions have been made for the trade receivables as of March 31, 2025 and there is no material recoverability issue with respect to such trade receivables, primarily because: (i) 98.3% of our trade receivables were aged within one year as of March 31, 2025, which were owed to us by district- or county-level CDCs.
Our prepayments, deposits and other receivables increased from RMB38.7 million as of December 31, 2023 to RMB83.2 million as of December 31, 2024, mainly due to (i) an increase of RMB32.7 million in prepayments for research and development services, primarily attributable to service fees prepaid to a CDMO for conducting pilot production of certain preclinical assets in support of their IND submissions, (ii) an increase of RMB6.4 million in value-added tax recoverable, and (iii) an increase of RMB5.1 million in deferred listing expense.
Financial Information · p. 471
As of May 31, 2025, RMB6.5 million, or 7.2%, of our prepayments, deposits and other receivables as of March 31, 2025 had been subsequently settled.
As of December 31, 2022, 2023, and 2024, our trade receivables, net of impairment, totaled RMB551.0 million, RMB608.6 million, and RMB880.9 million, respectively, accounting for 56.8%, 51.8%, and 60.4% of our total current assets, respectively.
Financial Information · p. 345
This trend is evidenced by the Company's trade receivable turnover days, which increased by 28.77%, from 247.5 days in 2023 to 318.7 days in 2024.
Financial Information · p. 345
However, the corresponding trade receivables from this business amounted to RMB453.6 million, accounting for 47.78% of total trade receivables.
Our prepayments increased by 30.8% from RMB345.7 million as of December 31, 2022, to RMB452.1 million as of December 31, 2023, and further increased by 13.4% to RMB512.5 million as of December 31, 2024.
Financial Information · p. 356
All of our prepayments for telecommunications resource procurement are refundable pursuant to the contracts with suppliers, accounting for 96.2%, 97.5%, and 94.8% of total prepayments as of December 31, 2022, 2023, and 2024, respectively.
Business · p. 230
On average, prepayments for telecommunications resources are generally expected to be consumed within three to four months.
As of December 31, 2022, 2023 and 2024, the balance of our trade and bills receivables were RMB373.3 million, RMB708.3 million and RMB713.6 million, respectively.
Financial Information · p. 423
Our trade and bills receivables turnover days further increased to 107.7 days in 2024, which is in line with our increased sales volume and adjustment to credit management to support business expansion.
Financial Information · p. 423
As a result, as of April 30, 2025, RMB320.9 million, RMB622.3 million and RMB291.0 million, or 80.4%, 83.6% and 38.2% of our trade and bills receivables outstanding as of December 31, 2022, 2023 and 2024, had been subsequently collected.