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
As at 30 September 2024, our trade receivables, net of loss allowances, increased from approximately RMB34.9 million as at 31 December 2023 to approximately RMB77.6 million as at 30 September 2024. This closing balance is mainly composed of the outstanding receivables from Russian Top-tier Retailer which was substantially subsequently settled as at the Latest Practicable Date.
Financial Information · p. 306
Our other receivables increased from approximately RMB34.4 million as at 31 December 2023 to approximately RMB62.5 million as at 30 September 2024. This increase was mainly due to (i) promotion expenses of approximately RMB14.6 million prepaid to certain marketing agents for the promotion on digital platforms in 9M2024, which was expected to be recognised in profit or loss within one year; and (ii) increase in value-added tax and other tax recoverables of approximately RMB10.1 million.
Financial Information · p. 307
As at 31 December 2021, 2022, 2023 and 30 September 2024, our trade receivables, net of loss allowances, of approximately RMB19.8 million, RMB15.6 million, RMB13.1 million and RMB8.8 million, respectively, were past due. Such amounts were due from our customers whom, to the best knowledge of our Directors, had no financial difficulties. Based on the previous experience of business cooperation, the overdue amounts can be recovered.
Our trade receivables increased from US$11.5 million as at 31 December 2022 to US$62.6 million as at 31 December 2023, which was in line with our increase in revenue in FY2023.
Financial Information · p. 346
Our trade receivables turnover days were within the typical credit term of within 30 working days granted to our customers, and amounted to 10 days, 20 days and 22 days in FY2022, FY2023 and 9M2024, respectively.
Financial Information · p. 346
As at 31 January 2025, US$46.2 million, or 100.0% of our trade receivables outstanding as at 30 September 2024, had been settled.
Trade receivables from our comprehensive recycling of resources business increased by 8.9% from RMB311.4 million as of December 31, 2021 to RMB339.2 million as of December 31, 2022 and further increased by 17.2% from RMB339.2 million as of December 31, 2022 to RMB397.5 million as of December 31, 2023, resulting from the delayed subsidy disbursements from PRC Government.
Financial Information · p. 537
As of January 31, 2025, RMB260.3 million or 42.9% of the trade receivables as of September 30, 2024 had been subsequently settled.
Financial Information · p. 538
We believe that the expected credit losses are limited because the trade receivable balances are due from the Ministry of Ecology and Environment of the PRC, which has high credibility and historically we did not incur any actual loss with this organization.
Our trade receivables increased from RMB70.4 million as of December 31, 2023 to RMB151.2 million as of September 30, 2024, mainly due to our increased sales of coffee machines to franchisees which have long credit periods.
Financial Information · p. 346
Our trade receivable turnover days increased to 4.7 days in the nine months ended September 30, 2024, mainly due to the longer credit period that we provide to our franchisees for their purchases of equipment from us.
Financial Information · p. 347
As of January 15, 2025, approximately RMB139.9 million, or 92.5%, of our trade receivables as of September 30, 2024 had been settled.
Our trade and bills receivables increased by RMB257.9 million or 86.0% from RMB301.0 million as at 31 December 2021 to RMB558.9 million as at 31 December 2022, mainly due to the increase in revenue following the launch of our new product, namely polyether monomers in June 2022.
Financial Information · p. 447
As at 30 June 2024, total trade and bills receivables of RMB149.4 million was due from Customer B and its subsidiaries, of which RMB34.6 million or 23.2% was settled as at the Latest Practicable Date.
Financial Information · p. 448
Our Directors considered that trade and bills receivables from Customer B and its subsidiaries has no recoverability issue because (i) the customer is a state-owned enterprise and a leading player in its industry with a registered capital of RMB12.1 billion as at the Latest Practicable Date; (ii) the customer had historical payment record with us; (iii) we did not have any material disagreement or disputes with this customer on trade and bills receivables; and (iv) there had not been any significant change in creditability of the customer and the balances were still considered to be fully recoverable.
Our trade and notes receivables increased from RMB15.3 million as of December 31, 2022 to RMB38.3 million as of December 31, 2023, and further to RMB63.3 million as of June 30, 2024, primarily due to the expansion of our sales network and the sales growth of our assembly character toys.
Financial Information · p. 297
Approximately 25.3%, 25.1%, 24.6% and 22.5% of our distributors as of December 31, 2021, 2022 and 2023 and June 30, 2024 were granted credit terms by us.
Business · p. 210
As of October 31, 2024, 98.2% of our total trade and notes receivables as of June 30, 2024, or RMB62.8 million, were settled.
Our trade and notes receivables turnover days further increased to 517.1 days for 6M2024 mainly because of (i) significant long outstanding trade and notes receivables of approximately RMB150.0 million as at 30 June 2024 which were mainly due from the Relevant Customer and Customer E; and (ii) the significant opening balance of our trade and notes receivables as at 31 December 2023 coupled with a relatively low level of our revenue during 6M2024.
Financial Information · p. 460
As at 30 June 2024, our trade and notes receivables aged between one year and two years primarily included: (i) trade and notes receivables of approximately RMB18.7 million due from the Relevant Customer; and (ii) trade and notes receivables of approximately RMB11.5 million due from Customer E.
Financial Information · p. 461
there was subsequent settlement of approximately RMB26.8 million (or approximately 75.4%) of our gross trade and notes receivables aged over one year as at 30 June 2024 up to the Latest Practicable Date.
Our trade receivables increased from RMB1.1 million as of December 31, 2021 to RMB8.4 million as of December 31, 2022, further to RMB50.7 million as of December 31, 2023, and further to RMB78.8 million as of June 30, 2024, primarily due to an increase in revenue under our various types of service and the resulting increase in sales on credit, as well as because we established new cooperation with research institutions under our research projects business, which led to increased credit period at the initial cooperation stage.
Financial Information · p. 456
The average trade receivables turnover days were 114.6 days in 2021, 153.3 days in 2022, 160.7 days in 2023 and 227.2 days for the six months ended June 30, 2024.
Financial Information · p. 457
As of October 31, 2024, RMB23.1 million, representing 29.4% of the trade receivables outstanding as of June 30, 2024 were subsequently settled.
Our trade receivables increased by 71.0% from RMB163.2 million as of December 31, 2021 to RMB279.0 million as of December 31, 2022, by 82.8% to RMB510.0 million as of December 31, 2023 and further by 13.6% to RMB579.1 million as of June 30, 2024, mainly as a result of an increase in the sales of our products and services and the longer payment cycles of certain regional healthcare administrator customers.
Financial Information · p. 434
We had relatively long trade receivables turnover days during the Track Record Period, primarily because a significant portion of our revenue was derived from sales to regional healthcare administrators, which typically feature a long payment cycle.
Business · p. 256
Approximately RMB78.9 million or 13.6%, of our trade receivables as of June 30, 2024 had been settled as of October 31, 2024.
Our trade and other receivables then increased to RMB337.0 million and RMB387.6 million as of December 31, 2023 and June 30, 2024, primarily due to the increase in trade receivables, net of loss allowance, which is attributable to our strong sales growth.
Financial Information · p. 416
Our trade receivable turnover days further shortened to 132.5 days in 2023, and remained relatively stable at 133.2 days in the six months ended June 30, 2024.
Financial Information · p. 417
As of October 31, 2024, RMB188.9 million, or 66.9% of our trade receivables as of June 30, 2024 had been settled.
Our long-term trade receivables primarily consist of our receivables due in more than one year in relation to the sales of comprehensive services, including our PHC Services, Patient Services and Regional Healthcare Solutions, primarily to two municipal regional healthcare administrator customers.
Financial Information · p. 455
Our long-term trade receivables subsequently decreased to RMB79.2 million as of December 31, 2023, because, as certain sales considerations had become overdue as of December 31, 2023 and certain considerations would become due within one year from December 31, 2023, the corresponding amount of long-term trade receivables had been reclassified as trade receivables.
Financial Information · p. 455
We believe that there is no recoverability issue for our long-term trade receivables on the basis that (i) as confirmed by Frost & Sullivan, purchases of healthcare administrator customers are approved and supported by relevant government budgeting plans; (ii) we have actively communicated with the respective customers on the expected collection of relevant long-term trade receivables.
Our trade receivables, net of loss allowance from third parties increased from RMB33.9 million as of December 31, 2022 to RMB112.1 million as of December 31, 2023, primarily due to the business expansion and revenue growth of our information technology services, RWS support services and pharmaceutical sales business, for which we granted credit periods of around 30 days to customers.
Financial Information · p. 467
Our average trade receivables turnover days increased from 21.8 days in 2023 to 29.3 days for the six months ended June 30, 2024, primarily because we offered more favorable credit terms to our customers to strengthen customer relationship and drive long-term business growth and stability.
Financial Information · p. 469
As of October 31, 2024, RMB74.8 million, or 87.3% of our trade receivables as of June 30, 2024 had been settled.
Our trade and notes receivables increased from RMB100.9 million as of December 31, 2021 to RMB217.7 million as of December 31, 2022, further to RMB333.6 million as of December 31, 2023, and then increased to RMB398.4 million as of June 30, 2024, primarily due to our business growth throughout the Track Record Period.
Financial Information · p. 408
Our trade and notes receivables turnover days increased from 220 days in 2023 to 294 days in the six months ended June 30, 2024, primarily because the increase in our trade receivables in the first half of 2024 outpaced the increase in our revenue in the same period, which was affected by the seasonal fluctuations in demand of our solutions.
Financial Information · p. 410
Our Directors believe that there is no material recoverability issue with respect to our trade and notes receivables and that we have sufficient provision for impairment in light of the prevailing circumstances as of the Latest Practicable Date, based on (i) our periodic evaluation to closely monitor our credit risks and make proper provision for expected impairment, (ii) our stringent internal controls on the management of trade and notes receivables, and (iii) the creditability of our major customers, which are reputable with solid track record in the industry.
We had trade and bills receivables of RMB16.4 million, RMB40.4 million, RMB41.6 million and RMB33.0 million as of December 31, 2021, 2022 and 2023 and June 30, 2024, respectively.
Financial Information · p. 324
Our trade receivables turnover days increased during the Track Record Period, as we continued to grow our customer base and granted credit periods to accommodate customers' payment practices, mainly for overseas customers.
Financial Information · p. 324
As of October 31, 2024, RMB22.1 million or approximately 60.8% of our trade receivables as of June 30, 2024 had been settled.
In 2021, 2022 and 2023, our trade receivables turnover days were 909 days, 1,029 days and 866 days, respectively.
Financial Information · p. 475
This leads to general capital constraints in the fuel cell vehicle industry, which, coupled with the fact that hydrogen fuel cell commercial vehicle manufacturers have strong bargaining power given our industry is still in the early stages of development, ultimately resulting in prolonged settlement of our trade receivables.
Financial Information · p. 474
As of December 31, 2021, 2022 and 2023 and May 31, 2024, our provision for impairment losses on trade receivables, commercial acceptance bills receivables amounted to RMB373.4 million, RMB400.1 million and RMB461.1 million and RMB503.0 million, respectively.
Upon requests from relevant customers to obtain the full amount of the 2023 Certified Amount as early as possible, we had, after taking into account various factors like (i) the disbursement of such subsidies having been officially confirmed by the government, making the risks associated with the loss of such amount remote, and (ii) our long-standing cooperative relationship with these customers with strategic value, including their commitment to promote the utilization of hydrogen energy for mutual benefits as proven by the successful track record of collaborative efforts, made a prepayment in the amount of RMB113.1 million to three customers in December 2023.
Financial Information · p. 484
As advised by our PRC Legal Adviser, the prepayment of subsidies to customers did not constitute a violation of the General Lending Provisions, because instead of the intent or purpose to provide financing support or conduct financing business, we made the payment in advance when the government's approval confirming the certainty of the 2023 Certified Amount was received, and merely changing the payment order will not be considered an act of private lending subject to the General Lending Provisions.
Financial Information · p. 484
Our prepayments, other receivables and other assets decreased by 26.2% from RMB364.2 million as of December 31, 2023 to RMB268.8 million as of May 31, 2024, primarily due to a decrease in prepayment of government subsidies, as we received the full amount of the prepaid subsidies in February 2024.
Our trade receivables aged between 3 to 6 months increased from RMB2.2 million as of December 31, 2022 to RMB4.5 million as of December 31, 2023 and further to RMB74.7 million as of June 30, 2024, primarily due to expansion of software development and implementation business under customer contracts for our retail core service cloud solutions, which generally have a credit period of under one year.
Financial Information · p. 395
As of September 30, 2024, RMB166.6 million or 65.0% of our trade receivables as of June 30, 2024 had been subsequently settled.
Financial Information · p. 395
We do not foresee any material recoverability issue with our trade receivables based on our evaluation of the historical credit standing and the credit records of our customers, which are generally leading local retail enterprises with strong economic performance and credit history, and with whom we have maintained long-term commercial cooperation.
In June 2020, we made a payment amount of RMB43.6 million for a cellphone order to Supplier X without verifying delivery receipt of the cellphone order. However, we did not receive the cellphones.
Financial Information · p. 397
The incident is under investigation by the relevant authority since 2020; therefore, there were no movements of the "receivable from a supplier" item from 2020 and throughout the Track Record Period.
Financial Information · p. 397
Subsequently, our Company conducted an internal review of the internal control mechanisms and adopted corresponding internal control measures.
As of January 1, 2021, we recorded a specific provision of RMB34.4 million for our trade receivables under ECL model, mainly due to financial difficulties of a prior-Track Record Period provincial-dealer.
Financial Information · p. 496
As of January 1, 2021, the total amount due from this provincial-dealer was RMB32.6 million, for which we made provision of RMB25.6 million.
Financial Information · p. 496
As of December 31, 2023, the amount due from this provincial-dealer was RMB24.0 million, which had been fully impaired.
Our trade and bills receivables increased by 15.6% from RMB410.3 million as of December 31, 2021 to RMB474.5 million as of December 31, 2022.
Financial Information · p. 535
Our trade receivables turnover days increased from 90 days in 2021 to 122 days in 2022 because of an increase in our trade receivables from sales of Guyoudao, a medical device product, which generally have a longer credit period than our drug products.
Financial Information · p. 537
According to our aging analysis of trade receivables and financial assets at fair value through other comprehensive income, there was an increase from RMB4.4 million at the end of 2023 to RMB44.8 million as of June 30, 2024, within the one to two-year range.