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 average trade receivables turnover days increased from 252 days in 2021 to 321 days in 2022, mainly because we delivered a large number of vehicle-mounted high-pressure hydrogen supply systems and related products to a customer in the fourth quarter of 2022 and we had not received such amount from the customer as of December 31, 2022.
Financial Information · p. 467
Although the credit term we grant to our customers is generally within one year, we still had some trade receivables over one year as of December 31, 2021, 2022 and 2023 and May 31, 2024, primarily due to the delays experienced by certain of our customers in receiving their subsidies, which they were entitled to enjoy under the relevant favorable government policies.
Financial Information · p. 468
As of September 30, 2024, RMB271.8 million, RMB301.8 million, RMB171.8 million and RMB70.1 million, or 78.1%, 70.1%, 31.7% and 14.1% of our trade receivable as of December 31, 2021, 2022 and 2023 and May 31, 2024, were subsequently settled, respectively.
As of December 31, 2021, 2022, 2023 and May 31, 2024, our trade and bills receivables were RMB509.0 million, RMB583.2 million, RMB669.5 million and RMB747.6 million, respectively.
Financial Information · p. 408
Our trade and bills receivables turnover days increased from 112 in 2021 to 144 in 2022, and decreased to 124 in 2023, mainly because some of our customers changed their payment methods between commercial acceptance drafts and bank acceptance drafts during the Track Record Period.
Financial Information · p. 409
As of August 31, 2024, RMB468.4 million, or 79.0%, of our trade receivables as of May 31, 2024 had been settled.
Our trade receivables net of allowance increased by 72.7% from RMB467.5 million as of December 31, 2022 to RMB807.5 million as of December 31, 2023, mainly attributable to an increase in trade receivables in line with our business growth, particularly those due from Wayfair and Amazon which have relatively longer credit terms.
Financial Information · p. 367
Our trade receivables turnover days subsequently increased from 28.6 in 2023 to 34.3 in the four months ended April 30, 2024, mainly due to the relatively lower revenue from sales of goods for March and April 2024 compared with holiday seasons in the U.S. and European markets during November and December 2023, most of which had been collected as of April 30, 2024.
Financial Information · p. 368
RMB624.7 million, or 92.4%, of our trade receivables as of April 30, 2024 had been settled as of August 31, 2024.
Our trade and other receivables increased significantly by 190.2% from RMB1,662.8 million as of December 31, 2021 to RMB4,825.2 million as of December 31, 2022, primarily due to our expansion in the LFP cathode material business through the acquisitions of Tianjin Beiterui Nano and Jiangsu Beiterui Nano in June 2021.
Financial Information · p. 430
Our trade receivable turnover days then increased to 89.8 days in 2023, primarily due to the increase in trade receivable turnover days of LFP cathode materials as a result of reduced revenue contribution from LFP cathode materials and the delay of payment from certain customer in consideration of the slowdown of the overall market condition in 2023.
Financial Information · p. 431
Our Directors are of the view that the provision for impairment losses of our trade receivables is sufficient and not excessive.
Our trade and note receivables increased from RMB169.4 million as of December 31, 2021 to RMB420.7 million as of December 31, 2022, and further to RMB541.1 million as of December 31, 2023.
Financial Information · p. 435
Our trade and note receivables turnover days decreased from 122 days in 2021 to 119 days in 2022, and to 113 days in 2023, as a result of our management of trade receivables and enhanced collection efforts.
Financial Information · p. 437
we are of the view that there is no material recoverability issue for our trade and note receivables.
Our trade and notes receivables increased from RMB191.2 million as of December 31, 2022 to RMB285.1 million as of December 31, 2023 and further to RMB305.2 million as of March 31, 2024, primarily due to the expansion of our business and the increase in our revenue, partially attributable to the increase in the proportion of revenue from the Kodo business to which our Company granted a slightly longer credit period.
Financial Information · p. 416
Our trade and notes receivables turnover days increased from 71 days in 2023 to 84 days in the three months ended March 31, 2024, primarily due to our business expansion and the increase in contribution from our Kodo business which had a slightly longer collection period.
Financial Information · p. 418
As of the Latest Practicable Date, RMB212.0 million, or 63.6% of our total trade receivables before impairment as of March 31, 2024, had been subsequently settled.
Our trade and notes receivables increased from RMB101.2 million as of December 31, 2021 to RMB129.7 million as of December 31, 2022, primarily due to our increased revenue and the prolonged payment cycle of our customers mainly caused by the COVID-19.
Financial Information · p. 409
Our trade and notes receivables turnover days then increased from 76.7 days in 2022 to 87.9 days in 2023, and further to 99.7 days in the first three months of 2024, primarily due to the prolonged payment cycle of our customers affected by the market condition.
Financial Information · p. 410
As of July 31, 2024, approximately RMB63.3 million, or 43.3% of our trade and notes receivables as of March 31, 2024, had been settled.
As at 31 March 2023, the gross trade receivables balance aged over 180 days of approximately HK$24.8 million mainly included (i) approximately HK$14.6 million from Customer A in respect of Project No. #01; and (ii) approximately HK$8.5 million for Customer C in respect of Project No. #01.
Our average turnover days of trade receivables and unbilled revenue increased from approximately 94.2 days for FY2021/22 to approximately 173.5 days for FY2022/23, which was mainly driven by (i) the effect of the long outstanding trade receivables from Customer A and Customer C as disclosed above; and (ii) the increase in our unbilled revenue balance as at 31 March 2023, the analysis of which is disclosed in the paragraph headed “Contract assets and liabilities” below in this section.
Financial Information · p. 356
As of the Latest Practicable Date, our Group has received emails from Customer A signifying that Customer A agreed to settle the outstanding balance of approximately HK$5.0 million by two instalments upon Customer A receiving batch payments from the project owner.
Our trade and note receivables at amortized cost increased by 24.9% from RMB38.4 billion as at 31 December 2023 to RMB48.0 billion as at 30 April 2024 and increased by 16.4% from RMB33.0 billion as at 31 December 2022 to RMB38.4 billion as at 31 December 2023, as a result of the growth of our overseas business, which generally features longer credit terms compared with domestic business.
Financial Information · p. 276
As at 31 July 2024, RMB35.8 billion, or 80.3% of our trade receivables at amortized cost as at 30 April 2024 had been settled.
Financial Information · p. 276
For a substantial portion of our Smart Home Solutions in mainland China, we generally require full payment upon delivery of goods.
As at 31 December 2021, 2022 and 2023 and 30 June 2024, RMB21.9 million, RMB30.8 million, RMB13.2 million and RMB13.5 million, representing 49.3%, 68.6%, 32.1% and 30.2% of our total trade receivables respectively, were aged over one year.
Financial Information · p. 328
In addition, RMB30.8 million of trade receivables brought forward from 31 December 2021 (i.e. trade receivables aged over one year as at 31 December 2022) remained unsettled, which accounted for 69.3% of the total trade receivables as at 31 December 2021, as a result, there was a significant increase in the trade receivable turnover days from 271 days in FY2021 to 639 days in FY2022.
Financial Information · p. 324
In view of the above, we have negotiated settlement plans, including but not limited to extending the due date and formulating payment schedule and instalment amount, with certain property developer debtors and has been closely monitoring and following-up the settlement progress with these debtors.
Our trade and notes receivables increased from RMB49.5 million as of December 31, 2021 to RMB125.2 million as of December 31, 2022, and further to RMB164.9 million as of December 31, 2023.
Financial Information · p. 380
Our trade and notes receivables turnover days amounted to 519 days in the three months ended March 31, 2024, primarily due to (i) that the settlement of certain customers delayed, despite their continuous payment, as their downstream customers experienced temporary financial constraints due to the macroeconomic conditions; and (ii) the relatively low revenue in the first quarter of 2024, in line with the reduced business activities during the Chinese New Year holiday period.
Financial Information · p. 381
As of May 31, 2024, RMB26.9 million, or approximately 15.9% of our trade and notes receivables as of March 31, 2024 had been subsequently collected.
Our net accounts receivables increased from RMB12.0 million as at 31 December 2021 to RMB21.1 million as at 31 December 2022, and further increased to RMB30.8 million as at 31 December 2023.
Financial Information · p. 353
Our average accounts receivables turnover days increased from 34.6 days for FY2021 to 40.7 days for FY2022, 54.5 days for FY2023, and further to 59.8 days for 4M2024 which was in line with our credit policy.
Financial Information · p. 354
As at 31 May 2024, RMB12.8 million or 47.0% of our accounts receivables outstanding as at 30 April 2024 were settled.
As of December 31, 2021, 2022 and 2023, our net trade receivables amounted to RMB215.7 million, RMB312.6 million and RMB582.8 million, respectively.
Financial Information · p. 446
Our trade receivables turnover days further increased from 222 days in 2022 to 243 days in 2023, primarily driven by our customers/enterprise-level users' adjustment of their internal policies for settling with their service providers in accordance with the macro-economic changes in the aftermath of the pandemic, which was in line with market practice according to the iResearch Report, and therefore slowed the pace at which the outstanding payments were being settled compared with previous years.
Financial Information · p. 449
Notwithstanding the foregoing, our Directors are of the view that there is no material recoverability issue with our trade receivables, based upon the reasons set forth below:
As a result of the above, we recorded an increasing trend of our overall average trade and notes receivables turnover days from approximately 198 days for the year ended 31 December 2021 to approximately 205 days for the year ended 31 December 2022; and further increased to approximately 214 days for the year ended 31 December 2023.
Financial Information · p. 308
As at 31 December 2023, we recorded gross trade receivables overdue over one year of approximately RMB25.8 million which accounted to approximately 9.0% of our total gross trade receivables
Financial Information · p. 311
our Directors are of the view that there will not be any material collection problem on the overdue balances and the provision for impairment is considered to be adequate.
Our prepayments increased from RMB10.2 million as of December 31, 2021 to RMB64.0 million as of December 31, 2022, primarily due to the prepayments we made to suppliers for pharmaceutical procurement during the COVID-19 pandemic to ensure the stability of our supply chain.
Financial Information · p. 392
Our prepayments decreased to RMB18.5 million as of December 31, 2023 as we were able make reduced prepayments to our suppliers for the procurement of pharmaceutical products as the COVID-19 pandemic abated.
During the Track Record Period, our trade receivables turnover days decreased from 106.7 days to 70.7 days and 60.7 days during FY2021, FY2022 and FY2023, respectively.
Financial Information · p. 445
As of 31 December 2021 and 2022 and 2023, included in the Group’s trade receivables balance were debtors with aggregate carrying amount of RMB31.7 million, RMB20.2 million and RMB12.2 million, respectively, which were past due but not impaired as of the reporting date.
Financial Information · p. 447
As at 30 April 2024, RMB38.7 million or 39.5% of our trade and other receivables outstanding as at 31 December 2023 have been subsequently settled.
During the Track Record Period, trade receivables that were aged over 180 days were RMB10.7 million, RMB14.4 million and RMB17.7 million as of December 31, 2021, 2022 and 2023, respectively, accounting for 34.1%, 41.1% and 32.7% of our total trade receivables as of the same dates, respectively, exceeding the typical credit period we granted to customers of 90 to 180 days.
Financial Information · p. 383
The provision rate for trade receivables assessed on individual basis increased significantly from 0.66% as of December 31, 2022 to 6.77% as of December 31, 2023, because we upwardly adjusted the provision rate for certain customer as the respective receivable is considered not recoverable as a result of the anticipated discontinuation of business relationship with that customer.
Financial Information · p. 382
As of April 30, 2024, approximately RMB20.7 million, or 38.2%, of our trade receivables as of December 31, 2023 had been settled.
Our deposits and prepayments increased from RMB27.1 million as at 31 December 2021 to RMB33.1 million as at 31 December 2022 to was primarily due to the prepayments for hardware as we commenced our group purchasing campaign service starting from the second half of FY2022 and we placed orders for a large amount of in-vehicle hardware to cope with the anticipated business demand.
Financial Information · p. 443
As at 30 April 2024, RMB21.6 million or 60.2% of our deposits and prepayments as at 31 December 2023 have been subsequently utilised.
Our prepayments, deposits and other receivables increased from RMB18.6 million as of December 31, 2021 to RMB106.9 million as of December 31, 2022, primarily due to (i) an increase in prepayments, mainly relating to the procurement for vehicles as we started to provide fleet sale and maintenance in 2022.
Financial Information · p. 498
As of December 31, 2022, there were 641 units of vehicles awaiting delivery, for which we had made prepayments of RMB77.9 million as of the same date;
Financial Information · p. 498
Our prepayments, deposits and other receivables increased from RMB106.9 million as of December 31, 2022 to RMB124.5 million as of December 31, 2023, primarily due to an increase in receivables of purchase rebates due from vehicle suppliers, resulting from the expanded scale of our fleet & management services.