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
The decrease was primarily attributable to a decrease in impairment loss on prepayment to suppliers, which decreased from RMB12.4 million in 2020 to RMB2.1 million in 2021 primarily because certain suppliers experienced sudden liquidity issues due to the outbreak of the COVID-19 pandemic in 2020.
Financial Information · p. 258
In response to suppliers’ liquidity issue, we enhanced our management on suppliers such as maintaining a blacklist of suppliers and reducing prepayments to suppliers that we do not frequently cooperate with.
Our current prepayments, other receivables and other assets significantly increased from RMB21.2 million as of December 31, 2021 to RMB47.6 million as of December 31, 2022.
Financial Information · p. 418
This increase was primarily attributable to the increase in prepayments amount to third-party contracting services (CRO and CDMO services) for pre-clinical evaluation and clinical trials of our product candidates and inventories.
Financial Information · p. 418
As of March 31, 2023, approximately RMB13.9 million, or 29.2% of our prepayments, other receivables and other assets as of December 31, 2022 were settled.
Before the allowance for credit losses of trade receivables, as of December 31, 2020, 2021 and 2022, our trade receivables were RMB223.6 million, RMB290.0 million and RMB322.4 million, respectively.
Financial Information · p. 312
For the years ended December 31, 2020, 2021, and 2022, our impairment losses under ECL, net of reversal amounted to RMB32.2 million, RMB30.5 million and RMB51.1 million, respectively.
Financial Information · p. 295
In view of the above, we believe there is no recoverability issue for our trade receivables.
Before allowance for impairment of trade receivables, as of December 31, 2020, 2021 and 2022, our trade receivables were RMB3,103.9 million, RMB5,033.4 million and RMB5,387.3 million, respectively.
Financial Information · p. 373
Our trade receivables turnover days decreased from 250 days for the year ended December 31, 2021 to 208 days for the year ended December 31, 2022, primarily due to our enhanced collection efforts in 2022.
Financial Information · p. 375
As of March 31, 2023, RMB2,591.6 million or 83.5%, RMB2,791.0 million or 55.5% and RMB1,200.9 million or 22.3% of our trade receivables as of December 31, 2020, 2021 and 2022, had been subsequently settled.
Our trade receivables turnover days increased from 71 days for FY2020 to 87 days for FY2021, mainly because when we renewed our framework agreement with Customer E in June 2020, we extended our credit period granted to Customer E from 126 days to 186 days.
Financial Information · p. 372
Our trade receivables turnover days further increased from 87 days for FY2021 to 102 days for FY2022, primarily due to the relatively slower settlement by certain of our customers.
Financial Information · p. 372
As at 28 February 2023, RMB186.3 million or 53.8% of the outstanding balance of our trade receivables as at 31 December 2022 had been settled.
Our trade receivables and contract assets turnover days decreased from approximately 120.8 days for the year ended 2020 to approximately 112.2 days for the year ended 2021 mainly due to the larger increase in revenue as compared to the increase in contract assets from the year ended 30 June 2020 to the year ended 30 June 2021 because of Projects 5046 and 5024, two public infrastructure projects involving temporary quarantine facilities at Penny's Bay, which contributed revenue of approximately HK$37.2 million and HK$21.1 million for the year ended 30 June 2021, respectively, but only had contract assets of approximately HK$1.0 million and HK$4.7 million as at 30 June 2021, respectively.
Financial Information · p. 315
Our retention receivables increased from approximately HK$12.7 million as at 30 June 2020 to approximately HK$14.4 million as at 30 June 2021 and further increased to approximately HK$20.7 million as at 30 June 2022 and approximately HK$21.5 million as at 31 October 2022.
Financial Information · p. 309
The allowance for credit losses increased as at 30 June 2022 as compared with 30 June 2021 mainly because of the full impairment of the outstanding trade receivables of approximately HK$0.6 million due from a customer who has defaulted in payment for the year ended 30 June 2022.
Our prepayments, deposits and other receivables increased from RMB14.0 million as of December 31, 2021 to RMB190.5 million as of December 31, 2022, primarily as a result of (i) an increase of prepayments for purchase of property, plant and equipment of RMB106.9 million, mainly representing prepayments for the project of our facility in Zhuhai and prepayments for the property in Beijing, (ii) an increase of prepayments for right-of-use assets of RMB45.3 million, mainly relating to the purchase of property in Beijing, (iii) an increase of value added tax recoverable of RMB12.0 million, largely relating to the purchase of property in Beijing, and (iv) an increase of deferred share issue costs for IPO of RMB9.9 million.
Our trade and bills receivables increased from RMB64.7 million as of December 31, 2021 to RMB179.8 million as of December 31, 2022, primarily due to our customers’ prolonged payment process amid the COVID-19 pandemic.
Financial Information · p. 295
As of February 28, 2023, RMB69.6 million, or 54.6% of our trade receivables outstanding as of December 31, 2022 had been subsequently collected.
Financial Information · p. 295
Nevertheless, we recorded loss allowance for our trade and bill receivables of RMB4.3 million, RMB5.2 million and RMB9.0 million in 2020, 2021 and 2022, respectively, which we believe are sufficient in view of the subsequent settlement of our trade and bills receivables.
Our net trade receivables increased from approximately RMB23.0 million as at 31 December 2019 to approximately RMB28.4 million as at 31 December 2020 and further increased to approximately RMB73.0 million as at 31 December 2021, which was mainly due to an increase in sales from FY2019 to FY2021, including last quarter of each year.
Financial Information · p. 387
Due to the temporary lockdown during March to May 2022, it took us longer time to collect trade receivables from customers and hence it rendered an increase in our average trade receivables turnover days to 95 days for 9M2022.
Financial Information · p. 387
Up to the Latest Practicable Date, 100% of our trade receivables as at 30 September 2022 were subsequently settled.
Trade receivables from third parties increased from US$90.8 million as of December 31, 2020 to US$125.3 million as of December 31, 2021, primarily due to (i) the increase in gross billing to our marketers as a result of our business expansion for our cross-border digital marketing services, and (ii) our extension of credit term in 2021 of one of our major customers, Marketer A.
Financial Information · p. 320
As of January 31, 2023, US$60.8 million, or 66.8% of our total trade receivables as of September 30, 2022 had been subsequently settled.
Financial Information · p. 320
As of December 31, 2019, 2020 and 2021 and September 30, 2022, our trade receivables that were outstanding for more than 12 months amounted to US$6.1 million, US$8.3 million, US$8.9 million and US$12.3 million, respectively, accounting for 6.3%, 9.1%, 7.1% and 13.5% of our trade receivables before allowance for impairment as of the respective dates.
For each of FY2019, FY2020, FY2021 and 3Q2022, our average trade and bills receivables turnover days were 76.9 days, 103.9 days, 97.3 days and 85.1 days, respectively.
Business · p. 289
The amount of trade receivables that were past due over one year as at 31 December 2019, 2020 and 2021 and 30 September 2022 was approximately RMB70.1 million, RMB64.3 million, RMB21.2 million and RMB35.3 million, respectively, representing approximately 14.6%, 12.5%, 4.7%, and 9.0% of the total trade receivables as at 31 December 2019, 2020 and 2021 and 30 September 2022, respectively.
Financial Information · p. 451
Approximately RMB216.9 million, representing 55.0% of the trade receivables as at 30 September 2022, was subsequently settled by the Latest Practicable Date.
Our prepayment amounted to approximately RMB1.3 million, RMB25.3 million and RMB18.5 million as at 31 December 2019, 2020 and 2021, respectively.
Financial Information · p. 469
Having considered that we had previously received approximately RMB51.9 million from Customer P as advance payment which was recorded in contract liabilities as at 31 December 2020, our Directors considered the arrangement is reasonable.
Our trade receivables increased from approximately USD8.6 million as at December 31, 2019 to approximately USD16.2 million as at December 31, 2020.
Financial Information · p. 454
This was mainly due to the outstanding receivables in the amount of approximately USD1.5 million from one of our customers who was embroiled in a dispute with their customer (the ''sub charterers'') during early 2022.
Financial Information · p. 454
As at December 31, 2021, the amount of approximately USD3.1 million (including receivables of approximately USD1.6 million aged less than one year and approximately USD1.5 million aged between one to two years) due from Seacon Shipping Group was individually determined and an impairment provision of approximately USD16,000 was made.
Prepayments, other receivables and other assets primarily consist of (i) other receivables from shippers for shipping fees, which represent the transportation fees uncollected from shippers on behalf of truckers upon fulfilment of the shipping orders under the freight platform services, as the majority of shippers generally paid such transportation fees to us shortly, but not immediately, after they confirmed the fulfillment of shipping orders during the Track Record Period; and (ii) government grants receivables, which represent the government grants from local government authorities to support the Group’s digital freight business.
Financial Information · p. 410
Our prepayments, other receivables and other assets balances decreased by 28.2% from RMB1,641.5 million as of December 31, 2021 to RMB1,179.0 million as of September 30, 2022, primarily because (i) we enhanced the settlement of shipping fees with our customers, and (ii) we received a considerable portion of government grants receivables in early 2022.
Financial Information · p. 411
We adopted comprehensive measures to manage the exposure to potential working capital mismatch, including close monitoring of relevant receivables, regular review of overdue balances by our senior management, and active communication with relevant shippers in case of any unusual delay of payment that went beyond the stipulated credit periods.