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 trade receivables increased by 66.4% from RMB348.1 million as of December 31, 2023 to RMB579.1 million as of December 31, 2024, further increased by 37.9% to RMB798.7 million as of December 31, 2025, and increased by 10.7% to RMB883.8 million as of March 31, 2026, generally in line with our increased sales volume of IC substrates and revenue growth during the Track Record Period, which was primarily driven by the increasing customer demand for our FCBGA substrates.
Financial Information · p. 229
As of May 31, 2026, RMB558.8 million, or 63.0% of our total trade receivables as of March 31, 2026, had been settled.
Our trade and bills receivables subsequently increased by 27.0% from RMB607.2 million as of December 31, 2024 to RMB771.4 million as of December 31, 2025, primarily because (i) as we actively expanded into new industries in 2025, there was an increase in the number of new customers, resulting in a higher proportion of sales settled under credit terms; and (ii) our sales of wind turbine generator components increased as our production capacity increased with additional production line.
Financial Information · p. 221
Our trade and bills receivables turnover days in 2023, 2024 and 2025 was 298 days, 260 days and 269 days, respectively.
Financial Information · p. 222
To better manage our outstanding trade and bills receivables, we implemented the Rules on Sales Operations Risk Control (《銷售業務風險控制規則》) (the "Rules") in January 2026.
As of December 31, 2023, 2024, and 2025, our trade receivables balances were RMB240.2 million, RMB274.6 million, and RMB338.5 million, respectively.
Financial Information · p. 181
The collection cycle in the oilfield services industry is typically extended due to the prolonged internal payment approval processes of our state-owned enterprise customers.
Financial Information · p. 181
Our trade receivables turnover days were 177 days, 214 days and 230 days for the years ended December 31, 2023, 2024 and 2025, respectively.
Our trade receivables increased from RMB1,626.6 million as of December 31, 2023 to RMB1,871.8 million as of December 31, 2024, and further increased to RMB2,159.4 million as of December 31, 2025, primarily due to continued increase in our revenue as a higher sales attributable to continuous increased market demand for our electronic components, electronic and ceramic materials and telecom components particularly for MLCCs, PKGs and ceramic ferrules and sleeves in 2024 and MLCCs, resistive paste, PKGs and ceramic ferrules and sleeves in 2025 in consumer electronics, home appliances, AI and data centers, and automotive electronics resulted in a corresponding increase in the receivables balance.
Financial Information · p. 219
As of April 30, 2026, 94.6% of our total trade receivables as of December 31, 2025, or RMB2,152.7 million, were settled.
Financial Information · p. 220
There is no material recoverability risk associated with our trade receivables.
In 2023, 2024 and 2025, our average trade receivables turnover days remained relatively stable, which were 382 days, 349 days, and 341 days, respectively.
Financial Information · p. 244
As of December 31, 2025, our trade receivables and bills receivables aged over one year amounted to RMB166.9 million, representing 25.4% of our total trade receivables and bills receivables.
Financial Information · p. 244
The longer settlement cycles are primarily attributable to the budgetary and fund allocation processes inherent in government bodies, which often require multiple layers of internal approval before payment can be disbursed.
Our trade receivables further increased to RMB8.8 million as at 31 December 2025, primarily due to increase receivables due from Customer F which resulted from extended credit terms granted to Customer F who was our largest customer in FY2024 and FY2025 upon commercial negotiation due to stronger customer bargaining power in light of its procurement size and its new listing status in Hong Kong during FY2025.
Financial Information · p. 230
Such increase was attributable to the extend credit terms granted to Customer F.
Financial Information · p. 230
As at 30 April 2026, approximately RMB5.5 million, representing 62.2% of our trade receivables as at 31 December 2025 had been settled.
As of December 31, 2023, 2024 and 2025, our trade receivables amounted to RMB94.7 million, RMB317.3 million and RMB409.1 million, respectively. Our trade receivables turnover days were 64 days, 73 days and 111 days for the respective periods.
Financial Information · p. 222
Our average trade receivables turnover days increased from 64 days in 2023 to 73 days in 2024, primarily because one of our top five customers did not make payments to us before December 31, 2024 as they had in previous years, due to the liquidity issues of the customer at the end of 2024.
Financial Information · p. 245
We have implemented credit control policies and procedures to manage our trade receivables, including credit assessments of customers, setting credit limits, monitoring aging of receivables, and following up on overdue accounts.
Our prepayments increased from RMB207.2 million as of December 31, 2023 to RMB868.1 million as of December 31, 2024, and further increased to RMB3,400.3 million as of December 31, 2025, primarily attributable to the expansion of our integrated supply chain logistics business, and in particular, the growth of our end-to-end supply chain logistics business in 2025, resulting in a significant increase in prepayments arising from end-to-end supply chain solution.
Financial Information · p. 238
Under this model, we purchase goods on behalf of our customers.
Financial Information · p. 238
As of April 30, 2026, RMB3,023.1 million, or 88.9%, of our prepayments as of December 31, 2025 had been subsequently settled.
Our trade and note receivables increased by 48.8% from RMB32.9 billion as of December 31, 2024 to RMB49.0 billion as of December 31, 2025, primarily due to our business growth and the consolidation of Wingtech Businesses.
Financial Information · p. 237
We seek to maintain strict control over our outstanding receivables to minimize credit risk.
Financial Information · p. 236
As of April 30, 2026, RMB46.7 billion, or approximately 94.8% of our trade and note receivables as of December 31, 2025 were subsequently settled.
Our trade receivables further increased from RMB33.5 million as of December 31, 2024 to RMB75.7 million as of December 31, 2025, primarily due to (i) our business expansion and revenue growth, and (ii) increased procurement activities by our downstream customers in the year end in anticipation of the potential price rise of our products following the higher cost for assembly and testing services in the market, leading to higher ending balances of our trade receivables.
Financial Information · p. 163
Our trade receivables turnover days were 4.3 days, 15.2 days and 35.1 days in 2023, 2024 and 2025.
Financial Information · p. 163
As of April 30, 2026, all of our trade receivables as of December 31, 2025, had been settled.
As of December 31, 2023, 2024 and 2025, trade receivables (gross balance) due from Customer A amounted to RMB15.3 million, RMB209.8 million and RMB231.5 million, and trade receivables (net balance) due from Customer A amounted to RMB14.6 million, RMB204.5 million and RMB217.1 million.
Financial Information · p. 246
As of the Latest Practicable Date, RMB215.1 million, or 92.9% of our trade receivables due from Customer A as of December 31, 2025 had been subsequently settled.
Financial Information · p. 247
We consider the financial position of Customer A will not have material impact on or material risk to our business going forward, as (i) our Group has successfully diversified its customer base in 2025.
Our non-current prepayments and other receivables increased from RMB1,695.9 million as of December 31, 2024 to RMB2,959.5 million as of December 31, 2025, primarily due to (i) an increase in others attributable to the nomination fees, which are upfront commercial payments made to customers to secure business projects, a practice commonly observed in the automotive supply chain, and are distinct from sales rebates, in relation to the Leoni Business;
Financial Information · p. 234
Our current prepayments and other receivables increased from RMB3,790.8 million as of December 31, 2024 to RMB6,914.4 million as of December 31, 2025, primarily due to (i) an increase in input VAT to be deducted; (ii) an increase in prepayments made to the third-party suppliers, resulting from our increased purchases to support our business needs; and (iii) an increase in amount due from the third parties, resulting from the expansion of our business as we acquired businesses in 2025.
Financial Information · p. 235
As of April 30, 2026, RMB6.3 billion, or approximately 90.7% of our prepayments and other receivables as of December 31, 2025 were subsequently settled.
The further increase from December 31, 2024 to December 31, 2025 was mainly due to an increase of RMB303.1 million in trade receivables, from RMB965.8 million as of December 31, 2024 to RMB1,268.9 million as of December 31, 2025, which was in line with our increased sales in 2025.
Financial Information · p. 176
We believe that the allowance for expected credit losses as of each reporting date was adequate to cover potential unrecoverable amounts.
Financial Information · p. 176
As of April 30, 2026, RMB895.6 million, or 78.5%, of our trade and notes receivables as of December 31, 2025, had been settled.
Our trade and notes receivables increased by 16.8% from RMB719.7 million as of December 31, 2023 to RMB840.3 million as of December 31, 2024, and further increased by 45.3% to RMB1,220.6 million as of December 31, 2025, primarily due to the increase in our revenue, which was accompanied by greater sales to industry leading customers that generally have relatively longer settlement cycles.
Financial Information · p. 231
Our trade receivables turnover days remained relatively stable at 148.1 days, 150.1 days and 144.0 days in 2023, 2024 and 2025, respectively, reflecting our organized receivables management.
Financial Information · p. 233
Based on the foregoing, our Directors are of the view that there was no material recoverability issue for our trade and notes receivables and that sufficient provision had been made at the end of each reporting period during the Track Record Period.
Our trade and bills receivables increased by 35.3% to RMB917.8 million as of December 31, 2025, in line with our revenue growth.
Financial Information · p. 246
As of April 30, 2026, RMB690.4 million, or 73.7% of trade and bills receivables as of December 31, 2025, had been subsequently settled.
Financial Information · p. 246
Our prepayment, deposits and other receivables increased by 76.6% to RMB1,091.8 million as of December 31, 2024, primarily attributable to our increased procurement of materials and increase in deductible input VAT.
Our trade receivables, net increased from nil as of December 31, 2023 to RMB3.6 million as of December 31, 2024, and further increased to RMB10.6 million as of December 31, 2025.
Financial Information · p. 189
Our trade receivables turnover days decreased to 48 days in 2025, mainly because our public cloud-based services, which generally have shorter credit terms compared to our other business lines, grew at a significantly faster pace and accounted for a larger proportion of our total revenue in 2025.
Financial Information · p. 189
As of April 30, 2026, approximately RMB7.8 million, or 74% of our trade receivables as of December 31, 2025, had been subsequently settled.
Subsequently, our trade receivables increased to approximately RMB152.2 million as at 31 December 2025, which was mainly driven by our growth in revenue resulting in an increase in trade receivables.
Financial Information · p. 221
As at Latest Practicable Date, approximately RMB39.2 million or 14.7% of our gross trade receivables as at 31 December 2025 had been subsequently settled.
Financial Information · p. 221
Our trade receivables turnover days decreased from approximately 97.3 days for FY2023 to approximately 68.3 days for FY2024, which was primarily due to our accelerated collection efforts and a higher proportion of prompt payments from our customers during the year.
Our trade receivables increased from RMB140.8 million as of December 31, 2023 to RMB165.0 million as of December 31, 2024, primarily due to higher sales and extended credit period to our certain customers.
Financial Information · p. 194
Our trade receivables turnover days increased from 65 days in 2023 to 72 days in 2024, primarily because customers who placed large volume orders gradually increased, and such customers requested us to extend credit period over time.
Financial Information · p. 195
As of April 30, 2026, RMB172.5 million, or 88.8% of our trade receivables as of December 31, 2025 had been settled.
Our trade and other receivables increased from RMB105.3 million as of December 31, 2023 to RMB172.2 million as of December 31, 2024, and further to RMB203.4 million as of December 31, 2025.
Financial Information · p. 236
Our trade receivable turnover days increased from 116 days in 2023 to 156 days in 2024, primarily due to the overall prolonged payment periods of our customers.
Financial Information · p. 238
As of April 30, 2026, approximately RMB42.8 million, or 21.1%, of our trade and other receivables as of December 31, 2025 had been settled.
Our prepayments, deposits and other receivables increased from approximately RMB164.1 million as at 31 December 2023 to approximately RMB237.0 million as at 31 December 2024, which was mainly due to an increase in prepayments made to third-party suppliers from approximately RMB143.0 million as at 31 December 2023 to approximately RMB217.9 million as at 31 December 2024 to cover the upfront expenses for our largest EPC project in terms of revenue derived in FY2024.
Financial Information · p. 223
As at the Latest Practicable Date, (i) approximately RMB166.4 million, or 74.3% of our prepayments made to third-party suppliers; (ii) approximately RMB2.0 million, or 80.0% of our amounts due from related parties; (iii) approximately RMB0.8 million, or 100.0% of our VAT recoverable; and (iv) approximately RMB3.4 million, or 10.9% of our deposits and other receivables, as at 31 December 2025, had been subsequently utilised, settled or recovered.