期内转为净流动负债

We recorded net current liabilities of RMB353.8 million, RMB590.1 million and RMB659.5 million as at December 31, 2022 and 2023 and April 30, 2024, respectively.

Overall, our continuous profitable operations provide the foundation to our Group's financial soundness and liquidity.

In addition, we closely monitor our cash flow and plan to make continuous efforts to improve our financial positions, including (i) adopt various strategies and measures including enhance our production capacity and market share to continuously maintain and improve our revenue growth and profitability; (ii) maintain our sound relationships with banks and other financial institutions to obtain financial facilities to support our business operations as required.

Our Group recorded net current liabilities of RMB49.3 million as of December 31, 2021, which was primarily attributable to the balances of amounts due to the immediate holding company and a shareholder, in aggregate, RMB95.0 million in relation to initial investment in and acquisition of Shenzhen EDA Group by Lesso; among which, RMB70.0 million of our amount due to immediate holding company has been capitalized as deemed capital contribution by way of discharge the liability due to the immediate holding company in FY2022; resulting in net current asset position as of December 31, 2022.

we had unutilized banking facilities of RMB84.0 million as of March 31, 2024, which can be utilized for working capital requirements;

Taking into account our cash generating capabilities, financial resources available to us as well as the net proceeds from the Global Offering, our Directors are of the opinion and the Sole Sponsor concurs that we have sufficient working capital required for our operation at present and for at least next 12 months from the date of this prospectus.

We recorded net current liabilities of RMB123.2 million, RMB63.6 million, RMB92.6 million and RMB78.8 million as at 31 December 2020 and 2021, 30 June 2023 and 31 October 2023, respectively, and net current assets of RMB92.6 million as at 31 December 2022.

Our net current assets of RMB92.6 million as at 31 December 2022 then turned around to a net current liabilities of RMB92.6 million as at 30 June 2023, primarily due to the (i) increase in trade and other payables of RMB98.6 million; and (ii) increase in current portion of bank borrowings of RMB59.0 million, partially offset by the increase in bills receivables at FVTOCI of RMB34.1 million as at 30 June 2023.

Our Directors confirm that, taking into consideration the financial resources presently available to us, including our positive operating cash flow, available unutilised banking facilities, other internal resources, and the estimated net proceeds from the Global Offering, we have sufficient working capital for our present requirements and for at least the next 12 months commencing from the date of this prospectus.

As of December 31, 2020, 2021, 2022, June 30, 2023 and September 30, 2023, we had net current assets of RMB256.8 million, RMB266.4 million, RMB69.6 million, net current liabilities of RMB357.2 million and RMB605.3 million, respectively.

Our net current assets decreased from RMB69.6 million as of December 31, 2022 to a net current liabilities of RMB357.2 million as of June 30, 2023, which was mainly due to the increase in our short-term borrowings by RMB782.7 million from RMB2,201.3 million as of December 31, 2022 to RMB2,984.0 million and an increase in our trade payables and bills payable by RMB370.4 million from RMB9,170.6 million as of December 31, 2022 to RMB9,541.0 million.

Taking into account the estimated net proceeds from the Global Offering (after a possible Downward Offer Price Adjustment setting the final Offer Price up to 10% below the bottom end of the indicative Offer Price range), our available banking facilities and cash flows from our operations, our Directors are of the opinion that we have sufficient working capital to meet our financial requirements for at least the next 12 months from the date of this prospectus.

For details, see "Risk Factors – Risks Related to Our Business and Industry – We have recorded net losses, net liabilities and operating cash outflow during the Track Record Period and recorded net current liabilities as of March 31, 2023, and we may not be able to achieve or subsequently maintain profitability."

We usually grant a credit term ranging from 3 to 6 months to our customers, whereas our suppliers, especially the new suppliers, usually grant us shorter credit terms.

Furthermore, taking into account (i) the financial resources available to us, including a total of RMB2,990 million liquid cash resources as of March 31, 2023 (that include cash and cash equivalents, short-term and long-term bank deposits, short-term investments measured at fair value through profit or loss, restricted cash), (ii) the portion of the estimated net proceeds from the Global Offering expected to be used for working capital and general corporate purposes, (iii) our good track record in being able to raise money from renowned investors to finance our business, as evidenced by our historical fund-raising activities, and (iv) our plans to continue to enhance our financial performance, our Directors believe that we have sufficient working capital for our present requirements and for the next 12 months from the date of this Prospectus.

Our net current liabilities decreased from RMB272.3 million as of December 31, 2020 to RMB18.0 million as of December 31, 2021, primarily due to (i) an increase in trade receivables of RMB1,668.4 million mainly attributable to increases in our revenue and business scale as a result of our business expansion;

Although we had net current liabilities as of December 31, 2020 and 2021, our Directors are of the opinion, and the Joint Sponsors concur, that we have sufficient working capital to meet our present and future cash requirements for at least the next 12 months from the date of publication of this Prospectus, taking into account our cash flow generated from operating activities, bank borrowings and available banking facilities and the net proceeds from the Global Offering, due to the following:

We had net cash flow from operating activities in the amount of RMB1,027.3 million, RMB2,449.4 million and RMB2,822.8 million for the years ended December 31, 2020, 2021 and 2022, respectively.

We recorded net current liabilities of RMB145.8 million as of December 31, 2021, as compared to net current assets of RMB386.0 million as of December 31, 2020.

Our Series A Preferred Shares will automatically be converted into ordinary shares upon the Global Offering.

Our Directors are of the opinion that, taking into account the financial resources available to the Group, including the estimated net proceeds from the Global Offering and the expected cash generated from operating activities, we have sufficient working capital for our present requirements and for the next 12 months from the date of this prospectus.