现金转化周期较长

As of December 31, 2023, 2024, and 2025, our trade and other receivables amounted to RMB4,575.4 million, RMB5,867.2 million and RMB5,505.5 million, respectively.

The turnover days of our trade receivables remained stable at 130.8 days in 2023 and 135.3 days in 2024. The trade receivable turnover days subsequently decreased to 118.1 days in 2025 primarily due to increased sale of optical modules, which typically has shorter credit term, contributed higher proportion of our revenue.

As of February 28, 2026, RMB2,510.2 million, or 54.6% of our trade and bills receivables as of December 31, 2025 had been settled.

We had a prolonged cash conversion cycle, as our inventory turnover days are 119.3, 158.5, 104.9 and 163.4 in 2022, 2023, 2024 and the ten months ended October 31, 2025, primarily due to the long cycle for raw material stocking and finished goods.

We had relatively long trade receivables turnover days of 54.2 days in 2023, primarily because we granted credit periods to more customers.

As of January 31, 2026, all of our trade receivables as of October 31, 2025 had been settled.

Our trade and bills receivables turnover days were 232 days, 186 days and 180 days in 2023, 2024 and 2025, respectively.

The decrease in our trade and bills receivables turnover days from 2023 to 2024 was primarily due to more bill discounting in 2024.

The bank acceptance notes were issued by reputable banks and with short-term maturity.

Our trade and bill receivables turnover days increased from 135 days in 2022 to 160 days in 2023, and further to 215 days in 2024, as the growth in trade and bill receivables outpaced the increase in revenue, which was primarily attributable to (i) our decision to offer more favorable credit terms to key account customers as part of our strategy to enhance market penetration; and (ii) the prolonged payment cycles of certain customers, particularly those in the photovoltaic industry.

As of December 31, 2025, approximately RMB818.0 million, or 38.9% of our trade receivables as of September 30, 2025, had been settled.

The notable increase in our provision for impairment loss on trade receivables and contract assets from 2023 to 2024 was primarily driven by the increased revenue contribution from certain key account customers, whose payment cycles are generally longer.

Our trade and bills receivables increased by RMB122.5 million to RMB1,238.1 million as of December 31, 2024, and RMB1,580.2 million as of June 30, 2025, primarily due to the sales of our products.

Our trade and bills receivables turnover days increased from 144 days in 2022 to 159 days in 2023, and decreased to 116 days in 2024, primarily due to a temporary extension of credit terms to certain customers in 2023 in consideration of our strategic cooperation with these customers.

As of December 31, 2022, 2023, and 2024, and June 30, 2025, in terms of gross carrying amounts, 39.1%, 28.2%, 42.6%, and 38.5% of the total trade receivables was due from our Group’s largest customer, and 62.7%, 69.3%, 68.8%, and 67.4% of the total trade receivables were due from the Group’s top five customers.

In 2021, 2022 and 2023, our trade receivables turnover days were 909 days, 1,029 days and 866 days, respectively.

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.

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.

The Group’s turnover days for trade and bills receivables and contract assets increased significantly from approximately 503.6 days for the year ended 31 December 2021 to approximately 689.6 days for the year ended 31 December 2022.

Following the COVID-19 pandemic, these end users faced temporary liquidity constraints, which resulted in payment delays to both Customer A and Customer B.

The Group’s loss allowance for trade and bills receivables increased from approximately RMB13.2 million as at 31 December 2022 to approximately RMB25.6 million as at 31 December 2023, which was mainly attributed to the increase in loss allowance of five Integrated Solution Services projects.

Our trade receivables turnover days for 2021, 2022 and 2023 were 114 days, 125 days and 133 days, respectively. Our trade payable turnover days for 2021, 2022 and 2023 were 95 days, 61 days and 57 days, respectively. Such gap between the accounts receivables turnover days and the accounts payable turnover days may result in liquidity mismatch.

For API marketplace, we plan to continue developing relationships with more customers of sound credit profile and expanding our business. We expect our bargaining power to increase in the future as our business grows, and that we would be able to negotiate for more favorable terms with our customers and shorten the collection period of our trade receivables, as well as negotiate for more favorable terms with our suppliers and extend the settlement period of our trade payables.

In addition, we plan to use 10% of our net proceeds from this Global Offering for working capital and general corporate purposes.

Our trade receivable turnover days increased from 224 days in 2021 to 284 days in 2022, primarily due to the decrease in the revenue generated from the provision of advertising and other services as a result of the decreased advertising budgets of our corporate customers amid the COVID-19 resurgence and associated economic downturn.

As of April 30, 2024, approximately RMB9.3 million, or 55.5% of our total trade receivables (or 78.5% of our net trade receivables) as of December 31, 2023, had been settled.

Based on the foregoing, we do not believe there is any recoverability issue for trade receivable balance past due over 180 days or past due over 365 days and have made no related provision.

Our cash and cash equivalents as of December 31, 2020, 2021 and 2022 and June 30, 2022 and 2023 was RMB12.2 million, RMB11.3 million, RMB20.2 million, RMB7.0 million and RMB32.6 million, respectively.

We may experience significant amount of cash outflow at a specific point of time when certain projects, in particular large scale projects, are at the initial stage which we may incur significant amount of upfront cost, which may lead to a decrease in the amount of cash and cash equivalents at the relevant point of time.

Despite our cash and cash equivalents fluctuated from time to time during the Track Record Period, we managed to expand our business since 2021 without experiencing financial difficulties.

As at 31 December 2020, 2021 and 2022 and 30 June 2023, our contract assets and trade receivables amounted to approximately RMB857.0 million, RMB1,072.4 million, RMB1,207.2 million and RMB1,095.1 million, respectively.

Our aggregate trade receivables and contract assets turnover days was approximately 190.5 days, 270.0 days, 310.8 days and 431.5 days, respectively, and our aggregate trade receivables and contract assets turnover days (excluding Customer Group A) was approximately 185.1 days, 260.2 days, 267.2 days and 390.0 days, respectively, for the years ended 31 December 2020, 2021 and 2022 and the six months ended 30 June 2023, and are within the range of 163.9 days to 442.0 days of those of our industry peers according to the Frost & Sullivan Report.

We have established a control procedure to set a target of recovering trade receivables and contract assets to ensure a progressive collection since 2022. Particularly our management team has set an overall recovery baseline target at 75% as compared with the current income incurred.

During the Track Record Period, we experienced a relatively stable trade receivable and contract asset turnover days ranged from approximately 153.0 days to 170.5 days.

Our net impairment losses of contract assets and trade receivables increased from approximately RMB0.2 million for FY2021 to approximately RMB3.3 million for FY2022.

Our trade receivable turnover days during the Track Record Period were approximately 51.5 days, 52.0 days, 53.9 days and 67.5 days for FY2020, FY2021, FY2022 and 6M2023, respectively.

Our contract assets increased by RMB1,365.3 million from RMB3,310.4 million as of December 31, 2020 to RMB4,675.8 million as of December 31, 2021, increased by RMB1,656.7 million to RMB6,332.5 million as of December 31, 2022 and further increase by RMB342.2 million to RMB6,674.7 million as of June 30, 2023, the increase was primarily due to (i) our revenue recognised from our construction projects; (ii) the cumulative effect of contract asset balances for some of our construction projects that have a longer duration; (iii) the overall economic downturn as a result of the COVID-19 pandemic in the last two years, during which the capital flow of our customer was generally tight, resulting in the certification and billing process lagging behind and (iv) increase in the retention receivable.

During the Track Record Period, upon completion of the project, the time required for us to complete the settlement review and issue the final settlement value (excluding 3%-10% of the retention money) balance reached approximately one to three years.

As of the Latest Practicable Date, RMB3,067.8 million representing 57.1% of the current portion of our contract assets for EPC projects as of June 30, 2023 were subsequently certified by and billed to our customers in accordance with the terms of our construction contracts after the settlement review as confirmed by our customers.

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.

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.

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.