减值亏损及拨备上升

Our average trade and notes receivables turnover days increased from 204.4 days in 2023 to 223.6 days in 2024, primarily due to (i) longer customer acceptance cycles resulting from our product iterations and upgrades in line with our business growth, as updated products typically require more thorough customer testing and validation prior to payment; and (ii) prolonged customer payment cycles, as intensified market competition for battery separator industry has strengthened the bargaining power of leading downstream customers, resulting of granting of extended credit terms to key customers.

Our allowance for impairment increased from RMB43.2 million as at 31 December 2023 to RMB103.5 million as at 31 December 2024, primarily due to (i) our full provision for trade receivables of RMB50.0 million in 2024 relating to one customers experienced deterioration of operating conditions, and (ii) an increase in use of commercial acceptance bills with higher credit risk by our customers.

We believe there is no recoverability issue for our trade receivables based on the following: (i) we have made sufficient provision for trade receivables; (ii) our evaluation of the good reputation and historical credit standing of our customers; (iii) our purchase of trade receivable insurance based on our assessment of recovery condition; and (iv) our measures to ensure the recovery of overdue receivables.

The increase in balance of trade and bills receivables from December 31, 2023 to December 31, 2024 of 12.7% outpaced the increase in our revenue of 5.2% during the same periods.

Our trade receivables turnover days increased from 125 days in 2023 to 146 days in 2024, mainly because we offered more flexible payment terms as part of our customer acquisitions strategies as mentioned above.

We recorded allowance for impairment losses on trade receivables of RMB4.9 million, RMB9.5 million and RMB12.0 million as of December 31, 2023, 2024 and 2025, respectively.

Our trade and bills receivables increased to RMB430.4 million as of December 31, 2025, primarily due to the increase in trade receivables from overseas customers as a result of increased sales volume.

Our trade and bills receivables turnover days increased from 53 days in 2023 to 55 days in 2024, primarily due to extended credit terms for overseas customers and longer collection periods for domestic real estate customers.

(Impairment loss)/reversal of impairment loss on financial assets and contract assets, net increased by 34.7% from RMB27.2 million in 2023 to RMB36.6 million in 2024, primarily due to individual provisions made based on changes in our credit assessment of certain real estate developer customer.

Our trade receivables turnover days were 108 days, 159 days and 171 days in 2023, 2024 and 2025, respectively.

Our impairment losses increased by 38.9% from RMB13.1 million in 2023 to RMB18.2 million in 2024, primarily due to an increase in the impairment losses in relation to the trade receivables from an OEM which faced operating difficulties in 2024.

Our Directors consider that there is no material recoverability issue with respect to the outstanding trade receivables and that our impairment provision was adequate in light of the prevailing circumstances as of the Latest Practicable Date, based on (i) our periodic assessment to closely monitor our credit exposure and identify significant increases in credit risks and, where applicable, make timely allowance for expected credit losses, (ii) the stringent internal measures we have taken to enhance the management and collection of trade receivables, and (iii) the reliability and track record of settlement from our customers, which are mainly established companies well-known in the industry.

Due to operational difficulties, Customer Group F experienced multiple debt defaults and cash flow shortages in 2023, which resulted in its inability to repay outstanding amounts owed to the Company.

We have now established a comprehensive internal control system to enhance management of trade receivables for our digital marketing business.

As of March 31, 2026, RMB3,436.0 million, or 51.6%, of our trade receivables as of December 31, 2025 had been subsequently settled.

Our trade and bills receivables turnover days, calculated as the average of the beginning and ending balance of trade and bills receivables for the year divided by the revenue for that year and multiplied by 365 days, amounted to 155 days, 161 days and 83 days in 2023, 2024 and 2025, respectively.

This was caused by delays in the acceptance and payment process for our domestic sales of wind power products, which are generally contingent upon the successful trial operation of the entire wind farm.

Our trade and bills receivables turnover days decreased to 83 days in 2025, primarily attributable to (i) our enhanced collection efforts for domestic orders, which accelerated the receipt of payments from our domestic customers, and (ii) the increased contribution of revenue from products delivered to overseas markets, which typically features better payment terms.

Our trade receivables remained relatively stable at HKD105.1 million and HKD102.6 million as of December 31, 2023 and 2024, respectively, and then increased to HKD129.7 million as of December 31, 2025.

Such customer failed to settle the outstanding amounts which were HKD5.3 million as of December 31, 2025 and we commenced legal proceedings against such customer to recover the overdue receivables.

Our Directors consider that the impairment provision was adequate and in accordance with our expected credit loss assessment under the applicable accounting standards, and such provision did not have a material adverse impact on our financial position or results of operations.

We had trade and bills receivables of RMB5,461.3 million, RMB5,978.4 million and RMB5,618.4 million as of December 31, 2023, 2024 and 2025, respectively.

Our trade and bills receivables turnover days increased to 239 days in 2025, primarily due to (i) an increase in credit terms we granted to customers with good creditworthiness; and (ii) an increase in overseas sales where we granted longer credit terms.

Our impairment losses (including reversal of impairment losses or impairment gains) on financial assets increased significantly from RMB27.3 million in 2023 to RMB154.3 million in 2024, primarily due to an increase in provisions for impairment of trade receivables and other receivables driven by (i) an increase in trade receivable balance; and (ii) the long credit periods to certain customers which triggered impairment.

It increased to RMB10,073.0 million as of December 31, 2025, resulting from the acquisition of Source Photonics and GMD.

During the Track Record Period, our trade and notes receivables turnover days continued to decrease, primarily due to the short collection cycle of customers receivables.

As of March 31, 2026, 86.9% of our total trade and notes receivables as of December 31, 2025, or RMB9,111.7 million, were settled.

Trade and bills receivables aged from one to two years increased from RMB4.9 million as of December 31, 2024 to RMB22.8 million as of December 31, 2025, primarily reflecting extended payment timelines as we facilitated amended settlement arrangements with certain customers, taking into account their short-term liquidity needs while preserving long-standing business relationships.

Our impairment losses on financial assets increased by 64.1% from RMB12.4 million in 2024 to RMB20.3 million in 2025, primarily due to our prudent assessment of the recoverability of certain aged trade receivables, resulting in additional expected credit loss provisions.

For the years ended December 31, 2023, 2024 and 2025, our trade and bills receivables turnover days, calculated by dividing the arithmetic mean of the opening and ending balance of trade and bills receivables by revenue for the relevant year and then multiplying by number of days for that year, amounted to 103 days, 102 days and 114 days.

Our trade and bills receivables turnover days decreased from 127 days in 2023 to 113 days in 2024 and further to 81 days in 2025, primarily due to our strengthened customer management and increased efforts in the collection of accounts receivable.

Our net impairment losses on financial assets increased from RMB2.4 million in 2023 to RMB4.3 million, in 2024, primarily attributable to the increase in year-end trade receivables balances, which was in line with our revenue growth.

As of February 28, 2026, RMB88.3 million, or approximately 53.7%, of our trade and bills receivables as of December 31, 2025 had been subsequently settled.

Our trade and bills receivables increased from RMB49.0 million as of December 31, 2023 to RMB73.8 million as of December 31, 2024, and further increased to RMB76.6 million as of December 31, 2025, primarily driven by (i) increased sales orders; and (ii) the extension of credit periods granted to selected customers to strengthen the cooperation with our major customers.

The increase in loss allowance for trade receivables as of December 31, 2025 was mainly attributable to outstanding receivables from one of our major customers during the Track Record Period.

In view of the longer outstanding period of the relevant receivables, we had made impairment provision under the expected credit loss model on a prudent basis after considering the aging profile of the receivables, our historical dealings with the customer and other relevant information available to us.

During the Track Record Period, we typically granted credit period to customers ranging from 30 days to two years.

As of December 31, 2023, 2024 and 2025, the amount of ECL allowance recognized was RMB82.2 million, RMB131.1 million and RMB174.6 million, respectively.

As of March 1, 2026, approximately RMB247.4 million, or 34.1%, of our trade receivables as of December 31, 2025 had been settled.

We incurred impairment loss on trade and other receivables and contract assets of RMB9.5 million, RMB7.6 million and RMB28.6 million in 2023, 2024 and 2025, respectively.

The increase was primarily attributable to the aging of certain long-outstanding balances from trade receivables and contract assets, primarily as a result of the prolonged acceptance and settlement period with a major customer.

Our trade and bills receivables turnover days decreased from 173.6 days in 2023 to 152.5 days in 2025.

As of December 31, 2023, 2024 and 2025, we recorded loss allowances for trade and bills receivables of RMB1,044.2 million, RMB1,046.1 million and RMB1,018.9 million, respectively.

Our trade and bills receivables turnover days decreased from 146 days in 2023 to 90 days in 2024, and further decreased to 67 days in 2025, resulting from our enhanced trade and bills receivables collection efforts.

The impairment losses on financial assets, net increased from RMB3.6 million in 2024 to RMB80.6 million in 2025, primarily due to provisions for impairment loss on expected non-recoverable new energy subsidy receivables.

The decrease in trade and bills receivables were primarily due to our collection efforts resulting in better trade and bills receivables management performance, as well as the decrease in our wholesale business, which generally involve more trade receivables as compare to our other businesses.

Our impairment losses under expected credit loss model increased from RMB30.3 million in 2023 to RMB45.6 million in 2024, which mainly reflected other receivables impairment in relation to the other receivables of certain pharmacies we shut down.

As of February 28, 2026, RMB381.3 million, or 39.1%, of our trade and bills receivables as of December 31, 2025 had been subsequently settled.

In 2023, 2024 and 2025, our impairment losses under expected credit loss model amounted to RMB14.9 million, RMB8.7 million and RMB18.4 million, respectively.

Our impairment losses under expected credit loss model increased significantly from RMB8.7 million in 2024 to RMB18.4 million in 2025, which was primarily attributable to increased impairment losses on trade and bills receivables as a result of impairment provisions recognized for certain AI vertical industry application projects that were overdue.

Such decrease was primarily due to the non-recurring impairment recognized in 2023 on our prepayment to a supplier in connection with our dispute with the supplier regarding its non-performance of contractual obligations. We have initiated legal proceedings against such supplier to recover our prepayment.

We then recorded impairment losses of RMB57.4 million and RMB122.8 million in 2024 and 2025, respectively.

Our impairment losses on financial and contract assets, net, increased from RMB57.4 million in 2024 to RMB122.8 million in 2025, primarily attributable to impairment on other receivables based on ECL model.

As of February 28, 2026, RMB742.3 million, or approximately 97.5%, of our trade and bills receivables as of December 31, 2025 had been subsequently collected.

During FY2024, our Group advanced RMB1,000,000 to a customer to assist in facilitating marketing activities in an online platform to which our Group’s SaaS product will be operated by the customer to generate income.

Our Directors are of the view that full recovery of the amount is highly uncertain and a full impairment for this amount was provided for prudent purpose.

Save as above and the prepayments we make to advertising agencies for acquiring online traffic inventory in the ordinary course of our online marketing solutions business, we did not provide advances to other customers during the Track Record Period and up to the Latest Practicable Date and has adopted internal policy governing the requirements and procedures for advances to third parties for prudent financial management.

Our trade, bills and other receivables increased by 10.7% from RMB482.0 million as of December 31, 2023 to RMB533.8 million as of December 31, 2024, and further increased by 2.6% to RMB547.7 million as of December 31, 2025, primarily in line with our revenue and business growth.

Our trade receivables turnover days amounted to 54 days, 34 days and 56 days in 2023, 2024 and 2025, respectively.

We recognized a net impairment loss of RMB49.1 million in 2025, compared to a net reversal of RMB2.5 million in 2024, primarily due to an increase in the balances of contract assets and trade receivables.