Analysis of Accounts Receivable and Capital Turnover Pressure of Chenguang Electric

Based on public prospectus and financial report data, Chenguang Electric is applying for an IPO on the Beijing Stock Exchange (BSE). The company is specialized in the R&D, production and sales of micro and special motors, whose products are mainly used in the cleaning appliance sector[1][2]. Regarding the changes in the proportion of accounts receivable you mentioned, let me conduct a systematic analysis for you:

Time Period	Accounts Receivable Balance	Proportion of Current Assets	Trend
2022	RMB 153 million	41.88%	Benchmark
2023	RMB 189 million	38.80%	Decreased by 3.08pp
2024	RMB 301 million	48.78%	Increased by 9.98pp
H1 2025	RMB 291 million	47.94%	Remained basically flat

Note:

I did not find corresponding data for the “increased from 50% to 86%” figure you mentioned in the official prospectus. The latest verifiable official data shows that the proportion of accounts receivable to current assets in H1 2025 is 47.94%. The 86% figure may come from other statistical calibers or unofficial channels, and it is recommended to refer to the company’s official disclosure documents.

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The accounts receivable turnover rate is a core indicator for measuring an enterprise’s fund recovery efficiency. Based on the data, Chenguang Electric’s accounts receivable turnover rate shows a

[1][2][3]:

Period	Chenguang Electric’s Turnover Rate	Industry Average	Gap
2022	2.94 times/year	3.40 times/year	-0.46
2023	3.89 times/year	3.80 times/year	+0.09
2024	3.14 times/year	3.86 times/year	-0.72
H1 2025	2.75 times/year	3.66 times/year	-0.91

• In H1 2025, Chenguang Electric’s accounts receivable turnover rate dropped to
  2.75 times/year
  , significantly lower than the industry average of
  3.66 times/year
• The gap widened from 0.46 in 2022 to 0.91 in 2025, indicating that the gap between the company and the industry average is expanding
• Based on the current turnover speed, Chenguang Electric takes an average of
  133 days
  to collect an accounts receivable, while the industry average only takes
  100 days

The current ratio and quick ratio are important indicators for measuring an enterprise’s short-term solvency. Chenguang Electric shows a

in both indicators[2][3]:

Indicator	2022	2023	2024	Industry Average (2024)
Current Ratio	1.73	1.71	1.54	3.04
Quick Ratio	1.51	1.59	1.37	2.50

• The current ratio has dropped from 1.73 in 2022 to 1.60 in 2025, a decrease of 7.5%
• Compared with the industry average, Chenguang Electric’s current ratio is only about
  50%
  of the industry average
• The quick ratio is also significantly lower than the industry level, indicating that although the proportion of inventory is not high, the overall liquidity is still weak

Financial Indicator	2022	2023	2024	H1 2025
Operating Revenue (RMB 100 million)	4.95	7.12	8.26	4.37
Net Profit (RMB 10,000)	5,827	9,933	7,863	4,324
Net Operating Cash Flow (RMB 10,000)	7,968	1.57	6,612	2,372
Net Cash Flow to Net Profit Ratio (Operating Cash Flow/Net Profit)	1.37	0.16	0.84	0.55

• The net operating cash flow in 2023 was only RMB 15,700, which is seriously mismatched with the nearly RMB 100 million net profit
• The net cash flow to net profit ratio dropped from 1.37 in 2022 to 0.55 in H1 2025, indicating continuous deterioration in profit quality
• The company’s profits are more on “paper”, with insufficient actual cash recovery capacity

According to the prospectus disclosure, the company’s overdue accounts receivable balance reached

at the end of 2024, an increase of compared with the end of the previous year[3]. The main reasons are:

• Some customers failed to make payments on time due to temporary capital turnover difficulties
• Some overseas customers failed to make payments on time due to foreign exchange controls or inconvenient international settlements

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Based on the above analysis, I constructed a comprehensive capital turnover pressure index:

Pressure Factor	Assessment Result	Risk Level
Increase in the proportion of accounts receivable	Increased by 6.06 percentage points	🟡 Medium
Turnover rate lower than industry average	Gap widened to 0.91 times/year	🔴 High
Decline in current ratio	Dropped from 1.73 to 1.60	🟡 Medium
Increase in overdue accounts receivable	Year-on-year growth of 56.93%	🔴 High
Deterioration in net cash flow to net profit ratio	Dropped from 1.37 to 0.55	🔴 High

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The company’s receivable assets (notes receivable + accounts receivable + prepayments) are approximately RMB 380 million, while its payable liabilities (notes payable + accounts payable + advances from customers) are approximately RMB 290 million. Receivables exceed payables by approximately RMB 90 million, indicating that the company has relatively weak bargaining power in the industry chain[2].

The company’s major customers have changed significantly during the reporting period, and the proportion of the top five customers may fluctuate, which is one of the factors that increase the difficulty of accounts receivable management[1][2].

On June 25, 2025, Chenguang Electric was issued a warning letter by the Zhejiang Securities Regulatory Bureau for violating information disclosure regulations, and was recorded in the securities and futures market integrity file[3].

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From the objective data:

1. The proportion of accounts receivable to current assets rose from 41.88% in 2022 to 47.94% in H1 2025. Although it did not reach the 86% level you mentioned, it does show an upward trend
2. The accounts receivable turnover rate has continued to decline, dropping to 2.75 times/year in H1 2025, significantly lower than the industry average of 3.66 times/year
3. The current ratio dropped from 1.73 to 1.60, which is lower than the industry’s healthy level
4. The quality of operating cash flow has deteriorated, with the net cash flow to net profit ratio dropping from 1.37 to 0.55

• If the 86% figure you mentioned is true, it is recommended to verify the specific statistical caliber (it may be the proportion of accounts receivable to total assets or other calibers)
• Focus on the improvement of capital utilization efficiency after the company’s IPO
• Track the changes in accounts receivable turnover rate and cash flow in subsequent quarterly reports

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[1] Dianman Finance - Chenguang Electric IPO: Low Capacity Utilization, Large Differences from Peers, and Sustainability of Performance Growth Questioned Twice (https://finance.sina.com.cn/stock/stockzmt/2026-01-04/doc-inhfcast0393906.shtml)

[2] Sina Finance - IPO Eagle Eye Alert | Chenguang Electric’s Gross Profit Margin Dropped Sharply (https://finance.sina.com.cn/stock/aiassist/ipofxyj/2025-12-26/doc-inhecwfh0800956.shtml)

[3] NetEase Finance - Chenguang Electric IPO: 23% Cut in Fundraising Amount Attracts Attention, Performance Stability Frequently Questioned (https://www.163.com/dy/article/KIE0U1IA05536HEC.html)