Analysis of Accounts Receivable Issues at Lieqi Intelligence and Research on Cash Flow Improvement Strategies for Optical Communication Equipment Providers

Based on the collected data and analysis, I will now provide you with a detailed report.

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Lieqi Intelligence (Stock Code: 688568.SS) was founded in 2015, and is a high-tech enterprise focusing on intelligent equipment manufacturing in the optical communication field. Its main products include chip mounters, coupling equipment, aging test equipment, and automated complete line solutions. The company has established in-depth cooperation with Zhongji Xuchuang since 2016, becoming a major supplier of its packaging equipment. Its products cover the core links of the entire process of optical module packaging and testing, supporting the packaging requirements of optical modules with a maximum rate of 1.6T[1][2].

According to public financial data, Lieqi Intelligence has shown a rapid growth trend in recent years:

Financial Indicator	2022	2023	2024	2025H1
Operating Revenue (RMB 100 million)	1.45	2.89	5.43	2.46
Net Profit (RMB 100 million)	0.35	0.82	1.82	0.69
YoY Growth of Operating Revenue	—	99.47%	87.74%	—
YoY Growth of Net Profit	—	132.09%	121.54%	—
Gross Profit Margin	49.33%	48.77%	50.32%	48.62%

From 2022 to 2024, the company’s operating revenue surged by 274%, and net profit increased fivefold, demonstrating strong growth momentum. However, this rapid growth is also accompanied by significant financial structure pressure[1][2].

As of the first half of 2025, Lieqi Intelligence’s accounts receivable problem has become prominent:

• Book balance of accounts receivable
  : RMB 109 million, accounting for 44.31% of current operating revenue
• Carrying value of accounts receivable
  : RMB 103 million, accounting for 41.87% of current operating revenue
• Total accounts receivable and contract assets
  : RMB 113 million, accounting for 10.53% of total assets

Changes in the carrying value of accounts receivable and contract assets at the end of each reporting period are as follows:

• End of 2022: RMB 30.7294 million
• End of 2023: RMB 111 million (YoY growth of 261.5%)
• End of 2024: RMB 128 million
• H1 2025: RMB 113 million[1][2]

Lieqi Intelligence faces a significant customer concentration problem:

• Proportion of sales revenue contributed by Zhongji Xuchuang:
  57.12% → 62.19% → 58.85% → 65.55%
  (2022-H1 2025)
• Proportion of revenue from top 5 customers:
  81.79% → 93.17% → 82.83% → 79.38%

Among them, accounts receivable from Zhongji Xuchuang reached RMB 43.5057 million, accounting for 36.45% of the total ending balance of accounts receivable and contract assets[1][2]. This high dependence on a single major customer means that the quality of the company’s accounts receivable is highly tied to the customer’s payment ability and willingness.

Carrying value of inventory at the end of each reporting period:

• End of 2022: RMB 117 million (accounting for 58.05% of current assets)
• End of 2023: RMB 261 million (accounting for 41.1% of current assets)
• End of 2024: RMB 311 million (accounting for 32.32% of current assets)
• H1 2025: RMB 415 million (accounting for 40.57% of current assets)[1][2]

The substantial growth in inventory not only occupies working capital but also faces the risk of unsold products due to delayed product upgrades and changes in customer demand.

From 2022 to 2024, the net cash flow from operating activities of the company was as follows:

• 2022: RMB 16.7081 million
• 2023: RMB 149 million
• 2024: RMB 142 million

However,

, marking an inflection point from positive to negative. The company stated that the main reasons are the adjustment of payment policies by downstream customers and increased inventory preparation to meet product order deliveries[1][2].

The optical communication equipment industry has the following inherent characteristics, which objectively increase the difficulty of accounts receivable management:

1. High concentration of downstream customers
   : According to Omdia data, from Q4 2023 to Q3 2024, the top 5 global players in the data center optical module segment accounted for approximately 70% of the market share, and the combined global market share of the top 4 domestic players was 44%[3]. This means that upstream equipment providers have to face a pattern dominated by a few major customers.
2. High degree of customization
   : Most optical module packaging equipment are customized products, with long customer introduction and certification cycles. Once a cooperative relationship is established, it is relatively stable, but this also leads to the bargaining power tilting towards the buyer.
3. Rapid technological iteration
   : Optical module technology is rapidly evolving from 400G to 800G and 1.6T, requiring equipment providers to continuously invest in R&D, increasing capital turnover pressure.

1. Trend of extended payment terms
   : Downstream optical module manufacturers are facing their own cash flow pressure, and generally tighten payment policies, transferring capital pressure to upstream equipment providers[1][2].
2. Capacity expansion cycle
   : The optical module industry experienced large-scale capacity expansion from 2023 to 2024, and equipment providers accepted looser credit terms to lock in orders.
3. Intensified competition
   : Competition among equipment providers is fierce, and they have to offer more favorable payment terms to win orders.

1. Weak bargaining power
   : High customer concentration leads to heavy dependence on a single customer, resulting in a lack of bargaining chips.
2. Lack of credit management
   : Some enterprises lack a sound customer credit evaluation system and accounts receivable tracking mechanism.
3. Imbalanced expansion pace
   : Rapid revenue growth has not been matched with corresponding working capital management and risk control capabilities.

• Establish an accounts receivable aging analysis mechanism: Conduct refined aging classification of accounts receivable (0-30 days, 31-60 days, 61-90 days, over 90 days) to identify high-risk receivables
• Implement a layered collection strategy: Launch a hierarchical collection process for overdue receivables, combining internal collection with external recovery
• Set collection KPIs: Include collection rate in the performance appraisal of the sales team, and clarify reward and punishment mechanisms

• Establish customer credit files: Collect information such as customer financial data, industry status, and historical payment records
• Implement dynamic credit rating: Adjust credit limits in a timely manner based on changes in customer operating conditions
• Introduce external credit data: Connect with professional credit reporting agencies to obtain more comprehensive customer credit information[4]

• Accounts receivable factoring
  : Transfer accounts receivable to financial institutions for financing to quickly recover funds
• Supply chain financing
  : Carry out supply chain financing in cooperation with core customers to lock in payment sources
• Credit insurance
  : Purchase credit insurance for accounts receivable from important customers to transfer default risks[4]

Drawing on the experience of peer companies, Lieqi Intelligence needs to reduce its dependence on Zhongji Xuchuang:

Company	Proportion of revenue from top 5 customers	Proportion of revenue from top customer
Tianfu Communication (2024)	86.80%	61.69%
Lieqi Intelligence (2025H1)	79.38%	65.55%

Recommended measures:

• Actively expand other leading customers such as Guangxun Technology, Yuanjie Technology, and Xinyisheng
• Develop customers in new fields such as semiconductors and automotive electronics to diversify industry risks
• Improve product quality and service level to enhance customer stickiness while maintaining bargaining power[3]

• Renegotiate payment terms with major customers to shorten payment cycles
• Provide early payment discounts as incentives to guide customers to pay in advance
• Adopt stepped payment term arrangements such as “3+3” or “3+6” to balance cash flow

• Deploy ERP/financial management systems to achieve full-process digital monitoring of accounts receivable
• Establish a cash flow forecasting model to early warn of funding gaps
• Use AI for dynamic assessment of customer credit risks and early warning of abnormalities[5]

• Establish strategic cooperation agreements with core customers to clarify long-term cooperation frameworks and payment guarantee mechanisms
• Explore deep binding models such as equity cooperation and joint R&D to enhance cooperation stability
• Participate in customer capacity planning to achieve precise matching of orders and production capacity

• Develop high-value-added products and services to increase gross profit margin and enhance self-financing capability
• Explore overseas markets to diversify single market risks
• Explore new business models such as equipment leasing and pay-per-use to improve cash flow structure

• Focus on industry M&A and integration opportunities to increase market share and bargaining power through external expansion
• Extend to upstream core component fields to gain discourse power in the supply chain
• Form differentiated competition with peers to avoid deterioration of payment conditions caused by price wars

1. Customer concentration risk
   : If Zhongji Xuchuang’s operating conditions deteriorate or it adjusts its procurement strategy, it will have a significant adverse impact on the company
2. Patent litigation risk
   : The company is facing patent infringement lawsuits from MRSI and Advanced Hong Kong, a subsidiary of ASMPT. Losing the lawsuit may affect business continuity
3. Technological iteration risk
   : As optical modules evolve to 1.6T and higher rates, delayed product R&D will result in loss of competitive advantage
4. Cash flow break risk
   : If operating cash flow remains negative and cannot be supplemented through financing, normal operations may be affected

For investors, it is necessary to pay attention to the changing trends of the following key indicators:

Monitoring Indicator	Early Warning Threshold	Recommended Action
Accounts receivable turnover days	Over 90 days	Review the effectiveness of credit policies
Operating cash flow/net profit	Below 50%	Assess profit quality
Customer concentration (top customer)	Over 60%	Monitor diversification progress
Inventory turnover days	Over 180 days	Assess inventory impairment risk

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The high accounts receivable problem of Lieqi Intelligence is a typical challenge faced by high-growth optical communication equipment providers. Its root cause lies in the superposition of multiple factors such as

, , and . In the short term, the company should strengthen accounts receivable collection and credit management; in the medium term, it needs to promote customer diversification and payment term optimization; in the long term, it needs to fundamentally improve cash flow quality through strategic cooperation and business upgrading.

For the entire optical communication equipment industry, under the market pattern of high downstream customer concentration,

are the three core paths to improve cash flow quality. Only by strengthening working capital management while expanding rapidly can enterprises achieve sustainable high-quality development.

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[1] Sina Finance - “Lieqi Intelligence’s IPO Net Profit Surges, Luo Chao is Undaunted by Patent Lawsuits” (https://finance.sina.com.cn/stock/newstock/2026-01-06/doc-inhfkfum1295415.shtml)

[2] Sina Finance - “Lieqi Intelligence’s IPO Net Profit Surges” (https://finance.sina.cn/stock/xg/xgzx/2026-01-06/detail-inhfkfum1295415.d.html)

[3] Shanghai Stock Exchange - “Report on Issuance of Shares and Cash Payment for Assets by Wuhan Changyingtong Optoelectronics Technology Co., Ltd.” (https://static.sse.com.cn/stock/disclosure/announcement/c/202507/688143_20250718_ZQXS.pdf)

[4] China Accounting Online - “Accounts Receivable Proportion Rises Year by Year, What Factors May Affect It?” (https://www.chinaacc.com/wenda/detail/xt/9393846)

[5] FineReport - “How AI Data Analysis Empowers Financial Statements” (https://www.finereport.com/blog/article/69453f7a86e97409bbd45830)