Zheng Quan Zhi Xing·2025-08-04 16:12Core Viewpoint - The company has faced significant challenges with its major client, A1 unit, leading to a substantial increase in bad debt provisions due to the inability to collect receivables, which has prompted a shift from collective to individual bad debt provisioning [1][2][10]. Group 1: Accounts Receivable and Bad Debt Provisions - As of the end of 2024, the company's accounts receivable from A1 unit amounted to 406 million yuan, with 224 million yuan (55.17%) attributed to A1 unit [1]. - The bad debt provision for A1 unit was adjusted from a collective basis to an individual basis, with a bad debt loss of 60.78 million yuan, representing a provision rate of 27% [1][10]. - The aging analysis shows that as of the end of 2024, 181.42 million yuan of accounts receivable from A1 unit were aged 2-3 years, and 41.80 million yuan were aged 3-4 years, with no repayments received to date [3][10]. Group 2: Revenue Recognition and Client Relationship - Revenue from A1 unit was recognized upon delivery and acceptance of products, with total recognized revenue of 285.66 million yuan against a contract amount of 288.66 million yuan [12][14]. - The company has maintained ongoing communication with A1 unit to facilitate the collection of receivables and has continued to provide after-sales support and product development [15][16]. - Despite the lack of new contracts or payments from A1 unit in 2024, the business relationship remains active, with ongoing product deliveries and technical support [16][18]. Group 3: Audit and Verification - The sponsor institution conducted thorough verification procedures, including interviews with management and reviews of accounts receivable details, confirming the accuracy of revenue recognition and the sufficiency of bad debt provisions [16][17]. - The audit confirmed that the company’s bad debt provisioning practices align with industry standards and that the provisions made for A1 unit were adequate given the circumstances [10][19].