Analysis of the 4111% Surge in Bad Debt Provisions at Wellgo Electronics

Based on my research and analysis, regarding the issue of “4111% surge in Wellgo’s bad debt provisions”, I found certain information ambiguity. Below is the relevant information I could find:

(Stock Code: 301251)

• Founded on April 7, 2017
• Core Business: R&D, production, and sales of printed circuit boards (PCBs)
• Listed on the ChiNext Board on September 6, 2023 [1]

According to Wellgo Electronics’ prospectus, the company adopts the following bad debt provision calculation methods:

1. Accounts Receivable
   : Bad debt provisions are calculated based on the expected credit loss amount over the entire life cycle
2. Notes Receivable
   : The bad debt provision rate for bank acceptance bills is 0, while provisions for commercial acceptance bills are calculated with reference to historical credit loss experience [2]

According to the company’s April 2025 Supervisory Board resolution announcement, the company reviewed and approved the “Proposal on the Provision of Asset Impairment Reserves for 2024”, but the specific provision amount and details were not disclosed in detail in the announcement [3].

Based on the characteristics of the PCB industry and the company’s situation, the increase in bad debt provisions may be related to the following factors:

1. Changes in Downstream Customers’ Payment Cycles
   : Increase in the proportion of accounts receivable with longer aging periods
2. Changes in Customer Credit Risks
   : Deterioration of operating conditions for some customers leading to reduced repayment ability
3. Impact of Industry Sentiment
   : Intensified competition in the electronic manufacturing industry, leading to capital pressure on some customers
4. Changes in Accounting Policies
   : Adjustment of bad debt provision ratios in accordance with new accounting standards

Regarding the specific figure of “4111% surge in bad debt provisions” you mentioned, I was unable to find exact data in public materials. This may be due to:

1. The change ratio for a specific period
2. Changes in bad debt provisions for a specific sub-item or customer
3. Detailed information that can only be obtained by reviewing the full text of the company’s 2024 annual report

To obtain accurate reasons for the surge in bad debt provisions and specific data, it is recommended to:

1. Review the
   full text of the 2024 annual report
   disclosed by the company on CNINFO (www.cninfo.com.cn)
2. Check the
   special announcement
   issued by the company regarding the provision of asset impairment reserves
3. Pay attention to relevant explanations in the company’s
   investor relations activities

[1] Eastmoney.com - Company Profile of Wellgo (301251)
[2] Prospectus of Jiangxi Wellgo Electronics Co., Ltd.
[3] Announcement of the 6th Resolution of the Second Supervisory Board of Jiangxi Wellgo Electronics Co., Ltd.

If you can provide a more specific time frame or information source, I can conduct a more in-depth analysis for you.