At a policy briefing on September 14, securities regulators announced a dual-pronged approach to address delayed payments to small and medium-sized suppliers, emphasizing stronger disclosure requirements for listed companies and smoother capital flows across industrial chains. This renewed focus has placed accounts payable practices and supplier payment terms under the market's microscope.

An analysis of interim reports from 2024 through 2026 reveals stark disparities in payables turnover days among more than 50 A-share biopharmaceutical companies. While firms like Kanghua Bio and Tiantan Bio maintain reasonable payment cycles of roughly ten days, numerous others exceed 300 days, with extreme outliers reaching thousands, tens of thousands, or even millions of days.

Across the sector, both loss-making innovative biotech firms and profitable industry leaders frequently extend payment periods to upstream suppliers, effectively utilizing their capital. As upstream raw material producers, CRO service providers, and packaging companies are often smaller entities with limited risk resistance, prolonged payment delays transmit credit risk along the supply chain.

Extreme Cases of Overdue Accounts Highlighted

*ST Kangle posted the most striking figures, with payables turnover days reaching 1,225,515 days in the 2024 interim report before spiking to 3,647,492 days by 2026. Accounts payable balances grew from 137 million yuan to 247 million yuan over two years, an increase exceeding 80%. Such astronomical turnover metrics indicate that most payables have been overdue for extended periods. With deteriorating fundamentals and shrinking financing channels, the company has resorted to indefinitely postponing supplier payments to sustain operations, shifting its financial strain onto upstream partners, many of whom may eventually need to write off these receivables.

Heyuan Bio-U also shows a steep upward trajectory in payment delays, with turnover days climbing from 4,639 to 6,415, and then to 9,110 across the three interim reports. Accounts payable surged from 92 million yuan to 576 million yuan, a 526% jump. As a company in early commercial stages with heavy R&D spending and reliance on external funding, extending supplier payment terms serves as a cash-preservation tactic. However, if future fundraising falls short, hundreds of millions in upstream funds could face recovery risks.

Zhixiang Jintai-U saw its turnover days drop from an extreme 3,443,049 in 2024 to 1,772 and 1,066 in subsequent reports, yet the figures remain elevated above 1,000 days, indicating persistently slow payment practices that have become the norm.

Industry Leaders Also Delay Payments

Beyond these extreme outliers, 13 biopharmaceutical companies recorded payables turnover exceeding 200 days in the 2026 interim report, including notable industry leaders. JUNSHI BIO-U, a key PD-1 player, reported accounts payable of 1.113 billion yuan and a turnover period of 711.78 days. Although the metric has improved from 1,031 days in 2024 and 875 days in 2025, it remains above 700 days, with payables balances consistently exceeding one billion yuan. The company has not disclosed a detailed aging breakdown but stated that no significant payables exceed one year, applying a materiality threshold of 10 million yuan. Given the extended turnover period, it is plausible that numerous smaller payables below that threshold have aged beyond a year, suggesting potential long-term occupation of funds from smaller suppliers.

Walvax Biotechnology reported accounts payable of 1.274 billion yuan in the 2026 interim report, with a turnover period of 899.97 days, nearly two and a half years. While down from 1,048 days in 2024, the figure remains near 900 days. Payables aged over one year grew from 299 million yuan to 474 million yuan and then to 501 million yuan across the three periods, with their share of total payables rising from 19.06% to 28.13% and then 39.32%, reflecting deepening occupation of upstream capital.

Additionally, Shenzhou Cell, Nearby Protein, and Kaiyin Technology each posted turnover days exceeding 360 in the 2026 interim report, meaning their payment cycles extend to a full year, effectively using supplier funds as interest-free working capital.

The divergent payment practices in the biologics sector stem from a combination of business models, capital market conditions, and supply chain bargaining power. For loss-making biotechs, delaying supplier payments represents the lowest-barrier, lowest-cost "hidden financing tool." For cash-rich leaders, extended payment terms reflect strong buyer-side leverage. In the case of financially distressed firms like *ST Kangle, the inability to pay forces indefinite deferrals. Yet the common thread is that upstream small and medium suppliers, with weaker bargaining positions, ultimately bear the brunt of these risks.

Recognizing that upstream SME suppliers form the foundation of industrial innovation, ensuring timely payments and unblocking capital circulation across the chain is both a matter of market fairness and high-quality industry development. As regulatory oversight tightens, the expectation is that companies will move away from relying on supplier capital and toward a fairer, more sustainable settlement ecosystem, fostering mutual prosperity along the entire biologics value chain.