How Much Money Niu Owes Its Suppliers

Figures converted from CNY at historical FX rates — see data/company.json.fx_rates. Ratios, margins, and multiples are unitless and unchanged.

How Much Money Niu Owes Its Suppliers

At Dec 31, 2025 Niu owed $156.9M (¥1,098.4M) to its supply chain — $100.7M of accounts payable to component vendors plus $56.3M of bank-acceptance notes issued through six bank facilities to settle vendor invoices on Niu's behalf. That combined number is down only 1.6% from $159.4M a year earlier, even though the headline accounts-payable line fell $18.4M — bank paper to vendors rose $16.0M and almost fully offset it. Anyone reading only the "accounts payable" line will understate vendor-economic exposure by roughly $56M (¥394M), the size of the notes-payable book that the FY2024 and FY2025 MD&A treat as a single working-capital category.

The Narrow Answer — Accounts Payable Only

The line a casual reader will quote — "Accounts payable" on the FY2025 balance sheet — reads $100.7M (¥704.1M), down from $119.1M (¥869.0M) the year before. On its own that looks like Niu is paying suppliers down. It is not the whole picture, but it is the cleanest answer to the literal question of unsettled vendor invoices on Niu's books.

USD figures use Dec 31, 2024 and Dec 31, 2025 period-end CNY/USD rates. The $18.4M YoY decline is real cash that left the building to vendors — but the bank, not Niu, increasingly stands behind the invoice that replaces it.

The Fuller Answer — Add Bank-Acceptance Notes

Bank-acceptance notes are short-dated bank instruments Niu issues to settle supplier invoices: the supplier (typically) discounts the note with the bank and gets cash; Niu then owes the bank at maturity. Economically the obligation has moved from Niu→supplier to Niu→bank, but the purchase it funded is identical, and the FY24 and FY25 MD&A bundles the two into a single working-capital line ("an increase of US$57.9M in accounts payable and notes payable" in FY24). Treating them together is the right read for an investor.

The bar chart tells the story the headline line hides: the supplier-economic obligation roughly quadrupled from $36M in FY2018 to $159M in FY2024, then ticked down only marginally in FY2025 as $18M of "true" AP rolled off but $16M of new bank paper went on. Disclosure of notes payable as a separate line item only began in FY2024 — pre-FY24 the company's revolving facilities were drawn only as bank loans, not as supplier-settling notes. The substitution is not a paydown.

The Economic Answer — Days Payable Outstanding

DPO is the cleanest way to size whether the supplier obligation has scaled with cost of goods or whether vendors are being asked to wait longer for the same cost base. We compute it on the same basis the forensics tab uses: average of beginning and ending (AP + notes payable), divided by full-year COGS, times 365.

Two things to read off this chart. First, the step-change happened in FY2022 — DPO jumped from 68 days to 107 days, well before notes-payable disclosure appeared, which means it was Niu's own AP that first absorbed the strain. Second, the FY24-FY25 decline (133 → 125 → 119) is small relative to the FY22 step-up: even with FY25 revenue +31% YoY and COGS +24%, the supplier-economic obligation is unwinding only slowly. At 119 days, Niu is 40–60 days above the ~60–80 day range typical of Chinese consumer-discretionary manufacturing (a benchmark cited by the forensics tab but not externally verified here — treat it as directional rather than a hard test). The gap is the working-capital lever the cash flow statement leans on.

The combined $157M owed to the supply chain is 83% the size of the $189M cash pile — a credit underwriter sizing short-tenor liquidity would view ~$56M of that as bank-funded vendor settlement (the notes payable, due within twelve months under the named facilities) and the $101M trade payable as standard trade credit. None of it represents long-dated debt; all of it is short-tenor working-capital paper that the company's $189M cash position can repay outright if vendors and banks pull terms simultaneously.

What Is in the Notes-Payable Balance

The FY2025 20-F MD&A itemises six bank facilities that, together, host the $56.3M of bank-acceptance notes outstanding at year-end. Each facility is held with a single mainland-China commercial bank, all are revolving and short-dated (six- or twelve-month tenor), and one is collateralised by a US-dollar deposit equivalent to $30.1M placed with the bank.

The cap utilisation tells the underwriter what is left in the tank: against ~$90M of named acceptance-note capacity (excluding the Mar 2023 secured-loan-only line), Niu had drawn $56M, or roughly 63%. There is ~$34M of unused capacity available before the company would need to renegotiate caps or open a new facility. That is the room for supplier-paper expansion in FY2026 without a new disclosure.

Supplier Concentration — A Disclosure-Tone Shift

A separate question — who Niu owes — is partly answered in the risk factors. The FY2024 20-F disclosed that one supplier accounted for more than 10% of total purchases in each of 2022, 2023, and 2024. The FY2025 20-F dropped that specific disclosure and reframed the supplier section around "multi-sourcing" language. The vendor is not named in either filing; the 2018 IPO prospectus disclosed anonymised Suppliers B–F that each held 10–24% of accounts payable at various 2016–H1 2018 dates, but those entities are not necessarily the same names today.

I read the disclosure change as neither incriminating nor exonerating. A reduction in stated concentration could reflect actual diversification (consistent with the cost-per-unit decline between FY24 and FY25), or it could reflect a softer disclosure choice. There is no aging schedule, no named supplier, no quantified supplier-finance program, and no separate footnote in either filing — these gaps are typical of 20-F supplier disclosure but limit what can be said with precision.

How the Working-Capital Lever Funded FY25 Cash Flow

The reason this number matters to an equity investor is mechanical. Reported FY2025 operating cash flow of $50.5M against a net loss of $5.6M sits at the top of a bridge whose biggest working-capital additions are franchisee refundable deposits ($23.8M), customer advances ($21.0M), and a receivables drawdown ($14.5M). Supplier obligations were a small net drag in FY25 (the $9.3M combined AP+notes-payable decline subtracted from OCF). But in FY24 the supplier-economic line was the dominant contributor: MD&A states that "an increase of $58.0M in accounts payable and notes payable" was the largest working-capital inflow funding FY24 OCF of $7.2M.

The two columns tell two different stories. FY24 OCF would have been a negative $50.8M without the supplier-credit build — the working-capital story carried the year. FY25 OCF was carried by different working-capital lines (deposits, advances, receivables collection); supplier-economic obligation stopped expanding in FY25 because it had already been pulled forward in FY24. Either way, the FY24-FY25 reported OCF is borrowed working-capital runway, not earned conversion.

The Judgment Call

This is a deliberate working-capital lever, not yet a supplier-strain signal. The supporting evidence:

The combined supplier-economic obligation at FY25 ($156.9M) is below its FY24 peak ($159.4M), DPO declined from 133 to 119 days over two years against rising COGS, and there is meaningful unused capacity (~$34M) on the named bank-acceptance facilities. None of the named facilities have been pulled or repriced in the FY25 20-F disclosure; one is collateralised by Niu's own US-dollar bank deposit ($30.1M), which is consistent with bank-paper costs being modest. The supplier-concentration line was softened, not strengthened.

The contrary read — that this is the early shape of supplier strain — would be supported by: the FY22 step-change from 68-day to 107-day DPO without a commensurate volume swing, the introduction of bank-acceptance paper as a separate line only in FY24, and the partial substitution of $16M of new bank notes for $18M of AP roll-off in FY25 (a tightening of vendor terms, not a relaxation). Both readings are consistent with the FY25 balance sheet; the FY26 trajectory of the $56M notes line is what will resolve them.

What Would Change My View

Three watch-items, anchored on the forensics tab's thresholds and on the specific facility disclosures above:

The single highest-leverage number on this page is the $56M notes-payable line. A continuing rise above $64M in FY26 would push the supplier-stretch flag from working-capital lever to early-strain signal; a reduction below $36M as the operating turnaround continues — i.e., the company funding FY26 from operations rather than vendor paper — would be the strongest single piece of evidence that the cash-flow engine is no longer borrowed.

Material Limitations

A few constraints on what can be said:

No accounts-payable aging. Niu does not disclose AP aging buckets, weighted-average payment terms, or specific supplier names. Any claim about specific vendor exposure beyond the disclosed >10% concentration line would be invented and is omitted here.

No FY26 interim balance sheet on file. The FY2025 20-F is the most recent balance-sheet snapshot. If a 6-K is filed with Q1 FY2026 results before this tab is read, the Q1 FY2026 supplier-obligation balance would supersede the year-end figures.

Sector-norm benchmark is directional. The "60–80 day sector norm" for Chinese consumer-discretionary manufacturing is cited by the forensics tab without an externally verified source. Peer DPO from Yadea Group (HK: 1585) and Aima Technology (HK: 9979) would tighten the benchmark; that comparison is not made here in numbers, only directionally.

Notes-payable economic ownership. Bank-acceptance notes outstanding at $56M may overstate true supplier-side exposure if suppliers have already discounted the notes with the bank — in which case the credit exposure on Niu's books is to the bank, and the supplier has been paid. There is no public disclosure of factoring rates on Niu paper, so this is acknowledged as an unknown rather than quantified.