Access Is Profitable, but Working Capital Still Keeps Cash in China

Access has moved beyond the operating-promise stage: it is profitable, it contributes almost as much to Priortech as Camtek, and it enters the second quarter with an expectation for about $100 million of sales. This continuation isolates the issue that the main article left open: profit conversion into accessible cash. At Access level, RMB162.0 million of operating cash flow looks strong, but it was almost fully absorbed by capacity investment, long-term assets, receivables and inventory. Before financing, operating and investing cash flows together created a negative cash gap of about RMB22.5 million, and cash increased only after RMB82.2 million of positive financing cash flow. The current read is therefore better on Access's business quality, but still cautious on Priortech's ability to benefit from that cash. The next proof point is not another headline about the listing process, but a quarter in which roughly $100 million of sales does not arrive with another rise in receivables, inventory or local debt.

Profit Is Already There, but It Still Sits Inside Access

The first quarter made Access a more tangible profit asset inside Priortech. Access recorded revenue of RMB629.5 million and net profit of RMB95.1 million, and in Priortech's statements it contributed $5.436 million to equity-method earnings. That was almost identical to Camtek's contribution in the same quarter, so Access is no longer just a private IPO option waiting for approval in China.

The business progress is also visible in mix. Power Device reached 50% of Access sales in the quarter, and Priortech's presentation frames it as the central engine around HPC and AI applications. At the same time, Access expects about $100 million of second-quarter sales. Those points support the view that demand is real and Access is already operating at a higher run rate.

But investee profit is not the same as cash at the parent. For a holding company, the question is not only how much Access earns, but how much of that profit can leave the operating company without hurting growth, production or the listing process. In the first quarter, that answer was still limited.

Operating Cash Flow Did Not Cover Actual Investment Spend

The relevant cash frame here is all-in cash flexibility after Access's actual cash uses, not normalized cash generation before investment. Access generated RMB162.0 million from operating activities, but investing cash flow was negative RMB184.5 million. Within that, RMB166.8 million went to purchases of fixed assets, intangible assets and other long-term assets.

The chart shows the point clearly: the business already brings in operating cash, but growth still requires larger cash outflows before financing. That is not necessarily operating weakness, because a company expanding capacity for Power Device can consume cash while profitability improves. The constraint is different: as long as actual investment spend absorbs most of the operating cash flow, Access's profit is hard to treat as cash that can move quickly to Priortech.

It is also important not to mix cash frames. RMB162.0 million of operating cash flow is a positive sign for the business. But cash flexibility after investment and financing tells a different story: Access needed positive financing cash flow to finish the quarter with higher cash. The statements do not split maintenance CAPEX from growth CAPEX, so it would be wrong to present the entire outflow as either recurring or one-off. The finding is enough to say the business is improving, but cash is still working inside Access rather than leaving it.

Receivables and Inventory Explain Where Growth Gets Stuck

Working capital is where the cost of growth appears. Accounts receivable rose to RMB540.9 million from RMB521.3 million at the end of 2025, and inventory rose to RMB339.8 million from RMB313.6 million. Those numbers are not unusual by themselves for a fast-growing industrial company, but they matter because they sit directly against the promise of higher second-quarter sales.

Customer quality also needs monitoring. The five largest receivable balances were 62.73% of gross receivables, including Infineon, Changdian, Siliconware, Huawei and Huatian. That can point to strong customer relationships, but it also means collection is concentrated: if a large customer stretches payment terms or orders grow faster than collection, cash flow can weaken even while profit looks good.

The yellow flag is the allowance ratio. It rose to 3.67% from 2.78% at the end of 2025, and within the aging schedule, receivables overdue by more than two years rose to RMB12.5 million from less than RMB0.7 million at the end of 2025. That is still small relative to total receivables, and it does not prove a broad collection problem. But it is enough to make the second quarter a real check: sales growth will be higher quality if it does not come with another increase in allowances or receivables.

The Next Point Is Collection, Not Another Listing Headline

Access's Shenzhen listing process still does not provide a cash solution. The prospectus review has not been completed, no approval has been granted, and the valuation, structure and size of the offering are still unknown. The listing may eventually change the value and liquidity layer, but for now it does not replace collection, inventory control and cash flow after investment.

The current conclusion is that Access already strengthens Priortech's asset quality, but still has not proved that it can release surplus cash up the chain. A second quarter with about $100 million of sales, stable receivables, controlled inventory and cash flow that does not depend on more local financing would change the weight of that claim. If sales grow together with another rise in receivables, inventory or debt, Access's profit will remain important, but less accessible to Priortech's shareholders.