A. History and Development of the Company We commenced operations in June 2014 through Beijing BaiJiaHuLian Technology Co., Ltd., which was renamed as Beijing BaiJia Technology Co., Ltd. in September 2020 and then renamed as Gaotu Education Technology Group Ltd. in July 2021, or Beijing Gaotu. Our holding company, BaiJiaHuLian Group Holdings Limited, was incorporated in August 2014 in the Cayman Islands to facilitate financing and offshore listing. In January 2019, we renamed our company as GSX Techedu Inc. In June 2021, we changed our legal name from “GSX Techedu Inc.” to “Gaotu Techedu Inc.,” effective June 4, 2021. In August 2014, we established a wholly-owned subsidiary in Hong Kong, BaiJiaHuLian HK Holdings Limited. In January 2015, BaiJiaHuLian HK Holdings Limited established a wholly-owned subsidiary in mainland China, namely Beijing Lexuebang. In April 2015, we gained control over Beijing Gaotu through Beijing Lexuebang by entering into a series of contractual arrangements with Beijing Gaotu and its shareholders. The contractual arrangements with Beijing Gaotu were subsequently amended and restated in March 2019. On June 6, 2019, our ADSs commenced trading on the NYSE under the symbol “GSX”. We raised from our initial public offering and from exercising the over-allotment option by the underwriters US$196.3 million in net proceeds after deducting underwriting commissions and the offering expenses payable by us. On May 6, 2021, we changed our ticker symbol from “GSX” to “GOTU”. In January 2020, we completed the acquisition of Zhengzhou Kaitong Kegongmao Co., Ltd. and renamed it as Zhengzhou GaoTuYunJi Education Technology Co., Ltd., which became a subsidiary of Beijing Gaotu. In December 2020, we raised US$870 million in net proceeds from the private placement of our newly issued Class A ordinary shares to certain investors. In May 2025, we gained control over Shanghai Duwen through Beijing Lexuebang by entering into a series of contractual arrangements with Shanghai Duwen and its shareholders. In the same month, we completed the acquisition of 100% of equity interest of Zhengzhou Weizhen Culture Technology Co., Ltd., which became a subsidiary of Zhengzhou GaoTuYunJi Education Technology Co., Ltd. In December 2025, we completed the acquisition of 100% of equity interest of Zhengzhou You’ai Culture Technology Co., Ltd., which became a subsidiary of Zhengzhou GaoTuYunJi Education Technology Co., Ltd. Our principal executive offices are located at 5F, Gientech Building, 17 East Zone, 10 Xibeiwang East Road, Haidian District, Beijing 100193, People’s Republic of China. Our telephone number at this address is +86 10 8282-6826. Our registered office in the Cayman Islands is located at the offices of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. Our agent for service of process in the United States is Puglisi & Associates, located at 850 Library Avenue, Suite 204, Newark, Delaware 19711. 71 All information we file with the SEC can be obtained over the internet at the SEC’s website at www.sec.gov. You can also find information on our website http://ir.gaotu.cn. The information contained on our website is not a part of this annual report. B. Business Overview Our Mission Our mission is to make learning better. We believe education is a lifelong journey of curiosity, growth and transformation. We put learners at the heart of all we do and grow alongside them every step of the way. Staying true to this purpose, we reimagine learning with the power of technology, creating experiences that are learner-centric, AI-powered and product-led. Building on a proven track record of innovation, we continue to push technological boundaries to elevate learning, making it more accessible, engaging and effective. Who We Are We are a leading data-driven education company focused on delivering measurable results through high-tech innovations. As the one of the few digital-native players among China’s leading education companies, we deliver AI-powered, product-led learning experiences that fuse high-quality teaching with frontier technology to build motivation, engagement and long-term growth. We offer comprehensive learning solutions for learners across various age groups from primary school students to adults. Our diverse online course formats, including large-class, small-class and one-on-one tutoring, are complemented by an expanding offline network of learning centers across China to provide face-to-face learning opportunities. Powered by AI and data analytics, our online and offline offerings personalize learning pathways, enhance learning effectiveness and support the varying needs of learners across different subjects. In addition to structured courses, we provide learners with a rich collection of AI-enhanced content and applications, enabling them to pursue self-directed, individualized learning at their own pace. What Makes Our Learning Experience Unique We are dedicated to creating learner-centric learning solutions for all demographics. We redefine the way learning is both engaging and effective by combining top-tier teachers, innovative curriculum, leading-edge technology and a product-led approach. Key elements of our solutions include: A mission-driven team of elite teachers. Behind every successful learning experience is an outstanding team of teachers who are deeply committed to empowering learners and driving measurable progress. Through rigorous recruitment and professional development programs, we build a robust talent pipeline that delivers high-quality educational experiences across online and offline course offerings. Our teachers are renowned for their engaging, dynamic teaching styles, artfully blending live interactions with tiered course designs to keep learners motivated and on track. Proprietary curriculum innovation driving outcomes. We develop and refine proprietary, research-backed curricula to maximize learner engagement and drive measurable learning outcomes. Using deep learning analytics and adaptive knowledge graphs, we align our courses with the developmental needs of each learner, offering a structured yet personalized learning path. Our curriculum is crafted to inspire curiosity, foster critical thinking and encourage active participation, integrating interactive teaching methods with a focus on holistic development that extends beyond learning performance. AI-powered, digital-native offering. As a born-digital platform, we have evolved into an AI-driven learning platform that makes education smarter, more personalized and more scalable. AI and big data analytics are embedded into every aspect of the education experience to optimize learner engagement, teaching effectiveness and operational efficiency. •For learners: effectiveness-focused personalization. AI-powered personalization fine-tunes content, pace and teaching delivery in real time, driving deeper engagement and tangible learning success while enhancing critical thinking, subject mastery and problem-solving skills. •For teachers: smarter teaching, less busywork. AI tools automate time-consuming tasks such as answering inquiries and study planning, providing real-time insights that improve teaching efficiency and allow teachers to focus on delivering personalized, high-impact learning experiences. 72 •For operations: optimized growth and sustainable impact. AI analytics optimize strategies for learner acquisition, engagement and retention, enabling precise resource allocation, smarter marketing and scalable growth while preserving personal touch that drives our success. Product-led growth defining engagement and expansion. We follow a proven product-led growth model that links product design directly with high-quality teaching delivery, creating impactful learning experiences that fuel organic growth. As our product matrix expands, we enrich diverse learning scenarios, boosting engagement and driving sustainable growth. By continuously refining each stage of the learning journey with real-time feedback, we elevate both learning effectiveness and learner satisfaction. How We Drive Scalable Growth Our success is fueled by two mutually reinforcing flywheels: the learning flywheel and the technology flywheel. These interconnected cycles create a self-sustaining loop of innovation, engagement and growth, continuously enhancing both educational outcomes and operational efficiency. •Learning flywheel driving growth and scalability. As a product-led platform, our focus on continuously improving and refining the learning experience magnifies engagement, attracting more learners to our platform. The more learners engage with our platform, the more learning scenarios and content available for us to refine our curriculum, enhance teaching quality and drive better learning effectiveness. Our elite teachers, proprietary curriculum and AI-driven personalization work together to create high-quality instruction, foster engagement and enhance learning outcomes. As our courses become more engaging and effective, learner retention increases, attracting more learners through word-of-mouth referrals. A growing learner base generates valuable data and user insights, which feed back into our system to continuously refine both our curriculum and AI models, reinforcing this cycle of growth and improvement. •Technology flywheel enabling smarter operations. AI fuels our technology efficiency by optimizing product development, marketing, learner acquisition and retention strategies. Our intelligent algorithms refine learner targeting and improve conversion rates, making sure that scalability does not come at the cost of personalization. Our operations model also optimizes cost structures, enabling us to expand efficiently and maintain high-quality services. These technological efficiencies free up resources for reinvestment in AI advancements and product innovation, further strengthening both product offerings and overall business performance. The learning and technology flywheels are closely intertwined, propelling each other forward in a continuous cycle. By elevating learning outcomes, we draw in more learners, generating rich data that refines our AI models. This continuous flow of data enhances our technology, empowering us to fine-tune learner targeting, streamline learner acquisition and improve retention strategies. As a result, we are able to scale rapidly, with our backend processes staying agile, nimble and aligned with our high standards of performance. This virtuous loop of innovation and growth places Gaotu at the leading edge of digital education, continuously redefining what can be achieved in the era of AI-empowered learning. Our Technology Platform Technology powers every stage of our education process from learner acquisition to success. By leveraging AI and big data analytics, we continuously enhance the learning experience and operational efficiency, creating a scalable model that drives measurable learning and business results. Highlights of our technology platform include: •A deep data moat. With over a decade’s accumulation of online learning data, we have developed Gaotu Data Platform, a vast repository of teacher-learner interactions, learning behaviors and content feedback. We amplify the impact of our scale by continuously unlocking greater value from our data. As our data assets expand, our AI models become more precise, enabling more personalized instruction and fueling the development of new curriculum and product features that drive higher engagement and enhanced learning outcomes. 73 •Human-AI collaboration. We believe AI is designed to complement, not replace, human roles in learning. It works in tandem with instructors and tutors to improve teaching efficiency and enhance learner relationships. AI-powered tools, such as learner demand analysis and learner progress insights, empower teachers to improve teaching quality and deepen their expertise. By automating routine tasks such as assignment grading and conversation analysis, AI allows teachers to focus on high-impact, personalized interactions and teaching delivery. •Effectiveness-oriented solutions. We leverage AI to deliver measurable improvements in both teaching effectiveness and operational efficiency. By automating key processes such as learner support and marketing, we have significantly reduced response times, streamlined workload distribution and optimized resource allocation. Our AI-driven personalization strategies improve learner engagement and amplify marketing impact, which lead to substantial gains in productivity and business performance. •Process automation for scalable operations. We apply AI across all facets of our business operations to streamline processes and maintain a high level of personalized service. By automating key processes such as lead management, learner interactions and routine administrative tasks, we optimize resource allocation and reduce manual workloads. •A shared, scalable infrastructure. Our shared technology infrastructure supports all of our products and services, accelerating the development and rollout of new features. By integrating a diverse range of leading-edge AI models, we refine personalized learning experiences, optimize learning analytics and elevate operational efficiency, which further strengthens our data-driven advantage. We have built a full-stack AI architecture spanning data, algorithms and applications, among others, enabling an end-to-end intelligent system that supports everything from data governance to business operations. By leveraging our proprietary AI tools and services and industry-leading models, we have achieved breakthroughs in conversion efficiency, learning experiences and operational productivity. Gaotu Data Platform. We have developed a centralized education data platform that collects and processes learner interactions across multiple dimensions, including course enrollment, live session attendance, assignment submissions and recorded lesson replays. Our advanced data analytics capabilities, powered by AI models and big data analytics, enhance the accuracy of learner behavior predictions, which enables us to optimize targeted marketing, streamline platform operations and refine the overall learning experience. Through predictive analytics, we anticipate course booking trends, topic preferences and learning progress, which allows us to provide personalized recommendations and improve marketing and instructional strategies. Our content development and sales and marketing teams leverage these insights to drive innovation in learner acquisition, refine promotional content distribution and enhance engagement. We also collaborate with major advertising media to expand our reach while maintaining strict data security. Machine learning platform. Our machine learning platform accelerates model development, training and optimization by consolidating advanced deep-learning frameworks. Leveraging our AI architecture, we have developed a suite of proprietary AI models for learning applications, significantly enhancing accuracy in tasks such as automated dialogue generation and content creation for teaching and research. These models also power features and tools such as automated question answering and AI-driven teaching assistants, providing 24/7 personalized support to both learners and teachers. With a distributed training framework, we have shortened model iteration cycles from weeks to hours, enabling parallel experimentation across all business lines. To maximize AI performance, we implement a hybrid deployment approach, integrating third-party foundation models such as DeepSeek with our domain-specific AI, which balances between broad AI capabilities and specialized performance optimized for learning. 74 AI tools and MLOps. Our AI tools and MLOps platform transform operational workflows by automating processes to improve efficiency and scalability. AI automation has significantly reduced the need for human intervention in standardized operational tasks, such as executing standard operating procedures and lead allocation. Key AI applications implemented include intelligent learner engagement, where our AI-driven dialogue system manages a significant portion of learner inquiries, allowing teachers to focus on teaching without being interrupted by routine questions particularly during class hours. Our intelligent grading tools efficiently handle a large volume of assignments with a level of accuracy and consistency comparable to that of human teachers, thus enabling small teams to process thousands of submissions quickly and effectively. Additionally, our smart exam subject selection planner guides learners in making data-driven decisions about which subjects to focus on to maximize their chances of success. Our AI tutor mobile app, which operates without the involvement of human teachers, delivers personalized learning experiences and real-time feedback with 24/7 support. In marketing and learner acquisition, AI-driven content personalization through Q&A, intent recognition and targeted recommendations has substantially increased conversion rates and overall transaction value with enhanced marketing staff productivity. Our Products and Services We promote learner engagement and learning achievement by offering a wide range of adaptable learning formats that cater to various needs and preferences. Powered by our technology infrastructure and AI-driven digital tools, we continue to expand and refine our educational offerings and business models to deliver high-quality, personalized learning experiences in the way that best suits the needs of each learner. Modes of Learning Delivery We provide a range of online and offline learning formats, supported by AI tools, to deliver an engaging and effective experience for every learner. Online courses. Our online learning formats include live large classes, which combine live-streamed lectures with AI-driven personalization and a dual-teacher system, where expert instructors lead classes, and a team of trained tutors offers real-time guidance in smaller groups. Through real-time classes along with small-group tutoring, learners across different regions can access top-tier teaching, benefiting from structured coursework, dynamic engagement tools and AI-powered learning analytics that adapt to their learning needs. In addition to large classes, we offer small-group and one-on-one tutoring sessions to accommodate varying learning preferences. Small-class format fosters lively discussions and peer collaboration in a seminar-style setting, and one-on-one tutoring sessions allow instructors to customize lessons based on each learner’s progress, learning style and learning goals. Our AI tutor further supports both instructors and tutors by promptly answering learner queries, offering instant explanations on difficult concepts and assisting with assignments at any time, which creates a fully rounded, human-AI-driven learning journey. Offline courses. Expanding upon our online offerings, we are growing our nationwide network of learning centers across China to provide face-to-face learning opportunities and more localized educational experiences. Our learning centers cater to learners who value in-person teaching, offering a supportive environment for direct interaction with instructors and peer collaboration. To meet the diverse educational needs and preferences of learners across different regions, we continuously adapt our curriculum, teaching methods and pricing strategies to align with local market conditions. AI-powered applications. We aspire to make our AI-powered applications a go-to resource for interactive and on-the-go learning, delivering bite-sized, on-demand educational content that fits into learners’ daily schedules. Among these applications are Xiaotu Wenwen (小途问问), an AI-driven Q&A tool that uses multimodal interactions to provide instant answers to learning questions and personalize content recommendations, and Maodou Loves Poems (毛豆爱古诗), an immersive learning tool for ancient Chinese poetry combining animated explanations and intelligent recitation assessments with voice interactions and gamified challenges to engage young learners in adaptive learning. Designed with a learner-first approach, these applications provide intuitive access to AI-enhanced courses, intelligent practice exercises, real-time tutor support and personalized learning recommendations. Using big data analytics and adaptive learning pathways, our AI tools tailor to each learner’s pace, strengthen weak areas and improve retention through gamified challenges, progress tracking and an interactive learning community where learners connect, share insights and exchange experiences. Additionally, our AI-powered applications feature pop culture collaborations and celebrity-led courses that attract and inspire learners, ranging from an eight-minute lesson to a deep dive into complex topics. 75 Content Offerings We offer a variety of courses for learners of different ages, covering a wide spectrum of topics. Our services primarily focus on learning services and educational content & digitalized learning products. All our course content is developed in-house to provide high quality and effective education experience for learners. Our teachers use our standardized curriculum for each course to ensure a seamless and effective learning experience for learners of different levels and backgrounds. Learning Services Learning services mainly include traditional learning services, non-academic tutoring services and college student and adult education services, each designed to meet distinct learning needs: •Traditional learning services. Our traditional learning services focus on traditional online non-compulsory academic subject tutoring services. We provide a comprehensive set of course offerings that covers core academic subjects, including mathematics, English, Chinese, physics, chemistry, biology, history, geography and political science for learners to improve specific capabilities and achieve better grades in examinations. •Non-academic tutoring services. We provide a range of courses to nurture personal interests and intellectual curiosity. Our non-academic offerings include adolescent development, Cambridge English, international competitions and international examinations. These course offerings are constructive in encouraging learners to think critically, developing their learning skills and exploring a variety of fields beyond traditional academics. We are also actively expanding and refining these non-academic tutoring courses to meet the evolving needs of our growing learner base. •College student and adult education services. We support adult learners and college students with courses to advance their academic and professional paths. Our professional courses cater to college students and adults preparing for qualification exams, such as teacher certification, equipping them with the skills necessary to enhance their careers. Additionally, we offer admission courses to help learners excel in entrance exams and interviews for postgraduate programs, civil service exams and more. We also provide specialized English courses focused on improving key language skills, such as grammar, vocabulary and speaking, all of which are essential for career growth. For those pursuing studies abroad, we offer consulting services to guide learners through the application process, as well as exam preparation courses such as IELTS and TOEFL to support their international goals. Educational Content & Digitalized Learning Products Educational content & digitalized learning products mainly include content products, such as books and digitalized auxiliary learning tools. We are continuously improving our educational products by utilizing the expertise of our instructors and content team alongside AI and data analytics, through capabilities such as content generation and graphical learning maps. •Educational content. Our in-house content development team designs all course materials, including course outlines, interactive courseware, practice exercises and lesson notes, to provide a smooth and effective learning experience for our learners. We have also published certain reference book, such as Chinese dictionaries and exam question compilations for the college entrance exam. •Digitalized learning products. We are actively expanding and upgrading our suite of education-focused digital products and solutions, which include AI-powered tools such as reading apps for young learners that provide real-time pronunciation correction and enhance reading comprehension. Additionally, we offer AI-based writing assessment tools that offer instant feedback to help learners improve their writing skills. We are also actively exploring the integration of intelligent hardware, such as learning pen and tablet devices for exam preparation, into our learning solutions, which we believe will further enhance the interactivity and personalization of the learning process. 76 Our Instructor and Tutor Talent Our Instructors We are committed to developing and maintaining a team of high-quality instructors. We believe our instructors’ teaching capabilities, experience and proven track record fundamentally differentiate us from our competitors. As of December 31, 2025, we had 4,989 instructors, including 2,576 full-time instructors and 2,413 contract instructors. We primarily seek qualified instructors who have extensive teaching experience and a strong reputation from other education institutions. We have adopted a quantitative approach to comprehensively assess candidates nationwide based on a wide set of criteria. Recruitment Leveraging our management team’s deep experience in the education sector, we have been able to accurately identify and effectively recruit and retain high quality instructors across our course offerings. We have a team of highly experienced recruitment personnel to seek qualified instructors across mainland China. We attract applicants through various online career platforms, and we regularly participate in job fairs. Prospective candidates must go through our rigorous interview process, including resume screening, in-person interviews, and demo courses. Training and Supervision All newly hired instructors are required to undergo standardized training to improve their skills in delivering courses to learners. Our instructors are required to continue to participate in periodic training programs that focus on education content, teaching skills and techniques, teaching performance, and our corporate culture and values. We have a quality assurance team that monitors the performance of our instructors for each course and generates analysis reports for the supervisor in the relevant subject area. Our instructors regularly receive constructive feedback on their courses from their supervisor. Our quality assurance team evaluates instructors’ performance based on an integrated, standardized evaluation system, including presentation skills, teaching process, course content and reactions to any emergent events. We provide personalized training programs for each instructor to address particular areas for improvement based on feedback from learners and our quality assurance team. Evaluation and Compensation We adopt a comprehensive set of key performance indicators and qualitative factors to evaluate instructor performance, including, among others, learner retention, teaching capability, and dedication. Our instructors’ promotion is largely based on these key performance indicators and qualitative factors. To incentivize our instructors, we offer competitive performance-based bonuses based on learner and/or learner parent satisfaction. Our Tutors We have a team of passionate and well-qualified tutors that are essential to our business. We have developed methods for hiring, training and retaining qualified tutors, which include a rigorous recruiting process, periodic training in teaching methods and skills, school culture and philosophy. Our tutors provide learning guidance and daily support to learners throughout the entire duration of a course. As of December 31, 2025, we had 5,323 tutors, including 3,928 full-time tutors and 1,395 contract tutors. Our tutors’ responsibilities typically include: •interacting with learners frequently to monitor learners’ learning progress and facilitate an engaging learning environment; •responding to learners’ queries, correcting learners’ post-class exercises in a timely manner after submission and providing prompt and personalized feedback to learners; •cooperating with instructors to improve learner satisfaction and learner retention; and •offering additional services such as study planning, family education support and emotional guidance to help learners maintain a balanced approach to their studies and navigate any personal or learning challenges that may arise. 77 Recruitment Leveraging our extensive experience in the private education sector, we have been able to effectively recruit and retain high quality tutors across our course offerings. We primarily seek tutor candidates from recent graduates of reputable universities in China who have demonstrated proficiency in the relevant subjects, a strong sense of responsibility, as well as good communication skills and learning capabilities. We hold recruiting events at universities across mainland China to seek qualified candidates. We have entered into cooperation arrangements with universities in mainland China, through which we promote our job offerings to and accept applications from their students. We also partner with universities in mainland China to provide internship and graduate programs, cultivating a sustainable talent pipeline for our tutor team. In addition, we also attract outstanding experienced applicants through various online career websites and regularly participate in job fairs to hire qualified candidates with one to two years of work experience. Training We provide our newly hired tutors with an orientation program to introduce their workflow and job responsibilities. To ensure our tutors will continue to engage and build relationships with learners, we have developed systematic on-the-job training programs covering four specific areas: corporate culture and tutor responsibilities, standardized workflow practices, personal capabilities development, management skills. Our tutors are required to attentively reach out to learners at each stage of their learning process based on our standardized workflow provided in our training programs. We also train our tutors to identify signs of learning challenges of learners and provide emotional support to learners to help cope with the challenging aspects of their studies. We have an on-going review mechanism to assess our tutors’ job performance. Evaluation and Compensation We use various key performance indicators to measure the performance of our tutors, which include, among others, learner retention, exercise completion, and learner satisfaction. Learners may provide feedback on the quality of our tutors anytime. Our tutors’ compensation consists of base salary and performance-based bonuses determined by learner retention and class and exercise completion. Educational Content Development Content Development Team In addition to our skilled instructors, we have a dedicated team focused on developing high-quality educational content that supports our teaching efforts. As of December 31, 2025, we had a content development team of 726 professionals, who focus on the following three areas: •Proprietary course curriculum and educational content. Our content development team is responsible for designing, updating and refining our course syllabi and materials to stay aligned with the latest trends and advancements in each subject area. This approach ensures that learners have access to up-to-date, high-quality content, fostering engagement, supporting skill development, and empowering them to apply knowledge effectively in real-world contexts. •Enhancing course materials for learning. To maximize the effectiveness of our online learning courses, our content development team collaborates closely with instructors to ensure that course materials are delivered in the most engaging and impactful way. While instructors maintain the flexibility to tailor their lessons, the team uses data analytics and best practice insights to guide instructors on how to best utilize course materials for optimal learning outcomes. •Designing and presenting course materials. Learners receive both physical copies and digital materials that are carefully curated to support their educational journey. Our content development team works on refining the layout and structure to ensure that the materials are not only functional but also enhance the overall learning experience. In addition, the team is consistently incorporating AI features into our products, such as reading apps for young learners that provide real-time pronunciation correction and elevate reading comprehension. 78 Content Development Process We design and develop substantially all of our course materials in-house, including course outlines, interactive courseware, practice exercises and lesson notes, to ensure a seamless and effective learning experience for our learners. We maintain a strict process for creating new course materials. Before new course material is officially applied, the drafts, along with the accompanying practice exercises, typically undergo multiple rounds of internal review. We generally pilot test new courses for up to six to twelve months before they are broadly released. We regularly update our course materials to stay abreast of the latest trends in their respective subject areas. We also develop and update curricula and course materials tailored for classes of varying difficulty levels to address diverse educational requirements and needs of our learners at different levels. We believe comprehensive quiz banks and exercises are important to enhance learners’ learning effectiveness. We offer learners pre-class and in-class quizzes and exercises to help them better assess their learning outcomes and identify areas for improvement. Our tutors monitor learning performance in these quizzes and exercises and report to our content development team, who will update our quiz banks and exercises catering to learner needs as well as identify weaknesses in the educational content and make timely adjustments. Course Fees Our course fees are generally collected in full upon enrollment. We accept payments through major third-party online payment channels in mainland China. For our courses, we allow learners to withdraw from the enrolled courses at any time and receive refunds for the undelivered classes. Sales and Marketing Marketing Channels We market our course offerings and enhance brand awareness through AI-enabled content-driven strategies across various online and offline channels. At the same time, we also generate sales leads from word-of-mouth referrals by our learners. Additionally, our marketing strategies leverage AI-driven content personalization, including Q&A and targeted recommendations, to boost our conversion rates and the overall transaction value with improved marketing staff productivity. Our intelligent customer service is available to assist potential learners with their inquiries to streamline the process and improve response times. We believe our high-quality course offerings and satisfactory learning experience powered by our suite of AI applications will continue to generate positive word-of-mouth referrals. Sales Process We have formulated an effective and systematic sales conversion standard operating procedure designed to optimize the effectiveness of each step of a prospective learner’s interaction with our platform, from content creation, content distribution, sales leads acquisition, to paid enrollment conversion and retention. We believe our sales efficiency relies on the multistage amplification of each of our sales links. Through AI-driven sales lead tracking, we closely monitor the conversion of each sales link to measure our sales effectiveness and continually optimize at each stage. Content Generation and Distribution We have a dedicated learner growth team who produces highly informative marketing content generally in the format of featured articles and short-form videos on parent-child relationships, book list recommendation, and skill set knowledge, among others. Our promotional content is generally distributed through major social media platforms in mainland China to access targeted audiences. 79 Online Promotional Programs The sales leads generated by our various marketing channels are directed to our sales team. Our sales team encourage prospective learners to sign up for promotional classes offered at a discount or for free. We devote significant resources to our trial programs as they make a great contribution to our new paid course enrollments. Our lower priced promotional program provides a carefully designed curriculum featuring a series of trial courses throughout a three-to-six-day period. The trial courses follow a similar format and are delivered by the same high-quality instructors as our standard courses. Our instructors devote a significant amount of time to preparing these course materials in advance. We staff each class with the same high-quality tutors as in our standard courses to assist with learners’ daily study. Our lower priced promotional program creates an immersive experience for prospective learners to understand the effectiveness of our superior teaching quality. The tutors promote our standard courses to prospective learners throughout the lower priced promotional program and continue to follow up with them after the lower priced promotional program. Our instructors also promote our paid courses when delivering courses in the lower priced promotional program. We believe their promotion, combined with prospective learners’ immersive experience of our courses, has served as an effective way to convert sales leads to paid course enrollments. Offline Promotional Initiatives We employ a variety of offline promotional initiatives to engage potential learners and strengthen brand presence, which include hosting expert lectures featuring renowned teachers and top achievers. We also partner with major schools to offer public classes to connect with target audiences directly. Additionally, we set up promotion points in communities and bookstores, offering free trial classes and distributing materials to convert prospects into active learners. Our offline educational salons provide a platform for parents to interact with experts on topics such as learning planning, which help us build trust and facilitate course enrollments. Localized Promotional Events Our localized promotional events engage with communities and strengthen regional connections. We partner with local education influencers, including bloggers and parent group leaders, to reach target audiences through live streams and product reviews. We also organize region-specific lectures featuring renowned local teachers. To enhance trust in second- and third-tier cities, we set up offline experience centers and collaborate with local tutoring institutions. Additionally, we customize our marketing materials, using dialect-specific content in areas such as Guangdong and Sichuan to better resonate with local parents. Data Privacy and Security We are committed to protecting our learners’ personal information and privacy. We have established and implemented a strict platform-wide policy on data collection, processing and usage. To ensure the confidentiality and integrity of our data, we maintain a comprehensive and rigorous data security program. We anonymize and encrypt confidential personal information and take other technological measures to ensure secure processing, transmission and usage of data. We have also established stringent internal protocols under which we grant classified access to confidential personal data only to limited employees with strictly defined and layered access authority. We strictly control and manage the use of data within our various teams. Our back-end security system is capable of handling malicious attacks to safeguard the security of our operations and to protect the privacy of our learners. Content Moderation Our courses undergo multiple rounds of internal review and pilot testing before being broadly released. Our tutors and quality assurance team monitor our live courses, chat messages and other content on our platform to ensure that we are able to identify content that may be deemed inappropriate or in violation of laws, regulations and government policies. When any inappropriate or illegal content is identified, we promptly remove the content. 80 Competition The education service market in mainland China is fragmented. We face competition in each topic of our course offerings from other educational service providers, such as TAL Education Group, New Oriental Education & Technology Group Inc. and some private companies. We compete primarily on the following factors: •quality of education services and learners’ learning experience; •the quality of teaching staff; •technology infrastructure and data analytics capabilities; •brand recognition; and •scope of course offerings. We believe that we are well-positioned to effectively compete with our peers with respect to the factors listed above. However, some of our current or future competitors may have longer operating histories, greater brand recognition, or greater financial, technical or marketing resources than we do. For a discussion of risks relating to competition, see “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—We face significant competition in each part of our current and future course and service offerings, which could divert learners to our competitors, lead to pricing pressure and loss of market shares, and significantly reduce our net revenues.” Intellectual Property Our trademarks, copyrights, domain names, trade secrets and other intellectual property rights distinguish our courses and services from those of our competitors and contribute to our ability to compete in our target markets. We rely on a combination of copyright and trademark law, trade secret protection and confidentiality agreements with employees to protect our intellectual property rights. In addition, under the employment agreements we enter into with our employees, they acknowledge that the intellectual property made by them in connection with their employment with us is our property. We also regularly monitor any infringement or misappropriation of our intellectual property rights. As of the date of this annual report, we have registered 425 domain names relating to our business, 221 software copyrights, 56 work copyrights, 123 patents and 1,096 trademarks in mainland China. Insurance We maintain public liability insurance and property insurance policies covering learners, equipment and facilities for injuries, death or losses due to fire, earthquake, flood or any other disaster. Consistent with customary industry practice in mainland China, we do not maintain business interruption insurance, nor do we maintain key-man life insurance. Regulations This section sets forth a summary of the most significant rules and regulations that affect our business activities in China or the rights of our shareholders to receive dividends and other distributions from us. 81 Regulation Related to Private Education Education Law of the PRC The PRC Education Law, sets forth provisions relating to the fundamental education systems of mainland China, including a school system of pre-school education, primary education, secondary education and higher education, a system of nine-year compulsory education and a system of education certificates. The Education Law stipulates that in principle, enterprises, institutions, social organizations and individuals are encouraged to operate schools and other types of educational organizations in accordance with the laws and regulations of mainland China. The Law for Promoting Private Education On December 28, 2002, the Standing Committee of the National People’s Congress promulgated the Law for Promoting Private Education, which was last amended on December 29, 2018 with such amendment effective on the same date. Under the amended Law for Promoting Private Education, sponsors of private schools may choose to establish non-profit or for-profit private schools at their own discretion, and the private schools shall obtain a private school operating permit issued by government authorities and registered with registration authorities. Amended Implementation Rules for the Law for Promoting Private Education On April 7, 2021, the State Council promulgated the Amended Implementation Rules for the Law for Promoting Private Education, which became effective on September 1, 2021. The amended implementation rules provide, among others, that online education activities using internet technology are encouraged by the regulatory authorities and shall comply with laws and regulations related to internet management. A private school engaging in online education activities using internet technology shall obtain the private school operating permit. It shall also establish and implement internet security management systems and take technical security measures. Upon discovery of any information whose release or transmission is prohibited by applicable laws or regulations, the private school shall immediately cease the transmission of that information and take further remedial actions, such as deleting that information, to prevent it from spreading. Records pertaining to the situation shall be kept and reported to the appropriate authorities. Regulation Related to After-School Tutoring The State Council issued an Opinion on Supervising After-School Tutoring Institutions on August 22, 2018, or the State Council Circular 80, which provided various guidance on regulating after-school tutoring institutions that target primary and secondary school students. The State Council Circular 80 provides for the conditions for approval and registration of after-school tutoring institutions, and requires relevant governmental authorities to tighten regulations on after-school tutoring institutions. The State Council Circular 80 specifies operating requirements that after-school tutoring institutions must meet. Such requirements include, among other things, that after-school tutoring institutions (i) have fixed training premises that conform to specified safety criteria, with an average area per student of no less than three square meters during the applicable training period; (ii) comply with relevant fire safety, environmental protection, hygiene, food operation and other specified requirements; (iii) purchase personal safety insurance for students to reduce safety risks; and (iv) not hire teachers who are working concurrently in primary or secondary schools, and teachers tutoring in academic subjects such as English are required to have the corresponding teaching qualifications. After-school tutoring institutions are prohibited from carrying out training that goes beyond the school syllabus, training in advance of the corresponding school schedule and any training activities linked with student admission, nor shall they organize any level test, rank examination or competition on academic subjects for primary and secondary students. According to State Council Circular 80, extracurricular training institutions are also required to disclose and file relevant information, including their training content, schedule, targeted students and school timetable to the relevant education authority, and their training classes may not end later than 8:30 p.m. each day. After-school tutoring institutions can only collect in advance fees for courses spanning three months or shorter. Additionally, State Council Circular 80 requests that competent local authorities formulate relevant local standards for after-school tutoring institutions within their administrative area. 82 On August 10, 2019, the Ministry of Education, jointly with certain other PRC government authorities, issued Opinions on Guiding and Regulating the Orderly and Healthy Development of Educational Mobile Apps, which require filings with the competent provincial regulatory authorities for education for mobile apps that provide services for school teaching and management, student learning and student life, or home-school interactions, with school faculty, students or parents as the main users, and with education or learning as the main application scenarios. These opinions also require, among others, that: (i) before such filing, the app’s provider must have obtained an ICP License or completed an ICP License filing and obtained the certificate and grade evaluation report for graded protection of cybersecurity; (ii) such apps whose main users are under the age of 18 must limit the users’ usage time, specify the range of suitable ages, and strictly monitor contents; (iii) before such an app is introduced as a mandatory app to students, the app must be approved by the applicable school through collective decision-making process and be filed with the competent education authority; and (iv) apps adopted by education authorities and schools as their uniformly used teaching or management tools may not charge the students or parents any fees, and may not offer any commercial advertisements or games. On November 11, 2019, the Ministry of Education issued the Management Rules on Filing of Educational Mobile Apps, which supplement the filing requirements for such apps. On September 19, 2019, the Ministry of Education, jointly with certain other government authorities, issued the Guidance Opinions on Promoting the Healthy Development of Online Education, which provide, among others, that (i) social forces are encouraged to establish online education institutions, develop online education resources, and provide high quality education services; and (ii) an online education negative list shall be promulgated and industries not included in the negative list are open for all types of entities to enter into. On November 27, 2020, the Ministry of Education and the Office of the Central Cyberspace Affairs Commission jointly promulgated the Notice on Further Strengthening the Standardized Management of Online Course Platforms for Minors. The notice emphasizes that local cyberspace authorities and education authorities shall regularly organize screening of the training platforms for minors and take measures such as suspending or removing training platforms or requiring training platforms to rectify within a given time limit. After such rectification is completed, the education authorities will review the filings. On June 10, 2020, the General Office of the Ministry of Education and the General Office of the SAMR promulgated the Notice on Issuing the Form of Service Contract for After-school Training Provided to Primary and Secondary School Students, which requires the local competent regulatory authorities to guide the relevant parties to use the form of service contract for after-school training activities provided to primary and secondary school students. The form of service contract covers the obligations and rights of parties involved in the after-school training, including detailed provisions on training fees, refund arrangement and default liabilities. On September 27, 2021, the General Office of the Ministry of Education and the General Office of the SAMR promulgated the Notice on Issuing the Form of Service Contract for After-school Training Provided to Primary and Secondary School Students, which further revised the form of service contract for after-school training. On December 29, 2006, the Standing Committee of the National People’s Congress promulgated the Law for Protection of Minors, which was most recently amended on April 26, 2024 and became effective on the same date. According to the amended Law for Protection of Minors, online education products and services which are targeted at minors shall not include any links to online games or push any advertisements and other information irrelevant to teaching. In addition, schools shall not use public holidays, weekends, winter and summer break periods to organize students in primary and secondary schools to take lessons collectively, which will aggregate students’ burden of study, and after-school tutoring service providers may not provide primary school curriculum education to the preschool-aged minors. On October 16, 2023, the State Council promulgated the Regulation of Online Protection of Minors, which provides that, providers of online education network products and services targeting minors shall provide corresponding products and services based on minors' physical and mental development characteristics and cognitive abilities at different age stages, in accordance with laws, administrative regulations or provisions promulgated by the State Council. 83 On July 24, 2021, the General Office of the State Council and the General Office of the Central Committee of the Communist Party of China jointly promulgated the Alleviating Burden Opinion, which provides that, among other things, (i) local government authorities shall no longer approve new after-school tutoring institutions providing tutoring services on academic subjects for students in compulsory education, and the existing after-school tutoring institutions providing tutoring services on academic subjects shall be registered as non-profit; (ii) online Academic AST Institutions that have filed with the local education administration authorities providing tutoring services on academic subjects shall be subject to review and re-approval procedures by competent government authorities, and any failure to obtain such approval will result in the cancellation of its previous filing and ICP license; (iii) Academic AST Institutions are prohibited from raising funds by listing on stock markets or conducting any capitalization activities and listed companies are prohibited from investing in Academic AST Institutions through capital markets fund raising activities, or acquiring assets of Academic AST Institutions by paying cash or issuing securities; and (iv) foreign capital is prohibited from controlling or participating in any Academic AST Institutions through mergers and acquisitions, entrusted operation, joining franchise or variable interest entities. Any violation of the foregoing shall be rectified. Moreover, the Alleviating Burden Opinion specifies a series of operating requirements that after-school tutoring institutions must meet, including, among other things, (i) no advertisements for after-school tutoring shall be published or broadcasted in the network platforms and billboards displayed in the mainstream media, new media, public place and residential areas; (ii) the provision of overseas education courses is strictly prohibited; (iii) fees charged for academic subjects tutoring in compulsory education shall be included into government-guided price management, and excessive high fees and excessive profit-seeking behaviors will be suppressed; (iv) government authorities will implement risk management and control for the pre-collection of fees by after-school tutoring institutions with requirements such as setting up third-party custodians and risk reserves, and strengthen supervision over loans regarding tutoring services; (v) online tutoring for preschool-age children is prohibited, and offline academic subjects (including foreign language) tutoring services for preschool-age children is also strictly prohibited; (vi) no more approval of new after-school tutoring institutions providing tutoring services on academic subjects for pre-school-age children and students on grade ten to twelve will be granted; and (vii) administration and supervision over academic subjects tutoring institutions for students on grade ten to twelve shall be implemented by reference to the applicable provisions of the Alleviating Burden Opinion. In addition, the Alleviating Burden Opinion also requires that local government authorities shall clarify the competent authorities for administering the non-academic after-school tutoring institutions, by classifying sports, culture and art, science and technology and other non­-academic subjects, formulate standards among different classification of non-academic tutoring and conduct strict examination before granting permission. As of the date of this annual report, certain local government authorities have promulgated rules that require non­-academic tutoring service providers in areas such as art, music, physics, among others, to obtain private school operating permit. On July 28, 2021, the General Office of the Ministry of Education promulgated the Notice on Further Clarifying the Scope of Academic Subjects and Non-Academic Subjects of After-School Tutoring in the Compulsory Education, which specifies that according to the national curriculum on compulsory education, when after-school institutions carry out tutoring, morality and rule of law, Chinese, history, geography, mathematics, foreign language (including English, Japanese, Russian), physics, chemistry and biology are classified as academic subjects, while sports (or sports and health), art (or music, art), and comprehensive practical activities (including information technology education, labor and technology education) are classified as non-academic subjects. On August 2, 2021, the Guangdong Education Bureau issued the Circular on Reducing the Burden of After-School Tutoring on Students in Compulsory Education to implement the Alleviating Burden Opinion. This circular stipulates requirements on Academic AST Institutions, including but not limited to license requirements, tutoring service requirements, advertisement regulations and fee regulations. 84 On August 18, 2021, the Beijing Municipality Government and the Beijing Municipal Committee of the Communist Party of China jointly published the full text of the Beijing Municipality’s Measures to Further Reduce the Burden of Homework and After-School Tutoring on Students in Compulsory Education in Beijing to implement the Alleviating Burden Opinion. These measures provide, among others, that (i) no new Academic AST Institutions will be approved, while existing Academic AST Institutions will be subject to review and re-registration aimed at reducing their numbers by phases; the remaining Academic AST Institutions shall all be registered as non-profit; (ii) online Academic AST Institutions previously filed with the local education administration authorities will be subject to review and re-approval; the registration and ICP license of any disqualifying online Academic AST Institutions will be rescinded; (iii) Academic AST Institutions are prohibited from (a) offering classes over contents outside of or in advance of the school curriculum, (b) offering classes based on any foreign curriculum, (c) soliciting and recruiting school teacher by offering excessive compensation, or (d) employing foreign personnel abroad to carry out training activities; non-Academic AST Institutions providers are prohibited from offering tutoring services on academic subjects; (iv) prices for Academic AST Institutions will need to follow the guidelines from the government to prevent any excessive charging or excessive profit-seeking activity; and (v) Academic AST Institutions are prohibited from financing by way of listing its securities or conducting other capital market activities; listed companies may not invest in Academic AST Institutions through capital markets fundraising activities, and may not acquire assets of Academic AST Institutions by paying cash or issuing securities; foreign capital is prohibited from controlling or participating in Academic AST Institutions through merger and acquisitions, entrusted operations, joining franchise or using variable interest entities. On August 25, 2021, the General Office of the Ministry of Education issued the Administrative Measures for After-School Tutoring Materials for Primary and Secondary School Students (for Trial Implementation), which provide that, among others, (i) after-school tutoring materials for primary and secondary school students and staff preparing such tutoring materials shall meet certain requirements specified in such measures, which include, among others, tutoring materials shall follow the national curriculum standard and shall not provide contents in advance of the school curriculum; (ii) after-school tutoring institutions shall establish internal management system for the tutoring materials and the staff preparing such tutoring materials; (iii) after-school tutoring institutions shall conduct internal review of the tutoring materials and the local education administrations shall conduct external review of the tutoring materials; (iv) after-school tutoring institutions may only use tutoring materials that have been internally and externally reviewed or if the materials have been officially published; (v) after school tutoring institutions shall file with the education administrations the tutoring materials and the staff preparing such materials; and (vi) after-school tutoring institutions in violation of the measures will be subject to rectification and shall not use the relevant tutoring materials during the rectification period; if the after-school tutoring institution refuses to rectify within the time limit or if the violation is severe, its private school operating permit may be revoked by the local education administration. On September 7, 2021, the Ministry of Education published on its official website that the Ministry of Education, together with two other government authorities, issued a circular requiring all Academic AST Institutions to complete registration as non-profit by the end of 2021, and all Academic AST Institutions shall, before completing such registration, suspend enrollment of students and charging fees. On September 9, 2021, the General Office of the Ministry of Education and the General Office of the Ministry of Human Resources and Social Security jointly issued the Administrative Measures for Practitioners of the After-School Tutoring Institutions (for Trial Implementation), which set out a series of requirements for the after-school tutoring institutions with respect to their employed teachers, research staff and teaching assistants. After-school tutoring institutions in violation of such requirements will be subject to rectification. If an after-school tutoring institution violates the requirements several times or violates several requirements, such after-school tutoring institution is prohibited from enrollment of students and shall not conduct tutoring activities during the rectification period; and if the after-school tutoring institution refuses to rectify within the time limit or if the violation is severe, its private school operating permit may be revoked by the local education administration. On March 3, 2022, the Ministry of Education jointly with other two authorities issued the Announcement on Regulating Non-Academic Subjects After-School Tutoring, which provides that, among others, (1) the non-academic subjects after-school tutoring institutions shall have corresponding qualifications, and the practitioners shall have corresponding certifications for professional capability; (2) tutoring fee information shall be made public; (3) non-academic subjects after-school tutoring institutions shall use the form of service contract for after-school training activities provided to primary and secondary school students, and any unfair competition, monopoly or price fraud is prohibited; and (4) fees charged for non-academic subjects after-school tutoring shall be collected in such institutions’ special accounts, and fees shall not be collected or disguised collected in a lump sum for more than 60 classes or three months. In addition, tutoring for primary and middle schools students shall not allow any tutoring loans made to pay tutoring fees. 85 On May 27, 2022, the Ministry of Education published a notice on its website, which states that the Ministry of Education is regulating and continues to regulate the non-academic tutoring institutions, by means of examination of qualifications of institutions, regulation of fee charging and supervision of pre-paid fees. Such notice also states that as of May 15, 2022, about 88% of the non-academic tutoring institutions nationwide have implemented third-party custodians or risk reserve funds to manage the risk of pre-paid fee. On November 21, 2022, the Chinese Ministry of Education and relevant authorities published the Opinions on Strengthening the Prevention and Administration of Invisible and Variant Tutoring on Academic Subjects, which stipulates that competent government authority will strengthen control and supervision over key locations such as commercial buildings and residential areas where there is a high incidence of illegal after-school tutoring, and institutions and individuals who engage in illegal after-school tutoring will be subject to penalties. On November 30, 2022, the Ministry of Education and other governmental authorities published Opinions on Regulation of Non-Academic After-School Tutoring for Primary and Secondary School Students, which provide that, among others, (1) local governments shall identify corresponding competent authorities for different tutoring categories and set forth basic standards; (2) non-academic tutoring institutions shall comply with requirements relating to premise, facilities, fire safety, environment protection and food safety; (3) practitioners shall have corresponding capability or certificates for different tutoring categories, and tutoring institutions shall not solicit or recruit primary and secondary school teachers; (4) non-academic online tutoring institutions shall obtain certificates issued by provincial government authorities; (5) class times shall not conflict with the teaching time of the local primary and secondary schools, and offline after-school trainings shall end no later than 8:30 p.m. and online live trainings shall end no later than 9:00 p.m.; (6) tuition fees collected by a tutoring institution shall not be collected in a lump sum for more than 60 course sessions, or for a course length of more than three months, or for more than RMB5,000, and tutoring institutions shall open a special bank account for the tuition fees and file the account information and other required information with government authorities. In addition, any violation under such opinions of a non-academic after-school tutoring institution shall be rectified accordingly by the end of June 2023. On March 14, 2023, the General Office of the Ministry of Education jointly with other four authorities issued the Administrative Measures for the Financial Management of After-School Tutoring Institutions, which provide that, among others, (1) tutoring pre-paid fees (including collected in cash) shall be deposited into such institution’s special accounts and shall be separated from its own funds. Tutoring fees shall not be collected in such institution’s other accounts or any third party’s accounts; (2) after-school tutoring institutions shall not accept any tutoring fees paid by means of tutoring loans; (3) after-school tutoring institutions shall use the contract template jointly stipulated by General Office of the Ministry of Education and the SAMR for the after-school tutoring service, and clearly specify the tutoring fees, refund arrangement and dispute resolutions. After-school tutoring institutions shall offer refunds for any remaining classes in a course to students who withdraw from the course in a timely manner. On August 23, 2023, the Ministry of Education issued Interim Measures for Administrative Penalties on Off-campus Tutoring, which became effective on October 15, 2023. These interim measures set out the general requirements for administrative penalties for illegal off-campus tutoring operated by any natural person, legal person or other organization that is offered to preschool children over 3 years of age, and primary and secondary school students. In particular, these interim measures provide that the following circumstances shall constitute illegal off-campus tutoring, and relevant natural person, legal person or other organization conducting such illegal off-campus tutoring may be subject to various administrative penalties, such as orders to rectify or cease tutoring activities, returning fees charged, revocation of operation approval, warning, criticism and fines: (i) any natural person, legal person or other organization carries out after-school tutoring without requisite private school operating permit and meets certain conditions, including having a specific tutoring facility for offline tutoring activities or a specific website or application for online tutoring activities, two or more tutoring personnel and corresponding organizational structure and division of work; (ii) any natural person, legal person or other organization carries out certain after-school academic tutoring activities in a disguised form without meeting the conditions as prescribed above but also without a private school operating permit; (iii) any after-school tutoring institution carries out after-school tutoring beyond the scope of its private school operating permit; (iv) any after-school tutoring institution carries out after-school tutoring in violation of applicable laws and regulations; (v) any after-school tutoring institution has the problem of disorganized management; and (vi) any after-school tutoring institution organizes or participates in the organization of social competitions without approval for preschool children over three years of age, and primary and secondary school students. 86 On February 8, 2024, the Ministry of Education issued the Administrative Regulations on Off-campus Tutoring (Draft for Comments), which provide that, among other things, (i) off-campus tutoring institutions shall be administered by the classification of academic subjects and non-academic subjects. All off-campus tutoring institutions shall obtain corresponding off-campus tutoring operating permit while the academic off-campus tutoring institutions for students in compulsory education shall complete registration as non-profit; (ii) online off-campus tutoring institutions shall be subject to review and approval by provincial education administration authorities. For non-academic off-campus tutoring institutions, prior to the application to education administration authorities, they are required to obtain approval from corresponding competent authorities depending on the tutoring categories. Where multiple competent authorities are involved, the application shall be submitted respectively; and (iii) the income of off-campus tutoring institutions collected from financing and tutoring fees shall be mainly used for engaging in educational services, improving training conditions and guaranteeing the welfare of employees. However, unlike the Alleviating Burden Opinion and certain previous regulations implementing the Alleviating Burden Opinion, these draft administrative regulations no longer emphasize administration and supervision over academic subjects tutoring institutions for students on grade ten to twelve shall be implemented by reference to the applicable provisions of the Alleviating Burden Opinion. As of the date of this annual report, these draft administrative regulations were released for public comment only, and their respective provisions and anticipated adoption or effective date may be subject to change. On November 11, 2024, the Guangdong Education Bureau and Guangdong Human resources and Social Security Bureau jointly issued the Standard of the Establishment of Off-campus Tutoring Institutions, specifying a series of requirements for the establishment and operation of academic off-campus tutoring institutions in Guangdong Province, with respect to their registered capitals, employed teachers, premise, facilities and fire safety measures. On January 3, 2025, the Ministry of Education promulgated the Administrative Measures for the Application of the National Off-campus Education and Training Supervision and Service Integrated Platform, which became effective on the same date. These measures establish a nationwide platform to support the supervision of off-campus tutoring activities. Off-campus tutoring institutions are required to register with the platform, provide and update relevant information, and conduct certain operational activities through the platform, including course display, enrollment, payment and refund processing. The platform also publicly discloses information such as the “whitelist” and “blacklist” of tutoring institutions and facilitates regulatory monitoring of tutoring institutions’ operations and prepaid funds. We are closely monitoring the evolving regulatory environment and are making efforts to seek guidance from and cooperate with the government authorities to comply with these regulations and implementation measures and we have been taking necessary measures to comply with the above requirements. However, as many of these regulations for online education are relatively new and the enforcement practices are evolving, our current practice may be deemed to be not in full compliance with these requirements. For detailed discussion, please see “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—Significant risks exist in relation to the interpretation and implementation of, or proposed changes to, the laws, regulations and policies of mainland China regarding the private education industry. In particular, our compliance with the Opinions on Further Alleviating the Burden of Homework and After-School Tutoring for Students in Compulsory Education and the implementation measures issued thereunder by the PRC government authorities has materially and adversely affected and will materially and adversely affect our business, financial condition, results of operations and prospect.” Regulation Related to Value-added Telecommunications Services On September 25, 2000, the State Council issued the PRC Regulations on Telecommunications, as last amended on February 6, 2016, to regulate telecommunications activities in mainland China. The Regulations on Telecommunications divided the telecommunications services into two categories, namely “infrastructure telecommunications services” and “value-added telecommunications services.” Pursuant to the Regulations on Telecommunications, operators of value-added telecommunications services must first obtain a Value-added Telecommunications Business Operating License from the MIIT or its provincial level counterparts. On March 1, 2009, the MIIT promulgated the Administrative Measures on Telecommunications Business Operating Licenses, which were amended on July 3, 2017 and came into effect on September 1, 2017. These measures set forth more specific provisions regarding the types of licenses required to operate value-added telecommunications services, the qualifications and procedures for obtaining such licenses and the administration and supervision of such licenses. 87 The Amended Classified Catalog of Telecommunications Services (2015 Version), which took effect on June 6, 2019, defines information services as “the information services provided for users through public communications networks or internet by means of information gathering, development, processing and the construction of the information platform.” Moreover, information services continue to be classified as a category of value-added telecommunications services and are clarified to include information release and delivery services, information search and query services, information community platform services, information real-time interactive services, and information protection and processing services. The Administrative Measures on Internet Information Services, promulgated by the PRC State Council on September 25, 2000, and last amended on December 6, 2024, set forth more specific rules on the provision of internet information services. According to these administrative measures, any company that engages in the provision of commercial internet information services shall obtain a sub-category Value-added Telecommunications Business Operating License for Internet Information Services, namely the ICP License, from the government authorities before providing any commercial internet information services within mainland China. Pursuant to the above-mentioned regulations, “commercial internet information services” generally refer to provision of specific information content, online advertising, web page construction and other online application services through internet for profit making purpose. In addition to the Telecommunications Regulations and the other regulations discussed above, the provision of commercial internet information services on mobile internet applications is regulated by the Administrative Provisions on Mobile Internet Applications Information Services, which were promulgated by the CAC on June 28, 2016 and last amended on June 14, 2022. The providers of mobile internet applications are subject to requirements under these provisions, including acquiring the qualifications and complying with other requirements provided by laws and regulations and being responsible for information security. The application providers shall not compel the user to agree to the processing of personal information for any reason, and shall not refuse the user to use its basic functions and services because the user does not agree to provide non-essential personal information. On July 21, 2023, the MIIT issued the Circular of the Ministry of Industry and Information Technology on the Record-filing of Mobile Internet Applications. According to the circular, all apps shall complete filings with the provincial communications administration of the place where the operator is located. For all apps that began to operate before July 21, 2023, the filing shall be completed by March 2024, and for all apps that began to operate after July 21, 2023, the filing shall be completed before the apps’ operation. Upon receipt of the filing materials submitted by any app operator, the provincial communications administration shall process the filing within 20 working days by issuing a filing number and disclosing the filing information to the public, provided that the materials are complete and accurate; otherwise, the filing shall not be processed. If the app information is changed or deregistered, the app operator shall report for such change or withdrawal with the original filing authority. We provide information and services to our students through our websites and mobile apps, which is classified as commercial internet information services as defined in the above provisions. To comply with the laws and regulations, Beijing Gaotu and two of its subsidiaries, Shanghai GaoTuYunJi Education Technology Co., Ltd., Beijing Xinjianzhineng Technology Co., Ltd., each currently holds a Value-added Telecommunications Business Operating License. Regulation Related to Foreign Investment On March 15, 2019, the National People’s Congress promulgated the Foreign Investment Law, which came into effect on January 1, 2020 and replaced the trio of existing laws regulating foreign investment in mainland China, namely, the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Cooperative Joint Venture Enterprise Law and the Wholly Foreign-invested Enterprise Law, together with their implementation rules and ancillary regulations. The existing foreign-invested enterprises established prior to the effective of the Foreign Investment Law may keep their corporate forms within five years. The implementing rules of the Foreign Investment Law will be stipulated separately by State Council. Pursuant to the Foreign Investment Law, “foreign investors” mean natural person, enterprise, or other organization of a foreign country; “foreign-invested enterprises” mean any enterprise established under the laws of mainland China that is wholly or partially invested by foreign investors; “foreign investment” means any foreign investor’s direct or indirect investment in mainland China, including: (i) establishing foreign invested enterprises in mainland China either individually or jointly with other investors, (ii) obtaining stock shares, stock equity, property shares, other similar interests in Chinese domestic enterprises, (iii) investing in new projects in mainland China either individually or jointly with other investors, and (iv) making investment through other means provided by laws, administrative regulations, or State Council provisions. 88 The Foreign Investment Law stipulates that mainland China implements the management system of pre-establishment national treatment plus a negative list to foreign investment and the government generally will not expropriate foreign investment, except under special circumstances, in which case it will provide fair and reasonable compensation to foreign investors. Foreign investors are barred from investing in prohibited industries on the negative list and must comply with the specified requirements when investing in restricted industries on that list. When a license is required to enter a certain industry, the foreign investor must apply for one, and the government must treat the application the same as one by a domestic enterprise, except where laws or regulations provide otherwise. In addition, foreign investors or foreign invested enterprises are required to file information reports and foreign investment shall be subject to the national security review. On December 26, 2019, the State Council promulgated the Implementation Rules of Foreign Investment Law, and became effective on January 1, 2020. The Implementation Rules of Foreign Investment Law restates certain principles of the Foreign Investment Law and further provides, among others, the existing foreign invested enterprises established prior to the effectiveness date of the pursuant to the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Cooperative Joint Venture Enterprise Law and the Wholly Foreign-invested Enterprise Law may, within the five-year period following the effective date of the Foreign Investment Law, adjust their corporate form or the governing structure and complete the change in registration pursuant to the provisions of the PRC Company Law, the PRC Partnership Enterprise Law and other applicable laws and regulations, and if it fails to do so, the enterprise registration authority will not process other registration matters of the foreign invested enterprise and may publicize such non-compliance starting from January 1, 2025. On December 26, 2019, the Supreme People’s Court issued an Interpretation of the Application of Foreign Investment Law, which further provides details with respects to the validity of foreign investment contracts. For detailed discussion of the risk associated with the Foreign Investment Law, see “Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—Uncertainties exist with respect to the interpretation and implementation of the Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance, business, financial condition and results of operations.” Regulation Related to Foreign Investment Restrictions Investment activities in mainland China by foreign investors are principally governed by the Guiding Foreign Investment Direction, which was promulgated by the State Council in February 2002 and came into effect in April 2002, and the Negative List, which was promulgated by the Ministry of Commerce and the NDRC in September 2024 and came into effect in November 2024. The Negative List sets out the restrictive measures in a unified manner, such as the requirements on shareholding percentages and management, for the access of foreign investments, and the industries that are prohibited for foreign investment. Any field not falling in the Negative List shall be administered under the principle of equal treatment to domestic and foreign investment. According to the Negative List, the proportion of foreign investments in an entity engaging in value-added telecommunications services (except for e-commerce, domestic multi-­party communications, storage-forwarding and call centers) shall not exceed 50%. Pursuant to the Negative List, a domestic enterprise engaged in activities in any field prohibited from foreign investment under the Negative List shall be subject to review and approval by the competent authorities for overseas listing and trading of shares, and any overseas investor in the enterprise shall not participate in the operation and management of the enterprise, and the equity ratio of overseas investors in the enterprise shall be governed mutatis mutandis by the regulations on the management of domestic securities investments made by overseas investors. Pursuant to the Regulations on Administration of Foreign-Invested Telecommunications Enterprises, which took effect on January 1, 2002 and were last amended on March 29, 2022 with effect from May 1, 2022, the foreign investor of a telecommunications enterprise is prohibited from holding more than 50% of the equity interest in a foreign-invested enterprise that provides value-added telecommunications services. Moreover, foreign investors that intend to invest in or establish a value-added telecommunications enterprise operating the value-added telecommunications business must obtain approvals from the MIIT and the Ministry of Commerce, or their authorized local counterparts, which retain considerable discretion in granting approvals. 89 On July 13, 2006, the MIIT issued the Circular on Strengthening the Administration of Foreign Investment in Value-added Telecommunications Services, which requires that (i) foreign investors can only operate a telecommunications business in mainland China through establishing a telecommunications enterprise with a valid telecommunications business operation license; (ii) domestic license holders are prohibited from leasing, transferring or selling telecommunications business operation licenses to foreign investors in any form, or providing any resource, sites or facilities to foreign investors to facilitate the unlicensed operation of telecommunications business in mainland China; and (iii) all value-added telecommunications services providers should improve network and information security, enact information safety administration regulations and set up emergency plans to ensure network and information safety. The provincial communications administration bureaus, as local authorities in charge of regulating telecommunications services, may revoke the value-added telecommunications business operation licenses of those who fail to comply with the above requirements or fail to rectify such noncompliance within specified time limits. On April 8, 2024, the MIIT promulgated the Announcement on Conducting the Pilot Program for Expanding the Opening-up of Value-added Telecom Services, or the Announcement. According to the Announcement, the pilot program will be initially conducted in the Beijing Comprehensive Demonstration Zone for Expanding the Opening-up of the Service Industry, Lingang New Area and Leading Area for Socialist Modernization Construction of the Shanghai Free Trade Zone, Hainan Free Trade Port, and Shenzhen Demonstration Zone of Socialism with Chinese Characteristics. The Announcement further specifies that in the approved pilot areas, restrictions on foreign ownership ratio will be removed for internet data centers (IDC), content delivery networks (CDN), internet service providers (ISP), online data processing and transaction processing, as well as information distribution platforms and delivery services in information services (excluding internet news information, online publishing, online audiovisual, and internet cultural operations), and information protection and processing services. The MIIT will be responsible for organizing the valuation and validation of the pilot implementation plans and conditions in these four areas, and making decisions regarding their approval. In October 2024, the MIIT officially launched the Pilot Program for Expanding the Opening-up of Value-added Telecom Services, or the Pilot Program. Given the recent enactment of the Announcement, there remains uncertainty with respect to the interpretation and practical application; given the recent launch of the Pilot Program, there remains uncertainty with respect to the process, timeframe and result of the approval. To comply with the above foreign investment restrictions, we rely on the contractual arrangements with the VIEs to operate our business in mainland China. However, there remains uncertainty with respect to the interpretation and application of existing or future laws and regulations of mainland China on foreign investment. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—If the PRC government finds that the agreements that establish the structure for operating certain of our operations in mainland China do not comply with mainland China’s regulations relating to the relevant industries, or if the determinations, changes or interpretations result in our inability to assert contractual control over the assets of our subsidiaries in mainland China or the VIEs that conduct our operations, our securities may decline in value or become worthless.” Regulation Related to Online Transmission of Audio-Visual Programs The SAPPRFT (currently known as National Radio and Television Administration) and the MIIT jointly promulgated the Administrative Provisions on Internet Audio-Visual Program Service, or the Audio-Visual Program Provisions, on December 20, 2007, which were last amended on August 28, 2015. Under the Audio-Visual Program Provisions, “online audio-visual program services” is defined as activities of producing, redacting and integrating audio-­visual programs, providing them to the general public via internet, and providing service for other people to upload and transmit audio-visual programs, and providers of online audio-visual program services are required to obtain a License for Online Transmission of Audio-Visual Programs issued by the SAPPRFT, or complete certain registration procedures with the SAPPRFT. In general, providers of online audio-­visual program services must be either state-owned or state-controlled entities, and the business to be carried out by such providers must satisfy the overall planning and guidance catalog for internet audio-visual program service determined by the SAPPRFT. On May 21, 2008, SAPPRFT issued a Notice on Relevant Issues Concerning Application and Approval of License for the Online Transmission of Audio-Visual Programs, as amended on August 28, 2015, which sets out detailed provisions concerning the application and approval process regarding the License for Online Transmission of Audio-Visual Programs. According to the above regulations, providers of internet audio-visual program services that engaged in such services prior to the promulgation of the Audio-Visual Program Provisions are eligible to apply for the license so long as those providers did not violate the laws and regulations in the past or their violation of the laws and regulations is minor in scope and can be rectified in a timely manner and they have no records of violation during the last three months prior to the promulgation of the Audio-Visual Program Provisions. 90 On March 30, 2009, SAPPRFT promulgated the Notice on Strengthening the Administration of the Content of Internet Audio-Visual Programs, which reiterates the pre-approval requirements for the audio-visual programs transmitted via the internet, including through mobile networks, where applicable, and prohibits certain types of internet audio-visual programs containing violence, pornography, gambling, terrorism, superstition or other similarly prohibited elements. On March 10, 2017, SAPPRFT issued the Provisional Implementation of the Tentative Categories of Internet Audio-Visual Program Services, which revised the previous version issued on March 17, 2010. According to the tentative categories, there are four categories of internet audio and video programs services which are further divided into seventeen sub-categories. The third sub-category to the second category covers the making and editing of certain specialized audio-visual programs concerning, among other things, educational content, and broadcasting such content to the general public online. We currently do not hold a License for Online Transmission of Audio-Visual Programs. As of the date of this document, only wholly state-owned or state-controlled enterprises are eligible to apply for the License for Online Transmission of Audio-Visual Programs. We offer certain online courses on our platforms in live-streaming format and we also offer video recordings of live streaming courses and certain other audio-video contents on our online platforms to our learners. Due to the significant uncertainty regarding the scope of audio-visual program services, we may be required to obtain a License for Online Transmission of Audio-Visual Programs or to complete the required registration. However, we may not be able to obtain the License for Online Transmission of Audio-Visual Programs as we are not a wholly state-owned or state-controlled entity. If this were to occur, we may be subject to penalties, fines, legal sanctions or an order to suspend the provision of our relevant services. In addition, it remains uncertain whether the PRC governmental authorities would issue more explicit interpretation and rules or promulgate new laws and regulations. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry —We face uncertainties with respect to the development of regulatory requirements on operating licenses and permits for our education services in mainland China. Failure to obtain or renew requested licenses or permits in a timely manner or obtain newly required ones due to adverse changes in regulations or policies could have a material adverse impact on our business, financial condition and results of operations.” Regulation Related to Internet Live Streaming Services On September 2, 2016, the SAPPRFT promulgated the Notice on Strengthening the Administration of Live Streaming Services of Internet Audio-Visual Program, which provides that any entity that intends to engage in live audio-visual broadcasting of major political, military, economic, social, cultural or sport events or activities, or live audio-visual broadcasting of general social or cultural group activities, general sporting events or other organizational events, must obtain a License for Online Transmission of Audio-Visual Programs with a permitted operation scope covering the above business activities. Any entity or individual without qualification is prohibited from broadcasting live audio-visual programs involving news, variety shows, sports, interviews, commentary or other forms of programs through any online live-streaming platform or online live broadcasting booth, nor are they permitted to start a live broadcasting channel for any audio­-visual programs. In addition, any entity without such license shall not operate audio-visual live streaming business and the live streaming programs provided by the qualified company shall not contain any content forbidden by laws and regulations. On November 4, 2016, the CAC promulgated the Provisions on the Administration of Internet Live Streaming Services, effective from December 1, 2016. Under these provisions, “internet live streaming service” is defined as the activities of continuously releasing real-time information to the public on internet in such forms as videos, audios, images and texts and the “internet live streaming service provider” is defined thereunder as an operator of the platform providing internet live streaming platform services. These provisions also provide that internet live streaming service providers shall examine and verify the identity information of internet live-streaming issuers and file the identity information of the issuers with local counterparts of the CAC. On July 12, 2017, the CAC issued a Notice on Development of the Filing Work for Enterprises Providing Internet Live Streaming Services, which provides that all the companies providing internet live streaming services shall file with the local authority since July 15, 2017, otherwise the CAC or its local counterparts may impose administrative sanctions on such companies. Pursuant to the Circular on Tightening the Administration of Internet Live-Streaming Services jointly issued by the MIIT, the Ministry of Culture and Tourism and several other government agencies on August 1, 2018, live streaming services providers are required to file with the local public security authority within 30 days after it commences the service online. 91 After consulting with the local counterparts of the CAC, we were informed that currently institutions offering education services via online-streaming like us are not required to complete the above-mentioned filings in practice. The CAC, the National Office of Anti-Pornography and Anti-Illegal, the MIIT, the Ministry of Public Security, the Ministry of Culture, the Ministry of Commerce, the SAMR and the National Radio and Television Administration jointly issued the Circular on the Guiding Opinions on Strengthening Standardized Management of Online Live Streaming on February 9, 2021, which further states that live streaming platforms which provide online audio-visual program services must obtain the Audio-Visual Permit (or complete the registration on the National Internet Audio-visual Platforms Information Management System and complete the ICP filing procedure. Regulation Related to Production and Distribution of Radio and Television Programs On July 19 2004, SAPPRFT promulgated the Administrative Measures on the Production and Operation of Radio and Television Programs, which became effective on August 20, 2004 and were last amended on June 3, 2025. These administrative measures are applicable for establishing institutions that produce and distribute radio and television programs or for the production of radio and television programs like programs with a special topic, column programs, variety shows, animated cartoons, radio plays and television dramas and for activities like transactions and agency transactions of program copyrights. Pursuant to these administrative measures, any entity that intends to produce or operate radio or television programs must first obtain the Permit for Production and Operation of Radio and TV Programs from SAPPRFT or its local branches. We currently hold a Permit for Production and Operation of Radio and TV Programs, which remains valid until October 14, 2027. Regulation Related to Internet Culture Activities On May 10, 2003, the Ministry of Culture (currently known as Ministry of Culture and Tourism), promulgated the Interim Administrative Provisions on Internet Culture, which were last amended on December 15, 2017. These provisions require internet information services providers engaging in commercial “internet culture activities” to obtain an Internet Culture Business Operating License from the Ministry of Culture. “Internet cultural activity” is defined under these provisions as an act of providing internet cultural products and related services. On May 14, 2019, the General Office of Ministry of Culture promulgated the Notice on Adjusting the Scope of Internet Culture Business Operating License and Further Standardize the Approval Work, which requires that online music, online shows and plays, online performances, online works of art, online cartoons, displays and games are the activities that require an Internet Culture Business Operating License. We currently hold an Internet Culture Business Operating License, which remains valid until October 28, 2028. Regulation Related to Online Publishing On February 4, 2016, the SAPPRFT (currently reformed into the State Administration of Press and Publication (National Copyright Bureau) under the Propaganda Department of the Central Committee of the Communist Party of China) and the MIIT jointly issued the Administrative Provisions on Online Publishing Services, which came into effect on March 10, 2016. Under these administrative provisions, any entity providing online publishing services shall obtain an Online Publishing Services Permit. “Online publishing services” refer to the provision of online publications to the public through information networks; and “online publications” refer to digital works with publishing features such as having been edited, produced or processed and are available to the public through information networks, including: (i) written works, pictures, maps, games, cartoons, audio/video reading materials and other original digital works containing useful knowledge or ideas in the field of literature, art, science or other fields; (ii) digital works of which the content is identical to that of any published book, newspaper, periodical, audio/video product, electronic publication or the like; (iii) network literature databases or other digital works, derived from any of the aforesaid works by selection, arrangement, collection or other means; and (iv) other types of digital works as may be determined by the SAPPRFT. 92 We currently do not hold an Online Publishing Service Permit. As of the date of this annual report, there has been no explicit interpretation from the governmental authorities nor is there a prevailing enforcement practice that deems the provision of our educational content to our students through our online platform as “online publishing,” which would require an Online Publishing Service Permit. Nevertheless, it remains unclear whether the local PRC authorities would adopt a different practice. In addition, it remains uncertain whether the PRC governmental authorities would issue more explicit interpretation and rules or promulgate new laws and regulations. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—We face uncertainties with respect to the development of regulatory requirements on operating licenses and permits for our education services in mainland China. Failure to obtain or renew requested licenses or permits in a timely manner or obtain newly required ones due to adverse changes in regulations or policies could have a material adverse impact on our business, financial condition and results of operations.” Regulation Related to Cybersecurity, Data Security, and Personal Information Protection Pursuant to the PRC Cyber Security Law issued by the Standing Committee of the National People’s Congress on November 7, 2016, effective as of June 1, 2017, “personal information” refers to all kinds of information recorded by electronic or otherwise that can be used to independently identify or be combined with other information to identify individuals’ personal information including but not limited to: individuals’ names, dates of birth, ID numbers, biologically identified personal information, addresses and telephone numbers, etc. The Cyber Security Law also provides that network operators shall meet their cyber security obligations and shall take technical measures and other necessary measures to protect the safety and stability of their networks. Under the PRC Cybersecurity Law, network operators are subject to various security protection-related obligations, including: (i) network operators shall comply with certain obligations regarding maintenance of the security of internet systems; (ii) network operators shall verify users’ identities before signing agreements or providing certain services such as information publishing or real-time communication services; (iii) when collecting or using personal information, network operators shall clearly indicate the purposes, methods and scope of the information collection, the use of information collection, and obtain the consent of those from whom the information is collected; (iv) network operators shall strictly preserve the privacy of user information they collect, and establish and maintain systems to protect user privacy; and (v) network operators shall strengthen management of information published by users, and when they discover information prohibited by laws and regulations from publication or dissemination, they shall immediately stop dissemination of that information, including taking measures such as deleting the information, preventing the information from spreading, saving relevant records, and reporting to the governmental agencies. In addition, the PRC Cyber Security Law requires that critical information infrastructures operators generally shall store, within the territory of mainland China, the personal information and important data collected and produced during their operations in mainland China and their purchase of network products and services that affect or may affect national securities shall be subject to national cybersecurity review. On October 28, 2025, the Standing Committee of the National People’s Congress adopted the Decision of the Standing Committee of the National People's Congress on Amending the PRC Cybersecurity Law. The revised RPC Cybersecurity Law came into force on January 1, 2026. The key amendments to the newly revised PRC Cybersecurity Law include: a material increase in the maximum number of fines for violations; the introduction of hierarchical and tiered penalties; the addition of new enforcement measures such as ordering the suspension or shutdown of applications; and the inclusion of regulatory requirements applicable to artificial intelligence for the first time. The revised RPC Cybersecurity Law also further refines provisions related to personal information protection and data security, and aligns with and complements the Personal Information Protection Law and the Data Security Law of the People’s Republic of China. 93 Pursuant to the Provisions on Internet Security Supervision and Inspection by Public Security Organs, which were promulgated by the Ministry of Public Security on September 15, 2018 and became effective on November 1, 2018, the public security departments are authorized to carry out internet security supervision and inspection of the internet service providers from the following aspects, among others: (i) whether the service providers have completed the recordation formalities for online entities, and filed the basic information on and the changes of the accessing entities and users; (ii) whether they have established and implemented the cybersecurity management system and protocols, and appointed the persons responsible for cybersecurity; (iii) whether the technical measures for recording and retaining users’ registration information and weblog data are in place according to the law; (iv) whether they have taken technical measures to prevent computer viruses, network attacks and network intrusion; (v) whether they have adopted preventive measures to tackle the information that is prohibited to be issued or transmitted by the laws and administrative regulations in the public information services; (vi) whether they provide technical support and assistance as required by laws to public security departments to safeguard national security and prevent and investigate on terrorist activities and criminal activities; and (vii) whether they have fulfilled the obligations of the grade-based cybersecurity protection and other obligations prescribed by the laws and administrative regulations. In particular, public security departments shall also carry out supervision and inspection on whether an internet service provider has taken required measures to manage information published by users, adopted proper measures to handle the published or transmitted information that is prohibited to be published or transmitted, and kept the relevant records. In addition, the Office of the Central Cyberspace Affairs Commission, the MIIT, the Ministry of Public Security, and the SAMR jointly issued an Announcement of Launching Special Crackdown Against Illegal Collection and Use of Personal Information by Apps on January 23, 2019 to implement special rectification works against mobile Apps that collect and use personal information in violation of applicable laws and regulations, where business operators are prohibited from collecting personal information irrelevant to their services, or forcing users to give authorization in disguised manner. On November 28, 2019, the National Internet Information Office, the MIIT, the Ministry of Public Security and the SAMR further jointly issued a notice to classify and identify illegal collection and use of personal information. On August 22, 2019, the Office of the Central Cyberspace Affairs Commission issued the Provisions on the Cyber Protection of Children’s Personal Information, which took effect on October 1, 2019. The Provisions on the Cyber Protection of Children’s Personal Information apply to the collection, storage, use, transfer and disclosure of the personal information of children under the age of 14 via the internet. The Provisions on the Cyber Protection of Children’s Personal Information require that network operators shall establish special rules and user agreements for protection of personal information for children under the age of 14, inform their guardians in a noticeable and clear manner, and shall obtain the consent of their guardians. When obtaining the consent of their guardians, network operators shall explicitly disclose several matters, including, without limitation, the purpose, method and scope of collection, storage, use, transfer and disclosure of such personal information, and methods for correcting and deleting such personal information. Provisions on the Cyber Protection of Children’s Personal Information also require that when collecting, storing, using, transferring and disclosing such personal information, network operators shall comply with certain regulatory requirements, including, without limitation, that network operators shall designate specific personnel to take charge of the protection of such personal information and shall strictly grant information access authorization for their staff to such personal information under the principle of minimal authorization. Pursuant to the Notice on Promulgation of the Rules on the Scope of Necessary Personal Information for Common Types of Mobile Internet Applications, which was promulgated by the CAC, the MIIT and certain other government authorities on March 12, 2021 and became effective on May 1, 2021, “necessary personal information” refers to the personal information necessary for ensuring the normal operation of an app’s basic functional services, without which the app cannot achieve its basic functional services. For learning and education App, the basic functional services are “online tutoring, online classes, etc.” and the necessary personal information is mobile phone numbers of registered users. Further, the SAMR promulgated the Measures for the Supervision and Administration of Online Transactions, which became effective from May 1, 2021. The measures require that online transaction operators shall not force customers, whether or not in a disguised manner, to consent to the collection and use of information not directly related to their business activities by means of one-off general authorization, default authorization, bundling with other authorizations, or the suspension of installation and use. Otherwise, such online transaction operator may be subject to fines and consequences under related laws and regulations, including without limitation suspension of business for rectification and revocation of permits and licenses. 94 On June 10, 2021, the Standing Committee of the National People’s Congress promulgated the Data Security Law, which became effective in September 2021. The Data Security Law provides for data security and privacy obligations on entities and individuals carrying out data activities and introduces a data classification and hierarchical protection system based on the importance of data in economic and social development, as well as the degree of harm it will cause to national security, public interests, or legitimate rights and interests of individuals or organizations when such data is tampered with, destroyed, leaked, or illegally acquired or used. The appropriate level of protection measures is required to be taken for each respective category of data. For example, a processor of important data shall designate the personnel and the management body responsible for data security, carry out risk assessments for its data processing activities and file the risk assessment reports with the competent authorities. In addition, the Data Security Law provides a national security review procedure for those data activities which affect or may affect national security and imposes export restrictions on certain data and information. On April 13, 2020, the CAC, the NDRC, and several other administrations jointly promulgated the Measures for Cybersecurity Review, which became effective on June 1, 2020. The Measures for Cybersecurity Review establish the basic framework for national security reviews of network products and services, and provide the principal provisions for undertaking cyber security reviews. In addition, on July 22, 2020, the Ministry of Public Security issued the Guiding Opinions on Implementing the Cyber Security Protection System and Critical Information Infrastructure Security Protection System to further improve the national cyber security prevention and control system. On December 28, 2021, the CAC, together with certain other PRC governmental authorities, jointly released the Revised Cybersecurity Review Measures, which took effect on February 15, 2022. Pursuant to the Revised Cybersecurity Review Measures, operators of critical information infrastructure that intend to purchase network products and services or online platform operators that are engaged in data processing activities that affect or may affect national security must apply for a cybersecurity review, and network platform operators that process personal information of more than one million users and seek to list abroad shall also apply for a cybersecurity review. The cybersecurity review will evaluate, among others, the risk of critical information infrastructure, core data, important data, or the risk of a large amount of personal information being influenced, controlled or maliciously used by foreign governments after going public, and cyber information security risk. The Revised Cybersecurity Review Measures set out certain general factors which would be the focus in assessing the national security risk during a cybersecurity review. The Personal Information Protection Law took effect in November 2021. The Personal Information Protection Law sets forth detailed rules on processing personal information, clarifies the rights of the individuals and the obligations of the personal information processors, and further strengthens the liabilities for illegal process of personal information. In addition to other rules and principles of personal information processing, the Personal Information Protection Law specifically provides rules for processing sensitive personal information. Sensitive personal information refers to personal information that, once leaked or illegally used, could easily lead to the infringement of human dignity or harm to the personal or property safety of an individual, including biometric recognition, religious belief, specific identity, medical and health, financial account, personal whereabouts and other information of an individual, as well as any personal information of a minor under the age of 14. Only where there is a specific purpose and sufficient necessity, and under circumstances where strict protection measures are taken, may personal information processors process sensitive personal information. A personal information processor shall inform the individual of the necessity of processing such sensitive personal information and the impact thereof on the individual’s rights and interests. Some information we collect, such as personal identity, location, mobile numbers and viewing histories, may be deemed to be sensitive personal information under the Personal Information Protection Law. The Personal Information Protection Law also strengthens the supervision of automatic decision making to protect the rights of individuals to obtain fair transaction terms and the supervision of mobile applications. On January 4, 2022, the CAC published the Administrative Provisions on Internet Information Service Algorithm Recommendation on its website, which became effective on March 1, 2022 and raise certain new compliance requirements on internet information service providers using algorithm recommendation technology. Specifically, these administrative provisions require that such service providers shall provide users with options that are not specific to their personal characteristics, or provide users with convenient options to cancel algorithmic recommendation services. 95 On November 25, 2022, the CAC and other authorities issued the Administrative Provisions on Deep Synthesis of Internet-based Information Services, effective from January 10, 2023. The rules define deep synthesis technologies—covering text, image, audio, video, and virtual scene generation and editing—and impose compliance obligations on service providers and technical supporters. Key requirements include implementing security management systems, user real-name authentication, enhanced content review, and rumor-refutation mechanisms. Service providers and technical supporters must ensure data security for training data. For biometric editing (e.g., facial or voice data), separate consent and security assessments for high-risk tools are required. The provisions also require implicit identifiers in all synthetic content without affecting user experience for traceability. In addition, where deep synthesis services risk causing public confusion or misunderstanding, service providers must add prominent identifiers at reasonable positions within the content to indicate its synthetic nature. Furthermore, service providers and technical supporters with public opinion or social mobilization capabilities must file algorithms with the CAC and undergo security assessments before launching new products or functions. On July 10, 2023, the CAC and several other administrations jointly issued the Provisional Measures for the Administration of Generative Artificial Intelligence Services, effective from August 15, 2023. The Provisional Measures for the Administration of Generative Artificial Intelligence Services clarify the basic norms of generative artificial intelligence services from the aspects of content security, data security, personal information protection and service standards, among others. On March 7, 2025, the CAC and several other administrations jointly issued the Notice on Promulgation of the Measures for Labeling AI-Generated or Composed Content, effective from September 1, 2025, which provides that service providers shall add explicit identifiers (such as text prompts, corner marks, etc.) and implicit identifiers (such as file metadata, digital watermarks, etc.) to generated synthetic content including text, images, audio, and video. It also clarifies the subject responsibilities in the processes of content generation, transmission, and distribution. On July 7, 2022, the CAC issued the Measures on Security Assessment of the Cross-border Transfer of Data, with effective from September 1, 2022. The measures provide that four types of cross-border transfers of critical data or personal data generated from or collected in the PRC should be subject to a security assessment, which include: (i) a data processor to transfer important data overseas; (ii) either a critical information infrastructure operator, or a data processor processing personal information of more than 1 million individuals, transfers personal information overseas; (iii) a data processor who has, since January 1 of the previous year, transferred personal information of more than 100,000 individuals overseas cumulatively, or transferred sensitive personal information of more than 10,000 individuals overseas cumulatively, transfers personal information overseas; or (iv) other circumstances under which security assessment of data cross-border transfer is required as prescribed by the national cyberspace administration. On March 22, 2024, the CAC promulgated the Provisions on Promoting and Regulating Cross-border Data Flows, which became effective the same day. According to these provisions, when a data processor transfers personal information (excluding important data) abroad, it may be exempted from applying for a cross-border transfer security assessment, concluding a standard contract for personal information to be provided abroad, or passing a security certification for protection of personal information, if it satisfies any of the following conditions: (i) where it is necessary to provide personal information abroad for the purpose of concluding or performing a contract to which an individual concerned is a party, such as contract for cross-border shopping, cross-border delivery, cross-border remittance, cross-border payment, cross-border account opening, air ticket and hotel reservation, visa handling, examination services; (ii) where it is necessary to provide employees’ personal information abroad for the purpose of conducting cross-border human resources management in accordance with the employment rules and regulations and collective contracts formulated in accordance with the law; (iii) where it is necessary to provide personal information abroad in an emergency to protect the life, health and property safety of a natural person; or (iv) where a data processor, other than a critical information infrastructure operator, provides abroad the personal information (excluding sensitive personal information) of not more than 100,000 persons accumulatively as of January 1 of the current year. On September 24, 2024, the CAC published the Regulations on the Network Data Security which came into force as from January 1, 2025. The Regulations on the Network Data Security require that if a network data processor carries out network data processing activities that affects or may affect national security, it shall conduct a national security review in accordance with relevant state regulations, and emphasized special protection of important data. Important data refers to data in a specific field, a specific group, a specific region, or of a certain precision and scale, which, once tampered with, damaged, leaked, or illegally accessed or illegally utilized, may directly jeopardize national security, economic operation, social stability, public health and safety. In addition, the Regulations on the Network Data Security require that data processors that process “important data” must conduct an annual data security risk assessment, and submit the assessment report of the preceding year to the municipal cybersecurity department. 96 As we provide information and services through our mobile apps and website, we are subject to these laws and regulations relating to protection of internet security and protection of privacy, and failure to comply with these laws and regulations could have a material adverse effect on us. For a detailed discussion, see “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry —Our business is subject to complex and evolving laws and regulations of mainland China regarding cybersecurity, information security, privacy and data protection. Many of these laws and regulations are subject to change and uncertain interpretation, and any failure or perceived failure to comply with these laws and regulations could result in claims, changes to our business practices, negative publicity, legal proceedings, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business.” Regulation Related to Publishing and Publication Distribution The State Council promulgated the Administrative Regulations on Publication, or the Publication Regulations, which was most recently amended on December 6, 2024 and came into effect on January 20, 2025. The Publication Regulations apply to publication activities, i.e., the publishing, printing, reproducing, importation or distribution of publications, including books, newspapers, periodicals, audio-visual products and electronic publications, each of which requires approval from the relevant publication administrative authorities. According to the Publication Regulations, any entity engaging in the activities of publishing, printing, reproducing, importation or distribution of publications, shall obtain relevant permits of publishing, printing, reproducing, importation or distribution of publications. Under the Administrative Provisions on the Publications Market, which were jointly promulgated by the SAPPRFT and the Ministry of Commerce on May 31, 2016, any enterprise or individual who engages in publication distribution activities shall obtain a Permit for Operating Publications from SAPPRFT or its local counterpart. “Publication” is defined as “books, newspapers, periodicals, audio-visual products, and electronic publications,” and “distributing” is defined as “general distribution, wholesale, retail, rental, exhibition and other activities,” respectively, under the administrative provisions. Without the requisite license, such entity or individual may be ordered to cease illegal acts by the competent administrative department of publication and be concurrently subject to fines. We currently hold various Permits for Operating Publications through the VIEs and their subsidiaries. Regulations on Tourism Tourism Law of the PRC, which was promulgated by the Standing Committee of the National People’s Congress and last amended on October 26, 2018, provides that, among other things, (i) to engage in the businesses of outbound tourism, a travel agency shall obtain corresponding business permit, and the specific conditions shall be provided for by the State Council and (ii) when organizing an outbound touring group, or organizing or receiving an inbound touring group, a travel agency shall, in accordance with the applicable provisions, arrange for a tour leader or tour guide to accompany the touring group in the whole tour. Regulations on Travel Agencies, which were promulgated by the State Council and amended on November 29, 2020, and the implementation rules of Regulations on Travel Agencies provide that, among other things, travel agent shall mean any entity that engages in the business of attracting, organizing, and receiving tourists, providing tourism services for tourists and operating domestic, outbound or border tourism; the aforementioned business shall include but not limit to arranging for transport services, arranging for accommodation services, providing services for tour guides or team leaders, providing services of tourism consultation and tourism activities design. According to the Regulations on Travel Agencies and their implementation rules, any tourism agent that engages in the outbound tourism shall apply for a permit to engage in the outbound tourism from the administrative department of tourism under the State Council, the governments of provinces, autonomous regions or municipalities. 97 Regulation Related to Advertising All commercial advertising activities for direct or indirect introduction of products or services promoted by product business operators or service providers via a certain medium and in a certain form within the territory of mainland China are applied to PRC Advertising Law, which was promulgated by the Standing Committee of the National People’s Congress on October 27, 1994 and was last amended on April 29, 2021. Pursuant to the PRC Advertising Law, advertisements must not contain, among other prohibited contents, terms such as “the state-level,” “the highest grade,” “the best” or other similar words. Particularly, an advertisement for education or training shall not contain any of the following items: (i) any promise relating to progression, passing examinations, or obtaining a degree or qualification certificate; (ii) any express or implied guaranteed promise relating to education or training results; or (iii) use of the names or images of research institutes, academic institutions, educational institutions, industry associations, professionals or beneficiaries for recommendation or as proof. Any data, statistics, research result, summary, quotation and other quoted information used in an advertisement shall be authentic and accurate, with the source indicated. If the quoted information is subject to a scope of application or a valid period, the scope of application or valid period shall be clearly indicated. On February 25, 2023, the SAMR issued Administrative Measures for Internet Advertising, which became effective on May 1, 2023. According to these administrative measures, commercial advertising for direct or indirect marketing goods or services in the form of text, image, audio, video, or other means through websites, web pages, internet apps, or other internet media within the territory of mainland China is subject to the Advertising Law and these administrative measures. These administrative measures further set out requirements for internet advertising activities, including among others, (a) with regard to commodities or services ranked under competitive bidding, advertisement publishers shall mark conspicuously the word “advertisement” to distinguish them from the organic search results; (b) where an internet advertisement is published in the form of pop-up or otherwise, an advertiser and advertisement publisher shall clearly mark the closure sign to ensure the closure of the advertisement by one click; (c) where an internet advertisement is published by means of algorithmic recommendation or otherwise, the relevant rules of the algorithmic recommendation service and the record of advertisement placement shall be included in the advertisement archives; (d) an internet platform operator shall, in the process of providing internet information services, take measures to prevent and stop illegal advertisements; (e) without the consent or request of users, or with explicit refusal by users, it is not allowed to send internet advertisements to their vehicles, navigation equipment, intelligent home appliances, etc.; and (f) where the promotion of goods or services by online live streaming constitutes a commercial advertisement, a product seller or service provider shall bear the responsibilities and obligations of the advertiser in accordance with the laws. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—Our advertising content may subject us to penalties and other administrative actions.” Regulation Related to Intellectual Property Rights Copyright and Software Registration The Copyright Law extends copyright protection to internet activities, products disseminated over the internet and software products. In addition, there is a voluntary registration system administered by the China Copyright Protection Center. To address the problem of copyright infringement related to the content posted or transmitted over the internet, the National Copyright Administration and the MIIT jointly promulgated the Measures for Administrative Protection of Copyright Related to Internet. The Computer Software Protection Regulations are formulated for protecting the rights and interests of computer software copyright owners, encouraging the development and application of computer software and promoting the development of software business. In order to further implement the Computer Software Protection Regulations, the National Copyright Administration issued the Computer Software Copyright Registration Procedures, which apply to software copyright registration, license contract registration and transfer contract registration. See “Item 4. Information on the Company—B. Business Overview—Intellectual Property” for more details on the current situation of our software copyrights. 98 Patents Pursuant to the Patent Law, a patentable invention, utility model or design must meet three conditions, namely novelty, inventiveness and practical applicability. Patents cannot be granted for scientific discoveries, rules and methods for intellectual activities, methods used to diagnose or treat diseases, animal and plant breeds or substances obtained by means of nuclear transformation. The Patent Office under the State Intellectual Property Office is responsible for receiving, examining and approving patent applications. A patent is valid for a twenty-year term for an invention, a fifteen-year term for a design, and a ten-year term for a utility model, all starting from the application date. Except under certain specific circumstances provided by law, any third-party user must obtain consent or a proper license from the patent owner to use the patent, otherwise the use will constitute an infringement of the rights of the patent holder. See “Item 4. Information on the Company—B. Business Overview—Intellectual Property” for more details on the current situation of our patents. Trademark Trademarks are protected by the PRC Trademark Law as well as its implementation rules. The Trademark Office of National Intellectual Property Administration under the SAMR handles trademark registrations and grants a protection term of ten years to registered trademarks which may be renewed for consecutive ten-year periods upon request by the trademark owner. The PRC Trademark Law has adopted a “first-to-file” principle with respect to trademark registration. Where a trademark for which a registration has been made is identical or similar to another trademark which has already been registered or been subject to a preliminary examination and approval for use on the same kind of or similar commodities or services, the application for registration of such trademark may be rejected. Any person applying for the registration of a trademark may not prejudice the existing right first obtained by others, nor may any person register in advance a trademark that has already been used by another party and has already gained a “sufficient degree of reputation” through such party’s use. See “Item 4. Information on the Company—B. Business Overview—Intellectual Property” for more details on the current situation of our trademarks. Domain Name According to the Administrative Measures on Internet Domain Names, any party that has domain name root servers, and the institution for operating domain name root servers, the domain name registry and the domain name registrar within the territory of mainland China, shall obtain a permit for this purpose from the MIIT or the communications administration of the local province, autonomous region or municipality directly under the Central Government. The registration of domain names is generally on a “first- apply-first-registration” basis and a domain name applicant will become the domain name holder upon the completion of the application procedure. See “Item 4. Information on the Company—B. Business Overview—Intellectual Property” for more details on the current situation of our domain names. Regulation Related to Employment, Social Insurance and Housing Fund Employment Pursuant to the PRC Labor Law and the PRC Labor Contract Law, a written labor contract shall be executed by an employer and an employee when the employment relationship is established, and an employer is under an obligation to sign an unlimited-term labor contract with any employee who has worked for the employer for ten consecutive years. Furthermore, if an employee requests or agrees to renew a fixed-term labor contract that has already been entered into twice consecutively, the resulting contract must have an unlimited term, with certain exceptions. The employer must also pay severance to an employee in nearly all instances where a labor contract, including a contract with an unlimited term, is terminated or expires. All employers must compensate their employees equal to at least the local minimum wage standards. All employers are required to establish a system for labor safety and sanitation, strictly abide by State rules and standards and provide employees with appropriate workplace safety training. In addition, the PRC government mandates that annual leave ranging from 5 to 15 days is available to nearly all employees and further require that the employer compensate an employee for any annual leave days the employee is unable to take in the amount of three times his daily salary, subject to certain exceptions. Moreover, all enterprises in mainland China are generally required to implement a standard working time system of eight hours a day and forty hours a week, and if the implementation of such standard working time system is not appropriate due to the nature of the job or the characteristics of business operation, the enterprise may implement a flexible working time system or comprehensive working time system after obtaining approvals from the authorities. 99 Social Insurance The Law on Social Insurance of the PRC has established social insurance systems of basic pension insurance, unemployment insurance, maternity insurance, work injury insurance and basic medical insurance, and has elaborated in detail the legal obligations and liabilities of employers who do not comply with laws and regulations on social insurance. According to the Interim Regulations on the Collection and Payment of Social Insurance Premiums, the Regulations on Work Injury Insurance, the Regulations on Unemployment Insurance and the Trial Measures on Employee Maternity Insurance of Enterprises, enterprises in mainland China shall provide benefit plans for their employees, which include basic pension insurance, unemployment insurance, maternity insurance, work injury insurance and basic medical insurance. An enterprise must provide social insurance by going through social insurance registration with local social insurance authorities or agencies, and shall pay or withhold relevant social insurance premiums for or on behalf of employees. On July 20, 2018, the General Office of the State Council issued the Plan for Reforming the State and Local Tax Collection and Administration Systems, which stipulated that the State Administration of Taxation of the PRC becomes solely responsible for collecting social insurance premiums. Housing Provident Fund According to the Administrative Regulations on the Housing Provident Fund, housing provident fund paid and deposited both by employee themselves and their unit employer shall be owned by the employees. A unit employer shall undertake registration of payment and deposit of the housing provident fund in the housing provident fund management center and, upon verification by the housing provident fund management center, open a housing provident fund account on behalf of its employees in a commissioned bank. Employers shall timely pay and deposit housing provident fund contributions in full amount and late or insufficient payments shall be prohibited. With respect to unit employers who violate the regulations hereinabove and fail to complete housing provident fund payment and deposit registrations or open housing provident fund accounts for their employees, such unit employers shall be ordered by the housing provident fund administration center to complete such procedures within a designated period. Those who fail to complete their registrations within the designated period shall be subject to a fine of between RMB10,000 and RMB50,000. When unit employers are in breach of these regulations and fail to pay deposit housing provident fund contributions in full amount as they fall due, the housing provident fund administration center shall order such unit employers to pay within a prescribed time limit, failing which an application may be made to a people’s court for compulsory enforcement. Regulation Related to Foreign Exchange Regulation on Foreign Currency Exchange The principal regulations governing foreign currency exchange in mainland China are the PRC Foreign Exchange Administration Regulations. Under the Foreign Exchange Administration Regulations, Renminbi is generally freely convertible for payments of current account items, such as trade and service-related foreign exchange transactions and dividend payments, but not freely convertible for capital account items, such as direct investment, loan or investment in securities outside mainland China, unless prior approval of SAFE or its local counterparts has been obtained. On February 13, 2015, SAFE promulgated the Notice on Further Simplifying and Improving the Direct Investment-related Foreign Exchange Administration Policies. After this notice became effective on June 1, 2015, instead of applying for approvals regarding foreign exchange registrations of foreign direct investment and overseas direct investment from SAFE, entities and individuals may apply for such foreign exchange registrations from qualified banks. The qualified banks, under the supervision of SAFE, may directly review the applications and conduct the registration. 100 On March 30, 2015, SAFE promulgated the Circular on Reforming the Management Approach regarding the Settlement of Foreign Capital of Foreign-invested Enterprise, or SAFE Circular 19. According to SAFE Circular 19, the foreign exchange capital of foreign-invested enterprises shall be subject to the Discretionary Foreign Exchange Settlement, which means that the foreign exchange capital in the capital account of a foreign-invested enterprise for which the rights and interests of monetary contribution have been confirmed by the local foreign exchange bureau (or the book-entry registration of monetary contribution by the banks) can be settled at the banks based on the actual operational needs of the foreign-invested enterprise. The proportion of Discretionary Foreign Exchange Settlement of the foreign exchange capital of a foreign-invested enterprise is temporarily set at 100%. The Renminbi converted from the foreign exchange capital will be kept in a designated account and if a foreign-invested enterprise needs to make further payment from such account, it still needs to provide supporting documents and proceed with the review process with the banks. Furthermore, SAFE Circular 19 stipulates that the use of capital by foreign-invested enterprises shall follow the principles of authenticity and self-use within the business scope of enterprises. The capital of a foreign-invested enterprise and capital in Renminbi obtained by the foreign-invested enterprise from foreign exchange settlement shall not be used for the following purposes: (i) directly or indirectly used for payments beyond the business scope of the enterprises or payments as prohibited by laws and regulations; (ii) directly or indirectly used for investment in securities unless otherwise provided by the laws and regulations; (iii) directly or indirectly used for granting entrust loans in Renminbi (unless permitted by the scope of business), repaying inter-enterprise borrowings (including advances by the third-party) or repaying the bank loans in Renminbi that have been sub-lent to third parties; or (iv) directly or indirectly used for expenses related to the purchase of real estate that is not for self-use (except for the foreign-invested real estate enterprises). Subsequently, pursuant to the Notice on Deepening the Reform of Foreign Exchange Management for cross-border Investment and financing, or the SAFE Circular 43 promulgated by SAFE on September 12, 2025, the restriction set out in item (iv) above regarding the use of settled RMB funds to purchase real estate not for self-use purposes has been removed. On June 9, 2016, SAFE promulgated the Circular on Reforming and Standardizing the Foreign Exchange Settlement Management Policy of Capital Account, or SAFE Circular 16. Pursuant to SAFE Circular 16, enterprises registered in mainland China may also convert their foreign debts from foreign currency to Renminbi on a self- discretionary basis. SAFE Circular 16 provides a unified standard for the conversion of foreign exchange under capital account items (including but not limited to foreign currency capital and foreign debts) on a self-discretionary basis which applies to all enterprises registered in mainland China. SAFE Circular 16 also reiterates the principle that Renminbi converted from foreign currency-denominated capital of a company may not be directly or indirectly used for purposes beyond its business scope or prohibited by laws of mainland China, while such converted Renminbi shall not be provided as loans to its non-affiliated entities. On January 26, 2017, SAFE promulgated the Circular on Further Improving Reform of Foreign Exchange Administration and Optimizing Genuineness and Compliance Verification, which stipulates several capital control measures with respect to the outbound remittance of profit from domestic entities to offshore entities, including (i) under the principle of genuine transaction, banks shall check board resolutions regarding profit distribution, the original version of tax filing records and audited financial statements; and (ii) domestic entities shall hold income to account for previous years’ losses before remitting the profits. Moreover, pursuant to this circular, domestic entities shall make detailed explanations of the sources of capital and utilization arrangements, and provide board resolutions, contracts and other proof when completing the registration procedures in connection with an outbound investment. On October 23, 2019, SAFE promulgated the Notice for Further Advancing the Facilitation of Cross-border Trade and Investment, or SAFE Circular 28, which, among other things, allows all foreign-invested companies to use Renminbi converted from foreign currency-denominated capital for equity investments in mainland China, as long as the equity investment is genuine, does not violate applicable laws, and complies with the negative list on foreign investment. On December 31, 2020, the People’s Bank of China, SAFE and other government authorities jointly issued the Circular on Further Optimizing Cross-border Renminbi Policies to Support the Stabilization of Foreign Trade and Foreign Investment, or Circular 330, which, among other things, reiterates the above provisions in SAFE Circular 28. However, there remains uncertainty about how SAFE and other government authorities as well as competent banks will carry out SAFE Circular 28 and Circular 330 in practice. 101 Regulation on Foreign Debt A loan made by a foreign entity as direct or indirect shareholder in a foreign-invested enterprise is considered to be foreign debt in mainland China and is regulated by various laws and regulations, including the Regulation of the People’s Republic of China on Foreign Exchange Administration, the Interim Provisions on the Management of Foreign Debts, the Statistical Monitoring of Foreign Debts Tentative Provisions, the Detailed Rules for the Implementation of Provisional Regulations on Statistics and Supervision of External Debt, and the Administrative Measures for Registration of Foreign Debts. Under these rules and regulations, a shareholder loan in the form of foreign debt made to a mainland China entity does not require the prior approval of SAFE. However, such foreign debt must be registered with and recorded by SAFE or its local branches within 15 business days after entering into the foreign debt contract. Pursuant to these rules and regulations, the aggregate of (i) the outstanding balance of foreign debts with a term not longer than one year and (ii) the accumulated amount of foreign debts with a term longer than one year of a foreign-invested enterprise shall not exceed the difference between its registered total investment and its registered capital. On January 12, 2017, the People’s Bank of China promulgated the Notice of the People’s Bank of China on Full-coverage Macro-prudent Management of Cross-border Financing, or Circular 9, which sets forth an upper limit for mainland China entities, including foreign-invested enterprises and domestic-invested enterprises, regarding their foreign debts. Pursuant to Circular 9, the limit of foreign debts for enterprises shall be calculated based on the following formula: the limit of foreign debt = net assets × cross-border financing leverage ratio × macro-prudent regulation parameter. “Net assets” is calculated as the net assets value stated in the relevant entity’s latest audited financial statement. The cross-border financing leverage ratio for enterprises is two. The macro-prudent regulation parameter is one. Circular 9 does not supersede the Interim Provisions on the Management of Foreign Debts, but rather serves as a supplement to it. Circular 9 provided for a one-year transitional period from its promulgation date for foreign-invested enterprises, during which period foreign-invested enterprise could choose to calculate their maximum amount of foreign debt based on either the method of calculation described in the preceding paragraph or the method of calculation described in this one. After the transition period, the maximum amount applicable to foreign-invested enterprises is to be determined by the People’s Bank of China and SAFE separately. However, although the one-year transitional period ended on January 10, 2018, as of the date of this annual report, neither the People’s Bank of China nor SAFE has issued any new regulations regarding the appropriate means of calculating the maximum amount of foreign debt for foreign-invested enterprises. Domestic-invested enterprises have only been subject to the limit based on net assets described in this paragraph in calculating the maximum amount of foreign debt they may hold from the date of promulgation of Circular 9. In addition, according to Circular 9, a foreign loan must be filed with SAFE through the online filing system of SAFE after the loan agreement is signed and at least three business days prior to the borrower withdraws any amount from such foreign loan. According to an announcement promulgated by the PBOC and the SAFE on July 20, 2023, the macro-prudent regulation parameter is raised to 1.5. We may not be able to obtain these government approvals or complete such registrations on a timely basis, or at all, with respect to future foreign loans provided by us to our mainland China subsidiaries. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—Mainland China’s regulation of loans to and direct investment in mainland China entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from making loans to or make additional capital contributions to our mainland China subsidiaries and VIEs, which could materially and adversely affect our liquidity and our ability to fund and expand our business.” Regulation on Foreign Exchange Registration of Overseas Investment by Domestic Residents SAFE issued SAFE Circular 37 in July 2014. SAFE Circular 37 regulates foreign exchange matters in relation to the use of special purpose vehicles by domestic residents or entities to seek offshore investment and financing or conduct round trip investment in mainland China. Under SAFE Circular 37, a special purpose vehicle refers to an offshore entity established or controlled, directly or indirectly, by domestic residents (including individuals and entities) for the purpose of seeking offshore financing or making offshore investment, using legitimate onshore or offshore assets or interests, while “round trip investment” refers to direct investment in mainland China by domestic residents through special purpose vehicles, namely, establishing foreign-invested enterprises to obtain the ownership, control rights and management rights. SAFE Circular 37 provides that, before making contribution into a special purpose vehicle, domestic residents are required to complete foreign exchange registration with SAFE or its local branch. SAFE promulgated the Notice on Further Simplifying and Improving the Administration of the Foreign Exchange Concerning Direct Investment in February 2015. This notice has amended SAFE Circular 37 requiring domestic residents or entities to register with qualified banks rather than SAFE or its local branch in connection with their establishment or control of an offshore entity established for the purpose of overseas investment or financing. 102 Domestic residents who had contributed legitimate onshore or offshore interests or assets to special purpose vehicles but had not obtained registration as required before the implementation of SAFE Circular 37 must register their ownership interests or control in the special purpose vehicles with qualified banks. An amendment to the registration is required if there is a material change with respect to the special purpose vehicle registered, such as any change of basic information (including change of the domestic residents, name and operation term), increases or decreases in investment amount, transfers or exchanges of shares, and mergers or divisions. Failure to comply with the registration procedures set forth in SAFE Circular 37 and the subsequent notice, or making misrepresentation on or failure to disclose controllers of the foreign-invested enterprise that is established through round-trip investment, may result in restrictions being imposed on the foreign exchange activities of the relevant foreign-invested enterprise, including payment of dividends and other distributions, such as proceeds from any reduction in capital, share transfer or liquidation, to its offshore parent or affiliate, and the capital inflow from the offshore parent, and may also subject relevant domestic residents or entities to penalties under the foreign exchange administration regulations of mainland China. We cannot assure you that all shareholders or beneficial owners of ours who are domestic residents or entities, including the beneficiaries of the trust schemes directly or indirectly holding interests in our Cayman Islands holding company, have complied with, and will in the future make, obtain or update any applicable registrations or approvals required by, SAFE regulations. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—Mainland China’s regulations relating to the establishment of offshore special purpose companies by domestic residents may subject our domestic resident beneficial owners or our mainland China subsidiaries to liability or penalties, limit our ability to inject capital into our mainland China subsidiaries, limit our mainland China subsidiaries’ ability to increase their registered capital or distribute profits to us, or may otherwise adversely affect us.” Regulation Related to Stock Incentive Plans SAFE promulgated the Circular of the State Administration of Foreign Exchange on Issues concerning the Administration of Foreign Exchange Used for Domestic Individuals’ Participation in Equity Incentive Plans of Companies Listed Overseas in February 2012. Under this circular and other applicable rules and regulations, domestic residents who participate in stock incentive plan in an overseas publicly-listed company are required to register with SAFE or its local branches and complete certain other procedures. Participants of a stock incentive plan who are domestic residents must retain a qualified domestic agent, which could be a mainland China subsidiary of the overseas publicly listed company or another qualified institution selected by the mainland China subsidiary, to conduct the SAFE registration and other procedures with respect to the stock incentive plan on behalf of the participants. In addition, the domestic agent is required to amend the SAFE registration with respect to the stock incentive plan if there is any material change to the stock incentive plan, the domestic agent or other material changes. The domestic agent must, on behalf of the domestic residents who have the right to exercise the employee share options, apply to SAFE or its local branches for an annual quota for the payment of foreign currencies in connection with the domestic residents’ exercise of the employee share options. The foreign exchange proceeds received by the domestic residents from the sale of shares under the stock incentive plans granted and dividends distributed by the overseas listed companies must be remitted into the bank accounts in mainland China opened by the domestic agents before distribution to such domestic residents. In addition, the State Administration of Taxation has issued certain circulars concerning employee share options or restricted shares. Under these circulars, the employees working in mainland China who exercise share options or are granted restricted shares will be subject to PRC individual income tax. The mainland China subsidiaries of such overseas listed company have obligations to file documents related to employee share options or restricted shares with tax authorities and to withhold individual income taxes of those employees who exercise their share options. If the employees fail to pay or the mainland China subsidiaries fail to withhold their income taxes according to laws and regulations, the mainland China subsidiaries may face sanctions imposed by the tax authorities or other PRC government authorities. 103 Regulation Related to Taxation Enterprise Income Tax On March 16, 2007, the National People’s Congress enacted the Enterprise Income Tax Law, which came into effect on January 1, 2008 and was last amended on December 29, 2018. On December 6, 2007, the State Council promulgated the Implementing Rules of the Enterprise Income Tax Law, which came into effect on January 1, 2008 and was latest amended on December 6, 2024 and came into effect on January 20, 2025. The Enterprise Income Tax Law imposes a uniform 25% enterprise income tax rate to both foreign-invested enterprises and domestic enterprises, except where tax incentives are granted to special industries and projects. Enterprises qualifying as “High and New Technology Enterprises” are entitled to a 15% enterprise income tax rate rather than the 25% uniform statutory tax rate. The preferential tax treatment continues as long as an enterprise can retain its “High and New Technology Enterprise” status. According to the Circular on Several Policies for Further Encouraging the Development of Software Industry and Integrated Circuit Industry promulgated by the State Council in January 2011, the Circular on Policies of Enterprises Income Tax for Further Encouraging the Development of Software Industry and Integrated Circuit Industry jointly promulgated by the Ministry of Finance and the State Administration of Taxation in April 2012, and the Circular on the Enterprise Income Tax Policies for Promoting the High-quality Development of the Integrated Circuit Industry and the Software Industry jointly promulgated by the Ministry of Finance, the State Taxation Administration, the NDRC and the MIIT in November 2020, an enterprise that qualifies as a “software enterprise” established after January 1, 2011, or a software enterprise, is exempt from enterprise income tax for two years beginning in the enterprise’s first profitable year followed by a tax rate of 12.5% for the succeeding three years. In December 2020, the Ministry of Finance, the State Administration of Taxation, the NDRC, and the MIIT jointly issued a circular which repealed the original preferential tax treatment applicable to certain “key software enterprise.” Such circular provides that the enterprise income tax of certain “key software enterprise” would be waived for five years since its first year of making profit and it may benefit from a preferential tax rate of 10% for the following years. Under the PRC Enterprise Income Tax Law and its implementing rules, an enterprise established outside mainland China with its “de facto management body” located in mainland China is considered a “resident enterprise,” which means it can be treated as domestic enterprise for enterprise income tax purposes. A non-resident enterprise that does not have an establishment or place of business in mainland China, or has an establishment or place of business in mainland China but the income of which has no actual relationship with such establishment or place of business, shall pay enterprise income tax on its income deriving from inside mainland China at the reduced rate of enterprise income tax of 10%. Dividends generated after January 1, 2008 and payable by a foreign-invested enterprise in mainland China to its foreign enterprise investors are subject to a 10% withholding tax, unless any such foreign investor’s jurisdiction of incorporation has a tax treaty with mainland China that provides for a preferential withholding arrangement. Pursuant to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, the withholding tax rate in respect to the payment of dividends by a mainland China enterprise to a Hong Kong enterprise may be reduced to 5% from a standard rate of 10% if the Hong Kong enterprise directly holds at least 25% of the mainland China enterprise. Pursuant to the Notice of the State Administration of Taxation on the Issues concerning the Application of the Dividend Clauses of Tax Agreements, a Hong Kong resident enterprise must meet the following conditions, among others, in order to apply the reduced withholding tax rate: (i) it must be a company; (ii) it must directly own the required percentage of equity interests and voting rights in the domestic resident enterprise of mainland China; and (iii) it must have directly owned such required percentage in the domestic resident enterprise of mainland China throughout the 12 months prior to receiving the dividends. On February 3, 2015, the State Administration of Taxation issued the Announcement of the State Administration of Taxation on Several Issues Concerning the Enterprise Income Tax on Indirect Property Transfer by Non-resident Enterprises, or Bulletin 7. Pursuant to the Bulletin 7, where a non-­resident enterprise indirectly transfers properties such as equity in domestic resident enterprises without any justifiable business purposes and aims to avoid the payment of enterprise income tax, such indirect transfer must be reclassified as a direct transfer of equity in domestic resident enterprise. To assess whether an indirect transfer of taxable properties in mainland China has reasonable commercial purposes, all arrangements related to the indirect transfer must be considered comprehensively and factors set forth in Bulletin 7 must be comprehensively analyzed in light of the actual circumstances. In addition, Bulletin 7 has introduced safe harbors for internal group restructurings and the purchase and sale of equity securities through a public securities market. 104 On October 17, 2017, the State Administration of Taxation issued the Announcement of the State Administration of Taxation on Issues Concerning the Withholding of Non-resident Enterprise Income Tax at Source, which further clarifies the practice and procedure of the withholding of non-resident enterprise income tax. Value-Added Tax Pursuant to the Provisional Regulations on PRC Value-Added Tax and its implementation regulations, unless otherwise specified by laws and regulations, any entity or individual engaged in the sales of goods, provision of processing, repairs and replacement services and importation of goods into mainland China is generally required to pay a value-added tax, or VAT, for revenues generated from sales of products, while qualified input VAT paid on taxable purchase can be offset against such output VAT. The Standing Committee of the National People’s Congress published the Value-Added Tax Law of the PRC on December 25, 2024, which came into effect on January 1, 2026 and replace the Interim Regulations on Value-Added Tax of the PRC. While the Value-Added Tax Law of the PRC mainly preserves the fundamental structure of the current VAT regulations and maintains current tax rates of 13%, 9%, 6% and 0%, it further clarifies the scope of taxable services, and narrows the scope of situations deemed as taxable transactions. It also integrates non-taxable items and establishes VAT as an outside-the-price tax, with a unified 3% tax rate for simplified taxation. In November 2011, the Ministry of Finance and the State Administration of Taxation promulgated the Pilot Plan for imposition of Value-Added Tax to Replace Business Tax. In March 2016, the Ministry of Finance and the State Administration of Taxation further promulgated the Notice on Fully Promoting the Pilot Plan for Replacing Business Tax by Value-Added Tax. Pursuant to the pilot plan and applicable notices, VAT is generally imposed in lieu of business tax in the modern service industries, including the value-added telecommunications services, on a nationwide basis. VAT of a rate of 6% applies to revenue derived from the provision of some modern services and VAT of a rate of 3% applies to small-scale taxpayer. A general VAT taxpayer is allowed to offset the qualified input VAT paid on taxable purchases against the output VAT chargeable on the modern services provided. Regulation Related to M&A and Overseas Listings On August 8, 2006, six PRC regulatory agencies, including the Ministry of Commerce, the State-owned Assets Supervision and Administration Commission, the State Administration of Taxation, the State Administration for Industry and Commerce (currently known as the SAMR), the CSRC and SAFE jointly issued the M&A Rules, which became effective on September 8, 2006 and were amended on June 22, 2009. The M&A Rules, among other things, require that (i) mainland China entities or individuals obtain the approval of the Ministry of Commerce before they establish or control a special purpose vehicle overseas, provided that they intend to use the special purpose vehicle to acquire their equity interests in a mainland China company through a share swap for newly issued shares of the special purpose vehicle, and list their equity interests in the mainland China company overseas by listing the special purpose vehicle in an overseas market; (ii) the special purpose vehicle obtains the approval of the Ministry of Commerce before it acquires the equity interests held by the mainland China entities or mainland China individual in the mainland China company through a share swap; and (iii) the special purpose vehicle obtains CSRC approval before it lists overseas. 105 The Anti-Monopoly Law promulgated by the Standing Committee of the National People’s Congress on August 30, 2007 and amended on June 24, 2022 requires that transactions which are deemed concentrations and involve parties with specified turnover thresholds must be cleared by the Ministry of Commerce before they can be completed. In addition, on February 3, 2011, the General Office of the State Council promulgated a Notice on Establishing the Security Review System for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or Circular 6, which officially established a security review system for mergers and acquisitions of domestic enterprises by foreign investors. Further, on August 25, 2011, the Ministry of Commerce promulgated the Security Review Regulations to implement Circular 6. Under Circular 6, a security review is required for mergers and acquisitions by foreign investors having “national defense and security” concerns and mergers and acquisitions by which foreign investors may acquire the “de facto control” of domestic enterprises with “national security” concerns. Under these regulations, the Ministry of Commerce will focus on the substance and actual impact of the transaction when deciding whether a specific merger or acquisition is subject to security review. If the Ministry of Commerce decides that a specific merger or acquisition is subject to security review, it will submit it to the Inter-Ministerial Panel, an authority established under Circular 6 led by the NDRC, and the Ministry of Commerce under the leadership of the State Council, to carry out the security review. The regulations prohibit foreign investors from bypassing the security review by structuring transactions through trusts, indirect investments, leases, loans, control through contractual arrangements or offshore transactions. On March 10, 2023, the SAMR promulgated the Provisions on the Review of Concentrations of Undertakings, the Provisions on Prohibition of Monopoly Agreements and the Provisions on Prohibition of Abuse of Market Dominance, effective from April 15, 2023, to further implement the Anti-Monopoly Law. The Provisions on Prohibition of Monopoly Agreements were last amended on December 9, 2025, and became effective on February 1, 2026. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—The M&A Rules and certain other regulations of mainland China establish complex procedures for some acquisitions of Chinese companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in mainland China.” On July 6, 2021, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly promulgated the Opinions on Strictly Cracking Down on Illegal Securities Activities in Accordance with the Law. These opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies. Effective measures, such as promoting the construction of regulatory systems will be taken to deal with the risks and incidents of China-based overseas listed companies, and cybersecurity and data privacy protection requirements and etc. On February 17, 2023, with the approval of the State Council, the CSRC released the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the Trial Measures, and five supporting guidelines, which came into effect on March 31, 2023. According to the Trial Measures, (i) where an issuer, which is a domestic company or an overseas company determined as indirect overseas offering and listing of a domestic company, seeks for follow-on offering of securities in the same overseas market after its initial public offering, the issuer shall submit filings with the CSRC within three business days after the completion of such follow-on offering; (ii) where an issuer seeks for offering and listing of securities in other overseas market after its initial public offering, the issuer shall submit filings with the CSRC within three business days after such application is submitted; (iii) if the overseas offering and listing of the issuer is considered as indirect overseas offering and listing of a domestic company, the issuer shall designate a major domestic operating entity responsible for all filing procedures with the CSRC; (iv) if the issuer meets both of the following conditions, the overseas offering and listing shall be determined as an indirect overseas offering and listing by a domestic company: (a) any of the total assets, net assets, revenues or profits of the domestic operating entities of the issuer in the most recent accounting year accounts for more than 50% of the corresponding figure in the issuer’s audited consolidated financial statements for the same period; (b) its major operational activities are carried out in China or its main places of business are located in China, or the senior managers in charge of operation and management of the issuer are mostly Chinese citizens or are domiciled in China; (v) the issuer shall report relevant information to the CSRC within three business days after the occurrence and announcement of the following events: (a) change in control of the issuer; (b) the issuer is subject to investigation, sanction and other measures imposed by the overseas securities regulatory authorities or the relevant authorities; (c) the issuer changes its listing status or the listing board; (d) the issuer terminates the listing voluntarily or compulsorily; (vi) the issuer shall report relevant information to the CSRC within three business days after any significant change in the main business operation of the issuer, if such change in business operation makes the issuer no longer need to comply with the filing requirements. 106 On the same day, the CSRC also held a press conference for the release of the Trial Measures and issued the Notice on Administration for the Filing of Overseas Offering and Listing by Domestic Companies, which, among others, clarifies that prior to the effectiveness of the Trial Measures, domestic companies that have already completed the overseas offering and listing are not required to complete the filing procedure at the current stage, but shall complete the filing procedure upon the occurrence of certain matters, such as follow-on offering of securities, as required in the Trial Measures. As a supplement to the Trial Measures, the CSRC, the Ministry of Finance, the National Administration of State Secrets Protection and the National Archives Administration have jointly issued the Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies on February 24, 2023, which came into effect on March 31, 2023. These provisions require that any domestic company that plans to, either directly or through its overseas listed entity, publicly disclose or provide any documents and materials containing state secrets or working secrets of governmental agencies to any individuals or entities including securities companies, securities service providers and overseas regulators, shall first obtain approval from competent governmental authorities in mainland China, and shall file with the secrecy administrative department at the same level. Regulation Related to Anti Long-Arm Jurisdiction The Ministry of Commerce issued Provisions on the List of Unreliable Entities on September 19, 2020. Pursuant to these provisions, the working mechanism shall, according to the investigation results and by taking the following factors into comprehensive consideration, decide whether or not to include a foreign entity concerned in the list of unreliable entities, and make an announcement on such inclusion: (i) the extent of damage caused to China’s sovereignty, security and development interests; (ii) the extent of the damage to the legitimate rights and interests of Chinese enterprises, other organizations or individuals; (iii) whether or not the international economic and trade rules are followed; and (iv) other factors that shall be taken into consideration. If a foreign entity is included in the list of unreliable entities, the working mechanism may decide to take one or more of the following measures: (i) restricting or prohibiting the foreign entity from engaging in import or export activities related to mainland China; (ii) restricting or prohibiting the foreign entity’s investment within the territory of mainland China; (iii) restricting or prohibiting the entry of the foreign entity’s relevant personnel or transport vehicles into the territory of mainland China; (iv) restricting or cancelling the work permit, stay or residence qualification of the foreign entity’s relevant personnel in mainland China; (v) imposing a fine corresponding to the seriousness of the case against the foreign entity; and (vi) other necessary measures. On January 9, 2021, the Ministry of Commerce promulgated the Rules on Counteracting Unjustified Extra-Territorial Application of Foreign Legislation and Other Measures. Pursuant to these rules, where a citizen, legal person or other organization of mainland China is prohibited or restricted by foreign legislation and other measures from engaging in normal economic, trade and related activities with a third State (or region) or its citizens, legal persons or other organizations, he/she/it shall truthfully report such matters to the competent department of commerce of the State Council within 30 days. The working mechanism takes the following factors into overall account when assessing whether there exists unjustified extra-territorial application of foreign legislation and other measures: (i) whether international law or the basic principles of international relations are violated; (ii) potential impact on China’s national sovereignty, security and development interests; (iii) potential impact on the legitimate rights and interests of the citizens, legal persons or other organizations of mainland China; and (iv) other factors that shall be taken into account. If the working mechanism determine that there exists unjustified extra-territorial application of foreign legislation and other measures, the Ministry of Commerce may issue an injunction that the foreign legislation and other measures shall not be accepted, executed, or observed. A citizen, legal person or other organization in mainland China may apply for exemption from compliance with an injunction. 107 C. Organizational Structure The following diagram illustrates our corporate structure, including our principal subsidiaries, the VIEs and their principal subsidiaries, as of the date of this annual report: Notes: (1)Shareholders of Beijing Gaotu and their respective shareholdings in Beijing Gaotu and relationship with our company are Larry Xiangdong Chen (98.28%), chairman of our board of directors and our chief executive officer, and Bin Luo (1.72%), our employee. (2)Shareholders of Shanghai Duwen and their respective shareholdings in Shanghai Duwen and relationship with our company are Guo Shuai (70%) and Huang Ruonan (30%), both are our consultants. 108 Contractual Arrangements with the VIEs and Their Shareholders Current laws and regulations of mainland China impose certain restrictions or prohibitions on foreign ownership of companies that engage in value-added telecommunication services and certain other businesses. We are an exempted company with limited liability incorporated in the Cayman Islands. The WFOEs are our mainland China subsidiaries and foreign-invested enterprises under the laws of mainland China. To comply with the laws and regulations of mainland China, we primarily conduct our business in mainland China through the VIEs and their subsidiaries based on a series of contractual arrangements by and among (i) the WFOEs, Beijing Gaotu and its shareholders and (ii) Beijing Lexuebang, Shanghai Duwen and its shareholders. On January 26, 2021, the WFOEs entered into a supplementary agreement with the Beijing Gaotu and its shareholders. Pursuant to the supplementary agreement, each of Wuhan Yuexuebang and Beijing Yuexuebang became a party to the original agreements, enjoyed the same rights of Beijing Lexuebang under the original agreements and jointly assume the obligations of Beijing Lexuebang thereunder. On November 30, 2024, the WFOEs entered into a Supplementary Agreement to the Exclusive Management Services and Business Cooperation Agreement with the Beijing Gaotu and its shareholders. Pursuant to the Supplementary Agreement, certain significant subsidiaries are included in the list of the subsidiaries of Beijing Gaotu attached as Appendix II of the Exclusive Management Services and Business Cooperation Agreement. On May 1, 2025, Beijing Lexuebang entered into a series of contractual arrangements with Shanghai Duwen and its shareholders, Guo Shuai and Huang Ruonan, including an Exclusive Call Option Agreement, an Exclusive Management Services and Business Cooperation Agreement, an Equity Interest Pledge Agreement and Powers of Attorney. In connection with such contractual arrangements, the spouse of Guo Shuai executed a spousal consent letter. Our contractual arrangements with the VIEs and their shareholders: (i) effectively assigned all of the voting rights underlying the nominee shareholders’ equity interest in the VIEs to us, (ii) enable us to receive substantially all of the economic benefits of the VIEs, and (iii) allow us to have an exclusive call option to purchase all or part of the equity interests in the VIEs when and to the extent permitted by the laws of mainland China. As a result of our direct ownership in our WFOEs and the contractual arrangements with the VIEs, we are regarded as the primary beneficiary of the VIEs, and we treat the VIEs and their subsidiaries as our consolidated entities under U.S. GAAP. We have consolidated the financial results of the VIEs and their subsidiaries in our consolidated financial statements in accordance with U.S. GAAP. The following is a summary of the currently effective contractual arrangements by and among our WFOEs, Beijing Gaotu and its shareholders. Agreements that effectively assigned all of the voting rights underlying the nominee shareholders’ equity interest in Beijing Gaotu to us Powers of Attorney. Pursuant to the powers of attorney executed by Beijing Gaotu’s shareholders, each of them irrevocably authorized the WFOEs or its designee(s) to act on their respective behalf as exclusive agent and attorney, to the extent permitted by law, with respect to all rights of shareholders concerning all the equity interest held by each of them in Beijing Gaotu, including but not limited to proposing to convene or attend shareholder meetings, signing the resolutions and minutes of such meetings, exercising all the rights as shareholders (including but not limited to voting rights, nomination rights, appointment rights, the right to receive dividends and the right to sell, transfer, pledge or dispose of all the equity held in part or in whole). Equity Interest Pledge Agreement. Under the equity interest pledge agreement among the WFOEs, Beijing Gaotu and its shareholders, Beijing Gaotu’s shareholders pledged all of their equity interests of Beijing Gaotu to the WFOEs as security for performance of the obligations of Beijing Gaotu and its shareholders under the exclusive call option agreement, the exclusive management services and business cooperation agreement and the powers of attorney. If any of the specified events of default occurs, the WFOEs may exercise the right to enforce the pledge immediately. The WFOEs may transfer all or any of its rights and obligations under the equity interest pledge agreement to its designee(s) at any time. The agreement will remain in effect until the fulfillment of all the obligations under the exclusive call option agreement, the exclusive management services and business cooperation agreement and the powers of attorney. We have registered the equity interest pledge under the equity interest pledge agreement in relation to Beijing Gaotu with the relevant office of the SAMR in accordance with the PRC Civil Code. 109 Agreements that allow us to receive economic benefits from Beijing Gaotu Exclusive Management Services and Business Cooperation Agreement. Pursuant to the exclusive management services and business cooperation agreement among the WFOEs, Beijing Gaotu and its shareholders, the WFOEs has the exclusive right to provide or designate any third-party to provide, among other things, education management consultancy services, permission of intellectual property rights, technological support and business support to Beijing Gaotu and its subsidiaries. In exchange, Beijing Gaotu and its subsidiaries pay service fees to the WFOEs in an amount determined by the WFOEs in its sole discretion. Without the prior written consent of the WFOEs, Beijing Gaotu and its subsidiaries cannot accept services provided by or establish similar cooperation relationship with any third-party. The WFOEs owns the exclusive intellectual property rights created as a result of the performance of this agreement unless otherwise provided by the laws or regulations of mainland China. The agreement will remain effective unless unanimously agreed by the parties concerned or unilaterally terminated by the WFOEs with a written notice. Unless otherwise required by applicable laws of mainland China, Beijing Gaotu and its shareholders do not have any right to terminate the agreement. Agreements that provide us with the call option to purchase the equity interests in Beijing Gaotu Exclusive Call Option Agreement. Under the exclusive call option agreement among the WFOEs, Beijing Gaotu and its shareholders, each of the shareholders of Beijing Gaotu irrevocably granted the WFOEs a right to purchase, or designate a third-party to purchase, all or any part of their equity interests in Beijing Gaotu at a purchase price equal to the lowest price permissible by the then-applicable laws and regulations of mainland China at WFOEs’ sole and absolute discretion to the extent permitted by the laws of mainland China. The shareholders of Beijing Gaotu shall promptly give all considerations they received from the exercise of the options to the WFOEs or its designee(s). Beijing Gaotu and its shareholders covenant that, without the WFOEs’ prior written consent, they will not, among other things, (i) create any pledge or encumbrance on their equity interests in Beijing Gaotu; (ii) transfer or otherwise dispose of their equity interests in Beijing Gaotu; (iii) change Beijing Gaotu’s registered capital; (iv) amend Beijing Gaotu’s articles of association; (v) sell, transfer, license or otherwise dispose of any of Beijing Gaotu’s assets or allow any encumbrance of any assets, except for the disposal or the encumbrances of the assets that are treated as necessary for their daily business operations with the value of the assets involved in a single transaction not exceeding RMB100,000; (vi) cause Beijing Gaotu to enter into any major contracts or terminate any material contracts to which Beijing Gaotu is a party; (vii) declare or distribute dividends; (viii) terminate, liquidate or dissolve Beijing Gaotu; or (ix) allow Beijing Gaotu to incur, inherit, guarantee or permit any debts, except for those payables incurred in the ordinary or usual course of business but not incurred by way of borrowing. The agreement will remain effective until terminated by the WFOEs at its discretion or the entire equity interests in Beijing Gaotu have been transferred to the WFOEs or its designee(s). Spousal Consent Letters. Pursuant to the spousal consent letters executed by the spouses of certain shareholders of Beijing Gaotu, the signing spouses unconditionally and irrevocably agreed that the equity interest in Beijing Gaotu held by and registered in the name of their spouses be disposed of in accordance with the exclusive call option agreement, the exclusive management services and business cooperation agreement, the equity interest pledge agreement and the powers of attorney described above, and that their spouses may perform, amend or terminate such agreements without their additional consent. Additionally, the signing spouses agreed not to assert any rights over the equity interest in Beijing Gaotu held by their spouses. In addition, in the event that the signing spouses obtains any equity interest in Beijing Gaotu held by their spouses for any reason, they agree to be bound by and sign any legal documents substantially similar to the contractual arrangements described above, as may be amended from time to time. Beijing Lexuebang, Shanghai Duwen and its shareholders have also entered into a series of contractual arrangements similar to the contractual arrangements described above. As of the date of this annual report, we have registered the equity interest pledge under the equity interest pledge agreement in relation to Shanghai Duwen with the relevant office of the SAMR in accordance with the PRC Civil Code. In the opinion of Tian Yuan Law Firm, our PRC counsel: •the ownership structures of the VIEs and the WFOEs in mainland China are not in violation of applicable laws and regulations of mainland China currently in effect; and •the contractual arrangements between the WFOEs, the VIEs and their shareholders governed by the laws of mainland China are valid, binding and enforceable, and will not result in any violation of applicable laws and regulations of mainland China currently in effect. 110 However, our PRC counsel has also advised us that the interpretation and application of current and future laws and regulations of mainland China are subject to changes. Accordingly, the PRC regulatory authorities may take a view that is contrary to the opinion of our PRC counsel. It is uncertain whether any new laws or regulations of mainland China relating to variable interest entity structures will be adopted or if adopted, what they would provide. If we or the VIEs are found to be in violation of any existing or future laws or regulations of mainland China, or fail to obtain or maintain any of the required permits or approvals, the PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—If the PRC government finds that the agreements that establish the structure for operating certain of our operations in mainland China do not comply with mainland China’s regulations relating to the relevant industries, or if the determinations, changes or interpretations result in our inability to assert contractual control over the assets of our subsidiaries in mainland China or the VIEs that conduct our operations, our securities may decline in value or become worthless,” “Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—Uncertainties exist with respect to the interpretation and implementation of the Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance, business, financial condition and results of operations” and “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—Uncertainties with respect to the legal system of mainland China could adversely affect us.” D. Property, Plants and Equipment Our principal executive offices are located in Beijing, China, where we lease premises of 23,472 square meters to support our content development activities and daily operations, with lease term ranging from 2.4 to 6.1 years. In addition, we lease approximately 212,492 square meters, to support our daily operations, with lease terms ranging from 0.2 to 7.2 years in Beijing and 18 other provinces and municipalities throughout mainland China. We lease all of the facilities that we currently occupy from independent third parties. We also own several plots of commercial real estate in the Economic Development Area of Zhengzhou, China, which we use for business operations. The commercial real estate includes eight office buildings, among which four buildings are currently in progress. These eight buildings have a combined gross floor area of 226,700 square meters. We believe that the facilities that we currently lease and the commercial real estate that we purchased in Zhengzhou, China are adequate to meet our needs for the foreseeable future.