A.History and Development of the Company In 2014, we commenced our operations through ZKH Industrial Supply (Shanghai) Co., Ltd. (formerly known as Shanghai ZKH Trading Co., Ltd.), or ZKH Industrial Supply. ZKH Industrial Supply established a number of subsidiaries to engage in MRO procurement services. We undertook a corporate restructuring throughout 2021 to 2022 in order to facilitate offshore financing and listing. ZKH Group Limited was incorporated in the Cayman Islands as our holding company in April 2021. In May 2021, ZKH Group Limited established a wholly owned subsidiary, ZKH Holdings Limited, in the British Virgin Islands. Shortly after its incorporation, ZKH Holdings Limited established a wholly owned subsidiary in Hong Kong, namely, ZKH Hong Kong Limited, which is our intermediary holding company in Hong Kong. ZKH Industrial Supply completed several rounds of equity financing since its inception. As a part of our corporate restructuring, the then existing shareholders of ZKH Industrial Supply immediately prior to the initiation of our corporate restructuring and their respective designated affiliates became ZKH Group Limited’s shareholders in December 2021 through a distribution of ZKH Group Limited’s shares in proportion to ZKH Industrial Supply’s previous shareholding structure. Following the completion of our corporate restructuring in September 2022, ZKH Industrial Supply became a wholly owned subsidiary of ZKH Hong Kong Limited. We expect to continue operating a majority of our business in China through ZKH Industrial Supply and its subsidiaries. On December 15, 2023, our ADSs commenced trading on NYSE under the symbol “ZKH.” We raised an aggregate of US$53.3 million in net proceeds from our initial public offering and the underwriters’ partial exercise of their option to purchase additional ADSs after deducting underwriting commissions and the offering expenses payable by us. 68 Table of Contents Our principal executive offices are located at 7/F, Tower 4, Libao Plaza, No. 36 Shenbin Road, Minhang District, Shanghai, 201106, People’s Republic of China. Our telephone number at this address is +86 (21) 5080-9696. Our registered office in the Cayman Islands is located at 4th Floor, Harbour Place, 103 South Church Street, PO Box 10240, Grand Cayman, KY1-1002, Cayman Islands. Our agent for service of process in the United States is Cogency Global Inc., located at 122 East 42nd Street, 18th Floor, New York, NY 10168. 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 corporate website ir.zkh.com. The information contained on our website is not a part of this annual report. B.Business Overview Our Mission Transparency and efficiency, for better commerce. Our Vision To be a world leading industrial supplies company offering superior customer value. Who We Are We are a leading MRO procurement service platform built upon strong supply chain capabilities, servicing customers internationally through a product-led, agentic AI-driven approach. Reducing high procurement costs, solving systematic management efficiency challenges, and revolutionizing the opaque MRO procurement process are our top priorities. We strive to create a fully integrated cycle of MRO procurement, warehousing, and fulfillment, by leveraging our comprehensive selection of readily available MRO products, robust fulfillment capabilities, and cutting-edge agentic AI tools, powered by our deep industry know-how and purpose-built supply chain infrastructure. We believe our market leadership roots in our ability to efficiently curate and timely deliver superior products optimally aligned with our customers’ demands through a transparent, intuitive, and intelligent procurement experience. We provide MRO procurement solutions to a large, diversified and loyal customer base mainly through our two major online platforms in China, ZKH platform and GBB platform. We directly served over 155,000 customers on our ZKH platform and GBB platform in 2025, representing an increase of approximately 85.6% from 2024. Our coveted customer base includes large corporations (including multi-national corporations), small- and mid-sized enterprises (“SMEs”), state-owned enterprises (“SOEs”), and retailers and micro businesses from various industry sectors. Our loyal, diversified customer base supported a resilient business performance in 2025 despite challenges in the demand environment, enabling our GMV to reach approximately RMB10.1 billion, with a 96.6% retention rate for our top 500 customers by GMV in 2025. We offer hyper-personalized product curation to our customers from a comprehensive selection of high-quality, value-for-money MRO products. Our online platforms provide MRO products covering major MRO product lines and approximately 23.2 million SKUs as of December 31, 2025, including our private label products and third-party products that we procured from over 19,000 suppliers in 2025. Empowered by cutting-edge AI tools and big data, our dedicated team’s extensive expertise in professional and industrial grade MRO products enable us to deliver a bespoke curation optimally aligned with each customer’s demand from a myriad of products with complicated technical specifications, varying application scenarios, and disparate supply-chain compliance capabilities. Our comprehensive product offerings and insightful, data-drive product curation capability possess a powerful networking effect and continue to help us retain key customers in the most lucrative market segment in the MRO industry, as evidenced by the increase of the number of our high-spending customers2 from over 1,000 in 2021 to over 1,500 in 2025. 2 “High-spending customers” refers to customers who spend over RMB1 million in any fiscal year. 69 Table of Contents Timely and reliable fulfillment is the cornerstone for our success. Our strategically positioned distribution centers, smart vending machines, and dedicated teams work together to streamline logistics, reduce costs, and enhance customer experience through rapid, flexible, and precise deliveries. Our nationwide fulfillment network consisted of 30 distribution centers, 107 transit warehouses and over 5,600 EVM smart vending machines as of December 31, 2025. We maintained a dedicated team of over 600 warehouse personnel and fulfillment service managers and over 200 delivery vehicles as of December 31, 2025 to address businesses’ customized fulfillment requests. In 2025, we have achieved next-business day delivery for certain of our orders, and majority of our customer-requested delivery windows are consistently met. Our agentic AI tools, built upon a robust technology infrastructure and vast industrial data, transform the opaque, labor-intensive MRO procurement workflows to a streamlined, transparent, and cost-efficient process. We believe MRO procurement is essential to manufacturing operations but remains complex, with businesses often purchasing a wide range of long-tail products in small quantity from various vendors operating on disjointed protocols. As Chinese manufacturers expand globally, the demand for scalable, efficient MRO solutions grows. In the meantime, the rise of agentic AI and large language models creates room for improved efficiency and service quality across the entire procurement process. To capture these market opportunities, we provide a one-stop MRO procurement solutions powered by innovative agentic AI tools that directly address the critical pain points of supplies management and industrial procurement. Our industry-leading agentic AIs like ProductRecom Agent optimize product offerings by delivering precise product recommendations, while MRO Procure Agent and AI Material Management Agent revolutionize the procurement workflows by automating labor-intensive procurement tasks, standardizing disjointed supplies management protocols, and integrating complex data into intuitive, customer-friendly catalogues. This transformation effectively reduces procurement costs, increases efficiency throughout the procurement lifecycle, and rapidly aggregating traffics to our platforms. Our Business Model We are a China-based B2B e-commerce platform that provide one-stop MRO procurement solutions with an international footprint. Built upon our deep industry know-how and supported by our cutting-edge technology and robust fulfillment capabilities, we offer a comprehensive selection of value-for-money MRO products, as well as online transaction services and end-to-end fulfillment services to participants across the industry value chain. Our MRO procurement solutions are mainly delivered through our two major online platforms in China, ZKH platform and GBB platform. We tactically started with providing one-stop MRO procurement services to large corporations in China. Since then, we have been expanding our services and product lines, building out our supply chain and fulfillment capabilities, and firmly establishing our reputation in timely delivering professionally curated MRO products on demand. To optimize customer experience and enhance synergy, we also provide full-suite transaction services across the entire value chain, covering product sourcing and selection, transaction management, inventory management, and end-to-end fulfillment. As our product sales model achieved substantial scale, we also expanded into marketplace model to further scale up our business. Following our success with established large enterprises, we developed a dual-platform strategy to diversify our customer base. Since December 2024, we have proactively broadened our international presence to tap into key global markets such as the U.S. We currently offer a broad range of MRO products covering major MRO product lines on our platforms, including equipment parts, chemicals, manufacturing parts, general consumables, and office supplies. For a detailed description of our product offerings, see “—Our Product-Led Approach.” Our one-stop MRO procurement solutions are further powered by various innovative agentic AI tools that aims to revolutionize customer experience and address industry pain points. See “Agentic AI-powered MRO Procurement Solutions” for details. By customer type, we mainly serve (i) large to small- and mid-sized corporations on our ZKH platform and (ii) retailers and micro businesses on our GBB platform. By revenue model, we derive revenue from our product sales model and our marketplace model. Under our product sales model, we purchase products from suppliers and sell them to our customers on a principal basis. Under our marketplace model, suppliers sell products to customers over our platform and pay us commissions on sales. On our ZKH platform, we operate both our product sales and our marketplace model, and on our GBB platform, we currently primarily operate our product sales model. 70 Table of Contents Dual Platform Strategy to Serve Diverse Customer Demands. Our dual platform strategy aims to serve diverse customer demands and strengthen resilience in our business performance. Our ZKH platform and GBB platform are highly scalable and complementary. We first started our operations on our ZKH platform for enterprise customers and have developed core capabilities in industry insights, technology empowerment and supply chain effectiveness over the past years. By leveraging the infrastructure we have built, we launched our GBB platform for retailers and micro businesses. Our ZKH platform continues to attract enterprise customers with highly complex procurement process and contributes a majority of our sales. Our GBB platform allows us to tap into the large yet fragmented MRO procurement demand from a vast network of retailers and micro businesses and expands our scale in a cost-effective way with low working capital requirements. ● ZKH platform for large to small - and mid- sized businesses. Our large to small - and mid-sized enterprise customers value superior price-to-performance ratios and rely on our comprehensive offerings and cutting-edge AI tools to optimize products sourcing. In addition to MRO products, we provide value-added MRO procurement and management services that streamline complicated, laborious enterprise procurement process for enterprise customers. Rooting in our purpose-built supply chain infrastructure and rich knowledge in industrial-grade MRO products, these procurement and management services have increased our appeal to enterprise customers, enabling us to effectively accumulate and retain customers on our ZKH platform. In 2025, GMV from ZKH platform reached RMB 9.1 billion, contributing 89.8% of our GMV. ● GBB platform for retailers and micro businesses. Retailers and micro businesses with less complex procurement process value readily available products at competitive prices and are willing to use cash settlement. Traditionally, retailers and micro businesses rely on offline channels to procure MRO products and often face challenges of price opacity, product selection, product availability and low bargaining power. GBB platform addresses these pain points by curating value-for-money MRO products among a wide selection of authentic, readily available products with transparent pricing and detailed technical specifications. In 2025, GMV from GBB platform reached RMB1.0 billion, contributing 10.2% of our GMV. Dual-Business Model to Scale Up Our Operations. Our dual business model, consisting of a product sales model and a marketplace model, enhances synergy and build business scale. We currently generate a majority of our revenues from our product sales model, under which we purchase products from suppliers, manage inventories, and sell to our customers. As our product sales grew substantially in size and we have accumulated supply chain management capabilities, we launched our marketplace model. Customers under our marketplace model still have the same access to our fulfillment services and after-sale services. GMV from our product sales model and marketplace model reached RMB8,829.0 million and RMB 1,304.5 million, contributing 87.1% and 12.9 % of our GMV, respectively, in 2025. Overseas Expansion to Capture Growth Opportunities. With the growing global demand of Chinese MRO products and trend of Chinese manufacturers expanding globally, we proactively broaden our international presence to support these enterprises in meeting MRO procurement demands across key global markets. Our strategy is dual-pronged: serving China-outbound manufacturing customers in emerging regions, while implementing a localized operational model in developed markets such as the U.S. and Europe. ● Global support for Chinese enterprises. In markets including Southeast Asia, South America, Africa and the Middle East, we pursue a strategy of serving China-outbound manufacturing customers. By leveraging on our existing business relationship with customers in China, we provide targeted MRO procurement services to support their local manufacturing facilities overseas. As of March 31, 2026, our fulfillment network for this business segment has expanded to 17 countries. 71 Table of Contents ● Localized strategy in the United States. In the U.S. market, we operate through our localized subsidiary and e-commerce platform, NorthSky Supply platform, which launched in December 2024. We penetrate this market by leveraging our robust supply chain capabilities, a curated selection of cost-effective products, and innovative technological advantages. Our U.S. business primarily serves small- and medium-sized enterprises, providing them with a trusted destination for industrial supplies without the typical brand premium. o Product offering and exclusive brands: As of March 31, 2026, our NorthSky Supply platform offers over 1,000 SKUs across diverse categories, including personal protective equipment, hand and power tools, machinery accessories, tapes and labels, shipping and storage materials, and HVAC equipment. We have strategically expanded our SKU count in warehouse-centric categories, such as material handling and storage. Our product portfolio features our private labels, including (i) Black Canyon, which focuses on hand tools, machinery accessories, measuring and marking tools, testing equipment, and power tool accessories, and (ii) Olympia, which provides comprehensive safety and security solutions, including hand, respiratory and ear protection, as well as facility safety products. o Omni-channel sales and localized services: In addition to NorthSky Supply platform, we sell our products through major U.S. e-commerce platforms, such as Amazon, to maximize market reach. Our U.S. operations are supported by a localized management and service infrastructure, including a key account sales team and a dedicated domestic customer service center. o Fulfillment excellence: To ensure timely nationwide delivery, we have expanded our logistics footprint. As of March 31, 2026, we rent a total of seven local warehouses, including two new facilities in Houston and five warehousing facilities located in Texas, California, Georgia, New Jersey, and Illinois. This network enables us to achieve delivery times as fast as two to three days for most locations across the United States. o High quality and compliance: Our NorthSky Supply platform is also committed to compliance with stringent U.S. and European standards. We provide comprehensive product certifications and testing reports to guarantee that every item meets the required regulatory and safety criteria, offering transparency and high-quality assurance to our global customer base. Our Product-Led Approach As a procurement services platform, we believe a product-led approach is the foundation to our competitive edge in customer experience. We endeavor to timely deliver a bespoke product curation to each customer from our comprehensive selection of high-quality, value-for-money MRO products, and intend to strategically positioning ourselves to capture margin expansion opportunities in different product categories. Comprehensive product base with on-demand availability We provide a comprehensive selection of readily available MRO products to satisfy varying demands of our diversified customer base. We offer a broad range of MRO products covering major MRO product lines and approximately 23.2 million SKUs on our platforms as of December 31, 2025. Our selection features a mix of private label products, well-known brand names, and third-party supplier offerings. Each SKU is carefully chosen from thousands of brands and millions of products, ensuring that only those with superior performance and advanced technology make the cut, delivering reliable and innovative solutions to meet our customers’ industrial needs. In 2025, we procured from over 19,000 suppliers for our platform. We had five major product categories consisting of 32 product lines available on our platform as of December 31, 2025 as follows. ● Equipment parts: including, without limitation, pump valve fittings, low voltage electrical, electric automation, wire and cable, fastening seal, pneumatics & hydraulics, and instrumentation; ● Chemicals: including, without limitation, workshop chemicals, chemical reagent, lubricant, paint & painting supplies, and adhesives; ● Manufacturing parts: including, without limitation, cutting tool, air compressor, electronic vending machine, factory automation, and abrasive measuring tool; 72 Table of Contents ● General consumables: including, without limitation, security-related products, material handling, power transmission, personal protective equipment, welding, tape & label, cleaning supplies, laboratory instrument consumables, and hardware & hand tools; ● Office supplies: including, without limitation, office supplies, furniture, fringe benefit, lightening, refrigeration & heating, ventilating, air conditioning, and building materials. Consistent product availability is the essence of a positive procurement experience and the backbone to ensure customer loyalty. We are shifting from a sourcing-oriented mode to an assortment-oriented mode to increase our in-stock products availability to increase transaction efficiency and lower transaction costs. With accurate demand forecasts, strategic supplier-platform relationship, and superior capability in inventory management, we are able to offer readily available products to ensure timely fulfillment. We have managed, digitalized and standardized the parameters of a massive catalogue of SKUs, which cannot be achieved by traditional MRO distributors with limited digital capabilities. We have also adopted an intelligent inventory management system that helps us set the optimal inventory level of various SKUs by determining the type of products to be kept in stock at the right time and right place and procurement frequency. Leveraging this inventory level optimization model, our inventory turnover days on a GMV basis remained stable at around 30 days. Our supply chain reliability is further enhanced by fusing superior inventory management capability with our strategically positioned fulfillment network, which has realized as fast as next-business day delivery for certain of our orders by end of 2025. Professional curation to optimally align with customer needs Leveraging on deep industry know-how and accumulated big data, our dedicated product team endeavor to curate products that optimally align with our customers’ business needs. A majority of MRO procurement demands in China focus on professional and industrial grade MRO products, including equipment parts, chemicals, and manufacturing parts. Sourcing these specialized products from a massive catalogue of MRO offerings remain challenging to many enterprises. Our product team are committed to present a hyper-personalized curation of industrial grade MRO products with competitive price, high quality, and exceptional performance through market study and a thoughtful selection process. Our rich knowledge of industrial products is built upon our experience professional team’s visibility into expansive industry data. We are developing a ZKH MRO Dictionary covering all of our product offerings, which consisted of approximately 23.2 million SKUs as of December 31, 2025, based on comprehensive market research and distill product insights by our dedicated team. Through data cleaning, standardization and classification, ZKH MRO Dictionary labels each of our product offerings with standardized data benchmarks and follows consistent nomenclature, allowing us to match products with our customers’ varying business needs. This innovation also facilitates cross-brand product selection and substitution, which helps optimizes procurement cost structure and enhances supply chain responsiveness. Private label products to promote higher margin The private label products in our products mix provide exceptional quality at competitive prices to our customers and enable us to promote higher margin. Our private label products initially and strategically target general consumables and office supplies, the sales of which are heavily impacted by price-to-performance ratios and less driven by brand recognition, and further expanded into complicated products such as hand tools and power tools. Our current private label lines in China include general MRO products sold under our ZKH brand name; PPE sold under our Andanda brand name. Our two primary private labels in the U.S. market are Olympia, specializing in PPE and security products; Black Canyon, offering hand tools, machinery accessories, measuring tools, and testing equipment. We believe our private label products portfolio is of superior price-to-performance ratios, and it strategically positions us to capture margin expansion opportunities. In 2025, GMV from private label products reached RMB843.9 million, contributing to 8.3% of our total GMV in 2025. Going forward, we are strategically positioned to sustain the growth momentum of our private label products and further increase its contribution to GMV. We will continue to scale investments in product design, R&D, testing, and sourcing capabilities with respect to the private label products. To advance this initiative, we have designated our Taicang factory as an innovation hub, where we are building an integrated product development ecosystem encompassing R&D, testing, and technical analysis capabilities. By developing an integrated product development system, we aim to enhances our ability to deliver professional product curation services through benchmarking, optimization, and scenario-based customization, thereby accelerating commercialization of our private label products. Concurrently, we are improving our quality control systems, including establishing collaborative laboratories with nationally accredited quality supervision institutions, in order to enhance our product testing capabilities and ensure consistent and reliable quality of private label products. 73 Table of Contents Agentic AI-powered MRO Procurement Solutions We have built a full-stack AI architecture purpose-built for the MRO procurement domain. Our architecture consists of a proprietary industrial data layer, a domain-specific knowledge graph, and a model layer powered by MRO vertical large language model enhanced through retrieval-augmented generation, tool-calling and multi-agent orchestration. On top of this foundation, specialized AI agents operate across product identification, demand matching, order execution, materials standardization and fulfillment routing. The architecture forms a continuously learning, closed-loop procurement engine in which data, reasoning and execution reinforce one another in real time. We deliver comprehensive AI-powered procurement solutions through our one-stop MRO procurement platforms, intending to reduce high procurement costs, solving systematic management efficiency challenges, and revolutionizing the opaque MRO procurement process. Traditional MRO procurement typically requires buyers to navigate a massive catalogue of specialized products while managing disjointed vendor relationships, each operating on isolated IT systems, disparate management protocols, and inconsistent nomenclature. Such decentralized procurement process often leads to inflated costs, operational delays, and repetitive labor. With profound experiences in the industrial product distribution and manufacturing industry, our founder, Mr. Long Chen, had experienced these industry pain points first-hand and identified enormous opportunities in China’s MRO segment, the transaction infrastructure of which was in great need of a comprehensive digital transformation. We have a successful track record of providing MRO procurement and management services to various value chain participant digitally. We are elevating our pre-existing services by incorporating paradigm-shifting agentic AI tools into our one-stop procurement solutions. These proprietary AI tools transform traditional procurement experiences to create a fully integrated cycle of intelligent procurement, warehousing, and fulfillment. The following provides an overview of the agentic AI tools that fueled our competitive edges in product offerings and curation, sales efficiency and operational leverage. Elevating product competitiveness and intelligent customer experience with increased sales efficiency Our agentic AI-driven, intelligent procurement management services continue to increase sales efficiency and optimize customer experience, which in turn creates a significant network effect for our platforms. In particular, our AI-powered MRO solutions create a more convenient, efficient, transparent, and cost-effective procurement process, which elevates our customer experience and brand recognition and allow us to attract more customers of all sizes across the industry in a self-reinforcing virtuous cycle. ● Streamlined collaboration enabled by AI-driven information integration. AI Material Management Agent, our pioneering agentic AI tool for supplies management and information integration, effectively reduce procurement inefficiency by streamlining the collaboration among all value chain participants. The lack of standardized and integrated supplies management protocols and nomenclature systems across supply chain participants has resulted in systematic efficiency challenges, including operational delays, human errors, and suboptimal cost structures. As a first-in-kind agentic AI in China’s MRO procurement industry, AI Material Management Agent seamlessly organizes and standardizes complex, multi-format data from customers and suppliers into precise catalog with consistent technical parameters and unique item codes. The impact on operational efficiency has been transformative: whereas processing 1,000 lines of material data previously required approximately 15 person-days of manual labor, our AI Material Management Agent can now complete the same task in roughly three minutes. By revolutionizing supplies sorting, it has slashed tasks that once took a full day to just an hour, dramatically reducing management costs and minimizing human error. Future enhancements will introduce real-time feedback and chat-based product inquiries, further expanding its capabilities. 74 Table of Contents ● Automated product selection and autonomous curation. Our agentic AI framework elevates product competitiveness by advancing our product curation capabilities for a diversified customer base. ProductRecom Agent, our AI-driven product recommendation tool, curate hyper personal product selection within one click. Customers can upload a shopping list to our platform and our system can automatically search and match products available on our platform, and recommend alternatives based on big data and our advanced models. By analyzing industry-specific workflows and building detailed customer purchasing profiles, it delivers precise, data-driven insights into evolving procurement needs. ProductRecom Agent, launched in the fourth quarter of 2024, served more than 30,000 customers in 2025 and generated over RMB200 million in cumulative sales by improving supply and demand matching and conversion efficiency. ● Seamless procurement process supported by agentic AI. Built on advanced MRO vertical AI model and a comprehensive MRO industry knowledge base, MROProcure Agent, our full life-cycle support AI agent, delivers an intelligent, autonomous alternative to the traditional procurement experience by automating the MRO procurement process and reducing the need for extensive manual intervention. MROProcure Agent takes the form of an intuitive chatbot integrated with multiple platforms and assists our customer on a 24-7 basis. MROProcure Agent excels in offering a seamless experience across multiple domains, including product recommendations, intelligent customer support, logistics tracking, order management, and knowledge-based Q&A. As of March 31, 2026, MROProcure Agent had been embedded in over 30,000 Enterprise WeChat groups for customers and suppliers, where it automatically answers or assists in answering customer and supplier inquiries. Improving operational leverage through automation initiatives By leveraging advanced AI technology, we continue to automate labor-intensive tasks throughout our service cycle, which improves our efficiency internally and optimizes our operational leverage. We internally developed the robotic process automation (“RPA”) technology that utilizes software robots to automate repetitive tasks of human in key procedures of MRO procurement, including inquiries, orders, shipment and invoicing. The number of RPA bots grew from over 1,400 in 2024 to approximately 5,000 in 2025, which exceeded the size of its human workforce and have become core infrastructure supporting scalable intelligent operations. Over the course of the year of 2025, these digital employees helped save substantial amount of labor hours. Our AI intelligent workbench integrates AI capabilities such as natural language processing to support the completion of complex procurement processes through conversational interaction, significantly reducing manual cross-system operations. It has achieved automation in 56 process scenarios, such as creating an order with one-sentence. AI Smart Workbench significantly reduced cross-system manual operations and enabled the transition of business processes from a high-touch to a low-touch operating model. In 2025, AI Smart Workbench autonomously executed more than 520,000 system operations and improved productivity in process-intensive roles, with customer service and procurement productivity up approximately 45% and 50%, respectively, year over year. The AI intelligent workbench will continue to enhance the agent’s understanding and operational capabilities regarding business processes, further realizing the transition from “Low-Touch” to “No-Touch.” Purpose-built MRO Fulfillment and Servicing Network We believe our professional and timely fulfillment is the foundation of our success. Our fulfillment consists of distribution centers, transit warehouses, and onsite locations supported by fulfillment service managers and EVM smart vending machines. Our comprehensive fulfillment network and robust end-to-end fulfillment capability will enhance customer experience and loyalty. End-to-end fulfillment As of December 31, 2025, we had a fulfillment network that covered the majority of major industrial hubs in China with 30 distribution centers and 107 transit warehouses, comprising an aggregate gross floor area of over 183,000 square meters. We had a team of over 611 warehouse personnel and fulfillment service managers and over 200 delivery vehicles to provide warehousing and end-to-end services to our customers and deployed over 5600 EVM smart vending machines to realize order-on-demand delivery in customers’ facilities, as of December 31, 2025. We intend to extend our fulfillment capabilities to other industry participants. For example, we may further explore business opportunities in lending spaces in our warehouses to and sharing logistics resources with the public. We flexibly engage suppliers to carry out direct shipping to customers. In 2025, approximately 51.7% GMV of our orders involved direct shipping from our suppliers to customers. Our fulfillment service managers ensure that the direct shipping orders can be delivered to our customers’ satisfaction. In addition to direct shipping, suppliers may choose to rent space in our warehouses and use logistics services available on our platform to ship their products stored in our warehouses. 75 Table of Contents We have established a set of stringent criteria for third-party logistic service providers and have entered into long-term framework agreements with the ones we have selected to serve our customers. Distribution centers and transit warehouses Our distribution network includes distribution centers and transit warehouses. A distribution center keeps our inventory and makes shipping of products in bulk. A transit warehouse temporarily stores goods and is set up to receive, consolidate, and quickly dispatch products for secondary or next-day delivery. ● Distribution center. Based on the type of goods they store, we categorize our distribution centers either as national distribution centers or as regional distribution centers. Our national distribution centers typically store infrequently transacted products, high value products, products with a long lead time, and other long-tail SKUs, to satisfy the needs of nationwide customers, improve the fulfill rates for long-tail SKUs and reduce our overall inventory level. Our regional distribution centers mainly store and collect SKUs that are popular in that province, and they are typically located at places closer to our customers. ● Transit warehouse. Transit warehouses temporarily store goods and are set up to receive, consolidate, and quickly dispatch products for secondary or next-day delivery. For example, our transit warehouses can consolidate, package and ship multiple ordered items in one lot following our customers’ requests. Since the stock does not remain in the facility for a very long time, ease of loading and unloading goods takes priority over storage capacity. To ensure fast delivery to the customers, our transit warehouses are strategically located close to areas that are in high demand for MRO products, such as industrial parks, chemical industry parks and mines. Onsite services We have fulfillment service managers and EVM smart vending machines deployed to provide onsite support and services. ● Fulfillment services managers. Our fulfillment service managers are dedicated to providing end-to-door and even end-to-desk delivery solutions to meet the complex and varied delivery demands from businesses. The last-mile delivery requests from businesses can be highly customized, which require our fulfillment teams to have the kind of deep insights into customers’ business that is built up over many years. The service scope of our fulfillment service managers covers unloading, inspection, stacking, and installation of products. ● Smart vending machines. We deploy EVM smart vending machines at customers’ facilities or factories to further improve their inventory management efficiency. Our EVM smart vending machines are designed to hold frequently purchased consumables, such as fasteners, office supplies, personal protective equipment, cutters and cutting tools, grinding materials and grinding tools. As of December 31, 2025, we deployed over 5,622 EVM smart vending machines, serving over 927 customers. Our EVM smart vending machines come in different types, either in the format of helix, locker, open racking, or open gate, to match the unique needs of our customers. These machines can measure and report the exact quantity in stock in real time and automatically send orders to us when inventory hits an established minimum threshold. Our EVM smart vending machines present an inventory management solution that automates process controls by providing 24/7 continuous inventory monitoring, real-time inventory visibility, and efficient replenishment. Our specialty warehouses Building on our comprehensive fulfillment services, we have developed specialty warehouses to address the specific needs of specific product lines, such as common chemicals (including lubricants), hazardous chemicals and fasteners. We cooperate with third-party qualified warehouses to store hazardous chemicals. We hold the licenses and permits to sell and distribute chemicals, including Hazardous Chemicals Operation License (Excluding Storage Facilities) and Certification for the Production and Operation of Precursor Chemicals (Class 3). 76 Table of Contents Warehouse Automation We launched our first automated warehouse for the fasteners’ product line in Shanghai, China in March 2024. The warehouse is equipped with advanced automated storage technologies, including multi-layer bin robots, telescopic unloading robots, intelligent loading/unloading machines, and conveyor systems. By integrating automated navigation, visual recognition, and smart picking systems, it achieves precise location tracking, unmanned operations, and efficient goods-to-person picking. The automated warehouse is expected to double storage efficiency for fasteners’ product line and cut forklift dependency by approximately 70%, and thereby significantly enhances operational efficiency. We may further explore opportunities to invest in and upgrade warehousing facilities for other product lines and categories to elevate our warehousing and fulfillment efficiencies. Our Customers We serve a diverse and expansive customer base across a broad spectrum of industrial sectors. The number of our customers increased significantly from over 66,000 in 2023 to over 83,000 in 2024, and further to over 155,000 in 2025. Our customer base is strategically categorized by geography and platform: ● Domestic customers in China. We provide comprehensive MRO solutions to a wide array of domestic enterprises through our platforms: o ZKH platform customers: We serve large corporations (including multi-national corporations), small- and mid-sized enterprises, and SOEs that seek to digitalize their MRO procurement processes. Among our top 500 customers on ZKH platform in 2025 (measured on a consolidated group basis), the GMV breakdown by industry was 23.8% from machinery, equipment and electrical goods manufacturing, 17.6% from resources industry, 19.5% from automobile and related industries, 9.1% from energy industry, 14.0% from consumer goods manufacturing, 3.7% from construction industry, and 12.3% from others. o GBB platform customers: GBB platform serves a decentralized network consisting of retailers and micro businesses, enabling us to capture fragmented demand across the broader MRO distribution market. ● Overseas customers. As we expand our global footprint, our overseas customer base primarily includes: o China-outbound customers: We support Chinese enterprises in their global expansion by providing consistent, high-quality MRO supply chain services for their overseas operations. o International small- and mid-sized enterprises: We serve small- and mid-sized enterprises in the United States and other international markets, leveraging our digital procurement infrastructure to address localized MRO needs. Sales and Marketing Sales Teams and Channels We maintain a multi-tiered internal sales force dedicated to customer acquisition, relationship management, and localized service. As of December 31, 2025, our total sales team consisted of approximately 1,200 employees, organized across our two primary platforms. ZKH Platform Sales Teams ZKH platform sales force is strategically divided to address the distinct procurement needs of large-scale enterprises and regional businesses: ● Industry and SOE team: Our industry customer sales team serves market-leading corporations in sectors such as mechanical and electrical manufacturing, automotive and chemical engineering. This team is responsible for developing and maintaining relationships with key account customers, leveraging deep vertical insights to increase customer wallet share. Working in tandem, our SOE customer sales team focuses on the unique procurement protocols and digitalization requirements of central and local SOEs, ensuring long-term institutional stability and contract compliance. 77 Table of Contents ● Regional sales team: To capture the vast market of small- and mid-sized enterprises, our regional sales team provides localized coverage through a grid-based personnel structure. These professionals are responsible for identifying and developing new local small- and mid-sized enterprises and maintaining ongoing business relationships within their assigned territories. Furthermore, the regional team collaborates closely with the industry and SOE teams to provide high-touch, on-site support to the local subsidiary factories of our national key accounts. This integrated approach ensures seamless service delivery across most provinces in China while optimizing operational efficiency and minimizing business travel requirements. GBB Platform Sales Team GBB platform sales team is specifically structured to support our network of retailer customers and micro businesses. This team focuses on identifying and proactively reaching out to a vast array of secondary distributors, trading companies, and local hardware merchants through targeted market outreach. Our sales professionals are primarily responsible for promoting GBB platform’s competitive value proposition, emphasizing the cost-effectiveness and broad selection of our merchandise to incentivize sourcing through our digital infrastructure. Marketing Activities We believe that the most effective form of marketing is to continually enhance our customer experience, as customer satisfaction engenders word-of-mouth referrals and repeat purchases. The seamless, one-stop procurement experience powered by our AI-fused digital solutions has fundamentally redefined our brand-customer engagement, creating a self-reinforcing cycle where technological innovation amplifies our brand equity while monetizing user intent. Our deployment of multimodal AI interfaces has established widespread customer recognition as a leading tech-powered MRO platform. We also host and attend various industry conferences, trade shows and exhibitions to market our brand and products. In addition to continuing marketing activities through our sales team, we also implement online marketing measures, such as advertisement through online advertising agencies and search engines, to cost-effectively and efficiently reach more customers. We have increasingly acquired more customers through online marketing activities, such as by leveraging livestreams to engage customers. Our Suppliers We procured from over 19,000 suppliers for our platform in 2025. We select suppliers on the basis of their price, inventory level, product quality, fulfillment capability and service. They must be able to secure timely supply and fulfillment of authentic products and provide quality after-sales customer services. We perform background checks on our suppliers and quality control checks on the products they provide before we enter into any agreement with them. We require all suppliers under our marketplace model to follow our strict standards for product authenticity and service reliability. We closely monitor their performance, price, and activities on our marketplace and implement punitive measures including fines and termination of business cooperation for their misbehavior. To mitigate supply chain volatility and secure cost advantages, we vertically optimized our procurement by forming strategic partnerships with upstream suppliers. As of December 31, 2025, over 93% of our products by procurement value is sourced directly from original manufacturers and their authorized distributors, ensuring both supply reliability and competitive pricing. Quality Control We maintain rigorous quality control procedures. We perform quality inspections following our quality inspection manual and inspection procedure protocol upon receipt of products. We expect suppliers to comply with laws and regulations and our quality standards. For defective products, we will return or exchange them following our procurement return and exchange procedure protocol. Suppliers will be subject to penalties or be asked to end their operations on our platform if they violate our quality standards, for example, by selling counterfeit products. We hold an ISO 9001 certificate applicable to the sales of MRO products. Pricing Policy We constantly monitor and compare prices on our platform against prices on other MRO procurement service platforms to direct our price setting. We have a dedicated pricing management team with specific personnel responsible for each product line. We hold price analysis and management meeting periodically to assess whether the prices we or our suppliers offer are reasonable and competitive in the market. 78 Table of Contents Under our product sales model, we determine prices of our products. Under our marketplace model, suppliers determine the prices sold to our customers in compliance with our pricing guidance. Inventory Control Based on historical transaction data insights accumulated over our platform, we have developed an automatic inventory level optimization model. Taking account of key factors such as purchase frequency, prices, sales volume, and seasonality, we leveraged our data analytics to train this model, so as to determine the type of products to be kept in stock at the right time, the re-order point and re-order quantity, which in turn optimizes our inventory level and procurement frequency. As a result of this model, our inventory turnover days remained stable, despite our business expansion. We have developed a warehouse location optimization model to select the most suitable location to store stocks in response to demands from a larger geographic area, which effectively shortens the product fulfillment time. We store and manage most of our inventory in rented warehouses. For hazardous chemicals, we rely on third-party warehouses who hold requisite licenses and permits to manage and store the inventory in Chinese mainland. We expect these third-party warehouses to strictly comply with PRC laws and regulations, and follow our standards and policies to store, maintain, and manage the hazardous chemicals and deliver quality fulfillment services to meet our customers’ needs. Our Technology and Research and Development Building upon our continuous investment in R&D to consolidate our technical platform advantages, in 2025, we further transitioned towards a lean and intelligent R&D model. In 2025, our AI coding generation rate increased from 6.6% to 27.1%, significantly improving per capita efficiency. While ensuring the safe, stable, and efficient operation of our platform, we continue to drive the iterative upgrade of our products and technologies. We also plan to establish an Innovation and R&D Center at our Taicang factory in Suzhou, China to strengthen product development, testing, and technical analysis, enabling expert product recommendations and driving the growth of our private label products. IT Infrastructure Our technology platform has been designed for reliability, scalability and flexibility and is administered by our technology department. We have access to a network of approximately 453 leased servers across China with power supply and power generator backup as of December 31, 2025. We currently utilize third-party clouds in China to host our network infrastructure. Our IT department regularly monitors the performance of our website, mobile apps, and infrastructure to enable us to respond quickly to potential problems. We have the capability to operate and serve during outbreaks related to servers, cables and power in data center scale or city scale. Even in the extreme hypothetical situation where all core data are deleted, we are able to restore to full service with our multi-layer backup system in a relatively short time. As of the date of this annual report, we have not experienced any service outage that materially affected our business operations. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—The proper functioning of our IT systems and technology infrastructure is essential to our business. Any disruption to our IT systems and technology infrastructure or the inability to maintain or upgrade our information systems, or convert to alternate systems in a timely and efficient manner, could disrupt operations, cause unanticipated increases in costs and/or decreases in revenues, and materially affect our ability to maintain the satisfactory performance of our platform and deliver consistent services to our customers.” Data Privacy and Security We have established and implemented a strict platform-wide policy on data collection, processing and usage. We collect information and other data that is related to the services we provide, with users’ prior consent. To ensure the confidentiality and integrity of our data, we maintain a comprehensive and rigorous data security program. We anonymize and encrypt confidential information and take other technological measures to ensure the secure processing, transmission and usage of data. We have also established stringent internal protocols, under which we grant classified access to confidential data only to limited employees with access authorization. 79 Table of Contents We back up our core data on a real-time basis and other data on a daily basis in separate and various secured data back-up systems to minimize the risk of data loss. Competition We face competition from a variety of players in the industry, including other MRO procurement platforms, manufacturers, wholesalers, and distributors that sell MRO products. We differentiate ourselves by integrating cutting-edge digitalization and AI capabilities into our distinct customer-centric culture, which is embedded in every aspect of our strategies and operations. We provide a transparent and efficient one-stop MRO procurement experience, advanced digital solutions along with intelligent services powered by AI, effective fulfillment services, broad product offerings, and sales and service representatives with deep industry insights. We believe that we are well-positioned to effectively compete on the basis of the factors listed above. However, some of our current or future competitors may have similar or greater market presence, name recognition, and financial, marketing, technological, and other resources. See “Item 3. Key Information—D. Risk Factors—Uncertainties relating to the growth and profitability of the evolving and dynamic MRO procurement service industry could adversely affect our business, prospects and results of operations. We cannot guarantee that our current or future strategies will be successfully implemented or will generate sustainable profit” for more details. Intellectual Property We rely on copyright, trademark and patent law and confidentiality, invention assignment and non-compete agreements with our employees and others to protect our proprietary rights. We make filings and registrations for our intellectual property rights such as patents. We also engage professional advisors to maintain our intellectual property registration and to mitigate the risk of potential infringement on our intellectual property. In 2023, 2024 and 2025, there has been no incidents of infringements on our intellectual property that materially and adversely affected our results of operations. As of December 31, 2025, we owned 152 computer software copyrights in Chinese mainland relating to various aspects of our operations and maintained 640 trademark registrations inside Chinese mainland and 246 trademark registrations outside Chinese mainland. We had 82 trademark applications inside Chinese mainland and 46 outside Chinese mainland. As of December 31, 2025, we had 187 patents granted in Chinese mainland, 2 patents granted outside Chinese mainland, 49 patent applications pending in Chinese mainland and 1 patent application pending outside Chinese mainland. As of December 31, 2025, we had registered 164 domain names. Our registered domain names include www.zkh.com, www.ZKH.ai, and www.northskysupply.com. Seasonality We experience seasonality in our business, as a combined result of seasonal fluctuations in customer purchases, promotional events and MRO procurement service industry seasonality patterns. We generally receive fewer purchase orders during public holidays in China, particularly during the Chinese New Year holiday season in the first quarter of each year. Furthermore, sales in the MRO procurement service industry are generally higher in the second half of each calendar year than in the first half of a calendar year. Overall, the impact of seasonality on our business has been relatively mild but we have seen an upward trend and such a trend may continue in the future. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—Our business and results of operations are subject to seasonal fluctuations and unexpected interruptions.” Insurance We maintain insurance policies to safeguard against risks and unexpected events. We have purchased all risk property insurance covering our inventory and fixed assets such as equipment, furniture and office facilities. We maintain public liability insurance for our business activities at three locations. We also provide social security insurance including pension insurance, unemployment insurance, work-related injury insurance, maternity insurance and medical insurance for our employees. We do not maintain business interruption insurance, nor do we maintain product liability insurance or key-man life insurance. 80 Table of Contents Corporate Social Responsibility Corporate social responsibility has been central to how we do business. We believe our continued growth rests on integrating social values into our business, starting with operating with integrity in all we do and extending to serving the community at large in China. We have established various corporate social responsibility initiatives to give back to the communities and to create value for the society. Environmental protection initiatives. We place great emphasis on environmental protection to echo the government’s advocacy in promoting ESG (environmental, social and governance) issues. By providing a set of guidelines, we hold ourselves to high standards of code of conducts in environmental protection. Our initiatives in environmental protection include strictly controlling the use of paper and the temperature of air conditionings, arranging vehicles for business trips in a more cost-effective way, and using environmentally friendly office supplies. For example, we have been phasing out the fossil-fuel vehicles from our fleet and putting new energy vehicles into more use. We also replaced traditional lighting with high power consumption with more energy-saving LED light bulbs in our offices and warehouses. We keep sustainability criteria as an integral part of our supplier selection process. As a part of this process, we will consider the potential suppliers’ carbon emission and climate related impacts. Depending on our business relationship with the suppliers, we may tailor our measures to individual suppliers by, for example, incorporating specific contractual clauses, requesting proof of compliance or flagging them for our onsite visits, to ensure they share a consistent sustainability vision with us. Corporate Philanthropy. We have also participated in various charitable initiatives including making donations to educational institutions, cities and regions damaged by natural disasters, projects for rural areas revitalization, public safety facilities and charity foundations. Regulation This section sets forth a summary of the significant laws, rules and regulations that affect our business activities in Chinese mainland and our shareholders’ rights to receive dividends and other distributions from us. Regulations Related to Foreign Investment The establishment, operation and management of corporate entities in Chinese mainland, including foreign-invested companies, are subject to the PRC Company Law, which was issued by the Standing Committee of the National People’s Congress on December 29, 1993. The PRC Company Law was last amended on December 29, 2023, with effect from July 1, 2024. Pursuant to the latest PRC Company Law, shareholders of a company must fully pay in their subscribed registered capital within five years from the date of establishment of this company, and companies established before July 1, 2024 must gradually adjust their capital contribution to meet this new requirement. Unless otherwise provided in the Chinese mainland’s foreign investment laws, the provisions of the PRC Company Law shall prevail. Investments in Chinese mainland by foreign investors and foreign-invested enterprises are regulated by the Catalog of Industries in which Foreign Investment is Encouraged (2022 edition), which became effective on January 1, 2023, and the Special Administrative Measures for Foreign Investment Access (Negative List 2024), or the 2024 Negative List, which became effective on November 1, 2024. The establishment of wholly foreign-owned enterprises is generally allowed in industries not included in the 2024 Negative List. Industries not listed in the 2024 Negative List are generally open to foreign investments unless specifically restricted by other applicable Chinese regulations. Under the 2024 Negative List, foreign equity in companies providing value-added telecommunications services, excluding e-commerce, domestic multi-party communications, data collection and transmission services, and call centers, should not exceed 50%. As of the date of this annual report, we are not aware of any of our engagement in business that are prohibited in the 2024 Negative List. Please see “Item 3. Key Information-D. Risk Factors-Risks Related to Our Business and Industry-Failure to obtain, renew, or retain licenses, permits or approvals may affect our ability to conduct or expand our business” for more details and relevant risks. 81 Table of Contents The establishment procedures, filing and approval procedures, registered capital requirements, foreign exchange restrictions, accounting practices, taxation, and labor matters of a wholly foreign-owned enterprise are governed by the PRC Foreign Investment Law, which became effective on January 1, 2020. The PRC Company Law and the PRC Partnership Enterprise Law generally govern the organization of a foreign-invested enterprise. The PRC Foreign Investment Law mainly stipulates four forms of foreign investments: (i) a foreign investor, individually or collectively with other investors, establishes a foreign-invested enterprise within Chinese mainland; (ii) a foreign investor acquires stock shares, equity shares, interests in assets, or other like rights and interests of an enterprise within Chinese mainland; (iii) a foreign investor, individually or collectively with other investors, invests in a new project within Chinese mainland; and (iv) foreign investors invest in Chinese mainland through any other methods under laws, administrative regulations, or provisions prescribed by the State Council. Under the PRC Foreign Investment Law, foreign investment is accorded pre-admission national treatment, which means that treatment given to foreign investors and their investments shall not be less favorable than those given to domestic investors and their investments, except where a foreign investment falls under the 2024 Negative List. It also provides several protective rules and principles for foreign investors and their investments in the Chinese mainland, including foreign investors’ funds being freely transferred out and into the territory of the PRC through the entire life cycle from the entry to the exit of foreign investment, a comprehensive system to guarantee fair competition among foreign-invested enterprises and domestic enterprises to be established, and prohibition of the state to expropriate any foreign investment except under special circumstances. In addition, the PRC Foreign Investment Law subjects foreign investors and foreign-invested enterprises to legal liabilities for failing to report their investment information in accordance with the requirements of an information reporting system to be established. It also provides that foreign-invested enterprises established according to the previous laws regulating foreign investment before the PRC Foreign Investment Law came into effect may maintain their structure and corporate governance within five years after the implementation of the PRC Foreign Investment Law. This means that foreign-invested enterprises may be required to adjust their structure and corporate governance in accordance with the PRC Company Law and other laws and regulations governing the corporate governance. On December 26, 2019, the State Council promulgated the Implementation Regulations for the PRC Foreign Investment Law, which became effective on January 1, 2020. The Implementation Regulations for the PRC Foreign Investment Law emphasizes the promotion of foreign investment and refines specific measures. On December 26, 2019, the Supreme People’s Court issued an Interpretation on Several Issues Concerning the Application of the PRC Foreign Investment Law, which also came into effect on January 1, 2020. The interpretation applies to any contractual dispute arising from the acquisition of rights and interests by a foreign investor through gift, division of property, merger of enterprises, and division of enterprises. On December 30, 2019, the Ministry of Commerce and the State Administration for Market Regulation jointly issued the Measures on Reporting of Foreign Investment Information. On December 31, 2019, the Ministry of Commerce issued the Announcement on Matters Relating to Foreign Investment Information Reporting, which emphasized the information reporting requirements provided by the Measures on Reporting of Foreign Investment Information and stipulated the forms for information reporting. On December 19, 2020, the National Development and Reform Commission and the Ministry of Commerce jointly issued the Measures for the Security Review of Foreign Investment, which became effective on January 18, 2021. The measures stipulate rules for foreign investment that is subject to security review. According to the measures, procedures will be established for organizing, coordinating and guiding the security review of foreign investments, and the office in charge of the security review will be set up under the National Development and Reform Commission and led by the National Development and Reform Commission and the Ministry of Commerce. Furthermore, the measures provide that, if foreign investors or relevant parties in Chinese mainland intend to invest in crucial information technology and internet products and services, or in crucial financial services, or in other crucial fields which relate to national security, they shall apply to the office in advance for a security review. For more details and relevant risks, please see “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—The M&A Rules and certain other PRC regulations may make it more difficult for us to pursue growth through acquisitions.” 82 Table of Contents Regulations on Chemical Industry Regulations on the Safety Management of Hazardous Chemicals Under the Regulations on the Safety Management of Hazardous Chemicals, which was promulgated by the State Council and was last amended on December 6, 2024, enterprises engaged in production, storage, usage, operation and transportation of hazardous chemicals are required to obtain permits and meet the safety conditions under laws, administrative regulations, national standards and industrial standards. An enterprise that engages in the operations of hazardous chemicals must obtain an operation license for hazardous chemicals, and it is not allowed to purchase hazardous chemicals from any entity which is unlawfully engaged in the production or business operations of hazardous chemicals, or operate hazardous chemicals without the chemical safety technical instructions or chemical safety labels. On December 27, 2025, the Standing Committee of the National People’s Congress passed the Law of the PRC on the Safety of Hazardous Chemicals, which is enacted to strengthen the safety management of hazardous chemicals, prevent and reduce accidents, and safeguard people’s lives and property as well as ecological environment. It shall enter into force on May 1, 2026. Regulations on the Operation Permit of Hazardous Chemicals According to the Administrative Measures of the Operation Permit of Hazardous Chemicals, which was issued by the State Administration of Work Safety (currently known as the Ministry of Emergency Management) and was last amended on July 1, 2015, an enterprise engaged in the business operations of hazardous chemicals must obtain an operation permit for hazardous chemicals. To obtain this permit, an applicant must meet all the statutory requirements on premises to operate and store hazardous chemicals, operation and storage standards, special staff training, safety management system and safety operation protocols, and emergency rescue plan. When an operation permit for hazardous chemicals holder modifies its enterprise name, principal person in charge, registered address or hazardous chemical storage facilities and monitoring measures, it must, within 20 business days from the date of modification, file a written application for modification with the issuing agency for a new operation permit. For our business operations of hazardous chemicals, we have obtained the required permits according to the foregoing rules. Regulations on the Operation of Precursor Chemicals Precursor chemicals refer to certain chemicals that can be used in the manufacture of narcotic drugs. The production, distribution, purchase, transportation, import and export of precursor chemicals in Chinese mainland are regulated by Regulation on the Administration of Precursor Chemicals adopted by the State Council, which became effective on November 1, 2005 and was last amended on September 18, 2018, and a catalogue of precursor chemicals which is divided into three categories: Category I covers the major materials to produce narcotic drugs, and Categories II and III cover the chemical auxiliary substances to produce narcotic drugs. To operate Category I pharmaceutical precursor chemicals, an enterprise needs to apply for an operating permit with the local counterparts of government’s drug administration department; and to operate Category I non-pharmaceutical precursor chemicals, an enterprise needs to apply for an operating permit with the local counterparts of government’s administration of work safety department of applicable level. An operator of Categories II or III precursor chemicals needs to make filings regarding the category, quantity and major transportation flow of the precursor chemicals that it operates to local counterparts of government’s administration of work safety department within 30 days from the commencement of its operation. For our business operations of precursor chemicals, we have obtained required record-filing certificates according to the foregoing rules. Regulations on the Operation of Non-Pharmaceutical Precursor Chemicals According to the Measures for the Licensing for Production and Operation of Non-Pharmaceutical Precursor Chemicals, which was promulgated by the Ministry of Emergency Management and became effective on April 15, 2006, an enterprise must obtain a license to produce or operate non-pharmaceutical precursor chemicals of Catalogue I, and make filings with local counterparts of government’s administration of work safety department to produce or operate non-pharmaceutical precursor chemicals of Catalogue II or III. Production or operation of non-pharmaceutical precursor chemicals without proper license or filing may lead to fines, confiscation of illegal gains, revocation of business license, and non-acceptance of future application for license or filings. For our business operations of non-pharmaceutical precursor chemicals, we have obtained required record-filing certificates according to the foregoing rules. 83 Table of Contents Regulation Related to Business Activities involving Medical Devices The Regulation on the Supervision and Administration of Medical Devices, which became effective on April 1, 2000 and was last amended on December 6, 2024, regulates the research and development, production, operation and use of medical devices in Chinese mainland. Medical devices are divided into three classes based on risk levels. Class I medical devices have low risks, whose safety and effectiveness can be ensured through routine administration. Class II medical devices have moderate risks, which are strictly controlled and administered to ensure their safety and effectiveness. Class III medical devices have relatively high risks, which are strictly controlled and administered through special measures to ensure their safety and effectiveness. The Measures for the Supervision and Administration of the Operation of Medical Devices, which became effective on October 1, 2014 and was last amended on May 1, 2022, regulates the business activities involving medical devices in Chinese mainland. Business activities involving medical devices are regulated in accordance with risk levels of the medical devices. No filing or license is required for business activities involving Class I medical devices. Filing is required for business activities involving Class II medical devices. A license is required for business activities involving Class III medical devices. For our business activities involving medical devices, we have obtained required permits according to the foregoing rules. Regulation Related to Product Quality and Consumers Protection According to the PRC Civil Code, which became effective on January 1, 2021, in the event of damages arising from a defective product, the victim may seek compensation from either the manufacturer or seller of such a product. If the defect is caused by the seller, the manufacturer shall be entitled to seek reimbursement from the seller upon compensation of the victim. According to the PRC Product Quality Law, which was promulgated by the Standing Committee of the National People’s Congress, became effective on September 1, 1993 and was last amended on December 29, 2018, provides that products for sale must satisfy safety standards and sellers must adopt measures to maintain the quality of products for sale. Sellers are not allowed to not mix impurities or imitations into products, sell counterfeit goods as genuine ones, or defective products as good ones or substandard products as standard ones. For sellers, any violation of state or industrial standards for health and safety or other requirements may result in civil liabilities and administrative penalties, such as compensation for damages, fines, confiscation of the proceeds from the sales of products illegally manufactured or sold, and revoking business license. Severe violations may subject the responsible individual or enterprise to criminal liabilities. According to the PRC Consumers Rights and Interests Protection Law, which became effective on January 1, 1994 and was last amended on March 15, 2014, business operators should guarantee that the products and services they provide satisfy the requirements for personal or property safety, and provide consumers with authentic information about the quality, function, usage and term of validity of the products or services. Where a business operator has discovered any defect in the goods or services that may endanger personal or property safety, the business operator must immediately report to the administrative authorities and notify consumers, and adopt measures such as suspension of selling, alert, recall, decontamination, destruction and suspension of manufacturing or services. The business operator bears necessary expenses due to recalls of goods incurred by consumers. If a business operator deceives consumers or knowingly sells substandard or defective products, it should compensate consumers for their losses and pay additional damages equal to three times the price of the goods or services. Interim Measures for Seven-day Unconditional Return of Online Purchased Goods, which became effective on March 15, 2017 and was last amended on October 23, 2020, further clarifies the scope of consumers’ rights to make returns without a reason, the standard of “good condition,” and return procedures. 84 Table of Contents Regulation Related to Value-Added Telecommunications Services Regulation on Value-Added Telecommunications Services The primary regulation governing telecommunications services is PRC Telecommunications Regulations, which were promulgated by the State Council, became effective on September 25, 2000 and was last amended on February 6, 2016. Under the PRC Telecommunications Regulations, a telecommunications service provider is required to obtain an operating license from the Ministry of Industry and Information Technology or its provincial counterparts, prior to the commencement of its operations. Otherwise, the operator might be subject to sanctions including corrective orders and warnings from the competent administration authority, fines and confiscation of illegal gains. In case of serious violations, the operator’s websites may be ordered to be closed. The PRC Telecommunications Regulations categorize all telecommunication services in Chinese mainland as either basic telecommunications services or value-added telecommunications services, and value-added telecommunications services are defined as telecommunications and information services provided through public network infrastructures. The Administrative Measures for Telecommunications Business Operating License, which was promulgated by the Ministry of Industry and Information Technology, became effective on April 10, 2009 and was last amended on September 1, 2017, sets forth more specific requirements regarding the types of licenses required to operate value-added telecommunications services, the qualifications and procedures for obtaining the licenses and the administration and supervision of these licenses. Pursuant to these administrative measures, a commercial operator of value-added telecommunication services must first obtain a Value-Added Telecommunication License. These measures also provide that an operator providing value-added services in multiple provinces is required to obtain a cross-region Value-Added Telecommunication License, whereas an operator providing value-added services in one province is required to obtain an intra-provincial Value-Added Telecommunication License. Pursuant to these administrative measures, any telecommunication services operator must conduct telecommunication business pursuant to the type and within the scope of business as specified in its Value-Added Telecommunication License. Pursuant to the Catalog of Telecommunications Services, which was promulgated by the Ministry of Information Industry (the predecessor of the Ministry of Industry and Information Technology), became effective on April 1, 2003 and was last amended on June 6, 2019, both online data processing and transaction processing services and internet information services fall within Class II value-added telecommunication services. The “online data processing and transaction processing services” refer to the online data processing and transaction processing services provided for users through public communication networks or the internet, using various kinds of data and transaction processing application platforms connected to various kinds of public communication networks or the internet. A telecommunication services operator engaged in online data processing and transaction processing services is required to obtain a Value-Added Telecommunication License for online data processing and transaction processing services. The “information services” refer to the information services provided for users via the public communication network or the internet and by the information collection, development, processing and construction of information platforms. The Administrative Measures on Internet Information Services, which was promulgated by the State Council, became effective on September 25, 2000 and was last amended on December 6, 2024, sets out guidelines on the provision of internet information services and classifies internet information services into commercial internet information services and non-commercial internet information services. Pursuant to these administrative measures, commercial internet information services refer to the provision with charge of payment of information or website production or other service activities to online users via the internet, and non-commercial internet information services refer to the provision with free of charge of information that is in the public domain and openly accessible to online users via the internet. These administrative measures also require that a provider of commercial internet information services shall obtain a Value-Added Telecommunication License for internet information services, and further require that a provider of non-commercial internet information services shall carry out record-filing procedures with the provincial level counterparts of the Ministry of Industry and Information Technology. For more details and relevant risks, please see “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—We may be adversely affected by the complexity, uncertainties and changes in PRC regulation of internet-related businesses and companies, and any lack of requisite approvals, licenses or permits applicable to our business may have a material adverse effect on our business and results of operations.” 85 Table of Contents Regulation on Foreign Investment Restriction on Value-Added Telecommunications Services Pursuant to the Provisions on Administration of Foreign-Invested Telecommunications Enterprises promulgated by the State Council on December 11, 2001 and last amended on May 1, 2022, the ultimate foreign equity ownership in a value-added telecommunications services provider may not exceed 50%. According to the Notice on Lifting the Restriction to Foreign Shareholding Percentage in Online Data Processing and Transaction Processing Business (Operational E-commerce) promulgated by the Ministry of Industry and Information Technology on June 19, 2015, foreign investors are allowed to hold up to 100% of the equity interest in the online data processing and transaction processing business (operational e-commerce) in Chinese mainland, while other requirements provided by the Provisions on Administration of Foreign-Invested Telecommunications Enterprises still apply. The 2024 Negative List allows foreign investors to hold more than 50% equity interests in a value-added telecommunications service provider engaging in domestic multiparty communication, storage-and-forward and call center businesses. The predecessor to the Ministry of Industry and Information Technology issued the Circular of the Ministry of Information Industry on Strengthening the Administration of Foreign Investment in Value-added Telecommunications Business, which became effective on July 13, 2006 and pursuant to which a foreign investor in the Chinese mainland’s telecommunications service industry must establish a foreign-invested enterprise and apply for a telecommunications business operations license. This circular further requires that (i) Chinese domestic telecommunications business enterprises must not lease, transfer or sell a telecommunications businesses operation license to a foreign investor through any form of transaction or provide resources, offices and working places, facilities or other assistance to support the illegal telecommunications services operations of a foreign investor; (ii) value-added telecommunications enterprises or their shareholders must directly own the domain names and trademarks used by such enterprises in their daily operations; (iii) each value-added telecommunications enterprise must have the necessary facilities for its approved business operations and maintain such facilities in the regions covered by its license; and (iv) all providers of value-added telecommunications services are required to maintain network and internet security in accordance with the standards set forth in the PRC regulations. If a license holder fails to comply with the requirements in the circular and cure such non-compliance thereafter, the Ministry of Industry and Information Technology or its local counterparts have the discretion to take measures against such license holder, including revoking its license for value-added telecommunications business. For more details and relevant risks, please see “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—We may be adversely affected by the complexity, uncertainties and changes in PRC regulation of internet-related businesses and companies, and any lack of requisite approvals, licenses or permits applicable to our business may have a material adverse effect on our business and results of operations.” Regulations Related to Mobile Internet Applications In addition to the telecommunications regulations and the other regulations discussed above, the provision of commercial internet information services on mobile internet apps is also regulated by the Administrative Provisions on Mobile Internet Applications Information Services, which was promulgated by the Cyberspace Administration of China, became effective on August 1, 2016 and was last amended on June 14, 2022. Pursuant to these administrative provisions, where an app provider provides any user with the information releasing, instant messaging and other services, it must verify the user’s mobile phone number, identity card number, unified social credit codes or other identity information. App providers shall not, for any reason, force users to consent to personal information processing, or refuse users to use their basic functions and services on the ground that users do not agree to providing unnecessary personal information. If an app provider violates the regulations and the service agreements, the application distribution platform must take measures to stop the violations, including giving a warning, suspending the service, disabling the app from the platform, keeping a record of the incident and reporting the incident to the governmental authorities. Regulations on Advertising Services The Standing Committee of the National People’s Congress enacted the PRC Advertising Law on October 27, 1994, which was last amended on April 29, 2021. The PRC Advertising Law increases the potential legal liability of advertising services providers and strengthens regulations of false advertising. The PRC Advertising Law sets forth certain content requirements for advertisements including, among other things, prohibitions on false or misleading content, superlative wording, socially destabilizing content or content involving obscenities, superstition, violence, discrimination or infringement of the public interest. 86 Table of Contents The State Administration for Market Regulation issued the Administrative Measures for Internet Advertising, which came into effect on May 1, 2023. The PRC Advertising Law and the Administrative Measures for Internet Advertising provide that online advertisements may not affect users’ normal use of internet and internet pop-up ads must display a “close” sign prominently and ensure one-click closing of the pop-up windows. Online advertisements must be recognizable by consumers as advertisements. With regard to the display of products or services in an order determined by competitive bidding, the publisher of such ordered information shall indicate conspicuously the word “advertisement” to distinguish them from information that result from natural searches. Except for circumstances where advertisements are prohibited from being published either directly or in a disguised form by laws and administrative regulations, advertisement publishers shall indicate conspicuously the word “advertisement” for goods or services promoted in the form of knowledge sharing, experience sharing, product or service evaluation with shopping links and other purchase methods attached. Regulation Related to Internet Security and Personal Information Protection Regulations Related to Internet Security The Decision in Relation to Protection of Internet Security, which was enacted by the Standing Committee of the National People’s Congress on December 28, 2000 and was last amended on August 27, 2009, provides that, among other things, the following activities conducted through the internet are subject to criminal punishment if any of them constitutes a crime under PRC laws: (i) hacking into a computer or system of strategic importance; (ii) intentionally inventing and spreading destructive programs such as computer viruses to attack the computer system and the communications network, thus damaging the computer system and the communications networks; (iii) violating national regulations, discontinuing the computer network or the communications service without authorization; (iv) leaking state secrets; (v) spreading false commercial information; and (vi) infringing intellectual property rights through internet. The Provisions on Technological Measures for Internet Security Protection, which was promulgated by the Ministry of Public Security and became effective on March 1, 2006, requires internet service providers and organizations that use interconnection to implement technical measures for internet security protection, including technical measures for preventing any matter or act that may endanger network security, such as computer viruses, invasion, and attacks to or destruction of the network. All internet access service providers are required to take measures to keep a record of and preserve user registration information. Under these measures, value-added telecommunications services license holders must regularly update information security and content control systems for their websites and must also report any public dissemination of prohibited content to local public security authorities. If a value-added telecommunications services license holder violates these measures, the Ministry of Public Security and the local security bureaus may revoke its operating license and shut down its websites. The Standing Committee of the National People’s Congress promulgated the PRC Cybersecurity Law, which became effective on June 1, 2017 and is applicable to the construction, operation, maintenance and use of networks as well as the supervision and administration of cybersecurity in Chinese mainland. The PRC Cybersecurity Law defines “networks” as systems that are composed of computers or other information terminals and facilities used for the purpose of collecting, storing, transmitting, exchanging and processing information in accordance with certain rules and procedures. “Network operators,” who are broadly defined as owners and administrators of networks and network service providers, are subject to various security protection-related obligations, including: (i) complying with security protection obligations in accordance with tiered cybersecurity system’s protection requirements, which include formulating internal security management rules and manual, appointing cybersecurity responsible personnel, adopting technical measures to prevent computer viruses and cybersecurity endangering activities, adopting technical measures to monitor and record network operation status and cybersecurity events; (ii) formulating cybersecurity emergency response plans, timely handling security risks, initiating emergency response plans, taking appropriate remedial measures and reporting to regulatory authorities; and (iii) providing technical assistance and support to public security and national security authorities for protection of national security and criminal investigations in accordance with the law. Network service providers who do not comply with the PRC Cybersecurity Law may be subject to fines, suspension of their businesses, shutdown of their websites and revocation of their business licenses. On October 28, 2025, the Standing Committee of the National People’s Congress issued the Decision on Amending the PRC Cybersecurity Law, which became effective on January 1, 2026. The amended PRC Cybersecurity Law enhanced the punishment against violations of the network operation security obligation, the critical information infrastructure operation security obligation, and the network information security obligation by increasing the upper limits of the fines and imposing additional penalties. The amended PRC Cybersecurity Law also enhanced the punishment against personal information infringement by referencing to the punishment under the PRC Personal Information Protection Law and other applicable laws. 87 Table of Contents On June 10, 2021, the Standing Committee of the National People’s Congress adopted the PRC Data Security Law, which became effective on September 1, 2021. The PRC Data Security Law is applicable to both data processing activities carried out within the territory of Chinese mainland and data processing activities carried out outside Chinese mainland that may harm the national security, public interests or the legitimate rights and interests of citizens or organizations of Chinese mainland. The PRC Data Security Law provides that the state shall establish a classified and graded data protection system. The PRC Data Security Law also imposes general and comprehensive obligations on entities and individuals when carrying out data processing activities, including, but not limited to, establishing whole-process data security management systems, organizing data security trainings, implementing necessary measures to ensure data security, strengthening risk monitoring, notifying users and authorities of security incidents, and the conduction of regular risk assessments. The PRC Data Security Law also provides that the government shall establish data security review mechanism for data processing activities that affect or may affect national security. Violation of the PRC Data Security Law may cause such administrative penalties such as warnings, fines, confiscation of illegal gains, suspension of business and revocation of licenses and civil and criminal liabilities. On September 24, 2024, the State Council published the Regulation on the Administration of Cyber Data Security, which provides that where data processors conduct network data processing activities that affect or may affect national security, they shall apply for a national security review in accordance with relevant national regulations. In addition, this Regulation requires that data processors processing important data shall conduct an annual risk assessment for network data processing activities and submit the risk assessment report to the competent authorities at or above the provincial level. On December 28, 2021, the Cyberspace Administration of China and certain other PRC governmental authorities jointly released the Revised Cybersecurity Review Measures, which became effective on February 15, 2022. Pursuant to these measures, (i) operators of critical information infrastructure that intend to purchase network products and services and online platform operators that conduct data processing activities, in each case that affect or may affect national security, and (ii) operators of network platforms seeking listing abroad that are in possession of more than one million users’ personal information must apply for a cybersecurity review. These measures also set out certain general factors which would be the focus in assessing the national security risk during a cybersecurity review, including, without limitation, risks of influence, control or malicious use of critical information infrastructure, core data, important data or large amounts of personal information by foreign governments in relation to listing abroad. On December 31, 2021, the Cyberspace Administration of China, the Ministry of Industry and Information Technology, the Ministry of Public Security and the State Administration for Market Regulation jointly made public the Administrative Provisions on Algorithm Recommendation of Network Information Services, which became effective on March 1, 2022. These administrative provisions are applicable to providers of internet information service leveraging algorithmic recommendation technologies, which include the use of algorithmic technologies such as generation and synthesis, personalized push, sorting and selection, retrieval and filtering, and scheduling decision-making to provide information to users. These administrative provisions also set out obligations on such provides to protect the interests and rights of the users, especially the interests and rights of minors, elders and workers. Regulations Related to Personal Information Protection Pursuant to the Decision on Strengthening the Protection of Online Information, which was issued by the Standing Committee of the National People’s Congress and came into effect on December 28, 2012, and the Order for the Protection of Telecommunication and Internet User Personal Information, which was issued by the Ministry of Industry and Information Technology and came into effect on September 1, 2013, any collection and use of a user’s personal information must be legal, reasonable and necessary, and must be subject to the consent of the user and limited to specified purposes, methods and scopes. An internet information service provider must also keep such information strictly confidential, and is further prohibited from divulging, tampering with or destroying any such information, or selling or providing such information to other parties. An internet information service provider is required to take technical and other measures to prevent the collected personal information from any unauthorized disclosure, damage or loss. Any violation of these laws and regulations may subject the internet information service provider to warnings, fines, confiscation of illegal gains, revocation of licenses, cancelation of filings, closedown of websites or even criminal liabilities. 88 Table of Contents With respect to the security of information collected and used by mobile apps, pursuant to the Announcement of Conducting Special Supervision against the Illegal Collection and Use of Personal Information by Apps, which was issued on January 23, 2019, app operators shall collect and use personal information in compliance with the PRC Cybersecurity Law and shall be responsible for the security of personal information obtained from users and take effective measures to strengthen the personal information protection. Furthermore, app operators must not force their users to make authorization by means of bundling, suspending installation or in other default forms and should not collect personal information in violation of laws, regulations or breach of user agreements. Such regulatory requirements were emphasized by the Notice on the Special Rectification of Apps Infringing upon User’s Personal Rights and Interests, which was issued by Ministry of Industry and Information Technology on October 31, 2019. The Cyberspace Administration of China, the Ministry of Industry and Information Technology, the Ministry of Public Security and the State Administration for Market Regulation jointly issued the Methods of Identifying Illegal Acts of Apps to Collect and Use Personal Information, which took into effect on November 28, 2019. This regulation further illustrates certain commonly seen illegal practices of apps operators in terms of personal information protection, including (i) failure to publicize rules for collecting and using personal information; (ii) failure to expressly state the purpose, manner and scope of collecting and using personal information; (iii) collection and use of personal information without consent of users of such App; (iv) collecting personal information irrelevant to the services provided by such app in violation of the principle of necessity; (v) provision of personal information to others without users’ consent; (vi) failure to provide the function of deleting or correcting personal information as required by laws; and (vii) failure to publish information such as methods for complaints and reporting. Any of the following acts of an app operator will constitute collection and use of personal information without consent of users: (i) collecting an user’s personal information or activating the permission for collecting any user’s personal information without obtaining such user’s consent; (ii) collecting personal information or activating the permission for collecting the personal information of any user who explicitly refuses such collection, or repeatedly seeking for user’s consent such that the user’s normal use of such app is disturbed; (iii) any user’s personal information which has been actually collected by the app operator or the permission for collecting any user’s personal information activated by the app operator is beyond the scope of personal information which such user authorizes such app operator to collect; (iv) seeking for any user’s consent in a non-explicit manner; (v) modifying any user’s settings for activating the permission for collecting any personal information without such user’s consent; (vi) using users’ personal information and any algorithms to directionally push any information, without providing the option of non-directed pushing such information; (vii) misleading users to permit collecting their personal information or activating the permission for collecting such users’ personal information by improper methods such as fraud and deception; (viii) failing to provide users with the means and methods to withdraw their permission of collecting personal information; and (ix) collecting and using personal information in violation of the rules for collecting and using personal information promulgated by such app operator. Pursuant to the Notice of the Supreme People’s Court, the Supreme People’s Procuratorate and the Ministry of Public Security on Legally Punishing Criminal Activities Infringing upon the Personal Information of Citizens, which became effective on April 23, 2013, and the Interpretation of the Supreme People’s Court and the Supreme People’s Procuratorate on Several Issues regarding Legal Application in Criminal Cases Infringing upon the Personal Information of Citizens, which became effective on June 1, 2017, the following activities may constitute the crime of infringing upon a citizen’s personal information: (i) providing a citizen’s personal information to specified persons or releasing a citizen’s personal information online or through other methods in violation of the provisions; (ii) providing legitimately collected information relating to a citizen to others without such citizen’s consent (unless the information is processed, not traceable to a specific person and not recoverable); (iii) collecting a citizen’s personal information in violation of applicable rules and regulations when performing a duty or providing services; or (iv) collecting a citizen’s personal information by purchasing, accepting or exchanging such information in violation of applicable rules and regulations. 89 Table of Contents On August 20, 2021, the Standing Committee of the National People’s Congress adopted the PRC Personal Information Protection Law, which became effective on November 1, 2021. The PRC Personal Information Protection Law is intended to protect personal information rights and interests, regulate activities of processing personal information and promote the reasonable use of personal information. The PRC Personal Information Protection Law applies to personal information processing activities within Chinese mainland, as well as processing activities outside Chinese mainland that are purposed to provide any product or service to any natural person within Chinese mainland or analyze or assess the behavior of that natural person within Chinese mainland. The PRC Personal Information Protection Law sets out the basic rules for processing personal information and the rules for cross-border transfer of personal information, as well as detailed requirements on the obligations and responsibilities of personal information processors, including, but not limited to, (i) obtaining consents for personal information processing, (ii) informing the individuals of the rules, purposes and impacts of personal information processing and how the individual can exercise their rights, (iii) reaching agreements with entrusted processors in terms of personal information processing, protection measures, and rights and obligations, and overseeing the data processing activities thereof; (iv) ensuring that the individuals have the channel to exercise their various personal information rights and respond to these rights; and (v) conducting personal information protection impact assessment under certain scenarios. Violation of the PRC Personal Information Protection Law may cause administrative penalties such as warnings, fines, confiscation of illegal gains, suspension of providing service and revocation of licenses, and civil and criminal liabilities. In addition, pursuant to the PRC Civil Code, the collection, storage, use, process, transmission, provision and disclosure of personal information should follow the principles of legitimacy, properness and necessity. For more details and related risks, please see “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—Failure or perceived failure to comply with existing or future laws and regulations related to personal information protection could lead to liabilities, administrative penalties or other regulatory actions, which could negatively affect our operating results and business.” Regulation Related to E-Commerce To regulate the e-commerce industry, on August 31, 2018, the Standing Committee of the National People’s Congress promulgated the PRC E-Commerce Law, which became effective on January 1, 2019. The PRC E-commerce Law imposes a series of requirements on e-commerce platform operators. Pursuant to the PRC E-commerce Law, an e-commerce platform operator shall respect and equally protect the legitimate interests of the consumers and provide options to consumers without targeting at their personal characteristics. The PRC E-commerce Law requires an e-commerce platform operator to, among other things, verify and register the identities, addresses, contacts and licenses of merchants who apply to provide goods or services on its platform, establish registration archives and update information on a regular basis; submit the identification information and tax-related information of the merchants on its platform to governmental authorities as required and remind the merchants to complete the registration with the governmental authorities; establish intellectual property rights protection rules, and take necessary measures against infringement of intellectual property rights by merchants on its platform. In addition, an e-commerce platform operator is not allowed to impose unreasonable restrictions over or add unjustified conditions to transactions concluded on its platform by merchants, or charge merchants operating on its platform any unreasonable fees. An e-commerce platform operator shall assume joint liabilities with the third-party merchants on its platform and may be subject to warnings and fines up to RMB2,000,000 where the operator fails to take necessary measures when it knows or should have known that the products or services provided by the third-party merchants on its platform do not meet the personal or property safety requirements or third-party merchants’ other acts may infringe on the lawful rights and interests of the consumers or any intellectual property rights of any other third parties. 90 Table of Contents According to the Interim Measures for Seven-day Unconditional Return of Online Purchased Goods, customers are entitled to return goods without reason, except for customized goods, fresh and perishable goods, audio-visual products, computer software and other digital products which are downloaded online or whose packages have been opened by consumers, and delivered newspapers or periodicals, and such other merchandize which is, as confirmed by the consumer at the time of purchase, not fit for the return policy by nature. Where the goods returned are intact, the online seller shall refund to the consumer the payments made for the goods within seven days upon receipt thereof. On June 12, 2019, the State Post Bureau and the Ministry of Commerce promulgated the Guiding Opinions on Regulating the Interconnection and Sharing of Data between Express Delivery and E-commerce Industries, which provides that, if e-commerce participants agree to deliver commodities through express delivery, an e-commerce platform operator shall provide the necessary delivery data to an express delivery service provider through the agreed means of data transmission. The e-commerce platform operator cannot, by restricting the interconnection and sharing of data, hinder the e-commerce participants from freely choosing the express delivery service. When collecting and sharing user information, e-commerce platform operators engaged in express delivery business must abide by the provisions of laws and administrative regulations on information protection, and the user information cannot be used for purposes unrelated to the delivery service they provide. On March 15, 2021, the State Administration for Market Regulation issued the Administration Measures for the Supervision of Online Transactions, which became effective on May 1, 2021 and was latest amended on March 18, 2025, providing specific rules for the online transaction operators, such as clarifying the specific acts infringing consumers’ personal information in online transactions, elaborating the prohibited contents that may not be contained in the standard terms, notifications and statements used by the online transaction operators, and measures to supervise sales of goods or provision of services through social network and live streaming. Furthermore, the Administration Measures for the Supervision of Online Transactions strengthen the protection of consumer rights, for example, by requiring that e - commerce operators providing auto - renewable subscription services remind consumers in a conspicuous manner before each automatic renewal to allow consumers to make the decision. Regulation Related to Intellectual Property Patent Patents in Chinese mainland are principally protected under the PRC Patent Law, which became effective on April 1, 1985 and was last amended on June 1, 2021, and the Implementation Rules of the PRC Patent Law, which was promulgated by the State Council on June 15, 2001 and last amended on January 20, 2024. The Chinese patent system adopts a “first-to-file” principle. To be patentable, an invention or a utility model must meet three criteria: novelty, inventiveness and practicability. The duration of a patent right is 10 years, 15 years or 20 years from the date of application, depending on the type of patent right. Copyright Copyright in Chinese mainland, including copyrighted software, is principally protected under the PRC Copyright Law and related rules and regulations. Under the PRC Copyright Law, which became effective on June 1, 1991 and was last amended on June 1, 2021, the term of protection for copyrighted software is 50 years. The Regulation on the Protection of the Right to Communicate Works to the Public over Information Networks, which became effective on July 1, 2006 and was last amended on March 1, 2013, provides specific rules on fair use, statutory license, and a safe harbor for use of copyrights and copyright management technology and specifies the liabilities of various entities for violations, including copyright holders, libraries and internet service providers. The Computer Software Copyright Registration Measures, which was promulgated by the National Copyright Administration on April 6, 1992 and was last amended on February 20, 2002, regulates registrations of software copyright, exclusive licensing contracts for software copyright and assignment agreements. The National Copyright Administration that administers software copyright registration and the Copyright Protection Center of China, is designated as the software registration authority. The Copyright Protection Center of China shall grant registration certificates to the Computer Software Copyrights applicants which meet the requirements of both the Computer Software Copyright Registration Measures and the Computer Software Protection Regulations. 91 Table of Contents Trademark Registered trademarks in Chinese mainland are protected under the PRC Trademark Law, which became effective on March 1,1983 and was last amended on November 1, 2019, and related rules and regulations. Trademarks are registered with the Trademark Office of National Intellectual Property Administration under the State Administration for Market Regulation, formerly the Trademark Office under this administration. Where registration is sought for a trademark that is identical or similar to another trademark which has already been registered or given preliminary examination and approval for use in the same or similar category of commodities or services, the application for registration of such trademark may be rejected. Trademark registrations are effective for a renewable ten-year period, unless otherwise revoked. Trade Secrets According to the PRC Anti-unfair Competition Law, which was promulgated by the Standing Committee of the National People’s Congress in September 1993 and was last amended by the Standing Committee of the National People’s Congress on June 27, 2025 and came into effect on October 15, 2025, the term “trade secrets” refers to technical and business information that is unknown to the public, has utility, may create business interests or profits for its legal owners or holders, and is maintained as a secret by its legal owners or holders. Under the PRC Anti-unfair Competition Law, business persons are prohibited from infringing others’ trade secrets by: (i) obtaining the trade secrets from the legal owners or holders by any unfair methods such as theft, bribery, fraud, coercion, electronic intrusion, or any other illicit means; (ii) disclosing, using or permitting others to use the trade secrets obtained illegally under item (i) above; (iii) disclosing, using or permitting others to use the trade secrets, in violation of any contractual agreements or any requirements of the legal owners or holders to keep such trade secrets in confidence; or (iv) instigating, inducing or assisting others to violate a confidentiality obligation or to violate a rights holder’s requirements on keeping confidentiality of trade secrets, disclosing, using or permitting others to use the trade secrets of the rights holder. If a third party knows or should have known of the above-mentioned illegal conduct but nevertheless obtains, uses or discloses trade secrets of others, the third party may be deemed to have committed a misappropriation of the others’ trade secrets. The parties whose trade secrets are being misappropriated may petition for administrative corrections, and regulatory authorities may stop any illegal activities and fine infringing parties. Additionally, the Anti-unfair Competition Law prohibits platform operators from using data, algorithms, technology or platform rules to disrupt or impede the normal business operations of other operators and further specifies the prohibited behaviors, such as obtaining and using data legally held by other operators through fraud and other improper means, and abusing platform rules to carry out malicious transactions. Moreover, platform operators are required not to compel operators on their platforms to sell goods at prices below cost, thereby disrupting the order of fair competition. Failure to comply with the Anti-unfair Competition Law would subject business operators to various administrative penalties, such as imposition of fines, confiscation of illegal gains and an order to cease business activities, and payment of compensatory damages. Domain Name Domain names in Chinese mainland are protected under the Administrative Measures on Internet Domain Names, which was promulgated by the Ministry of Industry and Information Technology and became effective on November 1, 2017. Domain name registrations are handled through domain name service agencies established under the relevant regulations, and applicants become domain name holders upon successful registration. Regulations of Anti-counterfeiting According to the PRC Trademark Law, counterfeit or unauthorized production of the label of another person’s registered trademark, or sale of any label that is counterfeited or produced without authorization will be deemed as an infringement of the exclusive right to use a registered trademark. The infringing party will be ordered to cease infringement immediately, a fine may be imposed and the counterfeit goods will be confiscated. The infringing party may also be held liable for damages suffered by the owner of the intellectual property rights, which will be equal to the gains obtained by the infringing party or the losses suffered by the owner as a result of the infringement, including reasonable expenses incurred by the owner in connection with enforcing its rights. Under the PRC Civil Code, an Internet service provider may be subject to joint liability if it is aware that an Internet user is infringing upon the intellectual property rights of others through its Internet services, such as selling counterfeit products, and fails to take necessary measures to stop that activity. If an Internet service provider receives a notice from an infringed party regarding an infringement, the Internet service provider is required to take certain measures, including deleting, blocking and unlinking the infringing content, in a timely manner. 92 Table of Contents In addition, under the Administration Measures for the Supervision of Online Transactions, an operator of an online trading platform must adopt measures to ensure safe online transactions, protect consumers’ rights and prevent unfair competition. Please see “Item 4. Information on the Company—B. Business Overview—Intellectual Property” for further information about our intellectual properties. Regulations on Employment and Social Welfare Labor Law and Labor Contract Law The PRC Labor Law, which became effective on January 1, 1995 and was last amended on December 29, 2018, and its implementation rules provide that enterprises and institutions must establish and improve work safety and health system, strictly enforce national regulations and standards on work safety and health, and carry out work safety and health education for workers. Working safety and health facilities shall meet national standard. Enterprises and institutions shall provide workers with working safety and health conditions meeting national rules and standards on labor protection. The PRC Labor Contract Law, which became effective on January 1, 2008 and was last amended on July 1, 2013, primarily aims at regulating rights and obligations of employer and employee relationships, including the establishment, performance, and termination of labor contracts. Pursuant to the PRC Labor Contract Law, labor contracts must be executed in writing if labor relationships are to be or have been established between employers and employees. Employers are prohibited from forcing employees to work above certain time limits and employers must pay employees for overtime work in accordance with national regulations. In addition, wages must not be lower than local standards on minimum wages and must be paid to employees in a timely manner. Social Insurance As required under the Regulation of Insurance for Labor Injury implemented on January 1, 2004 and last amended on January 1, 2011, the Provisional Measures for Maternity Insurance of Employees of Corporations implemented on January 1, 1995, the Decisions on the Establishment of a Unified Program for Old-Aged Pension Insurance of the State Council issued on July 16, 1997, the Decisions on the Establishment of the Medical Insurance Program for Urban Workers of the State Council promulgated on December 14, 1998, the Unemployment Insurance Measures promulgated on January 22, 1999 and the PRC Social Insurance Law implemented on July 1, 2011 and last amended on December 29, 2018, employers are required to provide their employees in Chinese mainland with welfare benefits covering pension insurance, unemployment insurance, maternity insurance, work-related injury insurance, and medical insurance. These payments are made to local administrative authorities. Any employer that fails to make social insurance contributions may be ordered to rectify the non-compliance and pay the required contributions within a prescribed time limit and be subject to a late fee. If the employer still fails to rectify the failure to make the contributions within the prescribed time, it may be subject to a fine ranging from one to three times the amount overdue. 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 stipulates that the State Administration of Taxation is solely responsible for collecting social insurance premiums. As required by PRC law and regulations, we participate in various employee social security plans that are organized by municipal and provincial governments for our employees in Chinese mainland, including pension, unemployment insurance, childbirth insurance, work-related injury insurance and medical insurance. Housing Fund In accordance with the Regulations on the Administration of Housing Funds, which was promulgated by the State Council, became effective on April 3,1999 and was last amended on March 24, 2019, employers must register at the designated administrative centers and open bank accounts for depositing employees’ housing funds. Employers and employees are also required to pay and deposit housing funds, with an amount no less than 5% of the monthly average salary of the employee in the preceding year in full and on time. As required by PRC law and regulations, we participate in various employee social security plans that are organized by municipal and provincial governments for our employees in Chinese mainland, including the housing fund. 93 Table of Contents Labor Dispatch Pursuant to the PRC Labor Law and Interim Provisions on Labor Dispatch, which became effective on March 1, 2014, labor dispatch employment is a supplemental form, which can only be adopted for temporary, auxiliary or alternative job positions. Temporary positions are positions subsisting for no more than six months; auxiliary positions are positions of non-major business serving for major businesses; and alternative positions are positions that can be held by dispatched laborers for a certain period of time, during which the former laborers are temporarily out of their positions for reasons. An employer is required to strictly control the number of dispatched laborers not to exceed 10% of the total number of its labor force. We are required to comply with the foregoing rules with respect to our labor dispatch arrangements in Chinese mainland. Regulations Related to Land Use Regulation on Land Use Rights and Construction Projects The PRC Land Administration Law, which was issued by the Standing Committee of the National People’s Congress on January 1, 1999 and was last amended on January 1, 2020, and other Chinese mainland land laws stipulate that there are two kinds of land in Chinese mainland: (i) collectively owned land, which is normally owned by farmers or villages for agricultural use; and (ii) state-owned land, whose land use right is subdivided into allocated and granted land use rights. Allocated land use rights are granted by the Chinese government to an entity for a particular purpose (e.g., research, military, medical, etc.). These allocated rights are inferior to granted land use rights in that they must be used for specified purpose and cannot be transferred, leased or mortgaged. Granted land use rights, on the other hand, are paid for and can be used for commercial and industrial purposes. Land may be designated for commercial, industrial, residential or other purposes and may not be used for any non-designated purpose. The land authorities may impose administrative sanctions, including fines, injunction orders or even confiscation of the land use rights, for any breach of this provision. The term of land use rights varies depending on the designated purpose. A land user may extend the term by entering into a contract to extend the term and paying an additional land grant fee to the land authorities. Upon the execution of a land use rights grant contract and payment of the land grant fee, owners of land use rights will be issued a State-owned land use certificate, which sets forth, among other things: (i) the nature of the land use right (granted or allocated); (ii) designated purpose of the land; (iii) term of the land use right; (iv) the location and size of the land; and (v) whether the land use rights are subject to any security interest. This certificate is the primary evidence of legal and valid land use rights. PRC laws require that, before commencing the construction of a building, an entity must obtain permits from various authorities. These permits include, without limitation, a state-owned land use certificate, a planning permit of land for construction use, a permit for planned construction project, and a construction permit. After the completion of construction, the entity shall also apply to competent authorities for inspection and acceptance of the construction project and then obtain a certificate for completion acceptance of construction project as well as a title certificate for building. Regulation Related to Fire Prevention Pursuant to the PRC Fire Prevention Law, which became effective on September 1, 1998 and was last amended on April 29, 2021, and other laws and regulations, the emergency management authority of the State Council and its local counterparts at or above county level shall monitor and administer the fire prevention affairs. The PRC Fire Prevention Law provides that the fire prevention design or construction of a construction project must meet the national fire prevention technical standards. Pursuant to the PRC Fire Prevention Law, the constructor or user entity shall apply to the fire and rescue department of the local government at or above county level for a fire safety inspection before a public gathering place is put into use or opens for business. Failure to obtain proper fire safety inspection or approval could lead to suspension of construction, usage, and business operations as well as fines ranging from RMB30,000 to RMB300,000. According to the Eight Measures for the Public Security Fire Department to Deepen Reform and Serve Economic and Social Development promulgated by the Ministry of Public Security of the PRC in August 2015, the filing of fire protection design and completion acceptance with respect to fire protection of construction projects with an investment of less than RMB300,000 or a building area of less than 300 square meters (or below the limit set by the housing and urban construction department of the provincial people’s government) was no longer required. 94 Table of Contents Regulation Related to Foreign Exchange and Dividend Distribution Regulation on Foreign Currency Exchange The principal regulations governing foreign currency exchange in Chinese mainland are the Foreign Exchange Administration Regulations, which became effective on April 1, 1996 and was last amended on August 5, 2008. Under PRC foreign exchange regulations, payments of current account items, such as profit distributions, interest payments and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval from the State Administration of Foreign Exchange, or SAFE, by complying with certain procedural requirements. By contrast, approval from or registration with appropriate government authorities is required where Renminbi is to be converted into foreign currency and remitted out of Chinese mainland to pay capital account items, such as direct investments, repayment of foreign currency-denominated loans, repatriation of investments and investments in securities outside of Chinese mainland. SAFE promulgated the Circular of Further Improving and Adjusting Foreign Exchange Administration Policies on Foreign Direct Investment, which became effective on December 17, 2012 and was last amended on December 30, 2019. The circular substantially amends and simplifies the foreign exchange procedure. Pursuant to the Adjusting Foreign Exchange Administration Policies on Foreign Direct Investment, the opening of various special purpose foreign exchange accounts, such as pre-establishment expenses accounts, foreign exchange capital accounts and guarantee accounts, the reinvestment of Renminbi proceeds derived by foreign investors in Chinese mainland, and remittance of foreign exchange profits and dividends by a foreign-invested enterprise to its foreign shareholders no longer require the approval or verification of SAFE, and multiple capital accounts for the same entity may be opened in different provinces, which was not possible previously. SAFE promulgated the Notice on Further Simplifying and Improving the Administration of the Foreign Exchange Concerning Direct Investment, which became effective on June 1, 2015 and was last amended on March 23, 2023. 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. Besides, the PRC governmental authorities have gradually relaxed restrictions on the settlement of the foreign exchange capitals of foreign-invested enterprises in recent years. In March 30, 2015, SAFE promulgated the Circular of the SAFE on Reforming the Management Approach regarding the Settlement of Foreign Capital of Foreign-invested Enterprise, which allows all foreign-invested enterprises established in Chinese mainland to settle their foreign exchange capital on a discretionary basis according to the actual needs of their business operation, provides the procedures for foreign-invested companies to use Renminbi converted from foreign currency-denominated capital for equity investments and removes certain other restrictions that had been provided in prior regulations. However, this circular continues to prohibit foreign-invested enterprises from using Renminbi funds converted from their foreign exchange capital for expenditure beyond their business scope and providing entrusted loans or repaying loans between non-financial enterprises. SAFE further promulgated the Notice of the SAFE on Reforming and Standardizing the Foreign Exchange Settlement Management Policy of Capital Account, which became effective on June 9, 2016 and was last amended on December 4, 2023, providing that discretionary foreign exchange settlement applies to foreign exchange capital, foreign debt offering proceeds and remitted foreign listing proceeds, and the corresponding Renminbi capital converted from foreign exchange may be used to extend loans to related parties or repay inter-company loans (including advances by third parties). On October 23, 2019, SAFE further issued the Circular of the SAFE on Further Promoting the Facilitation of Cross-border Trade and Investment, which became effective on the same day. This circular allows non-investment foreign-invested enterprises to use their capital funds to make equity investments in Chinese mainland as long as such investments do not violate the Negative List and the target investment projects are genuine and in compliance with laws. In addition, it stipulates that qualified enterprises in certain pilot areas may use their capital income from registered capital, foreign debt and overseas listing, for the purpose of domestic payments without providing authenticity certifications to the banks in advance for those domestic payments. For more details and relevant risks, please see “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—Governmental control of currency conversion may limit our ability to utilize our income effectively and affect the value of your investment.” ​ 95 Table of Contents Regulation on Dividend Distribution The principal regulations governing distribution of dividends of foreign-invested enterprises is the PRC Company Law. Under these laws and regulations, foreign-invested enterprises in Chinese mainland may pay dividends only out of their accumulated after-tax profits, if any, determined in accordance with accounting standards in Chinese mainland and regulations. In addition, a Chinese company, including a foreign-invested enterprise in Chinese mainland, is required to allocate at least 10% of its accumulated profits each year, if any, to fund certain reserve funds until these reserves have reached 50% of the registered capital of the enterprise. A Chinese company may, in its discretion, allocate a portion of its after-tax profits based on accounting standards in Chinese mainland to staff welfare and bonus funds. These reserves are not distributable as cash dividends. SAFE promulgated the Notice on Improving the Check of Authenticity and Compliance to Further Promote Foreign Exchange Control in January 2017, which stipulates several capital control measures with respect to outbound remittance of profits from domestic entities to offshore entities, including the following: (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, domestic entities shall make detailed explanations of 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. For more details and relevant risks, please see “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—We may rely on dividends and other distributions on equity paid by our Chinese mainland subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our Chinese mainland subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business.” Regulation on Foreign Exchange Registration of Overseas Investment by PRC residents SAFE issued the Circular on Relevant Issues Relating to Domestic Resident’s Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, which became effective on July 4, 2014. This circular regulates foreign exchange matters in relation to the use of special purpose vehicles by PRC residents or entities to seek offshore investment and financing or conduct round trip investment in Chinese mainland. Under this circular, a “special purpose vehicle” refers to an offshore entity established or controlled, directly or indirectly, by Chinese residents or 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 Chinese mainland by Chinese residents or entities through special purpose vehicles, namely, establishing foreign-invested enterprises to obtain ownership, control rights and management rights. This circular also provides that, before making a contribution into a special purpose vehicle, Chinese residents or entities are required to complete foreign exchange registration with SAFE or its local branch. On February 13, 2015, SAFE promulgated the Notice on Further Simplifying and Improving the Administration of the Foreign Exchange Concerning Direct Investment, which has amended the Circular on Relevant Issues Relating to Domestic Resident’s Investment and Financing and Roundtrip Investment through Special Purpose Vehicles by requiring Chinese 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. Chinese residents or entities who had contributed legitimate onshore or offshore interests or assets to special purpose vehicles but had not registered as required before the implementation of the Circular on Relevant Issues Relating to Domestic Resident’s Investment and Financing and Roundtrip Investment through Special Purpose Vehicles 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 Chinese 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 the Circular on Relevant Issues Relating to Domestic Resident’s Investment and Financing and Roundtrip Investment through Special Purpose Vehicles and the subsequent notice, or making misrepresentations or failing to disclose the control 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 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 Chinese residents or entities to penalties under Chinese mainland foreign exchange administration regulations. For more details and relevant risks, please see “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—PRC regulations relating to offshore investment activities by PRC residents may limit the ability of our Chinese mainland subsidiaries to change their registered capital or distribute profits to us or otherwise expose us or our PRC resident beneficial owners to liability and penalties under PRC laws. In addition, any failure to comply with PRC regulations with respect to registration requirements for offshore financing may subject us to legal or administrative sanctions.” 96 Table of Contents Regulation Related to Stock Incentive Plans On February 15, 2012, SAFE promulgated the Notice on Foreign Exchange Administration of PRC Residents Participating in Share Incentive Plans of Offshore Listed Companies. Under this notice and other rules and regulations, domestic individuals, which means the Chinese residents and non-PRC citizens residing in Chinese mainland for a continuous period of not less than one year, subject to a few exceptions, who participate in a 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 Chinese residents must retain a qualified Chinese mainland agent, which could be a Chinese subsidiary of the overseas publicly listed company or another qualified institution selected by the Chinese subsidiary, to conduct the SAFE registration and other procedures with respect to the stock incentive plan on behalf of its participants. The participants must also retain an overseas entrusted institution to handle matters in connection with their exercise of stock options, the purchase and sale of corresponding stocks or interests and fund transfers. In addition, the Chinese mainland 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 Chinese mainland agent or the overseas entrusted institution or other material changes. The Chinese mainland agents must, on behalf of the Chinese 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 Chinese residents’ exercise of the employee share options. The foreign exchange proceeds received by the Chinese 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 Chinese mainland opened by the Chinese mainland agents before distribution to such Chinese residents. In addition, the Circular on Relevant Issues Relating to Domestic Resident’s Investment and Financing and Roundtrip Investment through Special Purpose Vehicles provides that Chinese residents who participate in a share incentive plan of an overseas unlisted special purpose company may register with SAFE or its local branches before exercising rights. For more details and relevant risks, please see “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—Any failure to comply with PRC regulations regarding the registration requirements for employee stock incentive plans may subject our plan participants or us to fines and other legal or administrative sanctions.” Regulation Related to Tax Enterprise Income Tax Under the PRC Enterprise Income Tax Law, which became effective on January 1, 2008 and was last amended on December 29, 2018, and its implementing rules, enterprises are classified as resident enterprises and non-resident enterprises. PRC resident enterprises typically pay an enterprise income tax at the rate of 25% while non-PRC resident enterprises without any branches in Chinese mainland should pay an enterprise income tax in connection with their income from Chinese mainland at the tax rate of 10%. An enterprise established outside of Chinese mainland with its “de facto management bodies” located within Chinese mainland is considered a “resident enterprise,” meaning that it can be treated in a manner similar to a Chinese domestic enterprise for enterprise income tax purposes. The implementing rules of the PRC Enterprise Income Tax Law define a de facto management body as a managing body that in practice exercises “substantial and overall management and control over the production and operations, personnel, accounting and properties” of the enterprise. Enterprises which qualify 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. ​ 97 Table of Contents The PRC Enterprise Income Tax Law and the implementation rules provide that an income tax rate of 10% should normally be applicable to dividends payable to investors that are “non-resident enterprises,” and gains derived by such investors, which (i) do not have an establishment or place of business in Chinese mainland, or (ii) have an establishment or place of business in Chinese mainland, but the relevant income is not effectively connected with the establishment or place of business to the extent such dividends and gains are derived from sources within Chinese mainland. Such income tax on the dividends may be reduced pursuant to a tax treaty between Chinese mainland and other jurisdictions. Pursuant to the Arrangement Between Chinese mainland and Hong Kong Special Administrative Region for the Avoidance of Double Taxation on Income, and other applicable PRC laws, if a Hong Kong resident enterprise is determined by the competent PRC tax authority to have satisfied the conditions and requirements under such double tax avoidance arrangement and other applicable laws, the 10% withholding tax on the dividends the Hong Kong resident enterprise receives from a PRC resident enterprise may be reduced to 5% upon receiving approval from the competent tax authority. However, according to the Notice on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties issued on February 20, 2009 by the State Administration of Taxation, if the tax authorities of Chinese mainland determine, in their discretion, that a company benefits from such reduced income tax rate due to a structure or arrangement that is primarily tax-driven, such tax authorities of Chinese mainland may adjust the preferential tax treatment; and according to the Announcement on Relevant Issues Concerning the “Beneficial Owners” in Tax Treaties issued on February 3, 2018 by the State Administration of Taxation and effective from April 1, 2018, comprehensive analysis based on the stipulated factor therein and actual circumstances shall be adopted when recognizing the “beneficial owner” and agents and designated wire beneficiaries are specifically excluded from being recognized as “beneficial owners.” For more details and relevant risks, please see “Item 5. Operating and Financial Review and Prospectus—A. Operating Results—Taxation—Chinese mainland.” Value-added Tax and Business Tax Pursuant to PRC tax regulations, an entity or individual conducting business in the service industry is generally required to pay a business tax at the rate of 5% on the revenues generated from providing such services. However, if the services provided are related to technology development and transfer, the business tax may be exempted subject to approval by the tax authorities. Whereas, pursuant to the Provisional Regulations on Value-Added Tax of the PRC, which became effective on January 1, 1994 and was last updated on November 19, 2017, and its implementation regulations, unless otherwise specified by the 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 Chinese mainland is generally required to pay a value-added tax for revenues generated from sales of products, while qualified input value-added tax paid on taxable purchase can be offset against such output value-added tax. On November 16, 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, which became effective on May 1, 2016. Pursuant to the pilot plan and related notices, value-added tax is generally imposed in lieu of business tax in the modern service industries, including the value-added tax, on a nationwide basis. A rate of 6% of value-added tax applies to revenue derived from the provision of some modern services. Certain small taxpayers under PRC law are subject to reduced value-added tax at a rate of 3%. Unlike business tax, a taxpayer is allowed to offset the qualified input value-added tax paid on taxable purchases against the output value-added tax chargeable on the modern services provided. The Notice on Adjustment of Value-Added Tax Rates, which became effective on May 1, 2018, and the Announcement on Relevant Policies for Deepening Value-added Tax Reform, which became effective on April 1, 2019, adjusted the value-added tax rates applicable to the taxable goods stipulated by the Provisional Regulations on Value-Added Tax of the PRC. Currently, sale of goods shall be subject to value-added taxes at a rate of 13%, except for the export of goods (which shall be subject to no value-added taxes) and the sale of certain types of goods (which shall be subject to value-added taxes at a rate of 9%). For more details and relevant risks, please see “Item 5. Operating and Financial Review and Prospectus—A. Operating Results—Taxation—Chinese mainland.” Dividend Withholding Tax The PRC Enterprise Income Tax Law provides that since January 1, 2008, an income tax rate of 10% will normally be applicable to dividends declared to non-PRC resident investors that do not have an establishment or place of business in Chinese mainland, or that have such establishment or place of business but the relevant income is not effectively connected with the establishment or place of business, to the extent such dividends are derived from sources within Chinese mainland. 98 Table of Contents Pursuant to the Arrangement Between Chinese mainland and Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and Capital and other applicable PRC laws, if a Hong Kong resident enterprise is determined by the competent PRC tax authority to have met the conditions and requirements under this arrangement and other applicable laws, the 10% withholding tax on the dividends the Hong Kong resident enterprise receives from a PRC resident enterprise may be reduced to 5%. However, according to the Circular on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties, if the tax authorities of Chinese mainland determine, in their discretions, that a company benefits from such reduced income tax rate due to a structure or arrangement that is primarily tax-driven, such tax authorities of Chinese mainland may adjust the preferential tax treatment. Pursuant to the Announcement on Relevant Issues Concerning the “Beneficial Owners” in Tax Treaties, which became effective on April 1, 2018, when determining the applicant’s status as the “beneficial owner” regarding tax treatments in connection with dividends, interests, or royalties in the tax treaties, several factors, including, without limitation, whether the applicant is obligated to pay more than 50% of his or her income in twelve months to residents in third country or region, whether the business operated by the applicant constitutes the actual business activities, and whether the counterparty country or region to the tax treaties does not levy any tax or grant any tax exemption on relevant incomes or levy tax at an extremely low rate, will be taken into account, and such factors will be analyzed according to the actual circumstances of the specific cases. This circular further provides that an applicant who intends to prove his or her status as the “beneficial owner” must submit the required documents to the tax bureau pursuant to the Announcement on Issuing the Measures for the Administration of Non-Resident Taxpayers’ Enjoyment of the Treatment under Tax Agreements. For more details and relevant risks, please see “Item 5. Operating and Financial Review and Prospectus—A. Operating Results—Taxation—Chinese mainland.” Tax on Indirect Transfer On February 3, 2015, the State Administration of Taxation issued the Circular on Issues of Enterprise Income Tax on Indirect Transfers of Assets by Non-PRC resident enterprises, pursuant to which an “indirect transfer” of assets, including equity interests in a PRC resident enterprise, by non-PRC resident enterprises, may be recharacterized and treated as a direct transfer of PRC taxable assets, if such arrangement does not have a reasonable commercial purpose and was established for the purpose of avoiding payment of PRC enterprise income tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise income tax. When determining whether there is a “reasonable commercial purpose” in the transaction arrangement, features to considered include, inter alia, whether the main value of the equity interest of the offshore enterprise derives directly or indirectly from PRC taxable assets; whether the assets of the offshore enterprise mainly consists of direct or indirect investment in Chinese mainland or if its income is mainly derived from Chinese mainland; and whether the offshore enterprise and its subsidiaries directly or indirectly holding PRC taxable assets have a real commercial nature which is evidenced by their actual function and risk exposure. Pursuant to this circular, where the payer fails to withhold any or sufficient tax, the transferor shall declare and pay such tax to the tax authority by itself within the statutory time limit. Late payment of applicable tax will subject the transferor to default interest. This circular does not apply to transactions of sale of shares by investors through a public stock exchange where such shares were acquired on a public stock exchange. On October 17, 2017, the State Administration of Taxation issued the Circular on Issues of Tax Withholding Regarding Non-PRC resident enterprise Income Tax, which was amended by the Announcement of the State Administration of Taxation on Revising Certain Taxation Normative Documents issued by the State Administration of Taxation on June 15, 2018. The Circular on Issues of Tax Withholding Regarding Non-PRC resident enterprise Income Tax further elaborates the implementation rules regarding the calculation, reporting, and payment obligations of the withholding tax by the non-resident enterprises. Nonetheless, there remain uncertainties as to the interpretation and application of the Circular on Issues of Enterprise Income Tax on Indirect Transfers of Assets by Non-PRC resident enterprises. The Circular on Issues of Enterprise Income Tax on Indirect Transfers of Assets by Non-PRC resident enterprises may be determined by the tax authorities to be applicable to our offshore transactions or sale of our shares or those of our offshore subsidiaries where non-resident enterprises, being the transferors, were involved. For more details and relevant risks, please see “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—We face uncertainties with respect to indirect transfer of equity interests in PRC resident enterprises by their non-PRC holding companies.” Regulations on Anti-Monopoly The PRC Anti-monopoly Law, which was adopted by Standing Committee of the National People’s Congress, became effective on August 1, 2008 and was last amended on August 1, 2022, provides the regulatory framework for the Chinese mainland anti-monopoly. Under the PRC Anti-monopoly Law, the prohibited monopolistic acts include monopolistic agreements, abuse of a dominant market position and concentration of businesses that may have the effect to eliminate or restrict competition. 99 Table of Contents Pursuant to the PRC Anti-monopoly Law, a business operator that possesses a dominant market position is prohibited from abusing its dominant market position, including conducting the following acts: (i) selling commodities at unfairly high prices or buying commodities at unfairly low prices; (ii) without justifiable reasons, selling commodities at prices below cost; (iii) without justifiable reasons, refusing to enter into transactions with their trading counterparts; (iv) without justifiable reasons, allowing trading counterparts to make transactions exclusively with itself or with the business operators designated by it; (v) without justifiable reasons, tying commodities or imposing unreasonable trading conditions to transactions; (vi) without justifiable reasons, applying differential prices and other transaction terms among their trading counterparts who are on an equal footing; and (vii) other acts determined as abuse of dominant market position by the governmental authorities. Pursuant to the PRC Anti-monopoly Law and related regulations, when a concentration of undertakings occurs and reaches any of the following thresholds, the undertakings concerned shall file a prior notification with the anti-monopoly agency (i.e., the State Administration for Market Regulation), (i) during the previous fiscal year, the total global turnover of all undertakings participating in the concentration exceeded RMB12 billion, and at least two of these undertakings each had a turnover of more than RMB800 million within China; or (ii) during the previous fiscal year, the total turnover within China of all the undertakings participating in the concentration exceeded RMB4 billion, and at least two of these undertakings each had a turnover of more than RMB800 million within China are triggered, and no concentration shall be implemented until the anti-monopoly agency clears the anti-monopoly filing. “Concentration of undertakings” means any of the following: (i) merger of undertakings; (ii) acquisition of control over another undertaking by acquiring equity or assets; or (iii) acquisition of control over, or exercising decisive influence on, another undertaking by contract or by any other means. In addition, pursuant to the PRC Anti-monopoly Law and related regulations, entering into monopolistic agreements, which means agreements or concerted practices to eliminate or restrict competition, is prohibited, unless such agreements satisfy the specific exemptions prescribed therein, such as improving technologies or increasing the efficiency and competitiveness of small-and mid-sized undertakings. If business operators fail to comply with the PRC Anti-monopoly Law or other relevant regulations, the anti-monopoly agency is empowered to cease the infringing activities, unwind the transactions and confiscate illegal gains and fines. On February 7, 2021, the Anti-monopoly Commission of the State Council published Anti-Monopoly Guidelines for the Internet Platform Economy Sector, which specify circumstances where an activity of an internet platform will be identified as monopolistic act as well as merger controlling filing procedures, which may be applicable to our Chinese mainland subsidiaries. On March 12, 2021, the State Administration for Market Regulation published several administrative penalty cases about concentration of business operators that violated PRC Anti-monopoly Law in the internet sector. In July 2021, the State Administration for Market Regulation released the revised Draft Provisions on the Administrative Penalties on Price-related Violation for Public Comment, which proposed significant penalties, including fines of up to 10% of revenue during the violation period, suspension of business or revocation of business license, for a number of price-related violations, such as below-cost pricing to squeeze out competitors, price discrimination, manipulation of market prices and fraudulent pricing. For more details and relevant risks, please see “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—Any failure or perceived failure by us to comply with the anti-monopoly and anti-unfair competition laws and regulations may result in governmental investigations or enforcement actions, litigation or claims against us and could have an adverse effect on our business, financial condition and results of operations.” On January 28, 2026, the State Administration for Market Regulation promulgated and implemented the Anti-Monopoly Compliance Guidelines for Internet Platforms, which are designed to support platform operators in preventing anti-monopoly compliance risks and enhancing internal management systems, with the objectives of protecting relevant parties’ rights, maintaining fair competition, and fostering the innovative and healthy development of the platform economy. 100 Table of Contents Regulations on M&A Rules and Overseas Listings Six PRC regulatory agencies, including the CSRC, adopted the M&A Rules, which became effective on September 8, 2006 and was last amended on June 22, 2009. Foreign investors shall comply with the M&A Rules when purchasing equity interests in a domestic company or subscribe the increased capital of a domestic company, which results in changing the nature of the domestic company into a foreign-invested enterprise; or when the foreign investors establish a foreign-invested enterprise in Chinese mainland and purchase the assets of a domestic company and operate the assets; or when the foreign investors purchase the asset of a domestic company and establish a foreign-invested enterprise by injecting such assets and operate the assets. The M&A Rules purport, among other things, to require offshore special purpose vehicles formed for overseas listing purposes through acquisitions of Chinese domestic companies and controlled by Chinese companies or individuals, to obtain the approval of the CSRC prior to publicly listing their securities on an overseas stock exchange. However, the PRC Foreign Investment Law has partly replaced the M&A Rules in terms of its rules on equity or assets acquisition of a non-related domestic company by a foreign investor. The equity and assets acquisition of a related domestic company by a foreign investor shall still be subject to the M&A Rules. On July 6, 2021, the General Office the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions on Strictly Cracking Down on Illegal Securities Activities in Accordance with the Law. These opinions emphasized the need to strengthen the supervision over overseas listings by China-based companies and proposed to take effective measures, such us promoting the establishment of regulatory systems to deal with the risks and incidents faced by China-based overseas listed companies. On February 17, 2023, the CSRC issued the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Enterprises, which became effective on March 31, 2023, and five supporting guidelines on CSRC’s official website. These measures impose substantially the same requirements for the overseas securities offering and listing by domestic enterprises. Under these measures, domestic enterprises conducting overseas securities offering and listing, either directly or indirectly, shall complete filings with the CSRC within three working days following the submission of an application for initial public offering or listing. Starting from March 31, 2023, domestic enterprises that have submitted valid applications for overseas offerings and listings but have not obtained the approval from the overseas regulatory authority or overseas stock exchange shall complete filings with the CSRC for such offerings, and the CSRC must have concluded the filing procedure and published the filing results on the CSRC website, prior to the completion of the overseas offerings and listings. Under these measures and the supporting guidelines, such filings shall include, among other documents, (i) a filing report, (ii) regulatory opinions, filing or approval documents issued by the competent authorities of the industry concerned (if applicable), (iii) opinions on the security assessment and review issued by the competent department of the State Council (if applicable), (iv) legal opinions and undertakings issued by PRC counsel, and (v) the listing documents. For more details and relevant risks, please see “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—The M&A Rules and certain other PRC regulations may make it more difficult for us to pursue growth through acquisitions” and “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—The approval of the CSRC or other PRC government authorities may be required in connection with our future offerings under PRC laws and regulations, and if required, we cannot predict whether or for how long we will be able to obtain such approval.” 101 Table of Contents C.Organizational Structure The following diagram illustrates our corporate structure, including our principal subsidiaries, as of the date of this annual report: ​ ​ We do not currently use, and have not used in the past, a variable interest entity structure. ZKH Group Limited is not a Chinese operating company but a Cayman Islands holding company with operations primarily conducted through our Chinese mainland subsidiaries. Under this holding company structure, investors in the ADSs are purchasing equity interests in the Cayman Islands holding company and are not purchasing equity securities of our operating subsidiaries in Chinese mainland. D.Property, Plants and Equipment Our headquarters is located in Shanghai, where we lease and occupy an office building with an aggregate floor area of approximately 10,337 square meters as of December 31, 2025. We lease other offices in Beijing Shenzhen, Suzhou and Wuhan with an aggregate floor area of approximately 17,766 square meters as of December 31, 2025. The lease agreements expire between September 30, 2026 to November 30, 2030. 102 Table of Contents We leased 30 distribution centers in Shanghai, Wuhan, Chengdu, Xi’an and other major cities in China, which have an aggregate floor area of approximately 135,953 square meters as of December 31, 2025. We operated 107 transit warehouses with an aggregate floor area of approximately 47,968 square meters as of December 31, 2025. Our comprehensive fulfillment facilities covered the majority of major industrial hubs in China. As of December 31, 2025, most of our system hardware is hosted in leased facilities located in Hangzhou and our back-up systems are hosted in leased facilities located in Beijing and Hangzhou. In December 2024, we concluded the physical construction activities of a factory on a parcel of land of 36,411 square meters in Taicang, Jiangsu Province, which is primarily intended to serve as a facility for MRO industrial partnership in technical support and quality assurance, and the Taicang factory is awaiting final completion inspection and official regulatory approvals prior to completion. We entered into an agreement to acquire use right of this parcel of land for RMB10.9 million in December 2022 and we obtained the land use right certificate in January 2023. Pursuant to the land use right agreement, we committed to making at least RMB273.1 million of capital expenditures in connection with our construction plan, of which RMB131.1 million has been paid as of December 31, 2025. See also “Item 5. Operating and Financial Review and Prospects-A. Operating Results-Material cash requirements.”