4.A. History and Development of the Company Atour Shanghai was established in 2013. We currently conduct all of our businesses through our indirectly wholly-owned subsidiaries in China. We established Atour Lifestyle Holdings Limited as our holding company in the Cayman Islands on April 10, 2012 in anticipation of future capital raising from international investors. Atour Hong Kong was incorporated on March 5, 2021 in Hong Kong. Atour Planet (HK) Holdings Limited was incorporated in Hong Kong on June 25, 2024. Atour Holding (SG) Private Limited was incorporated in Singapore on March 12, 2025. In connection with the restructuring for our initial public offering, Atour Lifestyle Holdings Limited acquired 100% of the equity interest in Atour Hong Kong, and Atour Hong Kong owns 100% of the equity interest in Atour Shanghai. In November 2022, we completed an initial public offering in which we offered and sold an aggregate of 16,387,500 Class A ordinary shares in the form of ADSs. On November 11, 2022, the ADSs representing our Class A ordinary shares commenced trading on Nasdaq under the symbol “ATAT.” 47 Table of Contents Our principal executive offices are located at 1st floor, Wuzhong Building, 618 Wuzhong Road, Minhang District, Shanghai, People’s Republic of China. Our telephone number at this address is +86-021-64059928. Our registered office in the Cayman Islands is located at P.O. Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. Our agent for service of process in the United States is located at 122 East 42nd Street, 18th Floor, New York, NY 10168. We are subject to the periodic reporting and other informational requirements of the Exchange Act as applicable to foreign private issuers. Under the Exchange Act, we are required to file reports and other information with the SEC. Specifically, we are required to file annually a Form 20-F within four months after the end of each fiscal year. The SEC also maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding registrants that make electronic filings with the SEC using its EDGAR system. Such information can also be found on our investor relations website at https://ir.yaduo.com. 4.B. Business Overview We are a leading lifestyle group in China that operates both hospitality and retail businesses. As a leader in quality living, our purpose is to create an intimate ambiance where people can warmly connect. Guided by our people-serving philosophy, we continuously refine our products and services to curate exceptional experiences for every user. We were the largest upper midscale hotel chain in China in terms of room number as of the end of 2025, according to Frost & Sullivan. Through our constantly expanding and iterating hotel network, loyalty program and data and technology capabilities, we have been tirelessly exploring new possible ways to set the new trends for China’s hospitality industry and expand our offerings beyond hotels. We mainly use a “manachise model” to expand our hotel network in a less capital-intensive manner. As of December 31, 2025, we had 1,996 manachised hotels and 19 leased hotels, with a total of 224,423 hotel rooms. Anchored in our experience-driven business model and people-serving philosophy, we have organically expanded from hospitality into retail with a focus on innovative sleep-related products, powered by our deep insights into customers’ sleep needs, thoughtfully designed products, strong brand recognition, and extensive hotel network. We operated the largest retail business among all hotel chains in China in terms of GMV in 2025, according to Frost & Sullivan. The revenue generated from our retail business was RMB3,671.0 million in 2025. Our Business Model Guided by our experience-driven business model and people-serving philosophy, we have become a leading lifestyle group in China that operates both hospitality and retail businesses. We were the largest upper midscale hotel chain in China in terms of room number as of the end of 2025 and operated the largest retail business among all hotel chains in China in terms of GMV in 2025, according to Frost & Sullivan. We not only offer a place to stay, but aim to redefine hospitality in China by making hotels a gateway to a rich selection of lifestyle offerings that allow guests and their loved ones to relax, enjoy, interact and share. In this regard, leveraging the insights into guests gained from our hotel business, we have developed a retail business strategically focused on customers’ needs for quality sleep. Our hotel and retail businesses benefit from strong synergies. We are the first hotel chain in China to establish a scenario-based retail business within hotels, according to Frost & Sullivan. Guests can directly experience sleep related products during their stays at our hotels. Since 2018, we have led an emerging trend in upper midscale hotel chains in China to immersively integrate a personalized, digitalized retail experience into traditional hotel offerings. Moreover, in-depth insights gained from hotel business can be applied in the design and development of retail products. The innovativeness and customer satisfaction of our retail products in turn enhance our brand recognition and attract more customers to our hotels. As a result, we created a virtuous cycle by expanding our retail business alongside our hotel business. 48 Table of Contents Atour — A Lifestyle Group We are a leading lifestyle group in China that operates both hospitality and retail businesses. We believe the core of a lifestyle group is to warmly connect with people and offer unique and personalized experience to customers. Guided by our experience-driven business model and people-serving philosophy, we are setting the new trends for China’s hospitality and lifestyle industry and building a curated community where lifestyle, culture and human connection converge. To realize this, we continuously enrich our brand portfolio while upgrading and iterating our existing brands and products to enhance guest experience and maintain our competitiveness. These initiatives allow us to continuously address evolving customer needs while maintaining a differentiated, experience-oriented approach. The following table sets forth a breakdown of our revenues by business line, both in absolute amount and as a percentage of total revenues, for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ ​ ​ RMB ​ ​ ​ % ​ ​ ​ RMB ​ ​ ​ % ​ ​ ​ RMB ​ ​ ​ % ​ ​ (in thousands, except for percentages) Revenues ​ ​ ​ ​ ​ ​ Manachised hotels 2,705,609 58.0 4,148,752 57.3 5,308,864 54.2 Leased hotels 840,044 18.0 701,963 9.7 590,372 6.0 Retail 971,931 20.8 2,198,198 30.3 3,670,969 37.5 Others(1) 148,383 3.2 199,019 2.7 219,954 2.3 Total 4,665,967 100.0 7,247,932 100.0 9,790,159 100.0 Note: (1) Primarily including our membership business. Our Hotel Business We are a pioneer of the experience-driven hotel business model, guided by our philosophy of serving people rather than simply operating hotel rooms. We strive to keep up with the changing preferences of guests and make innovations a part of the regular user experience to deliver effective personalized services. We also adopt a standardized approach to bring less complex, more cost-effective operations and complement the delivery of personalized services, substantially improving user experience. Benefiting from this differentiated model, we were the largest upper midscale hotel chain in China with 224,423 rooms in total across our hotel network as of December 31, 2025, according to Frost & Sullivan. An Experience-driven Approach We are a trailblazer in the upper midscale hotel chains in China underpinned by our experience-driven business model and people-serving philosophy. Rather than simply offering accommodations, we have been committed to delivering curated lifestyle experience that resonates with modern travelers since our inception, while incorporating elements of a distinctive “Chinese Experience” into our service design with inspiration from traditional Chinese culture and hospitality. We continuously refine guest experience by ensuring operational consistency across all service touchpoints, exploring deeper engagement and innovation in core experience areas, and enhancing partner collaboration to deliver a seamless, high-quality experience for every guest. We have embedded such experience-driven approach into a standardized service framework to offer consistent yet personalized experiences across all hotels under each Atour brand. This unique model has won satisfaction and loyalty from our customers and supported scalable hotel operations, enabling us to solidify our leadership in the experience-driven hospitality sector. Through extensive industry knowledge and operating know-how, we have distilled as many as 21 touchpoints where guests are expected to have the most meaningful interactions with us — from the moment when they make their initial bookings through Atour’s mobile app, mini-programs or third-party platforms, to guests’ check-ins at our hotels, from their calls for room services to seeing them off at the end of their stays. For each of the 21 guest touchpoints, we have established a tracking and evaluation mechanism, ensuring that every interaction delivers a consistent and elevated experience. For example, our hotel staff always welcome the guests with a cup of warm tea while they are waiting to be checked in and offer them a bottle of water when they check out. In the early morning, the hotel staff also have a couple of on-the-go breakfast packed and kept at the front desk so that guests who need to catch an early flight still get to enjoy their breakfast on the way to the airport. 49 Table of Contents Our 21 well-defined touchpoints underpin a standardized framework that ensures consistent guest experience. Guided by our Atour Service Methodology and based on our deep insights into the evolving preferences of the young generations of customers, we embed flexibility into our standardized service framework, allowing guests to personalize certain aspects of their hotel stay that were traditionally controlled exclusively by the hotel. In particular, we have introduced the APLUS customer service program, which offers tailored service options to meet individual guest preferences within a unified operational structure. See “— Our Loyalty Program — ACARD Loyalty Program” for further details. To further support the delivery of personalized services in a timely and effective manner, we adopt and implement a simplified yet effective set of procedures for our hotels’ on-site staff to act on guest needs directly. Under such procedures, our front line staff are empowered with appropriate levels of freedom and discretion to identify and overcome challenges to understanding guest needs and deliver unique services based on these preferences. For example, each of our hotel staff is granted a budget each month that they may utilize in their discretion to help the guests with their unique requests, such as buying medicine for the guests or accompanying them to the hospital. Meanwhile, we take our guests’ reviews and feedback seriously, especially those helping us better understand our guests. Through our performance review process, we keep enhancing guest experience at our hotels and uphold our operational standards. Our Hotel Network We adopt a “manachise” hotel operation model for substantially all of our hotels. Under the manachise model, we manage hotels through the on-site hotel managers and deputy managers we appoint to each hotel. As of December 31, 2025, we had 1,996 manachised hotels, accounting for approximately 99.1% of our total hotels. We also operate certain hotels under the lease model, under which we design, decorate, and operate hotels located on leased premises. As of December 31, 2025, we had 19 leased hotels, accounting for approximately 0.9% of our total hotels. The following table sets forth the number of hotels we operated as of the dates indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ ​ ​ 2023 ​ ​ ​ 2024 ​ ​ ​ 2025 Number of hotels ​ ​ ​ ​ Manachised ​ 1,178 1,593 1,996 Leased ​ 32 26 19 Total(1) ​ 1,210 1,619 2,015 Note: (1) Consists of hotels at ramp-up stage and mature operation stage. See “Item 5. Operating and Financial Review and Prospects — 5.A. Operating Results — Key Factors Affecting Our Results of Operations — Specific Factors Affecting Our Results of Operations” for the number of our hotels at ramp-up stage and mature operation stage. ​ We primarily focus on Tier 1, New Tier 1 and Tier 2 cities in China. We believe these markets fit our positioning as a leading lifestyle hotel chain. As of December 31, 2025, our hotel network covered 2,015 hotels spanning 230 cities in 31 provinces, autonomous regions and municipalities in China. As of December 31, 2025, we had an additional 779 hotels under development. ​ 50 Table of Contents The following table sets forth the changes in the number of our hotels and hotel rooms for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ ​ ​ Properties ​ ​ ​ Rooms ​ ​ ​ Properties ​ ​ ​ Rooms ​ ​ ​ Properties ​ ​ ​ Rooms Manachised hotels at the beginning of the year 899 ​ 102,945 ​ 1,178 ​ 133,291 ​ 1,593 ​ 179,469 Add 289 ​ 32,782 ​ 470 ​ 55,877 ​ 488 ​ 58,106 Less(1) 10 ​ 2,436 ​ 55 ​ 9,699 ​ 85 ​ 16,292 At the end of the year 1,178 ​ 133,291 ​ 1,593 ​ 179,469 ​ 1,996 ​ 221,283 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Leased hotels at the beginning of the year 33 ​ 5,053 ​ 32 ​ 4,630 ​ 26 ​ 3,715 Add — ​ 89 ​ 1 ​ 380 ​ — ​ 589 Less 1 ​ 512 ​ 7 ​ 1,295 ​ 7 ​ 1,164 At the end of the year(2) 32 ​ 4,630 ​ 26 ​ 3,715 ​ 19 ​ 3,140 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total at the end of the year 1,210 ​ 137,921 ​ 1,619 ​ 183,184 ​ 2,015 ​ 224,423 Note: (1) Closures of these manachised hotels were primarily due to the failure of the relevant franchisees to comply with our brand and operating standards, which in some cases resulted in quality deficiencies or suboptimal operational performance. In 2023, 2024 and 2025, revenue contributions from manachised hotels closed in such year represented a negligible portion of our total revenues. (2) The decrease in the number of leased hotels was primarily because our leased hotels primarily serve as demonstration properties to define the operational and quality standards of our hotels and to promote new brands, which is not a focus of our future expansion. We mainly rely on the manachised model to drive a scalable, asset-light expansion of our hotel network. ​ Manachised Hotels We have adopted the “manachise” hotel operation model as part of our group-level expansion strategy since our inception in 2013, making us one of the first upper midscale hotel chains in China to adopt such hotel operation model according to Frost & Sullivan. Unlike the traditional franchise model, our manachise model that combines “franchise” and management to ensure product quality and consistency across our hotel network. As of December 31, 2025, we had 1,996 manachised hotels, representing 99.1% of our total hotels as of the same date. Leased Hotels As of December 31, 2025, we had 19 leased hotels, accounting for approximately 0.9% of our total hotels. We manage and operate each aspect of these hotels and bear the corresponding expenses. We are responsible for recruiting, training and supervising the hotel managers and employees, paying for leases and costs associated with construction and renovation of these hotels, and purchasing all supplies and other required equipment. We take charge of all the day-to-day operations of our leased hotels, including but not limited to, ensuring valid licenses and permits for each leased hotel, handling customer complaints, taking responsibilities for incidents that happened at leased hotels within the range of our duty of care, and purchasing and maintaining sufficient insurance policies for leased hotels. Our Hotel Brand Portfolio We purposefully design and operate individually conceived lifestyle hotel brands that cater to diversified audiences, with a common thread of brand hallmarks that deliver a locally inspired, neighborhood boutique yet consistently enjoyable experience. As of December 31, 2025, we had developed seven lifestyle hotel brands, covering the entire chain of midscale to luxury hotels with differentiated appeal to a wide range of guests, from discerning business travelers to the younger generations seeking unique and personalized hospitality experiences. The following table sets forth the key information about each of our hotel brands. 51 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2025 Hotel Brand ​ ​ ​ Positioning ​ ​ ​ Cities ​ ​ ​ Properties ​ ​ ​ Rooms ​ ​ ​ ​ Leased ​ ​ ​ Manachised ​ ​ A.T. House ​ Luxury ​ 1 ​ 1 ​ — ​ 214 SAVHE ​ Upscale ​ 3 ​ 1 ​ 2 ​ 487 Atour S ​ Upscale ​ 32 ​ 2 ​ 87 ​ 12,261 Atour Origin (1) ​ Upper Midscale ​ 30 ​ 1 ​ 48 ​ 5,737 Atour ​ Upper Midscale ​ 224 ​ 12 ​ 1,479 ​ 168,129 Atour X ​ Upper Midscale ​ 66 ​ 2 ​ 179 ​ 19,229 Atour Light ​ Midscale ​ 59 ​ — ​ 201 ​ 18,366 Total ​ ​ ​ 230 ​ 19 ​ 1,996 ​ 224,423 Note: (1) Atour Origin, initially launched in November 2023 as Atour Series 4 under the Atour Hotel brand, has recently been upgraded to an independent upper midscale hotel brand within our portfolio. ​ We focus on upper midscale hotel brands, Atour, Atour Origin and Atour X, and expand into the midscale segment through our fast-growing Atour Light brand. We further supplement our offerings with upscale and luxury hotel brands, such as Atour S, SAVHE and A.T. House, to accommodate diversified customer needs. Each of our hotel brands has its own unique personality under the unified ethos of inclusivity and presence of humanness. Across all our brands, we are dedicated to offering every guest a unique, memorable experience. Upper Midscale Brands Atour Hotel At the heart of our hotel network is Atour Hotel, an upper midscale hotel brand designed for quality-conscious travelers who seek layers of user experience that mixes comfort with a stylish vibe. With the debut of the first Atour Hotel in Xi’an in 2013, today the brand spanned 224 cities across China as of December 31, 2025, mainly located in key commercial areas in top-tier cities in China, with an ADR of RMB424.4 in 2025. Atour Hotel blends modern sophistication with a deep appreciation for local culture, creating a space that feels both contemporary and rich in humanistic warmth. Our spacious guest rooms typically have an area of approximately 25 square meters, with some as large as 35 square meters. The public areas in an Atour Hotel typically range from 450 to 560 square meters and include standard amenities for all hotels, including on-premise restaurants offering local breakfast, a laundry room, and a fitness center. In addition, we operate the “Bambook Library,” a 24/7 mobile library designed as a spiritual retreat for our guests, creating accessible spaces that can bring our guests a calm and focused reading experience. Atour Series 3 is our core hotel product model under the Atour brand designed to deliver functional comfort, efficient services and consistent stay experience to continuously reinforce our position as a leading brand in mainstream business travel scenarios. By addressing the essential needs of business travelers, it strengthens our leading position in the upper midscale segment. We introduced Atour 3.6, the latest Atour Series 3 hotel product model, in the first quarter of 2025, to further elevate the guest experience. Guided by an “Timeless and Humane” product philosophy, Atour 3.6 embraces a calm and balanced aesthetic rooted in natural textures and minimalist spatial compositions. For existing hotels with renovation needs, we have introduced the Atour “3.5SE” renovation program to help them maintain market competitiveness. As of December 31, 2025, we had 1,491 Atour Hotels in operation with a total of 168,129 guest rooms. As of the same date, we also had 555 Atour Hotels under development with a total of 61,803 guest rooms. 52 Table of Contents Atour Origin Hotel Atour Origin hotel, initially launched in November 2023 as Atour Series 4 under the Atour Hotel brand, has recently been upgraded to an independent upper midscale hotel brand within our portfolio. It is designed to shape the future of the upper midscale market by catering to the evolving needs of both business and leisure travelers seeking productivity and relaxation. Inspired by Yaduo (the Chinese name of Atour) village, this new brand embraces the concept of “natural tranquility,” offering customers immersive experiences with contentment and relaxation. Our Atour Origin hotels introduce extensive upgrades across multiple facets of the hotel, including multi-functional workspaces, premium sleep settings in guest rooms, and enhanced dining services. Atour Origin hotels place strong emphasis on fostering a deep emotional resonance with guests, creating a restorative and healing experience that promotes holistic well-being. Such experience-driven approaches aim to establish an advanced operating model defined by superior quality, increased pricing potential, and improved operational efficiency. As of December 31, 2025, Atour Origin hotels could be found in 30 cities across China mainly located in key commercial areas in top-tier cities in China, with an ADR of RMB536.5 in 2025. As of December 31, 2025, we had 49 Atour Origin hotels in operation with a total of 5,737 guest rooms. As of the same date, we also had 60 Atour Origin hotels under development with a total of 6,903 guest rooms. Atour X Hotel Atour X Hotel is our upper midscale hotel brand, created by converting existing boutique hotel properties on the market into “Atour” hotels adhering to the same standards of services and offerings, while maintaining its original design elements. As of December 31, 2025, it could be found in 66 cities across China, with an ADR of RMB427.0 in 2025. We keep the flavorful and diversified design of the existing hotel properties, while applying our uniform service standards to ensure service quality and consistency. As of December 31, 2025, we had 181 Atour X Hotels with a total of 19,229 guest rooms. As of the same date, we also had seven Atour X Hotels under development with a total of 818 guest rooms. Midscale Brand Atour Light Hotel Atour Light is our midscale hotel brand with a cheerful spirit, primarily catering to young urban travelers seeking the best value and experience. We first introduced the Atour Light Hotel in 2016, and since then its footprint had been expanded to cover 59 cities across China as of December 31, 2025. Our Atour Light hotels currently are mainly located in key commercial areas in top-tier cities in China, with an ADR of RMB390.7 in 2025. In February 2023, we launched Atour Light 3.0, the upgraded hotel product model, which is thoughtfully designed to meet the needs of young, urban business travelers, offering quality services and exceptional experiences tailored to their preferences. Since its launch, Atour Light 3.0 has consistently delivered brand-defining innovations and breakthroughs across operations management and user experience, and garnered positive reception from a growing base of franchisees. To better serve the evolving needs of younger consumers in the midscale segment, we introduced Atour Light 3.3, an upgraded version of our Atour Light hotel product model, in the first quarter of 2025. Drawing inspiration from the “Blue Nights of Genoa,” Atour Light 3.3 features a youthful, minimalist design that emphasizes flexibility, efficiency and comfort. The refreshed design enhances space utilization through modular layouts and compact multi-purpose furnishings, while incorporating vibrant color palettes and social-friendly public areas to foster a light, energetic ambiance. Continuing the signature design style of our Atour Light Hotels, Atour Light 3.3 offers more flexible and functional public spaces as well as refreshed in-room fixtures and configurations to guests, and a more cost-efficient hotel product model with optimized capital investment and operating expenditures to franchisees. As of December 31, 2025, we had 201 Atour Light Hotels in operation with a total of 18,366 guest rooms. As of the same date, we also had 104 Atour Light Hotels under development with a total of 9,632 guest rooms. 53 Table of Contents Upscale and Luxury Brands SAVHE Hotel SAVHE, launched in October 2024, is an upscale hotel brand that focuses on “natural healing.” Guided by the brand ethos of “Oriental Serenity,” SAVHE creates deeply immersive experience across sleep, healing and wellness, revolutionizing the approach to guest care. As of December 31, 2025, we had three SAVHE hotels in operation with 487 rooms available and an ADR of RMB1,042.6 in 2025. As of the same date, we also had two SAVHE hotels under development with a total of 233 guest rooms. It is designed to deliver a refined and sensory experience that integrates emotional wellness with sophisticated living. Drawing inspiration from rituals of rest and restoration, the hotel offers signature features such as personalized fragrance selection upon check-in and all-day dining with seasonal menus, and a sleep-optimized environment supported by our proprietary deep sleep products. Through an integration of room design, personalized services and deep sleep products, SAVHE redefines modern urban hospitality for business and leisure travelers seeking comfort, calm, and intentional living. Since its launch, SAVHE has been widely recognized for its thoughtful services and immersive stay experience and has become one of the most differentiated and highly regarded brands within our brand portfolio. Atour S Hotel We position Atour S as an upscale hotel brand that primarily serves high-end business and leisure travelers. It offers the same inspiring experience of a standard Atour Hotel, only better. We first introduced the Atour S brand in 2016. Since then, its network had been expanded to cover 32 cities across China as of December 31, 2025, mainly located in premium commercial districts in the downtown areas in top-tier cities in China, with an ADR of RMB530.8 in 2025. Loyal to the best elements of local designs and cultures, Atour S is committed to setting the standard for a fully upgraded user experience for any discerning travelers, with more spacious and well designed rooms and top-quality amenities. Guest rooms typically have an area of 27 to 35 square meters, and public areas typically range from 650 to 1,000 square meters, considerably more spacious than those in a traditional Atour Hotel. As of December 31, 2025, we had 89 Atour S Hotels with a total of 12,261 guest rooms. As of the same date, we also had 51 Atour S Hotels under development with a total of 6,512 guest rooms. A.T. House A.T. House is our first full-service luxury hotel brand, which aims to become a luxury lifestyle destination that appeals to discerning travelers seeking uniqueness in every aspect of their hotel experience. As of December 31, 2025, we had one A.T. House in Shanghai, with 214 rooms available and an ADR of RMB780.2 in 2025. Defying the conventional norm of luxury, A.T. House is focused on creating and promoting a pulsating and design-driven lifestyle culture — inducing an air of creativity and adhering to our guests’ affinity for fashion, art, and contemporary culture. Guest rooms are larger than those in a standard Atour Hotel and come with a living area, bringing a sense of home to our guests. The public area is also more spacious than that in our standard Atour Hotel, and comes with two banquet halls, all-day dining, as well as other well-being amenities. Hotel Development Our manachise hotel operation model enables us to expand our hotel network in a less capital-intensive and more efficient manner. We also develop and operate leased hotels to increase our brand influence and set successful examples for our franchisee partners. As of December 31, 2025, we had 1,996 manachised hotels and 19 leased hotels. As of the same date, we had an additional 779 manachised hotels under development. 54 Table of Contents Hotel Management Our hotel management team has accumulated significant experience with respect to the operation of hotels. Building on this experience, our management team has developed a robust operational platform for our nationwide operations, implemented a rigorous budgeting process, and utilized our real-time information systems to monitor our hotel performance. We believe these systems are critical in maximizing our revenues and profitability. Hotel Reservations Guests can make hotel reservations primarily through our self-developed Atour mobile app and mini-programs and our cooperating OTA platforms and travel agencies. We have established business relationships with leading OTA platforms in China. The OTA platforms can obtain real-time hotel information and make hotel bookings through our central reservation system. We enter into framework cooperation agreements with the OTA platforms, with a term of typically one year, pursuant to which our hotels would offer hotel rooms to the OTA platforms for sale on their systems. The OTA platforms typically charge us a service fee based on a certain percentage of the revenue generated from the sale of hotel rooms through their platforms. For our manachised hotels, such service fee is paid by the respective franchisees. Our cooperation with OTA platforms allows us to market to a wider potential customer group and further enhance the occupancy rates of our hotels on a day-to-day basis. Our Retail Business As a leading lifestyle group, we extend our experience-driven business model and people-serving philosophy beyond hotel stays. We have strategically focused our retail business on the sleep category and developed our flagship brand, Atour Planet, which offers a curated range of sleep-related products such as pillows, comforters, and mattresses. As the core of our offerings under Atour Planet, our Deep Sleep series products are designed to enhance every dimension of the sleep experience and have played a pivotal role in shaping the brand image of Atour Planet in the market. Leveraging the success of our Deep Sleep series and ongoing product innovation, Atour Planet has established strong market recognition and a loyal customer base. Our Products We offer a series of products under our Atour Planet brand, which target real and nuanced sleep pain points identified through our deep insights accumulated from hotel operations. Unlike traditional retailers that rely on broad SKU expansion, we strategically focus on developing a limited number of products addressing a wide range of sleep needs of different users. This focused approach allows us to drive growth through a few category-defining bestsellers. In 2023, 2024 and 2025, pillows and comforters are the primary categories of our retail product portfolio. Atour Planet — Pillows Our pillow products are well designed to meet specific user needs, from cervical support to climate comfort, and are deeply rooted in insights derived from our customers’ real sleep behaviors. The retail price of our pillow products typically ranges from RMB164 to RMB439 per unit. Deep Sleep Memory Foam Pillow Pro Series The Deep Sleep Memory Foam Pillow Pro series is our signature pillow product, including three generations, Pro 1.0, Pro 2.0 and Pro 3.0. We launched Deep Sleep Memory Foam Pillow Pro 1.0 in 2023. Our flagship pillow product in 2024, Deep Sleep Memory Foam Pillow Pro 2.0, features a carefully engineered three-layer foam structure with a self-developed spring foam placed between a soft comfort layer and a firm support base as well as an R-shaped neck support structure that adapts to the natural curve of the neck. Both features enable the pillows to gently fill the gap between the user’s neck and the pillow surface with the user’s every movement—delicately supporting the user’s sleep throughout the night. In August 2025, we officially launched the latest Deep Sleep Memory Foam Pillow Pro 3.0. This product delivers multiple breakthrough upgrades including an innovative curve- fitting design and a partitioned support structure that better cradles the head and naturally fits the curvature of the neck and shoulders. The accompanying pillowcase uses a new weaving technique, which enhances breathability and moisture-wicking while keeping the pillow surface at a stable temperature. 55 Table of Contents Other Pillow Products In addition to the Deep Sleep Memory Foam Pillow Pro series, we offer a select range of pillows tailored to specific user preferences and demographics, including slow-rebound memory foam pillows, goose down pillows, travel pillows and children’s pillows, each addressing the core sleep needs of different consumers. Atour Planet — Comforters Following the success of our pillow products, we have extended our pillow development methodology to comforters. Based on real user feedback and our extensive insights into customers’ sleep-related needs, our comforter products aim to address the subtle yet important discomforts that commonly impact sleep quality, such as night sweats, temperature fluctuations and bulky bedding structure. The retail price of our comforter products typically ranges from RMB299 to RMB1,099 per unit. Deep Sleep Thermo-Regulating Comforter Pro Series Our Deep Sleep Thermo-Regulating Comforter Pro series is developed to address common but often overlooked sleep disruptions caused by temperature imbalance, humidity and lack of adaptability. Rooted in our people-serving philosophy, the series combines advanced materials and thoughtful construction to deliver consistent and hotel-quality sleep comfort across all seasons. Our Deep Sleep Thermo-Regulating Comforter Pro series is designed for all-season adaptability and optimal body-temperature control. Its skin-friendly fabrics and hypoallergenic fill deliver a soft, breathable and moisture-wicking feel for year-round comfort. The cover-free, dual-layer modular construction can be detached or swapped to suit seasonal needs, while the PCM fiber blend dynamically absorbs and releases heat to maintain thermal balance throughout the night. The comforters are fully machine-washable and dryer-friendly, ensuring low- maintenance care. In addition, their flexible design supports both folding and hanging storage, allowing efficient use of space without compromising comfort or performance. Our Deep Sleep Thermo-Regulating Comforter Pro series has been widely recognized by customers. The success of the comforter products has not only brought a new driver to our retail business but also evidenced our ability to replicate our development model across categories and continuously launch “blockbuster” products. Other Comforter Products In addition to the Deep Sleep comforter series, we offer other options of comforters to comprehensively address various user needs, including antibacterial soy fiber all-season comforter and bi-color silk comforter. Atour Planet — Others We have strategically expanded the Atour Planet portfolio to include a broader range of sleep-related essentials, covering not only pillows and comforters but also mattresses, fitted sheets, loungewear and other accessories. These products are designed to complement our core pillow and comforter products and address factors that affect sleep quality, reinforcing our position in the growing sleep economy and elevating our experience-driven retail business. Our continuously expanding deep sleep product portfolio comprehensively covers the diverse needs of customer home sleep micro-environment and demonstrates our capabilities to provide systematic solutions in the sleep segment. Product Design and Development We adopt an experience-driven approach to product design and development, grounded in our deep understanding of customer behavior and needs across both hotel and retail settings. Rooted in our people-serving philosophy, we design around “small but real discomforts” that commonly disrupt sleep, such as overheating, frequent turning and insufficient neck support. We combine insights from customer reviews, surveys and sleep behavior research to identify sleep issues and transform them into compelling product features. Particularly, we leverage proprietary digital tools, including AI-powered analysis system for customer reviews, to systematically track user reviews across our hotel network, e-commerce platforms and social media channels. 56 Table of Contents Our product pipeline prioritizes functionality, user experience and long-term usage value. Instead of pursuing breadth through SKU expansion, we focus on creating a highly curated portfolio of bestsellers that solve real-life pain points across the sleep experience. By continuously monitoring market trends and leveraging real-time customer feedback, we are able to upgrade existing products and launch new ones that strengthen our brand image and customer loyalty. Our design and development process follows a structured framework known as IDEA, which stands for insight, design, engaging and amplifying. ● Insight. We collect and analyze feedback from millions of hotel stays, online reviews and targeted customer surveys to uncover unmet sleep needs. ● Design. Leveraging both in-house and certified partner teams, we translate insights into concept sketches and user-centric prototypes, ensuring both functionality and aesthetic alignment with our brand. ● Engaging. We actively engage customers to build brand awareness and foster their understanding of our sleep-related products. Our marketing content is tailored to deliver the message that our sleep-related products are derived from our insights into consumers’ real sleep needs and launched after thousands of hours of product testing, which positions our products as the intuitive and trusted choice for quality sleep. ● Amplifying. During the first eight weeks after the launch of a product, we monitor and collect customer feedback on a daily basis to refine product details, communication strategies and content materials to align with evolving customer preferences and strengthen our market positioning. This end-to-end model allows us to build category-defining products that seamlessly extend the hotel experience into consumers’ daily lives. Manufacturing and Supply Chain Management We have a dedicated retail team and a comprehensive management system supporting the full spectrum of our retail business, from product development to after-sales customer service. We have established a comprehensive and e-commerce-focused user experience monitoring system for our retail brand “Atour Planet.” The system is designed to track customers’ reviews and feedback on our retail products, logistics and delivery, and after-sale services throughout their shopping journeys. We actively track customers’ feedback and are committed to timely reach-outs to dissatisfied customers and resolving any issues. Although we do not operate our own production lines, our in-house retail team plays a key role in material selection, production process design and quality control across our OEM network to ensure consistent product quality and user experience at scale. We adopt a data-driven inventory and fulfillment model, leveraging SKU-level demand forecasting to support a flexible logistics framework. This approach enables us to maintain a lean inventory profile while ensuring rapid response across our omni-channel retail network. We have also implemented an intelligent tracking system that provides full traceability of core SKUs, enhancing return efficiency and reinforcing customer confidence in product reliability. Sales and Distribution We operate an integrated omni-channel sales and distribution network with a strategic focus on online channels to support the growth of our retail business. As of December 31, 2025, our sales and distribution network consisted of (i) online channels, including Tmall, JD.com, Douyin and other leading e-commerce platforms in China as well as our proprietary mobile app and mini-programs and (ii) our offline hotel network. Online Channels We primarily sell retail products through or to leading third-party e-commerce platforms in China, such as Tmall, JD.com and Douyin. We have also developed a comprehensive online sales platform that integrates e-commerce functions into our mobile app and mini-programs. In 2023, 2024 and 2025, approximately 80.3%, 90.7% and 93.1% of GMV of our retail business was generated online, respectively. Through online channels, we generally sell products directly to end customers, which allows us to directly engage with a wide customer base, ensure data transparency and maintain full control over user experience, pricing and inventory. 57 Table of Contents Offline Channels In addition to online distribution, we have established a differentiated scenario-based retail model fully integrated into our hotel network. Guest rooms at our hotel are a fully immersive product experience space, allowing guests to explore and try our retail products during their stay, which in turn strengthens brand loyalty. We equip certain types of hotel rooms with our Atour Planet deep sleep products and allow guests to choose these products for a sleep trial as part of the APLUS service. Guests can personally experience our retail products during their stays at our hotels. In addition, all of our hotel lobbies come with a display area, where guests can view and select the deep sleep products. By offering various thoughtfully designed sleep-related products at the customers’ choice in a hotel setting, we create a hotel environment optimized for rest and recovery and delivers sleep-centered experiential services to its hotel customers. In 2023, 2024 and 2025, approximately 19.7%, 9.3% and 6.9% of GMV of our retail business was generated from our offline channels, respectively. Pricing and Return Policy We determine the pricing of our retail products considering various factors like functionality, design quality, emotional value and user experience. We maintain consistent price for the same product across all sales channels to ensure transparency and consumer trust. We may strategically use promotional campaigns and member-exclusive discounts to stimulate purchase without undermining perceived product value. We offer a standard 7-day unconditional return policy for most retail products sold through online channels, in compliance with relevant e-commerce regulations in China. For key products such as pillows and comforters, we provide detailed size information and usage guidance to reduce mismatch-related returns. Returned items undergo quality inspection, and customers are refunded or allowed to exchange based on product condition and return reason. Our return policy is designed to strike a balance between user flexibility and operational efficiency, while protecting product hygiene standards for deeply personal items. Our Loyalty Program ACARD Loyalty Program Our ACARD loyalty program is a tier-based, fully digitized loyalty program. The ACARD members may earn loyalty points with each stay at our hotels and each purchase of our retail products and use such loyalty points to redeem rewards including coupons and lifestyle products. The ACARD members are also entitled to different classes of member benefits, privileges and rewards, including discounts of room rates, free breakfast, travel support and many more, corresponding to their membership tiers. We provide a special benefit to ACARD members booking through our Atour mobile app and mini-programs, under which any eligible post-booking rate reduction before check-out is automatically refunded or credited as points. Our ACARD members increased by 41.2% from 63.4 million as of December 31, 2023 to 89.5 million as of December 31, 2024, and further increased by 25.2% to 112.0 million as of December 31, 2025. Member Acquisition and Operation Guided by our experience-driven approach, we acquire and engage ACARD members through multiple channels. Guests are invited to enroll in our ACARD loyalty program upon check-in or via in-room touchpoints during their stay at our hotels, while users can register as ACARD members, track member benefits and access personalized promotions on our mobile app and mini programs. Following the integration of hotel and retail memberships, consumers purchasing our retail products can also directly join our ACARD loyalty program on our collaborating e-commerce platforms. In addition, we have partnered with selected brands in other industries and sectors, such as travel, fitness and online streaming, to introduce collaboration membership programs, which allow us to tap into adjacent customer bases and drive quality traffic into our ACARD membership program. Meanwhile, we adopt data-driven, tier-based engagement strategies to nurture member loyalty. Through personalized communication, dynamic benefit upgrades and member-exclusive initiatives such as seasonal promotions or sleep-focused campaigns, we enhance member stickiness across both hotel and retail businesses. 58 Table of Contents Upgrade and Integration We continuously engage our customers to enhance customer loyalty through our ACARD loyalty program. We have initiated a comprehensive upgrade of our ACARD membership ecosystem, seamlessly integrating membership identities and benefits across our hotel and retail businesses. Such integration reinforces the synergy between accommodation and retail experiences, and thereby, drives customer acquisition and enhances customer loyalty. The upgrade allows us to provide membership benefits to both hotel and retail members across different platforms, enabling us to create a closed-loop service experience. The ACARD members can now enjoy exclusive discounts on accommodations while accessing special retail promotions, enhancing overall customer satisfaction and loyalty. APLUS Customer Service Program To further improve user experience and enhance customer loyalty, we have introduced the APLUS customer service program. Through the APLUS program, hotel guests can customize their stay by selecting from a curated suite of services that can be pre-arranged prior to their arrival. As of December 31, 2025, our APLUS program offers over 20 personalized services to further elevate user experience, including pillow trial, facial cleansing kit, disposable clothing and good-night milk, among others. Since its launch, our APLUS program has been widely recognized among our hotel guests. Technology and Digitalization Driven by our commitment to user experience and as part of our strategy to enhance operational efficiency, we have built a fully cloud-based digital management system that covers all core business functions. According to Frost & Sullivan, we were one of the first hoteliers in the hospitality industry to adopt a fully cloud-based digital management system in China. We have successfully developed and implemented a wide arrange of IT systems that cover all core business functions. On top of these IT systems, we have been dedicated to utilizing advanced technologies to support our business. In this regard, we have applied an AI-powered analysis system for customer reviews to further enhance our experience-driven model, and a data-driven site selection tool to optimize our manachise model. Atour Mobile App and Mini-programs Our self-developed Atour mobile app and mini-programs serve as a digital channel, enhancing CRS functionality, streamlining the check-in experience, and strengthening member engagement and retention. Through the app, guests can request in-room amenities, enjoying a contact-free and efficient experience, along with access to the APLUS personalized service. Our ACARD membership ecosystem is also embedded within the app, offering a tiered loyalty program where guests accumulate status through their stays, unlocking exclusive benefits such as complimentary breakfast, room upgrades, and late check-out privileges. The flexible point redemption system allows members to use accumulated points for both hotel stays and retail purchases. In addition, the app supports mobile check-out, eliminating traditional front desk procedures for a seamless experience. Users can also access real-time nationwide hotel availability, apply room filters, and view dynamic pricing. We also operate an independent and dedicated mini-program, “Atour Planet”, for our retail business. Retail customers can access “Atour Planet” mini-program directly or be redirected seamlessly from our Atour mobile app or mini-program for hotel services, enabling integrated access to both hotel and retail offerings within our digital ecosystem. Through “Atour Planet” mini-program, customers can browse and purchase our retail products, access promotional campaigns and participate in interactive brand activities. 59 Table of Contents Central Reservation System (CRS) We have adopted a self-developed, cloud-based, all-channel, real-time CRS available 24 hours a day, seven days a week. Our CRS is fully integrated with all of our booking channels, including mobile app, mini programs, third-party platforms and other reservation partners. This effectively allows us to manage room inventories, prices and reservations instantly across all major channels. The real-time inventory management module of the system improves the efficiency of reservations, enhances customer satisfaction and maximizes profitability. The price management module allows us to set up rates at different levels (including property, market segments, booking channels and hotel brands) and distributes price adjustments and promotional offers to all major channels simultaneously, which greatly increases efficiency in managing all booking channels and enhances our ability to optimize total profit. In addition, the CRS comes with an embedded business intelligence module, which allows hotel staff to monitor and analyze the core operational metrics and make well-informed business decisions in time. In 2023, 2024 and 2025, room nights reserved through our core CRS channels, including total room nights sold (i) through our own channels to our individual members and (ii) to corporate customers, accounted for 63.4%, 63.0% and 62.9% of our total room nights for the same periods, respectively. Such a high percentage of booking through CRS enables us to achieve higher operating efficiency compared to hotels that rely heavily on travel intermediaries such as OTA platforms. Customer Relationship Management System (CRM) Our self-developed CRM serves multiple critical functions. It enables seamless customer lifecycle management from initial acquisition to long-term retention, while also automating sales and marketing processes to improve operational efficiency. The system integrates customer service functions to enhance guest interactions and ensures that every touchpoint aligns with our service standards. Its business value lies in improving customer loyalty, increasing repeat bookings, optimizing operations, reducing operational costs, driving revenue growth, and ensuring regulatory compliance. Property Management System (PMS) Our self-developed PMS enables each hotel within the network to accurately and cost-effectively manage its room inventory and reservations on its own in real time. It also allows the submission of price adjustment requests through an Internet browser, which in turn optimizes each hotel’s occupancy rate, ADR and RevPAR. The system is designed to enhance our profitability and competitiveness by integrating with the CRS and CRM. The main functions of the PMS cover the full lifecycle of accommodation orders management, including pre-stay, during-stay, and post-stay processes. Before check-in, it manages room status and reservation orders to ensure operational readiness, including room availability, pricing adjustments, and maintenance scheduling. During the stay, the system handles order processing, room assignments, task coordination, billing, and night audits. After check-out, it manages guest profile data, corporate account handling, and detailed financial reporting. The PMS enables us to more effectively assess the performance of our hotels in a timely manner, efficiently allocate resources, and identify and refine specific market and sales targets. Hotel Lifecycle Management System (HLM) Our self-developed HLM is an end-to-end digital management platform that covers the full lifecycle of hotel development, from site evaluation, approval, contract signing, pre- opening execution (including standard implementation, construction progress tracking and procurement coordination), to opening procedures (such as license and permit processing, staff training and opening countdown). With standardized workflows, visual dashboards and transparent data integration, HLM systematically addresses the pain points in hotel development such as prolonged cycles, fragmented information and uncontrolled costs, and significantly improves the efficiency of opening new hotels while ensuring the consistent quality standard in newly opened hotels, which maximizes the value of our assets. Intelligent Tools We have adopted and applied several intelligent tools in business operations to improve customer satisfaction while enhancing operational efficiency. For example, we adopted an AI-powered semantic analysis system to extract insights from customers’ reviews, which helps identify customer behavioral trends, refine features of its services and products and enhance personalized experience. We have also adopted self-developed data driven technologies to assist franchisees with hotel site selection, and an automated decision reporting system to optimize the hotel development process. 60 Table of Contents Data Privacy and Protection We place a strong emphasis on data security. We have in place extensive policies, processes, network architecture, and software to protect customer data. We collect personal information of our guests customarily required for their hotel booking, check-ins and check-outs, including their names, ID numbers and mobile phone numbers. In addition, we collect personal information of our loyalty members to provide membership services. For instance, we collect members’ mobile phone numbers to facilitate their completion of membership registration; we collect members’ ID information to bind their identity to their membership accounts, and based on this, provide membership benefits such as points accumulation. Members may also voluntarily provide us with personal information not required for registration, such as gender and date of birth, to enjoy membership services such as birthday privileges. We also collect consumers’ personal information under our retail business operations — for example, we collect consumers’ contact name, phone number, and delivery address to fulfill product delivery, complete order transactions, and provide customer service. We stored personal information in data centers deployed within the territory of the PRC, and we did not have any cross-border transfer of personal information during our daily business operations. To ensure the confidentiality and integrity of our guests’ data, we maintain comprehensive and rigorous data security measures. We de-identify and encrypt confidential personal 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 personal data only to limited employees with strictly defined and layered access authorization. Our manachised hotels use our operation systems to collect the guests’ data, and the data are then stored on the highly secured server that we rent from third-party cloud service providers. Only authorized staff of our manachised hotels can read and record the data, and our systems keep records of their access to the data. We have also implemented measures restricting data access and prohibiting data exporting for those hotels. In the course of our daily business operations, our franchisees use PMS and other relevant systems uniformly operated and maintained by us to process guests’ order data. We share guests’ order data with franchisees through such systems in order to ensure that they can assist guests in completing service processes including hotel booking, check-in, check-out and other related processes. We have adopted strict data security and internal control measures to safeguard the security of personal information during such sharing. For instance, we require franchisees to comply with data security and personal information protection obligations through contractual clauses such as confidentiality agreements and data processing agreements signed with them. Furthermore, the front-end of our PMS system has implemented desensitization processing for personal information such as guests’ names, phone numbers, and ID details, and is equipped with strict access control mechanisms, which ensures that only a limited number of authorized personnel of the franchisees can access guests’ personal information when necessary for business operations. We have complied with the applicable laws and regulations in PRC relating to data security, personal information and privacy protection in all material aspects. Up to the date of this annual report, (i) we have not experienced any material incident of data leakage, data loss or breach incidents, and (ii) we had not been subject to (a) any material administrative penalties, or other sanctions imposed by any relevant competent authorities in respect of cybersecurity, data security and personal information protection, and (b) any infringement of third-party rights, and there were no material disputes, conflicts, litigation, arbitration, or claims in connection therewith. See “Item 3. Key Information — 3.D. Risk Factors — Risks Related to Our Business and Industry — We may be liable for improper collection, use or appropriation of personal information provided by our customers.” Intellectual Property We rely on a combination of patent, copyright, trade secret and trademark laws as well as contractual restrictions such as confidentiality agreements and license agreements to protect our intellectual property. We have implemented an intellectual property management policy, which covers the registration, maintenance, enforcement and protection of our intellectual property rights. Our employees are subject to confidentiality and proprietary information obligations under our internal policies, while consultants and other third parties are required to comply with confidentiality and proprietary information requirements as set forth in their engagement or other relevant agreements with us. As of December 31, 2025, we had 42 issued patents, 31 pending patent applications, 79 registered copyrights, 1,612 registered trademarks (including but not limited to “Atour,” “Atour Light,” and “Atour Planet”), and 65 domain names under our name in China. As of the same date, we had 102 registered trademarks overseas. Our intellectual property is subject to risks of theft and other unauthorized use, and our ability to protect our intellectual property from unauthorized use is limited. In addition, we may be subject to claims that we have infringed the intellectual property rights of others. See “Item 3. Key Information — 3.D. Risk Factors — Risks Related to Our Business and Industry — Any failure to protect our trademarks, patents and other intellectual property rights could have a negative impact on our business.” 61 Table of Contents Branding and Marketing Brand building lies at the heart of our marketing efforts. Our marketing strategy is designed to enhance our brand recognition and strengthen customer loyalty. Anchored in our experience-driven business model and people-serving philosophy, we strategically focus on our long-term positioning as a lifestyle brand, aiming to build and differentiate the brand image of each of our hotel and retail products. We focus our marketing campaigns on both online platforms and offline channels, enabling broader and more targeted audience engagement. We have created a large volume of sleep-related content on leading social media platforms in China to build brand recognition in online communities and also worked with key opinion influencers to increase exposure and gain positive word-of-mouth referrals. For our hotel business, we target the distinct guest segments served by each of our hotel brands and implement branding strategies based on data insights, customer behavior and touchpoint design. We have strengthened our marketing strategies for retail business by developing and launching blockbuster products. These are supported by themed campaigns for specific contexts that reinforce the link between our products and consumers’ emotional needs. In addition, we are actively exploring new marketing approaches. We held our first “Deep Sleep Conference” in Lijiang, Yunnan Province in October 2024. The “Deep Sleep Conference” was a well-orchestrated marketing campaign that blended immersive experiences, product storytelling, and brand strategy. In the future, we plan to make “Deep Sleep Conference” an ongoing brand-building initiative and develop it as a platform to communicate our product philosophy, showcase our latest research and development achievements, share our exploration into the science of deep sleep and introduce new sleep-related products. Supply Chain Management To ensure operational consistency and mitigate supply chain risks, we have deployed a proprietary digital supply chain system that enables end-to-end online management across procurement, inventory and logistics. The system integrates several quality management tools, including on-site data entry modules, remote analytics, and real-time monitoring dashboards powered by business intelligence and big data technologies. These tools allow us to track supplier performance metrics, monitor defect rates by batch, and conduct variance analysis across different production lines and locations. We have also implemented an intelligent tracking system that enables full traceability of core SKUs from production through to final delivery, which significantly improves return handling, strengthens quality assurance, and enhances supplier accountability. Production We outsourced the production of hotel supplies, construction materials and our retail products to third party manufacturers. We procure hotel supplies and construction materials directly from qualified suppliers, and adopt an original equipment manufacturer (“OEM”) model for our retail products, cooperating with experienced manufacturers in China with extensive expertise in the retail sector. We operate under an asset-light production model and do not have our own production lines. Hotel Business For hotel-related goods, including linens, bedding, in-room amenities, operating supplies and equipment, and construction and renovation materials, we primarily adopt a traditional direct procurement model. We select suppliers for hotel business through tendering or price comparison procedures, and conduct supplier qualification reviews and on-site inspections before entering into agreements with selected suppliers. Pursuant to such agreements, we then place procurement orders through our centralized system. We assign purchase orders automatically or manually to approved suppliers only, and we require each hotel in our network to conduct final acceptance upon delivery. Through this process, we ensure compliance with our internal procurement guidelines, maintain consistent quality and timely delivery of hotel supplies, and reduce the risks of supply disruption or construction delays. 62 Table of Contents Retail Business For our retail products, we leverage our strong in-house design and product development capabilities to work closely with OEM partners throughout the production process. Our product design team is actively involved in material selection, ergonomic design, production process specification, tooling development and quality benchmarking to ensure that our products maintain a high degree of consistency in terms of design, performance and user experience across different manufacturers. To facilitate standardized and scalable production, we provide each OEM partner with detailed standard operating procedures (SOPs), technical specifications and reference samples, and conduct both in-process and post-production inspections, including regular on-site audits to verify compliance with our production requirements and quality standards. Quality Control We have stringent quality assurance and control procedures in place to ensure supplier compliance with our product safety and quality standards. All suppliers are required to undergo on-boarding procedures with a rigorous quality screening process before we begin working with them. In addition, our framework agreements with suppliers have clauses that ensure a baseline quality of the products produced by the suppliers, including those related to technical specification, quality specification, inspection standards and defective product handling. Upon receipt of product shipments, we conduct inspections on appearance, quantity and specifications in accordance with our SOPs. For hotel-related goods, each hotel carries out inspections before acceptance. For retail products, our designated warehouse acceptance personnel perform the inspections. Our quality control teams also conduct regular site visits to suppliers’ production facilities to assess compliance with our operational standards and verify the condition of equipment, production environments and finished goods. Retail Inventory Management For our retail business, we operate a centralized, data-driven system that integrates demand forecasting, procurement and warehousing to optimize inventory turnover and product traceability. We generate monthly rolling forecasts at the SKU level based on real-time omni-channel sales data. Based on these forecasts, we submit procurement applications and place purchase orders with, or issue customized processing contracts to, our OEM partners. Once the production of retail products we ordered is completed, we and our OEM partners conduct multi-step quality inspections before admitting the products into third-party warehouses. To efficiently manage the inventory level, we have deployed a warehouse management system that enables us to monitor inventory turnover, in-transit stock and sell-through performance, maintain safety stock for key SKUs, and dynamically adjust replenishment based on real-time demand. We have also implemented end-to-end SKU traceability, covering factory production, warehouse delivery and returns, thereby enhancing supplier accountability and return efficiency. Distribution and Delivery Our distribution and delivery system is designed to support timely and demand- responsive fulfillment across both our hotel and retail businesses. Suppliers are generally responsible for delivering products either to our warehouses or, for certain hotel-related goods, directly to hotel sites, depending on the order type and contractual arrangement. For hotel business, procurement of construction materials and routine replenishment of operational supplies is generally made directly from suppliers to our hotels in accordance with established replenishment schedules and usage thresholds. For our retail business, we operate a distribution and delivery network supported by four regional warehouses. Inbound shipments are allocated to designated warehouses based on sales forecasts, and orders are dispatched from the warehouse nearest to the end customers or points of sale to ensure timely fulfilment. This arrangement allows us to reduce logistics costs and efficiently support both online and offline sales channels. For online orders, retail products are shipped directly from our warehouses to end customers, while for offline channels, goods are delivered to our hotels or other points of sale in accordance with our arrangements with franchisees and channel partners. To enhance logistics transparency and service quality, we have implemented digital tracking functions for selected retail SKUs. These tools enable greater visibility over the movement of goods, assist with exception handling, and support coordination between internal teams and logistics service providers. 63 Table of Contents Our Environmental, Social and Governance (ESG) Initiatives We place significant emphasis on sustainable development, incorporating the principles of environmental, social and governance (“ESG”) into our corporate mission of “creating an intimate ambiance where people can warmly connect.” We have implemented six ESG commitments, namely “responsible governance, customer first, growing with employees, sharing values, safeguarding nature and staying true to original aspirations.” ESG Governance To support our sustainable development, we have established a three-tier ESG governance structure, consisting of our board of directors, an executive committee, and an ESG working group. Our board of directors serves as the highest supervisory body for our ESG governance, overseeing all ESG-related matters, providing supervision and guidance, approving ESG-related policies, and evaluating ESG performance. The executive committee is directly accountable for our ESG initiatives and responsible for strategic planning, goal assessment, and risk management, including water and energy management strategies and performance. The ESG working group coordinates ESG-related works across departments and business units focusing on project planning, overall coordination, and implementation of ESG initiatives. In order to minimize the environmental impact of our operations and actively fulfill our environmental protection responsibilities, we have also implemented an environmental policy as the guiding framework for our environmental initiatives. Environmental Protection We deeply integrate the concept of sustainable development into hotel operations and retail business, putting environmental protection responsibilities into practice through concrete actions. We require all business departments to stay abreast of updates and changes in relevant environmental regulations to ensure full compliance in all operational activities. In addition, we conduct regular performance assessments of environmental management practices across departments. For any identified issues, we promptly implement corrective measures and continuously improve our environmental compliance management. Eco-friendly Hotel Operation We integrate holistic environmental management into every aspect of our hotel operations. From the initial design and material procurement stages, we prioritize sustainable and durable building materials, and employ modular construction methods to minimize the environmental impacts on our projects. Prior to opening, each hotel undergoes stringent testing across key environmental indicators to ensure full compliance with national and local environmental regulations. Throughout our daily operations, we maintain rigorous environmental management across key areas to ensure systematic and effective implementation. In terms of energy consumption, we have installed high-efficiency equipment across our hotels and continuously monitor and analyze energy usage data. Based on such analysis, we implement targeted improvements, including equipment upgrades and operational optimization, to enhance energy efficiency. We are also actively introducing solar power generation systems to facilitate the transition toward renewable energy sources. With respect to water resources, we have equipped our hotels with water-saving fixtures and implemented routine maintenance and inspection programs for water-related equipment and pipelines to prevent leaks and minimize water loss. Water usage is accurately metered and monitored in real time to reduce waste. In addition, we use environmentally compliant cleaning agents and treat wastewater in strict accordance with applicable national regulations. For waste management, we have established a comprehensive waste sorting system across our hotels, including standardized temporary storage of different waste categories. We engage qualified third parties or local municipal sanitation authorities for the sorting and disposal of waste, ensuring compliance with all applicable regulatory requirements. Guided by the principle of green development, we continue to explore environment-friendly development paths by integrating sustainability into every business practice, from product design, selection of building materials, to equipment procurement and the development of consumables. 64 Table of Contents We insist on promoting the use of modular design in our hotel business, increasing the proportion of modular design in every hotel product models. By integrating energy saving and low-carbon concepts from the outset, we outline our practical actions to promote and popularize green construction in the hotel industry. Our design approach follows the principle of “80% standardization + 20% personalization,” ensuring consistency in the overall design style while allowing for customization based on individual property conditions and local culture. Modular design and assembly play an important role in improving construction efficiency and effectively mitigating environmental impact within the hotel industry. We also prioritize the environmental sustainability and durability of building materials and are committed to sourcing high quality, cost-effective options. Through our supply chain purchasing platform, Atour Market, we have successfully introduced and promoted a variety of environmentally friendly building materials, including bamboo fiber wallcovering materials and ENF-grade eco-friendly wall panels, across all our hotels. The bamboo fiber wallcovering materials adopted at our hotels have a formaldehyde emission level of less than 0.1 mg/L, significantly exceeding China’s highest environmental protection standard (0.5 mg/L). We will continue to explore and develop new sustainable materials. With these eco-friendly offerings we are well-positioned to deliver a greener and more exceptional accommodation experience to customers. Green Retail Products We have implemented comprehensive green control for our retail business. In terms of raw materials, we prioritize the use of eco-friendly materials whenever possible and regularly audit the environmental performance of our raw material suppliers to ensure strict compliance with environmental standards throughout the production process. In terms of packaging, we actively adopt recyclable and biodegradable materials and work closely with suppliers to develop lightweight designs that significantly reduce packaging material usage. Our retail business also exemplifies our commitment to sustainable development. We use sustainable materials in a number of Atour Planet products to optimize the package design and improve the “recyclability” of these products. While delivering comfort and warmth to customers, we remain mindful of minimizing environmental impact throughout the production and usage process. In material selection for Atour Planet products, we adhere to strict sustainability principles, prioritizing the use of environmentally friendly materials. For example, one of our blockbuster products, the Deep Sleep Thermo-Regulating Comforter Pro series, uses Naia™ Acetate Fiber (made from wood pulp in sustainably managed forests and plantations) and EcoCosy Cellulosic Fiber (derived from natural wood sources harvested from planted forests) in both the moisture-wicking layer and the skin adhesive fabric. Both materials are bio-based cellulose fibers, which are natural, safe and skin-friendly and have also been certified by several external authorities. Social Responsibility Public Welfare and Social Contributions We are also committed to giving back to our society and communities. Yaduo village served as an inspiration for establishing our Atour Group. Our management team returned to Yaduo Village in 2017 and decided to uplift the village via the development of the tea industry. In 2018, we partnered with the local government to establish a dedicated tea farmers’ cooperative and pioneered a “Tea Farmer + Cooperative + Enterprise” business model to address tea sales challenges. Since then, all our hotels have been offering complimentary “Atour Tea” in certain room types to guests during their stay. Meanwhile, we have also made “Atour Tea” available through our online retail channels. In 2019, we established a standardized tea production base in Yaduo Village, following a standard factory model. This base enhanced production standards, created more job opportunities, and helped to lifting Yaduo village out of poverty. As of December 31, 2025, the tea plantation area covered approximately 2,800 acres. The cumulative purchase of finished tea leaves exceeded 318,000 kilograms, with a total value exceeding RMB76 million. Such initiatives not only help increase income of villagers in Yaduo Village and surrounding areas, but also extends warmth and the power of our original spirit to every customer. While promoting the economic and cultural development of Yaduo village, we also aimed to contribute to the region’s ecological and environmental protection. Yaduo Village, nestled against the Gaoligong Mountains, is home to the Skywalker Hoolock Gibbon, a rare and endangered species unique to China. We launched the “Yuan Meng Project” in partnership with a nonprofit organization to help protect the critically endangered Skywalker Hoolock Gibbon. We are calling on the public to join us in safeguarding this endangered species through a series of campaigns, leveraging our brand influence to encourage greater participation in biodiversity conservation. We also launched charity merchandise sales on our mobile app and mini-programs, with all profits donated to gibbon conservation efforts. 65 Table of Contents In 2025, the Atour Charity Foundation was officially established. Committed to supporting disadvantaged groups, advancing public welfare, and fulfilling our corporate social responsibility, the Foundation serves as a platform for spreading humanistic care and uniting positive forces for good. It currently oversees three projects: Love Fitting Rooms, which continues to provide seasonal clothing to residents of Yaduo Village and neighboring communities; Reading Under the Moon Mountain, offering educational support to outstanding students from financially disadvantaged families in Yaduo Village and Shiyueliang Town; and Atour Community Care Station, dedicated to delivering daily care and assistance to local elderly individuals living alone. Through the Foundation, Atour transforms goodwill into lasting support, turning one-time donations into sustained impact and ensuring that warmth and care truly reach those in need. Employee Support We view our employees as partners who walk alongside us, moving forward together. We are committed to treating them with respect, care, and support. While ensuring the protection of their basic rights and interests, we place strong emphasis on employee career development and well-being. Through various initiatives, such as training, honor-based incentives, and welfare benefits, we strive to foster the mutual growth of both our employees and the organization, promoting our culture of care and warmth. Competition China’s hotel industry is highly fragmented, comprising a large number of independent hotels alongside a relatively small number of hotel chains. Our principal competitors for the hotel business include other branded and independent hotel operating companies, national and international hotel brands and ownership companies. Particularly, our properties and brands compete with other hotels, resorts, motels and inns in their respective geographic markets or customer segments, including facilities owned by local interests, individuals, national and international chains, institutions, and investment and pension funds. We also compete in China’s sleep-related home textile market, the largest sector of the sleep-related product retail industry. Our principal competitors for the retail business include other retailers of the sleep-related products that we are offering, such as home textile retailers. We believe that (i) our position as a multi-branded manager and franchisor of hotels, combined with our growing presence in the retail industry, helps us succeed as one of the largest and most innovative hospitality companies in China, (ii) our retail business is positioned favorably in market competition as a result of our strong market research, product development, supply chain management, marketing and customer service capabilities, and (iii) our ability to integrate retail into our hotel experience — allowing guests to try and purchase products in an immersive setting — provides us with a unique advantage over traditional retail brands. Insurance We believe that our hotels are covered by adequate property and liability insurance policies with coverage features and insured limits that we believe are customary for similar companies in China in accordance with our standards, including but not limited to property, employer’s liability and public liability insurance, as well as construction-related insurance prior to hotel opening, which is in line with industry practice. Such insurance policies must remain valid throughout the operation period of any manachised hotel, and the franchisees are required to name us as an additional insured party and provide proof of coverage upon request to ensure continuous protection of both the franchisees’ and our interests. For our leased hotels, we maintain comprehensive insurance coverage throughout the construction and operation stages, including but not limited to construction all-risk, property all-risk, employer’s liability and public liability insurance, fidelity insurance, business interruption insurance and cash insurance. Moreover, we also require our franchisees to carry adequate property and liability insurance policies. We carry property insurance that covers the assets that we own at our hotels. As a result, our Directors are of the view that our insurance coverage is adequate and sufficient to cover the major risks associated with our business operations. Although we require our franchisees to purchase customary insurance policies, we cannot guarantee that they will adhere to such requirements. If we were held liable for amounts and claims exceeding the limits, our financial condition may be materially and adversely affected. See “Item 3. Key Information — 3.D. Risk Factors — Risks Related to Our Business and Industry — We have limited insurance coverage.” Regulation This section sets forth a summary of the principal PRC laws and regulations relevant to our business and operations in China. 66 Table of Contents The hospitality industry in China is subject to a number of laws and regulations, including laws and regulations relating specifically to hotel operation and management and commercial franchising, as well as those relating to environmental and consumer protection. The principal regulations governing foreign ownership of hotel businesses in the PRC are the Special Administrative Measures (Negative List) for the Access of Foreign Investment (Edition 2024) issued on September 6, 2024, which became effective on November 1, 2024 and the Industry Guidelines on Encouraged Foreign Investment (Edition 2025) issued on December 15, 2025, which became effective as of February 1, 2026, both of which were promulgated by the PRC Ministry of Commerce, or the MOFCOM, and the National Development and Reform Commission, or the NRDC. Pursuant to these regulations, there are no restrictions on foreign investment in limited-service hotel businesses in China aside from business licenses and other permits that every hotel must obtain. Similar with other industries in China, regulations governing the hospitality industry in China are still developing and evolving. As a result, most legislative actions consist of general measures such as industry standards, rules or circulars issued by different ministries rather than detailed legislations. This section summarizes the principal PRC laws and regulations currently relevant to our business and operations. Regulations on Hotel Operation The Ministry of Public Security issued the Measures for the Control of Security in the Hospitality Industry in November 1987, which were amended in January 2011, November 2020 and March 2022, and the State Council promulgated the Decision of the State Council on Establishing Administrative License for Necessarily Retained Items Requiring Administrative Examination and Approval in June 2004 and amended it in January 2009 and August 2016, respectively. Under these two regulations, anyone who applies to operate a hotel is subject to examination and approval by the local public security authority and must obtain a special industry license. The Measures for the Control of Security in the Hospitality Industry impose certain security control obligations on the operators. For example, the hotel must examine the identification card of any guest to whom accommodation is provided and make an accurate registration. The hotel must also report to the local public security authority if it discovers anyone violating the law or behaving suspiciously or an offender wanted by the public security authority. Pursuant to the Measures for the Control of Security in the Hospitality Industry, hotels failing to obtain the special industry license may be subject to warnings or fines of up to RMB200. In addition, pursuant to the Law of the PRC on Penalties for the Violation of Public Security Administration promulgated in August 2005 and amended in October 2012 and June 2025, and various local regulations, hotels failing to obtain the special industry license may be subject to warnings, orders to suspend or cease continuing business operations, confiscations of illegal gains or fines. Operators of hotel businesses who have obtained the special industry license but violate applicable administrative regulations may also be subject to revocation of such licenses in serious circumstances. The State Council promulgated the Administrative Regulations on Sanitation of Public Places in April 1987 and amended it in February 2016, April 2019 and December 2024, according to which, a hotel must obtain a public area hygiene license before opening for business. Pursuant to this regulation, hotels failing to obtain a public area hygiene license may be subject to the following administrative penalties depending on the seriousness of their respective activities: (i) warnings; (ii) fines; or (iii) orders to suspend or cease continuing business operations. In March 1991, the Ministry of Health promulgated the Implementation Rules of the Administrative Regulations on Sanitation of Public Places, which was most recently amended in December 2017, according to which hotel operators shall establish sanitation management system and keep records of sanitation management. The Standing Committee of the National People’s Congress, or the SCNPC, enacted the Food Safety Law of the PRC in February 2009, which was most recently amended in April 2021 and September 2025, according to which any hotel that provides food must obtain a license. In June 2023, the State Administration for Market Regulation promulgated the Administrative Measures for Food Operation Licensing and Record-filing, which came into effect in December 2023 and replaced the Administrative Measures on Administration of Food Business Licensing which was enacted in August 2015 and amended in November 2017. According to the Administrative Measures for Food Operation Licensing and Record-Filing, any entity involving sales of food or food services must obtain a food business license. Pursuant to the Food Safety Law of the PRC, hotels failing to obtain the food business license (or formerly the food service license) may be subject to: (i) confiscation of illegal gains, food illegally produced for sale, and tools, facilities and raw materials used for illegal production; or (ii) fines between RMB50,000 and RMB100,000 if the value of food illegally produced is less than RMB10,000, or fines equal to 10 to 20 times of the value of food if such value is equal to or more than RMB10,000. 67 Table of Contents The Fire Prevention Law of the PRC, promulgated in April 1998 and amended in October 2008, April 2019 and April 2021, respectively, by the SCNPC, and the Provisions on Supervision and Inspection on Fire Prevention and Control, amended and promulgated on April 30, 2009 and effective as of May 1, 2009 and most recently amended on July 17, 2012 by the Ministry of Public Security, and the Interim Provisions on Administration of Review and Examination of Fire Prevention Design of Construction Projects promulgated on April 1, 2020, effective as of June 1, 2020 and amended on August 21, 2023 by the Ministry of Housing and Urban-rural Construction require that (i) the fire prevention design documents of special construction projects, such as hotels with overall floor area of more than 10,000 square meters, shall be reviewed and inspected by local housing and urban-rural development authorities before construction; (ii) the construction of specific construction projects, such as hotels with overall floor area of more than 10,000 square meters be inspected and accepted by local housing and urban-rural development authorities from a fire prevention perspective before completion; and (iii) the public gathering places, such as hotels, shall complete fire prevention safety inspection with the local fire and rescue department, which is a prerequisite for business opening. Pursuant to these regulations, related hotels failing to obtain approval of fire prevention inspection and acceptance or failing fire prevention safety inspections (including acceptance check and safety check on fire prevention) may be subject to: (i) orders to suspend the construction of projects, use or operation of business; and (ii) fines between RMB30,000 and RMB300,000. On November 27, 2023, the General Administration of Quality Supervision, Inspection and Quarantine and Standardization Administration approved and issued Classification and Accreditation for Star-rated Tourist Hotels (GB/T14308-2023), which became effective on March 1, 2024. Under Classification and Accreditation for Star-rated Tourist Hotels, all hotels with operations of over one year are eligible to apply for a star rating assessment. There are five ratings from one star to five stars for tourist hotels, assessed based on the level of facilities, management standards and quality of service. A star rating, once granted, is valid for five years. On September 21, 2012, the Ministry of Commerce promulgated the Provisional Administrative Measures for Single-purpose Commercial Prepaid Cards, which was amended on August 18, 2016. Pursuant to this regulation, if an enterprise engaged in retail, accommodation and catering, or residential services issues any single-purpose commercial prepaid card to its customers, it shall undergo a record-filing procedure. For a hotel primarily engaged in the business of accommodation, the aggregate balance of the advance payment under the single-purpose commercial prepaid cards it issued shall not exceed 40% of its income from its primary business in the previous financial year. On April 25, 2013, the SCNPC issued the Tourism Law of the PRC, which became effective on October 1, 2013 and was most recently amended on October 26, 2018. According to this law, the accommodation operators shall fulfill their obligations under the agreements with customers. If the accommodation operators subcontract part of their services to any third party or involve any third party to provide services to customers, the accommodation operators shall assume the joint and several liabilities with the third parties for any damage caused to the customers. Regulations on Leasing Under the Law of the PRC on Administration of Urban Real Estate promulgated by the SCNPC, which took effect as of January 1995 and was amended in August 2007, August 2009 and August 2019, respectively, and the Administrative Measures on Leasing of Commodity House promulgated by the Ministry of Housing and Urban-rural Construction, which took effect as of February 1, 2011, when leasing premises, the lessor and lessee are required to enter into a written lease contract, prescribing such provisions as the leasing term, use of the premises, rental and repair liabilities, and other rights and obligations of both parties. Both lessor and lessee are also required to go through registration procedures to record the lease with the real estate administration department. Pursuant to these laws and regulations and various local regulations, if the lessor and lessee fail to go through the registration procedures, both lessor and lessee may be subject to fines, and the leasing interest may be subordinated to an interested third party acting in good faith. On May 28, 2020, the Civil Code of the People’s Republic of China (the “Civil Code”) was promulgated by the National People’s Congress, and the Civil Code came into effect on January 1, 2021 and replaced the Property Law, the Contract Law of the PRC and several other basic civil laws in the PRC. According to the Civil Code, subject to consent of the lessor, the lessee may sublease the leased item to a third party. Where the lessee subleases the lease item, the leasing contract between the lessee and the lessor remains valid. The lessor is entitled to terminate the contract if the lessee subleases the lease item without the consent of the lessor. Where a lessor knows or should have known of the sublease made by a lessee but fails to raise any objection within six months, the lessor is deemed to have consented to the sublease. Pursuant to the Civil Code, where a mortgagor leases the mortgaged property before the mortgage contract is concluded, the previously established leasing relation shall not be affected; and where a mortgagor leases the mortgaged property after the creation of the mortgage interest, the leasing interest will be subordinated to the registered mortgage interest. 68 Table of Contents Regulations on Land or Property Use In June 1986, the SCNPC promulgated the Land Administration Law of the PRC, which was last amended on August 26, 2019 and became effective on January 1, 2020. In January 1991, the State Council published Rules for Implementation of the Land Administration Law of the PRC which was last amended on July 2, 2021 and came into effect on September 1, 2021. According to the regulations, enterprises and individuals shall use land strictly in accordance with the purpose stipulated in the land use master plan. Changes to the purpose of the use of land in accordance with laws must be supported by approval documents, and an application for the change of registration must be submitted to the land administration department of the people’s government above county level in which the land is situated. The change registration shall be carried out by the original land registration administrative authority in accordance with law. If the enterprises or individuals do not use state-owned land in accordance with the approved land use purpose, the natural resources administrative department of the people’s government at county level and above shall order the party concerned to hand over the land. Regulations on Consumer Protection In October 1993, the SCNPC promulgated the Law of the PRC on the Protection of the Rights and Interests of Consumers, or the Consumer Protection Law, which became effective on January 1, 1994 and was amended on October 25, 2013. Under the Consumer Protection Law, a business operator providing a commodity or service to a consumer is subject to a number of requirements, including the following: ● to ensure that commodities and services meet with certain safety requirements; ● to protect the safety of consumers; ● to disclose serious defects of a commodity or a service and to adopt preventive measures against damage occurrence; ● to provide consumers with accurate information and to refrain from conducting false advertising; ● to obtain consents of consumers and to disclose the rules for the collection and/or use of information when collecting data or information from consumers; to take technical measures and other necessary measures to protect the personal information collected from consumers; not to divulge, sell, or illegally provide consumers’ information to others; not to send commercial information to consumers without the consent or request of consumers or with a clear refusal from consumers; ● not to set unreasonable or unfair terms for consumers or alleviate or release itself from civil liability for harming the legal rights and interests of consumers by means of standard contracts, circulars, announcements, shop notices or other means; ● to remind consumers in a conspicuous manner to pay attention to the quality, quantity and prices or fees of commodities or services, duration and manner of performance, safety precautions and risk warnings, after-sales service, civil liability and other terms and conditions vital to the interests of consumers under a standard form of agreement prepared by the business operators, and to provide explanations as required by consumers; and ● not to insult or slander consumers or to search the person of, or articles carried by, a consumer or to infringe upon the personal freedom of a consumer. Business operators may be subject to civil liabilities for failing to fulfill the obligations discussed above. These liabilities include ceasing infringement, restoring the consumer’s reputation, eliminating the adverse effects suffered by the consumer, and offering an apology and compensation for any losses incurred. The following penalties may also be imposed upon business operators for the infraction of these obligations: issuance of a warning, confiscation of any illegal income, imposition of a fine, an order to cease business operation, revocation of its business license or imposition of criminal liabilities under circumstances that are specified in laws and statutory regulations. Regulations on Environmental Protection In February 2012, the SCNPC issued the newly amended Law of the PRC on Promoting Clean Production, which regulates service enterprises such as restaurants, entertainment establishments and hotels and requires them to use technologies and equipment that conserve energy and water, serve other environmental protection purposes, and reduce or stop the use of consumer goods that waste resources or pollute the environment. 69 Table of Contents According to the Environmental Protection Law of the PRC promulgated by the SCNPC on December 26, 1989 and last amended on April 24, 2014, the Environmental Impact Assessment Law of the PRC promulgated by the SCNPC on October 28, 2002 and last amended on December 29, 2018, and the Administrative Regulations on Environmental Protection for Construction Projects promulgated by the State Council on November 29, 1998 and amended on July 16, 2017 and came into effect on October 1, 2017, hotels located in environmental sensitive areas shall submit a Report Form on Environmental Impact Assessment to competent environmental protection authorities for approvals before commencing the construction. Pursuant to the Environmental Impact Assessment Law of the PRC, any hotel failing to obtain the approval of the Report/Form of Environmental Impact Assessment may be ordered to cease construction and restore the property to its original state, and according to the violation activities committed and the harmful consequences thereof, be subject to fines of no less than 1% but no more than 5% of the total investment amount for the construction project of such hotel. The person directly responsible for the project may be subject to certain administrative penalties. Regulations on Commercial Franchising Franchise operations are subject to the supervision and administration of the MOFCOM, and its regional counterparts. Such activities are currently regulated by the Administrative Regulations on Commercial Franchising, which was promulgated by the State Council on February 6, 2007 and became effective on May 1, 2007. The Administrative Regulations on Commercial Franchising were subsequently supplemented by the Administrative Measures on Filing of Commercial Franchises, which was amended and promulgated by the MOFCOM on December 12, 2011, became effective on February 1, 2012 and was most recently amended on December 29, 2023, and the newly amended Administrative Measures on Information Disclosure of Commercial Franchises, which was promulgated by the MOFCOM on February 23, 2012 and became effective on April 1, 2012. Under the above applicable regulations, a franchisor must have certain prerequisites including a mature business model, the capability to provide long-term business guidance and training services to franchisees and ownership of at least two self-operated storefronts that have been in operation for at least one year within China. Franchisors engaged in franchising activities without satisfying the above requirements may be subject to penalties such as forfeit of illegal income and imposition of fines between RMB100,000 and RMB500,000 and may be bulletined by the MOFCOM or its local counterparts. Franchise contracts shall include certain required provisions, such as terms, termination rights and payments. Franchisors are generally required to file franchise contracts with the MOFCOM or its local counterparts. Failure to report franchising activities may result in penalties such as fines up to RMB100,000. Such non - compliance may also be bulletined. In the first quarter of every year, franchisors are required to report to the MOFCOM or its local counterparts any franchise contracts they executed, canceled, renewed or amended in the previous year. The term of a franchise contract shall be no less than three years unless otherwise agreed by franchisees. The franchisee is entitled to terminate the franchise contract in his sole discretion within a set period of time upon signing of the franchise contract. Pursuant to the Administrative Measures on Information Disclosure of Commercial Franchises, 30 days prior to the execution of franchise contracts, franchisors are required to provide franchisees with copies of the franchise contracts, as well as written true and accurate basic information on matters including: ● the name, domiciles, legal representative, registered capital, scope of business and basic information relating to its commercial franchising; ● basic information relating to the registered trademark, logo, patent, know-how and business model; ● the type, amount and method of payment of franchise fees (including payment of deposit and the conditions and method of refund of deposit); ● the price and conditions for the franchisor to provide goods, service and equipment to the franchisee; ● the detailed plan, provision and implementation plan of consistent services including operational guidance, technical support and business training provided to the franchisee; ● detailed measures for guiding and supervising the operation of the franchisor; ● investment budget for all franchised hotels of the franchisee; 70 Table of Contents ● the current numbers, territory and operation evaluation of the franchisees within China; ● a summary of accounting statements audited by an accounting firm and a summary of audit reports for the previous two years; ● information on any lawsuit in which the franchisor has been involved in the previous five years; ● basic information regarding whether the franchisor and its legal representative have any record of material violation; and ● other information required to be disclosed by the MOFCOM. In the event of failure to disclose or misrepresentation, the franchisee may terminate the franchise contract and the franchisor may be fined up to RMB100,000. In addition, such non - compliance may be bulletined. According to the Manual of Guidance on Administration for Foreign Investment Access (Edition 2008) promulgated by the MOFCOM in December 2008, if an existing foreign-invested company wishes to operate a franchise in China, it must apply to the MOFCOM or its local counterparts and must include “engaging in commercial activities by way of franchise” in its business scope. Regulations on Intellectual Property Rights The PRC Copyright Law, which took effect on June 1, 1991 and was subsequently amended on October 27, 2001, on February 26, 2010 and on November 11,2020, respectively, provides that Chinese citizens, legal persons, or other organizations shall, whether published or not, own copyright in their copyrightable works, which include, among others, works of literature, art, natural science, social science, engineering technology and computer software. Copyright owners enjoy certain legal rights, including right of publication, right of authorship and right of reproduction. The Copyright Law extends copyright protection to Internet activities, products disseminated over the Internet and software products. In addition, the Copyright Law provides for a voluntary registration system administered by the China Copyright Protection Center. According to the Copyright Law, an infringer of the copyrights shall be subject to various civil liabilities, which include ceasing infringement activities, apologizing to the copyright owners and compensating the loss of copyright owner. Infringers of copyright may also be subject to fines and/or administrative or criminal liabilities in severe situations. Pursuant to the Computer Software Protection Regulations promulgated by the State Council on June 4, 1991 and subsequently amended on December 20, 2001 and on January 30, 2013, Chinese citizens, legal persons and other organizations shall enjoy copyright on software they develop, regardless of whether the software is released publicly. Software copyright commences from the date on which the development of the software is completed. The protection period for software copyright of a legal person or other organizations shall be 50 years, concluding on December 31 of the 50th year after the software’s initial release. The software copyright owner may go through the registration formalities with a software registration authority recognized by the State Council’s copyright administrative department. The software copyright owner may authorize others to exercise that copyright and is entitled to receive remuneration. Both the Trademark Law of the PRC adopted by the SCNPC on August 23, 1982 and last amended on April 23, 2019, and the Implementation Regulation of the Trademark Law of the PRC adopted by the State Council on August 3, 2002 and revised on April 29, 2014 give protection to the holders of registered trademarks and trade names. The National Intellectual Property Administration (Trademark Office) handles trademark registrations. Trademarks can be registered for a term of ten years and can be extended for another ten years if requested upon expiration of any ten-year term. Trademark license agreements must be filed with the Trademark Office. According to the Administrative Measures on Internet Domain Names promulgated by the Ministry of Industry and Information Technology of PRC on August 24, 2017 and took effect on November 1, 2017. The registration of domain names in PRC is on a “first-apply-first-registration” basis. A domain name applicant will become the domain name holder upon the completion of the application procedure. Pursuant to the PRC Patent Law which was promulgated by the SCNPC on March 12, 1984 and amended on August 25, 2000, on December 27, 2008 and on October 17, 2020, and its implementation rules, once a patent for an invention or utility model has been granted, unless otherwise provided by the Patent Law, no entity or individual may use the patent, patented product or patented process for production or business purposes without the authorization of the patent owner. Once a patent has been granted for a design, no entity or individual may manufacture, sell or import any product containing the patented design without the permission of the patent owner. If a patent is found to have been infringed, the infringer must, in accordance with relevant regulations, cease such infringement, take remedial action and pay damages. 71 Table of Contents Regulations on Taxation According to the Enterprise Income Tax Law of the PRC, or the EIT Law, which was promulgated on March 16, 2007, and came into effect on January 1, 2008 and was amended by the SCNPC on February 24, 2017 and December 29, 2018, and the Implementation Regulations on the Enterprise Income Tax Law, which was promulgated by the State Council on December 6, 2007 and came into effect on January 1, 2008, and was amended by the State Council on December 6, 2024 and came into effect on January 20, 2025, a uniform income tax rate of 25% will be applied to domestic enterprises, foreign-invested enterprises. These enterprises are classified as either resident enterprises or nonresident enterprises. Besides enterprises established within the PRC, enterprises established in accordance with the laws of other judicial districts whose “de facto management bodies” are within the PRC are considered “resident enterprises” and subject to the uniform 25% enterprise income tax rate for their global income. A nonresident enterprise refers to an entity established under foreign law whose “de facto management bodies” are not within the PRC but which have an establishment or place of business in the PRC, or which do not have an establishment or place of business in the PRC but have income sourced within the PRC. An income tax rate of 10% will normally be applicable to dividends declared to or any other gains realized on the transfer of shares by non-PRC resident enterprise investors that do not have an establishment or place of business in the PRC, 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 the PRC. According to the Arrangement for the Avoidance of Double Taxation and Tax Evasion between Mainland of China and Hong Kong entered into between Chinese Mainland and the Hong Kong Special Administrative Region on August 21, 2006, if the non-PRC parent company of a PRC enterprise is a Hong Kong resident which directly owns 25% or more of the equity interest of the PRC foreign-invested enterprise which pays the dividends and interests, the 10% withholding tax rate applicable under the EIT Law may be lowered to 5% for dividends and 7% for interest payments if a Hong Kong resident enterprise is determined by the competent PRC tax authority to have satisfied the relevant conditions and requirements under such Double Tax Avoidance Arrangement and other applicable laws. However, according to the Notice on the Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties, which was promulgated by the State Administration of Taxation or the SAT on February 20, 2009 and which came into effect on the same date, if the relevant PRC tax authorities determine, in their discretion, that a company benefits unjustifiably from such reduced income tax rate due to a structure or arrangement that is primarily tax-driven, such PRC tax authorities may adjust the preferential tax treatment; and based on the Announcement of the Certain Issues with Respect to the “Beneficial Owner” in Tax Treaties, issued by the SAT on February 3, 2018 and effective on April 1, 2018, if an applicant’s business activities do not constitute substantive business activities, it could result in the negative determination of the applicant’s status as a “beneficial owner,” and consequently, the applicant could be precluded from enjoying the above-mentioned reduced income tax rate of 5% under the Double Tax Avoidance Arrangement. The Provisional Regulations on Value-added Tax, which was promulgated on December 13, 1993, came into effect on January 1, 1994, and last amended on November 19, 2017, and the Detailed Implementing Rules of the Provisional Regulations on Value-added Tax, which was promulgated on December 25, 1993 and came into effect on the same date, and was amended on December 15, 2008 and October 28, 2011, came into effect on November 1, 2011 set out that all taxpayers selling goods or providing processing, repairing or replacement services, sales of services, intangible assets and immovable assets and importing goods in China shall pay a value-added tax. On December 25, 2024, the Value-Added Tax Law of the PRC was promulgated by SCNPC and came into effect on January 1, 2026, superseding the Provisional Regulations on Value-added Tax. According to this law, entities and individuals (including individual businesses) that sell goods, services, intangible assets, or immovable property within the territory of the PRC, or import goods, are VAT taxpayers and shall pay value-added tax in accordance with regulations. On November 19, 2017, the State Council promulgated the Decisions on Abolishing the Provisional Regulations of the PRC on Business Tax and Amending the Provisional Regulations of the PRC on Value-added Tax, according to which, all enterprises and individuals engaged in the sale of goods, the provision of processing, repair and replacement services, sales of services, intangible assets, real property and the importation of goods within the territory of the PRC are the taxpayers of value-added tax. The value-added tax rates generally applicable are simplified as 17%, 11%, 6% and 0%, and the value-added tax rate applicable to the small-scale taxpayers is 3%. According to the Notice of the Ministry of Finance and the State Administration of Taxation on Adjusting Value-added Tax Rates issued on April 4, 2018 and became effective on May 1, 2018, the deduction rates of 17% and 11% applicable to the taxpayers who have value added tax, taxable sales activities, or imported goods are adjusted to 16% and 10%, respectively. According to the Announcement on Policies for Deepening the Value-added Tax Reform issued by the Ministry of Finance, the SAT and the General Administration of Customs on March 20, 2019 and became effective on April 1, 2019, the value added tax rate was reduced to 13% and 9%, respectively. 72 Table of Contents Regulations on Offline Distribution of Publications On January 2, 1997, the State Council of the PRC promulgated the Administrative Regulations on Publishing which was last amended on December 6, 2024. On May 31, 2016, the State Administration of Press, Publication, Radio, Film and MOFCOM jointly issued the Administrative Provisions on the Publication Market, which was effective as of June 1, 2016. According to these regulations, the activities of publication distribution, including publication wholesale or retail activities, which shall be carried with the publication operation license. Without licensing, such entity or individual may be ordered to cease illegal acts by the competent administrative department of publication and SAIC, be subject to confiscation of publication, any illegal income and special tools and equipment for illegal activities, and be concurrently subject to a fine. Regulations on Foreign Currency Exchange The principal regulations governing foreign currency exchange in China are the Foreign Exchange Control Regulations of the PRC promulgated by the State Council, as amended on August 5, 2008, or the Foreign Exchange Regulations. Under the Foreign Exchange Regulations, the RMB is freely convertible for current account items, including goods, services, gains and transaction items, but not for capital account items, such as capital transfers, direct investments, investment in securities, derivatives and loans, unless the prior approval of the State Administration of Foreign Exchange, or the SAFE, is obtained and prior registration with the SAFE is made. The Circular on Reforming the Management Method regarding the Settlement of Foreign Exchange Capital of Foreign-invested Enterprises (“Circular 19”), promulgated on March 30, 2015 and last amended on March 23, 2023, allows foreign-invested enterprises to make equity investments by using RMB funds converted from foreign exchange capital. Under the Circular 19, the foreign exchange capital in the capital account of foreign-invested enterprises upon the confirmation of rights and interests of monetary contribution by the local foreign exchange bureau (or the book-entry registration of monetary contribution by the banks) can be settled at the banks based on the actual operation needs of the enterprises. The proportion of willingness-based foreign exchange settlement of capital for foreign-invested enterprises is temporarily set at 100%. The SAFE can adjust such proportion in due time based on the circumstances of the international balance of payments. However, the Circular 19 and the Circular on Reforming and Regulating the Management Policies on the Settlement of Capital Projects continues to prohibit foreign-invested enterprises from, among other things, using RMB fund converted from its foreign exchange capitals for expenditure beyond its business scope, investment and financing in securities and other investments except for bank’s principal-secured products, providing loans to non-affiliated enterprises or constructing or purchasing real estate not for self-use. On October 23, 2019, the SAFE promulgated the Circular on Further Promoting the Facilitation of Cross-border Trade and Investment, which was replaced by the Circular on Further Deepening the Reform to Promote the Facilitation Cross-border Trade and Investment as of December 4, 2023 (“Circular 28”). Pursuant to Circular 28, on the basis of allowing investment-oriented foreign-invested enterprise (including foreign-invested investment companies, foreign-invested venture capital enterprises and foreign-invested equity investment enterprises) to use capital funds for domestic equity investment in accordance with laws and regulations, non-investment foreign-invested enterprises shall be allowed to use capital funds for domestic equity investment in accordance with the laws under the premise of not violating the Negative List and the authenticity and compliance of their domestic invested projects. According to the Circular on Optimizing Administration of Foreign Exchange to Support the Development of Foreign-related Business issued by the SAFE on April 10, 2020, eligible enterprises are allowed to make domestic payments by using their capital funds, foreign credits and the income under capital accounts of overseas listing, with no need to provide the evidentiary materials concerning authenticity of such capital for banks in advance, provided that their capital use shall be authentic and in line with provisions, and conform to the prevailing administrative regulations on the use of income under capital accounts. The concerned bank shall conduct spot checking in accordance with the relevant requirements. 73 Table of Contents On December 25, 2006, the People’s Bank of China issued the Administration Measures on Individual Foreign Exchange Control and its Implementation Rules were issued by the SAFE on December 25, 2006 and January 5, 2007, both of which became effective on February 1, 2007. The Implementation Rules was later amended on May 29, 2016 and on March 23, 2023. Under these regulations, all foreign exchange matters involved in the employee stock ownership plan, stock option plan and other similar plans, participated by onshore individuals shall be transacted upon approval from the SAFE or its authorized branch. On February 15, 2012, the SAFE promulgated the Notice on Relevant Issues Concerning Foreign Exchange Control on Domestic Individuals Participating in the Stock Incentive Plan of An Overseas Listed Company, or Circular 7, to replace the Operating Procedures for Administration of Domestic Individuals Participating in the Employee Stock Option Plan or Stock Option Plan of An Overseas Listed Company. Under Circular 7, the board members, supervisors, officers or other employees, including PRC citizens and foreigners having lived within the territory of the PRC successively for at least one year of a PRC entity, who participate in stock incentive plans or stock option plans by an overseas publicly listed company, or the PRC participants, are required, through a PRC agent or PRC subsidiaries of such overseas publicly-listed company, to complete certain foreign exchange registration procedures with respect to the plans upon the examination by, and approval of, the SAFE. We and our PRC participants who have been granted stock options are subject to Circular 7. If our PRC participants who hold such options or our PRC subsidiary fail to comply with these regulations, such participants and their PRC employer may be subject to fines and legal sanctions. Regulations on Foreign Investment The National People’s Congress enacted the Foreign Investment Law of the PRC on March 15, 2019 and the State Council promulgated the Implementation Regulations of Foreign Investment Law of the PRC on December 26, 2019, both of which came into force on January 1, 2020. On December 30, 2019, the MOFCOM and the SAMR jointly promulgated the Measures on Reporting of Foreign Investment Information, which also became effective on January 1, 2020. Under these laws and regulations, foreign investors or foreign-invested enterprises shall report and update investment information to the competent department for commerce through the Enterprise Registration System and the National Enterprise Credit Information Publicity System. Any foreign investor or foreign-invested company found to be non-compliant with these reporting obligations may potentially be subject to fines and legal sanctions. The Foreign Investment Law of the PRC, together with its Implementation Regulations replaced, in their entirety, the trio of previous laws regulating foreign investment in China, namely, the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Cooperative Joint Venture Enterprise Law and the Wholly Foreign-invested Enterprise Law, together with their implementation rules and ancillary regulations. Generally speaking, the Company Law of the PRC or the Partnership Law of the PRC (promulgated by the SCNPC in February 1997 and amended in August 2006) shall apply with respect to the organization of foreign-invested enterprises. Regulations on Dividend Distribution The principal regulations governing distribution of dividends of foreign-invested enterprises include the Company Law of the PRC (the “Company Law”). Under the Company Law, companies shall contribute 10% of the profits into their statutory surplus reserve upon distribution of their post-tax profits of the current year. A company may discontinue the contribution when the aggregate sum of the statutory surplus reserve is more than 50% of its registered capital. Regulations on Offshore Financing On October 21, 2005, the SAFE issued Notice on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Corporate Financing and Roundtrip Investment through Offshore Special Purpose Vehicles, or Circular 75, which became effective as of November 1, 2005. Under Circular 75, if PRC residents use assets or equity interests in their PRC entities as capital contributions to establish offshore special-purpose companies directly or indirectly controlled by such PRC residents to carry out equity financing overseas and through special-purpose companies to carry out direct investment activities in China, they are required to register with local SAFE branches with respect to their overseas investments in offshore companies and roundtrip investment. PRC residents are also required to file amendments to their registrations if their offshore companies experience material events involving capital variation, such as changes in share capital, share transfers, mergers and acquisitions, spin-off transactions, long-term equity or debt investments or uses of assets in China to guarantee offshore obligations. 74 Table of Contents Moreover, Circular 75 applies retroactively. As a result, PRC residents who have established or acquired control of offshore companies that have made onshore investments in the PRC in the past were required to complete the relevant registration procedures with the local SAFE branch by March 31, 2006. Under the relevant rules, failure to comply with the registration procedures set forth in Circular 75 may result in restrictions being imposed on the foreign exchange activities of the relevant onshore company, including the increase of its registered capital, the payment of dividends and other distributions to its offshore parent or affiliate and the capital inflow from the offshore entity, and may also subject relevant PRC residents to penalties under PRC foreign exchange administration regulations. PRC residents who control our company are required to register periodically with the SAFE in connection with their investments in us. The SAFE issued a series of guidelines to its local branches with respect to the operational process for SAFE registration, including the Notice of the State Administration of Foreign Exchange on Further Improving and Adjusting Foreign Exchange Administration Policies for Direct Investment, or Circular 59, which came into effect as of December 17, 2012 and last amended on December 30, 2019. The guidelines standardized more specific and stringent supervision on the registration required by Circular 75. For example, the guidelines impose obligations on onshore subsidiaries of an offshore entity to make true and accurate statements to the local SAFE authorities in case any shareholder or beneficial owner of the offshore entity is a PRC citizen or resident. Untrue statements by the onshore subsidiaries will lead to potential liability for the subsidiaries, and in some instances, for their legal representatives and other individuals. On July 4, 2014, the SAFE issued the Circular of the State Administration of Foreign Exchange on Relevant Issues concerning Foreign Exchange Administration of the Overseas Investment and Financing and Round-trip Investments by Domestic Residents through Special Purpose Vehicles, or Circular 37, which became effective and suspended Circular 75 on the same date, and Circular 37 shall prevail over any other inconsistency between itself and relevant regulations promulgated previously. Pursuant to Circular 37, any PRC residents, including both PRC institutions and individual residents, are required to register with the local branch of the SAFE before making a contribution to an enterprise directly established or indirectly controlled by the PRC residents outside of the PRC for the purpose of overseas investment or financing with their legally owned domestic or offshore assets or equity interests, referred to in this circular as a “special purpose vehicle.” Under Circular 37, the term “PRC institutions” refers to entities with legal person status or other economic organizations established within the territory of the PRC. The term “PRC individual residents” includes all PRC citizens (also including PRC citizens abroad) and foreigners who habitually reside in the PRC for economic benefit. A registered special purpose vehicle is required to amend its SAFE registration with respect to such vehicle in connection with any change of basic information including PRC individual resident shareholder, name, term of operation, or PRC individual resident’s increase or decrease of capital, transfer or exchange of shares, merger, division or other material changes. In addition, if a non-listed special purpose vehicle grants any equity incentives to directors, supervisors or employees of domestic companies under its direct or indirect control, the relevant PRC individual residents could register with the local branch of the SAFE before exercising such options. The SAFE simultaneously issued guidance to its local branches with respect to the implementation of Circular 37. Under Circular 37, failure to comply with the foreign exchange registration procedures may result in restrictions being imposed on the foreign exchange activities of the relevant onshore company, including restrictions on the payment of dividends and other distributions to its offshore parent company and the capital inflow from the offshore entity, and may also subject the relevant PRC residents and onshore company to penalties under the PRC foreign exchange administration regulations. On January 5, 2023, the National Development and Reform Commission issued the Administrative Measures for Examination and Registration of Medium and Long-term Foreign Debts of Enterprises, which came into effect on February 10, 2023 and replaced the Circular of the National Development and Reform Commission on Promoting the Administrative Reform of the Record-filing and Registration System for the Issuance of Foreign Debts by Enterprises. According to the Administrative Measures for Examination and Registration of Medium and Long-term Foreign Debts of Enterprises, enterprises shall, prior to the borrowing of foreign debts, obtain the certificate of examination and registration of foreign debts borrowed by enterprises and complete the formalities of examination and registration. Enterprises that have not completed examination and registration formalities are not allowed to borrow foreign debts. 75 Table of Contents Regulations on Merger and Acquisition and Overseas Listing On August 8, 2006, six PRC regulatory agencies, including the China Securities Regulatory Commission, or the CSRC, adopted the M&A Rules, which became effective on September 8, 2006 and was amended on June 22, 2009. Foreign investors shall comply with the M&A Rules when they purchase equity interests of a domestic company or subscribe the increased capital of a domestic company, and thus changing the nature of the domestic company into a foreign-invested enterprise; or when the foreign investors establish a foreign-invested enterprise in the PRC, through which to purchase the assets of a domestic company and operate the assets; or when the foreign investors purchase the asset of a domestic company, 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 PRC domestic companies and controlled by PRC companies or individuals who also control such PRC domestic companies, to obtain the approval of CSRC prior to publicly listing their securities on an overseas stock exchange. Regulation on Security Review In August 2011, the MOFCOM promulgated the Rules of Ministry of Commerce on Implementation of Security Review System of Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the MOFCOM Security Review Rule, which came into effect on September 1, 2011, to implement the Notice of the General Office of the State Council on Establishing the Security Review System for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors promulgated on February 3, 2011. Under these regulations, a security review is required for foreign investors’ mergers and acquisitions having “national defense and security” implications and mergers and acquisitions by which foreign investors may acquire “de facto control” of domestic enterprises having “national security” implications. In addition, when deciding whether a specific merger or acquisition of a domestic enterprise by foreign investors is subject to a security review, the MOFCOM will look into the substance and actual impact of the transaction. The MOFCOM Security Review Rule further prohibits foreign investors from bypassing the security review requirement by structuring transactions through proxies, trusts, indirect investments, leases, loans, control through contractual arrangements or offshore transactions. On December 19, 2020, the NDRC and MOFCOM promulgated the Measures for the Security Review of Foreign Investments which became effective on January 18, 2021. Under the Security Review of Foreign Investments, for foreign investments that affect or may affect national security, security review shall be conducted by the office led by NDRC and MOFCOM. For the purpose of these Measures, the term “foreign investment” refers to the investment activities carried out by foreign investors directly or indirectly within the territory of the PRC, including the following circumstances: ● where foreign investors invest, solely or jointly with other investors, in new projects or establishing enterprises in the PRC; ● where foreign investors acquire equity or assets of domestic enterprises by way of merger and acquisition; or ● where foreign investors make investments in the PRC in any other form. Regulation on Information Protection on Networks On December 28, 2012, the SCNPC issued Decision of the Standing Committee of the National People’s Congress on Strengthening Information Protection on Networks, pursuant to which network service providers and other enterprises and institutions shall, when gathering and using electronic personal information of citizens in business activities, publish their collection and use rules and adhere to the principles of legality, rationality and necessarily, explicitly state the purposes, manners and scopes of collecting and using information, and obtain the consent of those from whom information is collected, and shall not collect and use information in violation of laws and regulations and the agreement between both sides; and the network service providers and other enterprises and institutions and their personnel must strictly keep such information confidential and may not divulge, alter, damage, sell, or illegally provide others with such information. 76 Table of Contents On July 16, 2013, the MIIT, issued the Provisions on the Protection of Personal Information of Telecommunication and Internet User, which was effective on September 1, 2013. The requirements under this order are stricter and wider compared to the above decision issued by the National People’s Congress. According to the provisions, if a network service provider wishes to collect or use personal information, it may do so only if such collection is necessary for the services it provides. Furthermore, it must disclose to its users the purpose, method and scope of any such collection or usage, and must obtain consent from the users whose information is being collected or used. Network service providers are also required to establish and publish their protocols relating to personal information collection or usage, keep any collected information strictly confidential and take technological and other measures to maintain the security of such information. Network service providers are required to cease any collection or usage of the relevant personal information, and provide services for the users to de-register the relevant user account, when a user stops using the relevant Internet service. Network service providers are further prohibited from divulging, distorting or destroying any such personal information, or selling or providing such personal information unlawfully to other parties. In addition, if a network service provider appoints an agent to undertake any marketing or technical services that involve the collection or usage of personal information, the network service provider is required to supervise and manage the protection of the information. The provisions state, in broad terms, that violators may face warnings, fines, public exposure and, criminal liability whereas the case constitutes a crime. The Cybersecurity Law of the PRC promulgated in November 2016 by SCNPC and last amended on October 28, 2025 and came into effect on January 1, 2026 absorbed and restated the principles and requirements mentioned in the aforesaid decision and order, and further provides that, where an individual finds any network operator collects or uses his or her personal information in violation of the provisions of any law, regulation or the agreement of both parties, the individual shall be entitled to request the network operator to delete his or her personal information; if the individual finds that his or her personal information collected or stored by the network operator has any error, he or she shall be entitled to request the network operator to make corrections, and the network operator shall take measures to do so. Pursuant to this law, the violators may be subject to: (i) warning; (ii) confiscation of illegal gains and fines equal to one to ten times of the illegal gains; or if without illegal gains, fines up to RMB500,000; or (iii) an order to shut down the website, suspend the business operation for rectification, or revoke business license. Besides, responsible persons may be subject to fines between RMB10,000 and RMB100,000. On June 10, 2021, the SCNPC promulgated the PRC Data Security Law, which came into effect in September 2021. The PRC Data Security Law imposes data security and privacy obligations on entities and individuals carrying out data activities, and introduces a data classification and hierarchical protection system based on the importance of data in economic and social development, as well as the degree of harm it will cause to national security, public interests, or legitimate rights and interests of individuals or organizations when such data is tampered with, destroyed, leaked, or illegally acquired or used. The PRC Data Security Law also provides for a national security review procedure for data activities that may affect national security and imposes export restrictions on certain data and information. In August 2021, the SCNPC officially promulgated the Personal Information Protection Law, which came into effect from November 1, 2021. The Personal Information Protection Law provides detailed rules on handling personal information and legal responsibilities, including but not limited to the scope of personal information and the ways of processing personal information, the establishment of rules for processing personal information, and the individual’s rights and the processor’s obligations in the processing of personal information. The Personal Information Protection Law also strengthens the punishment for those who illegally process personal information. On December 28, 2021, the CAC and 12 other relevant PRC government authorities published the amended Cybersecurity Review Measures, which came into effect on February 15, 2022 and supersede and replace the Cybersecurity Review Measures previously promulgated on April 13, 2020. The final Cybersecurity Review Measures provide that the purchase of network products and services by a “critical information infrastructure operator” (the “CIIO”) and the data processing activities of a “network platform operator” that affect or may affect national security shall be subject to the cybersecurity review. 77 Table of Contents Where the purchase of network products and services by a CIIO affects or may affect national security, the CIIO shall notify the Cybersecurity Review Office, which is under the CAC, and a cybersecurity review shall be conducted pursuant to the Cybersecurity Review Measures. Furthermore, if a “network platform operator” that possesses personal information of more than one million users and seeks a listing in a foreign country must apply for a cybersecurity review with the Cybersecurity Review Office. According to the final Cybersecurity Review Measures, the term “network products and services” mainly refers to core network equipment, important communication products, high performance computers and servers, large-capacity storage devices, large-capacity databases and application software, network security equipment, cloud computing services, and other network products and services that have a significant impact on critical information infrastructure security, cybersecurity and data security. Under the Cybersecurity Law, where CIIOs use network products or services that have not been reviewed for security or have failed the cybersecurity review, they shall be ordered by the relevant competent departments to stop using such products or services, and a fine of no less than one, but no more than ten times the purchase amount shall be imposed. As for the persons in charge directly or otherwise are directly responsible, a fine of no less than RMB10,000 but no more than RMB100,000 shall be imposed. As of the date of this annual report, we have not received any notice from the CAC which identifies us as a CIIO under the Cybersecurity Review Measures. Regulations on Employee Share Option Plans Pursuant to the Notice of Issues Related to the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Listed Company, or SAFE Circular 7, issued by the SAFE in February 2012, employees, directors, supervisors, and other senior management participating in any share incentive plan of an overseas publicly-listed company who are PRC citizens or non-PRC citizens residing in China for a continuous period of not less than one year, subject to a few exceptions, are required to register with SAFE through a domestic qualified agent, which may be a PRC subsidiary of such overseas listed company, and complete certain other procedures. See “Item 4. Information on The Company — 4.B. Business Overview — Regulation — Regulations on Foreign Currency Exchange.” In addition, the SAT has issued certain circulars concerning employee share options and restricted shares. Under these circulars, employees working in the PRC who exercise share options or are granted restricted shares will be subject to PRC individual income tax. The PRC subsidiaries of an overseas listed company are obligated to file documents related to employee share options and restricted shares with relevant tax authorities and to withhold individual income taxes of employees who exercise their share option or purchase restricted shares. If the employees fail to pay or the PRC subsidiaries fail to withhold income tax in accordance with relevant laws and regulations, the PRC subsidiaries may face sanctions imposed by the tax authorities or other PRC governmental authorities. Regulations on Employment and Social Insurance The PRC Labor Contract Law promulgated by SCNPC in 2007 and amended in December 2012, and its implementation rules issued by the State Council in 2008, require employers to provide written contracts to their employees, restrict the use of temporary workers and aim to give employees long-term job security. Violations of the PRC Labor Law and the PRC Labor Contract Law may result in fines and other administrative sanctions, and serious violations may result in criminal liabilities. The PRC governmental authorities have passed a variety of laws and regulations regarding social insurance and housing funds from time to time, including, among others, the PRC Social Insurance Law, the Regulation of Insurance for Labor Injury, the Regulations of Insurance for Unemployment and the Provisional Insurance Measures for Maternal Employees. Pursuant to these laws and regulations, PRC companies must make contributions at specified levels for their employees to the relevant local social insurance and housing fund authorities. Failure to comply with such laws and regulations may result in various fines and legal sanctions and supplemental contributions to the local social insurance and housing fund regulatory authorities. 78 Table of Contents Regulations on Advertising According to Advertising Law of the PRC, or Advertising Law, which was promulgated by SCNP on October 27, 1994 and amended on September 1, 2015, October 26, 2018 and April 29, 2021, advertisements shall not contain any false or misleading information, and shall not deceive or mislead consumers. Advertisers, advertising agents and advertisement publishers shall abide by the laws, regulations and the principles of justice, honesty and fair competition in carrying out advertising activities. Local administrative departments for industry and commerce at and above the county level shall take charge of the supervision and administration on advertising within their respective administrative jurisdictions. Other relevant departments of the local people’s governments at and above the county level shall take charge of the advertising management-related work within their respective scope of duties. According to the Advertising Law, the use of internet to publish or distribute advertisements shall not affect the normal use of the internet by users. Advertisements published on internet pages such as pop-up advertisements shall be conspicuously marked with a closing sign to ensure one-click closure. Regulations on Internet Platform Business According to the Telecommunications Regulations of the PRC issued by the State Council on September 25, 2000 and was amended on July 29, 2014 and February 6, 2016, respectively, value-added telecommunications services are defined as telecommunications and information services provided through public network infrastructures and are subject to licenses prior to commencement of operations, and according to the Catalogue of Telecommunications Business (2015 Edition) attached to the Telecommunications Regulations of the PRC, value-added telecommunications services are divided into two categories, class I value-added telecommunication services and class II value-added telecommunication services. On July 3, 2017, the MIIT issued the revised Administrative Measures for the Licensing of Telecommunications Business, or the Telecom License Measures, which became effective on September 1, 2017, to supplement the Telecom Regulations. The Telecom License Measures require that an operator of value-added telecommunications services obtain a VATs License from the MIIT or its provincial level counterparts. The term of a VATs License is five years and the license holder is subject to annual inspection. An e-commerce operator shall obtain a license for value-added telecommunications services with the specification of online data processing and transaction processing business from appropriate telecommunications authorities, pursuant to the Telecommunications Regulations and the Catalog of Telecommunications Services. On February 7, 2021, the Anti-monopoly Commission of the State Council promulgated Guidelines to Anti-Monopoly in the Field of Platform Economy, or the Anti-Monopoly Guidelines for Platform Economy. The Anti-Monopoly Guidelines for Platform Economy provides operational standards and guidelines for identifying certain internet platforms’ abuse of market dominant position which are prohibited to restrict unfair competition and safeguard users’ interests, including without limitation, prohibiting personalized pricing using big data and analytics, selling products below cost without reasonable causes, actions or arrangements seen as exclusivity arrangements, using technology means to block competitors’ interface, using bundle services to sell services or products. In addition, internet platforms’ compulsory collection of user data may be viewed as abuse of dominant market position that may have the effect to eliminate or restrict competition. On August 31, 2018, the SCNPC promulgated the E-commerce Law, which came into effect on January 1, 2019. The E-commerce Law imposes a series of requirements on e-commerce operators including e-commerce platform operators, merchants operating on the platform and the individuals and entities carrying out business online. According to the Measures for the Investigation and Treatment of Internet Food Safety Violations promulgated by China Food and Drug Administration on July 14, 2016, which became effective on October 1, 2016 and was amended by SAMR on April 2, 2021 and March 18, 2025, SAMR is responsible for supervising and guiding the investigation and treatment of Internet food safety violations nationwide, and local market regulatory departments at or above the county level are responsible for their administrative areas Internal network food safety violations investigation. Food producers and distributors who engage in food trade on their own network platform should also file with the market regulatory departments at or above the county level to get the record number. 79 Table of Contents 4.C. Organizational Structure The following chart illustrates our corporate structure, including our significant subsidiaries as that term is defined under Section 1-02 of Regulation S-X under the Securities Act and certain other subsidiaries, as of the date of this annual report. Transfer of Funds and Other Assets through Our Organization We are a holding company with no business operations of our own. We conduct all of our operations through our indirectly owned subsidiaries in China, and a substantial portion of our assets are located in China. As a result, our ability to pay dividends and to service any debt we may incur overseas largely depends upon dividends paid by our subsidiaries. If our subsidiaries incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us. In addition, our subsidiaries in China are permitted to pay dividends to us only out of their retained earnings, if any, as determined in accordance with the Accounting Standards for Business Enterprise as promulgated by the Ministry of Finance of the PRC, or the PRC GAAP. Pursuant to the laws and regulations applicable to China’s foreign investment enterprises, our subsidiaries that are foreign investment enterprises in the PRC have to make appropriation from their after-tax profit, as determined under PRC GAAP, to reserve funds including (i) general reserve fund, (ii) enterprise expansion fund and (iii) staff bonus and welfare fund. The appropriation to the general reserve fund must be at least 10% of the after-tax profits calculated in accordance with the PRC GAAP. Appropriation is not required if the reserve fund has reached 50% of the registered capital of our subsidiaries. Appropriations to the other two reserve funds are at the discretion of our subsidiaries. Our PRC subsidiaries did not make any contributions to the enterprise expansion fund or the staff and bonus welfare fund from 2023 to 2025. The PRC reserve fund of our PRC subsidiaries totaled RMB286.7 million and RMB 375.5 million (US$53.7 million) as of December 31, 2024 and 2025, respectively. See “Item 4. Information on The Company — 4.B. Business Overview — Regulations — Regulations on Dividend Distribution” for a detailed discussion of the PRC legal restrictions on dividends and our ability to transfer cash within our group. In addition, ADS holders may potentially be subject to PRC taxes on dividends paid by us in the event Atour Lifestyle Holdings Limited is deemed as a PRC resident enterprise for PRC tax purposes. See “Item 5. Operating and Financial Review and Prospects — 5.A. Operating Results — Taxation — Chinese Mainland” for more details. In August 2024, we announced a three-year annual dividend policy, under which we plan to declare and distribute dividends with an aggregate amount of no less than 50% of our net income for the preceding financial year in each of the three financial years commencing 2024. The exact dividend amount will be determined at the Board’s discretion, based on its assessment of the Company’s actual and projected results of operations, financial and cash position, capital requirements and other relevant factors. In August 2024, May 2025 and November 2025, we distributed cash dividends of approximately RMB436.0 million, RMB418.2 million (US$59.8 million) and RMB353.8 million (US$50.6 million), respectively. 80 Table of Contents In 2025, with cash generated from operating activities in the PRC by Atour Shanghai and its subsidiaries, Atour Shanghai distributed RMB800.0 million (US$114.4 million) to Atour Hong Kong. Our subsidiaries in the PRC generate cash from operating activities, which may be reinvested in our business or used to fund share repurchases and dividend distributions. In the future, cash proceeds raised from overseas financing activities may be transferred by us through our Hong Kong subsidiaries to their respective PRC subsidiaries via capital contribution and shareholder loans, as the case may be. Subsequently, these PRC subsidiaries will transfer funds to their own subsidiaries to meet the capital needs of our business operations. 4.D. Property, Plants and Equipment We are headquartered in Shanghai, China. As of December 31, 2025, we had leased a total of 37 properties for commercial uses, with 19 properties used for the operations of our leased hotels and 18 properties for other commercial uses, such as our headquarters and office premises. The gross floor area of our leased properties for commercial uses reaches up to 230,779.2 square meters. All our leased properties are located in the PRC, and we do not own any real property. We believe that our current facilities are adequate to meet our current needs.