You should read the following discussion together with our consolidated financial statements and the related notes included elsewhere in this annual report. This discussion contains forward-looking statements about our business and operations. Our actual results may differ materially from those we currently anticipate as a result of many factors, including those we describe under “Item 3. Key Information—Item 3.D. Risk Factors” and elsewhere in this annual report. The following includes discussion of certain of our key performance metrics for the periods indicated. See Introduction in this annual report for the definition of these metrics and a description of how they are calculated. 5.A. Operating Results Key Factors Affecting Our Results of Operations General Factors Affecting Our Results of Operations Our results of operations are subject to general economic conditions and conditions affecting the industries we operate in general, which include, among others: ●Changes in the national, regional or local economic conditions in China. Our financial performance is closely tied to macroeconomic conditions and is significantly affected by fluctuations in discretionary spending by individuals and businesses. Moreover, events such as natural disasters, geopolitical tensions, or the recurrence of contagious diseases could suppress travel and in-person consumption, negatively impacting both customer demands for our business. For example, the COVID-19 pandemic had a substantial adverse impact on our operations, though we have seen a sustained recovery in both sectors since late 2022. ●PRC government policies and regulations. Our business is subject to various compliance and operational requirements under PRC laws. For details, see “Item 4. Information on The Company — 4.B. Business Overview — Regulation.” Any changes to the existing laws and regulations in the future may increase our compliance efforts at significant cost. ●Industry competition. The hospitality and retail industries in China are highly competitive. In the hospitality sector, we compete primarily with both domestic and international branded hotel chains and independent hotels. In the retail sector, we face competition from a wide range of home textile brands. Competition in the hospitality industry is generally focused on hotel room rates, quality of accommodations, brand recognitions, convenience of locations, geographic coverages, quality and range of services, other lifestyle offerings and guest amenities. Competition in the retail industry is generally driven by product quality, design, pricing, brand strength, sales channels, marketing capabilities and customer loyalty. 81 Table of Contents ●Seasonality. The hospitality industry and retail industries are subject to fluctuations in revenues due to seasonality. The periods during which our properties experience higher revenues vary from property to property, depending principally upon their locations, types of property and competitive mix within the specific locations. Generally, the first quarter, in which both the New Year and Spring Festival holidays fall, accounts for a lower percentage of our annual revenues than the other quarters of the year. July and August typically represent peak season months, during which we benefit from higher room rates and increased revenue due to heightened travel activity. In addition, certain special events, such as large-scale exhibitions, concerts or sports events, may increase the demand for our hotels significantly as such special events may attract travelers into and within the regions in China where we operate hotels. Based on historical results, we generally expect our hotel revenues for each hotel to be higher in the remaining three quarters of each year than in each of the first quarter due to general travel and consumption patterns in China. Our historical retail revenues also exhibit seasonality, with higher sales typically recorded during the second and fourth quarters due to major e-commerce promotional events and holiday-related spending. Specific Factors Affecting Our Results of Operations While our business is affected by factors relating to general economic conditions and the hospitality and retail industries in China, we believe that our results of operations are also affected by company-specific factors, including, among others: ●The total number of hotels and hotel rooms in our hotel network. Our revenues largely depend on the size of our hotel network. Furthermore, we believe the expanded geographic coverage of our hotel network will enhance our brand recognition. We mainly adopt a “manachise” model to operate the vast majority of the hotels in our hotel network. As a result, whether we can successfully increase the number of hotels and hotel rooms in our hotel network is largely affected by our ability to franchise additional hotel properties at desirable locations on commercially favorable terms, as well as to maintain the quality of service, hotel facilities, and guest rooms across our hotels, and to preserve the value of our brand. ●The scale and operational efficiency of our retail business. Our retail business, anchored by in-room experiences and digital commerce, has become an increasingly significant revenue contributor to us. Growth and profitability in this business depend on our ability to continuously curate relevant offerings, manage product development and supply chains efficiently, and capture demand both through hotel channels and direct-to-consumer platforms. As our product mix and channel reach evolve, retail performance will remain a key driver of our overall financial results. ●The fixed-cost nature of our business. A significant portion of our operating costs and expenses associated with our hotel operations and franchise model, including rent and base salary, is relatively fixed. Similarly, our retail operations involve fixed costs related to procurement, warehousing, and logistics. As a result, an increase in our revenues, no matter from higher RevPAR or increased retail sales, generally will result in higher profitability. Vice versa, a decrease in our revenues could result in a disproportionately larger decrease in our profits because our operating costs and expenses are unlikely to decrease proportionately. ●The proportion of mature hotels in our hotel portfolio. The operation of each hotel typically involves three stages: development, ramp-up and mature operations. We define mature hotels as those that have been in operation for more than six months. It typically takes six months for our newly opened hotels to ramp up before such hotels can generate normal and stable revenues. During the ramp-up stage, when the occupancy rate is relatively low, revenues generated from these new hotels may be insufficient to cover their operating costs. The table below illustrates the number of our hotels in development stage, ramp-up stage and mature operation stage as of the dates indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ ​ ​ ​ ​ ​ ​ Percentage of ​ ​ ​ ​ ​ ​ ​ Percentage of ​ ​ ​ ​ ​ ​ ​ Percentage of ​ ​ Number ​ total hotels ​ Number of ​ total hotels in ​ Number ​ total hotels in ​ ​ of hotels ​ in the three stages ​ hotels ​ the three stages ​ of hotels ​ the three stages Development stage 617 ​ 33.8 % 741 ​ 31.4 % 779 ​ 27.9 % Ramp-up stage 203 ​ 11.1 % 280 ​ 11.9 % 296 ​ 10.6 % Mature stage 1,007 ​ 55.1 % 1,339 ​ 56.7 % 1,719 ​ 61.5 % ​ 82 Table of Contents ●The growth of our ACARD members and their levels of engagement. Our tier-based ACARD loyalty program is a fully digitized membership program that unites all our hotel and lifestyle brands. Our ACARD members contribute to a significant portion of our revenue. Our member base has been growing rapidly. As of December 31, 2025, our ACARD loyalty program had amassed 112.0 million registered individual members. If we are able to further grow the size of our member base and increase customer stickiness of our loyalty program, we will be able to further increase our revenue and reduce our customer acquisition expenses. Key Performance Indicators We utilize a set of non-financial and financial key performance indicators which our senior management reviews frequently. The review of these indicators facilitates timely evaluation of the performance of our business and effective communication of results and key decisions, allowing our business to react promptly to changing customer demands and market conditions. Non-Financial Key Performance Indicators Our non-financial key performance indicators consist of the increase in total number of hotels and hotel rooms in our hotel chain and RevPAR achieved by our hotels. Increase in total hotels and hotel rooms. As we continue to scale our presence by leveraging our strong brand reputation, the total number of our hotels increased from 1,210 as of December 31, 2023 to 1,619 as of December 31, 2024, and further to 2,015 as of December 31, 2025. Similarly, the total number of our hotel rooms increased from 137,921 as of December 31, 2023 to 183,184 as of December 31, 2024, and further to 224,423 as of December 31, 2025. As of the same date, we had a total of 779 manachised hotels with a total of 85,901 rooms under development. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, ​ ​ 2023 ​ 2024 ​ 2025 Total hotels ​ ​ ​ Manachised hotels 1,178 ​ 1,593 ​ 1,996 Leased hotels 32 ​ 26 ​ 19 All hotels 1,210 ​ 1,619 ​ 2,015 Hotel rooms ​ ​ ​ ​ ​ Manachised hotels 133,291 ​ 179,469 ​ 221,283 Leased hotels 4,630 ​ 3,715 ​ 3,140 All hotels 137,921 ​ 183,184 ​ 224,423 ​ RevPAR. RevPAR is calculated as the total revenue during a period divided by the number of available rooms of such hotel during the same period. As a commonly used operating measure in the hospitality industry, RevPAR is largely affected by occupancy rate and ADR. Occupancy rates of our hotels mainly depend on the locations of our hotels, product and service offerings, the effectiveness of our sales and brand promotion efforts, our ability to effectively manage hotel reservations, the performance of managerial and other employees of our hotels, as well as our ability to respond to competitive pressure. We set the room rates of our hotels primarily based on the location of a hotel, room rates charged by our competitors within the same locality, seasonality, and our relative brand and product strengths. To drive our occupancy rates and room rates, we focus on continuing to improve our guests’ hotel and retail experiences and increasing the stickiness of our loyalty program members, through continuously improving our service quality, expanding our hotel brand portfolios, and integrating technologies into our customer service and hotel operations. 83 Table of Contents The following table sets forth the key performance indicators of our hotels for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ ​ ​ 2023(1) ​ ​ ​ 2024(1) ​ ​ ​ 2025(1) Occupancy rate(2) (in percentage) ​ ​ ​ ​ Manachised hotels 77.6 % 77.2 % 75.8 % Leased hotels 83.6 % 83.2 % 82.2 % All hotels 77.8 % 77.4 % 75.9 % ADR(2) (in RMB) ​ ​ ​ ​ Manachised hotels 457.8 433.0 429.0 ​ Leased hotels 587.2 563.5 582.2 ​ All hotels 463.6 436.8 431.9 ​ RevPAR(2) (in RMB) ​ ​ ​ ​ Manachised hotels 370.8 347.3 336.6 ​ Leased hotels 517.2 495.0 504.8 ​ All hotels 376.8 351.3 339.6 ​ Notes: (1) Excludes, for purposes of calculating these key operating metrics, (i) approximately 308 thousand room-nights related to hotel rooms that were requisitioned by the government for quarantine needs in response to the COVID-19 pandemic or otherwise became unavailable due to temporary hotel closures in 2023; and (ii) approximately 252 thousand and 316 thousand room-nights related to hotel rooms that became unavailable due to temporary hotel closures in 2024 and 2025, respectively. Since the third quarter of 2023, no hotels have been requisitioned for quarantine needs. The ADR and RevPAR are calculated based on the tax-inclusive room rates. (2) Excludes hotel rooms that became unavailable due to temporary hotel closures resulting from various reasons, such as room maintenance or temporary suspension of hotel operations due to power outages or other facility-related issues. The ADR and RevPAR are calculated based on tax-inclusive room rates. Moreover, we measure the operational performance of our hotels by comparing same-hotel occupancy rate, ADR and RevPAR. These same-hotel metrics provide a period-to-period comparison of the operational performance of hotels that have operated for more than 18 calendar months as of the 15th day (inclusive) of any month within a given period. The following table sets forth the details of our same-hotel performance for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ Years ended December 31, ​ Years ended December 31, ​ ​ ​ ​ 2022 ​ ​ ​ 2023 ​ ​ ​ 2023 ​ ​ ​ 2024 ​ ​ ​ 2024 ​ ​ ​ 2025 Number of same hotels ​ ​ ​ ​ ​ ​ ​ Manachised hotels 763 968 1,299 ​ Leased hotels 33 30 23 ​ All hotels 796 998 1,322 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Same-hotel occupancy rate(1) (in percentage) ​ ​ ​ ​ ​ ​ ​ Manachised hotels 63.2 % 78.7 % 78.2 % 78.9 % 78.1 % 76.4 % Leased hotels 65.8 % 83.6 % 83.7 % 83.1 % 83.2 % 82.1 % All hotels 63.4 % 79.0 % 78.4 % 79.0 % 78.2 % 76.5 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Same-hotel ADR(1) (in RMB) ​ ​ ​ ​ ​ ​ ​ Manachised hotels 385.9 460.2 459.1 439.9 435.4 426.8 ​ Leased hotels 465.0 587.2 588.8 561.5 571.1 564.3 ​ All hotels 390.9 467.4 464.6 444.6 438.9 429.9 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Same-hotel RevPAR(1) (in RMB) ​ ​ ​ ​ ​ ​ ​ Manachised hotels 257.6 378.6 374.9 360.5 353.1 337.8 ​ Leased hotels 330.6 517.2 519.6 492.5 501.3 489.1 ​ All hotels 262.1 386.1 380.6 365.4 356.7 341.0 ​ Note: (1) Excludes hotel rooms that became unavailable due to temporary hotel closures resulting from various reasons, such as room maintenance or temporary suspension of hotel operations due to power outages or other facility-related issues. The ADR and RevPAR are calculated based on tax-inclusive room rates. 84 Table of Contents Key Components of Results of Operations Our financial key performance indicators consist of our net revenues, operating costs and expenses, EBITDA (non-GAAP) and adjusted EBITDA (non-GAAP) which are discussed in more detail in the following paragraphs and in “Item 5. Operating and Financial Review and Prospects-5.A. Operating Results-Non-GAAP Financial Measures.” Net revenues We primarily derive our revenues from (i) franchise and management fees from our manachised hotels and sales of hotel supplies and other products to our manachised hotels, (ii) operations of our leased hotels, and (iii) sales of our retail products in connection with our retail business. The following table sets forth the revenues generated from our manachised and leased hotels, and retail business and others, both in absolute amount and as a percentage of net revenues for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ ​ ​ RMB ​ ​ ​ % ​ ​ ​ RMB ​ ​ ​ % ​ ​ ​ RMB ​ ​ ​ USD ​ ​ ​ % ​ ​ (in thousands, except for percentages) Revenues ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Manachised hotels 2,705,609 ​ 58.0 ​ 4,148,752 ​ 57.3 ​ 5,308,864 ​ 759,157 ​ 54.2 Leased hotels 840,044 ​ 18.0 ​ 701,963 ​ 9.7 ​ 590,372 ​ 84,422 ​ 6.0 Retail 971,931 ​ 20.8 ​ 2,198,198 ​ 30.3 ​ 3,670,969 ​ 524,942 ​ 37.5 Others(1) ​ 148,383 ​ 3.2 ​ 199,019 ​ 2.7 ​ 219,954 ​ 31,453 ​ 2.3 Total 4,665,967 ​ 100.0 ​ 7,247,932 ​ 100.0 ​ 9,790,159 ​ 1,399,974 ​ 100.0 Note: (1)Primarily including our membership business. Manachised hotels. In 2023, 2024 and 2025, we generated revenues of RMB2,705.6 million, RMB4,148.8 million and RMB5,308.9 million (US$759.2 million) from our manachised hotels, respectively, which accounted for 58.0%, 57.3% and 54.2% of our net revenues for the relevant years. We select manachised hotels based on a variety of factors, including the attractiveness of the location, the quality of the franchised property and the background, and business ideology and value of the franchisee. We manage our manachised hotels and impose the same high service quality and operational standards on all manachised hotels as our leased hotels to ensure the quality and consistency of our service and product offerings across our hotel network. We authorize a manachised hotel to use our relevant hotel brand names, logos and relevant trademarks. The franchisee is responsible for the hotel’s construction, renovation and maintenance. We provide guidance to the franchisee on the construction or renovation of the hotel and require the hotel to meet our standards before approving it to commence operations. We appoint and train hotel managers and deputy managers who are responsible for hiring hotel staff and managing daily operations of our manachised hotels. We also provide our franchisees with comprehensive management services, including central reservation, revenue management, sales and marketing support, technology support, quality assurance inspections and other operational support and information. Our franchise and management agreements for our manachised hotels typically run for a fixed term of up to 20 years. We generally charge our franchisees an upfront franchise fee at a rate of approximately RMB4,000 to RMB8,000 per room, depending on the brand of the manachised hotel, discretionary promotion and discount arrangements, as well as fees related to pre-opening services, including information system installation service. After a manachised hotel opens, we generally charge the franchisee a monthly franchise and management fee of 5% to 8% of the gross revenues generated by each manachised hotel depending on the hotel brand and discretionary adjustments. Furthermore, we charge our franchisees a fixed monthly hotel managers fee, fees for purchase of hotel supplies and other products, and other ongoing service fees, such as system and accounting support fees. We do not expect any material franchise and management agreements to be terminated in the foreseeable future. Leased hotels. In 2023, 2024 and 2025, we generated revenues of RMB840.0 million, RMB702.0 million and RMB590.4 million (US$84.4 million) from our leased hotels, respectively, which accounted for 18.0%, 9.7% and 6.0% of our net revenues for the relevant years. 85 Table of Contents For our leased hotels, we lease properties from real estate owners or lessors and we are responsible for hotel development and customization to conform to our standards, as well as for repairs and maintenance and operating costs and expenses of properties over the term of the lease. We are also responsible for all aspects of hotel operations and management, including hiring, training and supervising the hotel managers and employees required to operate our hotels and purchasing supplies. Our typical lease term is up to 15 years. We typically enjoy an initial rent-free period of up to six months. We do not expect any material lease agreements to be terminated in the foreseeable future. The rent is generally paid upfront at the beginning of each payment period and we recognize the total rental expense on a straight-line basis over the initial lease term. Retail. In 2023, 2024 and 2025, we generated revenues of RMB971.9 million, RMB2,198.2 million and RMB3,671.0 million (US$524.9 million) from retail business, respectively, which accounted for 20.8%, 30.3% and 37.5% of our net revenues for the relevant years. We are the first hotel chain in China to integrate retail products into the guest experience through both online and offline channels. We focus on the sleep category, offering private label products under the “Atour Planet” line. Our products are available through our mobile app, mini-programs, third-party e-commerce platforms, hotel lobbies and guestrooms. In manachised hotels, products are sold by franchisees under our pricing guidance. We oversee the full cycle of product development, from market research and design to quality control and supply chain management. Our strong execution and customer insights have enabled us to scale our retail business while maintaining high product and service standards. Others. Besides the revenues discussed above, we generate a minor portion of revenues from our other business as we continue to diversify our monetization methods and drive customer spending, primarily including our membership business. In 2023, 2024 and 2025, we generated revenues of RMB148.4 million, RMB199.0 million and RMB220.0 million (US$31.5 million) from other business, respectively, which accounted for 3.2%, 2.7% and 2.3% of our net revenues for the relevant years. Operating Costs and Expenses Our operating costs and expenses consist of hotel operating costs, retail costs, other operating costs, selling and marketing expenses, general and administrative expenses and technology and development expenses. The following table sets forth the components of our operating costs and expenses, both in absolute amount and as a percentage of net revenues for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ ​ ​ RMB ​ ​ ​ % ​ ​ ​ RMB ​ ​ ​ % ​ ​ ​ RMB ​ ​ ​ US$ ​ ​ ​ % ​ ​ (in thousands except percentage) Net Revenues 4,665,967 ​ 100.0 ​ 7,247,932 ​ 100.0 ​ 9,790,159 ​ 1,399,974 ​ 100.0 Operating costs and expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Hotel operating costs 2,240,890 ​ 47.9 ​ 3,108,158 ​ 42.9 ​ 3,716,236 ​ 531,415 ​ 38.0 Retail costs ​ 513,326 ​ 11.0 ​ 1,083,709 ​ 15.0 ​ 1,741,233 ​ 248,993 ​ 17.8 Other operating costs 72,543 ​ 1.6 ​ 44,524 ​ 0.6 ​ 25,832 ​ 3,693 ​ 0.2 Selling and marketing expenses 469,595 ​ 10.1 ​ 972,863 ​ 13.4 ​ 1,489,682 ​ 213,022 ​ 15.2 General and administrative expenses ​ 451,470 ​ 9.7 ​ 352,590 ​ 4.9 ​ 516,671 ​ 73,883 ​ 5.3 Technology and development expenses ​ 77,288 ​ 1.7 ​ 134,017 ​ 1.8 ​ 177,917 ​ 25,442 ​ 1.8 Total operating costs and expenses ​ 3,825,112 ​ 82.0 ​ 5,695,861 ​ 78.6 ​ 7,667,571 ​ 1,096,448 ​ 78.3 ​ 86 Table of Contents Hotel operating costs. Our hotel operating costs account for a substantial majority of our total operating costs and expenses, which consist of costs and expenses directly attributable to the operation of our leased and manachised hotels. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ ​ ​ RMB ​ ​ ​ RMB ​ ​ ​ RMB ​ ​ ​ US$ ​ ​ (in thousands) Hotel operating costs ​ ​ ​ ​ ​ ​ ​ ​ Manachised hotels 1,533,326 ​ 2,502,081 ​ 3,202,206 ​ 457,910 Leased hotels 707,564 ​ 606,077 ​ 514,030 ​ 73,505 Total hotel operating costs 2,240,890 ​ 3,108,158 ​ 3,716,236 ​ 531,415 ​ Manachised hotel operating costs primarily include costs of hotel supplies and other products sold to our manachised hotels as well as compensation and benefits for manachised hotel managers and deputy managers. Compensation and benefits are recouped by us in the form of monthly hotel managers fees. We aim to manage the growth rate of these costs while we increase the revenue of manachised hotels through fast expansion in the number of such hotels. Leased hotel operating costs primarily include rental and utility costs for hotel properties, compensation and benefits for our hotel-based employees, costs of hotel room consumable products and depreciation and amortization of leasehold improvements, equipment, fixture and furniture. These costs are relatively fixed. We aim to manage these costs while we increase the revenue of leased hotels. We aim to continue to manage our hotel operating costs as a percentage of our net revenues as we continue to achieve economies of scale and manage our operating costs and expenses through application of technologies. Retail costs. Our retail costs primarily include cost of our lifestyle products in relation to our retail business. Other operating costs. Besides our hotel operating costs and retail costs, we also incur other operating costs. Selling and marketing expenses. Our selling and marketing expenses consist primarily of advertising and promotion expenses, commissions to travel intermediaries and e-commerce platforms, and compensation and benefits for our sales and marketing personnel. General and administrative expenses. Our general and administrative expenses consist primarily of compensation and benefits for our corporate and regional office and other relevant employees, travel and communication expenses of our general and administrative staff, costs of third-party professional services, allowance expenses for doubtful accounts and office expenses for corporate and regional offices including depreciation and amortization expense of office equipment. Technology and development expenses. Our technology and development expenses consist of (i) staff costs incurred for the self-developed hotel operation, reservation systems and other systems related to sales of hotel supplies and retail business, (ii) servers and cloud infrastructure costs, (iii) retail products development costs, (iv) other expenses related to technology and development functions. Taxation Cayman Islands We were incorporated in the Cayman Islands. Under the current laws of the Cayman Islands, we are not subject to income, corporate or capital gains tax in the Cayman Islands. In addition, our payment of dividends, if any, is not subject to withholding tax in the Cayman Islands. Singapore Our subsidiary in Singapore is considered a Singapore tax resident company under Singapore tax laws, and is subject to Singapore corporate income tax at a rate of 17%. 87 Table of Contents Hong Kong, China Under the current Hong Kong S.A.R. Inland Revenue Ordinance, our Hong Kong subsidiaries are subject to Hong Kong S.A.R. profits tax at the rate of 16.5% on the taxable income generated from the operations in Hong Kong S.A.R. A two-tiered profits tax rates regime was introduced in 2018 where the first HK$2 million of assessable profits earned by a company will be taxed at half of the current tax rate (8.25%) whilst the remaining profits will continue to be taxed at 16.5%. There is an anti-fragmentation measure where each group will have to nominate only one company in the group to benefit from the progressive rates. Chinese Mainland Our subsidiaries in China are companies incorporated under PRC law and, as such, are subject to PRC enterprise income tax on their taxable income in accordance with the relevant PRC income tax laws. Pursuant to the PRC Enterprise Income Tax Law, or EIT Law, which became effective on January 1, 2008 and was most recently amended on December 29, 2018, a uniform 25% enterprise income tax rate is generally applicable to both foreign-invested enterprises and domestic enterprises, except where a special preferential rate applies. The enterprise income tax is calculated based on the entity’s global income as determined under PRC tax laws and accounting standards. Our PRC subsidiaries, Shanghai Chengduo Information Technology Co., Ltd. and Shanghai Dongduo Digital Intelligence Technology Co., Ltd., have been accredited as software enterprises since 2022 and 2025, respectively. They qualify for a tax holiday, which provides an exemption from enterprise income tax (“EIT”) for two years commencing from their first profit-making year, followed by a 50% reduction of EIT for the subsequent three years. The software enterprise qualification is subject to an annual assessment. In September 2025, Shanghai Chengduo Information Technology Co., Ltd. has obtained an updated software enterprise certificate, valid for one year, evidencing its continued qualification. Additionally, our subsidiary, Shanghai Shengkuai Technology Co., Ltd., was certified as a High-and-New Technology Enterprise (“HNTE”) for a period of three years from 2025 to 2027. Accordingly, it is entitled to a preferential tax rate of 15%, provided that all certification criteria for the HNTE status are satisfied in the relevant years. We are subject to VAT at a rate of 3%, 6%, 9%, or 13% on the services and products we provide and related surcharges. We are also subject to surcharges on VAT payments in accordance with PRC law. The ultimate shareholder of our company is a Cayman Islands holding company. The direct shareholders of our subsidiaries in China, which are Hong Kong enterprises, may receive dividends from their respective PRC subsidiaries. The PRC EIT Law and its implementing rules provide that dividends paid by a PRC entity to a nonresident enterprise for income tax purposes is subject to PRC withholding tax at a rate of 10%, subject to reduction by an applicable tax treaty with China. Pursuant to the Arrangement between Chinese Mainland and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, the withholding tax rate in respect to the payment of dividends by a PRC enterprise to a Hong Kong enterprise may be reduced to 5% from a standard rate of 10% if the Hong Kong enterprise directly holds at least 25% of the PRC enterprise. Pursuant to the Notice of the State Administration of Taxation on the Issues concerning the Application of the Dividend Clauses of Tax Agreements, or SAT Circular 81, a Hong Kong resident enterprise must meet the following conditions, among others, in order to apply the reduced withholding tax rate: (i) it must be a company; (ii) it must directly own the required percentage of equity interests and voting rights in the PRC resident enterprise; and (iii) it must have directly owned such required percentage in the PRC resident enterprise throughout the 12 months prior to receiving the dividends. In October 2019, the State Administration of Taxation promulgated the Administrative Measures for Nonresident Taxpayers to Enjoy Treatment under Tax Treaties, or SAT Circular 35, which became effective on January 1, 2020. SAT Circular 35 provides that nonresident enterprises are not required to obtain pre-approval from the relevant tax authority in order to enjoy the reduced withholding tax. Instead, nonresident enterprises and their withholding agents may, by self-assessment and on confirmation that the prescribed criteria to enjoy the tax treaty benefits are met, directly apply the reduced withholding tax rate, and file necessary forms and supporting documents when performing tax filings, which will be subject to post-tax filing examinations by the relevant tax authorities. Accordingly, Atour Hong Kong may be able to benefit from the 5% withholding tax rate for the dividends it receives from its PRC subsidiaries, if it satisfies the conditions prescribed under SAT Circular 81 and other relevant tax rules and regulations. However, according to SAT Circular 81 and SAT Circular 35, if the relevant tax authorities consider the transactions or our arrangements are for the primary purpose of enjoying a favorable tax treatment, the relevant tax authorities may adjust the favorable withholding tax in the future. 88 Table of Contents The Organisation for Economic Co-operation and Development (OECD) developed the Global Anti-Base Erosion Rules (“Pillar Two”) to ensure that large multinational enterprises with consolidated revenue exceeding EUR750 million pay a global minimum tax of 15%. While we expect to be within the scope of Pillar Two starting in 2026, based on our internal analysis, we do not expect this legislation to have a material impact on our consolidated financial statements. We will continue to closely monitor the global implementation process of Pillar Two and continue to assess its potential impact on us and our subsidiaries. If our holding company in the Cayman Islands or any of our subsidiaries outside of China were deemed to be a “resident enterprise” under the PRC EIT Law, it would be subject to enterprise income tax on its worldwide income at a rate of 25%. See “Item 3. Key Information—3.D. Risk Factors—Risks Related to Doing Business in China—If we are classified as a PRC resident enterprise for PRC enterprise income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders and ADS holders.” Results of Operations The following table sets forth a summary of our consolidated results of operations, both in absolute amount and as a percentage of net revenues for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ ​ ​ RMB ​ ​ ​ % ​ ​ ​ RMB ​ ​ ​ % ​ ​ ​ RMB ​ ​ ​ US$ ​ ​ ​ % ​ ​ (in thousands except percentage) Revenues: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Manachised hotels 2,705,609 ​ 58.0 ​ 4,148,752 ​ 57.3 ​ 5,308,864 ​ 759,157 ​ 54.2 Leased hotels 840,044 ​ 18.0 ​ 701,963 ​ 9.7 ​ 590,372 ​ 84,422 ​ 6.0 Retail 971,931 ​ 20.8 ​ 2,198,198 ​ 30.3 ​ 3,670,969 ​ 524,942 ​ 37.5 Others ​ 148,383 ​ 3.2 ​ 199,019 ​ 2.7 ​ 219,954 ​ 31,453 ​ 2.3 Net revenues 4,665,967 ​ 100.0 ​ 7,247,932 ​ 100.0 ​ 9,790,159 ​ 1,399,974 ​ 100.0 Operating costs and expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Hotel operating costs (2,240,890) ​ (47.9) ​ (3,108,158) ​ (42.9) ​ (3,716,236) ​ (531,415) ​ (38.0) Retail costs ​ (513,326) ​ (11.0) ​ (1,083,709) ​ (15.0) ​ (1,741,233) ​ (248,993) ​ (17.8) Other operating costs (72,543) ​ (1.6) ​ (44,524) ​ (0.6) ​ (25,832) ​ (3,693) ​ (0.2) Selling and marketing expenses (469,595) ​ (10.1) ​ (972,863) ​ (13.4) ​ (1,489,682) ​ (213,022) ​ (15.2) General and administrative expenses (451,470) ​ (9.7) ​ (352,590) ​ (4.9) ​ (516,671) ​ (73,883) ​ (5.3) Technology and development expenses (77,288) ​ (1.7) ​ (134,017) ​ (1.8) ​ (177,917) ​ (25,442) ​ (1.8) Total operating costs and expenses (3,825,112) ​ (82.0) ​ (5,695,861) ​ (78.6) ​ (7,667,571) ​ (1,096,448) ​ (78.3) Other operating income, net 83,179 ​ 1.8 ​ 70,231 ​ 1.0 ​ 184,089 ​ 26,324 ​ 1.9 Income from operation 924,034 ​ 19.8 ​ 1,622,302 ​ 22.4 ​ 2,306,677 ​ 329,850 ​ 23.6 Interest income 29,569 ​ 0.6 ​ 48,415 ​ 0.6 ​ 72,167 ​ 10,320 ​ 0.7 Gain from short-term investments 34,519 ​ 0.7 ​ 48,943 ​ 0.7 ​ 44,867 ​ 6,416 ​ 0.4 Interest expense (5,005) ​ (0.1) ​ (3,110) ​ (0.0) ​ (4,249) ​ (608) ​ (0.0) Other (expenses) income, net (1,024) ​ (0.0) ​ 2,465 ​ 0.0 ​ (56,554) ​ (8,087) ​ (0.6) Income before income tax 982,093 ​ 21.0 ​ 1,719,015 ​ 23.7 ​ 2,362,908 ​ 337,891 ​ 24.1 Income tax expense (243,036) ​ (5.2) ​ (446,031) ​ (6.1) ​ (741,646) ​ (106,054) ​ (7.5) Net income 739,057 ​ 15.8 ​ 1,272,984 ​ 17.6 ​ 1,621,262 ​ 231,837 ​ 16.6 Less: net income (loss) attributable to non-controlling interests 1,920 ​ 0.0 ​ (2,364) ​ 0.0 ​ 270 ​ 39 ​ 0.0 Net income attributable to the Company 737,137 ​ 15.8 ​ 1,275,348 ​ 17.6 ​ 1,620,992 ​ 231,798 ​ 16.6 ​ Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 Net revenues. Our net revenues increased from RMB7,247.9 million in 2024 to RMB9,790.2 million (US$1,400.0 million) in 2025, driven by the growth in manachised hotel and retail businesses. ● Manachised hotels. Revenues from our manachised hotels increased by 28.0% from RMB4,148.8 million in 2024 to RMB5,308.9 million (US$759.2 million) in 2025. The increase was primarily driven by our ongoing hotel network expansion. The total number of our manachised hotels increased from 1,593 as of December 31, 2024 to 1,996 as of December 31, 2025. 89 Table of Contents ● Leased hotels. Revenues from our leased hotels decreased by 15.9% from RMB702.0 million in 2024 to RMB590.4 million (US$84.4 million) in 2025. The decrease was primarily due to the decrease in the number of leased hotels, which was in line with our strategy to focus on expanding our asset-light manachised hotel operations. The total number of our leased hotels decreased from 26 as of December 31, 2024 to 19 as of December 31, 2025. ● Retail. Our retail revenues increased by 67.0% from RMB2,198.2 million in 2024 to RMB3,671.0 million (US$524.9 million) in 2025. The increase was driven by the rising recognition of our retail brands and the success of our product innovation and development initiatives, as we continued to broaden our product portfolio with new models of pillows and comforters. ● Others. Our other revenues increased by 10.5% from RMB199.0 million in 2024 to RMB220.0 million (US$31.5 million) in 2025. The increase was driven by our fast-growing membership business. Operating Costs and Expenses. Our operating costs and expenses increased by 34.6% from RMB5,695.9 million in 2024 to RMB7,667.6 million (US$1,096.4 million) in 2025. ● Hotel operating costs. Our hotel operating costs increased by 19.6% from RMB3,108.2 million in 2024 to RMB3,716.2 million (US$531.4 million) in 2025. The increase was mainly due to the increase in variable costs, such as supply chain costs and hotel manager costs, associated with our ongoing hotel network expansion. ● Retail costs. Our retail costs increased by 60.7% from RMB1,083.7 million in 2024 to RMB1,741.2 million (US$249.0 million) in 2025. The increase was associated with the rapid growth of our retail business. Retail costs represented 47.4% of retail revenues in 2025, down from 49.3% in 2024. ● Other operating costs. Our other operating costs decreased by 42.0% from RMB44.5 million in 2024 to RMB25.8 million (US$3.7 million) in 2025. ● Selling and marketing expenses. Our selling and marketing expenses increased by 53.1% from RMB972.9 million in 2024 to RMB1,489.7 million (US$213.0 million) in 2025. The increase was mainly due to our enhanced investment in brand recognition and the effective development of online channels, aligned with the growth of our retail business. ● General and administrative expenses. Our general and administrative expenses increased by 46.5% from RMB352.6 million in 2024 to RMB516.7 million (US$73.9 million) in 2025. The increase was primarily due to an increase in labor costs and share-based compensation expenses. ● Technology and development expenses. Our technology and development expenses increased by 32.8% from RMB134.0 million in 2024 to RMB177.9 million (US$25.4 million) in 2025. The increase was mainly attributable to our increased investments in technology systems and infrastructure to support our expanding hotel network, retail business and improve customer experience. Other operating income, net. Our net other operating income primarily consists of income from government subsidies and value-added tax related benefits, offset by other operating expenses. Our net other operating income increased by 162.1% from RMB70.2 million in 2024 to RMB184.1 million (US$26.3 million) in 2025. The increase was mainly due to increase of income from government subsidies. Income from operation. As a result of the foregoing, we had income from operation of RMB1,622.3 million and RMB2,306.7 million (US$329.9 million) in 2024 and 2025, respectively, representing an increase of 42.2%. Interest income. Our interest income consists primarily of interest from our bank deposits. Our interest income increased by 49.1% from RMB48.4 million in 2024 to RMB72.2 million (US$10.3 million) in 2025, due to increased cash at bank in line with our business expansion and revenue growth. Gain from short-term investments. Our gain from short-term investments decreased by 8.3% from RMB48.9 million in 2024 to RMB44.9 million (US$6.4 million) in 2025, due to a decrease in the yield of structured deposits we purchased. Interest expense. Our interest expense consists primarily of interests related to our borrowings. Our interest expense increased by 36.6% from RMB3.1 million in 2024 to RMB4.2 million (US$0.6 million) in 2025, due to an increase in our borrowings. 90 Table of Contents Income tax expense. Our income tax expense increased by 66.3% from RMB446.0 million in 2024 to RMB741.6 million (US$106.0 million) in 2025. The increase in income tax expense was attributable to higher income before tax. The effective tax rate increased from 25.9% in 2024 to 31.4% in 2025, primarily due to non-deductible share-based compensation expenses and withholding tax on increased earnings distribution. Net income. As a result of the foregoing, we had net income of RMB1,273.0 million and RMB1,621.3 million (US$231.8 million) in 2024 and 2025, respectively, representing an increase of 27.4%. Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 For a detailed description of the comparison of our operating results for the year ended December 31, 2024 to the year ended December 31, 2023, see “Item 5.A. Operating Results — Results of Operations — Year Ended December 31, 2024 Compared to Year Ended December 31, 2023” of our annual report on Form 20-F for the fiscal year ended December 31, 2024 filed with the Securities and Exchange Commission on April 25, 2025. Non-GAAP Financial Measures To supplement our consolidated financial results presented in accordance with the U.S. GAAP extracted from our consolidated financial statements, we use the following non-GAAP measures: adjusted net income, which is defined as net income excluding share-based compensation expenses; EBITDA, which is defined as earnings before interest income, interest expense, income tax expense and depreciation and amortization; adjusted EBITDA, which is defined as EBITDA excluding share-based compensation expenses. Share-based compensation expenses are non-cash in nature. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with the U.S. GAAP. We believe that EBITDA is widely used by other companies in the hospitality and retail industries and may be used by investors as a measure of the financial performance. Given the significant investments that we have made in leasehold improvements and other fixed assets of leased hotels, depreciation and amortization comprises a significant portion of our cost structure. We believe that EBITDA will provide investors with a useful tool for comparability between periods because it eliminates depreciation and amortization attributable to capital expenditures. Adjusted net income and adjusted EBITDA provide meaningful supplemental information regarding our performance by excluding share-based compensation expenses, as the investors can better understand our performance and compare business trends among different reporting periods on a consistent basis excluding share-based compensation expenses which are not expected to result in cash payment. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate our management’s internal comparisons to our historical performance. We believe these non-GAAP financial measures are also useful to investors in allowing for greater transparency with respect to supplemental information used regularly by our management in financial and operational decision-making. The use of these non-GAAP measures has certain limitations as the excluded items have been and will be incurred and are not reflected in the presentation of these non-GAAP measures. Each of these items should also be considered in the overall evaluation of the results. We compensate for these limitations by providing the relevant disclosure of the relevant items both in its reconciliations to the U.S. GAAP financial measures and in our consolidated financial statements, all of which should be considered when evaluating our performance. In addition, these measures may not be comparable to similarly titled measures utilized by other companies since such other companies may not calculate these measures in the same manner as we do. 91 Table of Contents A reconciliation of net income which is the most directly comparable the U.S. GAAP measure to adjusted net income (non-GAAP measure), EBITDA (non-GAAP measure) and adjusted EBITDA (non-GAAP measure), is provided below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ ​ ​ RMB ​ ​ ​ RMB ​ ​ ​ RMB ​ ​ ​ US$ ​ ​ (in thousands) Net income 739,057 ​ 1,272,984 ​ 1,621,262 ​ 231,837 Share-based compensation expenses, net of tax effect of nil(1) 163,978 ​ 32,792 ​ 131,472 ​ 18,801 Adjusted Net income (Non-GAAP measure) ​ 903,035 ​ 1,305,776 ​ 1,752,734 ​ 250,638 ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income ​ 739,057 ​ 1,272,984 ​ 1,621,262 ​ 231,837 Interest income ​ (29,569) ​ (48,415) ​ (72,167) ​ (10,320) Interest expense ​ 5,005 ​ 3,110 ​ 4,249 ​ 608 Income tax expense ​ 243,036 ​ 446,031 ​ 741,646 ​ 106,054 Depreciation and amortization ​ 85,021 ​ 65,232 ​ 54,106 ​ 7,737 EBITDA (Non-GAAP measure) ​ 1,042,550 ​ 1,738,942 ​ 2,349,096 ​ 335,916 Share-based compensation expenses ​ 163,978 ​ 32,792 ​ 131,472 ​ 18,801 Adjusted EBITDA (Non-GAAP measure) 1,206,528 ​ 1,771,734 ​ 2,480,568 ​ 354,717 Note: (1) The share-based compensation expenses were recorded at entities in PRC. Share-based compensation expenses were nondeductible expenses in PRC. Therefore, there is no tax impact for share-based compensation expenses adjustment for non-GAAP financial measures. 5.B. Liquidity and Capital Resources Cash Flows and Working Capital Our principal sources of liquidity come from cash generated from operating activities, equity financing and bank loans. As of December 31, 2025, we had RMB3,303.9 million (US$472.5 million) in cash and cash equivalents. Our cash and cash equivalents consist of cash on hand and liquid investments which have maturities of three months or less when acquired and are unrestricted as to withdrawal or use. We expect to incur additional capital expenditures in connection with leasehold improvements of our leased hotels. We believe that our current cash and anticipated cash flow from operations will be sufficient to meet our anticipated cash needs, including our cash needs for working capital and capital expenditures, for at least the next 12 months. We intend to finance our future working capital requirements and capital expenditures with anticipated cash generated from operating activities and funds raised from financing activities. However, we may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to execute our growth strategies and scale our business could be significantly impaired, and our business, operating results and financial condition may be adversely affected. See “Item 3. Key Information—3.D. Risk Factors—Risks Related to Our Business and Industry—We require significant capital to fund our operations, growth and technological investments. If we cannot obtain sufficient capital on acceptable terms, our business, financial condition and prospects may suffer.” 92 Table of Contents The following table sets forth a summary of our cash flows for the years indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ ​ ​ RMB ​ ​ ​ RMB ​ ​ ​ RMB ​ ​ ​ US$ ​ ​ (in thousands) Net cash generated from operating activities 1,988,674 ​ 1,725,948 ​ 1,992,822 ​ 284,969 Net cash used in investing activities (600,521) ​ (520,554) ​ (1,332,071) ​ (190,483) Net cash used in financing activities (146,916) ​ (426,595) ​ (924,887) ​ (132,257) Net increase (decrease) in cash and cash equivalents and restricted cash 1,251,646 ​ 777,877 ​ (299,458) ​ (42,822) Cash and cash equivalents and restricted cash at the beginning of the year 1,590,107 ​ 2,841,753 ​ 3,619,630 ​ 517,600 Cash and cash equivalents and restricted cash at the end of the year 2,841,753 ​ 3,619,630 ​ 3,320,172 ​ 474,778 ​ Operating Activities Our net cash generated from operating activities decreased from RMB1,988.7 million in 2023 to RMB1,725.9 million in 2024, mainly due to the increase in net income, as adjusted by changes in working capital, including primarily the decrease in accrued expenses and other payables, deferred revenue and accounts payable. In 2025, our net cash generated from operating activities was RMB1,992.8 million (US$285.0 million), which was primarily attributable to net income, adjusted for non-cash items and changes in working capital, which primarily include: (i) reduction in the carrying amount of ROU assets, (ii) share-based compensation, and (iii) impairment of inventories. The amount was further adjusted by changes in operating assets and liabilities, primarily including (i) prepayments and other current assets, (ii) deferred revenue, (iii) operating lease liabilities, and (iv) accrued expenses and other payables. Investing Activities Our cash used in investing activities is primarily related to our leasehold improvements and purchase of equipment and fixtures used in leased hotels, and investment in short-term financial products. Our net cash used in investing activities decreased from RMB600.5 million in 2023 to RMB520.6 million in 2024, primarily due to the increase in proceeds from maturities of short-term investments. In 2025, our net cash used in investing activities was RMB1,332.1 million (US$190.5 million), which was primarily attributable to (i) payment for purchases of short-term investments and (ii) payment for purchases of property and equipment; partially offset by (i) proceeds from maturities of short-term investments and (ii) proceeds from disposal of property and equipment. Financing Activities Our financing activities primarily consisted of net proceeds from initial public offering, bank borrowings, proceeds from employee stock option exercise, payment for dividends and payment for share repurchases. Our net cash used in financing activities increased from RMB146.9 million in 2023 to RMB426.6 million in 2024, which was attributable to the increase in our cash dividend payment and decrease in proceeds from employee stock option exercise net off by the decrease in repayment of borrowings. In 2025, our net cash used in financing activities was RMB924.9 million (US$132.3 million), which was primarily attributable to (i) payment for dividends, (ii) payment for share repurchases, and (iii) repayment of borrowings, and partially offset by (i) proceeds from borrowings and (ii) proceeds from stock option exercises. Material Cash Requirements Our material cash requirements as of December 31, 2025 and any subsequent interim period primarily include our working capital and operating expenditure needs, capital expenditures, contractual obligations and outstanding indebtedness. 93 Table of Contents Other than the capital expenditures and contractual obligations, as discussed below, we did not have any significant capital and other commitments, long-term obligations or guarantees as of December 31, 2025. Capital Expenditures Our capital expenditures were incurred primarily in connection with leasehold improvements, investments in furniture, fixtures and equipment and technology, information and operational software. Our capital expenditures were RMB41.7 million, RMB58.2 million and RMB86.0 million (US$12.3 million) in 2023, 2024 and 2025, respectively. We will continue to make capital expenditures to meet the expected growth of our operations and expect cash generated from our operating activities and financing activities will continue to meet our capital expenditure needs in the foreseeable future. Contractual Obligations The following table sets forth our contractual obligations as of December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payment Due by Period ​ ​ ​ ​ ​ ​ ​ ​ Less ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ More ​ ​ ​ ​ Than ​ 1 – 3 ​ 3 – 5 ​ Than ​ ​ Total ​ 1 Year ​ Years ​ Years ​ 5 Years ​ ​ (RMB in thousands) Operating lease obligations 1,460,686 ​ 279,099 ​ 466,597 ​ 402,029 ​ 312,961 ​ Our operating lease obligations are primarily related to our obligations under lease agreements with lessors of business offices and certain hotels. Outstanding Indebtedness As of December 31, 2025, we had several credit facilities with third party banks under which we can borrow up to RMB780.0 million during the term of the facilities maturing from January 2026 to December 2026. The drawdown of the credit facilities is subject to the terms and conditions of each agreement. As of December 31, 2025, the unutilized credit facilities amounted to RMB530.0 million. Off-Balance Sheet Commitments and Arrangements Other than operating lease obligations set forth in the table under the caption “Contractual Obligations” above, we have not entered into any material financial guarantees or other commitments to guarantee the payment obligations of any third parties. In addition, we have not entered into any derivative contracts that are indexed to our shares and classified as shareholders’ equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us. Holding Company Structure 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. This holding company structure involves unique risks to investors. For example, 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. 94 Table of Contents 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. Appropriation to the other two reserve funds is at our subsidiaries’ discretion. Our PRC subsidiaries did not make any contributions to the enterprise expansion fund or the staff and bonus welfare fund during each period presented. 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-Regulation-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. In 2025, Atour Shanghai distributed RMB800.0 million (US$114.4 million) to Atour Hong Kong. Cash generated from operating activities by our PRC subsidiaries are primarily utilized for dividend distributions and share repurchases. 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. For details about the applicable PRC rules that limit transfer of funds from overseas to our PRC subsidiaries, see “Item 14. Material Modifications to The Rights of Security Holders and Use of Proceeds,” “Item 3. Key Information — 3.D. Risk Factors — Risks Related to Doing Business in China — PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental regulation of currency conversion may restrict or delay us from using the proceeds of our initial public offering to make loans or additional capital contributions to our PRC subsidiaries, which could adversely affect our liquidity and our ability to fund and expand our business” and “Item 4. Information on The Company — 4.B. Business Overview — Regulation — Regulations on Offshore Financing.” 5.C. Research and Development, Patents and Licenses, etc. Research and development (“R&D”) is a significant contributor to our growth and market value, and constitutes one of our major activities and expenses. Our R&D activities mainly focus on digitalizing our business to further cater to customer demands and enhance user experience. Our R&D team is spearheaded by seasoned industry veterans with profound visions and insights in IT, product development, among others. We have also been exploring collaborations with renowned universities and research institutes, including a leading university in Hong Kong, to further promote product innovation, establish product standards and enhance product quality. Our collaboration with the leading university in Hong Kong focuses on the research and testing on fabric finishing and filling materials for our Deep Sleep series products, as well as research projects relating to thermal-regulating and sensory-comfort properties of such materials. We believe that the collaboration has further strengthened our research and development capabilities in material science and supported the development of proprietary formulations for our Deep Sleep series products. It has also enhanced the technological differentiation and competitiveness of our retail products. 95 Table of Contents 5.D. Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended December 31, 2025 that are reasonably likely to have a material and adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial condition. 5.E. Critical Accounting Estimates We prepare our financial statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”), which requires us to make judgments, estimates and assumptions. We continually evaluate these estimates and assumptions based on the most recent available information, our own historical experience and various other assumptions that we believe to be reasonable under the circumstances. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from our expectations as a result of changes in our estimates. Impairment of long-lived assets For the purposes of impairment testing of long-lived assets of leased hotel, we have concluded that an individual hotel is the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. When there are circumstances that require the long-lived assets of a leased hotel be tested for possible impairment, we first compare undiscounted cash flows generated by the assets to their carrying amount. If the carrying amount of the long-lived assets is not recoverable based on an undiscounted cash flow, an impairment is recognized for the amount by which the asset’s carrying amount exceeds its fair value. Fair value is determined through various valuation techniques, including discounted cash flow models, quoted market values, and third-party independent appraisals, as considered necessary. Key assumptions in the undiscounted cash flows include the average daily rates and occupancy rates that are used to estimate the future cashflows of leased hotels. Estimates of future cash flows of leased hotels involve highly subjective judgments and can be significantly impacted by changes in the business or economic conditions. The fair values of these assets primarily reflect the price a market participant would pay to sub-lease the operating lease right-of-use assets and acquire the remaining property and equipment, representing the highest and best use of these assets. Significant unobservable inputs used in the fair value measurement include future market rental prices, which were determined with the assistance of an independent valuation specialist. We recognized impairment losses of RMB60.5 million, RMB54.7 million and RMB55.4 million related to leased hotels, which included RMB55.4 million, RMB48.5 million and RMB11.8 million for property and equipment and RMB5.1 million, RMB6.2 million and RMB43.6 million for operating lease right-of-use assets, recorded in hotel operating costs in our consolidated statements of comprehensive income for the years ended December 31, 2023, 2024 and 2025, respectively. ​