Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2023 shares | |
Document Information [Line Items] | |
Document Type | 20-F |
Document Registration Statement | false |
Document Annual Report | true |
Document Period End Date | Dec. 31, 2023 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2023 |
Document Transition Report | false |
Document Shell Company Report | false |
Entity File Number | 001-41885 |
Entity Registrant Name | ZKH Group Limited |
Entity Incorporation, State or Country Code | E9 |
Entity Address, Address Line One | 7/F, Tower 4, Libao Plaza, No. 36 Shenbin Road |
Entity Address, Adress Line Two | Minhang District, |
Entity Address, City or Town | Shanghai |
Entity Address, Postal Zip Code | 201106 |
Entity Address, Country | CN |
Entity Common Stock, Shares Outstanding | 5,637,415,964 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | true |
ICFR Auditor Attestation Flag | false |
Document Financial Statement Error Correction [Flag] | false |
Document Accounting Standard | U.S. GAAP |
Entity Shell Company | false |
Entity Central Index Key | 0001862044 |
Document Fiscal Period Focus | FY |
Amendment Flag | false |
Auditor Name | PricewaterhouseCoopers Zhong Tian LLP |
Auditor Location | Shenzhen, the People’s Republic of China |
Auditor Firm ID | 1424 |
Business Contact | |
Document Information [Line Items] | |
Entity Address, Address Line One | 7/F, Tower 4, Libao Plaza, No. 36 Shenbin Road |
Entity Address, Adress Line Two | Minhang District, |
Entity Address, City or Town | Shanghai |
Entity Address, Postal Zip Code | 201106 |
Entity Address, Country | CN |
Contact Personnel Name | Chun Chiu Lai |
Country Region | 86 |
City Area Code | 21 |
Local Phone Number | 5080-9696 |
Contact Personnel Email Address | IR@zkh.com |
ADS | |
Document Information [Line Items] | |
Title of 12(b) Security | American depositary shares (each representingthirty-five (35) Class A ordinary shares,par value US$0.0000001 per share) |
Trading Symbol | ZKH |
Security Exchange Name | NYSE |
Class A Ordinary Shares | |
Document Information [Line Items] | |
Title of 12(b) Security | Class A ordinary shares, par value US$0.0000001 per share* |
No Trading Symbol Flag | true |
Security Exchange Name | NYSE |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | ¥ 1,090,621 | ¥ 1,954,246 |
Restricted cash | 159,751 | 51,610 |
Short-term investments | 874,210 | |
Accounts receivable, net | 3,639,794 | 3,067,064 |
Notes receivable | 352,997 | 310,708 |
Inventories | 668,984 | 655,997 |
Prepayments and other current assets | 168,117 | 243,630 |
Total current assets | 6,954,474 | 6,283,255 |
Non-current assets: | ||
Property and equipment, net | 145,288 | 166,740 |
Land use right | 11,033 | 10,930 |
Operating lease right-of-use assets, net | 224,930 | 297,937 |
Intangible assets, net | 20,096 | 24,051 |
Goodwill | 30,807 | 30,807 |
Total non-current assets | 432,154 | 530,465 |
Total assets | 7,386,628 | 6,813,720 |
Current liabilities: | ||
Short-term borrowings | 585,000 | 250,000 |
Accounts and notes payable | 2,883,370 | 2,566,136 |
Operating lease liabilities | 91,230 | 95,775 |
Advance from customers | 19,907 | 31,131 |
Accrued expenses and other current liabilities | 448,225 | 539,191 |
Total current liabilities | 4,027,732 | 3,482,233 |
Non-current liabilities: | ||
Non-current operating lease liabilities | 146,970 | 214,427 |
Other non-current liabilities | 507 | 782 |
Total non-current liabilities | 147,477 | 215,209 |
Total liabilities | 4,175,209 | 3,697,442 |
Commitments and contingencies (Note 22) | ||
Mezzanine equity: | ||
Convertible redeemable preferred shares | 7,182,773 | |
ZKH Group Limited shareholders' (deficit)/equity: | ||
Ordinary shares (USD0.0000001 par value; 496,253,373,300 and 496,253,373,300 shares authorized; 1,218,621,800 and 5,621,490,964 shares issued and outstanding as of December 31, 2022 and 2023, respectively) | 4 | 1 |
Additional paid-in capital | 8,139,349 | |
Statutory reserves | 6,013 | 5,278 |
Accumulated other comprehensive loss | (25,154) | (51,910) |
Accumulated deficit | (4,908,793) | (4,024,102) |
Total ZKH Group Limited shareholders' (deficit)/equity | 3,211,419 | (4,070,733) |
Non-controlling interests | 4,238 | |
Total shareholders' (deficit)/equity | 3,211,419 | (4,066,495) |
Total liabilities, mezzanine equity and shareholders' (deficit)/equity | ¥ 7,386,628 | 6,813,720 |
Series A Preferred Shares | ||
Mezzanine equity: | ||
Convertible redeemable preferred shares | 26,934 | |
Series A+ Preferred Shares | ||
Mezzanine equity: | ||
Convertible redeemable preferred shares | 40,608 | |
Series B Preferred Shares | ||
Mezzanine equity: | ||
Convertible redeemable preferred shares | 389,960 | |
Series B+ Preferred Shares | ||
Mezzanine equity: | ||
Convertible redeemable preferred shares | 240,033 | |
Series C1 Preferred Shares | ||
Mezzanine equity: | ||
Convertible redeemable preferred shares | 769,548 | |
Series C2 Preferred Shares | ||
Mezzanine equity: | ||
Convertible redeemable preferred shares | 458,503 | |
Series D1 Preferred Shares | ||
Mezzanine equity: | ||
Convertible redeemable preferred shares | 1,219,370 | |
Series D2 Preferred Shares | ||
Mezzanine equity: | ||
Convertible redeemable preferred shares | 179,429 | |
Series E Preferred Shares | ||
Mezzanine equity: | ||
Convertible redeemable preferred shares | 2,226,911 | |
Series F Preferred Shares | ||
Mezzanine equity: | ||
Convertible redeemable preferred shares | ¥ 1,631,477 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
Convertible redeemable preferred shares, shares outstanding | 4,138,640,113 | |
Ordinary shares, par value (in dollars per share) | $ 0.00 | $ 0.00 |
Ordinary shares, shares authorized | 496,253,373,300 | 496,253,373,300 |
Ordinary shares, shares issued | 5,621,490,964 | 1,218,621,800 |
Ordinary shares, shares outstanding | 5,621,490,964 | 1,218,621,800 |
Series A Preferred Shares | ||
Convertible redeemable preferred shares, par value (in dollars per share) | $ 0.00 | $ 0.00 |
Convertible redeemable preferred shares, shares authorized | 0 | 58,480,000 |
Convertible redeemable preferred shares, shares issued | 0 | 58,480,000 |
Convertible redeemable preferred shares, shares outstanding | 0 | 58,480,000 |
Series A+ Preferred Shares | ||
Convertible redeemable preferred shares, par value (in dollars per share) | $ 0.00 | $ 0.00 |
Convertible redeemable preferred shares, shares authorized | 0 | 84,480,000 |
Convertible redeemable preferred shares, shares issued | 0 | 84,480,000 |
Convertible redeemable preferred shares, shares outstanding | 0 | 84,480,000 |
Series B Preferred Shares | ||
Convertible redeemable preferred shares, par value (in dollars per share) | $ 0.00 | $ 0.00 |
Convertible redeemable preferred shares, shares authorized | 0 | 734,209,000 |
Convertible redeemable preferred shares, shares issued | 0 | 734,209,000 |
Convertible redeemable preferred shares, shares outstanding | 0 | 734,209,000 |
Series B+ Preferred Shares | ||
Convertible redeemable preferred shares, par value (in dollars per share) | $ 0.00 | $ 0.00 |
Convertible redeemable preferred shares, shares authorized | 0 | 277,730,000 |
Convertible redeemable preferred shares, shares issued | 0 | 277,730,000 |
Convertible redeemable preferred shares, shares outstanding | 0 | 277,730,000 |
Series C1 Preferred Shares | ||
Convertible redeemable preferred shares, par value (in dollars per share) | $ 0.00 | $ 0.00 |
Convertible redeemable preferred shares, shares authorized | 0 | 604,820,600 |
Convertible redeemable preferred shares, shares issued | 0 | 604,820,600 |
Convertible redeemable preferred shares, shares outstanding | 0 | 604,820,600 |
Series C2 Preferred Shares | ||
Convertible redeemable preferred shares, par value (in dollars per share) | $ 0.00 | $ 0.00 |
Convertible redeemable preferred shares, shares authorized | 0 | 372,859,000 |
Convertible redeemable preferred shares, shares issued | 0 | 372,859,000 |
Convertible redeemable preferred shares, shares outstanding | 0 | 372,859,000 |
Series D1 Preferred Shares | ||
Convertible redeemable preferred shares, par value (in dollars per share) | $ 0.00 | $ 0.00 |
Convertible redeemable preferred shares, shares authorized | 0 | 705,523,600 |
Convertible redeemable preferred shares, shares issued | 0 | 705,523,600 |
Convertible redeemable preferred shares, shares outstanding | 0 | 705,523,600 |
Series D2 Preferred Shares | ||
Convertible redeemable preferred shares, par value (in dollars per share) | $ 0.00 | $ 0.00 |
Convertible redeemable preferred shares, shares authorized | 0 | 105,302,000 |
Convertible redeemable preferred shares, shares issued | 0 | 105,302,000 |
Convertible redeemable preferred shares, shares outstanding | 0 | 105,302,000 |
Series E Preferred Shares | ||
Convertible redeemable preferred shares, par value (in dollars per share) | $ 0.00 | $ 0.00 |
Convertible redeemable preferred shares, shares authorized | 0 | 803,222,500 |
Convertible redeemable preferred shares, shares issued | 0 | 803,222,500 |
Convertible redeemable preferred shares, shares outstanding | 0 | 803,222,500 |
Series F Preferred Shares | ||
Convertible redeemable preferred shares, par value (in dollars per share) | $ 0.00 | $ 0.00 |
Convertible redeemable preferred shares, shares authorized | 0 | 392,013,413 |
Convertible redeemable preferred shares, shares issued | 0 | 392,013,413 |
Convertible redeemable preferred shares, shares outstanding | 0 | 392,013,413 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Net revenues | |||
Total net revenues | ¥ 8,721,175 | ¥ 8,315,236 | ¥ 7,654,591 |
Cost of revenues | (7,268,741) | (6,997,566) | (6,614,836) |
Operating expenses | |||
Fulfillment | (438,959) | (467,384) | (444,510) |
Sales and marketing | (700,791) | (683,206) | (689,637) |
Research and development | (175,915) | (240,534) | (256,421) |
General and administrative | (535,493) | (612,252) | (759,627) |
Loss from operations | (398,724) | (685,706) | (1,110,440) |
Interest and investment income | 53,703 | 14,559 | 28,277 |
Interest expense | (19,343) | (94,182) | (10,593) |
Others, net | 59,659 | 33,737 | (1,156) |
Loss before income tax | (304,705) | (731,592) | (1,093,912) |
Income tax (expenses)/benefits | (195) | 471 | (200) |
Net loss | (304,900) | (731,121) | (1,094,112) |
Less: net income/(loss) attributable to non-controlling interests | (393) | 333 | 112 |
Less: net income/(loss) attributable to redeemable non-controlling interests | (193) | 4,227 | 28,260 |
Net loss attributable to ZKH Group Limited | (304,314) | (735,681) | (1,122,484) |
Accretion on preferred shares to redemption value | (660,070) | (509,281) | (329,737) |
Net loss attributable to ZKH Group Limited's ordinary shareholders | (964,384) | (1,244,962) | (1,452,221) |
Net loss | (304,900) | (731,121) | (1,094,112) |
Other comprehensive loss: | |||
Foreign currency translation adjustments | 26,756 | (50,980) | (490) |
Total comprehensive loss | (278,144) | (782,101) | (1,094,602) |
Less: comprehensive income/(loss) attributable to non-controlling interests | (393) | 333 | 112 |
Less: comprehensive income/(loss) attributable to redeemable non-controlling interests | (193) | 4,227 | 28,260 |
Comprehensive loss attributable to ZKH Group Limited | (277,558) | (786,661) | (1,122,974) |
Total comprehensive loss attributable to ZKH Group Limited's ordinary shareholders | ¥ (937,628) | ¥ (1,295,942) | ¥ (1,452,711) |
Net loss per ordinary share attributable to ordinary shareholders | |||
Basic | ¥ (0.63) | ¥ (0.94) | ¥ (1.20) |
Diluted | ¥ (0.63) | ¥ (0.94) | ¥ (1.20) |
Weighted average number of shares | |||
Basic | 1,528,540,765 | 1,325,036,140 | 1,213,878,050 |
Diluted | 1,528,540,765 | 1,325,036,140 | 1,213,878,050 |
ADS | |||
Net loss per ordinary share attributable to ordinary shareholders | |||
Basic | ¥ (22.08) | ¥ (32.88) | ¥ (41.87) |
Diluted | ¥ (22.08) | ¥ (32.88) | ¥ (41.87) |
Weighted average number of shares | |||
Basic | 43,672,593 | 37,858,175 | 34,682,230 |
Diluted | 43,672,593 | 37,858,175 | 34,682,230 |
Net product revenues | |||
Net revenues | |||
Total net revenues | ¥ 8,341,603 | ¥ 8,086,920 | ¥ 7,500,036 |
Net service revenues | |||
Net revenues | |||
Total net revenues | 307,412 | 179,508 | 116,692 |
Other revenues | |||
Net revenues | |||
Total net revenues | ¥ 72,160 | ¥ 48,808 | ¥ 37,863 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Class A Ordinary Shares | |||
Number of underlying shares represented by one ADS | 35 | 35 | 35 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY/(DEFICIT) - CNY (¥) ¥ in Thousands | Ordinary Shares | Additional Paid-in Capital | Statutory Reserves | Accumulated Other Comprehensive Loss | Retained Earnings (Accumulated Deficit) | Non-controlling Interests | Total |
Balance, Beginning at Dec. 31, 2020 | ¥ 1 | ¥ 5,278 | ¥ (440) | ¥ (1,473,424) | ¥ 3,793 | ¥ (1,464,792) | |
Balance, Beginning (Shares) at Dec. 31, 2020 | 1,118,621,800 | ||||||
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT | |||||||
Net (loss)/income | (1,094,224) | 112 | (1,094,112) | ||||
Foreign currency translation adjustments | (490) | (490) | |||||
Share-based compensation and vesting of share-based awards | ¥ 151,419 | 151,419 | |||||
Share-based compensation and vesting of share-based awards (Shares) | 100,000,000 | ||||||
Accretion on convertible redeemable preferred shares to redemption value | (151,419) | (178,318) | (329,737) | ||||
Accretion of redeemable non-controlling interests | (28,260) | (28,260) | |||||
Balance, Ending at Dec. 31, 2021 | ¥ 1 | 5,278 | (930) | (2,774,226) | 3,905 | (2,765,972) | |
Balance, Ending (Shares) at Dec. 31, 2021 | 1,218,621,800 | ||||||
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT | |||||||
Net (loss)/income | (731,454) | 333 | (731,121) | ||||
Foreign currency translation adjustments | (50,980) | (50,980) | |||||
Share-based compensation and vesting of share-based awards | (4,914) | (4,914) | |||||
Accretion on convertible redeemable preferred shares to redemption value | (509,281) | (509,281) | |||||
Accretion of redeemable non-controlling interests | (4,227) | (4,227) | |||||
Balance, Ending at Dec. 31, 2022 | ¥ 1 | 5,278 | (51,910) | (4,024,102) | 4,238 | ¥ (4,066,495) | |
Balance, Ending (Shares) at Dec. 31, 2022 | 1,218,621,800 | 1,218,621,800 | |||||
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT | |||||||
Net (loss)/income | (304,507) | (393) | ¥ (304,900) | ||||
Foreign currency translation adjustments | 26,756 | 26,756 | |||||
Share-based compensation and vesting of share-based awards | 34,840 | 34,840 | |||||
Accretion on convertible redeemable preferred shares to redemption value | (80,428) | (579,642) | (660,070) | ||||
Change on repurchase premium related to Shanghai Kunjun Material Technology Co.,Ltd | 193 | 193 | |||||
Extinguishment of Series F convertible redeemable preferred shares | 272,426 | 272,426 | |||||
Issuance of ordinary shares upon Initial Public Offering ("IPO"), net of issuance cost | 340,732 | 340,732 | |||||
Issuance of ordinary shares upon Initial Public Offering ("IPO"), net of issuance cost (Shares) | 140,000,000 | ||||||
Automatic conversion of convertible preferred shares into ordinary shares upon IPO | ¥ 3 | 7,570,414 | 7,570,417 | ||||
Automatic conversion of convertible preferred shares into ordinary shares upon IPO (Shares) | 4,262,869,164 | ||||||
Repurchase of non-controlling interests | 1,365 | ¥ (3,845) | (2,480) | ||||
Appropriation to statutory reserve | 735 | (735) | |||||
Balance, Ending at Dec. 31, 2023 | ¥ 4 | ¥ 8,139,349 | ¥ 6,013 | ¥ (25,154) | ¥ (4,908,793) | ¥ 3,211,419 | |
Balance, Ending (Shares) at Dec. 31, 2023 | 5,621,490,964 | 5,621,490,964 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities: | |||
Net loss | ¥ (304,900) | ¥ (731,121) | ¥ (1,094,112) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Depreciation and amortization | 73,466 | 76,073 | 53,025 |
Share-based compensation expense | 17,393 | 31,899 | 183,349 |
Loss on disposals of property and equipment | 3,011 | 175 | 432 |
Allowance for credit losses | 12,756 | 28,006 | 31,476 |
Write-down of inventories | 39,969 | 21,139 | 14,310 |
Investment income | (6,100) | (124) | (6,232) |
Interest expenses of convertible notes | 73,081 | ||
Foreign exchange losses/(gains) | 11,061 | (13,733) | 8,205 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (585,486) | (333,067) | (1,127,262) |
Notes receivable | (42,289) | 85,753 | (103,280) |
Inventories | (52,956) | 85,802 | (329,237) |
Prepayments and other current assets | 51,982 | 21,551 | (58,662) |
Accounts and notes payable | 317,234 | 119,814 | 922,880 |
Advance from customers | (11,224) | 1,019 | 11,330 |
Operating lease right-of use assets | 73,007 | 81,378 | (71,440) |
Land use right | (328) | 10,930 | |
Accrued expenses and other liabilities | (92,542) | 29,342 | 116,736 |
Operating lease liabilities | (72,002) | (92,120) | 65,730 |
Net cash used in operating activities | (567,948) | (504,203) | (1,382,752) |
Cash flows from investing activities: | |||
Purchase of short-term investments | (1,288,080) | (100,000) | (1,480,018) |
Maturity of short-term investments | 430,623 | 100,124 | 1,548,882 |
Purchase of property and equipment | (50,496) | (37,047) | (145,200) |
Purchase of intangible assets | (5,067) | (13,057) | (12,867) |
Proceeds from sale of property and equipment and intangible assets | 4,718 | 12,940 | 5,047 |
Cash paid for a business combination in previous years, net of cash acquired | (10,239) | ||
Net cash used in investing activities | (908,302) | (37,040) | (94,395) |
Cash flows from financing activities: | |||
Proceeds from issuance of convertible note | 1,384,218 | ||
Proceeds from short-term borrowings | 1,114,000 | 764,160 | 404,170 |
Repayment of short-term borrowings | (779,000) | (807,592) | (215,842) |
Acquisition of the redeemable non-controlling interest | (5,044) | (22,396) | (13,697) |
Proceeds from public offering, net of issuance costs | 385,768 | ||
Other financing activities | (15,680) | ||
Net cash provided by financing activities | 715,724 | 1,302,710 | 174,631 |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 5,042 | 117,469 | (8,695) |
(Decrease)/Increase in cash, cash equivalents, and restricted cash | (755,484) | 878,936 | (1,311,211) |
Cash, cash equivalents, and restricted cash at beginning of year | 2,005,856 | 1,126,920 | 2,438,131 |
Cash, cash equivalents, and restricted cash at end of year | 1,250,372 | 2,005,856 | 1,126,920 |
Supplemental cash flow information: | |||
Cash payments for interest | (19,343) | (20,957) | (10,291) |
Cash payments for income taxes | (154) | (1,220) | (1,224) |
Supplemental information for non-cash financing activities: | |||
Accretion on convertible redeemable preferred shares to redemption value | (660,070) | (509,281) | ¥ (329,737) |
Issuance of Series F preferred shares from conversion of the convertible notes | ¥ (1,631,564) | ||
Conversion of preferred shares to ordinary shares | ¥ (7,570,417) |
Organization and principal acti
Organization and principal activities | 12 Months Ended |
Dec. 31, 2023 | |
Organization and principal activities | |
Organization and principal activities | 1. Organization and principal activities (a) Principal activities ZKH Group Limited (the “Company”) was incorporated under the laws of the Cayman Islands on April 26, 2021 as an exempted company with limited liability. The Company and its subsidiaries are collectively referred to as the “Group”. The Group is a maintenance, repair and operating (“MRO”) products trading and service platform (“MRO Business”). For the years ended December 31, 2021, 2022 and 2023, its primary operations are conducted in the People’s Republic of China (“PRC”). (b) History of the Group and Restructuring Prior to the incorporation of the Company and the completion of the restructuring as described below, the Group commenced its operations through ZKH Industrial Supply (Shanghai) Co, Ltd. (“ZKH Industrial Supply”), founded by Mr. Long Chen (the ‘‘Founder’’) in 1998, and subsequently obtained financing from various third party investors (collectively ‘‘Third Party Investors’’) from 2015 through 2022. In preparation for its initial public offering (“IPO”), the Group completed a restructuring (the “Restructuring”) on September 30, 2022, which involved the following steps: ● On April 26, 2021, the Company was established under the laws of the Cayman Islands as an exempted company with limited liability with 95,000 ordinary shares authorized at a par value of US $0.0000001 each. ● On May 6, 2021, ZKH Holdings Limited was incorporated in British Virgin Islands (“BVI”) as a wholly owned subsidiary of the Company. ● On May 20, 2021, ZKH Hong Kong Limited was incorporated in Hong Kong as a wholly owned subsidiary ZKH Holdings Limited. ● On December 30, 2021, the Company issued 1,161,080,000 ordinary shares, 57,541,800 Series Seed Preferred Shares, 58,480,000 Series A Preferred Shares, 84,480,000 Series A+ Preferred Shares, 734,209,000 Series B Preferred Shares, 277,730,000 Series B+ Preferred Shares, 604,820,600 Series C1 Preferred Shares, 372,859,000 Series C2 Preferred Shares, 705,523,600 Series D1 Preferred Shares, 105,302,000 Series D2 Preferred Shares and 803,222,500 Series E Preferred Shares in aggregate, to the existing shareholders of ZKH Industrial Supply, based on their respective equity interests and classes in ZKH Industrial Supply. ● Through a series of restructuring steps pursuant to the restructuring agreements, on June 29, 2022, ZKH Hong Kong Limited obtained 100 % equity interests in ZKH Industrial Supply. Consequently, ZKH Industrial Supply became an indirect wholly owned subsidiary of the Company. ● Cash considerations of all the restructuring steps were settled on September 30, 2022. The equity interests held by the Founder and Third-Party Investors in the Company after the Restructuring are the same as the equity interests held by them in ZKH Industrial Supply before the Restructuring. 1. Organization and principal activities (continued) (b) History of the Group and Restructuring (continued) Immediately prior to and after the Restructuring, the Listing Business was operated by ZKH Industrial Supply and its subsidiaries (collectively the “Operating Companies”). Pursuant to the Restructuring, the Listing Business was transferred to and held by the Company through the Operating Companies. The Company has not been involved in any other business prior to the Restructuring and does not meet the definition of a business. The Restructuring is merely a restructuring of the Listing Business with no change in management and control of such business. Accordingly, the Group resulting from the Restructuring is regarded as a recapitalization of the Listing Business under the Operating Companies for the purpose of this financial statements. The financial statements of the Group have been prepared on a consolidated basis as if the Restructuring had occurred since the earliest presented in these financial statements and is presented using the carrying values of the assets, liabilities and operating results of the Listing Business under the Operating Companies for all periods presented. Initial Public Offering On December 15, 2023, the Company completed its initial public offering (the “IPO”) on the New York Stock Exchange. In this offering, 4,000,000 American Depositary Shares (“ADSs”), representing 140,000,000 Class A Ordinary Shares, were issued and sold to the public at a price of US$15.50 per ADS. Immediately prior to the completion of the IPO, 3,746,626,700 was automatically converted into Class A Ordinary Shares on a one-for-one basis, and 392,013,413 Series F Preferred Shares was automatically converted into Class A Ordinary Shares on the conversion rate of 1:1.3169. As at December 31, 2023,the Company’s principal subsidiaries are as follows: Name Place of incorporation Date of incorporation Percentage of equity interest Principal activities Wholly owned subsidiaries ZKH Industrial Supply Shanghai, China May 27, 1996 100% Sale of MRO products Shanghai Gongbangbang Industrial Tech Co., Ltd. Shanghai, China January 30, 2013 100% Sale of MRO products Shanghai Kunhe Supply Chain Management Co., Ltd. Shanghai, China March 6, 2018 100% Logistics and Warehousing Shenzhen Kuntong Smart Warehousing Technology Co., Ltd.(Kuntong) Shenzhen, China January 18, 2007 100% Production and sale of intelligent warehousing equipments ZKH Holdings Limited British Virgin Islands May 6, 2021 100% Investment holding ZKH Hong Kong Limited Hong Kong May 20, 2021 100% Investment holding |
Summary of significant accounti
Summary of significant accounting policies | 12 Months Ended |
Dec. 31, 2023 | |
Summary of significant accounting policies | |
Summary of significant accounting policies | 2. Summary of significant accounting policies (a) Basis of presentation The consolidated financial statements of the Group have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”). Significant accounting policies followed by the Group in the preparation of the accompanying consolidated financial statements are summarized below. 2. Summary of significant accounting policies (continued) (b) Principles of Consolidation The consolidated financial statements include the financial statements of the Company and its subsidiaries for which the Company is the ultimate primary beneficiary. All transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation. A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting power, has the power to appoint or remove the majority of the members of the board of directors (the “Board”), to cast majority of votes at the meeting of the Board or to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders. (c) Use of estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires the Group to make estimates and assumptions that affect the reported amounts of assets and liabilities, mezzanine equity and related disclosures of contingent liabilities as of the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant accounting estimates are used for, but not limited to, the valuation and recognition of share-based compensation arrangements, allowance for credit losses, lower of cost and net realizable value of inventories, fair value of ordinary shares and convertible redeemable preferred shares. (d) Segment reporting The Group engages primarily in the business-to-business trading and services of industrial products through its platform. The Group’s chief operating decision maker, who has been identified as the Chief Executive Officer reviews the consolidated results when making decisions about allocating resources and assessing performance of the Group as a whole and hence, the Group has only one reportable segment. The Group does not distinguish expenses and related assets and liabilities between markets or segments for the purpose of internal reports. As the Group’s long-lived assets are all located in the PRC and substantially all the Group’s revenues are derived from the PRC, no geographical segments are presented. (e) Functional currency and foreign currency translation The Group’s reporting currency is Renminbi (“RMB”). The functional currency of the Group’s entities incorporated in Cayman Islands, BVI and Hong Kong is U.S. dollars (“US$”). The functional currency of all the other significant subsidiaries is RMB. The determination of the respective functional currency is based on the criteria of ASC Topic 830, Foreign Currency Matters. 2. Summary of significant accounting policies (continued) (e) Functional currency and foreign currency translation (continued) Transactions denominated in currencies other than functional currency are translated into functional currency at the exchange rates quoted by authoritative banks prevailing at the dates of the transactions. Exchange gains and losses resulting from those foreign currency transactions denominated in a currency other than the functional currency are recorded as a component of others, net in the consolidated statements of comprehensive loss. Total exchange gains/(losses) were a loss of RMB8,205, a gain of RMB13,733, and a loss of RMB11,061 for the years ended December 31, 2021, 2022 and 2023, respectively. The consolidated financial statements of the Group are translated from the functional currency into RMB. Assets and liabilities denominated in foreign currencies are translated into RMB using the applicable exchange rates at the balance sheet date. Equity accounts other than earnings generated in current period are translated into RMB at the appropriate historical rates. Revenues, expenses, gains and losses are translated into RMB using the periodic average exchange rates. The resulting foreign currency translation adjustments are recorded in other comprehensive loss in the consolidated statements of comprehensive loss, and the accumulated currency translation adjustments are presented as a component of accumulated other comprehensive (loss) gain in the consolidated statements of shareholders’ equity/(deficit). (f) Fair value Accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurement for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Accounting guidance establishes three levels of inputs that maybe used to measure fair value: Level 1 — Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 — Include other inputs that are directly or indirectly observable in the marketplace. Level 3 — Unobservable inputs which are supported by little or no market activity. Accounting guidance also describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. Financial assets and liabilities of the Group not measured at fair value mainly consist of cash and cash equivalents, restricted cash, accounts receivable, notes receivable, certain other current assets and certain accruals and other liabilities. As of December 31, 2022 and 2023, the carrying values of these financial instruments approximated their fair values due to their short-term maturity. 2. Summary of significant accounting policies (continued) (g) Cash and cash equivalents Cash and cash equivalents consist of demand deposit, time deposits with original maturities less than three months and cash placed with banks and third-party payment processor, which are unrestricted as to withdrawal or use. (h) Restricted cash Cash that is restricted as to withdrawal or for use or pledged as security is reported separately on the face of the consolidated balance sheets, and is included in the total cash, cash equivalents, and restricted cash in the consolidated statements of cash flows. The Group’s restricted cash mainly represents pledged time deposit, security deposits held in designated bank accounts for issuance of bank acceptance and letter of guarantee. (i) Short-term investments Short-term investments consist primarily of investments in wealth management products issued by banks, money market fund and time deposit placed with bank with original maturities longer than three months but less than one year. These investments are stated at fair value. Changes in the fair value are reflected in interest and investment income, net in the consolidated statements of comprehensive loss. (j) Derivatives Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date. All derivatives are carried as assets when the fair values are positive and as liabilities when the fair values are negative. Derivative financial instruments are neither held nor issued by the Company for trading purposes. In the normal course of business, the Company uses derivative financial instruments to manage foreign currency exchange rate risk. Currency exposure is monitored and managed by the Company as part of its risk management program which seeks to reduce the potentially adverse effects that market volatility could have on operating results. The company uses forward contracts to economically hedge, on a net basis, the foreign currency exposure of a portion of the company’s nonfunctional currency assets and liabilities. The terms of these forward contracts are generally less than one year. 2. Summary of significant accounting policies (continued) (k) Accounts receivable and allowance for credit losses Accounts receivable represents the amounts that the Group has an unconditional right to consideration and is recorded net of allowance for credit losses. The Group estimated allowance for credit losses to reserve for potentially uncollectible receivable amounts periodically, considering factors in assessing the collectability of its accounts receivable, such as historical distribution of the age of the amounts due, payment history, creditworthiness, forward-looking factor, historical collections data of the customers, to assess the credit risk characteristics. If there is strong evidence indicating that the accounts receivable is likely to be unrecoverable, the Group also makes specific allowance in the period in which a loss is determined to be probable. Accounts receivable is considered impaired and written- off when it is probable that all contractual payments due will not be collected after all collection efforts have been exhausted. (l) Notes receivable Notes receivable are primarily bank acceptance notes. The Group accepts bank acceptance notes from customers for products sold or services performed in the ordinary course of business. Bank acceptance notes are primarily negotiable instruments with cash settlement from commercial banks within half a year. Upon receipt of the bank acceptance notes, the Group’s accounts receivable from the customer is derecognized. The bank acceptance notes can also be endorsed to suppliers as settlement of accounts payable. Bank acceptance notes of RMB192,691 and RMB143,752 were endorsed to suppliers as of December 31, 2022 and 2023 respectively. (m) Current expected credit losses In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASC 326”), which requires entities to measure all expected credit losses for financial assets held at the reporting date, including accounts receivable and notes receivable, using a current expected credit loss model based on historical experience adjusted for judgments about the effects of relevant observable data, including current and future economic conditions periodically. The Group estimates the allowance for accounts receivable based on historical collection activity, current business environment and forecasts of future macroeconomic conditions that may affect the customers’ ability of payment. The accounts receivable was segmented into groups based on certain credit risk characteristics, and the Group determined expected loss rates for each group based on historical loss experience adjusted for judgments about the effects of relevant observable data including historical default rates, lifetime for debt recovery, current and future economic conditions. (n) Inventories Inventories, primarily consisting of products available for sale, are stated at the lower of cost and net realizable value. Cost of inventories is determined using the weighted average cost method. Adjustments are recorded to write down the cost of inventories to the estimated net realizable value due to slow-moving merchandise and damaged goods, which is dependent upon factors such as historical and forecasted consumer demand, and promotional environment. The Group takes ownership, risks and rewards of the products purchased. Write downs are recorded in cost of revenues in the consolidated statements of comprehensive loss. The Group also provides fulfillment-related services in connection with the Group’s marketplace. Third-party sellers maintain ownership of their inventories and therefore these products are not included in the Group’s inventories. 2. Summary of significant accounting policies (continued) (o) Property and equipment, net Property and equipment are stated at cost less accumulated depreciation and any impairment loss. Depreciation is computed using the straight-line method with 5% residual value based on the estimated useful lives of the various classes of assets, which range as follows: Furniture and office equipment 3 – 5 years Machinery 5 – 10 years Vehicles 3 – 5 years Computer equipment 3 – 5 years Leasehold improvement shorter of remaining lease period and estimated useful life Expenditures for maintenance and repairs are expensed as incurred. The gain or loss on the disposal of property and equipment is the difference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in other income, net in the consolidated statements of comprehensive loss. (p) Intangible assets, net Intangible assets purchased from third parties are initially recorded at cost and amortized on a straight-line basis over the estimated economic useful lives. The Group performs valuation of the intangible assets arising from business combination to determine the fair value to be assigned to each asset acquired. The acquired intangible assets are recognized and measured at fair value and are expensed or amortized using the straight-line approach over the estimated economic useful lives of the assets. The estimated useful lives of intangible assets are as follows: Trademarks 10 years Patent right 10 years Software 3 – 5 years Customer relationship 10 years (q) Business combinations and non-controlling interests The Group accounts for its business combinations using the acquisition method of accounting. The cost of an acquisition is measured as the aggregate of the acquisition date fair value of the assets transferred to the sellers, liabilities incurred by the Group and equity instruments issued by the Group. Transaction costs directly attributable to the acquisition are expensed as incurred. Identifiable assets acquired and liabilities assumed are measured separately at their fair values as of the acquisition date, irrespective of the extent of any non-controlling interests. The excess of (i) the total of consideration paid fair value of the non-controlling interests over (ii) the fair value of the identifiable net assets of the acquiree is recorded as goodwill. 2. Summary of significant accounting policies (continued) (q) Business combinations and non-controlling interests (continued) For the Company’s non-wholly owned subsidiaries, a non-controlling interest is recognized to reflect the portion of equity that is not attributable, directly or indirectly, to the Company. Non-controlling interests are classified as a separate line item in the equity section of the Group’s consolidated balance sheets. When the non-controlling interest is redeemable at the option of the holders, which is not solely within the control of the Company, the non-controlling interest is classified as mezzanine equity. The Company accretes changes in the redemption value over the period from the date that it becomes probable that the mezzanine equity will become redeemable to the earliest redemption date using the effective interest method. Consolidated net loss or income in the consolidated statements of comprehensive loss includes net income attributable to non-controlling interests and mezzanine equity holders when applicable. Cash flows related to transactions with non-controlling interests are presented under financing activities in the consolidated statements of cash flows. (r) Goodwill Goodwill represents the excess of (i) the total of consideration paid fair value of the non-controlling interests over (ii) the fair value of the identifiable net assets of the acquiree. Goodwill is not depreciated or amortized but is tested for impairment on an annual basis, and between annual tests when an event occurs or circumstances change that could indicate that the asset might be impaired. The annual impairment test includes an option to assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. In the qualitative assessment, the Group considers primary factors such as industry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. If the Group decides, as a result of its qualitative assessment, that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is mandatory. Otherwise, no further testing is required. The quantitative impairment test consists of a comparison of the fair value based on discounted cash flow of each reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss equal to the difference will be recorded. The impairment charge would be recorded in the consolidated statements of comprehensive loss. There is no event or any circumstance that the Company identified, which indicated that the fair value of the Company’s reporting unit was below its carrying value. No impairment of goodwill was recognized for the years ended December 31, 2021, 2022 and 2023. (s) Leases The Group accounts for leases in accordance with ASC 842, Leases (“ASC 842”), which requires lessees to recognize leases on the balance sheet and disclose key information about leasing arrangements. The Group categorizes leases with contractual terms longer than twelve months as either operating or finance lease. 2. Summary of significant accounting policies (continued) (s) Leases (continued) The Group determines if a contract contains a lease based on whether it has the right to obtain substantially all of the economic benefits from the use of an identified asset which the Group does not own and whether it has the right to direct the use of an identified asset in exchange for consideration. Operating lease right-of-use (“ROU”) assets represent the Group’s right to use an underlying asset for the lease term and lease liabilities represent the Group’s obligation to make lease payments arising from the lease. ROU assets are recognized as the amount of the lease liability, adjusted for lease incentives received. Lease liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value of the future lease payments is the Group’s incremental borrowing rate (“IBR”), because the interest rate implicit in most of the Group’s leases is not readily determinable. The IBR is a hypothetical rate based on the Group’s understanding of what its credit rating would be to borrow and resulting interest the Group would pay to borrow an amount equal to the lease payments in a similar economic environment over the lease term on a collateralized basis. The amortization of the right-of-use asset is described as the difference between the straight-line lease expense and the accretion of interest on the lease liability each period. The land use rights are operating leases with term of about 50 years. Other than the land use rights, the lease terms of operating and finance leases vary from more than a year to 20 years. Operating leases are included in land use right, operating lease right-of-use assets, current and non- current operating lease liabilities on the Group’s consolidated balance sheets. Finance leases are included in property and equipment, net, other current and non-current liabilities on the Group’s consolidated balance sheets. As of December 31, 2022 and 2023, all of the Group’s ROU assets were generated from leased assets in the PRC. (t) Revenue recognition Under ASC 606, the Group recognizes revenues when the Group satisfies a performance obligation by transferring a promised good or service (that is, an asset) to a customer. An asset is transferred when the customer obtains control of that asset. The Group evaluates whether it is appropriate to record the gross amount of product sales and related costs or the net amount earned as commissions. When the Group is a principal, that the Group obtains control of the specified goods or services before they are transferred to the customers, the revenues should be recognized in the gross amount of consideration to which it expects to be entitled in exchange for the specified goods or services transferred. When the Group is an agent and its obligation is to facilitate third parties in fulfilling their performance obligation for specified goods or services, the revenues should be recognized in the net amount for the amount of commission which the Group earns in exchange for arranging for the specified goods or services to be provided by other parties. Revenues should be recognised, after deducting discounting and estimated cash rebates, as the Group does not receive a good or service that is distinct in exchange for discount or rebates granted to customers and be recorded net of value-added taxes. Revenue arrangements with multiple deliverables are divided into separate units of accounting based on the selling price of each separate unit. 2. Summary of significant accounting policies (continued) (t) Revenue recognition (continued) Net product revenues The Group recognizes the net product revenues from the product sales model on a gross basis as the Group is acting as a principal in these transactions and is responsible for fulfilling the promise to provide the specified goods. The Group recognizes revenue net of discounts and return allowances when the products are delivered to customers. Judgement is required to estimate return allowances. The Group reasonably estimates the possibility of sales return based on the historical experience. Based on management’s assessment, as of December 31, 2022 and 2023, liabilities for return allowances were insignificant. Net service revenues Under marketplace model, the Group charges commission fees to third-party merchants, where the Group generally is acting as an agent and its performance obligation is to arrange for the provision of the specified goods or services by those third-party merchants to customers of the platform. Upon successful sales to customers of the platform, the Group charges the third-party merchants a fixed rate commission fee based on the sales amount. The net service revenues are recognized on a net basis at the point of delivery of products, net of return allowances. Accounts and notes receivable related to the marketplace service amounts to RMB489,777 and RMB964,587 as of December 31, 2022 and 2023, respectively, which are billed to end customers on gross basis on behalf of the third-party merchants. Other revenues The Group rents certain machinery and equipment as operating lease. Revenues resulting from operating lease are recognized over the contractual lease period on straight line basis. The Group also provides testing and repairment services and warehousing and logistics services. Revenues resulting from these services are recognized when the Group rendered such services. (u) Advances from customers Amounts recorded in the advance from customers account represent cash payments made upfront by the Group’s customers under each sales contract, related to unsatisfied performance obligation at the end of the period. The amounts in the advance from customers would be recognised as revenue when the revenue recognition criteria are met. (v) Cost of revenue Cost of revenues consists primarily of purchase price of products, inbound shipping charges, write- downs of inventories and the rebates from suppliers. The rebates we receive from suppliers are treated as a reduction in the purchase price and will be recorded as a reduction in cost of revenues when the product is sold. The cost of revenues does not include shipping and handling expenses, payroll and benefits of logistic staff or logistic centers rental expenses, therefore cost of revenues of the Group may not be comparable to other companies which include such expenses in their cost of revenues. Cost of revenues mainly represents that under the product sales model. 2. Summary of significant accounting policies (continued) (w) Fulfillment Fulfillment expenses consist primarily of (i) expenses incurred in operating the Group’s distribution centers and transit warehouses, including personnel cost and expenses attributable to receiving, inspecting and warehousing inventories, picking, packaging, preparing customer orders for shipment, and dispatching and delivering, (ii) lease expenses of distribution centers and transit warehouses, (iii) depreciation of vehicle and equipment, (iv) expenses charged by third-party couriers for dispatching and delivering the Group’s products. Shipping cost included in fulfillment expenses amounted to RMB111,592, RMB105,420 and RMB103,940 for the years ended December 31, 2021, 2022 and 2023, respectively. (x) Sales and marketing Sales and marketing expenses consist primarily of payroll and related expenses for employees involved in sales and marketing activities, and advertising costs. Advertising costs included in sales and marketing expenses are expensed as incurred, and amounted to RMB50,412, RMB18,730 and RMB34,830 for the years ended December 31, 2021, 2022 and 2023, respectively. (y) Research and development Research and development expenses consist primarily of payroll and related expenses for research and development employees involved in designing, developing and maintaining software technology platform, and technology infrastructure costs. Software development costs are recorded in “Research and development” as incurred as the costs qualifying for capitalization have been insignificant. (z) General and administrative General and administrative expenses consist primarily of employee related expenses for product line and other general corporate functions, including administration, finance, tax, legal and human relations; costs associated with these functions including facilities and equipment depreciation expenses, professional fee, rental and other general corporate related expenses. (aa) Share-based compensation The Group grants share options (collectively, “Share-based Awards”) to eligible employees and directors under the share incentive plan. The Group accounts for share-based compensation in accordance with ASC 718, Compensation—Stock Compensation. Share-based awards with service conditions only are measured at the grant date fair value of the awards and recognized as expenses using the graded-vesting method, over the requisite service period. Share-based awards that are subject to both service conditions and the occurrence of IPO as performance condition, are measured at the grant date fair value. Cumulative share-based compensation expenses for the awards that have satisfied the service condition were recorded upon the completion of the IPO, using the graded-vesting method. The Group adopted ASU 2016-09 to recognize the impact of forfeiture within compensation expense, when they occur. 2. Summary of significant accounting policies (continued) (aa) Share-based compensation (continued) Management applies significant judgment in determining the fair value of share-based awards at grant dates given that the ordinary shares underlying the awards were not publicly traded at the time of grant. Fair value of the ordinary shares was determined and allocated using the income approach and equity allocation model, each of which requires complex and subjective judgments regarding the expected revenue growth rates, operating profit margins, discount rates, terminal growth rates, a discount for lack of marketability (“DLOM”) and probability of the three scenarios assumed under the equity allocation model, namely: (i) the liquidation scenario, (ii) the redemption scenario, and (iii) the mandatory conversion scenario. The fair value of Share options is estimated on the grant date using the Binomial option-pricing model where management also applies judgment related to the expected volatility, risk-free interest rate, expected dividend yield, exercise multiple and expected post-vesting forfeiture rate. The assumptions used in share-based compensation expenses recognition represent management’s best estimates, but these estimates involve inherent uncertainties and application of management judgment. If factors change or different assumptions are used, the share-based compensation expenses could be materially different for any period. Moreover, the estimates of fair value of the awards are not intended to predict actual future events or the value that ultimately will be realized by grantees who receive Share- based Awards, and subsequent events are not indicative of the reasonableness of the original estimates of fair value made by the Group for accounting purposes. (bb) Other employee benefits Employees of the Group in the PRC are entitled to staff welfare benefits including pension benefits, work-related injury benefits, maternity insurance, medical insurance, unemployment benefit and housing fund plans through a PRC government-mandated multi-employer defined contribution plan. The Group is required to contribute to the plan based on certain percentages of the employees’ salaries, up to a maximum amount specified by the local government. The PRC government is responsible for the medical benefits and the pension liability to be paid to these employees and the Group’s obligations are limited to the amounts contributed and no legal obligation beyond the contributions made. Employee social security and welfare benefits included as expenses amounted to RMB291,839, RMB339,155 and RMB323,685 for the years ended December 31, 2021, 2022 and 2023, respectively. (cc) Income tax Current income taxes are provided on the basis of net income for financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions. The Group follows the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the temporary differences between the financial statements carrying amounts and tax bases of existing assets and liabilities by applying enacted statutory tax rates that will be in effect in the period in which the temporary differences are expected to reverse. The Group records a valuation allowance to reduce the amount of deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized in the consolidated statements of comprehensive loss in the period of change. Deferred tax assets and liabilities are classified as non-current in the consolidated balance sheets. 2. Summary of significant accounting policies (continued) (cc) Income tax (continued) The Group recognizes in its consolidated financial statements the benefit of a tax position if the tax position is “more likely than not” to prevail based on the facts and technical merits of the position. Tax positions that meet the “more likely than not” recognition threshold are measured at the largest amount of tax benefit that has a greater than fifty percent likelihood of being realized upon settlement. The Group estimates its liability for unrecognized tax benefits which are periodically assessed and may be affected |
Concentration and risks
Concentration and risks | 12 Months Ended |
Dec. 31, 2023 | |
Concentration and risks | |
Concentration and risks | 3. Concentration and risks Concentration of customers and suppliers There are no customers or suppliers from whom revenues or purchases individually represent greater than 10% of the total revenues or the total purchases of the Group for the years ended December 31, 2021, 2022 and 2023. 3. Concentration and risks (continued) Concentration of credit risk Assets that potentially subject the Group to significant concentrations of credit risk primarily consist of cash and cash equivalents, restricted cash, accounts receivable and notes receivable. The maximum exposure of such assets to credit risk is their carrying amounts as of the balance sheet dates. As of December 31, 2022 and 2023, majority of the Group’s cash and cash equivalents, restricted cash and notes receivable were held by or accepted by major financial institutions located in the PRC and Hong Kong which the management believes are of high credit quality. Accounts receivable are typically unsecured and are mainly derived from the ordinary course of business in the PRC. The risk with respect to these financial instruments is mitigated by credit evaluations the Group performs on its customers and its ongoing monitoring processes of outstanding balances. There was no individual customer accounted for more than 10% of accounts receivable as of December 31, 2022 and 2023. Currency convertibility risk The Group’s sales, purchase and expense transactions are generally denominated in RMB and a significant portion of the Group’s assets and liabilities are denominated in RMB. The cash transfers from the PRC subsidiaries to their parent companies outside of China are subject to PRC government control of currency conversion. In the PRC, foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the PBOC. Remittances in currencies other than RMB by the Group in the PRC must be processed through the PBOC or other PRC foreign exchange regulatory bodies and require certain supporting documentation in order to effect the remittance. If such foreign exchange control system prevents the Group from obtaining sufficient foreign currencies to satisfy its currency demands, the Group may not be able to pay dividends in foreign currencies. As of December 31, 2022 and 2023, the Group’s cash and cash equivalents and restricted cash denominated in RMB were RMB1,076,036 and RMB897,896, accounting for 53.64% and 71.81% of the Group’s total cash and cash equivalents and restricted cash, respectively. |
Fair value measurement
Fair value measurement | 12 Months Ended |
Dec. 31, 2023 | |
Fair value measurement | |
Fair value measurement | 4. Fair value measurement When available, the Group uses quoted market prices to determine the fair value of an asset or liability. If quoted market prices are not available, the Group will measure fair value using valuation techniques that use, when possible, current market-based or independently sourced market parameters, such as interest rates and currency rates. Following is a description of the valuation techniques that the Group uses to measure the fair value of assets that the Group reports in its consolidated balance sheets at fair value on a recurring basis. 4. Fair value measurement (continued) Short-term investments The Group values its wealth management products issued by banks, money market fund and time deposits placed with bank with original maturities longer than three months but less than one year using alternative pricing sources and models utilizing market observable inputs, and accordingly the Group classifies the valuation techniques that use these inputs as Level 2. For the years ended December 31, 2021, 2022 and 2023, gross unrealized gains of nil, nil and nil were recorded on short-term investments, respectively. As of December 31, 2022, the Group had no assets and liabilities that were measured at fair value on a recurring basis. As of December 31, 2023, the Group had 874,210 assets and no liabilities that were measured at fair value on a recurring basis. Other financial instruments The followings are other financial instruments not measured at fair value in the consolidated balance sheets, but for which the fair value is estimated for disclosure purposes. Short-term receivables and payables. Accounts receivable, prepayments and other current assets are financial assets with carrying values that approximate to fair value due to their short-term nature. Accounts payable, accrued expenses and other current liabilities and advance from customers, are financial liabilities with carrying values that approximate to fair value due to their short-term nature. Short-term borrowings. The fair value of borrowings was determined using the present value of future cash flows based on the borrowing rates currently available for borrowings with similar terms and maturities. The carrying value of short-term borrowings and current portion of long-term borrowings approximated to fair value due to their short maturities as of December 31, 2022 and 2023. |
Accounts receivable, net
Accounts receivable, net | 12 Months Ended |
Dec. 31, 2023 | |
Accounts receivable, net | |
Accounts receivable, net | 5. Accounts receivable, net Accounts receivable consist of the following: As of December 31, 2022 2023 RMB RMB Accounts receivable 3,164,023 3,746,826 Allowance for credit losses (96,959) (107,032) Accounts receivable, net 3,067,064 3,639,794 The movements in the allowance for credit losses are as follows: Year ended December 31, 2022 2023 RMB RMB Balance at the beginning of the year 85,115 96,959 Additions 28,006 12,388 Write-off (16,162) (2,683) Recovery of write-off — 368 Balance at the end of the year 96,959 107,032 |
Prepayments and other current a
Prepayments and other current assets | 12 Months Ended |
Dec. 31, 2023 | |
Prepayments and other current assets | |
Prepayments and other current assets | 6. Prepayments and other current assets Prepayments and other current assets consist of the following: As of December 31, 2022 2023 RMB RMB Prepayment 109,027 43,278 Other current assets 134,603 124,839 Total 243,630 168,117 Prepayments primarily consist of prepayments for purchase of products. |
Property and equipment, net
Property and equipment, net | 12 Months Ended |
Dec. 31, 2023 | |
Property and equipment, net | |
Property and equipment, net | 7. Property and equipment, net Property and equipment consist of the following: As of December 31, 2022 2023 RMB RMB Machinery 130,866 130,786 Leasehold improvement 92,340 88,209 Computer equipment 41,422 39,536 Furniture and office equipment 28,123 26,572 Vehicles 13,128 11,371 Construction in process 2,777 31,009 Total 308,656 327,483 Accumulated depreciation (141,916) (182,195) Net book value 166,740 145,288 Depreciation expenses recognized for the years ended December 31, 2021, 2022 and 2023 were RMB46,638, RMB67,875 and RMB64,610, respectively. |
Intangible assets, net
Intangible assets, net | 12 Months Ended |
Dec. 31, 2023 | |
Intangible assets, net | |
Intangible assets, net | 8. Intangible assets, net Intangible assets consist of the following: As of December 31, 2022 Weighted average Gross Net amortization carrying Accumulated carrying period amount amortization amount Year RMB RMB RMB Software 4.9 37,055 (18,378) 18,677 Customer relationship 10.0 7,736 (2,600) 5,136 Trademarks 10.0 462 (337) 125 Patent right 10.0 142 (29) 113 Total 5.7 45,395 (21,344) 24,051 8. Intangible assets, net (continued) As of December 31, 2023 Weighted average Gross Net amortization carrying Accumulated carrying period amount amortization amount Year RMB RMB RMB Software 3.7 42,715 (27,482) 15,233 Customer relationship 6.0 7,735 (3,364) 4,371 Trademarks 10.0 623 (361) 262 Patent right 10.0 282 (52) 230 Total 5.0 51,355 (31,259) 20,096 Amortization expenses recognized for the years ended December 31, 2021, 2022 and 2023 were RMB6,387, RMB8,198 and RMB8,857, respectively. No impairment charge was recognized for any of the periods presented. As of December 31, 2023, amortization expenses related to the intangible assets for future periods are estimated to be as follows: Year ended December 31, 2028 and 2024 2025 2026 2027 thereafter Total RMB RMB RMB RMB RMB RMB Amortization expenses 6,712 6,329 3,313 1,610 2,132 20,096 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases | |
Leases | 9. Leases Operating leases of the Group mainly include land use rights and leases of offices, warehouse, delivery and servicing center and vehicle. The components of lease expenses were as follows: Year ended December 31, 2021 2022 2023 RMB RMB RMB Operating lease expenses 148,234 135,663 121,393 Short-term lease expenses 1,615 24,359 56,808 Total 149,849 160,022 178,201 Short-term leases primarily represent the lease with a term of 12 months or less. The operating lease expense and short-term lease expense were recognized in cost of revenues, fulfillment, sales and marketing, research and development and general and administrative expenses. 9. Leases (continued) Supplemental cash flows information related to leases was as follows: Year ended December 31, 2021 2022 2023 RMB RMB RMB Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows payment from operating lease 135,161 146,733 126,758 RoU assets obtained in exchanges for lease liabilities RoU assets obtained in exchanges for new operating lease liabilities 214,305 66,494 54,944 A summary of supplemental information related to leases as of December 31, 2022 and 2023 is as follows: As of December 31, 2022 2023 RMB RMB Land use rights, net 10,930 11,033 Operating lease right-of-use assets, net (excluding land use rights) 297,937 224,930 Operating lease RoU assets, net 308,867 235,963 Operating lease liabilities – current 95,775 91,230 Operating lease liabilities – non-current 214,427 146,970 Total operating lease liabilities 310,202 238,200 As of December 31, 2022 2023 Weighted average remaining lease term Land use rights 50 years 49 years Operating leases 2.90 years 3.31 years Weighted average discount rate Land use rights — — Operating leases 4.36 % 4.38% 9. Leases (continued) A Summary of maturities of lease liabilities as of December 31, 2023 were as follows: As of December 31, 2023 RMB 2024 109,845 2025 72,794 2026 25,658 2027 10,464 2028 10,778 Thereafter 42,608 Total undiscounted lease payments 272,147 Less: interest (33,947) Present value of lease liabilities 238,200 As of December 31, 2023, the Group has RMB249 lease contract that has been entered into but not yet commenced. The Group’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2023 | |
Borrowings | |
Borrowings | 10. Borrowings Borrowings consisted of the following: As of December 31, 2022 2023 RMB RMB Short-term bank borrowings 250,000 585,000 As of December 31, 2022, the Group maintained several unsecured revolving credit facilities provided by certain financial institutions for an aggregate amount of RMB1,450,000. An aggregated amount of RMB475,973 has been drawn as of December 31, 2022, including (i) RMB250,000 of bank borrowings with expiration date ranging from January 2023 to March 2023. The interest rate on any outstanding utilized amount under these bank borrowings is calculated ranging from LPR minus 25 basis to LPR minus 15 basis points. As of December 31, 2022, the one-year LPR was 3.65%. The borrowings are denominated in RMB; and (ii) bank guarantees on the Group’s accounts payable and purchase commitment of RMB225,973 in aggregate. 10. Borrowings (continued) As of December 31, 2023, the Group maintained several unsecured revolving credit facilities provided by certain financial institutions for an aggregate amount of RMB2,440,000. An aggregated amount of RMB844,434 has been drawn as of December 31, 2023, including (i) RMB585,000 of bank borrowings with expiration date ranging from February 2024 to November 2024. The interest rate on any outstanding utilized amount under these bank borrowings is calculated ranging from LPR minus 65 basis to LPR minus 5 basis points. As of December 31, 2023, the one-year LPR was 3.45%. The borrowings are denominated in RMB; (ii) outstanding accounts payable under the supplier finance program of RMB193,194 with expiration date ranging from January 2024 to May 2024; and (iii) bank guarantees on the Group’s purchase commitment of RMB66,240 in aggregate. Certain of the Group’s banking facilities are subject to the fulfillment of covenants relating to certain financial position performance and results of the Group, as are commonly found in borrowing arrangements with financial institutions. If the Group were to breach the covenants, the drawn down facilities would become payable on demand. The Group regularly monitors its compliance with these covenants. As of December 31, 2022 and 2023, none of the covenants relating to drawn down facilities had been breached. In August 2023, the Group entered into a six-month loan agreement of RMB100,000 with a commercial bank in the PRC. The borrowings bear annual interest rate of LPR minus 75 basis and was pledged by time deposit of the Group of US$14,500. |
Accounts and notes payable
Accounts and notes payable | 12 Months Ended |
Dec. 31, 2023 | |
Accounts and notes payable | |
Accounts and notes payable | 11. Accounts and notes payable The Group measures accounts payable and notes payable at amortized cost considering they are arising from transactions with suppliers in the normal course of business and are due in customary trade terms not exceeding one year. As of December 31, 2022 2023 RMB RMB Accounts payable 2,555,381 2,875,222 Notes payable (a) 10,755 8,148 Total accounts and notes payable 2,566,136 2,883,370 (a) The Group’s notes payable mainly include short-term notes, typically with terms between 3 to 6 months : which are provided to the Group’s suppliers and manufacturers. Notes payable as of December 31, 2022 and 2023 were secured by restricted cash of RMB 9,373 and RMB 5,265 held in designated bank accounts, respectively. |
Accrued expenses and other curr
Accrued expenses and other current liabilities | 12 Months Ended |
Dec. 31, 2023 | |
Accrued expenses and other current liabilities | |
Accrued expenses and other current liabilities | 12. Accrued expenses and other current liabilities Accrued expenses and other current liabilities consist of the following: As of December 31, 2022 2023 RMB RMB Employee benefit obligation 182,468 162,915 Share-based compensation liability 92,628 73,043 Other taxes payables 112,235 17,819 Deposits from suppliers (a) 54,879 67,098 Other payables due to non-controlling interest shareholders — 2,474 Other current liabilities 96,981 124,876 Total 539,191 448,225 (a) Deposit mainly represents deposits from third-party merchants for participating in the Group’s marketplace. |
Net revenues
Net revenues | 12 Months Ended |
Dec. 31, 2023 | |
Net revenues | |
Net revenues | 13. Net revenues The Group principally generates its net product revenue from the product sales model and net service revenues from the marketplace model. The Group operates ZKH platform and GBB platform which are distinguished by customer type. ZKH customers mainly include enterprise customers in a variety of industries and GBB customers mainly include trading companies, distributor and local hardware stores. The Group’s principal operations and geographic markets are in the PRC. Year ended December 31, 2021 2022 2023 RMB RMB RMB Net product revenues From ZKH platform 6,549,947 7,277,260 7,381,501 From GBB platform 950,089 809,660 960,102 7,500,036 8,086,920 8,341,603 Net service revenues From ZKH platform 116,692 179,508 307,412 Other revenues 37,863 48,808 72,160 Total 7,654,591 8,315,236 8,721,175 |
Others, net
Others, net | 12 Months Ended |
Dec. 31, 2023 | |
Others, net | |
Others, net | 14. Others, net Other income and expense consist of the following: Year ended December 31, 2021 2022 2023 RMB RMB RMB Government grants 17,832 24,330 71,503 Foreign exchange (losses)/gains, net (8,205) 13,733 (11,061) Gains on derivatives — — 6,926 Others (10,783) (4,326) (7,709) Total (1,156) 33,737 59,659 Government grants mainly represent amounts received from local governments in connection with the Group’s technology development activities. During the year ended December 31, 2023, the Company entered into two foreign currency forward contracts to buy US$ using RMB in order to economically hedge the foreign currency risk of a portion of the Company’s intra-group balances denominated in non-functional currency. The Company estimates the fair value of the contracts using future cash based on forward exchange rates (from observable forward exchange rates at the end of the reporting period) and contract forward rates, discounted at a rate that reflects the credit risk of various counterparties. Both of such forward contracts have been settled as of December 31, 2023. The gain from the fair values of these contracts was RMB6,926 for the year ended December 31, 2023 and are recorded in others, net in the consolidated statements of comprehensive loss. The RMB6,926 cash receipt from these contracts was reflected in cash flows from operating activities in the consolidated statement of cash flows. |
Income tax
Income tax | 12 Months Ended |
Dec. 31, 2023 | |
Income tax | |
Income tax | 15. Income tax Cayman Islands The Company was incorporated in the Cayman Islands. Under the current laws of the Cayman Islands, the Company and its subsidiaries incorporated in the Cayman Islands are not subject to tax on income or capital gains. Additionally, the Cayman Islands does not impose a withholding tax on payments of dividends to shareholders. British Virgin Islands Under the current laws of the British Virgin Islands, entities incorporated in the British Virgin Islands are not subject to tax on their income or capital gains. Hong Kong Under the current Hong Kong Inland Revenue Ordinance, the Company’s subsidiaries incorporated in Hong Kong are subject to 16.5% Hong Kong profit tax on its taxable income generated from operations in Hong Kong. Additionally, payments of dividends by the subsidiaries incorporated in Hong Kong to the Company are not subject to any Hong Kong withholding tax. PRC Under the PRC Enterprise Income Tax Law (the “EIT Law”), the standard enterprise income tax rate for domestic enterprises and foreign invested enterprises is 25%. 15. Income tax (continued) The EIT Law and its implementation rules permit certain High and New Technologies Enterprises, or HNTEs, to enjoy a reduced 15% enterprise income tax rate subject to these HNTEs meeting certain qualification criteria. The HNTE certificate is effective for a period of three years. An entity could reapply for the HNTE certificate when the prior certificate expires. Kuntong applied for the HNTE qualification and obtained the certificate in2023. Therefore, Kuntong is entitled to enjoy the preferential income tax rate of 15% for the three years from 2023 to 2026. According to a policy promulgated by the State Tax Bureau of the PRC and effective from 2008 onwards, enterprises engaged in R&D activities are entitled to claim an additional tax deduction amounting to 50% of the qualified R&D expenses incurred (“Super Deduction”) in determining its tax assessable profits for that year. The additional tax deduction amount of the qualified R&D expenses has been increased from 75% to 100%, further increased from 100% to 200%, effective from 2021 and 2023, respectively. The qualified R&D expenses are claimed by the Group according to the relevant tax rules and may be different from research and development expenses as disclosed in the financial statements. Composition of income tax expenses are as follows: Year ended December 31, 2021 2022 2023 RMB RMB RMB Current income tax expense 200 (471) 195 Deferred tax expense — — — Total 200 (471) 195 Composition of loss before tax are as follows: Year ended December 31, 2021 2022 2023 RMB RMB RMB Loss from Mainland China operations (1,095,499) (717,979) (330,426) Income/(loss) from overseas operations 1,587 (13,613) 25,721 Total loss before income tax (1,093,912) (731,592) (304,705) 15. Income tax (continued) Reconciliations of the income tax expenses computed by applying the PRC statutory income tax rate of 25% to the Group’s income tax expenses of the years presented are as follows: Year ended December 31, 2021 2022 2023 RMB RMB RMB Loss before income tax (1,093,912) (731,592) (304,705) Income tax benefit at PRC statutory tax rate (273,478) (182,898) (76,176) Effect of different tax rate of different jurisdictions (135) 1,428 (1,930) Effect of preferential tax rates 4,460 3,983 3,427 Effect of Super Deduction for research and development expenses (2,622) (2,010) (2,285) Non-deductible expenses and non-taxable income 54,862 29,314 28,385 Change in valuation allowance 217,113 149,712 48,774 Total income tax expense/ (benefits) 200 (471) 195 Deferred tax The Group considers positive and negative evidence to determine whether some portion or all of the deferred tax assets will be more-likely-than-not realized. This assessment considers, among other matters, the nature, frequency and severity of recent losses and forecasts of future profitability. These assumptions require significant judgment and the forecasts of future taxable income are consistent with the plans and estimates the Group is using to manage the underlying business. As of December 31, 2021 2022 2023 RMB RMB RMB Deferred tax assets: Net operating losses carried forward 308,981 442,384 551,813 Accruals and others 67,952 84,261 23,606 Less: valuation allowance (376,933) (526,645) (575,419) Net deferred tax assets — — — Full valuation allowances have been provided where, based on all available evidence, management determined that deferred tax assets are not more likely than not to be realizable in future tax years. Movement of valuation allowance is as follow: Year ended December 31, 2021 2022 2023 RMB RMB RMB Balance at the beginning of the year 159,820 376,933 526,645 Additions 217,113 149,712 49,008 Loss utilized — — (234) Balance at the end of the year 376,933 526,645 575,419 As of December 31, 2023, the Group had deductible tax losses carry forwards of approximately RMB2,566,249 which will expire during the period from 2028 to 2033. |
Loss per share
Loss per share | 12 Months Ended |
Dec. 31, 2023 | |
Loss per share | |
Loss per share | 16. Loss per share Basic loss per share and diluted loss per share have been calculated in accordance with ASC 260 on computation of earnings per share for the years ended December 31, 2021, 2022 and 2023 as follows: Year ended December 31, 2021 2022 2023 RMB RMB RMB Numerator: Net loss attributable to ordinary shareholders – basic and diluted (1,452,221) (1,244,962) (964,384) Denominator: Weighted-average ordinary shares outstanding – basic and diluted 1,213,878,050 1,325,036,140 1,528,540,765 Net loss per share attributable to ordinary shareholders: – Basic and diluted (1.20) (0.94) (0.63) As a result of the Group’s net loss for the three years ended December 31, 2021, 2022 and 2023, the following potential ordinary shares in the respective periods were excluded from the calculation of diluted loss per share as their inclusion would have been anti-dilutive. Year ended December 31, 2021 2022 2023 Preferred shares – weighted shares 3,746,626,700 3,837,917,495 3,945,881,532 Share options - weighted shares 41,350,000 64,117,791 76,965,197 |
Ordinary shares
Ordinary shares | 12 Months Ended |
Dec. 31, 2023 | |
Ordinary shares | |
Ordinary shares | 17. Ordinary shares ZKH Group Limited was incorporated under the laws of the Cayman Islands on April 26, 2021. The Company authorized 496,195,831,500 ordinary shares with par value of US$0.0000001 per shares, among which 1,161,080,000 and 5,621,490,964 shares were issued and outstanding as of December 31, 2022 and 2023, respectively. The issuance of shares in 2022 is considered as a part of the Restructuring of the Company, which was retroactively applied as if the transaction occurred at the beginning of the period presented (see Note 1). The issuance of shares in 2023 is for the IPO purpose. During the IPO, the Company issued a total of 4,000,000 ADSs, with one ADSs representing thirty-five Class A ordinary shares of the Company with par value of US$0.0000001 per share. The Company received a total of approximately US$57,660 (RMB409,282) of net proceeds after deducting the underwriter commissions. |
Ordinary shares with preference
Ordinary shares with preference rights | 12 Months Ended |
Dec. 31, 2023 | |
Ordinary shares with preference rights | |
Ordinary shares with preference rights | 18. Ordinary shares with preference rights Series Seed Preferred Shares On December 22, 2015, the Group issued 111,110,000 Series Seed Preferred Shares in exchange for an aggregate cash consideration of RMB20,000,000 or RMB0.18 per share. The key terms of the Series Seed are summarized as follows. Dividends rights Each Preferred Shareholder and ordinary shareholder shall be entitled to receive dividends for each share held by such holder, payable out of funds or assets when and as such funds or assets become legally available therefor pari passu with each other on a pro rata basis. Such dividends shall be payable only when, as, and if declared by the Board of Directors and shall be non-cumulative. No dividends Conversion rights Optional Conversion: Unless converted earlier pursuant to Automatic Conversion as described below, any Preferred Share may, at the option of the Preferred Shareholder thereof, be converted at any time after the date of issuance of such Preferred Shares, without the payment of any additional consideration, into fully- paid and non-assessable Ordinary Shares based on the Conversion Price. Automatic Conversion: Each preferred share shall automatically be converted, based on the Conversion Price, without the payment of any additional consideration, into fully-paid and non-assessable Ordinary Shares upon the Qualified IPO as defined in the Memorandum and Articles of Association. The initial conversion ratio of Series Seed Preferred Shares to ordinary shares was 1:1, subject to adjustments in the event of (i) share splits and combinations, (ii) share dividends and distributions, (iii) reorganizations, mergers, consolidations, reclassifications, exchanges, substitutions or (iv) issuance or deemed issuance of new securities for a consideration per ordinary share received by the Group less than the conversion price with respect to any preferred share in effect immediately prior to such issue or deemed issue. 18. Ordinary shares with preference rights (continued) Redemption feature The Founder shall redeem, all of the outstanding Series Seed Preferred Shares held by the requesting holder upon the written request of such holder, at any time after the earliest to occur of: (1) The Group fails to complete a Qualified IPO or a Qualified Buyout on or prior to December 31, 2024; (2) The Founder no longer devotes his full time and energy into the Group Companies; (3) The Group becomes bankrupt, is liquidated or in custody; (4) Material changes occur to the core business or the controlling shareholder of the Group Companies; (5) Without the approval of the Board of Directors of the Group Company, the Founder engages in any Related-party Transaction outside the ordinary course of business, and such Related-party Transaction would cause material adverse impact upon the benefits and interests of the Series Seed Investors; or the Founder seriously violates any laws or regulations; (6) The Founder pledges all or any of its Equity Securities of the Group Companies, and the pledgee enforces such pledge over all or any of the Equity Securities held by the Founder in the Group Companies. The redemption price for each Preferred Share of Series Seed upon exercise of the redemption option by the holder, will be an amount equal to the aggregate of (a) the applicable Original Issue Price as set forth in the Investor Rights Agreement, (b) an amount that gives such shareholder compounded accrued daily interest (on the basis of a 365-day year basis) at a rate of ten percent (10%) per annum on the applicable Original Issue Price, calculated from the applicable Original Issue Date as set forth in the Investor Rights Agreement up until the date of receipt by such shareholder of the full redemption amount thereof, and (c) any declared but unpaid dividends, minus (d) any cash proceeds received from the equity interest or shares owned due to capital increase, and any other compensation, indemnification or other proceeds received from the Founder and the Group due to the occurrence of the Redemption Events. Liquidation preferences In the event of any liquidation, dissolution or winding up of the Group, or any Deemed Liquidation Event, distributions to the Shareholders shall be made in the following manner, after satisfaction of all creditors’ claims and claims that may be mandated by law: The holders of Series Seed Preferred Shares have preference over holders of ordinary shares with respect to payment of dividends and distribution of assets. Upon Liquidation Event, Series Seed Preferred Shares shall rank senior to ordinary shares. The holders of Series Seed Preferred Shares shall be entitled to receive an amount per share equal to (a) 100% of the Original Issue Price, plus (b) an interest accrued thereon at the simple rate of six percent (6%) per annum. Deemed Liquidation Event includes: (i) any consolidation, amalgamation, scheme of arrangement or merger of any Group Company with or into any other Person or other reorganization in which the members or shareholders of such Group Company immediately prior to such consolidation, amalgamation, merger, scheme of arrangement or reorganization own less than fifty percent (50%) of such Group Company’s voting power in the aggregate immediately after such consolidation, merger, amalgamation, scheme of arrangement or reorganization, or in which the Founder of any Group Company is changed; (ii) a sale, transfer, lease, or other disposition of all or substantially all of the assets and/or intellectual property rights of any Group Company (or any series of related transactions resulting in such sale, transfer, lease, or other disposition of all or substantially all of the assets and/or intellectual property of such Group Company); and (iii) the exclusive licensing of all or substantially all of any Group Company’s intellectual property to a third party. Voting rights The holders of the Series Seed Preferred Shares will vote together on an as-converted basis with the holders of ordinary shares and not as a separate class, except as specifically provided herein or as otherwise required by Companies Laws. Each preferred share shall have a number of votes equal to the number of votes attributable to the ordinary shares then issuable upon conversion of such preferred share. 18. Ordinary shares with preference rights (continued) The key transaction of Series Seed Preferred shares On December 22, 2015, the Group issued 111,110,000 Series Seed Preferred Shares in exchange for an aggregate cash consideration of RMB20,000,000. On March 28 of 2019, 53,568,200 Series Seed Preferred Shares Accounting for Series Seed preferred shares The Group noted that specifically for Series Seed Equity Instrument, the redemption provision shall only be settled by the Founder’s assets. The redemption provision was agreed to among the investors, therefore such agreement did not change the rights attached to the Group’s ordinary shares. Hence, the redemption provision does not have any impact on the classification of the ordinary shares issued by the Group to the Series Seed investor. The ordinary shares issued to the Seed investor by the Group shall be treated and accounted for as ordinary shares with preference rights. All Series Seed Preferred Shares have been converted to Class A ordinary shares upon IPO. As of December 31, 2023, the Company had no outstanding Series Seed Preferred Shares. |
Convertible redeemable preferre
Convertible redeemable preferred shares | 12 Months Ended |
Dec. 31, 2023 | |
Convertible redeemable preferred shares | |
Convertible redeemable preferred shares | 19. Convertible redeemable preferred shares The following table summarizes the issuances of convertible redeemable preferred shares: Issuance date/ Issue price Number Name Amendment date per share of shares Series A Preferred Shares April 2016 RMB0.3078 58,480,000 Series A+ Preferred Shares May 2017 RMB0.3420 84,480,000 Series B Preferred Shares August 2017 RMB0.3848 649,760,000 Series B+ Preferred Shares December 2017 RMB0.6733 277,730,000 Series C1 Preferred Shares July 2018 RMB0.9334/US$0.1404 604,820,600 Series C2 Preferred Shares August 2018 RMB0.9334 289,379,800 Series D1 Preferred Shares June 2019 US$0.1899 705,523,600 Series D2 Preferred Shares August 2019 US$0.1899 105,302,000 Series E Preferred Shares October 2020 RMB2.3119/US$0.3425 803,222,500 Series F Preferred Shares October 2022/ November 2023 US$0.5659 392,013,413 The key terms of the Series A Preferred Shares, Series A+ Preferred Shares, Series B Preferred Shares, Series B+ Preferred Shares, Series C1 Preferred Shares, Series C2 Preferred Shares, Series D1 Preferred Shares, Series D2 Preferred Shares, Series E Preferred Shares and Series F Preferred Shares (collectively referred as the “Preferred Shares”) are summarized as follows. Dividends rights Each Preferred Shareholder and ordinary shareholder shall be entitled to receive dividends for each share held by such holder, payable out of funds or assets when and as such funds or assets become legally available therefor pari passu with each other on a pro rata basis. Such dividends shall be payable only when, as, and if declared by the Board of Directors and shall be non-cumulative. No dividends on preferred shares and ordinary shares have been declared since the issuance date until December 31, 2023. 19. Convertible redeemable preferred shares (continued) Conversion rights Optional Conversion: Unless converted earlier pursuant to Automatic Conversion as described below, any preferred share may, at the option of the preferred shareholder thereof, be converted at any time after the date of issuance of such preferred shares, without the payment of any additional consideration, into fully-paid and non-assessable Ordinary Shares based on the Conversion Price Automatic Conversion: Each preferred share shall automatically be converted, based on the then-effective Conversion Price, without the payment of any additional consideration, into fully-paid and non-assessable Ordinary Shares upon the Qualified IPO as defined in the Memorandum and Articles of Association. The initial conversion ratio of preferred shares to ordinary shares was 1:1, subject to adjustments in the event of (i) share splits and combinations, (ii) share dividends and distributions, (iii) reorganizations, mergers, consolidations, reclassifications, exchanges, substitutions or (iv) issuance or deemed issuance of new securities for a consideration per ordinary share received by the Group less than the conversion price with respect to any preferred share in effect immediately prior to such issue or deemed issue. On November 17, 2023 (Amendment date), the Company entered into an amendment agreement with shareholders of Preferred Shares, pursuant to which the conversion ratio of Series F Preferred Shares was changed from 1:1 to 1:1.3169 and the qualified IPO share price as stipulated in the definition of “Qualified IPO” was adjusted down (“the Series F Amendments). 19. Convertible redeemable preferred shares (continued) Redemption feature The Group shall redeem, all of the outstanding preferred shares held by the requesting holder upon the written request of such holder, at any time after the earliest to occur of: (1) the Group fails to complete a Qualified IPO or a Qualified Buyout on or prior to December 31, 2024; (2) The Founder directly or indirectly disposes of in any manner (including, without limitation, transfer, gift, pledge, put in trust or custody) the shares of the Group directly held or indirectly controlled by it; (3) The Founder no longer devotes his full time and energy to the Group, or there is any change to the Founder of the Group (unless such change occurs due to the execution of the act-in-concert agreement for the IPO need); (4) The Group is in custody, becomes bankrupt or is liquidated; (5) Any material change occurs to the management personnel or the Principal Business of the Group; (6) a breach by any of the Group or the Founder, where applicable, of its obligations that will have a material adverse effect to the Group; (7) Without the approval by the Board of the Group, the Group enters into a Related-party Transaction with its Affiliate outside the ordinary course of business of the Group, or the Group provides guarantee for any Person other than the Subsidiaries indicated in the consolidated financial statements of the Group, and such Related-party Transaction or guarantee causes material adverse effect upon the benefits The redemption price for each preferred share of Series D1, Series D2 E F (a) the applicable Original Issue Price as set forth in the Investor Rights Agreement, (b) an amount that gives such shareholder compounded accrued daily interest (on the basis of a 365-day year basis) at The redemption price for each preferred share of Series A, Series A+, Series B, Series B+, Series C1 and Series C2 upon exercise of the redemption option by the holder, will be an amount equal to the aggregate of (a) the applicable Original Issue Price as set forth in the Investor Rights Agreement, (b) an amount that would give such holder of respective applicable preferred shares a simple non-compounded interest of six percent (6%) (for Series A, Series Series Series Series Upon redemption event, Series F Preferred Shares shall rank senior to Series E Preferred Shares. Series E Preferred Shares shall rank senior to Series D1 and Series D2 Preferred Shares. Series D1 and Series D2 Preferred Shares (the redemption of the Series D2 Preferred Shares shall rank pari passu with the redemption of Series D1 Preferred Shares) shall rank senior to Series C1 Preferred Shares. Series C1 Preferred Shares shall rank pari pass with the redemption of Series C2, Series B, Series B+, Series A+ and Series A Preferred Shares. 19. Convertible redeemable preferred shares (continued) Liquidation preferences In the event of any liquidation, dissolution or winding up of the Group, or any Deemed Liquidation Event, distributions to the Shareholders shall be made in the following manner, after satisfaction of all creditors’ claims and claims that may be mandated by law: The holders of Preferred Shares have preference over holders of ordinary shares with respect to payment of dividends and distribution of assets. Upon Liquidation Event, Series F Preferred Shares shall rank senior to Series E Preferred Shares. Series E Preferred Shares shall rank senior to Series D1 and Series D2 Preferred Shares. Series D1 and Series D2 Preferred Shares (the liquidation preference of the Series D1 Preferred Shares shall rank pari passu with the liquidation preference of Series D2 Preferred Shares) shall rank senior to Series C1 and Series C2 Preferred Shares. Series C1 and Series C2 Preferred Shares (the liquidation preference of the Series C1 Preferred Shares shall rank pari passu with the liquidation preference of Series C2 Preferred Shares) shall rank senior to Series B+ Preferred Shares. Series B+ Preferred Shares shall rank senior to Series B Preferred Shares. Series B, Series A+ and Series A, which rank pari passu with each other, shall rank senior to ordinary shares. The holders of Series D1, Series D2 and Series E Preferred Shares shall be entitled to receive an amount per share equal to (a) 110% of the Original Price per annum 2 per A Series Series pe annum Deemed Liquidation Event included: (i) any consolidation, amalgamation, scheme of arrangement or merger of any Group Company with or into any other Person or other reorganization in which the members or shareholders of such Group Company immediately prior to such consolidation, amalgamation, merger, scheme of arrangement or reorganization own less than fifty percent (50%) of such Group Company’s voting power in the aggregate immediately after such consolidation, merger, amalgamation, scheme of arrangement or reorganization, or in which the Founder of any Group Company is changed; (ii) a sale, transfer, lease, or other disposition of all or substantially all of the assets and/or intellectual property rights of any Group Company (or any series of related transactions resulting in such sale, transfer, lease, or other disposition of all or substantially all of the assets and/or intellectual property of such Group Company); and (iii) the exclusive licensing of all or substantially all of any Group Company’s intellectual property to a third party. Voting rights Holders of the preferred shares will vote together on an as-converted basis with the holders of ordinary shares and not as a separate class, except as specifically provided herein or as otherwise required by Companies Laws. Each preferred share shall have a number of votes equal to the number of votes attributable to the ordinary shares then issuable upon conversion of such preferred share. 19. Convertible redeemable preferred shares (continued) The Group’s preferred shares activities for the years ended December 31, 2022 and 2023 are summarized below: SeriesA SeriesA+ SeriesB SeriesB+ SeriesC1 SeriesC2 SeriesD1 SeriesD2 SeriesE SeriesF Total Number of Number of Number of Number of Number of Number of Number of Number of Number of Number of Number of shares Amount shares Amount shares Amount shares Amount shares Amount shares Amount shares Amount shares Amount shares Amount shares Amount shares Amount RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB Balance as of January 1, 2022 58,480,000 26,703 84,480,000 39,901 734,209,000 381,310 277,730,000 228,493 604,820,600 702,521 372,859,000 430,041 705,523,600 1,105,823 105,302,000 168,717 803,222,500 1,958,419 — — 3,746,626,700 5,041,928 Conversion of Series F convertible notes, net of cost — — — — — — — — — — — — — — — — — — 392,013,413 1,631,564 392,013,413 1,631,564 Accretion on Preferred Shares to redemption value — 231 — 707 — 8,650 — 11,540 — 67,027 — 28,462 — 113,547 — 10,712 — 268,492 — (87) — 509,281 Balance as of December 31, 2022 58,480,000 26,934 84,480,000 40,608 734,209,000 389,960 277,730,000 240,033 604,820,600 769,548 372,859,000 458,503 705,523,600 1,219,370 105,302,000 179,429 803,222,500 2,226,911 392,013,413 1,631,477 4,138,640,113 7,182,773 Accretion on Preferred Shares to redemption value — 223 — 691 — 8,444 — 11,578 — 60,431 — 29,188 — 120,500 — 17,339 — 224,990 — 186,686 — 660,070 Amendment of series F convertible redeemable preferred share — — — — — — — — — — — — — — — — — — — (272,426) — (272,426) Automatic conversion of preferred shares into ordinary shares upon IPO (1) (58,480,000) (27,157) (84,480,000) (41,299) (734,209,000) (398,404) (277,730,000) (251,611) (604,820,600) (829,979) (372,859,000) (487,691) (705,523,600) (1,339,870) (105,302,000) (196,768) (803,222,500) (2,451,901) (392,013,413) (1,545,737) (4,138,640,113) (7,570,417) Balance as of December 31, 2023 — — — — — — — — — — — — — — — — — — — — — — (1) All of the preferred shares were converted to Class A Ordinary Shares upon the completion of the Company’s IPO in December 2023 . 19. Convertible redeemable preferred shares (continued) The key transaction of preferred shares Series A Preferred Shares On April 8, 2016, the Group issued 58,480,000 Series A Preferred Shares in exchange for an aggregate cash consideration of RMB18 million or RMB0.3078 per share. Series A+ Preferred Shares On May 18, 2017, the Group issued 84,480,000 Series A+ Preferred Shares in exchange for an aggregate cash consideration of RMB28.89 million or RMB0.3420 per share. Series B Preferred Shares On August 14, 2017, the Group issued 649,760,000 Series B Preferred Shares in exchange for an aggregate cash consideration of RMB250 million or RMB0.3848 per share. On November of 2017, 114.36 million ordinary shares held by the Founder of the Group were re-designated to Series B Preferred Shares, which were then transferred to certain new investors for a total consideration of RMB 44 million. On March of 2019, 29,911,000 Series B Preferred Shares were re-designated to Series C2 Preferred Shares, which were then transferred to certain new investors for a total consideration of RMB 27.92 million. The Group did not receive any proceeds from these transfers. By the end of 2022, number of Series B Preferred Shares amounts to 734,209,000 . The Group considered that such re-designation, in substance, was the same as a repurchase and cancellation of the former ordinary shares or preferred shares, and simultaneously an issuance of the preferred shares. Therefore, the Group recorded 1) the difference between the fair value and the par value of the ordinary shares against additional paid-in capital or by increasing accumulated deficit once additional paid-in capital has been exhausted; 2) the difference between the fair value and the carrying amount of the former preferred shares against additional paid-in capital or by increasing the accumulated deficit once additional paid-in capital has been exhausted; and 3) difference between the fair value of the newly issued preferred shares and the former ordinary shares or preferred shares as share based compensation expenses. In order to determine the fair value of preferred shares at the time of re-designation, the Group first determined the business entity value based on equity financing transaction prices and then allocated the business entity value to each element of the capital structure (convertible redeemable preferred shares and ordinary shares) using an option pricing method. Three scenarios were assumed, namely: (i) the liquidation scenario, in which the option pricing method was adopted to allocate the value between convertible preferred shares and ordinary shares, (ii) the redemption scenario, in which the option pricing method was adopted to allocate the value between convertible preferred shares and ordinary shares, and (iii) the mandatory conversion scenario, in which equity value was allocated to convertible preferred shares and ordinary shares on an as-if converted basis. Series B+ Preferred Shares On December 27, 2017, the Group issued 277,730,000 Series B+ Preferred Shares in exchange for an aggregate cash consideration of RMB187 million or RMB0.6733 per share. 19. Convertible redeemable preferred shares (continued) The key transaction of preferred shares (continued) Series C1 Preferred Shares On July 3, 2018, the Group issued 604,820,600 Series C1 Preferred Shares in exchange for an aggregate cash consideration of RMB573.98 million or RMB0.9334/ US$0.1404 per share. Series C2 Preferred Shares On August 6, 2018, the Group issued 289,379,800 Series C2 Preferred Shares in exchange for an aggregate cash consideration of RMB270.52 million or RMB0.9334 per share. On March of 2019, 29,911,000 Series B Preferred Shares were re-designated to Series C2 Preferred Shares as mentioned in Series B section and 53,568,200 ordinary shares held by the Series Seed of the Group were re- designated to Series C2 Preferred Shares, which were then transferred to certain new investor for a total consideration of RMB50 million. The Group did not receive any proceeds from these transfers. By the end of 2022, number of Series C2 Preferred Shares amounts to 372,859,000. Series D1 Preferred Shares On June 5, 2019, the Group issued 705,523,600 Series D1 Preferred Shares in exchange for an aggregate cash consideration of RMB923.18 million or US$0.1899 per share. Series D2 Preferred Shares On August 12, 2019, the Group issued 105,302,000 Series D2 Preferred Shares in exchange for an aggregate cash consideration of RMB141.46 million or US$0.1899 per share. Series E Preferred Shares On October 27, 2020, the Group issued 803,222,500 Series E Preferred Shares in exchange for an aggregate cash consideration of RMB1,819.78 million or RMB2.3119/ US$0.3425 per share. Series F Preferred Shares In February 2022, the Company issued Series F Convertible Notes in an aggregate principal amount of US$221.8 million with simple interest at 8% per annum, maturing ten months after the issuance date. The Series F Convertible Notes shall be automatically converted into the Series F Preferred Shares at a conversion price of US$0.5659 per share, upon completion of the Restructuring prior to the maturity date, or immediately prior to the consummation of a Qualified IPO, or optional converted into Series F Preferred Shares any time on or after the Maturity Date. The Restructuring has completed on September 30, 2022. Under the Series F convertible note subscription agreement, the conversion should be completed in 5 workdays. On October 7, 2022, the Series F Convertible Notes were converted into 392,013,413 Series F Preferred Shares prior to the Maturity Date. 19. Convertible redeemable preferred shares (continued) Accounting for preferred shares The Group classified the preferred shares in the mezzanine equity of the consolidated balance sheets as they were contingently redeemable at the options of the holders. The Group recorded accretion on the preferred shares, where applicable, to the redemption value from the issuance dates to the earliest redemption dates. The accretion calculated using the effective interest method, was recorded against additional paid-in capital. Once additional paid-in capital had been exhausted, additional charges were recorded by increasing the accumulated deficit. The accretion of preferred shares was RMB329,737, RMB509,281 and RMB660,070 for the years ended December 31, 2021, 2022 and 2023, respectively. Each issuance of the preferred shares was recognized at the respective issue price at the date of issuance net of issuance costs. The issuance costs for preferred shares was nil, RMB19,549 and nil for the years ended December 31, 2021, 2022 and 2023, respectively. The Group determined that the embedded conversion features and the redemption features did not require bifurcation as they either were clearly and closely related to the preferred shares or did not meet the definition of a derivative. The Group has determined that there was no beneficial conversion feature attributable to any of the Preferred Shares because the initial effective conversion price of these Preferred Shares was higher than the fair value of the Group’s ordinary shares determined by the Group with the assistance from an independent valuation firm. Modification and extinguishment of preferred shares The Group assessed whether an amendment to the terms of its preferred shares was an extinguishment or a modification using the fair value model. When preferred shares were extinguished, the difference between the fair value of the consideration was transferred to the convertible preferred shareholders and the carrying amount of the convertible preferred shares (net of issuance costs) were treated as deemed dividends to preferred shareholders. The Group considered that a significant change in fair value after the change of the terms to be substantive and thus triggered extinguishment. A change in fair value, which was not significant immediately after the change of the terms was considered non-substantive and thus subject to modification accounting. When the preferred shares were modified, the Group evaluated whether there was a transfer of value between ordinary shareholders and preferred shareholders as a result of the modification and therefore, would be recorded as a reduction of, or increase to, accumulated deficit as a deemed dividend. When value was transferred from preferred shareholders to ordinary shareholders, the value was recorded as an increase to accumulated deficit while charges against additional paid-in capital. In connection with the issuance of Series B+ Preferred Shares in December 2017, preferential liquidation rights were added for Series Seed, A, A+ and B Preferred Shares. The management assessed the amendments quantitatively using the fair value model to Series Seed, A, A+ and B Preferred Shares and concluded they should be accounted for as an extinguishment based on the assessment. In connection with the issuance of Series C1 Preferred Shares in July 2018, the earliest redemption date of the Series A and Series A+ Preferred Shares was changed from on or before December 31, 2021 to on or before July 31, 2023. In connection with the issuance of Series D1 Preferred Shares in June 2019, the earliest redemption date of the Preferred Shares before Series D1 was changed from on or before July 31, 2023 to on or before December 31, 2023. In connection with the issuance of Series E Preferred Shares on October of 2020, the earliest redemption date of the preferred shares before Series E was changed from on or before December 31, 2023 to on or before December 31, 2024. From both quantitative and qualitative perspectives, the Group assessed the impact of the above modification and concluded that the amended represents a modification rather than extinguishment of the preferred shares, and the impact of the modification is immaterial. 19. Convertible redeemable preferred shares (continued) Modification and extinguishment of preferred shares (continued) In connection with the Series F Amendments, the management assessed the amendments quantitatively using the fair value model to Series F Preferred Shares and concluded they should be accounted for as an extinguishment based on the assessment. Conversion upon IPO In December 2023, upon the completion of the Company’s IPO, all the issued and outstanding preferred shares were automatically converted into ordinary shares based on aforementioned conversion rate. |
Share-based compensation
Share-based compensation | 12 Months Ended |
Dec. 31, 2023 | |
Share-based compensation | |
Share-based compensation | 20. Share-based compensation The Group maintains share incentive plans under which the Group may grant a variety of incentive awards to employees and executives, which include share option awards and share options with employee termination compensation. Restricted shares On December 30, 2021, the Group granted 100,000,000 restricted shares at nominal consideration under the share incentive plan, which were all vested immediately at the grant date. The share-based compensation expenses of RMB135,261 were recognized immediately at the grant date. The fair value of the restricted shares was US$0.21 per share on December 30, 2021. Share options From August 2018 to January 2022, the Group has granted options to certain employees with service condition only. Share options granted are subject to a four From July 2022 to December 2023, the Group has granted 79,528,000 options to certain employees that are subject to both service and performance condition, where awards granted are only exercisable upon the occurrence of an IPO by the Group. As such, there is no share-based compensation expense recognized until the date of consummation of the IPO. In December 2023, due to the completion of the IPO, the accumulative share-based compensation expenses of 12,917 for these share options were recorded accordingly. Share options with employee termination compensation In May 2020, the Group has granted 137,877,968 liability-classified share options to certain employees with service condition only. Share options granted are subject to a nineteen-month vesting schedule, vesting on a monthly basis. Upon employee’s termination, for all or part of the portion of the Option that was vested, the employee shall have the right to request the Group to compensate in cash for an amount calculated based on number of months for the employee’s continuous service. 20. Share-based compensation (continued) Share options with employee termination compensation (continued) From February 2022 to January 2023, the Group has granted 41,217,213 liability-classified share options, respectively, to certain employees that are subject to both service and performance condition. In the event the employee terminates employment prior to the consummation of an IPO, the Group shall reimburse the Grantee at an amount calculated based on the net assets of the Group as of the end of the last year prior to such termination. From July 2022 to July 2023, the Group has granted 12,134,888 liability-classified employee share options to certain employees that are subject to both service and performance condition. Share options granted are subject to a three-year vesting schedule, vesting one third Share-based compensation was recognized in operating expenses for the years ended December 31, 2021, 2022 and 2023 as follows: Year ended December 31, 2021 2022 2023 RMB RMB RMB Fulfillment 2,154 585 195 Sales and marketing 8,204 5,935 4,682 Research and development 10,134 3,883 3,070 General and administrative 162,857 21,496 9,446 Total share-based compensation expenses 183,349 31,899 17,393 A summary of the changes in the share options relating to ordinary shares granted by the Group for the years ended December 31, 2021, 2022 and 2023 is as follows: Weighted-average Weighted-average Options granted exercise grant date fair share number price (US$) value (US$) Outstanding as of January 1, 2021 189,927,968 0.0205 0.1136 Granted 18,200,000 0.1079 0.1177 Cancelled/Forfeited (9,163,845) 0.0993 0.1201 Outstanding as of December 31, 2021 198,964,123 0.0227 0.1137 Granted 56,222,658 0.0861 0.1417 Cancelled/Forfeited (72,438,216) 0.0520 0.1080 Outstanding as of December 31, 2022 182,748,565 0.0306 0.1245 Granted 80,907,443 0.1306 0.3169 Cancelled/Forfeited (14,700,489) 0.0579 0.1580 Outstanding as of December 31, 2023 248,955,519 0.0615 0.1851 20. Share-based compensation (continued) Share options with employee termination compensation (continued) The following table summarizes information regarding the share options outstanding as of December 31, 2022 and 2023: As of December 31, 2022 Weighted-average remaining Weighted-average exercise Options exercise price contractual Aggregate number per option life (years) intrinsic value US$ US$ in thousands Options outstanding 182,748,565 0.03 7.91 47,615 Exercisable 120,164,340 0.01 7.32 34,611 Expected to vest 62,584,225 0.08 9.04 13,398 As of December 31, 2023 Weighted-average remaining Weighted-average exercise Options exercise price contractual Aggregate number per option life (years) intrinsic value US$ US$ in thousands Options outstanding 248,955,519 0.06 7.80 100,501 Exercisable 133,762,513 0.02 6.49 60,138 Expected to vest 115,193,006 0.12 9.32 40,363 No options were exercised for the years ended December 31, 2021, 2022 and 2023. The Group uses the Binominal option pricing model to estimate the fair value of share options. The assumptions used to value the fair value of each option granted under the Group’s Share Incentive Plans during 2021, 2022 and 2023 are as follow: Year ended December 31 2021 2022 2023 RMB RMB RMB Exercise price RMB0.70 RMB0.00 – 1.80 RMB0.00-1.80 (USD$0.11) (USD$0.00 – 0.26) (USD$0.00-0.25) Fair value of the ordinary shares on the RMB1.31 RMB1.35 – 1.40 RMB2.04-3.10 date of option grant (USD$0.20) (USD$0.19 – 0.21) (USD$0.30-0.43) Risk-free interest rate 3.09 % 2.70% – 2.88 % 2.64%-3.84 % Contractual life 10 years 10 years 10 years Expected forfeiture rate (post-vesting) 16 % 16 % 16 % Exercise multiples 2.8 2.8 2.8 Expected dividend yield — — — Expected volatility 32.00 % 29.77% – 30.16 % 30.09% – 30.41 % (i) Risk-free interest rate is based on the yields of China Government Bonds with maturities similar to the expected life of the share options in effect at the time of grant. 20. Share-based compensation (continued) Share options with employee termination compensation (continued) (ii) Expected dividend yield is assumed to be nil as the Group has no history or expectation of paying a dividend on its ordinary shares. (iii) The exercise multiples were estimated based on the vesting and contractual terms of the awards and management’s expectation of exercise behaviour of the grantees. (iv) Expected volatility is assumed based on the historical volatility of the Group and the Group’s comparable companies in the period equal to the expected life of each grant. As of December 31, 2022 and 2023, there were RMB14,395 and RMB166,224 unrecognized compensation expenses related to the share options granted, which is expected to be recognized over a weighted-average period of 3.14 and 3.80 years, respectively. |
Related party transactions
Related party transactions | 12 Months Ended |
Dec. 31, 2023 | |
Related party transactions | |
Related party transactions | 21. Related party transactions For the years ended December 31, 2021, 2022 and 2023, the Group had no material related party transactions and no material related party balance as of December 31, 2022 and 2023. |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and contingencies | |
Commitments and contingencies | 22. Commitments and contingencies Capital commitments Capital expenditures contracted for are analysed as follows: As of December 31, 2022 2023 RMB RMB Contracted but not provided for: A planned factory construction project (i) 273,083 173,418 Construction commitments — 71,395 Assets under construction 1,725 45 Total 274,808 244,858 (i) The Group plans to construct a factory to manufacture their selected self-branded products, such as fasteners, located on a parcel of land in Taicang, Jiangsu Province to which the Group acquired the land use rights. In accordance with the land use rights agreement, at least RMB 273,083 capital expenditures in connection with such construction plan is committed by the Group. The Group commenced the construction in the second quarter of 2023 and plans to complete the construction by the end of 2024. |
Statutory reserves, restricted
Statutory reserves, restricted net assets and parent company only condensed financial information | 12 Months Ended |
Dec. 31, 2023 | |
Statutory reserves, restricted net assets and parent company only condensed financial information | |
Statutory reserves, restricted net assets and parent company only condensed financial information | 23. Statutory reserves, restricted net assets and parent company only condensed financial information Pursuant to laws applicable to entities incorporated in the PRC, the Company’s subsidiaries in the PRC must make appropriations from after-tax profit to non-distributable reserve funds. These reserve funds include one or more of the following: (i) a general reserve, (ii) an enterprise expansion fund and (iii) a staff bonus and welfare fund. Subject to certain cumulative limits, the general reserve fund requires an annual appropriation of 10% of after-tax profit (as determined under accounting principles generally accepted in the PRC at each year-end) until the accumulative amount of such reserve fund reaches 50% of a company’s registered capital, the other fund appropriations are at the subsidiaries’ discretion. These reserve funds can only be used for specific purposes of enterprise expansion and staff bonus and welfare and are not distributable as cash dividends. As a result of these restrictions under PRC laws and regulations, the Company’s PRC subsidiaries are restricted in their ability to transfer a portion of their net assets to the Company either in the form of dividends, loans or advances. The restricted portion amounted to RMB1,432,854 as of December 31, 2023. The Company performed a test on the restricted net assets of its subsidiaries in accordance with Securities and Exchange Commission Regulation S-X Rule 4-08 (e) (3), “General Notes to Financial Statements” and concluded that it was applicable for the Company to disclose the condensed financial information for the parent company for the year ended December 31, 2022 and 2023. For the purpose of presenting parent only financial information, the Company records its investments in its subsidiaries under the equity method of accounting. Such investments are presented on the separate condensed balance sheet of the Company as “Investment in subsidiaries” and the loss of the subsidiaries is presented as “share of loss from subsidiaries”. The subsidiaries did not pay any dividend to the Company for the years presented. Certain information and footnote disclosures generally included in financial statements prepared in accordance with U.S. GAAP have been condensed and omitted. The footnote disclosures contain supplemental information relating to the operations of the Company, as such, these statements are not the general-purpose financial statements of the reporting entity and should be read in conjunction with the notes to the consolidated financial statements of the Company. The Company did not have significant capital and other commitments or guarantees as of December 31, 2022 and 2023. 23. Statutory reserves, restricted net assets and parent company only condensed financial information (continued) Condensed balance sheet of the parent company As of December 31, 2022 2023 RMB RMB Assets Cash and cash equivalents 616 2,381 Prepayments and other current assets 23,406 461,183 Total current assets 24,022 463,564 Investment in subsidiaries 3,094,130 2,778,527 Total non-current assets 3,094,130 2,778,527 Total assets 3,118,152 3,242,091 Liabilities Accrued expenses and other current liabilities 6,112 30,672 Total current liabilities 6,112 30,672 Total non-current liabilities — — Total liabilities 6,112 30,672 Mezzanine equity 7,182,773 — ZKH Group Limited shareholders’ (deficit)/equity Ordinary shares 1 4 Additional paid-in capital — 8,139,349 Statutory reserves 5,278 6,013 Accumulated other comprehensive loss (51,910) (25,154) Accumulated deficit (4,024,102) (4,908,793) Total ZKH Group Limited shareholders’ (deficit)/equity (4,070,733) 3,211,419 Total liabilities, mezzanine equity and shareholders’ (deficit)/equity 3,118,152 3,242,091 23. Statutory reserves, restricted net assets and parent company only condensed financial information (continued) Condensed statement of comprehensive loss Year ended December 31, 2022 2023 RMB RMB General and administrative (6,038) (8,586) Interest and investment income 1 — Interest expense (73,081) — Share of loss from subsidiaries (643,683) (297,229) Others, net (12,880) 1,501 Net loss attributable to ZKH Group Limited (735,681) (304,314) Accretion on preferred shares to redemption value (509,281) (660,070) Net loss attributable to ZKH Group Limited’s ordinary shareholders (1,244,962) (964,384) Net loss attributable to ZKH Group Limited (735,681) (304,314) Other comprehensive loss: Foreign currency translation adjustments (50,980) 26,756 Total comprehensive loss (786,661) (277,558) Accretion on Preferred Shares to redemption value (509,281) (660,070) Total comprehensive loss attributable to ZKH Group Limited’s ordinary shareholders (1,295,942) (937,628) Condensed statement of cash flows Year ended December 31, 2022 2023 RMB RMB Net cash used in operating activities (277) (77) Net cash used in investing activities (5,559,727) (402,789) Net cash provided by financing activities 5,560,594 407,581 Effect of exchange rate changes on cash, cash equivalents, and restricted cash 26 (2,950) Increase in cash, cash equivalents, and restricted cash 616 1,765 Cash, cash equivalents, and restricted cash at beginning of year — 616 Cash, cash equivalents, and restricted cash at end of year 616 2,381 |
Subsequent events
Subsequent events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent events | |
Subsequent events | 24. Subsequent events In January 2024, the Group granted 5,485,508 options to its employee, which are subject to service conditions only. In January 2024, the Company issued 455,000 ADSs at a public offering price of $15.50 per ADS in connection with the underwriters’ partially exercise of their overallotment option to purchase additional ordinary shares in our initial public offering. Aggregate net proceeds from the transaction were $6,559. |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Summary of significant accounting policies | |
Basis of presentation | (a) Basis of presentation The consolidated financial statements of the Group have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”). Significant accounting policies followed by the Group in the preparation of the accompanying consolidated financial statements are summarized below. |
Principles of Consolidation | (b) Principles of Consolidation The consolidated financial statements include the financial statements of the Company and its subsidiaries for which the Company is the ultimate primary beneficiary. All transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation. A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting power, has the power to appoint or remove the majority of the members of the board of directors (the “Board”), to cast majority of votes at the meeting of the Board or to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders. |
Use of estimates | (c) Use of estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires the Group to make estimates and assumptions that affect the reported amounts of assets and liabilities, mezzanine equity and related disclosures of contingent liabilities as of the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant accounting estimates are used for, but not limited to, the valuation and recognition of share-based compensation arrangements, allowance for credit losses, lower of cost and net realizable value of inventories, fair value of ordinary shares and convertible redeemable preferred shares. |
Segment reporting | (d) Segment reporting The Group engages primarily in the business-to-business trading and services of industrial products through its platform. The Group’s chief operating decision maker, who has been identified as the Chief Executive Officer reviews the consolidated results when making decisions about allocating resources and assessing performance of the Group as a whole and hence, the Group has only one reportable segment. The Group does not distinguish expenses and related assets and liabilities between markets or segments for the purpose of internal reports. As the Group’s long-lived assets are all located in the PRC and substantially all the Group’s revenues are derived from the PRC, no geographical segments are presented. |
Functional currency and foreign currency translation | (e) Functional currency and foreign currency translation The Group’s reporting currency is Renminbi (“RMB”). The functional currency of the Group’s entities incorporated in Cayman Islands, BVI and Hong Kong is U.S. dollars (“US$”). The functional currency of all the other significant subsidiaries is RMB. The determination of the respective functional currency is based on the criteria of ASC Topic 830, Foreign Currency Matters. 2. Summary of significant accounting policies (continued) (e) Functional currency and foreign currency translation (continued) Transactions denominated in currencies other than functional currency are translated into functional currency at the exchange rates quoted by authoritative banks prevailing at the dates of the transactions. Exchange gains and losses resulting from those foreign currency transactions denominated in a currency other than the functional currency are recorded as a component of others, net in the consolidated statements of comprehensive loss. Total exchange gains/(losses) were a loss of RMB8,205, a gain of RMB13,733, and a loss of RMB11,061 for the years ended December 31, 2021, 2022 and 2023, respectively. The consolidated financial statements of the Group are translated from the functional currency into RMB. Assets and liabilities denominated in foreign currencies are translated into RMB using the applicable exchange rates at the balance sheet date. Equity accounts other than earnings generated in current period are translated into RMB at the appropriate historical rates. Revenues, expenses, gains and losses are translated into RMB using the periodic average exchange rates. The resulting foreign currency translation adjustments are recorded in other comprehensive loss in the consolidated statements of comprehensive loss, and the accumulated currency translation adjustments are presented as a component of accumulated other comprehensive (loss) gain in the consolidated statements of shareholders’ equity/(deficit). |
Fair value | (f) Fair value Accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurement for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Accounting guidance establishes three levels of inputs that maybe used to measure fair value: Level 1 — Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 — Include other inputs that are directly or indirectly observable in the marketplace. Level 3 — Unobservable inputs which are supported by little or no market activity. Accounting guidance also describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. Financial assets and liabilities of the Group not measured at fair value mainly consist of cash and cash equivalents, restricted cash, accounts receivable, notes receivable, certain other current assets and certain accruals and other liabilities. As of December 31, 2022 and 2023, the carrying values of these financial instruments approximated their fair values due to their short-term maturity. |
Cash and cash equivalents | (g) Cash and cash equivalents Cash and cash equivalents consist of demand deposit, time deposits with original maturities less than three months and cash placed with banks and third-party payment processor, which are unrestricted as to withdrawal or use. |
Restricted cash | (h) Restricted cash Cash that is restricted as to withdrawal or for use or pledged as security is reported separately on the face of the consolidated balance sheets, and is included in the total cash, cash equivalents, and restricted cash in the consolidated statements of cash flows. The Group’s restricted cash mainly represents pledged time deposit, security deposits held in designated bank accounts for issuance of bank acceptance and letter of guarantee. |
Short-term investments | (i) Short-term investments Short-term investments consist primarily of investments in wealth management products issued by banks, money market fund and time deposit placed with bank with original maturities longer than three months but less than one year. These investments are stated at fair value. Changes in the fair value are reflected in interest and investment income, net in the consolidated statements of comprehensive loss. |
Derivatives | (j) Derivatives Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date. All derivatives are carried as assets when the fair values are positive and as liabilities when the fair values are negative. Derivative financial instruments are neither held nor issued by the Company for trading purposes. In the normal course of business, the Company uses derivative financial instruments to manage foreign currency exchange rate risk. Currency exposure is monitored and managed by the Company as part of its risk management program which seeks to reduce the potentially adverse effects that market volatility could have on operating results. The company uses forward contracts to economically hedge, on a net basis, the foreign currency exposure of a portion of the company’s nonfunctional currency assets and liabilities. The terms of these forward contracts are generally less than one year. |
Accounts receivable and allowance for credit losses | (k) Accounts receivable and allowance for credit losses Accounts receivable represents the amounts that the Group has an unconditional right to consideration and is recorded net of allowance for credit losses. The Group estimated allowance for credit losses to reserve for potentially uncollectible receivable amounts periodically, considering factors in assessing the collectability of its accounts receivable, such as historical distribution of the age of the amounts due, payment history, creditworthiness, forward-looking factor, historical collections data of the customers, to assess the credit risk characteristics. If there is strong evidence indicating that the accounts receivable is likely to be unrecoverable, the Group also makes specific allowance in the period in which a loss is determined to be probable. Accounts receivable is considered impaired and written- off when it is probable that all contractual payments due will not be collected after all collection efforts have been exhausted. |
Notes receivable | (l) Notes receivable Notes receivable are primarily bank acceptance notes. The Group accepts bank acceptance notes from customers for products sold or services performed in the ordinary course of business. Bank acceptance notes are primarily negotiable instruments with cash settlement from commercial banks within half a year. Upon receipt of the bank acceptance notes, the Group’s accounts receivable from the customer is derecognized. The bank acceptance notes can also be endorsed to suppliers as settlement of accounts payable. Bank acceptance notes of RMB192,691 and RMB143,752 were endorsed to suppliers as of December 31, 2022 and 2023 respectively. |
Current expected credit losses | (m) Current expected credit losses In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASC 326”), which requires entities to measure all expected credit losses for financial assets held at the reporting date, including accounts receivable and notes receivable, using a current expected credit loss model based on historical experience adjusted for judgments about the effects of relevant observable data, including current and future economic conditions periodically. The Group estimates the allowance for accounts receivable based on historical collection activity, current business environment and forecasts of future macroeconomic conditions that may affect the customers’ ability of payment. The accounts receivable was segmented into groups based on certain credit risk characteristics, and the Group determined expected loss rates for each group based on historical loss experience adjusted for judgments about the effects of relevant observable data including historical default rates, lifetime for debt recovery, current and future economic conditions. |
Inventories | (n) Inventories Inventories, primarily consisting of products available for sale, are stated at the lower of cost and net realizable value. Cost of inventories is determined using the weighted average cost method. Adjustments are recorded to write down the cost of inventories to the estimated net realizable value due to slow-moving merchandise and damaged goods, which is dependent upon factors such as historical and forecasted consumer demand, and promotional environment. The Group takes ownership, risks and rewards of the products purchased. Write downs are recorded in cost of revenues in the consolidated statements of comprehensive loss. The Group also provides fulfillment-related services in connection with the Group’s marketplace. Third-party sellers maintain ownership of their inventories and therefore these products are not included in the Group’s inventories. |
Property and equipment, net | (o) Property and equipment, net Property and equipment are stated at cost less accumulated depreciation and any impairment loss. Depreciation is computed using the straight-line method with 5% residual value based on the estimated useful lives of the various classes of assets, which range as follows: Furniture and office equipment 3 – 5 years Machinery 5 – 10 years Vehicles 3 – 5 years Computer equipment 3 – 5 years Leasehold improvement shorter of remaining lease period and estimated useful life Expenditures for maintenance and repairs are expensed as incurred. The gain or loss on the disposal of property and equipment is the difference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in other income, net in the consolidated statements of comprehensive loss. |
Intangible assets, net | (p) Intangible assets, net Intangible assets purchased from third parties are initially recorded at cost and amortized on a straight-line basis over the estimated economic useful lives. The Group performs valuation of the intangible assets arising from business combination to determine the fair value to be assigned to each asset acquired. The acquired intangible assets are recognized and measured at fair value and are expensed or amortized using the straight-line approach over the estimated economic useful lives of the assets. The estimated useful lives of intangible assets are as follows: Trademarks 10 years Patent right 10 years Software 3 – 5 years Customer relationship 10 years |
Business combinations and non-controlling interests | (q) Business combinations and non-controlling interests The Group accounts for its business combinations using the acquisition method of accounting. The cost of an acquisition is measured as the aggregate of the acquisition date fair value of the assets transferred to the sellers, liabilities incurred by the Group and equity instruments issued by the Group. Transaction costs directly attributable to the acquisition are expensed as incurred. Identifiable assets acquired and liabilities assumed are measured separately at their fair values as of the acquisition date, irrespective of the extent of any non-controlling interests. The excess of (i) the total of consideration paid fair value of the non-controlling interests over (ii) the fair value of the identifiable net assets of the acquiree is recorded as goodwill. 2. Summary of significant accounting policies (continued) (q) Business combinations and non-controlling interests (continued) For the Company’s non-wholly owned subsidiaries, a non-controlling interest is recognized to reflect the portion of equity that is not attributable, directly or indirectly, to the Company. Non-controlling interests are classified as a separate line item in the equity section of the Group’s consolidated balance sheets. When the non-controlling interest is redeemable at the option of the holders, which is not solely within the control of the Company, the non-controlling interest is classified as mezzanine equity. The Company accretes changes in the redemption value over the period from the date that it becomes probable that the mezzanine equity will become redeemable to the earliest redemption date using the effective interest method. Consolidated net loss or income in the consolidated statements of comprehensive loss includes net income attributable to non-controlling interests and mezzanine equity holders when applicable. Cash flows related to transactions with non-controlling interests are presented under financing activities in the consolidated statements of cash flows. |
Goodwill | (r) Goodwill Goodwill represents the excess of (i) the total of consideration paid fair value of the non-controlling interests over (ii) the fair value of the identifiable net assets of the acquiree. Goodwill is not depreciated or amortized but is tested for impairment on an annual basis, and between annual tests when an event occurs or circumstances change that could indicate that the asset might be impaired. The annual impairment test includes an option to assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. In the qualitative assessment, the Group considers primary factors such as industry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. If the Group decides, as a result of its qualitative assessment, that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is mandatory. Otherwise, no further testing is required. The quantitative impairment test consists of a comparison of the fair value based on discounted cash flow of each reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss equal to the difference will be recorded. The impairment charge would be recorded in the consolidated statements of comprehensive loss. There is no event or any circumstance that the Company identified, which indicated that the fair value of the Company’s reporting unit was below its carrying value. No impairment of goodwill was recognized for the years ended December 31, 2021, 2022 and 2023. |
Leases | (s) Leases The Group accounts for leases in accordance with ASC 842, Leases (“ASC 842”), which requires lessees to recognize leases on the balance sheet and disclose key information about leasing arrangements. The Group categorizes leases with contractual terms longer than twelve months as either operating or finance lease. 2. Summary of significant accounting policies (continued) (s) Leases (continued) The Group determines if a contract contains a lease based on whether it has the right to obtain substantially all of the economic benefits from the use of an identified asset which the Group does not own and whether it has the right to direct the use of an identified asset in exchange for consideration. Operating lease right-of-use (“ROU”) assets represent the Group’s right to use an underlying asset for the lease term and lease liabilities represent the Group’s obligation to make lease payments arising from the lease. ROU assets are recognized as the amount of the lease liability, adjusted for lease incentives received. Lease liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value of the future lease payments is the Group’s incremental borrowing rate (“IBR”), because the interest rate implicit in most of the Group’s leases is not readily determinable. The IBR is a hypothetical rate based on the Group’s understanding of what its credit rating would be to borrow and resulting interest the Group would pay to borrow an amount equal to the lease payments in a similar economic environment over the lease term on a collateralized basis. The amortization of the right-of-use asset is described as the difference between the straight-line lease expense and the accretion of interest on the lease liability each period. The land use rights are operating leases with term of about 50 years. Other than the land use rights, the lease terms of operating and finance leases vary from more than a year to 20 years. Operating leases are included in land use right, operating lease right-of-use assets, current and non- current operating lease liabilities on the Group’s consolidated balance sheets. Finance leases are included in property and equipment, net, other current and non-current liabilities on the Group’s consolidated balance sheets. As of December 31, 2022 and 2023, all of the Group’s ROU assets were generated from leased assets in the PRC. |
Revenue recognition | (t) Revenue recognition Under ASC 606, the Group recognizes revenues when the Group satisfies a performance obligation by transferring a promised good or service (that is, an asset) to a customer. An asset is transferred when the customer obtains control of that asset. The Group evaluates whether it is appropriate to record the gross amount of product sales and related costs or the net amount earned as commissions. When the Group is a principal, that the Group obtains control of the specified goods or services before they are transferred to the customers, the revenues should be recognized in the gross amount of consideration to which it expects to be entitled in exchange for the specified goods or services transferred. When the Group is an agent and its obligation is to facilitate third parties in fulfilling their performance obligation for specified goods or services, the revenues should be recognized in the net amount for the amount of commission which the Group earns in exchange for arranging for the specified goods or services to be provided by other parties. Revenues should be recognised, after deducting discounting and estimated cash rebates, as the Group does not receive a good or service that is distinct in exchange for discount or rebates granted to customers and be recorded net of value-added taxes. Revenue arrangements with multiple deliverables are divided into separate units of accounting based on the selling price of each separate unit. 2. Summary of significant accounting policies (continued) (t) Revenue recognition (continued) Net product revenues The Group recognizes the net product revenues from the product sales model on a gross basis as the Group is acting as a principal in these transactions and is responsible for fulfilling the promise to provide the specified goods. The Group recognizes revenue net of discounts and return allowances when the products are delivered to customers. Judgement is required to estimate return allowances. The Group reasonably estimates the possibility of sales return based on the historical experience. Based on management’s assessment, as of December 31, 2022 and 2023, liabilities for return allowances were insignificant. Net service revenues Under marketplace model, the Group charges commission fees to third-party merchants, where the Group generally is acting as an agent and its performance obligation is to arrange for the provision of the specified goods or services by those third-party merchants to customers of the platform. Upon successful sales to customers of the platform, the Group charges the third-party merchants a fixed rate commission fee based on the sales amount. The net service revenues are recognized on a net basis at the point of delivery of products, net of return allowances. Accounts and notes receivable related to the marketplace service amounts to RMB489,777 and RMB964,587 as of December 31, 2022 and 2023, respectively, which are billed to end customers on gross basis on behalf of the third-party merchants. Other revenues The Group rents certain machinery and equipment as operating lease. Revenues resulting from operating lease are recognized over the contractual lease period on straight line basis. The Group also provides testing and repairment services and warehousing and logistics services. Revenues resulting from these services are recognized when the Group rendered such services. |
Advances from customers | (u) Advances from customers Amounts recorded in the advance from customers account represent cash payments made upfront by the Group’s customers under each sales contract, related to unsatisfied performance obligation at the end of the period. The amounts in the advance from customers would be recognised as revenue when the revenue recognition criteria are met. |
Cost of revenue | (v) Cost of revenue Cost of revenues consists primarily of purchase price of products, inbound shipping charges, write- downs of inventories and the rebates from suppliers. The rebates we receive from suppliers are treated as a reduction in the purchase price and will be recorded as a reduction in cost of revenues when the product is sold. The cost of revenues does not include shipping and handling expenses, payroll and benefits of logistic staff or logistic centers rental expenses, therefore cost of revenues of the Group may not be comparable to other companies which include such expenses in their cost of revenues. Cost of revenues mainly represents that under the product sales model. |
Fulfillment | (w) Fulfillment Fulfillment expenses consist primarily of (i) expenses incurred in operating the Group’s distribution centers and transit warehouses, including personnel cost and expenses attributable to receiving, inspecting and warehousing inventories, picking, packaging, preparing customer orders for shipment, and dispatching and delivering, (ii) lease expenses of distribution centers and transit warehouses, (iii) depreciation of vehicle and equipment, (iv) expenses charged by third-party couriers for dispatching and delivering the Group’s products. Shipping cost included in fulfillment expenses amounted to RMB111,592, RMB105,420 and RMB103,940 for the years ended December 31, 2021, 2022 and 2023, respectively. |
Sales and marketing | (x) Sales and marketing Sales and marketing expenses consist primarily of payroll and related expenses for employees involved in sales and marketing activities, and advertising costs. Advertising costs included in sales and marketing expenses are expensed as incurred, and amounted to RMB50,412, RMB18,730 and RMB34,830 for the years ended December 31, 2021, 2022 and 2023, respectively. |
Research and development | (y) Research and development Research and development expenses consist primarily of payroll and related expenses for research and development employees involved in designing, developing and maintaining software technology platform, and technology infrastructure costs. Software development costs are recorded in “Research and development” as incurred as the costs qualifying for capitalization have been insignificant. |
General and administrative | (z) General and administrative General and administrative expenses consist primarily of employee related expenses for product line and other general corporate functions, including administration, finance, tax, legal and human relations; costs associated with these functions including facilities and equipment depreciation expenses, professional fee, rental and other general corporate related expenses. |
Share-based compensation | (aa) Share-based compensation The Group grants share options (collectively, “Share-based Awards”) to eligible employees and directors under the share incentive plan. The Group accounts for share-based compensation in accordance with ASC 718, Compensation—Stock Compensation. Share-based awards with service conditions only are measured at the grant date fair value of the awards and recognized as expenses using the graded-vesting method, over the requisite service period. Share-based awards that are subject to both service conditions and the occurrence of IPO as performance condition, are measured at the grant date fair value. Cumulative share-based compensation expenses for the awards that have satisfied the service condition were recorded upon the completion of the IPO, using the graded-vesting method. The Group adopted ASU 2016-09 to recognize the impact of forfeiture within compensation expense, when they occur. 2. Summary of significant accounting policies (continued) (aa) Share-based compensation (continued) Management applies significant judgment in determining the fair value of share-based awards at grant dates given that the ordinary shares underlying the awards were not publicly traded at the time of grant. Fair value of the ordinary shares was determined and allocated using the income approach and equity allocation model, each of which requires complex and subjective judgments regarding the expected revenue growth rates, operating profit margins, discount rates, terminal growth rates, a discount for lack of marketability (“DLOM”) and probability of the three scenarios assumed under the equity allocation model, namely: (i) the liquidation scenario, (ii) the redemption scenario, and (iii) the mandatory conversion scenario. The fair value of Share options is estimated on the grant date using the Binomial option-pricing model where management also applies judgment related to the expected volatility, risk-free interest rate, expected dividend yield, exercise multiple and expected post-vesting forfeiture rate. The assumptions used in share-based compensation expenses recognition represent management’s best estimates, but these estimates involve inherent uncertainties and application of management judgment. If factors change or different assumptions are used, the share-based compensation expenses could be materially different for any period. Moreover, the estimates of fair value of the awards are not intended to predict actual future events or the value that ultimately will be realized by grantees who receive Share- based Awards, and subsequent events are not indicative of the reasonableness of the original estimates of fair value made by the Group for accounting purposes. |
Other employee benefits | (bb) Other employee benefits Employees of the Group in the PRC are entitled to staff welfare benefits including pension benefits, work-related injury benefits, maternity insurance, medical insurance, unemployment benefit and housing fund plans through a PRC government-mandated multi-employer defined contribution plan. The Group is required to contribute to the plan based on certain percentages of the employees’ salaries, up to a maximum amount specified by the local government. The PRC government is responsible for the medical benefits and the pension liability to be paid to these employees and the Group’s obligations are limited to the amounts contributed and no legal obligation beyond the contributions made. Employee social security and welfare benefits included as expenses amounted to RMB291,839, RMB339,155 and RMB323,685 for the years ended December 31, 2021, 2022 and 2023, respectively. |
Income tax | (cc) Income tax Current income taxes are provided on the basis of net income for financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions. The Group follows the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the temporary differences between the financial statements carrying amounts and tax bases of existing assets and liabilities by applying enacted statutory tax rates that will be in effect in the period in which the temporary differences are expected to reverse. The Group records a valuation allowance to reduce the amount of deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized in the consolidated statements of comprehensive loss in the period of change. Deferred tax assets and liabilities are classified as non-current in the consolidated balance sheets. 2. Summary of significant accounting policies (continued) (cc) Income tax (continued) The Group recognizes in its consolidated financial statements the benefit of a tax position if the tax position is “more likely than not” to prevail based on the facts and technical merits of the position. Tax positions that meet the “more likely than not” recognition threshold are measured at the largest amount of tax benefit that has a greater than fifty percent likelihood of being realized upon settlement. The Group estimates its liability for unrecognized tax benefits which are periodically assessed and may be affected by changing interpretations of laws, rulings by tax authorities, changes and/or developments with respect to tax audits, and expiration of the statute of limitations. The ultimate outcome for a particular tax position may not be determined with certainty prior to the conclusion of a tax audit and, in some cases, appeal or litigation process. The actual benefits ultimately realized may differ from the Group’s estimates. As each audit is concluded, adjustments, if any, are recorded in the Group’s consolidated financial statements in the period in which the audit is concluded. Additionally, in future periods, changes in facts, circumstances and new information may require the Group to adjust the recognition and measurement estimates with regard to individual tax positions. Changes in recognition and measurement estimates are recognized in the period in which the changes occur. As of December 31, 2022 and 2023, the Group did not have any significant unrecognized uncertain tax positions. |
Government grants | (dd) Government grants Government grants are recognized as income in other income, net or as a reduction of specific costs and expenses for which the grants are intended to compensate. Such amounts are recognized in the consolidated income statements upon receipt and when all conditions attached to the grants are fulfilled. Government grants included as other income in the consolidated statements of comprehensive loss amounted to RMB17,832, RMB24,330 and RMB71,503 for the years ended December 31, 2021, 2022 and 2023, respectively. |
Statutory reserves | (ee) Statutory reserves The Company’s subsidiaries established in the PRC are required to make appropriations to certain non-distributable reserve funds. In accordance with the laws applicable to the Foreign Investment Enterprises established in the PRC, the Company’s subsidiaries registered as wholly-owned foreign enterprise have to make appropriations from their after-tax profits (as determined under generally accepted accounting principles in the PRC (“PRC GAAP”)) to reserve funds including general reserve fund, enterprise expansion fund and 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 general reserve fund has reached 50% of the registered capital of the Company. Appropriations to the enterprise expansion fund and staff bonus and welfare fund are made at the respective company’s discretion. In addition, in accordance with the PRC Company Laws, the ‘Company’s subsidiaries, registered as Chinese domestic companies, must make appropriations from their after-tax profits as determined under the PRC GAAP to non-distributable reserve funds including statutory surplus fund and discretionary surplus fund. The appropriation to the statutory surplus fund must be 10% of the after-tax profits as determined under the PRC GAAP. 2. Summary of significant accounting policies (continued) (ee) Statutory reserves (continued) Appropriation is not required if the statutory surplus fund has reached 50% of the registered capital of the Company. Appropriation to the discretionary surplus fund is made at the discretion of the respective company. The use of the general reserve fund, enterprise expansion fund, statutory surplus fund and discretionary surplus fund are restricted to the offsetting of losses or increasing of the registered capital of the respective company. The staff bonus and welfare fund is a liability in nature and is restricted to fund payments of special bonus to employees and for the collective welfare of employees. None of these reserves are allowed to be transferred to the Company in terms of cash dividends, loans or advances, nor can they be distributed except under liquidation. For the years ended December 31, 2022 and 2023, nil and RMB735 profit appropriation to statutory reserves was made. |
Loss per share | (ff) Loss per share Basic loss per share is computed by dividing net loss attributable to holders of ordinary shares, considering the accretion on Preferred Shares to redemption value by the weighted average number of ordinary shares outstanding during the period using the two-class method. Under the two-class method, net income is allocated between ordinary shares and other participating securities based on their participating rights. Diluted loss per share is calculated by dividing net loss attributable to ordinary shareholders, as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares consist of shares issuable upon the conversion of the Preferred Shares using the if-converted method, and ordinary shares issuable upon the exercise of outstanding share options (using the treasury stock method). Ordinary equivalent shares are not included in the denominator of the diluted earnings per share calculation when inclusion of such shares would be anti-dilutive. |
Commitments and contingencies | (gg) Commitments and contingencies In the normal course of business, the Group is subject to contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters. Liabilities for the contingencies are recorded when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Group, but which will only be resolved when one or more future events occur or fail to occur. The Group assesses these contingent liabilities, which inherently involves judgment. In assessing loss contingencies related to legal proceedings that are pending against the Group or unasserted claims that may result in legal proceedings, the Group, in consultation with its legal counsel, evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, the estimated liability would be accrued in the consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable, or is probable but cannot be estimated, the nature of the contingent liability, together with an estimate of the range of the reasonably possible loss, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed. |
Recent accounting pronouncements | (hh) Recent accounting pronouncements In September 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations (“ASU 2022-04”), which requires a buyer in a supplier finance program to disclose sufficient information about the program, enabling users of the financial statements to understand the nature of the program and activity and changes during the period. ASU 2022-04 was effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the requirement on rollforward information, which is effective for fiscal years beginning after December 15, 2023. During the first quarter 2023, the Group adopted ASU 2022-04, which did not have a material impact on our consolidated financial position, results of operations and cash flows. The Group has a supplier finance program whereby they have entered into payment processing agreements with several financial institutions. Under these agreements, the financial institutions act as paying agents with respect to accounts payable due to certain suppliers. Participating suppliers may, at their sole discretion, elect to receive payment for one or more of the payment obligations, prior to their scheduled due dates, at a discounted price from participating financial institutions. The Group is not a party to the agreements between the participating financial institutions and the suppliers in connection with the program, and the Group’s rights and obligations to suppliers are not impacted. The Group does not reimburse suppliers for any costs they incur for participation in the program. The Group has no economic interest in their suppliers’ decision to participate in the program. The Group’s responsibility is limited to making payment to the respective financial institution according to the terms originally negotiated with the supplier, regardless of whether the supplier elects to receive early payment from the financial institution. The payment terms negotiate with suppliers are consistent, irrespective of whether a supplier participates in the program. Current payment terms with a majority of suppliers generally range from 60 to 180 days, which the Group deems to be commercially reasonable. The obligations to suppliers, including amounts due and scheduled payment terms, are not impacted. The outstanding payment obligations under the supplier finance program were RMB186,261 and RMB221,523 as of December 31, 2022 and 2023, respectively, and are recorded within accounts payable on the consolidated balance sheets. The restricted cash pledged for the outstanding payment obligations were RMB15,615 and RMB15,651 as of December 31, 2022 and 2023, respectively, and are recorded within restricted cash on the consolidated balance sheets. The Group does not pledge any other assets as security as part of the program. The associated payments are included in operating activities within the consolidated statements of cash flows. The roll-forwards of the group’s outstanding obligations confirmed as valid under its supplier finance program for years ended December 31, 2022 and 2023, are as follows: Year ended December 31, 2022 2023 RMB RMB Balance at the beginning of the year 228,104 186,261 Invoices confirmed during the year 392,323 621,071 Confirmed invoices paid during the year (434,166) (585,809) Balance at the end of the year 186,261 221,523 |
Organization and principal ac_2
Organization and principal activities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Organization and principal activities | |
Schedule of principal subsidiaries | Name Place of incorporation Date of incorporation Percentage of equity interest Principal activities Wholly owned subsidiaries ZKH Industrial Supply Shanghai, China May 27, 1996 100% Sale of MRO products Shanghai Gongbangbang Industrial Tech Co., Ltd. Shanghai, China January 30, 2013 100% Sale of MRO products Shanghai Kunhe Supply Chain Management Co., Ltd. Shanghai, China March 6, 2018 100% Logistics and Warehousing Shenzhen Kuntong Smart Warehousing Technology Co., Ltd.(Kuntong) Shenzhen, China January 18, 2007 100% Production and sale of intelligent warehousing equipments ZKH Holdings Limited British Virgin Islands May 6, 2021 100% Investment holding ZKH Hong Kong Limited Hong Kong May 20, 2021 100% Investment holding |
Summary of significant accoun_3
Summary of significant accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Summary of significant accounting policies | |
Schedule of estimated useful lives of the various classes of assets | Furniture and office equipment 3 – 5 years Machinery 5 – 10 years Vehicles 3 – 5 years Computer equipment 3 – 5 years Leasehold improvement shorter of remaining lease period and estimated useful life |
Schedule of estimated useful lives of intangible assets | Trademarks 10 years Patent right 10 years Software 3 – 5 years Customer relationship 10 years |
Schedule of supplier finance program | Year ended December 31, 2022 2023 RMB RMB Balance at the beginning of the year 228,104 186,261 Invoices confirmed during the year 392,323 621,071 Confirmed invoices paid during the year (434,166) (585,809) Balance at the end of the year 186,261 221,523 |
Accounts receivable, net (Table
Accounts receivable, net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounts receivable, net | |
Schedule of accounts receivable, net | As of December 31, 2022 2023 RMB RMB Accounts receivable 3,164,023 3,746,826 Allowance for credit losses (96,959) (107,032) Accounts receivable, net 3,067,064 3,639,794 |
Schedule of movements in the allowance for credit losses | Year ended December 31, 2022 2023 RMB RMB Balance at the beginning of the year 85,115 96,959 Additions 28,006 12,388 Write-off (16,162) (2,683) Recovery of write-off — 368 Balance at the end of the year 96,959 107,032 |
Prepayments and other current_2
Prepayments and other current assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Prepayments and other current assets | |
Schedule of prepayments and other current assets | As of December 31, 2022 2023 RMB RMB Prepayment 109,027 43,278 Other current assets 134,603 124,839 Total 243,630 168,117 |
Property and equipment, net (Ta
Property and equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property and equipment, net | |
Schedule of property and equipment, net | As of December 31, 2022 2023 RMB RMB Machinery 130,866 130,786 Leasehold improvement 92,340 88,209 Computer equipment 41,422 39,536 Furniture and office equipment 28,123 26,572 Vehicles 13,128 11,371 Construction in process 2,777 31,009 Total 308,656 327,483 Accumulated depreciation (141,916) (182,195) Net book value 166,740 145,288 |
Intangible assets, net (Tables)
Intangible assets, net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Intangible assets, net | |
Schedule of intangible assets | As of December 31, 2022 Weighted average Gross Net amortization carrying Accumulated carrying period amount amortization amount Year RMB RMB RMB Software 4.9 37,055 (18,378) 18,677 Customer relationship 10.0 7,736 (2,600) 5,136 Trademarks 10.0 462 (337) 125 Patent right 10.0 142 (29) 113 Total 5.7 45,395 (21,344) 24,051 As of December 31, 2023 Weighted average Gross Net amortization carrying Accumulated carrying period amount amortization amount Year RMB RMB RMB Software 3.7 42,715 (27,482) 15,233 Customer relationship 6.0 7,735 (3,364) 4,371 Trademarks 10.0 623 (361) 262 Patent right 10.0 282 (52) 230 Total 5.0 51,355 (31,259) 20,096 |
Schedule of amortization expenses related to the intangible assets for future periods | Year ended December 31, 2028 and 2024 2025 2026 2027 thereafter Total RMB RMB RMB RMB RMB RMB Amortization expenses 6,712 6,329 3,313 1,610 2,132 20,096 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases | |
Schedule of components of lease expenses, supplemental cash flows information and supplemental information related to leases | Year ended December 31, 2021 2022 2023 RMB RMB RMB Operating lease expenses 148,234 135,663 121,393 Short-term lease expenses 1,615 24,359 56,808 Total 149,849 160,022 178,201 Year ended December 31, 2021 2022 2023 RMB RMB RMB Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows payment from operating lease 135,161 146,733 126,758 RoU assets obtained in exchanges for lease liabilities RoU assets obtained in exchanges for new operating lease liabilities 214,305 66,494 54,944 As of December 31, 2022 2023 RMB RMB Land use rights, net 10,930 11,033 Operating lease right-of-use assets, net (excluding land use rights) 297,937 224,930 Operating lease RoU assets, net 308,867 235,963 Operating lease liabilities – current 95,775 91,230 Operating lease liabilities – non-current 214,427 146,970 Total operating lease liabilities 310,202 238,200 As of December 31, 2022 2023 Weighted average remaining lease term Land use rights 50 years 49 years Operating leases 2.90 years 3.31 years Weighted average discount rate Land use rights — — Operating leases 4.36 % 4.38% |
Schedule of maturities of lease liabilities | As of December 31, 2023 RMB 2024 109,845 2025 72,794 2026 25,658 2027 10,464 2028 10,778 Thereafter 42,608 Total undiscounted lease payments 272,147 Less: interest (33,947) Present value of lease liabilities 238,200 |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Borrowings | |
Schedule of borrowings | As of December 31, 2022 2023 RMB RMB Short-term bank borrowings 250,000 585,000 |
Accounts and notes payable (Tab
Accounts and notes payable (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounts and notes payable | |
Schedule of accounts and notes payable | As of December 31, 2022 2023 RMB RMB Accounts payable 2,555,381 2,875,222 Notes payable (a) 10,755 8,148 Total accounts and notes payable 2,566,136 2,883,370 (a) The Group’s notes payable mainly include short-term notes, typically with terms between 3 to 6 months : which are provided to the Group’s suppliers and manufacturers. Notes payable as of December 31, 2022 and 2023 were secured by restricted cash of RMB 9,373 and RMB 5,265 held in designated bank accounts, respectively. |
Accrued expenses and other cu_2
Accrued expenses and other current liabilities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accrued expenses and other current liabilities | |
Schedule of accrued expenses and other current liabilities | As of December 31, 2022 2023 RMB RMB Employee benefit obligation 182,468 162,915 Share-based compensation liability 92,628 73,043 Other taxes payables 112,235 17,819 Deposits from suppliers (a) 54,879 67,098 Other payables due to non-controlling interest shareholders — 2,474 Other current liabilities 96,981 124,876 Total 539,191 448,225 (a) Deposit mainly represents deposits from third-party merchants for participating in the Group’s marketplace. |
Net revenues (Tables)
Net revenues (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Net revenues | |
Schedule of net revenues | Year ended December 31, 2021 2022 2023 RMB RMB RMB Net product revenues From ZKH platform 6,549,947 7,277,260 7,381,501 From GBB platform 950,089 809,660 960,102 7,500,036 8,086,920 8,341,603 Net service revenues From ZKH platform 116,692 179,508 307,412 Other revenues 37,863 48,808 72,160 Total 7,654,591 8,315,236 8,721,175 |
Others, net (Tables)
Others, net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Others, net | |
Schedule of components of other income and expense | Year ended December 31, 2021 2022 2023 RMB RMB RMB Government grants 17,832 24,330 71,503 Foreign exchange (losses)/gains, net (8,205) 13,733 (11,061) Gains on derivatives — — 6,926 Others (10,783) (4,326) (7,709) Total (1,156) 33,737 59,659 |
Income tax (Tables)
Income tax (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income tax | |
Schedule of composition of income tax expenses | Year ended December 31, 2021 2022 2023 RMB RMB RMB Current income tax expense 200 (471) 195 Deferred tax expense — — — Total 200 (471) 195 |
Schedule of composition of loss before tax | Year ended December 31, 2021 2022 2023 RMB RMB RMB Loss from Mainland China operations (1,095,499) (717,979) (330,426) Income/(loss) from overseas operations 1,587 (13,613) 25,721 Total loss before income tax (1,093,912) (731,592) (304,705) |
Schedule of reconciliations of the income tax expenses | Year ended December 31, 2021 2022 2023 RMB RMB RMB Loss before income tax (1,093,912) (731,592) (304,705) Income tax benefit at PRC statutory tax rate (273,478) (182,898) (76,176) Effect of different tax rate of different jurisdictions (135) 1,428 (1,930) Effect of preferential tax rates 4,460 3,983 3,427 Effect of Super Deduction for research and development expenses (2,622) (2,010) (2,285) Non-deductible expenses and non-taxable income 54,862 29,314 28,385 Change in valuation allowance 217,113 149,712 48,774 Total income tax expense/ (benefits) 200 (471) 195 |
Schedule of deferred tax | As of December 31, 2021 2022 2023 RMB RMB RMB Deferred tax assets: Net operating losses carried forward 308,981 442,384 551,813 Accruals and others 67,952 84,261 23,606 Less: valuation allowance (376,933) (526,645) (575,419) Net deferred tax assets — — — |
Schedule of movement of valuation allowance | Year ended December 31, 2021 2022 2023 RMB RMB RMB Balance at the beginning of the year 159,820 376,933 526,645 Additions 217,113 149,712 49,008 Loss utilized — — (234) Balance at the end of the year 376,933 526,645 575,419 |
Loss per share (Tables)
Loss per share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Loss per share | |
Schedule of computation of earnings per share | Year ended December 31, 2021 2022 2023 RMB RMB RMB Numerator: Net loss attributable to ordinary shareholders – basic and diluted (1,452,221) (1,244,962) (964,384) Denominator: Weighted-average ordinary shares outstanding – basic and diluted 1,213,878,050 1,325,036,140 1,528,540,765 Net loss per share attributable to ordinary shareholders: – Basic and diluted (1.20) (0.94) (0.63) |
Schedule of antidilutive securities excluded from diluted loss per share | Year ended December 31, 2021 2022 2023 Preferred shares – weighted shares 3,746,626,700 3,837,917,495 3,945,881,532 Share options - weighted shares 41,350,000 64,117,791 76,965,197 |
Convertible redeemable prefer_2
Convertible redeemable preferred shares (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Convertible redeemable preferred shares | |
Schedule of issuances of convertible redeemable preferred shares | Issuance date/ Issue price Number Name Amendment date per share of shares Series A Preferred Shares April 2016 RMB0.3078 58,480,000 Series A+ Preferred Shares May 2017 RMB0.3420 84,480,000 Series B Preferred Shares August 2017 RMB0.3848 649,760,000 Series B+ Preferred Shares December 2017 RMB0.6733 277,730,000 Series C1 Preferred Shares July 2018 RMB0.9334/US$0.1404 604,820,600 Series C2 Preferred Shares August 2018 RMB0.9334 289,379,800 Series D1 Preferred Shares June 2019 US$0.1899 705,523,600 Series D2 Preferred Shares August 2019 US$0.1899 105,302,000 Series E Preferred Shares October 2020 RMB2.3119/US$0.3425 803,222,500 Series F Preferred Shares October 2022/ November 2023 US$0.5659 392,013,413 |
Schedule of preferred shares activities | SeriesA SeriesA+ SeriesB SeriesB+ SeriesC1 SeriesC2 SeriesD1 SeriesD2 SeriesE SeriesF Total Number of Number of Number of Number of Number of Number of Number of Number of Number of Number of Number of shares Amount shares Amount shares Amount shares Amount shares Amount shares Amount shares Amount shares Amount shares Amount shares Amount shares Amount RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB Balance as of January 1, 2022 58,480,000 26,703 84,480,000 39,901 734,209,000 381,310 277,730,000 228,493 604,820,600 702,521 372,859,000 430,041 705,523,600 1,105,823 105,302,000 168,717 803,222,500 1,958,419 — — 3,746,626,700 5,041,928 Conversion of Series F convertible notes, net of cost — — — — — — — — — — — — — — — — — — 392,013,413 1,631,564 392,013,413 1,631,564 Accretion on Preferred Shares to redemption value — 231 — 707 — 8,650 — 11,540 — 67,027 — 28,462 — 113,547 — 10,712 — 268,492 — (87) — 509,281 Balance as of December 31, 2022 58,480,000 26,934 84,480,000 40,608 734,209,000 389,960 277,730,000 240,033 604,820,600 769,548 372,859,000 458,503 705,523,600 1,219,370 105,302,000 179,429 803,222,500 2,226,911 392,013,413 1,631,477 4,138,640,113 7,182,773 Accretion on Preferred Shares to redemption value — 223 — 691 — 8,444 — 11,578 — 60,431 — 29,188 — 120,500 — 17,339 — 224,990 — 186,686 — 660,070 Amendment of series F convertible redeemable preferred share — — — — — — — — — — — — — — — — — — — (272,426) — (272,426) Automatic conversion of preferred shares into ordinary shares upon IPO (1) (58,480,000) (27,157) (84,480,000) (41,299) (734,209,000) (398,404) (277,730,000) (251,611) (604,820,600) (829,979) (372,859,000) (487,691) (705,523,600) (1,339,870) (105,302,000) (196,768) (803,222,500) (2,451,901) (392,013,413) (1,545,737) (4,138,640,113) (7,570,417) Balance as of December 31, 2023 — — — — — — — — — — — — — — — — — — — — — — (1) All of the preferred shares were converted to Class A Ordinary Shares upon the completion of the Company’s IPO in December 2023 . |
Share-based compensation (Table
Share-based compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-based compensation | |
Schedule of share-based compensation recognized in operating expenses | Year ended December 31, 2021 2022 2023 RMB RMB RMB Fulfillment 2,154 585 195 Sales and marketing 8,204 5,935 4,682 Research and development 10,134 3,883 3,070 General and administrative 162,857 21,496 9,446 Total share-based compensation expenses 183,349 31,899 17,393 |
Schedule of changes in share options relating to ordinary shares granted | Weighted-average Weighted-average Options granted exercise grant date fair share number price (US$) value (US$) Outstanding as of January 1, 2021 189,927,968 0.0205 0.1136 Granted 18,200,000 0.1079 0.1177 Cancelled/Forfeited (9,163,845) 0.0993 0.1201 Outstanding as of December 31, 2021 198,964,123 0.0227 0.1137 Granted 56,222,658 0.0861 0.1417 Cancelled/Forfeited (72,438,216) 0.0520 0.1080 Outstanding as of December 31, 2022 182,748,565 0.0306 0.1245 Granted 80,907,443 0.1306 0.3169 Cancelled/Forfeited (14,700,489) 0.0579 0.1580 Outstanding as of December 31, 2023 248,955,519 0.0615 0.1851 |
Schedule of information regarding share options outstanding | As of December 31, 2022 Weighted-average remaining Weighted-average exercise Options exercise price contractual Aggregate number per option life (years) intrinsic value US$ US$ in thousands Options outstanding 182,748,565 0.03 7.91 47,615 Exercisable 120,164,340 0.01 7.32 34,611 Expected to vest 62,584,225 0.08 9.04 13,398 As of December 31, 2023 Weighted-average remaining Weighted-average exercise Options exercise price contractual Aggregate number per option life (years) intrinsic value US$ US$ in thousands Options outstanding 248,955,519 0.06 7.80 100,501 Exercisable 133,762,513 0.02 6.49 60,138 Expected to vest 115,193,006 0.12 9.32 40,363 |
Schedule of assumptions used to value the fair value of each option granted | Year ended December 31 2021 2022 2023 RMB RMB RMB Exercise price RMB0.70 RMB0.00 – 1.80 RMB0.00-1.80 (USD$0.11) (USD$0.00 – 0.26) (USD$0.00-0.25) Fair value of the ordinary shares on the RMB1.31 RMB1.35 – 1.40 RMB2.04-3.10 date of option grant (USD$0.20) (USD$0.19 – 0.21) (USD$0.30-0.43) Risk-free interest rate 3.09 % 2.70% – 2.88 % 2.64%-3.84 % Contractual life 10 years 10 years 10 years Expected forfeiture rate (post-vesting) 16 % 16 % 16 % Exercise multiples 2.8 2.8 2.8 Expected dividend yield — — — Expected volatility 32.00 % 29.77% – 30.16 % 30.09% – 30.41 % (i) Risk-free interest rate is based on the yields of China Government Bonds with maturities similar to the expected life of the share options in effect at the time of grant. 20. Share-based compensation (continued) Share options with employee termination compensation (continued) (ii) Expected dividend yield is assumed to be nil as the Group has no history or expectation of paying a dividend on its ordinary shares. (iii) The exercise multiples were estimated based on the vesting and contractual terms of the awards and management’s expectation of exercise behaviour of the grantees. (iv) Expected volatility is assumed based on the historical volatility of the Group and the Group’s comparable companies in the period equal to the expected life of each grant. |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and contingencies | |
Schedule of capital expenditures contracted | As of December 31, 2022 2023 RMB RMB Contracted but not provided for: A planned factory construction project (i) 273,083 173,418 Construction commitments — 71,395 Assets under construction 1,725 45 Total 274,808 244,858 (i) The Group plans to construct a factory to manufacture their selected self-branded products, such as fasteners, located on a parcel of land in Taicang, Jiangsu Province to which the Group acquired the land use rights. In accordance with the land use rights agreement, at least RMB 273,083 capital expenditures in connection with such construction plan is committed by the Group. The Group commenced the construction in the second quarter of 2023 and plans to complete the construction by the end of 2024. |
Statutory reserves, restricte_2
Statutory reserves, restricted net assets and parent company only condensed financial information (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Statutory reserves, restricted net assets and parent company only condensed financial information | |
Schedule of condensed balance sheet of the parent company | As of December 31, 2022 2023 RMB RMB Assets Cash and cash equivalents 616 2,381 Prepayments and other current assets 23,406 461,183 Total current assets 24,022 463,564 Investment in subsidiaries 3,094,130 2,778,527 Total non-current assets 3,094,130 2,778,527 Total assets 3,118,152 3,242,091 Liabilities Accrued expenses and other current liabilities 6,112 30,672 Total current liabilities 6,112 30,672 Total non-current liabilities — — Total liabilities 6,112 30,672 Mezzanine equity 7,182,773 — ZKH Group Limited shareholders’ (deficit)/equity Ordinary shares 1 4 Additional paid-in capital — 8,139,349 Statutory reserves 5,278 6,013 Accumulated other comprehensive loss (51,910) (25,154) Accumulated deficit (4,024,102) (4,908,793) Total ZKH Group Limited shareholders’ (deficit)/equity (4,070,733) 3,211,419 Total liabilities, mezzanine equity and shareholders’ (deficit)/equity 3,118,152 3,242,091 |
Schedule of condensed statement of comprehensive loss of the parent company | Year ended December 31, 2022 2023 RMB RMB General and administrative (6,038) (8,586) Interest and investment income 1 — Interest expense (73,081) — Share of loss from subsidiaries (643,683) (297,229) Others, net (12,880) 1,501 Net loss attributable to ZKH Group Limited (735,681) (304,314) Accretion on preferred shares to redemption value (509,281) (660,070) Net loss attributable to ZKH Group Limited’s ordinary shareholders (1,244,962) (964,384) Net loss attributable to ZKH Group Limited (735,681) (304,314) Other comprehensive loss: Foreign currency translation adjustments (50,980) 26,756 Total comprehensive loss (786,661) (277,558) Accretion on Preferred Shares to redemption value (509,281) (660,070) Total comprehensive loss attributable to ZKH Group Limited’s ordinary shareholders (1,295,942) (937,628) |
Schedule of condensed statement of cash flows of the parent company | Year ended December 31, 2022 2023 RMB RMB Net cash used in operating activities (277) (77) Net cash used in investing activities (5,559,727) (402,789) Net cash provided by financing activities 5,560,594 407,581 Effect of exchange rate changes on cash, cash equivalents, and restricted cash 26 (2,950) Increase in cash, cash equivalents, and restricted cash 616 1,765 Cash, cash equivalents, and restricted cash at beginning of year — 616 Cash, cash equivalents, and restricted cash at end of year 616 2,381 |
Organization and principal ac_3
Organization and principal activities (Details) | Dec. 15, 2023 $ / shares shares | Dec. 30, 2021 shares | Dec. 22, 2015 ¥ / shares shares | Dec. 31, 2023 $ / shares shares | Nov. 17, 2023 | Nov. 16, 2023 | Dec. 31, 2022 $ / shares shares | Jun. 29, 2022 | Apr. 26, 2021 $ / shares shares |
Organization and principal activities | |||||||||
Ordinary shares, shares authorized | 496,253,373,300 | 496,253,373,300 | 95,000 | ||||||
Ordinary shares, par value (in dollars per share) | $ / shares | $ 0.00 | $ 0.00 | $ 0.00 | ||||||
ZKH Industrial Supply | |||||||||
Organization and principal activities | |||||||||
Ownership interest (as a percent) | 100% | ||||||||
ZKH Hong Kong Limited | ZKH Industrial Supply | |||||||||
Organization and principal activities | |||||||||
Ownership interest (as a percent) | 100% | ||||||||
Ordinary shares | |||||||||
Organization and principal activities | |||||||||
Shares issued | 1,161,080,000 | ||||||||
Series Seed Preferred Shares | |||||||||
Organization and principal activities | |||||||||
Shares issued | 57,541,800 | 111,110,000 | |||||||
Public per share | ¥ / shares | ¥ 0.18 | ||||||||
Conversion ratio | 1 | ||||||||
Series A Preferred Shares | |||||||||
Organization and principal activities | |||||||||
Shares issued | 58,480,000 | ||||||||
Series A+ Preferred Shares | |||||||||
Organization and principal activities | |||||||||
Shares issued | 84,480,000 | ||||||||
Series B Preferred Shares | |||||||||
Organization and principal activities | |||||||||
Shares issued | 734,209,000 | ||||||||
Series B+ Preferred Shares | |||||||||
Organization and principal activities | |||||||||
Shares issued | 277,730,000 | ||||||||
Series C1 Preferred Shares | |||||||||
Organization and principal activities | |||||||||
Shares issued | 604,820,600 | ||||||||
Series C2 Preferred Shares | |||||||||
Organization and principal activities | |||||||||
Shares issued | 372,859,000 | ||||||||
Series D1 Preferred Shares | |||||||||
Organization and principal activities | |||||||||
Shares issued | 705,523,600 | ||||||||
Series D2 Preferred Shares | |||||||||
Organization and principal activities | |||||||||
Shares issued | 105,302,000 | ||||||||
Series E Preferred Shares | |||||||||
Organization and principal activities | |||||||||
Shares issued | 803,222,500 | ||||||||
ADS | IPO | |||||||||
Organization and principal activities | |||||||||
Shares issued | 4,000,000 | ||||||||
Public per share | $ / shares | $ 15.50 | ||||||||
Class A Ordinary Shares | IPO | |||||||||
Organization and principal activities | |||||||||
Ordinary shares, par value (in dollars per share) | $ / shares | $ 0.00 | ||||||||
Shares issued | 140,000,000 | ||||||||
Convertible redeemable preferred shares other than series F | |||||||||
Organization and principal activities | |||||||||
Number of shares converted | 3,746,626,700 | ||||||||
Conversion ratio | 1 | ||||||||
Series F Preferred Shares | |||||||||
Organization and principal activities | |||||||||
Number of shares converted | 392,013,413 | ||||||||
Conversion ratio | 1.3169 | 1.3169 | 1 |
Organization and principal ac_4
Organization and principal activities - Principal subsidiaries (Details) | Dec. 31, 2023 |
ZKH Industrial Supply | |
Organization Consolidation And Presentation Of Financials Statements [Line Items] | |
Ownership interest (as a percent) | 100% |
Shanghai Gongbangbang Industrial Tech Co., Ltd | |
Organization Consolidation And Presentation Of Financials Statements [Line Items] | |
Ownership interest (as a percent) | 100% |
Shanghai Kunhe Supply Chain Management Co., Ltd | |
Organization Consolidation And Presentation Of Financials Statements [Line Items] | |
Ownership interest (as a percent) | 100% |
Shenzhen Kuntong Smart Warehousing Technology Co., Ltd | |
Organization Consolidation And Presentation Of Financials Statements [Line Items] | |
Ownership interest (as a percent) | 100% |
ZKH Holdings Limited | |
Organization Consolidation And Presentation Of Financials Statements [Line Items] | |
Ownership interest (as a percent) | 100% |
ZKH Hong Kong Limited | |
Organization Consolidation And Presentation Of Financials Statements [Line Items] | |
Ownership interest (as a percent) | 100% |
Summary of significant accoun_4
Summary of significant accounting policies (Details) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 CNY (¥) segment | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
Summary of significant accounting policies | |||
Number of reportable segments | segment | 1 | ||
Foreign exchange losses/(gains) | ¥ 11,061 | ¥ (13,733) | ¥ 8,205 |
Bank acceptance notes endorsed to suppliers | 143,752 | 192,691 | |
Impairment of goodwill | 0 | 0 | 0 |
Accounts and notes receivable related to marketplace service | 964,587 | 489,777 | |
Shipping cost | 103,940 | 105,420 | 111,592 |
Advertising costs | 34,830 | 18,730 | 50,412 |
Employee social security and welfare benefits | 323,685 | 339,155 | 291,839 |
Government grants | 71,503 | 24,330 | ¥ 17,832 |
Profit appropriation to statutory reserves | ¥ 735 | ¥ 0 |
Summary of significant accoun_5
Summary of significant accounting policies - Property and equipment, net (Details) | Dec. 31, 2023 |
Property, plant and equipment | |
Depreciation is computed using the straight-line method (as a percent) | 5% |
Furniture and office equipment | Minimum | |
Property, plant and equipment | |
Estimated useful life of property, plant and equipment | 3 years |
Furniture and office equipment | Maximum | |
Property, plant and equipment | |
Estimated useful life of property, plant and equipment | 5 years |
Machinery | Minimum | |
Property, plant and equipment | |
Estimated useful life of property, plant and equipment | 5 years |
Machinery | Maximum | |
Property, plant and equipment | |
Estimated useful life of property, plant and equipment | 10 years |
Vehicles | Minimum | |
Property, plant and equipment | |
Estimated useful life of property, plant and equipment | 3 years |
Vehicles | Maximum | |
Property, plant and equipment | |
Estimated useful life of property, plant and equipment | 5 years |
Computer equipment | Minimum | |
Property, plant and equipment | |
Estimated useful life of property, plant and equipment | 3 years |
Computer equipment | Maximum | |
Property, plant and equipment | |
Estimated useful life of property, plant and equipment | 5 years |
Summary of significant accoun_6
Summary of significant accounting policies - Intangible assets, net (Details) | Dec. 31, 2023 |
Trademarks | |
Intangible assets, net | |
Estimated useful lives of intangible assets | 10 years |
Patent right | |
Intangible assets, net | |
Estimated useful lives of intangible assets | 10 years |
Software | Minimum | |
Intangible assets, net | |
Estimated useful lives of intangible assets | 3 years |
Software | Maximum | |
Intangible assets, net | |
Estimated useful lives of intangible assets | 5 years |
Customer relationship | |
Intangible assets, net | |
Estimated useful lives of intangible assets | 10 years |
Summary of significant accoun_7
Summary of significant accounting policies - Leases (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Summary of significant accounting policies | |
Term of land use rights as operating lease (in years) | 50 years |
Terms of operating and finance leases (in years) | 20 years |
Summary of significant accoun_8
Summary of significant accounting policies - Recent accounting pronouncements (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Amount of outstanding payment obligations under the supplier finance program | ¥ 221,523 | ¥ 186,261 |
Supplier Finance Program, Obligation, Current, Statement of Financial Position [Extensible Enumeration] | Accounts Payable And Notes Payable, Current | Accounts Payable And Notes Payable, Current |
Amount of assets pledged to secure outstanding payments | ¥ 15,651 | ¥ 15,615 |
Balance at the beginning of the year | 186,261 | 228,104 |
Invoices confirmed during the year | 621,071 | 392,323 |
Confirmed invoices paid during the year | (585,809) | (434,166) |
Balance at the end of the year | ¥ 221,523 | ¥ 186,261 |
Minimum | ||
Majority of suppliers, term | 60 days | |
Maximum | ||
Majority of suppliers, term | 180 days |
Concentration and risks (Detail
Concentration and risks (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Concentration and risks | ||||
Cash and cash equivalents and restricted cash | ¥ 1,250,372 | ¥ 2,005,856 | ¥ 1,126,920 | ¥ 2,438,131 |
Currency convertibility risk | Cash and cash equivalents and restricted cash | Denominated in RMB | ||||
Concentration and risks | ||||
Cash and cash equivalents and restricted cash | ¥ 897,896 | ¥ 1,076,036 | ||
Concentration risk (as a percent) | 71.81% | 53.64% |
Fair value measurement (Details
Fair value measurement (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Fair value measurement | |||
Gross unrealized gains | ¥ 0 | ¥ 0 | ¥ 0 |
Recurring basis | |||
Fair value measurement | |||
Assets measured at fair value | 874,210 | 0 | |
Liability measured at fair value | ¥ 0 | ¥ 0 |
Accounts receivable, net (Detai
Accounts receivable, net (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Accounts receivable, net | |||
Accounts receivable | ¥ 3,746,826 | ¥ 3,164,023 | |
Allowance for credit losses | (107,032) | (96,959) | ¥ (85,115) |
Accounts receivable, net | ¥ 3,639,794 | ¥ 3,067,064 |
Accounts receivable, net - Allo
Accounts receivable, net - Allowance of credit losses (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Accounts receivable, net | ||
Balance at the beginning of the year | ¥ 96,959 | ¥ 85,115 |
Additions | 12,388 | 28,006 |
Write-off | (2,683) | (16,162) |
Recovery of write-off | 368 | |
Balance at the end of the year | ¥ 107,032 | ¥ 96,959 |
Prepayments and other current_3
Prepayments and other current assets (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Prepayments and other current assets | ||
Prepayment | ¥ 43,278 | ¥ 109,027 |
Other current assets | 124,839 | 134,603 |
Total | ¥ 168,117 | ¥ 243,630 |
Property and equipment, net (De
Property and equipment, net (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, Gross | ¥ 327,483 | ¥ 308,656 | |
Accumulated depreciation | (182,195) | (141,916) | |
Net book value | 145,288 | 166,740 | |
Depreciation | 64,610 | 67,875 | ¥ 46,638 |
Machinery | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, Gross | 130,786 | 130,866 | |
Leasehold improvement | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, Gross | 88,209 | 92,340 | |
Computer equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, Gross | 39,536 | 41,422 | |
Furniture and office equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, Gross | 26,572 | 28,123 | |
Vehicles | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, Gross | 11,371 | 13,128 | |
Construction in process | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, Gross | ¥ 31,009 | ¥ 2,777 |
Intangible assets, net (Details
Intangible assets, net (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Intangible assets, net | ||
Weighted average amortization period (in years) | 5 years | 5 years 8 months 12 days |
Gross carrying amount | ¥ 51,355 | ¥ 45,395 |
Accumulated amortization | (31,259) | (21,344) |
Net carrying amount | ¥ 20,096 | ¥ 24,051 |
Software | ||
Intangible assets, net | ||
Weighted average amortization period (in years) | 3 years 8 months 12 days | 4 years 10 months 24 days |
Gross carrying amount | ¥ 42,715 | ¥ 37,055 |
Accumulated amortization | (27,482) | (18,378) |
Net carrying amount | ¥ 15,233 | ¥ 18,677 |
Customer relationship | ||
Intangible assets, net | ||
Weighted average amortization period (in years) | 6 years | 10 years |
Gross carrying amount | ¥ 7,735 | ¥ 7,736 |
Accumulated amortization | (3,364) | (2,600) |
Net carrying amount | ¥ 4,371 | ¥ 5,136 |
Trademarks | ||
Intangible assets, net | ||
Weighted average amortization period (in years) | 10 years | 10 years |
Gross carrying amount | ¥ 623 | ¥ 462 |
Accumulated amortization | (361) | (337) |
Net carrying amount | ¥ 262 | ¥ 125 |
Patent right | ||
Intangible assets, net | ||
Weighted average amortization period (in years) | 10 years | 10 years |
Gross carrying amount | ¥ 282 | ¥ 142 |
Accumulated amortization | (52) | (29) |
Net carrying amount | ¥ 230 | ¥ 113 |
Intangible assets, net - Narrat
Intangible assets, net - Narratives (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Intangible assets, net | |||
Amortization expenses | ¥ 8,857 | ¥ 8,198 | ¥ 6,387 |
Impairment Charges | ¥ 0 | ¥ 0 | ¥ 0 |
Intangible assets, net - Amorti
Intangible assets, net - Amortization expenses recognized (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Intangible assets, net | ||
2024 | ¥ 6,712 | |
2025 | 6,329 | |
2026 | 3,313 | |
2027 | 1,610 | |
2028 and thereafter | 2,132 | |
Net carrying amount | ¥ 20,096 | ¥ 24,051 |
Leases (Details)
Leases (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Components of lease expenses | |||
Operating lease expenses | ¥ 121,393 | ¥ 135,663 | ¥ 148,234 |
Short-term lease expenses | 56,808 | 24,359 | 1,615 |
Total | ¥ 178,201 | ¥ 160,022 | ¥ 149,849 |
Leases - Supplemental cash flow
Leases - Supplemental cash flows information (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows payment from operating lease | ¥ 126,758 | ¥ 146,733 | ¥ 135,161 |
RoU assets obtained in exchanges for lease liabilities | |||
RoU assets obtained in exchanges for new operating lease liabilities | ¥ 54,944 | ¥ 66,494 | ¥ 214,305 |
Leases - Supplemental informati
Leases - Supplemental information (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Leases | ||
Land use right | ¥ 11,033 | ¥ 10,930 |
Operating lease right-of-use assets, net (excluding land use rights) | 224,930 | 297,937 |
Operating lease RoU assets, net | ¥ 235,963 | ¥ 308,867 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Land use right, Operating lease right-of-use assets, net (excluding land use rights) | Land use right, Operating lease right-of-use assets, net (excluding land use rights) |
Operating lease liabilities - current | ¥ 91,230 | ¥ 95,775 |
Operating lease liabilities - non-current | 146,970 | 214,427 |
Total operating lease liabilities | ¥ 238,200 | ¥ 310,202 |
Weighted average remaining lease term (in years) | ||
Land use rights | 49 years | 50 years |
Operating leases | 3 years 3 months 21 days | 2 years 10 months 24 days |
Weighted average discount rate (as a percent) | ||
Operating leases | 4.38% | 4.36% |
Leases - Maturities of lease li
Leases - Maturities of lease liabilities (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Maturities of lease liabilities | ||
2024 | ¥ 109,845 | |
2025 | 72,794 | |
2026 | 25,658 | |
2027 | 10,464 | |
2028 | 10,778 | |
Thereafter | 42,608 | |
Total undiscounted lease payments | 272,147 | |
Less: interest | (33,947) | |
Present value of lease liabilities | ¥ 238,200 | ¥ 310,202 |
Leases - Lease not yet commence
Leases - Lease not yet commenced (Details) ¥ in Thousands | 12 Months Ended |
Dec. 31, 2023 CNY (¥) | |
Leases | |
Lease contract entered into but not yet commenced | ¥ 249 |
Existence of material residual value guarantees | false |
Borrowings (Details)
Borrowings (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Borrowings | ||
Short-term bank borrowings | ¥ 585,000 | ¥ 250,000 |
Borrowings - Narratives (Detail
Borrowings - Narratives (Details) ¥ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Aug. 31, 2023 CNY (¥) | Dec. 31, 2023 CNY (¥) | Dec. 31, 2022 CNY (¥) | Aug. 31, 2023 USD ($) | Dec. 31, 2021 CNY (¥) | |
Borrowings | |||||
Short-term borrowings | ¥ 585,000 | ¥ 250,000 | |||
Supplier finance program | ¥ 221,523 | 186,261 | ¥ 228,104 | ||
Maturity term (in months) | 6 months | ||||
Amount of commercial bank in the PRC | ¥ 100,000 | ||||
Amount of pledged by time deposit | $ | $ 14,500 | ||||
Minimum | |||||
Borrowings | |||||
Maturity term (in months) | 3 months | ||||
Maximum | |||||
Borrowings | |||||
Maturity term (in months) | 6 months | ||||
Loan Prime Rate | |||||
Borrowings | |||||
Spread on variable rate | (0.75%) | ||||
Unsecured revolving credit facilities | |||||
Borrowings | |||||
Aggregate amount | ¥ 2,440,000 | 1,450,000 | |||
Amount drawn | 844,434 | 475,973 | |||
Short-term borrowings | 585,000 | 250,000 | |||
Bank guarantees | 66,240 | ¥ 225,973 | |||
Supplier finance program | ¥ 193,194 | ||||
Unsecured revolving credit facilities | Loan Prime Rate | Minimum | |||||
Borrowings | |||||
Spread on variable rate | (0.65%) | (0.25%) | |||
Unsecured revolving credit facilities | Loan Prime Rate | Maximum | |||||
Borrowings | |||||
Spread on variable rate | (0.05%) | (0.15%) | |||
Unsecured revolving credit facilities | One-year LPR | |||||
Borrowings | |||||
Variable rate basis | 3.45% | 3.65% |
Accounts and notes payable (Det
Accounts and notes payable (Details) - CNY (¥) ¥ in Thousands | 1 Months Ended | 12 Months Ended | |
Aug. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Accounts and notes payable | |||
Accounts payable | ¥ 2,875,222 | ¥ 2,555,381 | |
Notes payable | 8,148 | 10,755 | |
Total accounts and notes payable | 2,883,370 | 2,566,136 | |
Term of the notes payable (in months) | 6 months | ||
Restricted cash held in designated bank accounts, provided as security for notes payable | ¥ 5,265 | ¥ 9,373 | |
Minimum | |||
Accounts and notes payable | |||
Term of the notes payable (in months) | 3 months | ||
Maximum | |||
Accounts and notes payable | |||
Term of the notes payable (in months) | 6 months |
Accrued expenses and other cu_3
Accrued expenses and other current liabilities (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Accrued expenses and other current liabilities | ||
Employee benefit obligation | ¥ 162,915 | ¥ 182,468 |
Share-based compensation liability | 73,043 | 92,628 |
Other taxes payables | 17,819 | 112,235 |
Deposits from suppliers | 67,098 | 54,879 |
Other payables due to non-controlling interest shareholders | 2,474 | |
Other current liabilities | 124,876 | 96,981 |
Total | ¥ 448,225 | ¥ 539,191 |
Net revenues (Details)
Net revenues (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Net revenues | |||
Total | ¥ 8,721,175 | ¥ 8,315,236 | ¥ 7,654,591 |
Net product revenues | |||
Net revenues | |||
Total | 8,341,603 | 8,086,920 | 7,500,036 |
Net product revenues | ZKH platform | |||
Net revenues | |||
Total | 7,381,501 | 7,277,260 | 6,549,947 |
Net product revenues | GBB platform | |||
Net revenues | |||
Total | 960,102 | 809,660 | 950,089 |
Net service revenues | |||
Net revenues | |||
Total | 307,412 | 179,508 | 116,692 |
Net service revenues | ZKH platform | |||
Net revenues | |||
Total | 307,412 | 179,508 | 116,692 |
Other revenues | |||
Net revenues | |||
Total | ¥ 72,160 | ¥ 48,808 | ¥ 37,863 |
Others, net (Details)
Others, net (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Others, net | |||
Government grants | ¥ 71,503 | ¥ 24,330 | ¥ 17,832 |
Foreign exchange (losses)/gains, net | (11,061) | 13,733 | (8,205) |
Gains on derivatives | 6,926 | ||
Others | (7,709) | (4,326) | (10,783) |
Total | ¥ 59,659 | ¥ 33,737 | ¥ (1,156) |
Others, net - Narratives (Detai
Others, net - Narratives (Details) ¥ in Thousands | 12 Months Ended |
Dec. 31, 2023 CNY (¥) item | |
Others, net | |
Gains on derivatives | ¥ 6,926 |
Foreign currency forward contracts | |
Others, net | |
Number of derivative contracts entered | item | 2 |
Gains on derivatives | ¥ 6,926 |
Cash receipt | ¥ 6,926 |
Income tax (Details)
Income tax (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | 48 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2018 | Dec. 31, 2026 | |
Income tax | |||||
Percentage of tax deduction to tax assessable profits as percentage of qualified R&D expenses | 200% | 100% | 75% | 50% | |
Deductible tax losses carry forwards | ¥ 2,566,249 | ||||
HONG KONG | |||||
Income tax | |||||
Statutory income tax rate | 16.50% | ||||
CHINA | |||||
Income tax | |||||
Statutory income tax rate | 25% | ||||
Preferential income tax rate | 15% | ||||
CHINA | Kuntong | |||||
Income tax | |||||
Preferential income tax rate | 15% |
Income tax - Composition of inc
Income tax - Composition of income tax expenses (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income tax | |||
Current income tax expense | ¥ 195 | ¥ (471) | ¥ 200 |
Total income tax expense/ (benefits) | ¥ 195 | ¥ (471) | ¥ 200 |
Income tax - Composition of los
Income tax - Composition of loss before tax (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income tax | |||
Loss from Mainland China operations | ¥ (330,426) | ¥ (717,979) | ¥ (1,095,499) |
Income/(loss) from overseas operations | 25,721 | (13,613) | 1,587 |
Total loss before income tax | ¥ (304,705) | ¥ (731,592) | ¥ (1,093,912) |
Income tax - Reconciliations of
Income tax - Reconciliations of income tax expenses (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income tax | |||
Loss before income tax | ¥ (304,705) | ¥ (731,592) | ¥ (1,093,912) |
Income tax benefit at PRC statutory tax rate | (76,176) | (182,898) | (273,478) |
Effect of different tax rate of different jurisdictions | (1,930) | 1,428 | (135) |
Effect of preferential tax rates | 3,427 | 3,983 | 4,460 |
Effect of Super Deduction for research and development expenses | (2,285) | (2,010) | (2,622) |
Non-deductible expenses and non-taxable income | 28,385 | 29,314 | 54,862 |
Change in valuation allowance | 48,774 | 149,712 | 217,113 |
Total income tax expense/ (benefits) | ¥ 195 | ¥ (471) | ¥ 200 |
Income tax - Deferred tax (Deta
Income tax - Deferred tax (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Income tax | ||||
Net operating losses carried forward | ¥ 551,813 | ¥ 442,384 | ¥ 308,981 | |
Accruals and others | 23,606 | 84,261 | 67,952 | |
Less: valuation allowance | ¥ (575,419) | ¥ (526,645) | ¥ (376,933) | ¥ (159,820) |
Income tax - Movement of valuat
Income tax - Movement of valuation allowance and tax losses carry forwards (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income tax | |||
Balance at the beginning of the year | ¥ 526,645 | ¥ 376,933 | ¥ 159,820 |
Additions | 49,008 | 149,712 | 217,113 |
Loss utilized | (234) | ||
Balance at the end of the year | ¥ 575,419 | ¥ 526,645 | ¥ 376,933 |
Loss per share - Computation of
Loss per share - Computation of earnings per share (Details) - CNY (¥) ¥ / shares in Units, ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Numerator: | |||
Net loss attributable to ordinary shareholders - basic | ¥ (964,384) | ¥ (1,244,962) | ¥ (1,452,221) |
Net loss attributable to ordinary shareholders - diluted | ¥ (964,384) | ¥ (1,244,962) | ¥ (1,452,221) |
Denominator: | |||
Weighted-average ordinary shares outstanding - basic | 1,528,540,765 | 1,325,036,140 | 1,213,878,050 |
Weighted-average ordinary shares outstanding - diluted | 1,528,540,765 | 1,325,036,140 | 1,213,878,050 |
Net loss per share attributable to ordinary shareholders: - Basic | ¥ (0.63) | ¥ (0.94) | ¥ (1.20) |
Net loss per share attributable to ordinary shareholders: - diluted | ¥ (0.63) | ¥ (0.94) | ¥ (1.20) |
Loss per share (Details)
Loss per share (Details) - shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Preferred shares | |||
Loss per share | |||
Antidilutive securities excluded from computation of diluted net loss per share | 3,945,881,532 | 3,837,917,495 | 3,746,626,700 |
Share options | |||
Loss per share | |||
Antidilutive securities excluded from computation of diluted net loss per share | 76,965,197 | 64,117,791 | 41,350,000 |
Ordinary shares (Details)
Ordinary shares (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands | 12 Months Ended | |||||
Dec. 15, 2023 $ / shares shares | Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2023 CNY (¥) | Dec. 31, 2022 $ / shares shares | Dec. 31, 2021 | Apr. 26, 2021 $ / shares shares | |
Ordinary shares | ||||||
Ordinary shares, shares authorized | 496,253,373,300 | 496,253,373,300 | 95,000 | |||
Ordinary shares, par value (in dollars per share) | $ / shares | $ 0.00 | $ 0.00 | $ 0.00 | |||
Ordinary shares, shares issued | 5,621,490,964 | 1,218,621,800 | ||||
Ordinary shares, shares outstanding | 5,621,490,964 | 1,218,621,800 | ||||
Class A Ordinary Shares | ||||||
Ordinary shares | ||||||
Number of underlying shares represented by one ADS | 35 | 35 | 35 | |||
IPO | ADS | ||||||
Ordinary shares | ||||||
Shares issued | 4,000,000 | |||||
Net proceeds | $ 57,660 | ¥ 409,282 | ||||
IPO | Class A Ordinary Shares | ||||||
Ordinary shares | ||||||
Ordinary shares, par value (in dollars per share) | $ / shares | $ 0.00 | |||||
Shares issued | 140,000,000 | |||||
Number of underlying shares represented by one ADS | 35 | |||||
Previously reported | ||||||
Ordinary shares | ||||||
Ordinary shares, shares authorized | 496,195,831,500 | 496,195,831,500 | ||||
Ordinary shares, par value (in dollars per share) | $ / shares | $ 0.00 | $ 0.00 | ||||
Ordinary shares, shares issued | 5,621,490,964 | 1,161,080,000 | ||||
Ordinary shares, shares outstanding | 5,621,490,964 | 1,161,080,000 |
Ordinary shares with preferen_2
Ordinary shares with preference rights (Details) ¥ / shares in Units, ¥ in Thousands | 12 Months Ended | ||||
Dec. 30, 2021 shares | Mar. 28, 2019 CNY (¥) shares | Dec. 22, 2015 CNY (¥) ¥ / shares shares | Dec. 31, 2023 ¥ / shares shares | Dec. 31, 2022 shares | |
Ordinary shares with preference rights | |||||
Outstanding shares | 5,621,490,964 | 1,218,621,800 | |||
Series Seed Preferred Shares | |||||
Ordinary shares with preference rights | |||||
Shares issued | 57,541,800 | 111,110,000 | |||
Cash consideration received | ¥ | ¥ 20,000,000 | ||||
Cash consideration received (in RMB per share) | ¥ / shares | ¥ 0.18 | ||||
Dividends declared on preferred shares | ¥ / shares | ¥ 0 | ||||
Dividends declared on ordinary shares | ¥ / shares | ¥ 0 | ||||
Conversion ratio | 1 | ||||
Compounded interest rate on redemption (in percent) | 10% | ||||
Liquidation preference, percentage of original issue price entitled (in percent) | 100% | ||||
Liquidation preference, percentage of simple interest accrued thereon entitled (in percent) | 6% | ||||
Number of shares re-designated to Series C2 Preferred Shares (in shares) | 53,568,200 | ||||
Outstanding shares | 0 | ||||
Series C2 Preferred Shares | |||||
Ordinary shares with preference rights | |||||
Shares issued | 372,859,000 | ||||
Number of shares re-designated from Series Seed Preferred Shares (in shares) | 53,568,200 | ||||
Total consideration on transfer of shares to certain new investor | ¥ | ¥ 50,000,000 |
Convertible redeemable prefer_3
Convertible redeemable preferred shares - Issuances (Details) | 1 Months Ended | ||||||||||||||||||||||
Oct. 27, 2020 ¥ / shares shares | Oct. 27, 2020 $ / shares shares | Aug. 12, 2019 $ / shares shares | Jun. 05, 2019 $ / shares shares | Aug. 06, 2018 ¥ / shares shares | Jul. 03, 2018 ¥ / shares shares | Jul. 03, 2018 $ / shares shares | Dec. 27, 2017 ¥ / shares shares | Aug. 14, 2017 ¥ / shares shares | May 18, 2017 ¥ / shares shares | Nov. 30, 2023 $ / shares shares | Oct. 31, 2022 $ / shares shares | Oct. 31, 2020 ¥ / shares shares | Oct. 31, 2020 $ / shares shares | Aug. 31, 2019 $ / shares shares | Jun. 30, 2019 $ / shares shares | Aug. 31, 2018 ¥ / shares shares | Jul. 31, 2018 ¥ / shares shares | Jul. 31, 2018 $ / shares shares | Dec. 31, 2017 ¥ / shares shares | Aug. 31, 2017 ¥ / shares shares | May 31, 2017 ¥ / shares shares | Apr. 30, 2016 ¥ / shares shares | |
Series A Preferred Shares | |||||||||||||||||||||||
Convertible redeemable preferred shares | |||||||||||||||||||||||
Issue price per share | ¥ / shares | ¥ 0.3078 | ||||||||||||||||||||||
Number of shares issued | 58,480,000 | ||||||||||||||||||||||
Series A+ Preferred Shares | |||||||||||||||||||||||
Convertible redeemable preferred shares | |||||||||||||||||||||||
Issue price per share | ¥ / shares | ¥ 0.3420 | ¥ 0.3420 | |||||||||||||||||||||
Number of shares issued | 84,480,000 | 84,480,000 | |||||||||||||||||||||
Series B Preferred Shares | |||||||||||||||||||||||
Convertible redeemable preferred shares | |||||||||||||||||||||||
Issue price per share | ¥ / shares | ¥ 0.3848 | ¥ 0.3848 | |||||||||||||||||||||
Number of shares issued | 649,760,000 | 649,760,000 | |||||||||||||||||||||
Series B+ Preferred Shares | |||||||||||||||||||||||
Convertible redeemable preferred shares | |||||||||||||||||||||||
Issue price per share | ¥ / shares | ¥ 0.6733 | ¥ 0.6733 | |||||||||||||||||||||
Number of shares issued | 277,730,000 | 277,730,000 | |||||||||||||||||||||
Series C1 Preferred Shares | |||||||||||||||||||||||
Convertible redeemable preferred shares | |||||||||||||||||||||||
Issue price per share | (per share) | ¥ 0.9334 | $ 0.1404 | ¥ 0.9334 | $ 0.1404 | |||||||||||||||||||
Number of shares issued | 604,820,600 | 604,820,600 | 604,820,600 | 604,820,600 | |||||||||||||||||||
Series C2 Preferred Shares | |||||||||||||||||||||||
Convertible redeemable preferred shares | |||||||||||||||||||||||
Issue price per share | ¥ / shares | ¥ 0.9334 | ¥ 0.9334 | |||||||||||||||||||||
Number of shares issued | 289,379,800 | 289,379,800 | |||||||||||||||||||||
Series D1 Preferred Shares | |||||||||||||||||||||||
Convertible redeemable preferred shares | |||||||||||||||||||||||
Issue price per share | $ / shares | $ 0.1899 | $ 0.1899 | |||||||||||||||||||||
Number of shares issued | 705,523,600 | 705,523,600 | |||||||||||||||||||||
Series D2 Preferred Shares | |||||||||||||||||||||||
Convertible redeemable preferred shares | |||||||||||||||||||||||
Issue price per share | $ / shares | $ 0.1899 | $ 0.1899 | |||||||||||||||||||||
Number of shares issued | 105,302,000 | 105,302,000 | |||||||||||||||||||||
Series E Preferred Shares | |||||||||||||||||||||||
Convertible redeemable preferred shares | |||||||||||||||||||||||
Issue price per share | (per share) | ¥ 2.3119 | $ 0.3425 | ¥ 2.3119 | $ 0.3425 | |||||||||||||||||||
Number of shares issued | 803,222,500 | 803,222,500 | 803,222,500 | 803,222,500 | |||||||||||||||||||
Series F Preferred Shares | |||||||||||||||||||||||
Convertible redeemable preferred shares | |||||||||||||||||||||||
Issue price per share | $ / shares | $ 0.5659 | $ 0.5659 | |||||||||||||||||||||
Number of shares issued | 392,013,413 | 392,013,413 |
Convertible redeemable prefer_4
Convertible redeemable preferred shares - Dividends rights (Details) | 12 Months Ended |
Dec. 31, 2023 ¥ / shares | |
Convertible redeemable preferred shares | |
Amount of dividends declared | ¥ 0 |
Convertible redeemable prefer_5
Convertible redeemable preferred shares - Conversion rights (Details) | Dec. 15, 2023 | Nov. 17, 2023 | Nov. 16, 2023 |
Series F Preferred Shares | |||
Convertible redeemable preferred shares | |||
Conversion ratio | 1.3169 | 1.3169 | 1 |
Convertible redeemable prefer_6
Convertible redeemable preferred shares - Liquidation preferences (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Series D1 Preferred Shares | |
Convertible redeemable preferred shares | |
Liquidation preference per share, Percentage of original issue price (in percent) | 110% |
Liquidation preference per share, Interest rate (in percent) | 8% |
Series D2 Preferred Shares | |
Convertible redeemable preferred shares | |
Liquidation preference per share, Percentage of original issue price (in percent) | 110% |
Liquidation preference per share, Interest rate (in percent) | 8% |
Series E Preferred Shares | |
Convertible redeemable preferred shares | |
Liquidation preference per share, Percentage of original issue price (in percent) | 110% |
Liquidation preference per share, Interest rate (in percent) | 8% |
Series C1 Preferred Shares | |
Convertible redeemable preferred shares | |
Liquidation preference per share, Percentage of original issue price (in percent) | 100% |
Liquidation preference per share, Interest rate (in percent) | 8% |
Series C2 Preferred Shares | |
Convertible redeemable preferred shares | |
Liquidation preference per share, Percentage of original issue price (in percent) | 100% |
Liquidation preference per share, Interest rate (in percent) | 8% |
Series A Preferred Shares | |
Convertible redeemable preferred shares | |
Liquidation preference per share, Percentage of original issue price (in percent) | 100% |
Liquidation preference per share, Interest rate (in percent) | 6% |
Series A+ Preferred Shares | |
Convertible redeemable preferred shares | |
Liquidation preference per share, Percentage of original issue price (in percent) | 100% |
Liquidation preference per share, Interest rate (in percent) | 6% |
Series B Preferred Shares | |
Convertible redeemable preferred shares | |
Liquidation preference per share, Percentage of original issue price (in percent) | 100% |
Liquidation preference per share, Interest rate (in percent) | 6% |
Series B+ Preferred Shares | |
Convertible redeemable preferred shares | |
Liquidation preference per share, Percentage of original issue price (in percent) | 100% |
Liquidation preference per share, Interest rate (in percent) | 6% |
Convertible redeemable prefer_7
Convertible redeemable preferred shares - Preferred shares activities (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Convertible redeemable preferred shares | ||
Balance as of beginning (in shares) | 4,138,640,113 | 3,746,626,700 |
Balance as of beginning | ¥ 7,182,773 | ¥ 5,041,928 |
Conversion of Series F convertible notes, net of cost (in shares) | 392,013,413 | |
Conversion of Series F convertible notes, net of cost | ¥ 1,631,564 | |
Accretion on Preferred Shares to redemption value | 660,070 | ¥ 509,281 |
Amendment of series F convertible redeemable preferred share | ¥ (272,426) | |
Automatic conversion of preferred shares into ordinary shares upon IPO(1) (in shares) | (4,138,640,113) | |
Automatic conversion of preferred shares into ordinary shares upon IPO(1) | ¥ (7,570,417) | |
Balance as of ending (in shares) | 4,138,640,113 | |
Balance as of ending | ¥ 7,182,773 | |
Series A Preferred Shares | ||
Convertible redeemable preferred shares | ||
Balance as of beginning (in shares) | 58,480,000 | 58,480,000 |
Balance as of beginning | ¥ 26,934 | ¥ 26,703 |
Accretion on Preferred Shares to redemption value | ¥ 223 | ¥ 231 |
Automatic conversion of preferred shares into ordinary shares upon IPO(1) (in shares) | (58,480,000) | |
Automatic conversion of preferred shares into ordinary shares upon IPO(1) | ¥ (27,157) | |
Balance as of ending (in shares) | 0 | 58,480,000 |
Balance as of ending | ¥ 26,934 | |
Series A+ Preferred Shares | ||
Convertible redeemable preferred shares | ||
Balance as of beginning (in shares) | 84,480,000 | 84,480,000 |
Balance as of beginning | ¥ 40,608 | ¥ 39,901 |
Accretion on Preferred Shares to redemption value | ¥ 691 | ¥ 707 |
Automatic conversion of preferred shares into ordinary shares upon IPO(1) (in shares) | (84,480,000) | |
Automatic conversion of preferred shares into ordinary shares upon IPO(1) | ¥ (41,299) | |
Balance as of ending (in shares) | 0 | 84,480,000 |
Balance as of ending | ¥ 40,608 | |
Series B Preferred Shares | ||
Convertible redeemable preferred shares | ||
Balance as of beginning (in shares) | 734,209,000 | 734,209,000 |
Balance as of beginning | ¥ 389,960 | ¥ 381,310 |
Accretion on Preferred Shares to redemption value | ¥ 8,444 | ¥ 8,650 |
Automatic conversion of preferred shares into ordinary shares upon IPO(1) (in shares) | (734,209,000) | |
Automatic conversion of preferred shares into ordinary shares upon IPO(1) | ¥ (398,404) | |
Balance as of ending (in shares) | 0 | 734,209,000 |
Balance as of ending | ¥ 389,960 | |
Series B+ Preferred Shares | ||
Convertible redeemable preferred shares | ||
Balance as of beginning (in shares) | 277,730,000 | 277,730,000 |
Balance as of beginning | ¥ 240,033 | ¥ 228,493 |
Accretion on Preferred Shares to redemption value | ¥ 11,578 | ¥ 11,540 |
Automatic conversion of preferred shares into ordinary shares upon IPO(1) (in shares) | (277,730,000) | |
Automatic conversion of preferred shares into ordinary shares upon IPO(1) | ¥ (251,611) | |
Balance as of ending (in shares) | 0 | 277,730,000 |
Balance as of ending | ¥ 240,033 | |
Series C1 Preferred Shares | ||
Convertible redeemable preferred shares | ||
Balance as of beginning (in shares) | 604,820,600 | 604,820,600 |
Balance as of beginning | ¥ 769,548 | ¥ 702,521 |
Accretion on Preferred Shares to redemption value | ¥ 60,431 | ¥ 67,027 |
Automatic conversion of preferred shares into ordinary shares upon IPO(1) (in shares) | (604,820,600) | |
Automatic conversion of preferred shares into ordinary shares upon IPO(1) | ¥ (829,979) | |
Balance as of ending (in shares) | 0 | 604,820,600 |
Balance as of ending | ¥ 769,548 | |
Series C2 Preferred Shares | ||
Convertible redeemable preferred shares | ||
Balance as of beginning (in shares) | 372,859,000 | 372,859,000 |
Balance as of beginning | ¥ 458,503 | ¥ 430,041 |
Accretion on Preferred Shares to redemption value | ¥ 29,188 | ¥ 28,462 |
Automatic conversion of preferred shares into ordinary shares upon IPO(1) (in shares) | (372,859,000) | |
Automatic conversion of preferred shares into ordinary shares upon IPO(1) | ¥ (487,691) | |
Balance as of ending (in shares) | 0 | 372,859,000 |
Balance as of ending | ¥ 458,503 | |
Series D1 Preferred Shares | ||
Convertible redeemable preferred shares | ||
Balance as of beginning (in shares) | 705,523,600 | 705,523,600 |
Balance as of beginning | ¥ 1,219,370 | ¥ 1,105,823 |
Accretion on Preferred Shares to redemption value | ¥ 120,500 | ¥ 113,547 |
Automatic conversion of preferred shares into ordinary shares upon IPO(1) (in shares) | (705,523,600) | |
Automatic conversion of preferred shares into ordinary shares upon IPO(1) | ¥ (1,339,870) | |
Balance as of ending (in shares) | 0 | 705,523,600 |
Balance as of ending | ¥ 1,219,370 | |
Series D2 Preferred Shares | ||
Convertible redeemable preferred shares | ||
Balance as of beginning (in shares) | 105,302,000 | 105,302,000 |
Balance as of beginning | ¥ 179,429 | ¥ 168,717 |
Accretion on Preferred Shares to redemption value | ¥ 17,339 | ¥ 10,712 |
Automatic conversion of preferred shares into ordinary shares upon IPO(1) (in shares) | (105,302,000) | |
Automatic conversion of preferred shares into ordinary shares upon IPO(1) | ¥ (196,768) | |
Balance as of ending (in shares) | 0 | 105,302,000 |
Balance as of ending | ¥ 179,429 | |
Series E Preferred Shares | ||
Convertible redeemable preferred shares | ||
Balance as of beginning (in shares) | 803,222,500 | 803,222,500 |
Balance as of beginning | ¥ 2,226,911 | ¥ 1,958,419 |
Accretion on Preferred Shares to redemption value | ¥ 224,990 | ¥ 268,492 |
Automatic conversion of preferred shares into ordinary shares upon IPO(1) (in shares) | (803,222,500) | |
Automatic conversion of preferred shares into ordinary shares upon IPO(1) | ¥ (2,451,901) | |
Balance as of ending (in shares) | 0 | 803,222,500 |
Balance as of ending | ¥ 2,226,911 | |
Series F Preferred Shares | ||
Convertible redeemable preferred shares | ||
Balance as of beginning (in shares) | 392,013,413 | |
Balance as of beginning | ¥ 1,631,477 | |
Conversion of Series F convertible notes, net of cost (in shares) | 392,013,413 | |
Conversion of Series F convertible notes, net of cost | ¥ 1,631,564 | |
Accretion on Preferred Shares to redemption value | 186,686 | ¥ (87) |
Amendment of series F convertible redeemable preferred share | ¥ (272,426) | |
Automatic conversion of preferred shares into ordinary shares upon IPO(1) (in shares) | (392,013,413) | |
Automatic conversion of preferred shares into ordinary shares upon IPO(1) | ¥ (1,545,737) | |
Balance as of ending (in shares) | 0 | 392,013,413 |
Balance as of ending | ¥ 1,631,477 |
Convertible redeemable prefer_8
Convertible redeemable preferred shares - Key Transaction of Preferred Shares (Details) ¥ / shares in Units, $ / shares in Units, ¥ in Thousands, $ in Millions | 1 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||
Oct. 07, 2022 shares | Oct. 27, 2020 CNY (¥) ¥ / shares shares | Oct. 27, 2020 $ / shares | Aug. 12, 2019 CNY (¥) shares | Aug. 12, 2019 $ / shares | Jun. 05, 2019 CNY (¥) shares | Jun. 05, 2019 $ / shares | Aug. 06, 2018 CNY (¥) ¥ / shares shares | Jul. 03, 2018 CNY (¥) ¥ / shares shares | Jul. 03, 2018 $ / shares | Dec. 27, 2017 CNY (¥) ¥ / shares shares | Aug. 14, 2017 CNY (¥) ¥ / shares shares | May 18, 2017 CNY (¥) ¥ / shares shares | Apr. 08, 2016 CNY (¥) ¥ / shares shares | Nov. 30, 2023 $ / shares shares | Aug. 31, 2023 CNY (¥) | Oct. 31, 2022 $ / shares shares | Sep. 30, 2022 | Feb. 28, 2022 USD ($) $ / shares | Oct. 31, 2020 ¥ / shares shares | Oct. 31, 2020 $ / shares shares | Aug. 31, 2019 $ / shares shares | Jun. 30, 2019 $ / shares shares | Mar. 31, 2019 CNY (¥) shares | Aug. 31, 2018 ¥ / shares shares | Jul. 31, 2018 ¥ / shares shares | Jul. 31, 2018 $ / shares shares | Dec. 31, 2017 ¥ / shares shares | Nov. 30, 2017 CNY (¥) shares | Aug. 31, 2017 ¥ / shares shares | May 31, 2017 ¥ / shares shares | Dec. 31, 2022 shares | Dec. 31, 2023 shares | Dec. 31, 2021 shares | |
Convertible redeemable preferred shares | ||||||||||||||||||||||||||||||||||
Number of shares outstanding | 4,138,640,113 | 3,746,626,700 | ||||||||||||||||||||||||||||||||
Aggregate principal amount | ¥ | ¥ 100,000 | |||||||||||||||||||||||||||||||||
Maturity term (in months) | 6 months | |||||||||||||||||||||||||||||||||
Number of shares converted from convertible notes | 392,013,413 | |||||||||||||||||||||||||||||||||
Series F Convertible Notes | ||||||||||||||||||||||||||||||||||
Convertible redeemable preferred shares | ||||||||||||||||||||||||||||||||||
Aggregate principal amount | $ | $ 221.8 | |||||||||||||||||||||||||||||||||
Simple interest rate (in percent) | 8% | |||||||||||||||||||||||||||||||||
Maturity term (in months) | 10 months | |||||||||||||||||||||||||||||||||
Conversion price | $ / shares | $ 0.5659 | |||||||||||||||||||||||||||||||||
Threshold period for completion of conversion (in days) | 5 days | |||||||||||||||||||||||||||||||||
Series A Preferred Shares | ||||||||||||||||||||||||||||||||||
Convertible redeemable preferred shares | ||||||||||||||||||||||||||||||||||
Number of shares issued | 58,480,000 | |||||||||||||||||||||||||||||||||
Aggregate cash consideration | ¥ | ¥ 18,000 | |||||||||||||||||||||||||||||||||
Issue price per share | ¥ / shares | ¥ 0.3078 | |||||||||||||||||||||||||||||||||
Series A+ Preferred Shares | ||||||||||||||||||||||||||||||||||
Convertible redeemable preferred shares | ||||||||||||||||||||||||||||||||||
Number of shares issued | 84,480,000 | 84,480,000 | ||||||||||||||||||||||||||||||||
Aggregate cash consideration | ¥ | ¥ 28,890 | |||||||||||||||||||||||||||||||||
Issue price per share | ¥ / shares | ¥ 0.3420 | ¥ 0.3420 | ||||||||||||||||||||||||||||||||
Number of shares outstanding | 84,480,000 | 0 | 84,480,000 | |||||||||||||||||||||||||||||||
Series B Preferred Shares | ||||||||||||||||||||||||||||||||||
Convertible redeemable preferred shares | ||||||||||||||||||||||||||||||||||
Number of shares issued | 649,760,000 | 649,760,000 | ||||||||||||||||||||||||||||||||
Aggregate cash consideration | ¥ | ¥ 250,000 | |||||||||||||||||||||||||||||||||
Issue price per share | ¥ / shares | ¥ 0.3848 | ¥ 0.3848 | ||||||||||||||||||||||||||||||||
Number of ordinary shares re-designated to temporary equity | 114,360,000 | |||||||||||||||||||||||||||||||||
Total consideration for transfer of shares | ¥ | ¥ 44,000 | |||||||||||||||||||||||||||||||||
Number of shares re-designated | 29,911,000 | |||||||||||||||||||||||||||||||||
Number of shares outstanding | 734,209,000 | 0 | 734,209,000 | |||||||||||||||||||||||||||||||
Series B+ Preferred Shares | ||||||||||||||||||||||||||||||||||
Convertible redeemable preferred shares | ||||||||||||||||||||||||||||||||||
Number of shares issued | 277,730,000 | 277,730,000 | ||||||||||||||||||||||||||||||||
Aggregate cash consideration | ¥ | ¥ 187,000 | |||||||||||||||||||||||||||||||||
Issue price per share | ¥ / shares | ¥ 0.6733 | ¥ 0.6733 | ||||||||||||||||||||||||||||||||
Number of shares outstanding | 277,730,000 | 0 | 277,730,000 | |||||||||||||||||||||||||||||||
Series C1 Preferred Shares | ||||||||||||||||||||||||||||||||||
Convertible redeemable preferred shares | ||||||||||||||||||||||||||||||||||
Number of shares issued | 604,820,600 | 604,820,600 | 604,820,600 | |||||||||||||||||||||||||||||||
Aggregate cash consideration | ¥ | ¥ 573,980 | |||||||||||||||||||||||||||||||||
Issue price per share | (per share) | ¥ 0.9334 | $ 0.1404 | ¥ 0.9334 | $ 0.1404 | ||||||||||||||||||||||||||||||
Number of shares outstanding | 604,820,600 | 0 | 604,820,600 | |||||||||||||||||||||||||||||||
Series C2 Preferred Shares | ||||||||||||||||||||||||||||||||||
Convertible redeemable preferred shares | ||||||||||||||||||||||||||||||||||
Number of shares issued | 289,379,800 | 289,379,800 | ||||||||||||||||||||||||||||||||
Aggregate cash consideration | ¥ | ¥ 270,520 | |||||||||||||||||||||||||||||||||
Issue price per share | ¥ / shares | ¥ 0.9334 | ¥ 0.9334 | ||||||||||||||||||||||||||||||||
Number of ordinary shares re-designated to temporary equity | 53,568,200 | |||||||||||||||||||||||||||||||||
Number of shares re-designated | 29,911,000 | |||||||||||||||||||||||||||||||||
Number of shares outstanding | 372,859,000 | 0 | 372,859,000 | |||||||||||||||||||||||||||||||
Series C2 Convertible Redeemable Preferred Shares, re-designated from Series B Preferred Shares | ||||||||||||||||||||||||||||||||||
Convertible redeemable preferred shares | ||||||||||||||||||||||||||||||||||
Total consideration for transfer of shares | ¥ | ¥ 27,920 | |||||||||||||||||||||||||||||||||
Series C2 Convertible Redeemable Preferred Shares, re-designated from Series B Preferred Shares and Ordinary Shares held by Series Seed | ||||||||||||||||||||||||||||||||||
Convertible redeemable preferred shares | ||||||||||||||||||||||||||||||||||
Total consideration for transfer of shares | ¥ | ¥ 50,000 | |||||||||||||||||||||||||||||||||
Series D1 Preferred Shares | ||||||||||||||||||||||||||||||||||
Convertible redeemable preferred shares | ||||||||||||||||||||||||||||||||||
Number of shares issued | 705,523,600 | 705,523,600 | ||||||||||||||||||||||||||||||||
Aggregate cash consideration | ¥ | ¥ 923,180 | |||||||||||||||||||||||||||||||||
Issue price per share | $ / shares | $ 0.1899 | $ 0.1899 | ||||||||||||||||||||||||||||||||
Number of shares outstanding | 705,523,600 | 0 | 705,523,600 | |||||||||||||||||||||||||||||||
Series D2 Preferred Shares | ||||||||||||||||||||||||||||||||||
Convertible redeemable preferred shares | ||||||||||||||||||||||||||||||||||
Number of shares issued | 105,302,000 | 105,302,000 | ||||||||||||||||||||||||||||||||
Aggregate cash consideration | ¥ | ¥ 141,460 | |||||||||||||||||||||||||||||||||
Issue price per share | $ / shares | $ 0.1899 | $ 0.1899 | ||||||||||||||||||||||||||||||||
Number of shares outstanding | 105,302,000 | 0 | 105,302,000 | |||||||||||||||||||||||||||||||
Series E Preferred Shares | ||||||||||||||||||||||||||||||||||
Convertible redeemable preferred shares | ||||||||||||||||||||||||||||||||||
Number of shares issued | 803,222,500 | 803,222,500 | 803,222,500 | |||||||||||||||||||||||||||||||
Aggregate cash consideration | ¥ | ¥ 1,819,780 | |||||||||||||||||||||||||||||||||
Issue price per share | (per share) | ¥ 2.3119 | $ 0.3425 | ¥ 2.3119 | $ 0.3425 | ||||||||||||||||||||||||||||||
Number of shares outstanding | 803,222,500 | 0 | 803,222,500 | |||||||||||||||||||||||||||||||
Series F Preferred Shares | ||||||||||||||||||||||||||||||||||
Convertible redeemable preferred shares | ||||||||||||||||||||||||||||||||||
Number of shares issued | 392,013,413 | 392,013,413 | ||||||||||||||||||||||||||||||||
Issue price per share | $ / shares | $ 0.5659 | $ 0.5659 | ||||||||||||||||||||||||||||||||
Number of shares outstanding | 392,013,413 | 0 | ||||||||||||||||||||||||||||||||
Number of shares converted from convertible notes | 392,013,413 | |||||||||||||||||||||||||||||||||
Series F Preferred Shares | Series F Convertible Notes | ||||||||||||||||||||||||||||||||||
Convertible redeemable preferred shares | ||||||||||||||||||||||||||||||||||
Number of shares converted from convertible notes | 392,013,413 |
Convertible redeemable prefer_9
Convertible redeemable preferred shares - Accounting for preferred shares (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Convertible redeemable preferred shares | ||||
Accretion of preferred shares | ¥ 660,070 | ¥ 509,281 | ¥ 329,737 | |
Issuance costs for preferred shares | ¥ 0 | ¥ 19,549 | ¥ 0 |
Convertible redeemable prefe_10
Convertible redeemable preferred shares - Redemption feature (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Series D1 Preferred Shares | |
Convertible redeemable preferred shares | |
Redemption amount, interest (in percent) | 8% |
Series D2 Preferred Shares | |
Convertible redeemable preferred shares | |
Redemption amount, interest (in percent) | 8% |
Series E Preferred Shares | |
Convertible redeemable preferred shares | |
Redemption amount, interest (in percent) | 8% |
Series F Preferred Shares | |
Convertible redeemable preferred shares | |
Redemption amount, interest (in percent) | 8% |
Series A Preferred Shares | |
Convertible redeemable preferred shares | |
Redemption amount, interest (in percent) | 6% |
Series A+ Preferred Shares | |
Convertible redeemable preferred shares | |
Redemption amount, interest (in percent) | 6% |
Series B Preferred Shares | |
Convertible redeemable preferred shares | |
Redemption amount, interest (in percent) | 6% |
Series B+ Preferred Shares | |
Convertible redeemable preferred shares | |
Redemption amount, interest (in percent) | 6% |
Series C1 Preferred Shares | |
Convertible redeemable preferred shares | |
Redemption amount, interest (in percent) | 8% |
Series C2 Preferred Shares | |
Convertible redeemable preferred shares | |
Redemption amount, interest (in percent) | 8% |
Share-based compensation - Rest
Share-based compensation - Restricted shares (Details) ¥ in Thousands | 12 Months Ended | ||||
Dec. 30, 2021 CNY (¥) shares | Dec. 31, 2023 CNY (¥) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | Dec. 30, 2021 $ / shares | |
Share-based compensation | |||||
Share-based compensation expenses | ¥ 17,393 | ¥ 31,899 | ¥ 183,349 | ||
Restricted shares | |||||
Share-based compensation | |||||
Number of restricted shares granted | shares | 100,000,000 | ||||
Share-based compensation expenses | ¥ 135,261 | ||||
Fair value of the restricted shares | $ / shares | $ 0.21 |
Share-based compensation - Shar
Share-based compensation - Share options (Details) - CNY (¥) ¥ in Thousands | 1 Months Ended | 5 Months Ended | 12 Months Ended | 18 Months Ended | 42 Months Ended | ||
Dec. 31, 2023 | Nov. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2023 | Jan. 31, 2022 | |
Share-based compensation | |||||||
Number of options granted | 80,907,443 | 56,222,658 | 18,200,000 | ||||
Share-based compensation expenses | ¥ 17,393 | ¥ 31,899 | ¥ 183,349 | ||||
Share options with service condition only | |||||||
Share-based compensation | |||||||
Vesting period | 4 years | ||||||
Number of options granted | 4,250,000 | 18,200,000 | |||||
Share options with service condition only | Vesting after the first or second anniversary | |||||||
Share-based compensation | |||||||
Vesting percentage | 25% | ||||||
Share options with service condition only | First percentage of vesting | Vesting upon the first or second anniversary | |||||||
Share-based compensation | |||||||
Vesting percentage | 25% | ||||||
Share options with service condition only | Second percentage of vesting | Vesting upon the first or second anniversary | |||||||
Share-based compensation | |||||||
Vesting percentage | 50% | ||||||
Share options with both service and performance condition | |||||||
Share-based compensation | |||||||
Number of options granted | 79,528,000 | ||||||
Share-based compensation expenses | ¥ 12,917 | ¥ 0 |
Share-based compensation - Sh_2
Share-based compensation - Share options with employee termination compensation (Details) - shares | 1 Months Ended | 12 Months Ended | 13 Months Ended | |||
May 31, 2020 | Dec. 31, 2023 | Jan. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Jul. 31, 2023 | |
Share-based compensation | ||||||
Number of options granted | 80,907,443 | 56,222,658 | 18,200,000 | |||
Share options with employee termination compensation with service condition only | ||||||
Share-based compensation | ||||||
Number of options granted | 137,877,968 | |||||
Vesting period | 19 months | |||||
Share options with employee termination compensation with both service and performance condition | ||||||
Share-based compensation | ||||||
Number of options granted | 41,217,213 | 12,134,888 | ||||
Vesting period | 3 years | |||||
Vesting percentage | 33.33% |
Share-based compensation - Sh_3
Share-based compensation - Share-based compensation expense (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based compensation recognized in operating expenses | |||
Total share-based compensation expenses | ¥ 17,393 | ¥ 31,899 | ¥ 183,349 |
Fulfillment | |||
Share-based compensation recognized in operating expenses | |||
Total share-based compensation expenses | 195 | 585 | 2,154 |
Sales and marketing | |||
Share-based compensation recognized in operating expenses | |||
Total share-based compensation expenses | 4,682 | 5,935 | 8,204 |
Research and development | |||
Share-based compensation recognized in operating expenses | |||
Total share-based compensation expenses | 3,070 | 3,883 | 10,134 |
General and administrative | |||
Share-based compensation recognized in operating expenses | |||
Total share-based compensation expenses | ¥ 9,446 | ¥ 21,496 | ¥ 162,857 |
Share-based compensation - Chan
Share-based compensation - Changes in the share options (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Options granted Share Number | |||
Outstanding as of beginning | 182,748,565 | 198,964,123 | 189,927,968 |
Number of options granted | 80,907,443 | 56,222,658 | 18,200,000 |
Cancelled/Forfeited | (14,700,489) | (72,438,216) | (9,163,845) |
Outstanding as of end | 248,955,519 | 182,748,565 | 198,964,123 |
Weighted-average exercise price (US$) | |||
Outstanding as of beginning (in dollars per share) | $ 0.0306 | $ 0.0227 | $ 0.0205 |
Granted (in dollars per share) | 0.1306 | 0.0861 | 0.1079 |
Cancelled/Forfeited (in dollars per share) | 0.0579 | 0.0520 | 0.0993 |
Outstanding as of end (in dollars per share) | 0.0615 | 0.0306 | 0.0227 |
Weighted-average grant date fair value (US$) | |||
Outstanding as of beginning (in dollars per share) | 0.1245 | 0.1137 | 0.1136 |
Granted (in dollars per share) | 0.3169 | 0.1417 | 0.1177 |
Cancelled/Forfeited (in dollars per share) | 0.1580 | 0.1080 | 0.1201 |
Outstanding as of end (in dollars per share) | $ 0.1851 | $ 0.1245 | $ 0.1137 |
Share-based compensation - Sh_4
Share-based compensation - Share options outstanding (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Options number | ||||
Options outstanding | 248,955,519 | 182,748,565 | 198,964,123 | 189,927,968 |
Exercisable | 133,762,513 | 120,164,340 | ||
Expected to vest | 115,193,006 | 62,584,225 | ||
Weighted-average exercise price per option | ||||
Options outstanding (in dollars per share) | $ 0.0615 | $ 0.0306 | $ 0.0227 | $ 0.0205 |
Exercisable (in dollars per share) | 0.02 | 0.01 | ||
Expected to vest (in dollars per share) | $ 0.12 | $ 0.08 | ||
Weighted-average remaining exercise contractual life (years) | ||||
Options outstanding (in years) | 7 years 9 months 18 days | 7 years 10 months 28 days | ||
Exercisable (in years) | 6 years 5 months 26 days | 7 years 3 months 25 days | ||
Expected to vest (in years) | 9 years 3 months 25 days | 9 years 14 days | ||
Aggregate intrinsic value | ||||
Options outstanding (in dollars) | $ 100,501 | $ 47,615 | ||
Exercisable (in dollars) | 60,138 | 34,611 | ||
Expected to vest (in dollars) | $ 40,363 | $ 13,398 | ||
Options exercised | 0 | 0 | 0 |
Share-based compensation - Assu
Share-based compensation - Assumptions used to value the fair value of each option granted (Details) | 12 Months Ended | |||||
Dec. 31, 2023 ¥ / shares | Dec. 31, 2022 ¥ / shares | Dec. 31, 2021 ¥ / shares | Dec. 31, 2023 $ / shares | Dec. 31, 2022 $ / shares | Dec. 31, 2021 $ / shares | |
Assumptions used to value the fair value of each option granted | ||||||
Exercise price | (per share) | ¥ 0.70 | $ 0.11 | ||||
Fair value of the ordinary shares on the date of option grant | (per share) | ¥ 1.31 | $ 0.20 | ||||
Risk-free interest rate | 3.09% | |||||
Risk-free interest rate, minimum | 2.64% | 2.70% | ||||
Risk-free interest rate, maximum | 3.84% | 2.88% | ||||
Contractual life | 10 years | 10 years | 10 years | |||
Expected forfeiture rate (post-vesting) | 16% | 16% | 16% | |||
Exercise multiples | 2.8 | 2.8 | 2.8 | |||
Expected volatility | 32% | |||||
Expected volatility, minimum | 30.09% | 29.77% | ||||
Expected volatility, maximum | 30.41% | 30.16% | ||||
Minimum | ||||||
Assumptions used to value the fair value of each option granted | ||||||
Exercise price | (per share) | ¥ 0 | ¥ 0 | $ 0 | $ 0 | ||
Fair value of the ordinary shares on the date of option grant | (per share) | 2.04 | 1.35 | 0.30 | 0.19 | ||
Maximum | ||||||
Assumptions used to value the fair value of each option granted | ||||||
Exercise price | (per share) | 1.80 | 1.80 | 0.25 | 0.26 | ||
Fair value of the ordinary shares on the date of option grant | (per share) | ¥ 3.10 | ¥ 1.40 | $ 0.43 | $ 0.21 |
Share-based compensation - Unre
Share-based compensation - Unrecognized compensation expenses (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-based compensation | ||
Unrecognized compensation expenses | ¥ 166,224 | ¥ 14,395 |
Unrecognized compensation expenses which is expected to be recognized over a weighted-average period | 3 years 9 months 18 days | 3 years 1 month 20 days |
Commitments and contingencies_2
Commitments and contingencies (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Capital commitments | ||
Commitments and contingencies | ||
Total | ¥ 244,858 | ¥ 274,808 |
A planned factory construction project | ||
Commitments and contingencies | ||
Total | 173,418 | 273,083 |
Construction Commitments | ||
Commitments and contingencies | ||
Total | 71,395 | |
Assets under construction | ||
Commitments and contingencies | ||
Total | ¥ 45 | ¥ 1,725 |
Statutory reserves, restricte_3
Statutory reserves, restricted net assets and parent company only condensed financial information (Details) ¥ in Thousands | Dec. 31, 2023 CNY (¥) |
Statutory reserves, restricted net assets and parent company only condensed financial information | |
Restricted net assets | ¥ 1,432,854 |
Statutory reserves, restricte_4
Statutory reserves, restricted net assets and parent company only condensed financial information - Condensed balance sheet (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Assets | |||
Cash and cash equivalents | ¥ 1,090,621 | ¥ 1,954,246 | |
Prepayments and other current assets | 168,117 | 243,630 | |
Total current assets | 6,954,474 | 6,283,255 | |
Total non-current assets | 432,154 | 530,465 | |
Total assets | 7,386,628 | 6,813,720 | |
Liabilities | |||
Accrued expenses and other current liabilities | 448,225 | 539,191 | |
Total current liabilities | 4,027,732 | 3,482,233 | |
Total non-current liabilities | 147,477 | 215,209 | |
Total liabilities | 4,175,209 | 3,697,442 | |
Mezzanine equity | 7,182,773 | ¥ 5,041,928 | |
ZKH Group Limited shareholders' (deficit)/equity: | |||
Ordinary shares | 4 | 1 | |
Additional paid-in capital | 8,139,349 | ||
Statutory reserves | 6,013 | 5,278 | |
Accumulated other comprehensive loss | (25,154) | (51,910) | |
Accumulated deficit | (4,908,793) | (4,024,102) | |
Total ZKH Group Limited shareholders' (deficit)/equity | 3,211,419 | (4,070,733) | |
Total liabilities, mezzanine equity and shareholders' (deficit)/equity | 7,386,628 | 6,813,720 | |
Parent company | Reportable legal entities | |||
Assets | |||
Cash and cash equivalents | 2,381 | 616 | |
Prepayments and other current assets | 461,183 | 23,406 | |
Total current assets | 463,564 | 24,022 | |
Investment in subsidiaries | 2,778,527 | 3,094,130 | |
Total non-current assets | 2,778,527 | 3,094,130 | |
Total assets | 3,242,091 | 3,118,152 | |
Liabilities | |||
Accrued expenses and other current liabilities | 30,672 | 6,112 | |
Total current liabilities | 30,672 | 6,112 | |
Total liabilities | 30,672 | 6,112 | |
Mezzanine equity | 7,182,773 | ||
ZKH Group Limited shareholders' (deficit)/equity: | |||
Ordinary shares | 4 | 1 | |
Additional paid-in capital | 8,139,349 | ||
Statutory reserves | 6,013 | 5,278 | |
Accumulated other comprehensive loss | (25,154) | (51,910) | |
Accumulated deficit | (4,908,793) | (4,024,102) | |
Total ZKH Group Limited shareholders' (deficit)/equity | 3,211,419 | (4,070,733) | |
Total liabilities, mezzanine equity and shareholders' (deficit)/equity | ¥ 3,242,091 | ¥ 3,118,152 |
Statutory reserves, restricte_5
Statutory reserves, restricted net assets and parent company only condensed financial information - Condensed statement of comprehensive loss (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Condensed statement of comprehensive loss | |||
General and administrative | ¥ (535,493) | ¥ (612,252) | ¥ (759,627) |
Interest and investment income | 53,703 | 14,559 | 28,277 |
Interest expense | (19,343) | (94,182) | (10,593) |
Others, net | 59,659 | 33,737 | (1,156) |
Net loss attributable to ZKH Group Limited | (304,314) | (735,681) | (1,122,484) |
Accretion on preferred shares to redemption value | (660,070) | (509,281) | (329,737) |
Net loss attributable to ZKH Group Limited's ordinary shareholders | (964,384) | (1,244,962) | (1,452,221) |
Net loss attributable to ZKH Group Limited | (304,314) | (735,681) | (1,122,484) |
Other comprehensive loss: | |||
Foreign currency translation adjustments | 26,756 | (50,980) | (490) |
Comprehensive loss attributable to ZKH Group Limited | (277,558) | (786,661) | (1,122,974) |
Total comprehensive loss attributable to ZKH Group Limited's ordinary shareholders | (937,628) | (1,295,942) | ¥ (1,452,711) |
Parent company | Reportable legal entities | |||
Condensed statement of comprehensive loss | |||
General and administrative | (8,586) | (6,038) | |
Interest and investment income | 1 | ||
Interest expense | (73,081) | ||
Share of loss from subsidiaries | (297,229) | (643,683) | |
Others, net | 1,501 | (12,880) | |
Net loss attributable to ZKH Group Limited | (304,314) | (735,681) | |
Accretion on preferred shares to redemption value | (660,070) | (509,281) | |
Net loss attributable to ZKH Group Limited's ordinary shareholders | (964,384) | (1,244,962) | |
Net loss attributable to ZKH Group Limited | (304,314) | (735,681) | |
Other comprehensive loss: | |||
Foreign currency translation adjustments | 26,756 | (50,980) | |
Comprehensive loss attributable to ZKH Group Limited | (277,558) | (786,661) | |
Total comprehensive loss attributable to ZKH Group Limited's ordinary shareholders | ¥ (937,628) | ¥ (1,295,942) |
Statutory reserves, restricte_6
Statutory reserves, restricted net assets and parent company only condensed financial information - Condensed statement of cash flows (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Condensed statement of cash flows | |||
Net cash used in operating activities | ¥ (567,948) | ¥ (504,203) | ¥ (1,382,752) |
Net cash used in investing activities | (908,302) | (37,040) | (94,395) |
Net cash provided by financing activities | 715,724 | 1,302,710 | 174,631 |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 5,042 | 117,469 | (8,695) |
(Decrease)/Increase in cash, cash equivalents, and restricted cash | (755,484) | 878,936 | (1,311,211) |
Cash, cash equivalents, and restricted cash at beginning of year | 2,005,856 | 1,126,920 | 2,438,131 |
Cash, cash equivalents, and restricted cash at end of year | 1,250,372 | 2,005,856 | ¥ 1,126,920 |
Parent company | Reportable legal entities | |||
Condensed statement of cash flows | |||
Net cash used in operating activities | (77) | (277) | |
Net cash used in investing activities | (402,789) | (5,559,727) | |
Net cash provided by financing activities | 407,581 | 5,560,594 | |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (2,950) | 26 | |
(Decrease)/Increase in cash, cash equivalents, and restricted cash | 1,765 | 616 | |
Cash, cash equivalents, and restricted cash at beginning of year | 616 | ||
Cash, cash equivalents, and restricted cash at end of year | ¥ 2,381 | ¥ 616 |
Subsequent events (Details)
Subsequent events (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Subsequent events | ||||
Number of options granted | 80,907,443 | 56,222,658 | 18,200,000 | |
Share options with service condition only | ||||
Subsequent events | ||||
Number of options granted | 4,250,000 | 18,200,000 | ||
Subsequent event | Over allotment option | ADS | ||||
Subsequent events | ||||
Shares issued | 455,000 | |||
Public per share | $ 15.50 | |||
Net proceeds | $ 6,559 | |||
Subsequent event | Share options with service condition only | ||||
Subsequent events | ||||
Number of options granted | 5,485,508 |