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What changed in Jayud Global Logistics Ltd's 20-F — 2022 vs 2023

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Paragraph-level year-over-year comparison of Jayud Global Logistics Ltd's 2022 and 2023 20-F annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+459 added−442 removedSource: 20-F (2024-04-26) vs 20-F (2023-05-15)

Top changes in Jayud Global Logistics Ltd's 2023 20-F

459 paragraphs added · 442 removed · 317 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

148 edited+70 added−32 removed531 unchanged
Biggest changeIf we cannot obtain sufficient capital on acceptable terms, our business, financial condition, and prospects will not be materially adversely affected. ● Failure to successfully implement our business strategy, effectively respond to changes in market dynamics and satisfactorily meet customer demand will cause our future financial results to suffer. ● We may need additional capital to pursue business objectives and respond to business opportunities, challenges or unforeseen circumstances, and financing may not be available on terms acceptable to us, or at all. ● We may fail to successfully enter necessary or desirable strategic alliances or make acquisitions or investments, and we may not be able to achieve the anticipated benefits from these alliances, acquisitions or investments we make. ● We rely on service providers, such as air, ocean and ground freight carriers, and if they become financially unstable or have reduced capacity to provide services because of COVID-19, it may adversely impact our business and operating results. ● Our business may be affected by fluctuations in China’s road transportation market. ● Any disruption to the operation of the warehousing and logistics facilities operated by us or other third-party transportation companies and couriers that facilitate our logistics services, or to the development of new warehousing and logistics facilities, could have a material adverse effect on our business, financial condition and results of operations. ● If we are unable to utilize our container depots and warehouses effectively, our business and results of operations may be adversely affected. ● We may be unable to obtain adequate amount of cargo space to meet our customers’ needs. ● We use third parties in some aspects of our operations and failure to maintain positive relationships with them could have a material adverse effect on our business, financial condition and results of operations. ● If we are unable to manage the expansion of our logistics infrastructure successfully, our business prospects and results of operations may be materially and adversely affected. ● We depend on a limited number of customers for a significant portion of our revenues and the loss of one or more of these customers could adversely affect our business, financial condition, and results of operations. ● If our customers reduce their expenditure on third-party supply chain solutions and logistics services or increase utilization of their internal solutions, our business and operating results may be materially and adversely affected. ● If we fail to cost-efficiently attract new customers to use our solutions and services, or to maintain relationships with existing customers, our business and results of operations could be adversely affected. 5 Risks Related to Doing Business in China ● Change in China’s economic, political or social conditions, laws, regulations or governmental policies could have a material adverse effect on our business, financial conditions and results of operations. ● Uncertainties with respect to the PRC legal system, including uncertainties regarding the interpretation and enforcement of laws, and sudden or unexpected changes of PRC laws and regulations with little advance notice could adversely affect us and limit the legal protections available to you and us, and the Chinese government may exert more oversight and control over offerings that are conducted overseas, which changes could materially hinder our ability to offer or continue to offer our securities, and cause the value of our securities to significantly decline or become worthless. ● The Chinese government exerts substantial oversight and influence over the manner in which we must conduct our business and may intervene or influence our operations at any time, which actions could impact our operations materially and adversely, and significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of our securities to significantly decline or be worthless. ● The PCAOB had historically been unable to inspect auditors in mainland China and Hong Kong in relation to their audit work.
Biggest changeIf we cannot obtain sufficient capital on acceptable terms, our business, financial condition, and prospects will be materially adversely affected. ● Failure to successfully implement our business strategy, effectively respond to changes in market dynamics and satisfactorily meet customer demand will cause our future financial results to suffer. ● We may need additional capital to pursue business objectives and respond to business opportunities, challenges or unforeseen circumstances, and financing may not be available on terms acceptable to us, or at all. ● We may fail to successfully enter necessary or desirable strategic alliances or make acquisitions or investments, and we may not be able to achieve the anticipated benefits from these alliances, acquisitions or investments we make. ● We rely on service providers, such as air, ocean and ground freight carriers, and if they become financially unstable or have reduced capacity to provide services because of pandemics, such as COVID-19, it may adversely impact our business and operating results. ● Our business may be affected by fluctuations in China’s road transportation market. ● Any disruption to the operation of the warehousing and logistics facilities operated by us or other third-party transportation companies and couriers that facilitate our logistics services, or to the development of new warehousing and logistics facilities, could have a material adverse effect on our business, financial condition and results of operations. ● If we are unable to utilize our container depots and warehouses effectively, our business and results of operations may be adversely affected. ● We may be unable to obtain adequate amount of cargo space to meet our customers’ needs. ● We use third parties in some aspects of our operations and failure to maintain positive relationships with them could have a material adverse effect on our business, financial condition and results of operations. ● If we are unable to manage the expansion of our logistics infrastructure successfully, our business prospects and results of operations may be materially and adversely affected. 6 ● We depend on a limited number of customers for a significant portion of our revenues and the loss of one or more of these customers could adversely affect our business, financial condition, and results of operations. ● If our customers reduce their expenditure on third-party supply chain solutions and logistics services or increase utilization of their internal solutions, our business and operating results may be materially and adversely affected. ● If we fail to cost-efficiently attract new customers to use our solutions and services, or to maintain relationships with existing customers, our business and results of operations could be adversely affected.
Any such failure would subject us to sanctions by the CSRC or other PRC regulatory authorities.
Any such failure would subject us to sanctions by the CSRC or other PRC regulatory authorities.
Furthermore, the PRC government authorities may further strengthen oversight and control over listings and offerings that are conducted overseas. Any such action may adversely affect our operations and significantly limit or completely hinder our ability to offer or continue to offer securities to you and cause the value of such securities to significantly decline or be worthless.
Furthermore, the PRC government authorities may further strengthen oversight and control over listings and offerings that are conducted overseas. Any such action may adversely affect our operations and significantly limit or completely hinder our ability to offer or continue to offer securities to you and cause the value of such securities to significantly decline or be worthless.
Moreover, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us.
Moreover, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us.
Any such failure would subject us to sanctions by the CSRC or other PRC regulatory authorities.
Any such failure would subject us to sanctions by the CSRC or other PRC regulatory authorities.
According to the Circular of the State Administration of Foreign Exchange on Issuing the Regulations on Foreign Exchange Administration of the Overseas Direct Investment of Domestic Institutions, which was promulgated by the State Administration of Foreign Exchange, or SAFE, on July 13, 2009 and took effect on August 1, 2009, and Notice on Further Simplifying and Improving the Administration of the Foreign Exchange Concerning Direct Investment, which was promulgated by the SAFE on February 13, 2015 and took effect on June 1, 2015, PRC enterprises must register for overseas direct investment with a local SAFE branch or its authorized banks.
According to the Circular of the State Administration of Foreign Exchange on Issuing the Regulations on Foreign Exchange Administration of the Overseas Direct Investment of Domestic Institutions, which was promulgated by SAFE, on July 13, 2009 and took effect on August 1, 2009, and Notice on Further Simplifying and Improving the Administration of the Foreign Exchange Concerning Direct Investment, which was promulgated by the SAFE on February 13, 2015 and took effect on June 1, 2015, PRC enterprises must register for overseas direct investment with a local SAFE branch or its authorized banks.
If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in these jurisdictions and if we use an accounting firm headquartered in one of these jurisdictions to issue an audit report by then, our Class A ordinary shares may be prohibited from trading in the United States under the HFCA Act, and such delisting or the threat of delisting may materially and adversely affect the value of your investment. ● The approval of and the filing with the CSRC or other PRC government authorities may be required in connection with our future offshore offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing. ● We may be liable for improper use or appropriation of personal information provided directly or indirectly by our customers or end users. ● You may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing actions in China against us or our management named in the annual report based on foreign laws. ● It may be difficult for overseas regulators to conduct investigations or collect evidence within China. ● It may be difficult for overseas shareholders and/or regulators to conduct investigations or collect evidence within Hong Kong. ● If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders. ● We face uncertainties with respect to indirect transfer of equity interests in PRC resident enterprises by their non-PRC holding companies. ● If our preferential tax treatments are revoked or become unavailable or if the calculation of our tax liability is successfully challenged by the PRC tax authorities, we may be required to pay tax, interest and penalties in excess of our tax provisions. ● Failure to make adequate contributions to various employee benefit plans as required by PRC regulations or comply with laws and regulations on other employment practices may subject us to penalties. ● The enforcement of the PRC Labor Contract Law and other labor-related regulations in the PRC may subject us to penalties or liabilities. ● The M&A Rules and certain other PRC regulations may make it more difficult for us to pursue growth through acquisitions. ● PRC regulations relating to offshore investment activities by PRC residents may limit our PRC subsidiaries’ ability to change their registered capital or distribute profits to us or otherwise expose us or our PRC resident beneficial owners to liability and penalties under PRC laws.
If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in these jurisdictions and if we use an accounting firm headquartered in one of these jurisdictions to issue an audit report by then, our Class A ordinary shares may be prohibited from trading in the United States under the HFCA Act, and such delisting or the threat of delisting may materially and adversely affect the value of your investment. ● The approval of and the filing with the CSRC or other PRC government authorities may be required in connection with our future offshore offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing. ● We may be liable for improper use or appropriation of personal information provided directly or indirectly by our customers or end users. ● You may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing actions in China against us or our management named in the annual report based on foreign laws. ● It may be difficult for overseas regulators to conduct investigations or collect evidence within China. ● It may be difficult for overseas shareholders and/or regulators to conduct investigations or collect evidence within Hong Kong. ● If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders. ● We face uncertainties with respect to indirect transfer of equity interests in PRC resident enterprises by their non-PRC holding companies. ● If our preferential tax treatments are revoked or become unavailable or if the calculation of our tax liability is successfully challenged by the PRC tax authorities, we may be required to pay tax, interest and penalties in excess of our tax provisions. 7 ● Failure to make adequate contributions to various employee benefit plans as required by PRC regulations or comply with laws and regulations on other employment practices may subject us to penalties. ● The enforcement of the PRC Labor Contract Law and other labor-related regulations in the PRC may subject us to penalties or liabilities. ● The M&A Rules and certain other PRC regulations may make it more difficult for us to pursue growth through acquisitions. ● PRC regulations relating to offshore investment activities by PRC residents may limit our PRC subsidiaries’ ability to change their registered capital or distribute profits to us or otherwise expose us or our PRC resident beneficial owners to liability and penalties under PRC laws.
In addition, we have other expenses that are fixed for a period of time, and we may not be able to adequately adjust them in a period of rapid change in platform activities; Any disruption to the operation of the warehousing and logistics facilities operated by us or other third-party transportation companies and couriers that facilitate our logistics services, or to the development of new warehousing and logistics facilities, could have a material adverse effect on our business, financial condition and results of operations.
In addition, we have other expenses that are fixed for a period of time, and we may not be able to adequately adjust them in a period of rapid change in platform activities; 14 Any disruption to the operation of the warehousing and logistics facilities operated by us or other third-party transportation companies and couriers that facilitate our logistics services, or to the development of new warehousing and logistics facilities, could have a material adverse effect on our business, financial condition and results of operations.
For instance, from April to May 2022, Shanghai was shut down and all the businesses in Shanghai were closed due to the COVID-19 Omicron variant. While all our major suppliers were fully operational as of December 31, 2022, any future disruption in their operations would impact our ability to manufacture and deliver our products to customers.
For instance, from April to May 2022, Shanghai was shut down and all the businesses in Shanghai were closed due to the COVID-19 Omicron variant. While all our major suppliers were fully operational as of December 31, 2023, any future disruption in their operations would impact our ability to manufacture and deliver our products to customers.
The FCPA also requires companies to make and keep books, records and accounts that accurately reflect transactions and dispositions of assets and to maintain a system of adequate internal accounting controls. We have direct or indirect interactions with officials and employees of government agencies and state-owned affiliated entities in the ordinary course of business.
The FCPA also requires companies to make and keep books, records and accounts that accurately reflect transactions and dispositions of assets and to maintain a system of adequate internal accounting controls. 23 We have direct or indirect interactions with officials and employees of government agencies and state-owned affiliated entities in the ordinary course of business.
This election allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies, and as a result of this election our financial statements may not be comparable to those of companies that comply with public company effective dates, including other emerging growth companies that have not made this election. 38
This election allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies, and as a result of this election our financial statements may not be comparable to those of companies that comply with public company effective dates, including other emerging growth companies that have not made this election.
Furthermore, when we expand into other markets, we will face competition from new competitors, domestic or foreign, who may also enter markets where we currently operate or plan to operate. Any significant increase in competition may have a material adverse effect on our revenue and profitability as well as on our operations and business prospect.
Furthermore, when we expand into other markets, we will face competition from new competitors, domestic or foreign, who may also enter markets where we currently operate or plan to operate. 10 Any significant increase in competition may have a material adverse effect on our revenue and profitability as well as on our operations and business prospect.
In addition, we may also be exposed to legal risks and subject to certain liabilities, including administrative fines, if those third parties fail to obtain all necessary licenses and permits as required. In addition, we are dependent in part on third party business partners to report certain events to us, such as delivery information and cargo claims.
In addition, we may also be exposed to legal risks and subject to certain liabilities, including administrative fines, if those third parties fail to obtain all necessary licenses and permits as required. 15 In addition, we are dependent in part on third party business partners to report certain events to us, such as delivery information and cargo claims.
GAAP and SEC reporting requirements. We also plan to adopt additional measures to improve our internal control over financial reporting, including, among others, creating U.S. GAAP accounting policies and procedures manual, which will be maintained, reviewed and updated, on a regular basis, to the latest US GAAP accounting standards, and strengthening corporate governance.
GAAP and SEC reporting requirements. We also plan to adopt additional measures to improve our internal control over financial reporting, including, among others, creating U.S. GAAP accounting policies and procedures manual, which will be maintained, reviewed and updated, on a regular basis, to the latest U.S. GAAP accounting standards, and strengthening corporate governance.
See also “—Risks Related to the Class A Ordinary Shares—You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law” for risks associated with investing in us as a Cayman Islands company.
See also “—Risks Related to the Class A Ordinary Shares—You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law” for risks associated with investing in us as a Cayman Islands exempted company.
Any uncertainties or negative publicity regarding such approval requirement could materially and adversely affect our business, prospects, financial condition, reputation, and the trading price of our listed securities. We may be liable for improper use or appropriation of personal information provided directly or indirectly by our customers or end users.
Any uncertainties or negative publicity regarding such approval requirement could materially and adversely affect our business, prospects, financial condition, reputation, and the trading price of our listed securities. 33 We may be liable for improper use or appropriation of personal information provided directly or indirectly by our customers or end users.
Technical hurdles in implementing technological advances may result in our services becoming less attractive to clients, which, in turn, may materially and adversely affect our business, results of operations and prospects. 17 We may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business and competitive position.
Technical hurdles in implementing technological advances may result in our services becoming less attractive to clients, which, in turn, may materially and adversely affect our business, results of operations and prospects. We may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business and competitive position.
Risk Factors — Risks Related to Our Business and Industry— Any lack of requisite approvals, licenses or permits applicable to our business operation may have a material and adverse impact on our business, financial condition and results of operations, and any requirement of approvals or permits in connection with our future offering of securities could cause our operations and financial conditions to be materially adversely affected, our ability to offer securities to investors to become significantly limited or completely hindered, and the securities being offered to substantially decline in value and become worthless.” On November 14, 2021, the Cyberspace Administration of China, or the CAC, issued the Administrative Regulations of Cyber Data Security (Draft for Comments), or the Draft Cyber Data Security Regulations, which provide that data processors conducting the following activities shall apply for cybersecurity review: (i) merger, reorganization or spin-off of Internet platform operators that have acquired a large number of data resources related to national security, economic development or public interests affects or may affect national security; (ii) listing abroad of data processors processing over one million users’ personal information; (iii) listing in Hong Kong which affects or may affect national security; (iv) other data processing activities that affect or may affect national security.
Risk Factors — Risks Related to Our Business and Industry— Any lack of requisite approvals, licenses or permits applicable to our business operation may have a material and adverse impact on our business, financial condition and results of operations, and any requirement of approvals or permits in connection with our future offering of securities could cause our operations and financial conditions to be materially adversely affected, our ability to offer securities to investors to become significantly limited or completely hindered, and the securities being offered to substantially decline in value and become worthless.” On November 14, 2021, the CAC issued the Administrative Regulations of Cyber Data Security (Draft for Comments), or the Draft Cyber Data Security Regulations, which provide that data processors conducting the following activities shall apply for cybersecurity review: (i) merger, reorganization or spin-off of Internet platform operators that have acquired a large number of data resources related to national security, economic development or public interests affects or may affect national security; (ii) listing abroad of data processors processing over one million users’ personal information; (iii) listing in Hong Kong which affects or may affect national security; (iv) other data processing activities that affect or may affect national security.
Any failure to obtain or delay in obtaining the CSRC approval for any of our offshore offerings, or a rescission of such approval if obtained, would subject us to sanctions imposed by the CSRC or other PRC regulatory authorities, which could include fines and penalties on our operations in China, restrictions or limitations on our ability to pay dividends outside of China, and other forms of sanctions that may materially and adversely affect our business, financial condition, and results of operations. 24 On July 6, 2021, the relevant PRC government authorities issued Opinions on Strictly Cracking Down Illegal Securities Activities in Accordance with the Law.
Any failure to obtain or delay in obtaining the CSRC approval for any of our offshore offerings, or a rescission of such approval if obtained, would subject us to sanctions imposed by the CSRC or other PRC regulatory authorities, which could include fines and penalties on our operations in China, restrictions or limitations on our ability to pay dividends outside of China, and other forms of sanctions that may materially and adversely affect our business, financial condition, and results of operations. 31 On July 6, 2021, the relevant PRC government authorities issued Opinions on Strictly Cracking Down Illegal Securities Activities in Accordance with the Law.
If we cannot successfully execute system maintenance and repair, our business and results of operations could be adversely affected and we could be subject to liability claims. If we fail to keep up with the technological developments and implementation of advanced technologies, our business, results of operations and prospects may be materially and adversely affected.
If we cannot successfully execute system maintenance and repair, our business and results of operations could be adversely affected and we could be subject to liability claims. 21 If we fail to keep up with the technological developments and implementation of advanced technologies, our business, results of operations and prospects may be materially and adversely affected.
We are a Cayman Islands company and substantially all of our assets are located outside of the United States. Substantially all of our current operations are conducted in China. In addition, a majority of our current directors and officers are nationals and residents of countries and regions other than the United States, including China and Hong Kong.
We are a Cayman Islands exempted company and substantially all of our assets are located outside of the United States. Substantially all of our current operations are conducted in China. In addition, a majority of our current directors and officers are nationals and residents of countries and regions other than the United States, including China and Hong Kong.
Any requirement to disclose our source code or pay damages for breach of contract could be harmful to our business, results of operations and financial condition. Our business depends on the continued efforts of our senior management, particularly Mr. Geng. If Mr.
Any requirement to disclose our source code or pay damages for breach of contract could be harmful to our business, results of operations and financial condition. 22 Our business depends on the continued efforts of our senior management, particularly Mr. Geng. If Mr.
These broad market and industry fluctuations may adversely affect the market price of our Class A ordinary shares. In addition, if the trading volumes of our Class A ordinary shares are low, persons buying or selling in relatively small quantities may easily influence prices of our Class A ordinary shares.
These broad market and industry fluctuations may adversely affect the market price of our Class A ordinary shares. 46 In addition, if the trading volumes of our Class A ordinary shares are low, persons buying or selling in relatively small quantities may easily influence prices of our Class A ordinary shares.
If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in these jurisdictions and if we use an accounting firm headquartered in one of these jurisdictions to issue an audit report by then, our Class A ordinary shares may be prohibited from trading in the United States under the HFCA Act, and such delisting or the threat of delisting may materially and adversely affect the value of your investment.” 2 Selected Financial Data The following selected consolidated statements of income and comprehensive income data for the years ended December 31, 2020, 2021 and 2022, selected consolidated balance sheets data as of December 31, 2021 and 2022, and selected consolidated cash flows data for the years ended December 31, 2020, 2021 and 2022 have been derived from our audited consolidated financial statements, which are included in this annual report beginning on page F-1.
If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in these jurisdictions and if we use an accounting firm headquartered in one of these jurisdictions to issue an audit report by then, our Class A ordinary shares may be prohibited from trading in the United States under the HFCA Act, and such delisting or the threat of delisting may materially and adversely affect the value of your investment.” Selected Financial Data The following selected consolidated statements of income and comprehensive income data for the years ended December 31, 2021, 2022 and 2023, selected consolidated balance sheets data as of December 31, 2022 and 2023, and selected consolidated cash flows data for the years ended December 31, 2021, 2022 and 2023 have been derived from our audited consolidated financial statements, which are included in this annual report beginning on page F-1.
If they fail to complete the filings or registrations required by the overseas direct investment regulations, the authorities may order them to suspend or cease the implementation of such investment and make corrections within a specified time, which may adversely affect our business, financial condition and results of operations. 31 Any failure to comply with PRC regulations regarding the registration requirements for employee stock incentive plans may subject our plan participants for us to fines and other legal or administrative sanctions.
If they fail to complete the filings or registrations required by the overseas direct investment regulations, the authorities may order them to suspend or cease the implementation of such investment and make corrections within a specified time, which may adversely affect our business, financial condition and results of operations. 41 Any failure to comply with PRC regulations regarding the registration requirements for employee stock incentive plans may subject our plan participants for us to fines and other legal or administrative sanctions.
Even if we manage the expansion of our logistics infrastructure successfully, it may not give us the competitive advantage that we expect if improved logistics services become widely available at reasonable prices to our existing and potential customers, such as large retailers, in China. 13 We depend on a limited number of customers for a significant portion of our revenues and the loss of one or more of these customers could adversely affect our business, financial condition, and results of operations.
Even if we manage the expansion of our logistics infrastructure successfully, it may not give us the competitive advantage that we expect if improved logistics services become widely available at reasonable prices to our existing and potential customers, such as large retailers, in China. 16 We depend on a limited number of customers for a significant portion of our revenues and the loss of one or more of these customers could adversely affect our business, financial condition, and results of operations.
In addition, the PRC governmental authorities have continued to introduce various new labor-related regulations since the effectiveness of the Labor Contract Law. These laws and regulations designed to enhance labor protection tend to increase our labor costs.
In addition, the PRC governmental authorities have continued to introduce various new labor-related regulations since the effectiveness of the Labor Contract Law. 39 These laws and regulations designed to enhance labor protection tend to increase our labor costs.
Since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory and contractual terms, it may be more difficult to evaluate or predict the outcome of administrative and court proceedings and the level of legal protection available to you and us than in more developed legal systems. 22 Furthermore, the PRC legal system is based in part on government policies and internal rules, some of which are not published on a timely basis or at all, and which may have a retroactive effect.
Since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory and contractual terms, it may be more difficult to evaluate or predict the outcome of administrative and court proceedings and the level of legal protection available to you and us than in more developed legal systems. 28 Furthermore, the PRC legal system is based in part on government policies and internal rules, some of which are not published on a timely basis or at all, and which may have a retroactive effect.
These regulatory authorities may impose restrictions and penalties on the operations in China, significantly limit or completely hinder our ability to launch any new offering of our securities, limit our ability to pay dividends outside of China, delay or restrict the repatriation of the proceeds from future capital raising activities into China, or take other actions that could materially and adversely affect our business, results of operations, financial condition and prospects, as well as the trading price of our ordinary shares.
These regulatory authorities may impose restrictions and penalties on the operations in China, significantly limit or completely hinder our ability to launch any new offering of our securities, limit our ability to pay dividends outside of China, delay or restrict the repatriation of the proceeds from future capital raising activities into China, or take other actions that could materially and adversely affect our business, results of operations, financial condition and prospects, as well as the trading price of our Class A ordinary shares.
As a result, our future capital requirements may be uncertain and actual capital requirements may be different from what we currently anticipate. We may seek equity or debt financing to finance all or some of our capital expenditures.
As a result, our future capital requirements may be uncertain and actual capital requirements may be different from what we currently anticipate. 12 We may seek equity or debt financing to finance all or some of our capital expenditures.
However, there is no assurance that such cooperation will materialize, or if it does, whether it will adequately address any efforts to investigate or collect evidence to the extent that may be sought by the U.S. regulators. 28 If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders.
However, there is no assurance that such cooperation will materialize, or if it does, whether it will adequately address any efforts to investigate or collect evidence to the extent that may be sought by the U.S. regulators. 37 If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders.
While we do not have any Ukrainian or Russian crew, our shipping routes currently do not cross the Black Sea and we otherwise conduct zero operations in Russia and Ukraine, it is possible that the conflict in Ukraine, including any increased shipping costs, disruptions of global shipping routes, any impact on the global supply chain and any impact on current or potential customers caused by the events in Russia and Ukraine, could adversely affect our operations or financial performance.
While we do not have any Ukrainian and Russian or Israel and Hamas crew, our shipping routes currently do not cross the Black Sea and we otherwise conduct zero operations in Russia and Ukraine, it is possible that the conflict in Ukraine, including any increased shipping costs, disruptions of global shipping routes, any impact on the global supply chain and any impact on current or potential customers caused by the events in Russia and Ukraine, could adversely affect our operations or financial performance.
If a significant number of our employees, or employees and third parties performing key functions, including our chief executive officer and members of our board of directors, become ill, our business may be further adversely impacted. 16 In the longer-term, the COVID-19 pandemic is likely to adversely affect the economies and financial markets of many countries, and could result in a global economic downturn and a recession.
If a significant number of our employees, or employees of third parties performing key functions, including our chief executive officer and members of our board of directors, become ill, our business may be further adversely impacted. 20 In the longer-term, the COVID-19 pandemic is likely to adversely affect the economies and financial markets of many countries, and could result in a global economic downturn and a recession.
Business Overview—Freight Forwarding Services—Warehousing Services.” Natural disasters or other unanticipated catastrophic events, including power interruptions, water shortage, storms, fires, environmental pollutions, earthquakes, terrorist attacks and wars, as well as changes in governmental planning for the land underlying these facilities, could destroy any inventory located in these facilities and significantly impair our business operations.
Business Overview—Freight Forwarding Services—Warehousing Services.” Natural disasters or other unanticipated catastrophic events, including power interruptions, water shortage, storms, fires, environmental pollution, earthquakes, terrorist attacks and wars, as well as changes in governmental planning for the land underlying these facilities, could destroy any inventory located in these facilities and significantly impair our business operations.
If we fail to address and comply with these regulations and any subsequent changes, we may be subject to penalty and our business may be harmed. 19 If we fail to implement and maintain an effective system of internal controls, we may be unable to accurately report our results of operations, meet our reporting obligations or prevent fraud, and investor confidence and the market price of our shares may be materially and adversely affected.
If we fail to address and comply with these regulations and any subsequent changes, we may be subject to penalty and our business may be harmed. 24 If we fail to implement and maintain an effective system of internal controls, we may be unable to accurately report our results of operations, meet our reporting obligations or prevent fraud, and investor confidence and the market price of our shares may be materially and adversely affected.
They may also have longer operating histories, a larger customer base or broader and deeper market coverage. As a result, our competitors may be able to respond more quickly and effectively to new or evolving opportunities, technologies, standards or user requirements than we do and may have the ability to initiate or withstand significant regulatory changes and industry evolvement.
They may also have longer operating histories, larger customer bases or broader and deeper market coverage. As a result, our competitors may be able to respond more quickly and effectively to new or evolving opportunities, technologies, standards or user requirements than we do and may have the ability to initiate or withstand significant regulatory changes and industry evolvement.
Our operations could be adversely affected, directly or indirectly, by existing or future laws and regulations relating to our business or industry, which could result in further material changes in our operations and adversely impact the value of our securities. 23 The PCAOB had historically been unable to inspect auditors in mainland China and Hong Kong in relation to their audit work.
Our operations could be adversely affected, directly or indirectly, by existing or future laws and regulations relating to our business or industry, which could result in further material changes in our operations and adversely impact the value of our securities. 29 The PCAOB had historically been unable to inspect auditors in mainland China and Hong Kong in relation to their audit work.
See “—Uncertainties with respect to the PRC legal system, including uncertainties regarding the interpretation and enforcement of laws, and sudden or unexpected changes of PRC laws and regulations with little advance notice could adversely affect us and limit the legal protections available to you and us, and the Chinese government may exert more oversight and control over offerings that are conducted overseas, which changes could materially hinder our ability to offer or continue to offer our securities, and cause the value of our securities to significantly decline or become worthless” on page 22 and “The approval of and the filing with the CSRC or other PRC government authorities may be required in connection with our future offshore offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing” on page 24.
See “—Uncertainties with respect to the PRC legal system, including uncertainties regarding the interpretation and enforcement of laws, and sudden or unexpected changes of PRC laws and regulations with little advance notice could adversely affect us and limit the legal protections available to you and us, and the Chinese government may exert more oversight and control over offerings that are conducted overseas, which changes could materially hinder our ability to offer or continue to offer our securities, and cause the value of our securities to significantly decline or become worthless” and “The approval of and the filing with the CSRC or other PRC government authorities may be required in connection with our future offshore offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing”.
Capitalization and Indebtedness Not applicable. C. Reasons for the Offer and Use of Proceeds Not applicable. 4 D. Risk Factors Summary Risk Factors Our business is subject to numerous risks and uncertainties, including risks that may prevent us from achieving our business objectives or may adversely affect our business, financial condition, results of operations, cash flows, and prospects.
Capitalization and Indebtedness Not applicable. C. Reasons for the Offer and Use of Proceeds Not applicable. 5 D. Risk Factors Summary Risk Factors Our business is subject to numerous risks and uncertainties, including risks that may prevent us from achieving our business objectives or may adversely affect our business, financial condition, results of operations, cash flows, and prospects.
In response to the above-mentioned material weaknesses (i) and (ii) identified, we implemented a number of measures to address the material weakness identified, including but not limited to recruitment of a chief financial officer with appropriate knowledge and experience in U.S. GAAP accounting and SEC reporting; and establishing of an audit committee.
In response to the above-mentioned material weaknesses (i) and (ii) identified, we implemented a number of measures to address the material weakness identified, including but not limited to recruitment of a chief financial officer with appropriate knowledge and experience in U.S. GAAP accounting and SEC reporting; and establishing of an audit committee and internal audit department.
If we cannot obtain sufficient capital on acceptable terms, our business, financial condition, and prospects will not be materially adversely affected.
If we cannot obtain sufficient capital on acceptable terms, our business, financial condition, and prospects will be materially adversely affected.
From time to time, we are exposed to currency risk primarily through sales and purchases which give rise to receivables, payables and cash balances that are denominated in currencies other than the functional currency of the operations to which the transactions relate. 33 Substantially all of our income and expenses are denominated in Renminbi and our reporting currency is Renminbi.
From time to time, we are exposed to currency risk primarily through sales and purchases which give rise to receivables, payables and cash balances that are denominated in currencies other than the functional currency of the operations to which the transactions relate. 44 Substantially all of our income and expenses are denominated in Renminbi and our reporting currency is Renminbi.
We may be unable to timely complete our evaluation testing and any required remediation. 20 During the course of documenting and testing our internal control procedures, in order to satisfy the requirements of Section 404 of the Sarbanes- Oxley Act of 2002, we may identify other weaknesses and deficiencies in our internal control over financial reporting.
We may be unable to timely complete our evaluation testing and any required remediation. 25 During the course of documenting and testing our internal control procedures, in order to satisfy the requirements of Section 404 of the Sarbanes- Oxley Act of 2002, we may identify other weaknesses and deficiencies in our internal control over financial reporting.
Risk Factors — Risks Related to Doing Business in China — The approval of and the filing with the CSRC or other PRC government authorities may be required in connection with our future offshore offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing.” The Holding Foreign Companies Accountable Act The Holding Foreign Companies Accountable Act (the “HFCA Act”) was enacted on December 18, 2020.
Risk Factors — Risks Related to Doing Business in China — The approval of and the filing with the CSRC or other PRC government authorities may be required in connection with our future offshore offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing.” The Holding Foreign Companies Accountable Act The Holding Foreign Companies Accountable Act, or the HFCA Act, was enacted on December 18, 2020.
Our amended and restated articles of association generally do not prohibit us from issuing additional Class B ordinary shares, and any future issuance of Class B ordinary shares may be dilutive to Class A ordinary shareholders. 35 The dual-class structure of our ordinary shares may adversely affect the trading market for our Class A ordinary shares.
Our amended and restated articles of association generally do not prohibit us from issuing additional Class B ordinary shares, and any future issuance of Class B ordinary shares may be dilutive to Class A ordinary shareholders. 47 The dual-class structure of our ordinary shares may adversely affect the trading market for our Class A ordinary shares.
Furthermore, if our services are perceived to be insecure or unsafe by our customers, our business volume may be significantly reduced, and our business, financial condition and results of operations may be materially and adversely affected. 9 We may be exposed to credit risks in relation to defaults from customers.
Furthermore, if our services are perceived to be insecure or unsafe by our customers, our business volume may be significantly reduced, and our business, financial condition and results of operations may be materially and adversely affected. 11 We may be exposed to credit risks in relation to defaults from customers.
As of December 31, 2022, we had not received any notice that we are a critical information infrastructure operator from any government authority, nor had we received any request from the CAC to undergo a cybersecurity review in relation to our initial public offering.
As of December 31, 2023, we had not received any notice that we are a critical information infrastructure operator from any government authority, nor had we received any request from the CAC to undergo a cybersecurity review in relation to our initial public offering.
If we raise additional funds through further issuances of equity or convertible debt securities, our existing shareholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our ordinary shares.
If we raise additional funds through further issuance of equity or convertible debt securities, our existing shareholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our ordinary shares.
In the course of management’s preparation and our independent registered public accounting firm’s auditing our consolidated financial statements for the year ended December 31, 2022, we and our independent registered public accounting firm identified three material weaknesses in our internal control over financial reporting.
In the course of management’s preparation and our independent registered public accounting firm’s auditing our consolidated financial statements for the year ended December 31, 2023, we and our independent registered public accounting firm identified three material weaknesses in our internal control over financial reporting.
Our auditor prior to December 8, 2022, Friedman LLP, or Friedman, and current auditor, Marcum Asia CPAs LLP (“Marcum Asia”), the independent registered public accounting firms that issue the audit reports included elsewhere in this annual report, as auditors of companies that are traded publicly in the United States and firms registered with the PCAOB, have been subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards.
Our auditor prior to November 11, 2022, Friedman LLP, or Friedman, and current auditor, Marcum Asia CPAs LLP (“Marcum Asia”), the independent registered public accounting firms that issue the audit reports included elsewhere in this annual report, as auditors of companies that are traded publicly in the United States and firms registered with the PCAOB, have been subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards.
We may compete with other companies for labor, and we may not be able to offer competitive salaries and benefits compared to what other companies do. 14 Our results of operations are subject to seasonal fluctuations.
We may compete with other companies for labor, and we may not be able to offer competitive salaries and benefits compared to what other companies do. 17 Our results of operations are subject to seasonal fluctuations.
GAAP and the SEC requirements; and (iii) information technology general control in the areas of: (a) risk and vulnerability assessment and management; (b) third-party (service organization) vendor management; (c) system change management; (d) backup and recovery management; (e) access to systems and data; (f) segregation of duties, privileged access, and monitoring; (g) password management.
GAAP and the SEC requirements; and (iii) information technology general control in the areas of: (a) risk and vulnerability assessment and management; (b) third-party (service organization) vendor management; (c) system change management; (d) backup and recovery management; (e) access to systems and data; (f) segregation of duties, privileged access, and monitoring; (g) password management and (h) cyber security management.
Accordingly, we may need to engage in equity or debt financings to secure additional funds. However, additional funds may not be available when we need them, on terms that are acceptable to us, or at all.
Accordingly, we may need to engage in equity or debt financing to secure additional funds. However, additional funds may not be available when we need them, on terms that are acceptable to us, or at all.
For the years ended December 31, 2020, 2021, and 2022, our labor costs comprised 5.3%, 3.5%, and 3.6% of our total operating expenses and cost of revenue for the same periods, respectively. Any failure to retain stable and dedicated labor by us may lead to disruptions to or delays in our services.
For the years ended December 31, 2021, 2022, and 2023, our labor costs comprised 3.5%, 3.6% and 5.1% of our total operating expenses and cost of revenue for the same periods, respectively. Any failure to retain stable and dedicated labor by us may lead to disruptions to or delays in our services.
On September 6, 2014, the Ministry of Commerce promulgated the Administrative Measures on Overseas Investments, which took effect as of October 6, 2014. According to this regulation, overseas investments of PRC enterprises that involve nonsensitive countries and regions and nonsensitive industries are subject to record-filing requirements with a local branch of Ministry of Commerce.
On September 6, 2014, the Ministry of Commerce promulgated the Administrative Measures on Overseas Investments, which took effect as of October 6, 2014. According to this regulation, overseas investments of PRC enterprises that involve non-sensitive countries and regions and non-sensitive industries are subject to record-filing requirements with a local branch of Ministry of Commerce.
Therefore, we concluded that currently we do not expect that laws and regulations in mainland China on data security, data protection, or cybersecurity to be applied to our Hong Kong subsidiaries or that the oversight of the Cyberspace Administration of China will be extended to its operations outside of mainland China.
Therefore, we concluded that currently we do not expect that laws and regulations in mainland China on data security, data protection, or cybersecurity to be applied to our Hong Kong subsidiaries or that the oversight of the CAC will be extended to its operations outside of mainland China.
On December 26, 2017, the NDRC promulgated the Administrative Measures on Overseas Investments by Enterprises, which took effect as of March 1, 2018. According to this regulation, nonsensitive overseas investment projects are subject to record-filing requirements with the local branch of the NDRC.
On December 26, 2017, the NDRC promulgated the Administrative Measures on Overseas Investments by Enterprises, which took effect as of March 1, 2018. According to this regulation, non-sensitive overseas investment projects are subject to record-filing requirements with the local branch of the NDRC.
As advised by our PRC counsel, we are not required to make filing with the CSRC in connection with our initial public offering and listing on the Nasdaq Capital Market in April 2023.
As advised by our PRC counsel, PacGate Law Group, we are not required to make filing with the CSRC in connection with our initial public offering and listing on the Nasdaq Capital Market in April 2023.
Section 404 of the Sarbanes-Oxley Act of 2002 requires that we include a report of management on our internal control over financial reporting in our annual report beginning with our second annual report on Form 20-F.
Section 404 of the Sarbanes-Oxley Act of 2002 requires that we include a report of management on our internal control over financial reporting in our annual report on Form 20-F.
If any such new laws, regulations, rules, or implementation and interpretation comes into effect, we will take all reasonable measures and actions to comply and to minimize the adverse effect of such laws on us. On August 20, 2021, the Standing Committee of the NPC approved the Personal Information Protection Law (“PIPL”), which became effective on November 1, 2021.
If any such new laws, regulations, rules, or implementation and interpretation comes into effect, we will take all reasonable measures and actions to comply and to minimize the adverse effect of such laws on us. 35 On August 20, 2021, SCNPC approved the Personal Information Protection Law (“PIPL”), which became effective on November 1, 2021.
As of December 31, 2022, we had an operation team of over 49 personnel who are responsible for delivery, warehouse operations as well as other functions such as customer services. We plan to establish larger, custom-designed warehouses to increase our storage capacity and to restructure and reorganize our logistics workflow and processes.
As of December 31, 2023, we had an operation team of 14 personnel who are responsible for delivery, warehouse operations as well as other functions such as customer services. We plan to establish larger, custom-designed warehouses to increase our storage capacity and to restructure and reorganize our logistics workflow and processes.
In addition, as of the same date, we had the rights to use two third-party warehouses located in Yiwu City of Zhejiang province and Hong Kong, with an aggregate GFA of approximately 8,531 sq.m.
In addition, as of the same date, we had the rights to use two third-party warehouses located in Yiwu City of Zhejiang province and Hong Kong, with an aggregate GFA of approximately 7,057 sq. m.
As a result of the conflict between Russia and Ukraine, Switzerland, the US, the EU, the UK and others have announced unprecedented levels of sanctions and other measures against Russia and certain Russian entities and nationals. Such sanctions against Russia may adversely affect our business, financial condition, results of operation and cash flows.
As a result of the conflict between Russia-Ukrainian and Israel-Hamas, Switzerland, the US, the EU, the UK and others have announced unprecedented levels of sanctions and other measures against Russia, Belarus and certain Russian entities and nationals. Such sanctions against Russia may adversely affect our business, financial condition, results of operation and cash flows.
In addition, any failure to comply with PRC regulations with respect to registration requirements for offshore financing may subject us to legal or administrative sanctions. ● We may be materially adversely affected if our shareholders and beneficial owners who are PRC entities fail to comply with the PRC overseas investment regulations. 6 Risks Related to the Class A Ordinary Shares ● The trading price of our Class A ordinary shares has been and will likely continue to be volatile, which could result in substantial losses to investors. ● The dual-class structure of our ordinary shares has the effect of concentrating voting power with our existing shareholders prior to the IPO, which will limit your ability to influence the outcome of important transactions, including a change in control. ● The dual-class structure of our ordinary shares may adversely affect the trading market for our Class A ordinary shares. ● If securities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendations regarding our Class A ordinary shares, the market price for our Class A ordinary shares and trading volume could decline. ● The sale or availability for sale of substantial amounts of our Class A ordinary shares could adversely affect their market price. ● Because we do not expect to pay dividends in the foreseeable future, you must rely on price appreciation of our Class A ordinary shares for return on your investment. ● There can be no assurance that we will not be a passive foreign investment company, or PFIC, for U.S. federal income tax purposes for any taxable year, which could subject U.S. investors in our Class A ordinary shares to significant adverse U.S. federal income tax consequences. ● Our memorandum and articles of association contain anti-takeover provisions that could have a material adverse effect on the rights of holders of our ordinary shares. ● Our amended and restated memorandum and articles of association provide that the United States District Court for the Southern District of New York (or, if the Southern District of New York lacks subject matter jurisdiction over a particular dispute, the state courts of New York County, New York) shall be the exclusive forum within the United States for the resolution of any complaint asserting a cause of action arising out of or relating in any way to the federal securities laws of the United States, regardless of whether such legal suit, action, or proceeding also involves parties other than us.
Risks Related to the Class A Ordinary Shares ● The trading price of our Class A ordinary shares has been and will likely continue to be volatile, which could result in substantial losses to investors. ● The dual-class structure of our ordinary shares has the effect of concentrating voting power with our existing shareholders prior to the IPO, which will limit your ability to influence the outcome of important transactions, including a change in control. ● The dual-class structure of our ordinary shares may adversely affect the trading market for our Class A ordinary shares. ● If securities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendations regarding our Class A ordinary shares, the market price for our Class A ordinary shares and trading volume could decline. ● The sale or availability for sale of substantial amounts of our Class A ordinary shares could adversely affect their market price. ● Because we do not expect to pay dividends in the foreseeable future, you must rely on price appreciation of our Class A ordinary shares for return on your investment. ● There can be no assurance that we will not be a passive foreign investment company, or PFIC, for U.S. federal income tax purposes for any taxable year, which could subject U.S. investors in our Class A ordinary shares to significant adverse U.S. federal income tax consequences. ● Our memorandum and articles of association contain anti-takeover provisions that could have a material adverse effect on the rights of holders of our Class A ordinary shares. ● Our amended and restated memorandum and articles of association provide that the United States District Court for the Southern District of New York (or, if the Southern District of New York lacks subject matter jurisdiction over a particular dispute, the state courts of New York County, New York) shall be the exclusive forum within the United States for the resolution of any complaint asserting a cause of action arising out of or relating in any way to the federal securities laws of the United States, regardless of whether such legal suit, action, or proceeding also involves parties other than us.
ITEM 3. KEY INFORMATION Risks Related to Doing Business in China Jayud Global Logistics Limited is not a Chinese operating company, but a Cayman Islands holding company with operations mainly conducted by its subsidiaries based in mainland China.
Risks Related to Doing Business in China Jayud Global Logistics Limited is not a Chinese operating company, but a Cayman Islands holding company with operations mainly conducted by its subsidiaries based in mainland China.
If we are unable to manage the expansion of our logistics infrastructure successfully, our business prospects and results of operations may be materially and adversely affected. As of December 31, 2022, we had two self-operated warehouses located in Shenzhen City of Guangdong province, respectively, with an aggregate GFA of approximately 14,564 sq.m.
If we are unable to manage the expansion of our logistics infrastructure successfully, our business prospects and results of operations may be materially and adversely affected. As of December 31, 2023, we had two self-operated warehouses located in Shenzhen City of Guangdong province, respectively, with an aggregate GFA of approximately 27,221 sq. m.
Pursuant to the Cybersecurity Review Measures (2020), operators of critical information infrastructure must pass a cybersecurity review when purchasing network products and services which do or may affect national security. 26 On June 10, 2021, the Standing Committee of the NPC promulgated the PRC Data Security Law, which took effect on September 1, 2021.
Pursuant to the Cybersecurity Review Measures (2020), operators of critical information infrastructure must pass a cybersecurity review when purchasing network products and services which do or may affect national security. 34 On June 10, 2021, the Standing Committee of the National People’s Congress (“SCNPC”) promulgated the PRC Data Security Law, which took effect on September 1, 2021.
Moreover, the Anti-Monopoly Law promulgated by the Standing Committee of the National People’s Congress, which became effective in 2008 and was recently amended in June 2022, requires that transactions which are deemed concentrations and involve parties with specified turnover thresholds must be cleared by the Ministry of Commerce before they can be completed.
Moreover, the Anti-Monopoly Law promulgated by SCNPC, which became effective in 2008 and was recently amended in June 2022, requires that transactions which are deemed concentrations and involve parties with specified turnover thresholds must be cleared by the Ministry of Commerce before they can be completed.
We do not know what regulations will be adopted or how such regulations will affect we and our listing on Nasdaq. In the event that the Cyberspace Administration of China determines that we are subject to these regulations, we may be required to delist from Nasdaq and we may be subject to fines and penalties.
We do not know what regulations will be adopted or how such regulations will affect we and our listing on Nasdaq. In the event that the CAC determines that we are subject to these regulations, we may be required to delist from Nasdaq and we may be subject to fines and penalties.
In addition, our offshore financing activities, such as the issuance of foreign debt, are also subject to PRC laws and regulations. In accordance with such laws and regulations, we may be required to complete filing and registration with the National Development and Reform Commission, or NDRC, prior to such activities.
In addition, our offshore financing activities, such as the issuance of foreign debt, are also subject to PRC laws and regulations. In accordance with such laws and regulations, we may be required to complete filing and registration with NDRC, prior to such activities.
Much uncertainty remains regarding the global impact of the conflict in Ukraine, and it is possible that such instability, uncertainty and resulting volatility could significantly increase our costs and adversely affect our business, including our ability to obtain oil and other energy resources, and as a result, adversely affect our business, financial condition, results of operation and cash flows.
Much uncertainty remains regarding the global impact of the conflicts between Russia-Ukraine and Israel-Hamas, and it is possible that such instability, uncertainty and resulting volatility could significantly increase our costs and adversely affect our business, including our ability to obtain oil and other energy resources, and as a result, adversely affect our business, financial condition, results of operation and cash flows.
On December 28, 2021, the CAC, together with other relevant administrative departments, jointly promulgated the Cybersecurity Review Measures which became effective on February 15, 2022. According to the Cybersecurity Review Measures, critical information infrastructure operators that procure internet products and services are subject to the cybersecurity review if their activities affect or may affect national security.
On December 28, 2021, the CAC, together with other twelve PRC regulatory authorities, jointly promulgated the Cybersecurity Review Measures which became effective on February 15, 2022. According to the Cybersecurity Review Measures, critical information infrastructure operators that procure internet products and services are subject to the cybersecurity review if their activities affect or may affect national security.
Although the Chinese government has implemented measures emphasizing the utilization of market forces for economic reform, the reduction of state ownership of productive assets and the establishment of improved corporate governance in business enterprises, a substantial portion of productive assets in China is still owned by the government.
Although the PRC government has implemented measures emphasizing the utilization of market forces for economic reform, the reduction of state ownership of productive assets and the establishment of improved corporate governance in business enterprises, a substantial portion of productive assets in China are still owned or controlled by the government.
Certain of our businesses depend significantly on a limited number of key customers. For the years ended December 31, 2020, 2021 and 2022, revenues generated from our five largest customers in terms of contract amount accounted for approximately 59.9%, 35.8%, and 46.1%, respectively. Most of our contracts with these key customers are generally renewed year-by-year.
Certain of our businesses depend significantly on a limited number of key customers. For the years ended December 31, 2021, 2022 and 2023, revenues generated from our five largest customers in terms of contract amount accounted for approximately 35.8%, 46.1% and 42.3% of our total revenues, respectively. Our contracts with these key customers are generally renewed year-by-year.
Failure to satisfy these requirements may result in penalties to rectify, fines, or suspension of business for remediation. We hold and complete all material licenses, permits and filings for our current operations and will apply for certain permits and filings with the government authorities if needed in the future. Please see “Item 4. Information on the Company—B.
Failure to satisfy these requirements may result in penalties to rectify, fines, or suspension of business for remediation. We hold and complete all material licenses, permits and filings for our current operations and will apply for certain permits and filings with the government authorities if needed in the future. See “Item 3. Key Information — Regulations”.
We are a company incorporated under the laws of the Cayman Islands. However, we conduct substantially all of our operations in China and substantially all of our assets are located in China. In addition, most of our management members reside within China for a significant portion of the time and many of them are PRC nationals.
However, we conduct substantially all of our operations in China and substantially all of our assets are located in China. In addition, most of our management members reside within China for a significant portion of the time and many of them are PRC nationals.
Risk Factors — Risks Related to Doing Business in China — We may be liable for improper use or appropriation of personal information provided directly or indirectly by our customers or end users.” 1 On February 17, 2023, the China Securities Regulatory Commission (the “CSRC”) promulgated the Trial Measures of the Overseas Securities Offering and Listing by Domestic Companies (the “Overseas Listing Trial Measures”) and the related guidelines, which became effective on March 31, 2023.
Risk Factors — Risks Related to Doing Business in China — We may be liable for improper use or appropriation of personal information provided directly or indirectly by our customers or end users.” 2 On February 17, 2023, the CSRC promulgated the Trial Measures of the Overseas Securities Offering and Listing by Domestic Companies (the “Overseas Listing Trial Measures”) and five interpretive guidelines (collectively, the “CSRC Filing Rules”), which became effective on March 31, 2023.
Moreover, failure to comply with the various foreign exchange registration requirements described above could result in liability under PRC laws for evasion of applicable foreign exchange restrictions, including (i) the requirement by SAFE to return the foreign exchange remitted overseas or into the PRC within a period of time specified by SAFE, with a fine of up to 30% of the total amount of foreign exchange remitted overseas or into PRC and deemed to have been evasive or illegal and (ii) in circumstances involving serious violations, a fine of no less than 30% of and up to the total amount of remitted foreign exchange deemed evasive or illegal.
Moreover, failure to comply with the various foreign exchange registration requirements described above could result in liability under PRC laws for evasion of applicable foreign exchange restrictions, including (i) the requirement by SAFE to return the foreign exchange remitted overseas or into the PRC within a period of time specified by SAFE, with a fine of up to 30% of the total amount of foreign exchange remitted overseas or into PRC and deemed to have been evasive or illegal and (ii) in circumstances involving serious violations, a fine of no less than 30% of and up to the total amount of remitted foreign exchange deemed evasive or illegal. 40 We are committed to complying with and to ensuring that our shareholders who are subject to these regulations will comply with the SAFE rules and regulations.
This could limit the ability of holders of our Class A ordinary shares or other securities to obtain a favorable judicial forum for disputes with us, our directors and officers, and potentially others. ● You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law. ● Certain judgments obtained against us by our shareholders may not be enforceable. ● We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to United States domestic public companies. ● We are an emerging growth company, and the reduced disclosure requirements applicable to emerging growth companies may make our Class A ordinary shares less attractive to investors. 7 Risks Related to Our Business and Industry Our business and growth are significantly affected by the development of international commerce and the e-commerce industry, as well as macroeconomic and other factors that affect demand for supply chain solutions and logistics services, in China and globally.
This could limit the ability of holders of our Class A ordinary shares or other securities to obtain a favorable judicial forum for disputes with us, our directors and officers, and potentially others. 8 ● You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law. ● Certain judgments obtained against us by our shareholders may not be enforceable. ● We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to United States domestic public companies. ● We are an emerging growth company, and the reduced disclosure requirements applicable to emerging growth companies may make our Class A ordinary shares less attractive to investors.
Our amended and restated memorandum and articles of association provide that the United States District Court for the Southern District of New York (or, if the Southern District of New York lacks subject matter jurisdiction over a particular dispute, the state courts of New York County, New York) shall be the exclusive forum within the United States for the resolution of any complaint asserting a cause of action arising out of or relating in any way to the federal securities laws of the United States, regardless of whether such legal suit, action, or proceeding also involves parties other than us.
If our board of directors decides to issue preferred shares, the price of our Class A ordinary shares may fall and the voting and other rights of the holders of our Class A ordinary shares may be materially and adversely affected. 49 Our amended and restated memorandum and articles of association provide that the United States District Court for the Southern District of New York (or, if the Southern District of New York lacks subject matter jurisdiction over a particular dispute, the state courts of New York County, New York) shall be the exclusive forum within the United States for the resolution of any complaint asserting a cause of action arising out of or relating in any way to the federal securities laws of the United States regardless of whether such legal suit, action, or proceeding also involves parties other than us.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeWe charge our customers warehousing fees primarily consist of our rental rate for the relevant warehouse, first-mile pickup and/or last-mile delivery fees, and fees for other warehousing services, as applicable. 42 Other Fragmented Logistics Services In addition to the foregoing, we also provide the following logistics services on a fragmented basis as per our customers’ needs: (i) port and depot services, where we help to load, upload, store and/or transport containers and cargos; (ii) non-time-definite delivery services, where we provide last-mile delivery for cross-border e-commerce businesses; and (iii) coordination services, where we connect cross-border supply chain solution providers, shippers and consignees to improve logistics efficiency.
Biggest changeOther Fragmented Logistics Services In addition to the foregoing, we also provide the following logistics services on a fragmented basis as per our customers’ needs: (i) port and depot services, where we help to load, upload, store and/or transport containers and cargos; (ii) non-time-definite delivery services, where we provide last-mile delivery for cross-border e-commerce businesses; and (iii) coordination services, where we connect cross-border supply chain solution providers, shippers and consignees to improve logistics efficiency. 56 Supply Chain Management Our supply chain management business primarily consists of two sub-operations, namely, (i) international trading, where we engage in international trading directly, with our customers being the purchasers or sellers, and (ii) agent services, where we are engaged by customers as their international trade agent, for the purpose of further streamlining the customers’ supply chain process.
Any failure or perceived failure by us to comply such regulations and authorities’ requirements may result in governmental investigations or enforcement actions, lawsuits or claims against us and could have an adverse effect on our business, financial condition and results of operations upon our future acquisition of PRC subsidiaries. 60 Regulations Relating to Information Protection on Networks On December 28, 2012, SCNPC issued Decision of the Standing Committee of the National People’s Congress on Strengthening Information Protection on Networks, pursuant to which network service providers and other enterprises and institutions shall, when gathering and using electronic personal information of citizens in business activities, publish their collection and use rules and adhere to the principles of legality, rationality and necessarily, explicitly state the purposes, manners and scopes of collecting and using information, and obtain the consent of those from whom information is collected, and shall not collect and use information in violation of laws and regulations and the agreement between both sides; and the network service providers and other enterprises and institutions and their personnel must strictly keep such information confidential and may not divulge, alter, damage, sell, or illegally provide others with such information.
Any failure or perceived failure by us to comply such regulations and authorities’ requirements may result in governmental investigations or enforcement actions, lawsuits or claims against us and could have an adverse effect on our business, financial condition and results of operations upon our future acquisition of PRC subsidiaries. 74 Regulations Relating to Information Protection on Networks On December 28, 2012, SCNPC issued Decision of the Standing Committee of the National People’s Congress on Strengthening Information Protection on Networks, pursuant to which network service providers and other enterprises and institutions shall, when gathering and using electronic personal information of citizens in business activities, publish their collection and use rules and adhere to the principles of legality, rationality and necessarily, explicitly state the purposes, manners and scopes of collecting and using information, and obtain the consent of those from whom information is collected, and shall not collect and use information in violation of laws and regulations and the agreement between both sides; and the network service providers and other enterprises and institutions and their personnel must strictly keep such information confidential and may not divulge, alter, damage, sell, or illegally provide others with such information.
For example, the M&A Rules require that MOC be notified in advance of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise, if (i) any important industry is concerned, (ii) such transaction involves factors that impact or may impact national economic security, or (iii) such transaction will lead to a change in control of a domestic enterprise which holds a famous trademark or PRC time-honored brand. 54 In addition, according to the Notice on Establishing the Security Review System for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors issued by the General Office of the State Council on February 3, 2011, and which became effective 30 days thereafter, the Rules on Implementation of Security Review System for the Merger and Acquisition of Domestic Enterprises by Foreign Investors issued by MOC on August 25, 2011, and which became effective on September 1, 2011, mergers and acquisitions by foreign investors that raise “national defense and security” concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic enterprises that raise “national security” concerns are subject to strict review by MOC, and the regulations prohibit any activities attempting to bypass such security review, including by structuring the transaction through a proxy or contractual control arrangement.
For example, the M&A Rules require that MOC be notified in advance of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise, if (i) any important industry is concerned, (ii) such transaction involves factors that impact or may impact national economic security, or (iii) such transaction will lead to a change in control of a domestic enterprise which holds a famous trademark or PRC time-honored brand. 68 In addition, according to the Notice on Establishing the Security Review System for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors issued by the General Office of the State Council on February 3, 2011, and which became effective 30 days thereafter, the Rules on Implementation of Security Review System for the Merger and Acquisition of Domestic Enterprises by Foreign Investors issued by MOC on August 25, 2011, and which became effective on September 1, 2011, mergers and acquisitions by foreign investors that raise “national defense and security” concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic enterprises that raise “national security” concerns are subject to strict review by MOC, and the regulations prohibit any activities attempting to bypass such security review, including by structuring the transaction through a proxy or contractual control arrangement.
There are also other conditions for enjoying the reduced withholding tax rate according to other relevant tax rules and regulations. 58 According to the Circular on Several Issues regarding the “Beneficial Owner” in Tax Treaties, which was issued on February 3, 2018 by the SAT, effective as of April 1, 2018, when determining the applicant’s status of the “beneficial owner” regarding tax treatments in connection with dividends, interests or royalties in the tax treaties, several factors, including without limitation, whether the applicant is obligated to pay more than 50% of its income in twelve months to residents in third country or region, whether the business operated by the applicant constitutes the actual business activities, and whether the counterparty country or region to the tax treaties does not levy any tax or grant tax exemption on relevant incomes or levy tax at an extremely low rate, will be taken into account, and it will be analyzed according to the actual circumstances of the specific cases.
There are also other conditions for enjoying the reduced withholding tax rate according to other relevant tax rules and regulations. 72 According to the Circular on Several Issues regarding the “Beneficial Owner” in Tax Treaties, which was issued on February 3, 2018 by the SAT, effective as of April 1, 2018, when determining the applicant’s status of the “beneficial owner” regarding tax treatments in connection with dividends, interests or royalties in the tax treaties, several factors, including without limitation, whether the applicant is obligated to pay more than 50% of its income in twelve months to residents in third country or region, whether the business operated by the applicant constitutes the actual business activities, and whether the counterparty country or region to the tax treaties does not levy any tax or grant tax exemption on relevant incomes or levy tax at an extremely low rate, will be taken into account, and it will be analyzed according to the actual circumstances of the specific cases.
On March 20, 2019, MOF, SAT and GAC jointly promulgated the Announcement on Relevant Policies for Deepening Value-Added Tax Reform, which became effective on April 1, 2019 and provides that (i) with respect to VAT taxable sales acts or import of goods originally subject to VAT rates of 16% and 10% respectively, such tax rates shall be adjusted to 13% and 9%, respectively; (ii) with respect to purchase of agricultural products originally subject to tax rate of 10%, such tax rate shall be adjusted to 9%; (iii) with respect to purchase of agricultural products for the purpose of production or consigned processing of goods subject to tax rate of 13%, such tax shall be calculated at the tax rate of 10%; (iv) with respect to export of goods and services originally subject to tax rate of 16% and export tax refund rate of 16%, the export tax refund rate shall be adjusted to 13%; and (v) with respect to export of goods and cross-border taxable acts originally subject to tax rate of 10% and export tax refund rate of 10%, the export tax refund rate shall be adjusted to 9%. 59 Urban Maintenance and Construction Tax Pursuant to the Urban Maintenance and Construction Tax Law of the PRC as promulgated in August 2020, any taxpayer, whether an entity or individual, of consumption tax or value-added tax shall be required to pay urban maintenance and construction tax based on the total amount of consumption tax or value-added tax paid by such taxpayer.
On March 20, 2019, MOF, SAT and GAC jointly promulgated the Announcement on Relevant Policies for Deepening Value-Added Tax Reform, which became effective on April 1, 2019 and provides that (i) with respect to VAT taxable sales acts or import of goods originally subject to VAT rates of 16% and 10% respectively, such tax rates shall be adjusted to 13% and 9%, respectively; (ii) with respect to purchase of agricultural products originally subject to tax rate of 10%, such tax rate shall be adjusted to 9%; (iii) with respect to purchase of agricultural products for the purpose of production or consigned processing of goods subject to tax rate of 13%, such tax shall be calculated at the tax rate of 10%; (iv) with respect to export of goods and services originally subject to tax rate of 16% and export tax refund rate of 16%, the export tax refund rate shall be adjusted to 13%; and (v) with respect to export of goods and cross-border taxable acts originally subject to tax rate of 10% and export tax refund rate of 10%, the export tax refund rate shall be adjusted to 9%. 73 Urban Maintenance and Construction Tax Pursuant to the Urban Maintenance and Construction Tax Law of the PRC as promulgated in August 2020, any taxpayer, whether an entity or individual, of consumption tax or value-added tax shall be required to pay urban maintenance and construction tax based on the total amount of consumption tax or value-added tax paid by such taxpayer.
We focus on attracting financially stable customers who ideally share traffic flows that complement our existing routes. By maintaining an even flow of freight traffic, we improve our utilization rate by minimizing the movement of empty idle equipment. Quality Control We believe that our ability to maintain the quality of our services is critical to our growth.
We focus on attracting financially stable customers who ideally share traffic flows that complement our existing routes. By maintaining an even flow of freight traffic, we improve our utilization rate by minimizing the movement of empty idle equipment. 58 Quality Control We believe that our ability to maintain the quality of our services is critical to our growth.
SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC on www.sec.gov . You can also find information on our website http://www.jayud.com/. The information contained on our website is not a part of this annual report. B.
SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC on www.sec.gov . You can also find information on our website http://www.jayud.com/. The information contained on our website is not a part of this annual report. 52 B.
By accumulating logistics big data, the Spider supports the optimization of logistics network and logistics intelligence improvement. 43 Our Global Network Headquartered in Shenzhen, Guangdong province, we focus on China as our primary market and expect to expand our business globally. Shenzhen is of great significance in the history of China’s opening-up.
By accumulating logistics big data, the Spider supports the optimization of logistics network and logistics intelligence improvement. Our Global Network Headquartered in Shenzhen, Guangdong province, we focus on China as our primary market and expect to expand our business globally. Shenzhen is of great significance in the history of China’s opening-up.
Violations of the PRC Labor Law and the Labor Contract Law may result in the imposition of fines and other administrative sanctions, and serious violations may result in criminal liabilities. 56 Enterprises in China are required by PRC laws and regulations to participate in certain employee benefit plans, including social insurance funds, namely a pension plan, a medical insurance plan, an unemployment insurance plan, a work-related injury insurance plan and a maternity insurance plan, and a housing provident fund, and contribute to the plans or funds in amounts equal to certain percentages of salaries, including bonuses and allowances, of the employees as specified by the local government from time to time at locations where they operate their businesses or where they are located.
Violations of the PRC Labor Law and the Labor Contract Law may result in the imposition of fines and other administrative sanctions, and serious violations may result in criminal liabilities. 70 Enterprises in China are required by PRC laws and regulations to participate in certain employee benefit plans, including social insurance funds, namely a pension plan, a medical insurance plan, an unemployment insurance plan, a work-related injury insurance plan and a maternity insurance plan, and a housing provident fund, and contribute to the plans or funds in amounts equal to certain percentages of salaries, including bonuses and allowances, of the employees as specified by the local government from time to time at locations where they operate their businesses or where they are located.
We also engage in the operation of depots and warehouses, customs clearance and ground express transportation services (either by our own fleet or third-party trucking service providers), thus reducing lead time and hassle while improving fulfillment efficiency. 39 The flow chart below sets forth an illustration of our integrated cross-border logistics service process: Contract Logistics Services We customize our integrated logistics solutions for our major customers, seamlessly covering their entire supply chain process from order origination to the final point of sale or delivery.
We also engage in the operation of depots and warehouses, customs clearance and ground express transportation services (either by our own fleet or third-party trucking service providers), thus reducing lead time and hassle while improving fulfillment efficiency. 53 The flow chart below sets forth an illustration of our integrated cross-border logistics service process: Contract Logistics Services We customize our integrated logistics solutions for our major customers, seamlessly covering their entire supply chain process from order origination to the final point of sale or delivery.
The companies that have already submitted applications for initial public offerings to overseas supervision administrations prior to the effective date of the Trial Measures but have not yet obtained approval from overseas supervision administrations or stock exchanges for the offering and listing prior to the effective date of the Trial Measures may arrange for the filing within a reasonable time period and should complete the filing procedures before such companies’ overseas issuances and listings. 53 As of the date of this annual report, we have not received any formal inquiry, notice, warning, sanction, or regulatory objection from the CSRC with respect to our listing.
The companies that have already submitted applications for initial public offerings to overseas supervision administrations prior to the effective date of the Trial Measures but have not yet obtained approval from overseas supervision administrations or stock exchanges for the offering and listing prior to the effective date of the Trial Measures may arrange for the filing within a reasonable time period and should complete the filing procedures before such companies’ overseas issuances and listings. 67 As of the date of this annual report, we have not received any formal inquiry, notice, warning, sanction, or regulatory objection from the CSRC with respect to our listing.
Each of our proprietary IT systems can integrate with our ERP system. We sell and license our proprietary IT systems as per our customers’ requests. We also develop customized proprietary IT systems depending on our major customers’ supply chain management needs.
Each of our proprietary IT systems can integrate with our ERP system. We sell and license our proprietary IT systems as per our customers’ requests. 57 We also develop customized proprietary IT systems depending on our major customers’ supply chain management needs.
In addition, pursuant to Circular 16, FIEs shall use their registered capital pursuant to the principle of authenticity and self-use within their business scope. 52 Pursuant to the Provisional Measures on Administration of Foreign Debt (the “Foreign Debt Measures”) issued by the State Development Planning Commission (revised), Ministry of Finance (“MOF”) and SAFE in January 2003 and effective as of March 1, 2003, any loans provided by us to our PRC subsidiaries in foreign currencies shall be classified as foreign debt under the Foreign Debt Measures.
In addition, pursuant to Circular 16, FIEs shall use their registered capital pursuant to the principle of authenticity and self-use within their business scope. 66 Pursuant to the Provisional Measures on Administration of Foreign Debt (the “Foreign Debt Measures”) issued by the State Development Planning Commission (revised), Ministry of Finance (“MOF”) and SAFE in January 2003 and effective as of March 1, 2003, any loans provided by us to our PRC subsidiaries in foreign currencies shall be classified as foreign debt under the Foreign Debt Measures.
This notice has amended SAFE Circular 37 requiring PRC residents or entities to register with qualified banks rather than SAFE or its local branch in connection with their establishment or control of an offshore entity established for overseas investment or financing. 51 PRC residents or entities who had contributed legitimate onshore or offshore interests or assets to SPVs but had not obtained registration as required before the implementation of SAFE Circular 37 must register their ownership interests or control in the SPVs with qualified banks.
This notice has amended SAFE Circular 37 requiring PRC residents or entities to register with qualified banks rather than SAFE or its local branch in connection with their establishment or control of an offshore entity established for overseas investment or financing. 65 PRC residents or entities who had contributed legitimate onshore or offshore interests or assets to SPVs but had not obtained registration as required before the implementation of SAFE Circular 37 must register their ownership interests or control in the SPVs with qualified banks.
Such Measures provide for strict requirements on the conclusion of contracts for outbound transfer of personal information based on the standard form and require the filing of such contracts with cyberspace administration at the provincial level within ten business days following its effectiveness. 61 On December 28, 2021, the CAC published the Cybersecurity Review Measures (2021), which came into effect on February 15, 2022 and has replaced the current Cybersecurity Review Measures (2020).
Such Measures provide for strict requirements on the conclusion of contracts for outbound transfer of personal information based on the standard form and require the filing of such contracts with cyberspace administration at the provincial level within ten business days following its effectiveness. 75 On December 28, 2021, the CAC published the Cybersecurity Review Measures (2021), which came into effect on February 15, 2022 and has replaced the current Cybersecurity Review Measures (2020).
Non-PRC resident enterprises without any branches in the PRC pay an enterprise income tax in connection with their income originating from the PRC at the tax rate of 10%. 57 On February 3, 2015, the PRC State Administration of Taxation, or the SAT, issued the Announcement on Several Issues Concerning the Enterprise Income Tax on Indirect Transfer of Assets by Non-Resident Enterprises, or SAT Bulletin 7.
Non-PRC resident enterprises without any branches in the PRC pay an enterprise income tax in connection with their income originating from the PRC at the tax rate of 10%. 71 On February 3, 2015, the PRC State Administration of Taxation, or the SAT, issued the Announcement on Several Issues Concerning the Enterprise Income Tax on Indirect Transfer of Assets by Non-Resident Enterprises, or SAT Bulletin 7.
Note: the English names of our PRC business entities are directly translated from Chinese and may be different from their names shown on their respective records filed with relevant PRC authorities. (1) No single shareholder among “other shareholders” beneficially owns more than 5% of our ordinary shares. 62 D.
Note: the English names of our PRC business entities are directly translated from Chinese and may be different from their names shown on their respective records filed with relevant PRC authorities. (1) No single shareholder among “other shareholders” beneficially owns more than 5% of our ordinary shares. 76 D.
As of December 31, 2022, we had established a presence in 11 provinces (including provincial municipalities) in mainland China, such as Shenzhen of Guangdong province, Nanjing of Jiangsu province, Ningbo and Yiwu of Zhejiang province, Qingdao of Shandong province, Beijing, Shanghai, Tianjin, as well as some major global transportation hubs such as Hong Kong.
As of December 31, 2023, we had established a presence in 11 provinces (including provincial municipalities) in mainland China, such as Shenzhen of Guangdong province, Nanjing of Jiangsu province, Ningbo and Yiwu of Zhejiang province, Qingdao of Shandong province, Beijing, Shanghai, Tianjin, as well as some major global transportation hubs such as Hong Kong.
Our global freight network covers various major trade lanes across the world, including Asia-North America, Asia-Europe and Intra-Asia trade lines. As of December 31, 2022, our footprints spread across six continents and over 16 countries, such as Thailand, Singapore, India, Philippine, the United Kingdom, and the United States.
Our global freight network covers various major trade lanes across the world, including Asia-North America, Asia-Europe and Intra-Asia trade lines. As of December 31, 2023, our footprints spread across six continents and over 16 countries, such as Thailand, Singapore, India, Philippine, the United Kingdom, and the United States.
Under the supervision of SAFE, the qualified banks may directly review the applications and conduct the registration. 50 On March 30, 2015, SAFE promulgated the Notice of the State Administration of Foreign Exchange on Reforming the Administration of Foreign Exchange Settlement of Capital of Foreign-Invested Enterprises, or SAFE Circular 19, which expands a pilot reform of the administration of the settlement of the foreign exchange capitals of foreign-invested enterprises nationwide.
Under the supervision of SAFE, the qualified banks may directly review the applications and conduct the registration. 64 On March 30, 2015, SAFE promulgated the Notice of the State Administration of Foreign Exchange on Reforming the Administration of Foreign Exchange Settlement of Capital of Foreign-Invested Enterprises, or SAFE Circular 19, which expands a pilot reform of the administration of the settlement of the foreign exchange capitals of foreign-invested enterprises nationwide.
On April 29, 2014, the State Council issued the revised the Implementing Regulations of the Trademark Law of the People’s Republic of China, which specified the requirements of applying for trademark registration and renewal. 49 Patent According to the Patent Law of the People’s Republic of China, or the Patent Law, promulgated by SCNPC on March 12, 1984 and amended on September 4, 1992, August 25, 2000, December 27, 2008, and October 17, 2020, respectively, and the Implementation Rules of the Patent Law of the People’s Republic of China, or the Implementation Rules of the Patent Law, promulgated by the State Council on June 15, 2001 and revised on December 28, 2002 and January 9, 2010, the patent administrative department under the State Council is responsible for the administration of patent-related work nationwide.
On April 29, 2014, the State Council issued the revised the Implementing Regulations of the Trademark Law of the People’s Republic of China, which specified the requirements of applying for trademark registration and renewal. 63 Patent According to the Patent Law of the People’s Republic of China, or the Patent Law, promulgated by SCNPC on March 12, 1984 and amended on September 4, 1992, August 25, 2000, December 27, 2008, and October 17, 2020, respectively, and the Implementation Rules of the Patent Law of the People’s Republic of China, or the Implementation Rules of the Patent Law, promulgated by the State Council on June 15, 2001 and revised on December 28, 2002, January 9, 2010, and December 11, 2023, the patent administrative department under the State Council is responsible for the administration of patent-related work nationwide.
As a result, although we believe that we have established strong competitive advantage over existing and potential competitors lies in customized logistics services, omnibearing supply chain solution services, eminent customer relationships, and the master of digitalization and informatization of logistics services, we may face competition from other companies with end-to-end cross-border service capabilities.
As a result, although we believe that we have established strong competitive advantage over existing and potential competitors lies in customized logistics services, omni-bearing supply chain solution services, eminent customer relationships, and the master of digitalization and informatization of logistics services, we may face competition from other companies with end-to-end cross-border service capabilities.
On September 6, 2014, MOC promulgated the Administrative Measures on Overseas Investments, which took effect as of October 6, 2014. According to this regulation, overseas investments of PRC enterprises that involve nonsensitive countries and regions and nonsensitive industries are subject to record-filing requirements with a local branch of MOC.
On September 6, 2014, MOC promulgated the Administrative Measures on Overseas Investments, which took effect as of October 6, 2014. According to this regulation, overseas investments of PRC enterprises that involve non-sensitive countries and regions and non-sensitive industries are subject to record-filing requirements with a local branch of MOC.
In February 2023, NDRC circulated the Guide to the Registration of Foreign Debt Issued by Enterprises on its official website, according to which, domestic companies (and their controlled overseas companies or branches) who borrowed from foreign companies (including overseas shareholders) a loan for more than one year need to apply to NDRC.
In February 2023, NDRC circulated the Guide to the Examination and Registration of Medium and Long-Term Foreign Debt Issued by Enterprises on its official website, according to which, domestic companies (and their controlled overseas companies or branches) who borrowed from foreign companies (including overseas shareholders) a loan for more than one year need to apply to NDRC.
We acquire new customers primarily through our sales and marketing personnel, who, through their experience and good rapport with clients, play an instrumental role in creating and expanding the work platform for us. As of December 31, 2022, we had sales and marketing teams in China of 42 employees.
We acquire new customers primarily through our sales and marketing personnel, who, through their experience and good rapport with clients, play an instrumental role in creating and expanding the work platform for us. As of December 31, 2023, we had sales and marketing teams in China of 46 employees.
Regulations Relating to Non-Vessel Operating Common Carrier Pursuant to the Regulations on International Maritime Transport promulgated by the State Council on December 11, 2001 and most recently amended on March 2, 2019 and Implementing Rules for the Regulations on International Maritime Transport promulgated by the Ministry of Transport on January 20, 2003 and most recently amended on November 28, 2019, Non-vessel operating common carriers (“NVOCC”) shall mean carriers that undertake to carry cargo of consignors, issue their own bills of lading or other transport documents, collect freight from the consignors, complete international maritime transport through international shipping operators, and bear carrier liability in the international maritime transport activities undertaken by them.
Regulations Relating to Non-Vessel Operating Common Carrier Pursuant to the Regulations on International Maritime Transport promulgated by the State Council on December 11, 2001 and most recently amended on July 20, 2023 and Implementing Rules for the Regulations on International Maritime Transport promulgated by the Ministry of Transport on January 20, 2003 and most recently amended on November 10, 2023, Non-vessel operating common carriers (“NVOCC”) shall mean carriers that undertake to carry cargo of consignors, issue their own bills of lading or other transport documents, collect freight from the consignors, complete international maritime transport through international shipping operators, and bear carrier liability in the international maritime transport activities undertaken by them.
Moreover, according to Negative List 2021, PRC entities which engage in any field forbidden by the Negative List 2021 for access of foreign investment shall be approved by competent PRC authorities when they seek listing offshore, and foreign investors shall not participate in operation and management and their shareholding ratio shall be in compliance with PRC laws. 55 According to the Implementing Rules, the registration of foreign-invested enterprises shall be handled by the State Administration for Market Regulation (“SAMR”) or its authorized local counterparts.
Moreover, according to Negative List 2021, PRC entities which engage in any field forbidden by the Negative List 2021 for access of foreign investment shall be approved by competent PRC authorities when they seek listing offshore, and foreign investors shall not participate in operation and management and their shareholding ratio shall be in compliance with PRC laws. 69 According to the Implementing Rules, the registration of foreign-invested enterprises shall be handled by SAMR or its authorized local counterparts.
Regulations Relating to Road Transportation Pursuant to the Regulations on Road Transportation promulgated by the State Council in April 2004 and most recently amended in March 2022, and the Provisions on Administration of Road Freight Transportation and Stations (Sites) issued by the Ministry of Transport in June 2005 and most recently amended in September 2022, or the Road Freight Provisions, the business operations of road freight transportation refer to commercial road freight transportation activities that provide public services.
Regulations Relating to Road Transportation Pursuant to the Regulations on Road Transportation promulgated by the State Council in April 2004 and most recently amended in July 2023, and the Provisions on Administration of Road Freight Transportation and Stations (Sites) issued by the Ministry of Transport in June 2005 and most recently amended in November 2023, or the Road Freight Provisions, the business operations of road freight transportation refer to commercial road freight transportation activities that provide public services.
Sales and Marketing We are engaged by our customers through tendering processes and direct engagements. For the years ended December 31, 2020, 2021, and 2022, revenues generated through tendering processes amounted to approximately RMB59.3 million, RMB51.0 million, and RMB21.0 million (US$3.2 million), respectively, accounting for approximately 20.4%, 9.4%, and 3.2%, respectively, of the total revenues for the same periods.
Sales and Marketing We are engaged by our customers through tendering processes and direct engagements. For the years ended December 31, 2021, 2022, and 2023, revenues generated through tendering processes amounted to approximately RMB51.0 million, RMB21.0 million and RMB62.0 million (US$8.8 million), respectively, accounting for approximately 9.4%, 3.2% and 12.4%, respectively, of the total revenues for the same periods.
Trademark According to the Trademark Law of the People’s Republic of China promulgated by SCNPC on August 23, 1982, and amended on February 22, 1993, October 27, 2001, August 30, 2013 and April 23, 2019, respectively, the Trademark Office of the State Administration for Market Regulation (“SAMR”) is responsible for the registration and administration of trademarks in China.
Trademark According to the Trademark Law of the People’s Republic of China promulgated by SCNPC on August 23, 1982, and amended on February 22, 1993, October 27, 2001, August 30, 2013 and April 23, 2019, respectively, SAMR is responsible for the registration and administration of trademarks in China.
Regulations Relating to Foreign Exchange Registration of Overseas Investment by PRC Enterprises On December 26, 2017, the National Development Reform Committee (“NDRC”) promulgated the Administrative Measures on Overseas Investments by Enterprises, which took effect as of March 1, 2018. According to this regulation, nonsensitive overseas investment projects are subject to record-filing requirements with the local branch of NDRC.
Regulations Relating to Foreign Exchange Registration of Overseas Investment by PRC Enterprises On December 26, 2017, NDRC promulgated the Administrative Measures on Overseas Investments by Enterprises, which took effect as of March 1, 2018. According to this regulation, non-sensitive overseas investment projects are subject to record-filing requirements with the local branch of NDRC.
In May 2022, we, through Shenzhen Jayud Logistics Technology Co., Ltd., entered into an agreement to obtain the right to use Dachan Bay Warehouse that was located close to Dachan Bay Terminals, Shenzhen Baoan International Airport and National Highway G4 which connects Beijing, Hong Kong and Macao, with an aggregate GFA of approximately 11,000 sq.m.
In May 2022, we, through Shenzhen Jayud Logistics Technology Co., Ltd., entered into an agreement to obtain the right to use Dachan Bay Warehouse that was located close to Dachan Bay Terminals, Shenzhen Baoan International Airport and National Highway G4 which connects Beijing, Hong Kong and Macao.
Before December 30, 2022, according to the then-effective Foreign Trade Law, and the Measures for the Record-Filing and Registration of Foreign Trade Operators promulgated by MOC on June 25, 2004, and most recently amended on May 10, 2021, foreign trade operators which engage in the import and export of goods shall go through the record-filing and registration with MOC or an authority authorized by MOC, unless laws, administrative regulations and rules of MOC provide that it is unnecessary to go through such formalities.
The import and export of goods that are restricted from being imported into or exported out of China shall be in compliance with relevant restrictive laws and regulations. 62 Before December 30, 2022, according to the then-effective Foreign Trade Law, and the Measures for the Record-Filing and Registration of Foreign Trade Operators promulgated by MOC on June 25, 2004, and most recently amended on May 10, 2021, foreign trade operators which engage in the import and export of goods shall go through the record-filing and registration with MOC or an authority authorized by MOC, unless laws, administrative regulations and rules of MOC provide that it is unnecessary to go through such formalities.
The road freight transportation includes general road freight transportation, special road freight transportation, road transportation of large articles, and road transportation of dangerous cargos. Special road freight transportation refers to freight transportation using special vehicles such as vehicles with containers, refrigeration equipment, or tank containers. The Road Freight Provisions set forth detailed requirements with respect to vehicles and drivers.
The road freight transportation includes general road freight transportation, special road freight transportation, road transportation of large articles, and road transportation of dangerous cargos. Special road freight transportation refers to freight transportation using special vehicles such as vehicles with containers, refrigeration equipment, or tank containers.
As of December 31, 2022, we had two self-operated warehouses located in Shenzhen of Guangdong province, with an aggregate GFA of approximately 14,564 sq. m. As of the same date, we had the rights to use two third-party warehouses located in Yiwu of Zhejiang province and Hong Kong, with an aggregate GFA of approximately 8,531 sq.m.
As of December 31, 2023, we had two self-operated warehouses located in Shenzhen of Guangdong province, with an aggregate GFA of approximately 27,221 sq. m. As of the same date, we had the rights to use two third-party warehouses located in Yiwu of Zhejiang province and Hong Kong, with an aggregate GFA of approximately 7,057 sq. m.
Under the Road Freight Provisions, anyone engaging in the business of operating road freight transportation or stations (sites) must obtain a road transportation operation permit from the local county-level competent authority for transportation, and each vehicle used for road freight transportation must have a road transportation certificate from the same authority.
The Road Freight Provisions set forth detailed requirements with respect to vehicles and drivers. 60 Under the Road Freight Provisions, anyone engaging in the business of operating road freight transportation or stations (sites) must obtain a road transportation operation permit from the local county-level competent authority for transportation, and each vehicle used for road freight transportation must have a road transportation certificate from the same authority.
In the event of repeated violations, the regulatory authority may suspend the operating license of the vehicle operator and/or revoke the business operation registration of the relevant vehicle. 46 Regulations Relating to International Freight Forwarding Agencies According to the Administrative Provisions on International Freight Forwarders (promulgated in 1995), its detailed rules for implementing (promulgated in 2004) and the Tentative Measures on Putting on Record of International Freight Forwarding Agencies (promulgated in 2005 and revised in 2016), all international freight forwarding agencies and their branches registered with state industrial and commercial administration in accordance with laws should be filed with the Ministry of Commerce (“MOC”) or the governmental authorities authorized by MOC.
Regulations Relating to International Freight Forwarding Agencies According to the Administrative Provisions on International Freight Forwarders (promulgated in 1995), its detailed rules for implementing (promulgated in 2004) and the Tentative Measures on Putting on Record of International Freight Forwarding Agencies (promulgated in 2005 and revised in 2016), all international freight forwarding agencies and their branches registered with state industrial and commercial administration in accordance with laws should be filed with the Ministry of Commerce (“MOC”) or the governmental authorities authorized by MOC.
Ocean freight capacities fluctuated since the COVID-19 outbreak. As such, in an effort to lock in capacity at prices that enable us to secure and retain customers, we have entered significant contracts with major container shipping companies.
As such, in an effort to lock in capacity at prices that enable us to secure and retain customers, we have entered significant contracts with major container shipping companies.
As a part of our value-added services, we from time to time sell and license our proprietary intelligent logistics IT systems as per our major customers’ requests.
As a part of our value-added services, we from time to time sell and license our proprietary intelligent logistics IT systems as per our major customers’ requests. We also develop customized proprietary IT systems depending on our major customers’ supply chain needs.
For the years ended December 31, 2020, 2021 and 2022, our gross profit amounted to RMB21.0 million, RMB34.5 million and RMB37.4 million (US$5.4 million), respectively, representing a year-over-year increase of 64.1% and 8.4%, respectively. We offer a comprehensive range of cross-border supply chain solution services, including: (i) freight forwarding services, (ii) supply chain management, and (iii) other value-added services.
For the years ended December 31, 2021, 2022 and 2023, our gross profit amounted to RMB34.5 million, RMB37.4 million and gross loss of RMB15.9 million (US$2.2 million), respectively. We offer a comprehensive range of cross-border supply chain solution services, including: (i) freight forwarding services, (ii) supply chain management, and (iii) other value-added services.
In addition, the sustained and steady growth of local economy and supportive government policies have backed up our development and brought us great convenience in daily operations. For the years ended December 31, 2020, 2021 and 2022, our total revenue amounted to RMB290.3 million, RMB545.6 million and RMB652.0 million (US$93.6 million), respectively, representing a year-over-year increase of 87.9% and 19.5%.
In addition, the sustained and steady growth of local economy and supportive government policies have backed up our development and brought us great convenience in daily operations. For the years ended December 31, 2021, 2022 and 2023, our total revenue amounted to RMB545.6 million, RMB652.0 million and RMB497.9 million (US$70.3 million).
The NVOCC performs the following activities relating to the entrusted cargo and carried out for the purpose of accomplishing such activities, including (1) conclusion of an international cargo transport contract in the capacity of a carrier with a consignor; (2) receipt and delivery of cargo in the capacity of a carrier; (3) issue of bills of lading or other transport documents; (4) collection of transport fees and other remuneration for services rendered; (5) booking of cabin or shipping space and cargo handling with international shipping operators or other transport operators; (6) payment of freight or other transport fees; (7) container de-consolidation and assembly business activities; and (8) other related business activities.
The NVOCC performs the following activities relating to the entrusted cargo and carried out for the purpose of accomplishing such activities, including (1) conclusion of an international cargo transport contract in the capacity of a carrier with a consignor; (2) receipt and delivery of cargo in the capacity of a carrier; (3) issue of bills of lading or other transport documents; (4) collection of transport fees and other remuneration for services rendered; (5) booking of cabin or shipping space and cargo handling with international shipping operators or other transport operators; (6) payment of freight or other transport fees; (7) container de-consolidation and assembly business activities; and (8) other related business activities. 61 According to the Regulations on International Maritime Transport and its implementation rules, all NVOCC shall complete bill of lading registration formalities with the department responsible for transportation under the State Council, and pay the security deposit.
Depending on the types of services involved in the process, we generally charge our ocean freight forwarding customers the following: (i) freight charges and our forwarding commissions; and (ii) additional service fees, which, depending on the instructions from our customers, may include custom clearance fees, insurance fees, first-mile pickup and/or last-mile delivery fees and warehousing fees. 41 Overland Freight Services Our overland freight services primarily include (i) first-mile pickup, (ii) last-mile delivery, and (iii) other overland freight forwarding services, such as rail freight and intermediate transportations with intermediate stops at Hong Kong.
Depending on the types of services involved in the process, we generally charge our ocean freight forwarding customers the following: (i) freight charges and our forwarding commissions; and (ii) additional service fees, which, depending on the instructions from our customers, may include custom clearance fees, insurance fees, first-mile pickup and/or last-mile delivery fees and warehousing fees.
Even if our efforts are successful, we may incur significant costs in defending our rights. From time to time, third parties may initiate litigation against us alleging infringement of their proprietary rights or declaring their non-infringement of our intellectual property rights. See “Item 3. Key Information — D.
From time to time, third parties may initiate litigation against us alleging infringement of their proprietary rights or declaring their non-infringement of our intellectual property rights. See “Item 3. Key Information — D.
We believe that our existing facilities are generally adequate to meet our current needs, but we expect to seek additional space as needed to accommodate future growth. ITEM 4A. UNRESOLVED STAFF COMMENTS Not applicable.
We believe that our existing facilities are generally adequate to meet our current needs, but we may seek additional space as needed to accommodate future growth.
For the fiscal years ended December 31, 2020, 2021, and 2022, revenues from our fragmented logistics services amounted to RMB32.8 million, RMB97.8 million, and RMB133.2 million (US$19.1 million), respectively, representing a year-on-year increase of 198.1% and 36.2%. 40 Air Freight Forwarding Services Operating as an air freight consolidator, we provide both time-saving and cost-effective air freight options to our customers.
For the fiscal years ended December 31, 2021, 2022, and 2023, revenues from our fragmented logistics services amounted to RMB97.8 million, RMB133.2 million and RMB94.7 million (US$13.4 million), respectively. Air Freight Forwarding Services Operating as an air freight consolidator, we provide both time-saving and cost-effective air freight options to our customers.
As of December 31, 2022, we have registered 51 registered copyrights, three registered domain names, and four registered trademarks, including “ 佳裕达 ”, “JAYUD GROUP” and “Joyed”. We intend to protect our intellectual properties vigorously, but there can be no assurance that our efforts will be successful.
As of December 31, 2023, we had registered 51 registered copyrights, three registered domain names, and four registered trademarks, including “佳裕达”, “JAYUD GROUP” and “Joyed.” We intend to protect our intellectual properties vigorously, but there can be no assurance that our efforts will be successful. Even if our efforts are successful, we may incur significant costs in defending our rights.
On December 30, 2022, the Foreign Trade Law of the PRC was amended, and foreign trade operators were no longer required to go through the record registration formalities. 48 According to the Customs Law of the PRC, unless otherwise provided for, the declaration of import or export goods and the payment of customs duties may be made by the consignees or consigners themselves, and such formalities may also be completed by their entrusted customs brokers that have registered with the PRC customs authority.
According to the Customs Law of the PRC, unless otherwise provided for, the declaration of import or export goods and the payment of customs duties may be made by the consignees or consigners themselves, and such formalities may also be completed by their entrusted customs brokers that have registered with the PRC customs authority.
Property, Plant and Equipment Our corporate headquarters are located in Shenzhen, China. As of December 31, 2022, the approximate gross floor area of our leased properties was 5,214 sq.m. in aggregate and we did not have self-held properties. We lease our premises from unrelated third parties under operating lease agreements.
Property, Plant and Equipment Our corporate headquarters are located in Shenzhen, China. As of December 31, 2023, the approximate gross floor area of our leased properties was 23,309.2 sq. m. in aggregate and we did not have self-held properties.
All facilities, such as trucks and equipment in warehouses, are subject to regular inspection to avoid any potential hazards and to minimize accidents.
To ensure employee and operators’ safety, we have implemented a regular facilities maintenance regime. All facilities, such as trucks and equipment in warehouses, are subject to regular inspection to avoid any potential hazards and to minimize accidents.
During the meetings, our management may review internal regulations and policies, propose new quality control measures, randomly inquire to check facilities’ conditions, go through key customers’ feedback, and deliberate reports on quality control updates presented by each department. 44 ● Regular facilities inspection. To ensure employee and operators’ safety, we have implemented a regular facilities maintenance regime.
Our management and other staff hold regular weekly or monthly meetings to discuss topics relating to quality control. During the meetings, our management may review internal regulations and policies, propose new quality control measures, randomly inquire to check facilities’ conditions, go through key customers’ feedback, and deliberate reports on quality control updates presented by each department. ● Regular facilities inspection.
Our principal executive offices are located at 4th Floor, Building 4, Shatoujiao Free Trade Zone, Yantian District, Shenzhen, the People’s Republic of China. Our telephone number at this address is +86 0755-25595406. Our registered office in the Cayman Islands is located at Vistra (Cayman) Limited, P. O.
Our principal executive offices are located at Building 3, No. 7 Gangqiao Road, Li Lang Community, Nanwan Street, Longgang District, Shenzhen, the People’s Republic of China. Our telephone number at this address is +86 0755-25595406. Our registered office in the Cayman Islands is located at Vistra (Cayman) Limited, P. O.
Freight Forwarding Services Our freight forwarding services primarily comprise (i) integrated cross-border logistics services, and (ii) fragmented logistics services. For the years ended December 31, 2020, 2021 and 2022, revenues from our freight forwarding services amounted to RMB243.6 million, RMB488.0 million, and RMB577.6 million (US$82.9 million), respectively, representing a year-over-year increase of 100.3% and 18.3%, respectively.
Freight Forwarding Services Our freight forwarding services primarily comprise (i) integrated cross-border logistics services, (ii) fragmented logistics services, and (iii) chartered airline freight services. For the years ended December 31, 2021, 2022 and 2023, revenues from our freight forwarding services amounted to RMB488.0 million, RMB577.6 million and RMB342.6 million (US$48.4 million), respectively.
No one shall import or export goods that are prohibited from being imported into or exported out of China. The import and export of goods that are restricted from being imported into or exported out of China shall be in compliance with relevant restrictive laws and regulations.
No one shall import or export goods that are prohibited from being imported into or exported out of China.
We also develop customized proprietary IT systems depending on our major customers’ supply chain needs. 45 Intellectual Property We seek to protect our intellectual properties through a combination of patents, copyrights, trademarks, trade secrets and confidentiality agreements.
Intellectual Property We seek to protect our intellectual properties through a combination of patents, copyrights, trademarks, trade secrets and confidentiality agreements.
For the years ended December 31, 2020, 2021, and 2022, our research and development expenses amounted to RMB1.4 million, RMB1.5 million, and RMB2.1 million (US$0.3 million), respectively.
As of December 31, 2023, the management of our research and development team had experience in the IT industry for more than five years. 59 For the years ended December 31, 2021, 2022, and 2023, our research and development expenses amounted to RMB1.5 million, RMB2.1 million and RMB1.4 million (US$0.2 million), respectively.
Customers of our ocean freight forwarding services primarily include manufacturers, companies that engages in international commerce, as well as other logistics service providers. The majority of shipments originate in Shenzhen of Guangdong province, Ningbo of Zhejiang province and Shanghai. We endeavor to ensure that our ocean freight shipping capacity is secured and planned in advance to meet our customers’ requirements.
The majority of shipments originate in Shenzhen of Guangdong province, Ningbo of Zhejiang province and Shanghai. 55 We endeavor to ensure that our ocean freight shipping capacity is secured and planned in advance to meet our customers’ requirements. Ocean freight capacities fluctuated since the COVID-19 outbreak.
Third Parties must obtain consent or a proper license from the patent owner to use the patent. Otherwise, the unauthorized use constitutes an infringement on the patent rights.
Third Parties must obtain consent or a proper license from the patent owner to use the patent. Otherwise, the unauthorized use constitutes an infringement on the patent rights. Domain Names On August 24, 2017, MIIT promulgated the Administrative Measures for Internet Domain Names, or the Domain Name Measures, which became effective on November 1, 2017.
For the fiscal years ended December 31, 2020, 2021, and 2022, revenues from our contract logistics segment amounted to RMB191.9 million, RMB255.8 million and RMB321.2 million (US$46.1 million), respectively, representing a year-over-year increase of 33.3% and 25.6%.
For the fiscal years ended December 31, 2021, 2022, and 2023, revenues from our contract logistics operation amounted to RMB255.8 million, RMB321.2 million and RMB83.0 million (US$12 million), respectively.
Fragmented Logistics Services We may also be engaged by our customers to provide one or more types of logistics services that only consist part of the entire cross-border cargo delivery process.
For the fiscal years ended December 31, 2021, 2022, and 2023, revenues from our basic logistics operation amounted to RMB134.4 million, RMB123.1 million and RMB136.7 million (US$19 million), respectively. 54 Fragmented Logistics Services We may also be engaged by our customers to provide one or more types of logistics services that only consist part of the entire cross-border cargo delivery process.
On February 27, 2019, the State Council issued the Decision to Cancel and Delegate to Lower-level Authorities a Group of Administrative Licensing Items, deciding to cancel 25 administrative licensing items, including the registration application procedures of NVOCC business, change to the filing procedures, and the NVOCC security deposit requirements. 47 Regulations Relating to Customs Declaration Pursuant to the Customs Law of the PRC promulgated by the Standing Committee of the National People’s Congress (“SCNPC”) on January 22, 1987, most recently amended on April 29, 2021, the consignor or consignee of the goods exported or imported as well as a customs declaration enterprise must register themselves for declaration activities at customs in accordance with the law.
Regulations Relating to Customs Declaration Pursuant to the Customs Law of the PRC promulgated by SCNPC on January 22, 1987, most recently amended on April 29, 2021, the consignor or consignee of the goods exported or imported as well as a customs declaration enterprise must register themselves for declaration activities at customs in accordance with the law.
Vehicle operators who violate this regulation may be subject to a fine of up to RMB30,000 for each violation.
Vehicle operators who violate this regulation may be subject to a fine of up to RMB30,000 for each violation. In the event of repeated violations, the regulatory authority may suspend the operating license of the vehicle operator and/or revoke the business operation registration of the relevant vehicle.
Customers of our overland freight services primarily include manufacturers, companies that engages in international commerce, as well as other logistics service providers. The majority of freights originate in Shenzhen of Guangdong province. We endeavor to ensure that our overland freight services capacity is secured and planned in advance to meet our customers’ requirements.
The majority of freights originate in Shenzhen of Guangdong province. We endeavor to ensure that our overland freight services capacity is secured and planned in advance to meet our customers’ requirements. To that end, we maintained a fleet of two self-owned trucks as of December 31, 2023 and have developed sound business relationships with third-party trucking service providers.
However, there are no guarantees that these trends will continue or that the COVID-19 pandemic will not cause any other business disruptions. Specifically, our operations in Hong Kong were negatively affected by the COVID-19 pandemic during the first half of 2022, which we believe may impact our results of operations for the same period.
However, there are no guarantees that these trends will continue or that the COVID-19 pandemic will not cause any other business disruptions.
As of December 31, 2022, our research and development team consisted of 20 employees. As of December 31, 2022, the management of our research and development team had experience in the IT industry for more than six years.
As of December 31, 2023, our research and development team consisted of five employees.
To that end, we maintained a fleet of two self-owned trucks as of December 31, 2022 and have developed sound business relationships with third-party trucking service providers. Furthermore, we have also chartered rail transport to secure stable overland freight service capabilities.
Furthermore, we have also chartered rail transport to secure stable overland freight service capabilities.
Removed
For the fiscal years ended December 31, 2020, 2021, and 2022, revenues from our basic logistics segment amounted to RMB18.9 million, RMB134.4 million and RMB123.1 million (US$17.7 million), respectively, representing a year-on-year increase of 609.5% and decrease of 8.4%.
Added
In the same month, we incorporated Joyed Logistics Service Inc. in the State of Georgia as our wholly owned U.S. subsidiary to expend our business in the U.S. In July 2023, we obtained 51% of the equity interests of Shenzhen Ronghai Tongda Supply Chain Management Co., Ltd.
Removed
Later in August, Shenzhen Jayud Logistics Technology Co., Ltd. assigned all its rights and obligations under such agreement to Shenzhen Jayud Yuncang Technology Co., Ltd., one of our subsidiaries in China, by entering into a supplementary agreement.
Added
In September 2023, we obtained 100% of the equity interest of HK XINYX Technology Limited. The main business focus of Shenzhen Ronghai Tongda Supply Chain Management Co., Ltd and HK XINYX Technology Limited is international trading business.
Removed
Supply Chain Management Our supply chain management business primarily consists of two sub-segments, namely, (i) international trading, where we engage in international trading directly, with our customers being the purchasers or sellers, and (ii) agent services, where we are engaged by customers as their international trade agent, for the purpose of further streamlining the customers’ supply chain process.
Added
In January 2024, Shenzhen Jayud Logistics Technology Co., Ltd., or Shenzhen Jayud, our wholly-owned PRC subsidiary, entered into an equity purchase agreement to acquire 51% of the equity interests in Qingdao Oranda Supply Chain Management Co., Ltd., a premier international logistics company.
Removed
Our management and other staff hold regular weekly or monthly meetings to discuss topics relating to quality control.
Added
In the same month, Shenzhen Jayud also entered into an equity purchase agreement to acquire 51% of the equity interests in Shenzhen Jiniu International Logistics Co., Ltd., a logistics company specialized in supply chain management, domestic cargo transportation agency, loading/unloading, and information consulting services.
Removed
According to the Regulations on International Maritime Transport and its implementation rules, all NVOCC shall complete bill of lading registration formalities with the department responsible for transportation under the State Council, and pay the security deposit.
Added
Customers of our ocean freight forwarding services primarily include manufacturers, companies that engages in international commerce, as well as other logistics service providers.
Removed
Domain Names On August 24, 2017, the Ministry of Industry and Information Technology (“MIIT”) promulgated the Administrative Measures for Internet Domain Names, or the Domain Name Measures, which became effective on November 1, 2017.
Added
Overland Freight Services Our overland freight services primarily include (i) first-mile pickup, (ii) last-mile delivery, and (iii) other overland freight forwarding services, such as rail freight and intermediate transportations with intermediate stops at Hong Kong. Customers of our overland freight services primarily include manufacturers, companies that engages in international commerce, as well as other logistics service providers.
Added
As of the date of the report, we had approximately 5,767 sq. m. of Dachan Bay Warehouse.
Added
We charge our customers warehousing fees primarily consist of our rental rate for the relevant warehouse, first-mile pickup and/or last-mile delivery fees, and fees for other warehousing services, as applicable. Chartered Airline Freight Services We provide a fixed volume or weight of space capacity on fixed-route air planes for customer transportation.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

76 edited+60 added−85 removed79 unchanged
Biggest changeOperating activities For the year ended December 31, 2022, our net cash used in operating activities was RMB15.2 million (US$2.2 million), which was primarily attributable to (i) a decrease of RMB53.6 million (US$7.7 million) in accounts payable to related parties and RMB23.8 million (US$3.4 million) in accounts payable to third parties as we made payments to Cargo Link Logistics HK Company Ltd. and our suppliers for freight services and other services; and (ii) a decrease of operating lease liabilities of RMB10.8 million (US$1.5 million) and accrued expenses and other current liabilities of RMB3.0 million (US$0.4 million) for payments of advances to employees, for daily operational expenses and transportation deposits; and was offset by (i) a decrease of accounts receivable of RMB55.9 million (US$8.0 million) for collection; and (iii) a decrease of prepaid expenses and other current assets, net of RMB10.1 million (US$1.4 million) associated with receipts of goods and service that reduced advances to supplies.
Biggest changeOperating activities For the year ended December 31, 2023, our net cash used in operating activities was RMB44.2 million (US$6.2 million), which was attributable to (i) a loss adjusted after non-cash items of RMB47.6 million (US$6.7 million); (ii) an increase of RMB19.8 million (US$2.8 million) in accounts receivable primarily due to the increase of revenue in the last quarter of 2023; (iii)an increase of RMB4.8 million (US$0.7 million) in prepaid expenses and other current assets, RMB0.2 million (US$0.02 million) in other receivable to related parties, and RMB1.0 million (US$0.1 million) in refundable deposit as we made prepaid deposits for chartered airlines and VAT taxes; (iv) a decrease of operating lease liabilities of RMB7.6 million (US$1.1 million) for rent payments; and (v) a decrease of RMB0.8 million (US$0.1 million) in accounts payable to related parties and RMB1.6 million (US$0.2 million) in tax payable due to payments to related party vendors and income tax payments for 2022; and was offset by (i) an increase of accounts payable of RMB21.7 million (US$3.1 million) associated with the expenses to third party transportation vendors and accrued expenses and other current liabilities of RMB3.3 million (US$0.5 million) for payments of advances to employees, for daily operational expenses and transportation deposits (ii) an increase of accounts payable to related parties of RMB7.3 million (US$1.0 million ) and contract liabilities of RMB2.8 million (US$0.4 million) for advances received from customers; and (iii) an decrease of RMB2.4 million (US$0.3 million) in contract assets and RMB1.7 million (US$0.2 million) in accounts receivable from a related party due to collection. 89 For the year ended December 31, 2022, our net cash used in operating activities was RMB15.2 million, which was primarily attributable to (i) a decrease of RMB53.6 million in accounts payable to related parties and RMB23.8 million in accounts payable to third parties as we made payments to Cargo Link Logistics HK Company Ltd. and our suppliers for freight services and other services; and (ii) a decrease of operating lease liabilities of RMB10.8 million and accrued expenses and other current liabilities of RMB3.0 million for payments of advances to employees, for daily operational expenses and transportation deposits; and was offset by (i) a decrease of accounts receivable of RMB55.9 million for collection; and (iii) a decrease of prepaid expenses and other current assets, net of RMB10.1 million associated with receipts of goods and service that reduced advances to supplies.
Selling expenses Our selling expenses mainly consisted of (i) employee payroll and commission, (ii) entertainment and marketing expenses, and (iii) rental and depreciation related to selling and marketing functions.
Selling expenses Our selling expenses mainly consisted of (i) employee payroll and commission, (ii) entertainment and marketing expenses, and (iii) rental and depreciation related to selling and marketing functions.
Research and development expenses Research and development expenses mainly consisted of (i) cost of materials used for experiment, (ii) employee payroll, and (iii) depreciation expense for experimental facilities and other daily expenses related to our research and development activities.
Research and development expenses Research and development expenses mainly consisted of (i) cost of materials used for experiment, (ii) employee payroll, and (iii) depreciation expense for experimental facilities and other daily expenses related to our research and development activities.
Material Modifications to the Rights of Security Holders and Use of Proceeds—Use of Proceeds” and “Item 3. Key Information — D.
Material Modifications to the Rights of Security Holders and Use of Proceeds—Use of Proceeds” and “Item 3. Key Information — D.
In addition, these restrictions have no impact on the ability for us to meet our cash obligations. In utilizing the proceeds we received from our initial public offering, we may make additional capital contributions to our PRC subsidiary, establish new PRC subsidiaries and make capital contributions to these new PRC subsidiaries, or make loans to the PRC subsidiaries.
In addition, these restrictions have no impact on the ability for us to meet our cash obligations. 88 In utilizing the proceeds we received from our initial public offering, we may make additional capital contributions to our PRC subsidiary, establish new PRC subsidiaries and make capital contributions to these new PRC subsidiaries, or make loans to the PRC subsidiaries.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the period from January 1, 2022 to December 31, 2022 that are reasonably likely to have a material and adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial conditions.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the period from January 1, 2022 to December 31, 2022 that are reasonably likely to have a material and adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial conditions. 94 E.
Financing activities For the year ended December 31, 2022, our net cash provided by financing activities was RMB9.3 million (US$1.3 million), which was primarily due to (i) proceeds from shareholders’ contribution of RMB24.7 million (US$3.5 million); (ii) proceeds from bank short-term borrowings of RMB18.0 million (US$2.6 million) and from bank long-term borrowings of RMB5.0 million (US$0.7 million); (iii) proceeds from loans provided by shareholders for RMB6.3 million (US$0.9 million); (iv) proceeds from loans provided by third parties of RMB5.6 million (US$0.8 million); (v) proceeds from a loan provided by a related party of RMB0.5 million (US$0.1 million); (vi) an increase of other payables to related parties of RMB0.6 million (US$0.1 million) for constructive disbursement; and (vii) proceeds from capital injection from noncontrolling shareholders of RMB0.2 million (US$0.03 million) and was offset by (i) repayments of bank short-term borrowings of RMB14.1 million (US$2.0 million) and of bank long-term borrowings of RMB4.5 million (US$0.6 million); (ii) repayments of loans to third parties of RMB10.4 million (US$1.5 million); (iii) repayments of loans to shareholders of RMB8.9 million (US$1.3 million); (iv) payments for dividend distribution of RMB6.2 million (US$0.9 million); (v) payments for deferred offering costs of RMB5.4 million (US$0.8 million); and (vi) repayments of loans to related parties of RMB2.1 million (US$0.3 million).
For the year ended December 31, 2022, our net cash provided by financing activities was RMB9.3 million, which was primarily due to (i) proceeds from shareholders’ contribution of RMB24.7 million; (ii) proceeds from bank short-term borrowings of RMB18.0 million and from bank long-term borrowings of RMB5.0 million; (iii) proceeds from loans provided by shareholders for RMB6.3 million; (iv) proceeds from loans provided by third parties of RMB5.6 million; (v) proceeds from a loan provided by a related party of RMB0.5 million; (vi) an increase of other payables to related parties of RMB0.6 million for constructive disbursement; and (vii) proceeds from capital injection from noncontrolling shareholders of RMB0.2 million and was offset by (i) repayments of bank short-term borrowings of RMB14.1 million and of bank long-term borrowings of RMB4.5 million; (ii) repayments of loans to third parties of RMB10.4 million; (iii) repayments of loans to shareholders of RMB8.9 million; (iv) payments for dividend distribution of RMB6.2 million; (v) payments for deferred offering costs of RMB5.4 million; and (vi) repayments of loans to related parties of RMB2.1 million.
But we expect the pressure of high fuel prices to be limited, as we plan to expand warehouse management services to diversify our service lines to mitigate the impact. 64 Impact of Supply Chain Disruptions The outbreak of COVID-19 since the beginning of March 2020 caused widespread shutdown and weakened the financial conditions of our upstream suppliers and downstream customers, which resulted in some disruptions to our business operations.
But we expect the pressure of high fuel prices to be limited, as we plan to expand warehouse management services to diversify our service lines to mitigate the impact. 78 Impact of Supply Chain Disruptions The outbreak of COVID-19 since the beginning of March 2020 caused widespread shutdown and weakened the financial conditions of our upstream suppliers and downstream customers, which resulted in some disruptions to our business operations.
We currently do not have any cash management policy that dictates the transfer of cash between our subsidiaries. See “Item 4. Information on the Company—B. Business Overview—Regulations— Regulations Relating to Foreign Exchange” for details of such procedures. 78 Inflation Since our inception, inflation in China has not materially affected our results of operations.
We currently do not have any cash management policy that dictates the transfer of cash between our subsidiaries. See “Item 4. Information on the Company—B. Business Overview—Regulations— Regulations Relating to Foreign Exchange” for details of such procedures. 93 Inflation Since our inception, inflation in China has not materially affected our results of operations.
In addition, our PRC subsidiaries are permitted to pay dividends to us only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Our PRC subsidiaries had aggregate retained earnings as determined under PRC accounting standards as of December 31, 2022.
In addition, our PRC subsidiaries are permitted to pay dividends to us only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Our PRC subsidiaries had aggregate retained earnings as determined under PRC accounting standards as of December 31, 2023.
According to the National Bureau of Statistics of China, the year-over-year percent changes in the consumer price index for 2020, 2021 and 2022 were increases of 0.2%, 1.5% and 1.8%, respectively. Although we have not been materially affected by inflation in the past, we may be affected if China experiences higher rates of inflation in the future.
According to the National Bureau of Statistics of China, the year-over-year percent changes in the consumer price index for 2021, 2022 and 2023 were increases of 1.5%, 1.8% and 2.2%, respectively. Although we have not been materially affected by inflation in the past, we may be affected if China experiences higher rates of inflation in the future.
Our business is less affected by the first type of inflationary pressure since substantially all of our business operations are in China, where inflation has been stable over the past three years. In 2020, 2021 and 2022, the inflation rate in China was 2.5%, 0.9% and 2.0%, respectively.
Our business is less affected by the first type of inflationary pressure since substantially all of our business operations are in China, where inflation has been stable over the past three years. In 2021, 2022 and 2023, the inflation rate in China was 0.9%, 2.0% and 2.2%, respectively.
Contribution is required until the reserve fund has reached 50% of the registered capital of our subsidiaries. As of December 31, 2022, our reserve fund did not reach 50% of the registered capital of our subsidiaries.
Contribution is required until the reserve fund has reached 50% of the registered capital of our subsidiaries. As of December 31, 2023, our reserve fund did not reach 50% of the registered capital of our subsidiaries.
For the year ended December 31, 2021, our net cash provided by financing activities was RMB12.9 million, which was primarily attributable to (i) proceeds from short-term borrowings of RMB18.0 million for our business growth and expansion; (ii) proceeds of loans provided by shareholders of RMB6.2 million; (iii) proceeds of loans provided by third parties of RMB4.8 million; (iv) proceeds from a long-term borrowing of RMB5.0 million; (v) proceeds of a short-term loan provided by a related party of RMB2.1 million; and (vi) capital contribution by a shareholder of RMB0.4 million, and was offset by (i) repayments of short-term borrowings of RMB14.8 million and a long-term borrowing of RMB0.6 million; (ii) repayments of loans to shareholders of RMB3.7 million; (iv) repayments for settling the constructive disbursement paid by related parties on behalf of Jayud of RMB1.8 million; (v) repayments of loans to third parties of RMB1.4 million; (vi) payments for deferred offering costs of RMB0.9 million; and (vii) repayment of a loan to a related party of RMB0.5 million. 76 For the year ended December 31, 2020, our net cash provided by financing activities was RMB3.8 million, which was primarily attributable to (i) proceeds from short-term borrowings of RMB10.7 million; (ii) proceeds from loans provided by third parties of RMB7.6 million; (iii) expenses paid by related parties on behalf of Jayud of RMB3.0 million; and (iv) proceeds from a loan provided by a related party of RMB1.4 million; and was offset by (i) repayments of short-term borrowings of RMB10.0 million; (ii) repayments of loans to third parties of RMB6.2 million; (iii) repayment of a loan to a related party of RMB1.4 million; and (iv) payment of dividend distribution to a shareholder of RMB1.4 million.
For the year ended December 31, 2021, our net cash provided by financing activities was RMB12.9 million, which was primarily attributable to (i) proceeds from short-term borrowings of RMB18.0 million for our business growth and expansion; (ii) proceeds of loans provided by shareholders of RMB6.2 million; (iii) proceeds of loans provided by third parties of RMB4.8 million; (iv) proceeds from a long-term borrowing of RMB5.0 million; (v) proceeds of a short-term loan provided by a related party of RMB2.1 million; and (vi) capital contribution by a shareholder of RMB0.4 million, and was offset by (i) repayments of short-term borrowings of RMB14.8 million and a long-term borrowing of RMB0.6 million; (ii) repayments of loans to shareholders of RMB3.7 million; (iv) repayments for settling the constructive disbursement paid by related parties on behalf of Jayud of RMB1.8 million; (v) repayments of loans to third parties of RMB1.4 million; (vi) payments for deferred offering costs of RMB0.9 million; and (vii) repayment of a loan to a related party of RMB0.5 million.
After foreign investors’ funds are received by Jayud Global Logistics Limited, our holding company, at the closing of our initial public offering, subject to the cash demand of our PRC and Hong Kong subsidiaries, the funds can be transferred to our wholly owned Hong Kong subsidiary, Jayud Global Logistics (Hong Kong) Limited, which will further distribute the funds to our PRC subsidiaries.
After foreign investors’ funds are received by Jayud Global Logistics Limited, our holding company, at the closing of our financing, subject to the cash demand of our PRC and Hong Kong subsidiaries, the funds can be transferred to our wholly owned Hong Kong subsidiary, Jayud Global Logistics (Hong Kong) Limited, which will further distribute the funds to our PRC subsidiaries.
Our revenue generated from Europe, primarily from freight forwarding services and supply chain management in aggregate, accounted RMB18.6 million, or 3.4% of total revenue, for the year ended December 31, 2021, and RMB42.5 million (US$6.3 million), or 6.5% of total revenue, for the year ended December 31, 2022.
Our revenue generated from Europe, primarily from freight forwarding services and supply chain management in aggregate, accounted RMB18.6 million, or 3.4% of total revenue, for the year ended December 31, 2021, and RMB42.5 million, or 6.5% of total revenue, for the year ended December 31, 2022, and RMB52.7 million (US$7.4 million), or 10.6% of total revenue, for the year ended December 31, 2023.
Investing activities For the year ended December 31, 2022, our net cash used in investing activities was RMB5.7 million (US$0.8 million), which was primarily attributable to the prepayment of acquisition deposit of RMB3.6 million (US$0.5 million) for acquiring a business and for the purchase of property and equipment of RMB2.2 million (US$0.3 million).
For the year ended December 31, 2022, our net cash used in investing activities was RMB5.7 million , which was primarily attributable to the prepayment of acquisition deposit of RMB3.6 million for acquiring a business and for the purchase of property and equipment of RMB2.2 million.
Capital Expenditures We made capital expenditures of RMB0.2 million, RMB0.6 million and RMB2.2 million (US$0.3 million) for the years ended December 31, 2020, 2021 and 2022, respectively. Our capital expenditures consisted primarily of expenditures related to the expansion of our new branch offices and logistics equipment.
Capital Expenditures We made capital expenditures of RMB0.6 million, RMB2.2 million and RMB4.4 million (US$0.6 million) for the years ended December 31, 2021, 2022 and 2023, respectively. Our capital expenditures consisted primarily of expenditures related to the expansion of our new offices and logistics equipment.
With respect to our PRC subsidiaries, the maximum amount of the loans that they can acquire in aggregate from the outside of China is (i) approximately RMB52.5 million (US$8.2 million) as of December 31, 2022 under the total investment minus registered capital approach as foreign-invested companies; or (ii) approximately RMB139.9 million (US$20.1 million) as of December 31, 2022 under the net asset approach.
With respect to our PRC subsidiaries, the maximum amount of the loans that they can acquire in aggregate from the outside of China is (i) approximately RMB63.2 million (US$8.9 million) as of December 31, 2023 under the total investment minus registered capital approach as foreign-invested companies; or (ii) approximately RMB55.1 million (US$7.8 million) as of December 31, 2023 under the net asset approach.
In addition, average revenue per customer were RMB542.7 thousand, RMB420 thousand and RMB347 thousand (US$50 thousand) per customer for the year ended December 31, 2020, 2021 and 2022, respectively. Our ability to increase our revenues and our profitability will depend on our ability to continue to increase our customer base and revenue per customer.
In addition, average revenue per customer were RMB420 thousand, RMB347 thousand and RMB270 thousand (US$38 thousand) per customer for the year ended December 31, 2021, 2022 and 2023, respectively. Our ability to increase our revenues and our profitability will depend on our ability to continue to increase our customer base and revenue per customer.
As of December 31, 2021 and 2022, our PRC subsidiaries had RMB22.6 million and RMB63.4 million (US$9.1 million) of restricted net asset, respectively. 77 On February 8, 2022 and February 28, 2022, Shenzhen Jiayuda E-Commerce Technology Co., Ltd and Shenzhen Jiayuda Global Supply Chain Co., Ltd. declared RMB2.4 million cash dividend and RMB7.4 million cash dividend respectively, to its then shareholders and its holding company, Shenzhen Jayud Logistics Technology Co., Ltd.
As of December 31, 2023, our PRC subsidiaries had RMB5.8 million (US$0.8 million) of restricted net asset, respectively. 92 On February 8, 2022 and February 28, 2022, Shenzhen Jiayuda E-Commerce Technology Co., Ltd and Shenzhen Jiayuda Global Supply Chain Co., Ltd. declared RMB2.4 million cash dividend and RMB7.4 million cash dividend respectively, to its then shareholders and its holding company, Shenzhen Jayud Logistics Technology Co., Ltd.
Operating Expenses Our operating expenses increased from RMB14.7 million for the year ended December 31, 2020 to RMB21.7 million (US$3.4 million) for the year ended December 31, 2021, representing a year-over-year increase of 47.6%. This increase was primarily attributable to the increases in our general and administrative expenses, selling expenses and, to a lesser extent, our research and development expenses.
Operating Expenses Our operating expenses increased from RMB21.7 million for the year ended December 31, 2021 to RMB36.7 million (US$5.3 million) for the year ended December 31, 2022, representing a year-over-year increase of 69.1%. This increase was primarily attributable to the increases in our general and administrative expenses, selling expenses and, to a lesser extent, our research and development expenses.
Among the RMB0.6 million capital expenditure, RMB0.2 million was invested in logistics-related software, in order to improve efficiency and effectiveness in daily operations. The rest of RMB0.4 million was invested in electronic equipment and machinery.
Among the RMB0.6 million capital expenditure, RMB0.2 million was invested in logistics-related software, in order to improve efficiency and effectiveness in daily operations.
Income taxes Our income tax expense increased by RMB0.1 million, or 4.2%, from RMB1.6 million for the year ended December 31, 2020 to RMB1.7 million (US$0.3 million) for the year ended December 31, 2021.
Income taxes Our income tax expense increased by RMB0.9 million, or 51.6%, from RMB1.7 million for the year ended December 31, 2021 to RMB2.6 million (US$0.4 million) for the year ended December 31, 2022.
For the years ended December 31, 2020, 2021 and 2022, our total revenue amounted to RMB290.3 million, RMB545.6 million and RMB652.0 million (US$93.6 million), respectively, representing a year-over-year increase of 87.9% and 19.5%.
For the years ended December 31, 2021, 2022 and 2023, our total revenue amounted to RMB545.6 million, RMB652.0 million and RMB497.9 million (US$70.3 million), respectively, representing a year-over-year increase of 19.5% from 2021 to 2022 and a year-over-year decrease of 23.6% from 2022 to 2023, respectively.
Therefore, with the increase in e-commerce related logistics services, our number of customers increased rapidly in 2022, but the percentage of revenue generated from e-commerce related logistics services decreased from 24.6% for the year ended December 31, 2021 to 18.9% for the year ended December 31, 2022.
Therefore, with the increase in e-commerce related logistics services, our number of customers increased rapidly in 2022, but the percentage of revenue generated from e-commerce related logistics services decreased from 24.6% for the year ended December 31, 2021 to 18.9% for the year ended December 31, 2022. However, larger customer base will provide us more development opportunities in the future.
C. Research and Development, Patents and Licenses, etc. See “Item 4. Information on the Company—B. Business Overview—Technology, Research and Development” and “Item 4. Information on the Company—B. Business Overview—Intellectual Property.” D.
Business Overview—Technology, Research and Development” and “Item 4. Information on the Company—B. Business Overview—Intellectual Property.” D.
Our gross profit is primarily affected by our ability to generate revenue and the fluctuation of our cost. 65 Our breakdown of gross profit by service line for the years indicated is set forth below: For the Year Ended December 31, 2020 2021 2022 RMB RMB RMB US$ (in thousands, except percentages) Freight forwarding Gross profit 17,453 31,774 34,957 5,019 Gross margin 7.2 % 6.5 % 6.1 % 6.1 % Supply chain management Gross profit 2,704 1,603 486 70 Gross margin 6.2 % 3.0 % 0.7 % 0.7 % Other value-added services Gross profit 870 1,123 1,943 279 Gross margin 31.5 % 27.9 % 36.0 % 36.0 % Total Gross profit 21,027 34,500 37,386 5,368 Gross margin 7.2 % 6.3 % 5.8 % 5.8 % Operating expenses Operating expenses include selling expenses, general and administrative expenses, and research and development expenses.
Our breakdown of gross profit by service line for the years indicated is set forth below: For the Year Ended December 31, 2021 2022 2023 RMB RMB RMB US$ (in thousands, except percentages) Freight forwarding Gross profit 31,774 34,957 (17,376 ) (2,453 ) Gross margin 6.5 % 6.1 % (5.1 )% (5.1 )% Supply chain management Gross profit 1,603 486 1,251 177 Gross margin 3.0 % 0.7 % 0.8 % 0.8 % Other value-added services Gross profit 1,123 1,943 254 36 Gross margin 27.9 % 36.0 % 9.6 % 9.6 % Total Gross profit 34,500 37,386 (15,871 ) (2,240 ) Gross margin 6.3 % 5.8 % (3.2 )% (3.2 )% Operating expenses Operating expenses include selling expenses, general and administrative expenses, and research and development expenses.
In addition, the sustained and steady growth of local economy and supportive government policies have backed up our development and brought us great convenience in daily operations. We experienced a rapid growth in 2020 and 2021 as well as in 2022.
In addition, the sustained and steady growth of local economy and supportive government policies have backed up our development and brought us great convenience in daily operations.
Liquidity and Capital Resources The following table sets forth a summary of our cash flows for the periods indicated: For the Year Ended December 31, 2020 2021 2022 RMB RMB RMB US$ (in thousands) Summary Consolidated Cash Flow Data: Net cash provided by/ (used in) operating activities 15,320 4,240 (15,232 ) (2,187 ) Net cash used in investing activities (155 ) (635 ) (5,729 ) (823 ) Net cash provided by financing activities 3,788 12,946 9,334 1,340 Effect of foreign exchange rate changes 11 10 (200 ) (28 ) Net increase/ (decrease) in cash and cash equivalents and restricted cash 18,964 16,561 (11,827 ) (1,698 ) Cash and cash equivalents and restricted cash at beginning of year 4,742 23,706 40,267 5,782 Cash and cash equivalents and restricted cash at end of year 23,706 40,267 28,440 4,084 In assessing our liquidity, we monitor and analyze our cash on-hand and our operating and capital expenditure commitments.
Liquidity and Capital Resources The following table sets forth a summary of our cash flows for the periods indicated: For the Year Ended December 31, 2021 2022 2023 RMB RMB RMB US$ (in thousands) Summary Consolidated Cash Flow Data: Net cash provided by/ (used in) operating activities 4,240 (15,232 ) (44,222 ) (6,244 ) Net cash used in investing activities (635 ) (5,729 ) (4,444 ) (627 ) Net cash provided by financing activities 12,946 9,334 48,191 6,804 Effect of foreign exchange rate changes 10 (200 ) (1,360 ) (192 ) Net increase/ (decrease) in cash and cash equivalents and restricted cash 16,561 (11,827 ) (1,835 ) (259 ) Cash and cash equivalents and restricted cash at beginning of year 23,706 40,267 28,440 4,015 Cash and cash equivalents and restricted cash at end of year 40,267 28,440 26,605 3,756 In assessing our liquidity, we monitor and analyze our cash on-hand and our operating and capital expenditure commitments.
Cost of freight charges, representing the main source of our cost of revenue, increased by RMB179.5 million, or 52.4%, from approximately RMB342.9 million for the year ended December 31, 2021 to approximately RMB522.5 million (US$75.0 million) for the year ended December 31, 2022. The main components of freight charges were the freight and the delivery fees paid to third-party carriers.
The increase was primarily attributable to the increase of the freight charges. Cost of freight charges, representing the main source of our cost of revenue, increased by RMB179.5 million, or 52.4%, from approximately RMB342.9 million for the year ended December 31, 2021 to approximately RMB522.5 million (US$75.0 million) for the year ended December 31, 2022.
Our cost of revenues for freight forwarding services increased by approximately RMB86.3 million, or 18.9%, from approximately RMB456.3 million for the year ended December 31, 2021 to approximately RMB542.6 million (US$77.9 million) for the year ended December 31, 2022. The increase was primarily attributable to the increase of the freight charges.
Cost of Revenues Our cost of revenues increased by 20.3% from RMB511.1 million for the year ended December 31, 2021 to RMB614.6 million (US$88.2 million) for the year ended December 31, 2022. 85 Our cost of revenues for freight forwarding services increased by approximately RMB86.3 million, or 18.9%, from approximately RMB456.3 million for the year ended December 31, 2021 to approximately RMB542.6 million (US$77.9 million) for the year ended December 31, 2022.
Gross profit margin of our other value-added services increased from 27.9% for the year ended December 31, 2021 to 36.0% for the year ended December 31, 2022 mainly due to the fact that we were able to undertake orders for customs brokerage with higher margin after we acquired the AEO certificate. 68 Operating Expenses Our operating expenses increased from RMB21.7 million for the year ended December 31, 2021 to RMB36.7 million (US$5.3 million) for the year ended December 31, 2022, representing a year-over-year increase of 69.1%.
Gross profit margin of our other value-added services increased from 27.9% for the year ended December 31, 2021 to 36.0% for the year ended December 31, 2022 mainly due to the fact that we were able to undertake orders for customs brokerage with higher margin after we acquired the AEO certificate.
Our cost of revenues primarily consists of (i) cost of freight charges, (ii) cost of goods, (iii) labor costs, (iv) cost of customs brokerage, (v) cost of packaging, (vi) cost of indemnities paid to carriers. Cost of freight charges consists of (i) air freight/ ocean freight/land freight charges, (ii) delivery fees, (iii) warehouse leasing costs, and (iv) other service fees.
Our cost of revenues primarily consists of (i) cost of freight charges, (ii) cost of goods, (iii) labor costs, (iv) cost of customs brokerage, (v) cost of packaging, (vi) cost of indemnities paid to carriers.
Year Ended December 31, 2021 Compared to Year Ended December 31, 2020 Revenues Total revenues increased by approximately RMB255.3 million, or 87.9%, from approximately RMB290.3 million for the year ended December 31, 2020 to approximately RMB545.6 million (US$85.6 million) for the year ended December 31, 2021, primarily attributable to a huge growth of our freight forwarding services and stable development of our supply chain management and other value-added services.
Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 Revenues Total revenues increased by approximately RMB106.4 million, or 19.5%, from approximately RMB545.6 million for the year ended December 31, 2021 to approximately RMB652.0 million (US$93.6 million) for the year ended December 31, 2022, primarily attributable to a growth of our freight forwarding services and stable development of our supply chain management and other value-added services.
However, larger customer base will provide us more development opportunities in the future. 67 Revenues from our supply chain management increased by RMB15.5 million, or 28.9%, from RMB53.5 million for the year ended December 31, 2021 to RMB69.0 million (US$9.9 million) for the year ended December 31, 2022.
Revenues from our supply chain management increased by RMB15.5 million, or 28.9%, from RMB53.5 million for the year ended December 31, 2021 to RMB69.0 million (US$9.9 million) for the year ended December 31, 2022.
To date, we have financed our working capital requirements from cash flow from operations, debt and equity financing and capital contributions from our existing shareholders. As of December 31, 2022, we had cash of RMB28.4 million (US$4.1 million) and working capital of approximately RMB0.4 million (US$0.1 million).
To date, we have financed our working capital requirements from cash flow from operations, debt and equity financing and capital contributions from our existing shareholders. As of December 31, 2023, we had cash of RMB26.6 million (US$3.8 million) and working capital deficit of approximately RMB27 million (US$3.8 million).
However, due to global inflation and also triggered by the tensions between Russia and Ukraine in 2022, the prices of fossil fuel have surged and affected the freight forwarding services section which still relies heavily on fossil fuels to power transportation.
However, due to global inflation and tensions between Russia and Ukraine in 2022, the prices of fossil fuel have surged and affected the freight forwarding services section which still relies heavily on fossil fuels to power transportation. With higher fuel prices, costs of freight forwarding services will increase and the demand for cross-border logistics services will be adversely affected.
Net income As a result of the foregoing, our net income decreased by RMB8.8 million, or 86.5%, from RMB10.2 million for the year ended December 31, 2021 to RMB1.4 million (US$0.2 million) for the year ended December 31, 2022.
This increase was primarily due to our effective income tax rate for the year ended December 31, 2022 was approximate 65.2% as compared to 14.3% in 2021 historically. 87 Net income As a result of the foregoing, our net income decreased by RMB8.8 million, or 86.5%, from RMB10.2 million for the year ended December 31, 2021 to RMB1.4 million (US$0.2 million) for the year ended December 31, 2022.
Our ability to obtain new customers and to increase our revenue per customer The number of our customers were 535, 1299 and 1879 as of December 31, 2020, 2021 and 2022, respectively, representing a year-over-year 142.8% and 44.6% increase.
Our ability to obtain new customers and to increase our revenue per customer The number of our customers were 1299, 1879 and 1,841 as of December 31, 2021, 2022 and 2023, respectively.
Therefore, our PRC subsidiaries will need to convert any capital contributions or loans from U.S. dollars into Renminbi in accordance with applicable PRC laws and regulations.
Business Overview—Regulations—Regulations Relating to Dividend Distributions” and “Item 4. Information on the Company—B. Business Overview—Regulations—Regulations Relating to Funds Transfer to PRC Subsidiaries.” Therefore, our PRC subsidiaries will need to convert any capital contributions or loans from U.S. dollars into Renminbi in accordance with applicable PRC laws and regulations.
A breakdown of our revenues for the years indicated is summarized below: For the Year Ended December 31, 2020 2021 2022 RMB % RMB % RMB US$ % (in thousands, except percentages) Freight forwarding 243,607 83.9 % 488,036 89.5 % 577,567 82,929 88.6 % Integrated cross-border logistics services 210,795 72.6 % 390,229 71.5 % 444,336 63,799 68.2 % Fragmented logistics services 32,812 11.3 % 97,807 17.9 % 133,231 19,130 20.4 % Supply chain management 43,967 15.1 % 53,532 9.8 % 69,023 9,911 10.6 % International trading in relation to supply chain management 41,986 14.5 % 52,975 9.7 % 68,879 9,890 10.6 % Agent services 1,981 0.7 % 557 0.1 % 144 21 0.0 % Other value-added services 2,759 1.0 % 4,025 0.7 % 5,401 775 0.8 % Total revenues 290,333 100.0 % 545,593 100.0 % 651,991 93,615 100.0 % Cost of Revenues Cost of revenues represents costs and expenses incurred in order to generate revenue.
A breakdown of our revenues for the years indicated is summarized below: For the Year Ended December 31, 2021 2022 2023 RMB % RMB % RMB US$ % (in thousands, except percentages) Freight forwarding 488,036 89.5 % 577,567 88.6 % 342,582 48,368 68.8 % Integrated cross-border logistics services 390,229 71.5 % 444,336 68.2 % 219,652 31,012 44.1 % Fragmented logistics services 97,807 17.9 % 133,231 20.4 % 94,720 13,373 19.0 % Chartered airline freight services 28,210 3,983 5.7 Supply chain management 53,532 9.8 % 69,023 10.6 % 152,630 21,550 30.7 % International trading in relation to supply chain management 52,975 9.7 % 68,879 10.6 % 152,545 21,538 30.7 % Agent services 557 0.1 % 144 0.0 % 85 12 0.0 % Other value-added services 4,025 0.7 % 5,401 0.8 % 2,656 375 0.5 % Total revenues 545,593 100.0 % 651,991 100.0 % 497,868 70,293 100.0 % Cost of Revenues Cost of revenues represents costs and expenses incurred in order to generate revenue.
Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity.
We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder’s equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity.
Financial expenses, net decreased by 30.6% from RMB1.4 million to RMB0.9 million (US$0.1 million), which was consistent with the change of the balance bank borrowings and loans. 69 Income taxes Our income tax expense increased by RMB0.9 million, or 51.6%, from RMB1.7 million for the year ended December 31, 2021 to RMB2.6 million (US$0.4 million) for the year ended December 31, 2022.
Financial expenses, net decreased by 30.6% from RMB1.4 million to RMB0.9 million (US$0.1 million), which was consistent with the change of the balance bank borrowings and loans.
Revenues from our supply chain management increased by RMB9.6 million, or 21.8%, from RMB44.0 million for the year ended December 31, 2020 to RMB53.5 million (US$8.4 million) for the year ended December 31, 2021.
Revenues from our supply chain management increased by RMB83.6 million, or 121.1%, from RMB69.0 million for the year ended December 31, 2022 to RMB152.6 million (US$21.5 million) for the year ended December 31, 2023.
Specifically, the average days sales in receivables from e-commerce related logistics services dropped from 46 days in 2020 to 10 days in 2021. This is mainly due to the development of e-commerce related logistics services, accounting for 24.6% of total revenue in 2021 and 6.5% of total revenue in 2020, respectively, the customers of which have shortened payment terms.
This is mainly due to the development of e-commerce related logistics services, accounting for 18.9% of total revenue in 2022 and 27.5% of total revenue in 2023, respectively, the customers of which have shortened payment terms.
Limited; (iii) an increase of accounts payable of RMB22.1 million and contract liabilities of RMB5.9 million; (iv) an increase of accrued expenses and other current liabilities of RMB2.9 million for transportation deposits and advances to employees; and (v) a decrease of accounts receivable from related parties of RMB2.8 million for collection; and was offset by (i) an increase of accounts receivable of RMB53.6 million and contract assets of RMB2.6 million as we achieved business growth and more sales; (ii) an increase of prepaid expenses and other current assets, net of RMB21.8 million as we made prepaid service fees for chartered airlines and advance payments for goods for international trading; (iii) a decrease of tax payable of RMB0.8 million for payments of taxation; and (iv) a decrease of others payable to shareholders of RMB0.7 million for payments of reimbursement. 74 For the year ended December 31, 2020, our net cash provided by operating activities was RMB15.3 million, which was primarily attributable to (i) net income of RMB3.0 million; (ii) an increase of accounts payable to related parties of RMB6.2 million for purchase of freight services with Cargo Link Logistics HK Company Ltd.; (iii) a decrease of accounts receivable of RMB5.0 million for collection due to higher account receivable turnover as a result of better management; (iv) an increase of contract liabilities of RMB1.8 million and accounts payable of RMB0.6 million for purchase of logistic services; and (v) an increase of tax payable of RMB1.6 million resulting from more profit achieved and was offset by (i) an increase of prepaid expenses and other current asset of RMB2.6 million for more tax refund and deposits receivables; and (ii) an increase of accounts receivable from related parties of RMB0.7 million for logistic services provided.
Limited; (iii) an increase of accounts payable of RMB22.1 million and contract liabilities of RMB5.9 million; (iv) an increase of accrued expenses and other current liabilities of RMB2.9 million for transportation deposits and advances to employees; and (v) a decrease of accounts receivable from related parties of RMB2.8 million for collection; and was offset by (i) an increase of accounts receivable of RMB53.6 million and contract assets of RMB2.6 million as we achieved business growth and more sales; (ii) an increase of prepaid expenses and other current assets, net of RMB21.8 million as we made prepaid service fees for chartered airlines and advance payments for goods for international trading; (iii) a decrease of tax payable of RMB0.8 million for payments of taxation; and (iv) a decrease of other payable to shareholders of RMB0.7 million for payments of reimbursement.
For example, any prolonged recurrence of other contagious diseases, social instability or significant natural disasters may have a negative impact on the demand for our services. 63 Our ability to maintain our major customers For the years ended December 31, 2020, 2021 and 2022, approximately 59.9%, 35.8% and 45.5% of our total revenues, respectively, were generated by our five largest customers.
For example, any prolonged recurrence of other contagious diseases, social instability or significant natural disasters may have a negative impact on the demand for our services. 77 Our ability to maintain our major customers The number of our customers were 1299, 1879 and 1,841 as of December 31, 2021, 2022 and 2023, respectively.
We anticipate that our operating expenses will continue to increase as we hire additional personnel and incur additional costs in connection with the expansion of our business operations.
We anticipate that our operating expenses will continue to increase as we hire additional personnel and incur additional costs in connection with the expansion of our business operations. 86 General and administrative expenses General and administrative expenses mainly consisted of (i) employee payroll, rental and depreciation related to general and administrative functions, (ii) professional service fees; and (iii) other corporate expenses.
Revenues from our other value-added services increased by RMB1.3 million, or 45.9%, from RMB2.8 million for the year ended December 31, 2020 to RMB4.0 million (US$0.6 million) for the year ended December 31, 2021.
Revenues from our other value-added services decreased by RMB2.7 million, or 50.8%, from RMB5.4 million for the year ended December 31, 2022 to RMB2.7 million (US$0.4 million) for the year ended December 31, 2023.
A breakdown of our cost of revenues for the years indicated is summarized below: For the Year Ended December 31, 2020 2021 2022 RMB % RMB % RMB US$ % (in thousands, except percentages) Freight forwarding 226,154 84.0 % 456,262 89.2 % 542,610 77,910 88.3 % Integrated cross-border logistics services 195,000 72.4 % 364,104 71.2 % 410,926 59,002 66.9 % Fragmented logistics services 31,154 11.6 % 92,158 18.0 % 131,684 18,908 21.4 % Supply chain management 41,263 15.3 % 51,929 10.2 % 68,536 9,841 11.1 % International trading in relation to supply chain management 41,263 15.3 % 51,929 10.2 % 68,536 9,841 11.1 % Agent services - - - - - - - Other value-added services 1,889 0.7 % 2,902 0.6 % 3,459 496 0.6 % Total cost of revenues 269,306 100.0 % 511,093 100.0 % 614,605 88,247 100.0 % Gross Profit Our gross profit equals to our revenue less our cost of revenues.
Cost of freight charges consists of (i) air freight/ ocean freight/land freight charges, (ii) delivery fees, (iii) warehouse leasing costs, and (iv) other service fees. 79 A breakdown of our cost of revenues for the years indicated is summarized below: For the Year Ended December 31, 2021 2022 2023 RMB % RMB % RMB US$ % (in thousands, except percentages) Freight forwarding 456,262 89.2 % 542,610 88.3 % 359,959 50,821 70.0 % Integrated cross-border logistics services 364,104 71.2 % 410,926 66.9 % 209,070 29,518 40.7 % Fragmented logistics services 92,158 18.0 % 131,684 21.4 % 124,567 17,587 24.2 % Chartered airline freight services 26,322 3,716 5.1 % Supply chain management 51,929 10.2 % 68,536 11.1 % 151,379 21,373 29.5 % International trading in relation to supply chain management 51,929 10.2 % 68,536 11.1 % 151,335 21,367 29.5 % Agent services - - - - 44 6 0.0 % Other value-added services 2,902 0.6 % 3,459 0.6 % 2,401 339 0.5 % Total cost of revenues 511,093 100.0 % 614,605 100.0 % 513,739 72,533 100.0 % Gross Profit Our gross profit equals to our revenue less our cost of revenues.
For the years ended December 31, 2020, our net cash used in investing activities was RMB0.2 million, which was primarily attributable to the purchase of property, equipment and software.
Investing activities For the years ended December 31, 2023, our net cash used in investing activities was RMB4.4 million (US$0.6 million), which was primarily attributable to the purchase of property, equipment and software. The RMB4.4 million (US$0.6 million) capital expenditure was mainly invested in electronic equipment, furniture and machinery used in our new office buildings and warehouses in 2023.
In the future, most cash proceeds raised from overseas financing activities, including our initial public offering, may be, and are intended to be, transferred by us through our wholly owned Hong Kong subsidiary, Jayud Global Logistics (Hong Kong) Limited, to our PRC subsidiaries via capital contribution and shareholder loans, as the case may be.
For the years ended December 31, 2022 and 2023, we transferred cash proceeds of RMB1.0 million to two of our Hong Kong subsidiaries, Sky Pacific Logistics HK Company Limited (“Sky Pacific”) and HongKong Jayud International Logistics Company Limited (“HK Jayud International”) and RMB1.9 million (US$0.3 million) to HK Jayud International and Joyed Logistics Services Inc. for the settlement of intercompany transactions .In the future, most cash proceeds raised from overseas financing activities, may be, and are intended to be, transferred by us through our wholly owned Hong Kong subsidiary, Jayud Global Logistics (Hong Kong) Limited, to our PRC subsidiaries via capital contribution and shareholder loans, as the case may be.
Our cost of revenues for supply chain management increased by approximately RMB10.6 million, or 25.8%, from approximately RMB41.3 million for the year ended December 31, 2020 to approximately RMB51.9 million (US$8.1 million) for the year ended December 31, 2021. The increase synchronized with the business growth of international trading.
Our cost of revenues for supply chain management increased by approximately RMB82.9 million, or 120.9%, from approximately RMB68.5 million for the year ended December 31, 2022 to approximately RMB151.4 million (US$21.4 million) for the year ended December 31, 2023. The increase synchronized with the business growth of electronic devices and chips business.
Our cost of revenues for other value-added services increased approximately RMB1.0 million, or 53.6%, from approximately RMB1.9 million for the year ended December 31, 2020 to approximately RMB2.9 million (US$0.5 million) for the year ended December 31, 2021. The increase was primarily attributable to more investment in rendering research IT services.
Our cost of revenues for other value-added services decreased by approximately RMB1.1 million, or 30.6%, from approximately RMB3.5 million for the year ended December 31, 2022 to approximately RMB2.4 million (US$0.3 million) for the year ended December 31, 2023.
Off-Balance Sheet Commitments and Arrangements We have not entered into any off-balance sheet financial guarantees or other off-balance sheet commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder’s equity or that are not reflected in our consolidated financial statements.
We will continue to make capital expenditures to meet the expected growth of our business. 91 Off-Balance Sheet Commitments and Arrangements We have not entered into any off-balance sheet financial guarantees or other off-balance sheet commitments to guarantee the payment obligations of any third parties.
For the years ended December 31, 2020 and 2021, our overall gross profit margin was 7.2% and 6.3%, respectively.
For the years ended December 31, 2022 and 2023, our overall gross profit margin was 5.8% and negative 3.2%, respectively. Gross profit margin of freight forwarding services decreased from 6.1% for the year ended December 31, 2022 to negative 5.1% for the year ended December 31, 2023.
We plan to fund our future capital expenditures with our existing cash balance and proceeds from our initial public offering. We will continue to make capital expenditures to meet the expected growth of our business.
We plan to fund our future capital expenditures with our existing cash balance and proceeds from debt and equity financing.
The following table sets forth our operating expenses, both in absolute amount and as a percentage of the total operating expenses, for the years indicated: For the Year Ended December 31, 2020 2021 2022 RMB % RMB % RMB US$ % (in thousands, except percentages) General and administrative expenses 7,043 47.9 % 11,276 52.0 % 18,555 2,664 50.6 % Selling expenses 6,273 42.7 % 8,956 41.3 % 16,033 2,302 43.7 % Research and development expenses 1,377 9.4 % 1,461 6.7 % 2,096 301 5.7 % Total operating expenses 14,693 100.0 % 21,693 100.0 % 36,684 5,267 100.0 % 66 RESULTS OF OPERATIONS For the Year Ended December 31, 2020 2021 2022 RMB RMB RMB US$ (in thousands) Revenues 290,333 545,593 651,991 93,615 Cost of revenues (269,306 ) (511,093 ) (614,605 ) (88,247 ) Gross profit 21,027 34,500 37,386 5,368 Operating expenses: General and administrative expenses (7,043 ) (11,276 ) (18,555 ) (2,664 ) Selling expenses (6,273 ) (8,956 ) (16,033 ) (2,302 ) Research and development expenses (1,377 ) (1,461 ) (2,096 ) (301 ) Total operating expenses (14,693 ) (21,693 ) (36,684 ) (5,267 ) Operating profit 6,334 12,807 702 101 Other income/(expenses): Other expense, net (88 ) (12 ) (206 ) (30 ) Foreign exchange gain (loss), net (913 ) 489 4,407 633 Financial expenses, net (651 ) (1,358 ) (943 ) (135 ) Total other income/(expenses), net (1,652 ) (881 ) 3,258 468 Income before income tax expense 4,682 11,927 3,960 569 Income tax expenses (1,635 ) (1,703 ) (2,582 ) (371 ) Net income 3,047 10,224 1,378 198 Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 Revenues Total revenues increased by approximately RMB106.4 million, or 19.5%, from approximately RMB545.6 million for the year ended December 31, 2021 to approximately RMB652.0 million (US$93.6 million) for the year ended December 31, 2022, primarily attributable to a growth of our freight forwarding services and stable development of our supply chain management and other value-added services.
Research and development expenses mainly consist of (i) cost of materials used for experiment, (ii) employee payroll, and (iii) depreciation expense for experimental facilities and other daily expenses related to our research and development activities in logistics related software development. 80 The following table sets forth our operating expenses, both in absolute amount and as a percentage of the total operating expenses, for the years indicated: For the Year Ended December 31, 2021 2022 2023 RMB % RMB % RMB US$ % (in thousands, except percentages) General and administrative expenses 11,276 52.0 % 17,617 48.0 % 26,202 3,699 41.0 % Selling expenses 8,956 41.3 % 16,033 43.7 % 11,943 1,686 18.7 % Provision for credit losses - - 938 2.6 % 18,217 2,572 28.5 % Impairment charges on long-lived assets - - - - 5,649 798 8.8 % Lease termination loss - - - - 479 68 0.8 % Research and development expenses 1,461 6.7 % 2,096 5.7 % 1,394 197 2.2 % Total operating expenses 21,693 100.0 % 36,684 100.0 % 63,884 9,020 100 % RESULTS OF OPERATIONS For the Year Ended December 31, 2021 2022 2023 RMB RMB RMB US$ (in thousands) Revenues 545,593 651,991 497,868 70,293 Cost of revenues (511,093 ) (614,605 ) (513,739 ) (72,533 ) Gross profit 34,500 37,386 (15,871 ) (2,240 ) Operating expenses: General and administrative expenses (11,276 ) (17,617 ) (26,202 ) (3,699 ) Selling expenses (8,956 ) (16,033 ) (11,943 ) (1,686 ) Provision for credit losses - (938 ) (18,217 ) (2,572 ) Impairment charges on long-lived assets - - (5,649 ) (798 ) Lease termination loss - - (479 ) (68 ) Research and development expenses (1,461 ) (2,096 ) (1,394 ) (197 ) Total operating expenses (21,693 ) (36,684 ) (63,884 ) (9,020 ) Operating profit 12,807 702 (79,755 ) (11,260 ) Other income/(expenses): Other expense, net (12 ) (206 ) (932 ) (132 ) Foreign exchange gain (loss), net 489 4,407 (1,401 ) (199 ) Financial expenses, net (1,358 ) (943 ) (995 ) (140 ) Total other income/(expenses), net (881 ) 3,258 (3,328 ) (471 ) Income before income tax expense 11,927 3,960 (83,083 ) (11,731 ) Income tax (expenses) benefit (1,703 ) (2,582 ) 2,808 397 Net income 10,224 1,378 (80,275 ) (11,334 ) 81 Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Revenues Total revenues decreased by approximately RMB154.1 million, or 23.6%, from approximately RMB652.0 million for the year ended December 31, 2022 to approximately RMB497.9 million (US$70.3 million) for the year ended December 31, 2023, primarily attributable to the decrease of revenues from our freight forwarding services and other value-added services offset by the increase of revenues from our supply chain management.
Cost of freight charges increased by RMB208.8 million, or 155.6%, from approximately RMB134.2 million for the year ended December 31, 2020 to approximately RMB342.9 million (US$53.8 million) for the year ended December 31, 2021. The main components of freight charges were the freight and the delivery fees paid to third-party carriers.
Cost of freight charges, representing the main source of our cost of revenue, decreased by RMB201.4 million, or 38.5%, from approximately RMB522.5 million for the year ended December 31, 2022 to approximately RMB321.1 million (US$45.3 million) for the year ended December 31, 2023. The main components of freight charges were the freight and the delivery fees paid to third-party carriers.
The average receivable balance increased by 65.4%, from 2020 to 2021, and revenue increased by 87.9% from 2020 to 2021, resulting in the average days sales in receivables decreased from 46 days in 2020 to 41 days in 2021.
The average receivable balance decreased by 30.5%, from 2022 to 2023, and revenue decreased by 23.6% from 2022 to 2023, resulting in the average days sales in receivables decreased from 33 days in 2022 to 30 days in 2023.
Research and development expenses increased slightly by 6.1% from RMB1.4 million for the year ended December 31, 2020 to RMB1.5 million (US$0.2 million) for the year ended December 31, 2021.
Research and development expenses decreased slightly by 33.5% from RMB2.1 million for the year ended December 31, 2022 to RMB1.4 million (US$0.2 million) for the year ended December 31, 2023. Our research project was mainly due to more investment for maintenance and inspection of equipment for research activities, and offset by reduce of staff of research and development department.
For the years ended December 31, 2020, 2021 and 2022, our gross profit amounted to RMB21.0 million, RMB34.5 million and RMB37.4 million (US$5.4 million), respectively, representing a year-over-year increase of 64.1% and 8.4%. We offer a comprehensive range of cross-border supply chain solution services, including: (i) freight forwarding services, (ii) supply chain management, and (iii) other value-added services.
For the years ended December 31, 2021, 2022 and 2023, our gross profit amounted to RMB34.5 million, RMB37.4 million and gross loss of RMB15.9 million (US$2.2 million), respectively, representing a year-over-year increase of 8.4% from 2021 to 2022 and a year-over-year decrease of 142.5% from 2022 to 2023, respectively.
Our cost of revenues for freight forwarding services increased by approximately RMB230.1 million, or 101.7%, from approximately RMB226.2 million for the year ended December 31, 2020 to approximately RMB456.3 million (US$71.6 million) for the year ended December 31, 2021. The increase was primarily attributable to the increase of the freight charges.
Our cost of revenues for freight forwarding services decreased by approximately RMB182.6 million, or 33.7%, from approximately RMB542.6 million for the year ended December 31, 2022 to approximately RMB360.0 million (US$50.8 million) for the year ended December 31, 2023.
Net income As a result of the foregoing, our net income increased by RMB7.2 million, or 235.5%, from RMB3.0 million for the year ended December 31, 2020 to RMB10.2 million (US$1.6 million) for the year ended December 31, 2021. B.
Net income As a result of the foregoing, our net income decreased by RMB81.7 million, or 5,925.9%, from net income of RMB1.4 million for the year ended December 31, 2022 to net loss of RMB80.3 million (US$11.3 million) for the year ended December 31, 2023.
We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all. 73 Current foreign exchange and other regulations in the PRC may restrict our PRC entities in their ability to transfer their net assets to us and our subsidiaries in Hong Kong.
Based on the approved management plan and shareholder financing, the Company concluded that substantial doubt is raised but is alleviated by management’s Plans. Current foreign exchange and other regulations in the PRC may restrict our PRC entities in their ability to transfer their net assets to us and our subsidiaries in Hong Kong.
Contractual Obligations The following table sets forth our contractual obligations as of December 31, 2022: Payments due by period Total Within one year Within 1-2 years Over 2 years RMB RMB RMB RMB Operating lease payment 32,957,093 19,078,380 12,474,763 1,403,950 Bank borrowings 19,800,000 15,400,000 4,400,000 - Total 52,757,093 34,478,380 16,874,763 1,403,950 Other than as shown above, we did not have any significant capital and other commitments, long-term obligations, or guarantees as of December 31, 2022.
Contractual Obligations The following table sets forth our contractual obligations as of December 31, 2023: Payments due by period Total Within one year Within 1-2 years Over 2 years RMB RMB RMB RMB Operating lease payment 14,023,293 8,806,671 3,405,098 1,811,524 Bank borrowings 30,003,498 30,003,498 - - Loan from a related party 3,000,000 3,000,000 - - Loans from a third party 2,833,080 - 2,833,080 - Loan from a shareholder 823,265 - 823,265 - Total 50,683,136 41,810,169 7,061,443 1,811,524 Other than as shown above, we did not have any significant capital and other commitments, long-term obligations, or guarantees as of December 31, 2023.
Financial expenses, net decreased by 44.4% from RMB1.6 million for the year ended December 31, 2020 to RMB0.9 million (US$0.1 million) for the year ended December 2021, which was primarily attributable to (i) an increase of RMB1.4 million in foreign exchange gain and was offset by (ii) an increase of RMB0.5 million in interest expenses as a result of the increased short-term borrowings balances.
Interest expenses, net slightly increased by 5.5% from RMB0.9 million for the year ended December 31, 2022 to RMB1.0 million (US$0.1 million) for the year ended December 31, 2023 since majority of the new bank borrowings and loans were made in the last quarter of 2023. 84 Income taxes Our income tax expense decreased by RMB5.4 million, or 208.7%, from income tax expense of RMB2.6 million for the year ended December 31, 2022 to income tax benefit of RMB2.8 million (US$0.4 million) for the year ended December 31, 2023 as a result of a loss incurred in 2023.
Revenues from our freight forwarding services increased by RMB244.4 million, or 100.3%, from RMB243.6 million for the year ended December 31, 2020 to RMB488.0 million (US$76.5 million) for the year ended December 31, 2021.
Revenues from our freight forwarding services decreased by RMB235.0 million, or 40.7%, from RMB577.6 million for the year ended December 31, 2022 to RMB342.6 million (US$48.4 million) for the year ended December 31, 2023. The decrease was mainly due to the significant decrease in the freight price, both in air and sea freight.
Cost of Revenues Our cost of revenues increased by 20.3% from RMB511.1 million for the year ended December 31, 2021 to RMB614.6 million (US$88.2 million) for the year ended December 31, 2022.
The decrease was due to the reduction of revenue from custom brokerage of RMB1.5 million (US$0.2 million) and from intelligent logistic IT services of RMB1.2 million (US$0.2 million). Cost of Revenues Our cost of revenues decreased by 16.4% from RMB614.6 million for the year ended December 31, 2022 to RMB513.7 million (US$72.5 million) for the year ended December 31, 2023.
Gross profit margin of our other value-added services decreased from 31.5% for the year ended December 31, 2020 to 27.9% for the year ended December 31, 2021 mainly due to the increasing employee welfare costs, in order to improve our efficiency of providing customs brokerage services, which was offset by increasing demands for software development system we offered.
Gross profit margin of our other value-added services decreased from 36.0% for the year ended December 31, 2022 to 9.6% for the year ended December 31, 2023 mainly due to the significant decrease of the sales price of custom brokerage.
For the years ended December 31, 2021 and 2022, we transferred cash proceeds of RMB7.3 million and RMB1.0 million (US$0.1 million) to Sky Pacific and HK Jayud International for the settlement of intercompany transactions.
For the years ended December 31, 2022 and 2023, one of our Hong Kong subsidiary, Jayud Global Logistics (Hong Kong), transferred cash proceeds of nil and RMB7.1 million (US$1 million) to Shenzhen Jayud Logistics Technology Co., Ltd as an investment.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those Temporary differences are expected to be recovered or settled.
Under this method, deferred tax assets and liabilities are determined on the basis of the differences between financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
Among the new customers acquired in 2021, 65.5% of them are relevant to e-commerce related logistics services. With the expansion of our e-commerce related logistics services in 2021, the percentage of revenue generated from e-commerce related logistics services increased from 6.5% in 2020 to 24.6% in 2021.
In addition, the number of customers decreased by 2% from 1,879 customers for the year ended December 31, 2022 to 1,841 customers for the year ended December 31, 2023. Among the new customers acquired for the year ended December 31, 2023, 55.4% of them are relevant to e-commerce related logistics services.
Cost of warehouse management increased by RMB0.7 million, or 21.5%, from RMB3.4 million for the year ended December 31, 2020, to RMB4.1 million (US$0.6 million) for the year ended December 31, 2021.
Other expenses, net increased by 352.6% from RMB0.2 million for the year ended December 31, 2022 to RMB0.9 million (US$0.1 million) for the year ended December 31, 2023, which was mainly due to an increase of loss from disposal of intangible assets and property and equipment of RMB0.7 million (US$0.1 million).
The State Administration of Taxation further announced that from January 1, 2022 to December 31, 2022, for the portion of taxable income not exceeding RMB1 million, the amount of taxable income can be halved from 25% to 12.5%, and the corporate income tax will be levied at 20%, for small and low-profit enterprises, and from January 1, 2022 to December 31, 2024, small and low-profit enterprises can enjoy a 20% corporate income tax rate on 25% of the taxable income amount for the portion of taxable income more than RMB1 million but not exceeding RMB3 million.
From January 1, 2022 to December 31, 2022, 12.5% of the first RMB 1.0 million of the assessable profit before tax is subject to preferential tax rate of 20% and the 25% of the assessable profit before tax exceeding RMB 1.0 million but not exceeding RMB 3.0 million is subject to preferential tax rate of 20%.
Removed
While certain service contracts contain options of renewal, there is no assurance that our major customers will continue their business relationships with us, or the revenue generated from dealings with them will be maintained or increased in the future.
Added
We offer a comprehensive range of cross-border supply chain solution services, including: (i) freight forwarding services, (ii) supply chain management, and (iii) other value-added services.
Removed
If we are unable to enter into new service contracts with our customers upon expiry of the current contracts, or there is a reduction or cessation of demands from these customers for whatever reasons and we are unable to enter into service contracts of comparable size and terms in substitution, our business, financial conditions and results of operation may be materially and adversely affected.
Added
In addition, average revenue per customer were RMB420 thousand, RMB347 thousand and RMB270 thousand, (US$38 thousand) per customer for the year ended December 31, 2021, 2022 and 2023, respectively. Our ability to increase our revenues and our profitability will depend on our ability to continue to increase our customer base and revenue per customer.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

23 edited+1 added−2 removed61 unchanged
Biggest changeFrom 2011 to 2014, she served as the VP Finance of Cathay Forest Products Corp. During the three years from 2008 to 2011, Ms. Bao served as the corporate controller of Arehada Mining Ltd. and from 2008 to 2010, she concurrently served as the corporate controller of Changfeng Energy Inc.
Biggest changeShe also served as a chief financial officer of Balintimes Online Media Ltd. from 2014 to 2015 in China. From 2011 to 2014, she served as the VP Finance of Cathay Forest Products Corp. During the three years from 2008 to 2011, Ms.
The audit committee is responsible for, among other things: ● selecting the independent registered public accounting firm and pre-approving all auditing and non-auditing services permitted to be performed by the independent registered public accounting firm; ● reviewing with the independent registered public accounting firm any audit problems or difficulties and management’s response; 84 ● reviewing and approving all proposed related party transactions, as defined in Item 404 of Regulation S-K under the Securities Act; ● discussing the annual audited financial statements with management and the independent registered public accounting firm; ● reviewing major issues as to the adequacy of our internal controls and any special audit steps adopted in light of material control deficiencies; ● annually reviewing and reassessing the adequacy of our audit committee charter; ● meeting separately and periodically with management and the independent registered public accounting firm; and ● reporting regularly to the board.
The audit committee is responsible for, among other things: ● selecting the independent registered public accounting firm and pre-approving all auditing and non-auditing services permitted to be performed by the independent registered public accounting firm; ● reviewing with the independent registered public accounting firm any audit problems or difficulties and management’s response; ● reviewing and approving all proposed related party transactions, as defined in Item 404 of Regulation S-K under the Securities Act; ● discussing the annual audited financial statements with management and the independent registered public accounting firm; ● reviewing major issues as to the adequacy of our internal controls and any special audit steps adopted in light of material control deficiencies; ● annually reviewing and reassessing the adequacy of our audit committee charter; ● meeting separately and periodically with management and the independent registered public accounting firm; and ● reporting regularly to the board.
The calculations in the table below are based on 21,352,223 ordinary shares outstanding as of the date of this annual report, comprising of (i) 14,942,623 Class A ordinary shares, and (ii) 6,409,600 Class B ordinary shares. 87 Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
The calculations in the table below are based on 21,352,223 ordinary shares outstanding as of the date of this annual report, comprising of (i) 14,942,623 Class A ordinary shares, and (ii) 6,409,600 Class B ordinary shares. Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
The nominating and corporate governance committee is responsible for, among other things: ● recommending nominees to the board of directors for election or re-election to the board of directors, or for appointment to fill any vacancy on the board of directors; ● reviewing annually with the board of directors the current composition of the board of directors with regards to characteristics such as independence, age, skills, experience and availability of service to us; ● selecting and recommending to the board of directors the names of directors to serve as members of the audit committee and the compensation committee, as well as of the nominating and corporate governance committee itself; and ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance. 85 Duties of Directors Directors and officers generally owe fiduciary duties to our company, and not to our company’s individual shareholders.
The nominating and corporate governance committee is responsible for, among other things: ● recommending nominees to the board of directors for election or re-election to the board of directors, or for appointment to fill any vacancy on the board of directors; ● reviewing annually with the board of directors the current composition of the board of directors with regards to characteristics such as independence, age, skills, experience and availability of service to us; ● selecting and recommending to the board of directors the names of directors to serve as members of the audit committee and the compensation committee, as well as of the nominating and corporate governance committee itself; and ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance. 101 Duties of Directors Directors and officers generally owe fiduciary duties to our company, and not to our company’s individual shareholders.
Committees of the Board of Directors We have established an audit committee, a compensation committee and a nominating and corporate governance committee under the board of directors. We have adopted a charter for each of the three committees. Each committee’s members and functions are described below. Audit Committee. Our audit committee consists of Mr. Steven Gu, Mr.
Committees of the Board of Directors We have established an audit committee, a compensation committee and a nominating and corporate governance committee under the board of directors. We have adopted a charter for each of the three committees. Each committee’s members and functions are described below. 100 Audit Committee. Our audit committee consists of Mr. Steven Gu, Mr.
These shares, however, are not included in the computation of the percentage ownership of any other person. See “—B. Compensation” for more details on options and restricted shares granted to our directors and executive officers.
These shares, however, are not included in the computation of the percentage ownership of any other person. 103 See “—B. Compensation” for more details on options and restricted shares granted to our directors and executive officers.
Li received the Advanced Diploma in Business Studies from Windsor Management College in Singapore. He has been a licensed individual at Hong Kong Securities and Futures Commission since 2009. We believe that Mr. Li is qualified to serve as our director based on his experience in investment and financing. 82 Mr.
Li received the Advanced Diploma in Business Studies from Windsor Management College in Singapore. He has been a licensed individual at Hong Kong Securities and Futures Commission since 2009. We believe that Mr. Li is qualified to serve as our director based on his experience in investment and financing. 98 Mr.
Gu has worked with businesses from startups to established middle-market corporations and Fortune 500 companies and he is currently a member of Georgia Asian Pacific American Bar Association, and Georgia Society of CPAs. He served as council member for Metro Atlanta Chamber of Commerce, and Technology Association of Georgia. From 2020 to 2022, Mr.
Gu has worked with businesses from startups to established middle-market corporations and Fortune 500 companies and he is currently a member of Georgia Asian Pacific American Bar Association, and Georgia Society of CPAs. He served as council member for Metro Atlanta Chamber of Commerce, and Technology Association of Georgia. From 2020 to 2023, Mr.
We have entered into indemnification agreements with each of our directors and executive officers. Under these agreements, we agree to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being our director or officer. 86 D.
We have entered into indemnification agreements with each of our directors and executive officers. Under these agreements, we agree to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being our director or officer. 102 D.
The registered address of Fornax Investment Holding Limited is Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands. 88 Our ordinary shares are divided into Class A ordinary shares and Class B ordinary shares.
The registered address of Fornax Investment Holding Limited is Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands. 104 Our ordinary shares are divided into Class A ordinary shares and Class B ordinary shares.
Wang previously served as the vice president of eBao Network Technology Co., Ltd. from 2019 to 2022 and the vice general manager of the south China region at Cainiao Network Technology Co., Ltd. from 2017 to 2019. From 2001 and 2017, Mr.
Wang previously served as the vice president of eBao Network Technology Co., Ltd. from 2019 to 2023 and the vice general manager of the south China region at Cainiao Network Technology Co., Ltd. from 2017 to 2019. From 2001 and 2017, Mr.
Employees As of December 31, 2022, we had 182 full time employees, all of whom are based in China. The following table sets forth the numbers of our employees categorized by function as of December 31, 2022.
Employees As of December 31, 2023, we had 175 full time employees, all of whom are based in China. The following table sets forth the numbers of our employees categorized by function as of December 31, 2023.
Our PRC subsidiaries are required by law to make contributions equal to certain percentages of each employee’s salary for his or her pension insurance, medical insurance, unemployment insurance and other statutory benefits and a housing provident fund. C. Board Practices Board of Directors Our board of directors consists of five directors.
Our PRC subsidiaries are required by law to make contributions equal to certain percentages of each employee’s salary for his or her pension insurance, medical insurance, unemployment insurance and other statutory benefits and a housing provident fund.
Compensation For the year ended December 31, 2022, we paid an aggregate of approximately RMB1.6 million (US$0.2 million) in cash and benefits to our directors and executive officers. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our executive officers and directors.
Compensation For the year ended December 31, 2023, we paid an aggregate of approximately RMB2.9 million (US$0.4 million) in cash and benefits to our directors and executive officers. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our executive officers and directors.
Directors and Executive Officers Age Position Xiaogang Geng 49 Founder, Chairman, Director and Chief Executive Officer Dun Zhao 40 Director and Chief Marketing Officer Feiyong Li 40 Independent Director Steven Gu 44 Independent Director Jian Wang 44 Independent Director Lin Bao 49 Chief Financial Officer Jianhong Huang 39 Chief Operating Officer Mr.
Directors and Executive Officers Age Position Xiaogang Geng 51 Founder, Chairman, Director and Chief Executive Officer Dun Zhao 42 Director and Chief Marketing Officer Feiyong Li 42 Independent Director Steven Gu 46 Independent Director Jian Wang 46 Independent Director Lin Bao 51 Chief Financial Officer Jianhong Huang 41 Chief Operating Officer Mr.
Bao has been serving as the independent director of Cetus Capital Acquisition Corp. since January 31, 2023, and served as a chief financial officer of Eagsen, Inc. from 2020 to 2022. Before Eagsen, Inc. was set up, Ms. Bao served as a chief financial officer of Shanghai Eagsen Intelligent Co., Ltd. from 2019 to 2020.
Bao has been serving as the independent director of Aimei Health Technology Co., Ltd since December 2023, independent director of SunCar Technology Group Inc. since May 2023, and Cetus Capital Acquisition Corp. since January 2023. She served as a chief financial officer of Eagsen, Inc. from 2020 to 2022. Before Eagsen, Inc. was set up, Ms.
From 2018 to 2019, she served as a chief financial officer of Jufeel International Group. From 2015 to 2018, Ms. Bao worked as an independent consultant to provide accounting advisory services for China-based companies. She also served as a chief financial officer of Balintimes Online Media Ltd. from 2014 to 2015 in China.
Bao served as a chief financial officer of Shanghai Eagsen Intelligent Co., Ltd. from 2019 to 2020. From 2018 to 2019, she served as a chief financial officer of Jufeel International Group. From 2015 to 2018, Ms. Bao worked as an independent consultant to provide accounting advisory services for China-based companies.
She graduated from Jiangxi Shangrao Education College with a major in computer application in 2001. 83 Board Diversity The table below provides certain information regarding the diversity of our board of directors as of the date of this annual report.
Huang worked as a manager assistant in a toy manufacturer from 2002 to 2003. She graduated from Jiangxi Shangrao Education College with a major in computer application in 2001. 99 Board Diversity The table below provides certain information regarding the diversity of our board of directors as of the date of this annual report.
Function As of December 31, 2022 Number % of Total Employees Management 6 3.3 % Supply chain service department 12 6.6 % E-commerce service department 14 7.7 % Key account service department 15 8.2 % Operational department 49 26.9 % IT department 20 11.0 % Human resources department 6 3.3 % Financial department 18 9.9 % Sales and marketing department 42 23.1 % Total 182 100.0 % As required by laws and regulations in China, we participate in various employee social security plans that are organized by municipal and provincial governments, including, among other things, housing, pension, medical insurance and unemployment insurance.
As of December 31, 2023 Function Number % of Total Employees Management 8 4.6 % Warehousing service department 14 8.0 % Custom brokage department 21 12 % Key account service department 14 8.0 % Operational department 37 21.1 % IT department 5 2.9 % Human resources department 6 3.4 % Financial department 24 13.7 % Sales and marketing department 46 26.3 % Total 175 100.0 % As required by laws and regulations in China, we participate in various employee social security plans that are organized by municipal and provincial governments, including, among other things, housing, pension, medical insurance and unemployment insurance.
From 2005 to 2008, she worked as a senior auditor in Ernst & Young LLP in Toronto, Canada. From 1994 to 2000, Ms. Bao served as the account manager of China Tuhsu Sunry Development Co. Ltd.
Bao served as the corporate controller of Arehada Mining Ltd. and from 2008 to 2010, she concurrently served as the corporate controller of Changfeng Energy Inc. From 2005 to 2008, she worked as a senior auditor in Ernst & Young LLP in Toronto, Canada. From 1994 to 2000, Ms.
She previously served as the manager of Shenzhen Qinhui Logistics Co., Ltd. from 2005 to 2008 and the operation supervisor of Dongguan Yihui Logistics Corporation from 2003 to 2005. Ms. Huang worked as a manager assistant in a toy manufacturer from 2002 to 2003.
She has been serving as the vice general manager of Shenzhen Jayud Logistics Technology Co., Ltd. since April 2015. She previously served as the manager of Shenzhen Qinhui Logistics Co., Ltd. from 2005 to 2008 and the operation supervisor of Dongguan Yihui Logistics Corporation from 2003 to 2005. Ms.
Jianhong Huang has served as our chief operating officer since March 31, 2023. Ms. Huang is well experienced in the global logistics service industry and has accumulated extensive on-site knowledge from her work experience. She has been serving as the vice general manager of Shenzhen Jayud Logistics Technology Co., Ltd. since April 2015.
Bao is a CPA in the United States, a Canadian Chartered Professional Accountant and a CPA in Hong Kong. Ms. Jianhong Huang has served as our chief operating officer since March 31, 2023. Ms. Huang is well experienced in the global logistics service industry and has accumulated extensive on-site knowledge from her work experience.
She received a Bachelor’s Degree in Accountancy from Concordia University in Montreal, Canada in 2004 and she graduated with a Bachelor’s Degree in Japanese from Beijing Second Foreign Language University in 1994. Ms. Bao is a CPA in the United States, a Canadian Chartered Professional Accountant and a CPA in Hong Kong. Ms.
Bao served as the account manager of China Tuhsu Sunry Development Co. Ltd. She received a Bachelor’s Degree in Accountancy from Concordia University in Montreal, Canada in 2004 and she graduated with a Bachelor’s Degree in Japanese from Beijing Second Foreign Language University in 1994. Ms.
Removed
These contracts include a standard non-compete covenant that prohibits the employee from competing with us, directly or indirectly, during his or her employment and for 12 months after the termination of the employment, provided that we pay compensation equal to half a month’s salary.
Added
Clawback Policy In April 2024, we adopted a Clawback Policy in compliance with the SEC rules and The Nasdaq Stock Market listing standards to recover any excess incentive-based compensation from current and former executive officers after an accounting restatement. C. Board Practices Board of Directors Our board of directors consists of five directors.
Removed
As of the date of this annual report, 800,000 of our issued and outstanding Class A ordinary shares were held by record holders in the United States, representing 3.7% of our total outstanding ordinary shares on an as-converted basis.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

4 edited+0 added−0 removed0 unchanged
Biggest changeFor the years ended December 31, 2020, 2021 and 2022, we borrowed loans amounting to nil, RMB6.2 million and RMB6.3 million (US$0.9 million), respectively, from certain of our directors, executive officers and principal shareholders. As of December 31, 2022, we had repaid all of such outstanding loans. C. Interests of Experts and Counsel Not applicable. 89
Biggest changeFor the years ended December 31, 2021, 2022 and 2023, we borrowed loans amounting to RMB6.2 million, RMB6.3 million and RMB6.8 million (US$1.0 million), respectively, from certain of our directors, executive officers and principal shareholders. As of December 31, 2023, we had RMB3.8 million (US$0.5 million) such loans outstanding. C. Interests of Experts and Counsel Not applicable. 105
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A. Major Shareholders Please refer to “Item 6. Directors, Senior Management and Employees—E. Share Ownership.” B. Related Party Transactions Employment Agreements and Indemnification Agreements See “Item 6. Directors, Senior Management and Employees—C. Board Practices—Employment Agreements and Indemnification Agreements.” Other Related Party Transactions Purchases and/or provision of logistics services and products.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS A. Major Shareholders Please refer to “Item 6. Directors, Senior Management and Employees—E. Share Ownership.” B. Related Party Transactions Employment Agreements and Indemnification Agreements See “Item 6. Directors, Senior Management and Employees—C. Board Practices—Employment Agreements and Indemnification Agreements.” Other Related Party Transactions Purchases and/or provision of logistics services, products and rent.
For the years ended December 31, 2020, 2021 and 2022, we provided logistics services amounting to RMB28.6 million, RMB14.1 million and RMB2.5 million (US$0.4 million), respectively, to certain related parties. Loans from certain directors, executive officers and principal shareholders .
For the years ended December 31, 2021, 2022 and 2023, we provided logistics services amounting to RMB14.1 million, RMB2.5 million and RMB0.2 million (US$0.03 million), respectively, to certain related parties. Loans from certain directors, executive officers and principal shareholders .
For the years ended December 31, 2020, 2021 and 2022, we purchased logistics services, products and equipment amounting to RMB159.3 million, RMB193.0 million and RMB123.3 million (US$17.7 million), respectively, from certain related parties.
For the years ended December 31, 2021, 2022 and 2023, we purchased logistics services, products, equipment and acquired rent amounting to RMB193.0 million, RMB123.3 million and RMB77.2 million (US$10.9 million), respectively, from certain related parties.