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Sunlands Technology Group

Sunlands Technology GroupSTG決算レポート

NYSE

STG Partners, LLC (STG) is an American private equity firm and based in Menlo Park, California. Its predecessor, Symphony Technology Group ("Symphony") was founded in 2002 by Romesh Wadhwani, William Chisholm, and Bryan Taylor. In 2017, Symphony was reorganized as STG Partners. As of March 2025, STG Partners managed approximately $12 billion in 19 pooled investment vehicle for its clients. The firm itself has less than one billion dollars in assets.

What changed in Sunlands Technology Group's 20-F — 2024 vs 2025

Top changes in Sunlands Technology Group's 2025 20-F

403 paragraphs added · 404 removed · 368 edited across 4 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

164 edited+15 added−18 removed716 unchanged
Risk Factors—Risks Related to Doing Business in China—We may rely on dividends and other distributions on equity paid by our PRC and Hong Kong subsidiaries to fund any cash and 11 financing requirements we may have, and any limitation on the ability of these subsidiaries in the PRC, including Hong Kong, to make payments to us could have a material and adverse effect on our ability to conduct the Group’s business.” For the purpose of illustration, the below table reflects the hypothetical taxes that might be required to be paid within China, assuming that: (i) we have taxable earnings, and (ii) we determine to pay a dividend in the future: Taxation Scenario (1) Statutory Tax and Standard Rates Hypothetical pre-tax earnings (2) 100 % Tax on earnings at statutory rate of 25% (3) (25 )% Net earnings available for distribution 75 % Withholding tax at standard rate of 10% (4) (7.5 )% Net distribution to Parent/Shareholders 67.5 % Notes: (1) The tax calculation has been simplified for the purpose of this example.
Risk Factors—Risks Related to Doing Business in China—We may rely on dividends and other distributions on equity paid by our PRC and Hong Kong subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of these subsidiaries in the PRC, including Hong Kong, to make payments to us could have a material and adverse effect on our ability to conduct the Group’s business.” For the purpose of illustration, the below table reflects the hypothetical taxes that might be required to be paid within China, assuming that: (i) we have taxable earnings, and (ii) we determine to pay a dividend in the future: 11 Taxation Scenario (1) Statutory Tax and Standard Rates Hypothetical pre-tax earnings (2) 100 % Tax on earnings at statutory rate of 25% (3) (25 )% Net earnings available for distribution 75 % Withholding tax at standard rate of 10% (4) (7.5 )% Net distribution to Parent/Shareholders 67.5 % Notes: (1) The tax calculation has been simplified for the purpose of this example.
The Group’s failure to fully comply with these existing and future laws and regulations may materially and adversely affect the Group’s business, financial condition and results of operations. We are subject to risks and uncertainties associated with the PRC laws, regulations and policies on the broader 23 education industry.
The Group’s failure to fully comply 23 with these existing and future laws and regulations may materially and adversely affect the Group’s business, financial condition and results of operations. We are subject to risks and uncertainties associated with the PRC laws, regulations and policies on the broader education industry.
However, the amount of the Group’s estimates may be inaccurate, in which case the Group’s financial condition and cash flow may be adversely affected if the Group were to pay late fees or fines in relation to the underpaid employee benefits. 35 Increases in labor costs in the PRC may adversely affect the Group’s business and results of operations.
However, the amount of the Group’s estimates may be inaccurate, in which case 35 the Group’s financial condition and cash flow may be adversely affected if the Group were to pay late fees or fines in relation to the underpaid employee benefits. Increases in labor costs in the PRC may adversely affect the Group’s business and results of operations.
Risks Related to Doing Business in China The approval, filing or other requirements of the China Securities Regulatory Commission or other PRC government authorities may be required under PRC law in connection with our issuance of securities overseas, and if required, we cannot predict whether or for how long the Group will be able to obtain such approval or complete such filing or other requirements.
Risks Related to Doing Business in China The approval, filing or other requirements of the China Securities Regulatory Commission or other PRC government authorities may be required under PRC law in connection with our issuance of securities overseas, and if required, we cannot predict whether or for how long the Group will be able to obtain such approval or complete such filing or other requirements.
The Chinese government may intervene or influence the Group’s operations in China at any time, or may exert more regulation over offerings conducted overseas and/or foreign investment in China-based issuers.
The Chinese government may intervene or influence the Group’s operations in China at any time, or may exert more regulation over offerings conducted overseas and/or foreign investment in China-based issuers.
Any actions by the Chinese government to exert more oversight and regulation over offerings that are conducted overseas and/or foreign investment in China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or become worthless.
Any actions by the Chinese government to exert more oversight and regulation over offerings that are conducted overseas and/or foreign investment in China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or become worthless.
Risks Related to the Group’s Business • If the Group fails to increase student enrollments, the Group’s net revenues may decline, and the Group may not be able to maintain growth. • If the Group fails to manage its business growth effectively, the success of the Group’s business model will be compromised. • The Group is subject to the uncertainty to continue to achieve profitability in the future. • If the Group is unable to conduct sales and marketing activities cost-effectively, the Group’s results of operations and financial condition may be materially and adversely affected. • The Group may be adversely affected by any negative publicity concerning the Group and the Group’s business, shareholders, affiliates, directors, officers and employees and the industry in which the Group operates, regardless of its accuracy, which could harm the Group’s reputation and business. • We are subject to risks and uncertainties associated with the PRC laws, regulations and policies on the broader education industry. • The Group faces risks associated with the lack of a private school operating permit for online education services as well as uncertainties surrounding PRC laws and regulations governing the education industry in general, including the Law for Promoting Private Education and its Implementation Rules. • The Group faces regulatory risks and uncertainties associated with the Group’s teachers’ lack of teaching licenses. • The Group faces regulatory risks and uncertainties with respect to the licensing requirement for the online transmission of internet audio-visual programs. • The failure to obtain and maintain other approvals, licenses, permits or filings applicable to the Group’s business could have a material adverse impact on the Group’s business, financial conditions and results of operations. • The Group may not be able to continue to recruit, train and retain a sufficient number of qualified faculty members.
Risks Related to the Group’s Business • If the Group fails to increase student enrollments, the Group’s net revenues may decline, and the Group may not be able to maintain growth. • If the Group fails to manage its business growth effectively, the success of the Group’s business model will be compromised. • The Group is subject to the uncertainty to continue to achieve profitability in the future. • If the Group is unable to conduct sales and marketing activities cost-effectively, the Group’s results of operations and financial condition may be materially and adversely affected. • The Group may be adversely affected by any negative publicity concerning the Group and the Group’s business, shareholders, affiliates, directors, officers and employees and the industry in which the Group operates, regardless of its accuracy, which could harm the Group’s reputation and business. • We are subject to risks and uncertainties associated with the PRC laws, regulations and policies on the broader education industry. • The Group faces risks associated with the lack of a private school operating permit for online education services as well as uncertainties surrounding PRC laws and regulations governing the education industry in general, including the Law for Promoting Private Education and its Implementation Rules. • The Group faces regulatory risks and uncertainties associated with the Group’s teachers’ lack of teaching licenses. • The Group faces regulatory risks and uncertainties with respect to the licensing requirement for the online transmission of internet audio-visual programs. 18 • The failure to obtain and maintain other approvals, licenses, permits or filings applicable to the Group’s business could have a material adverse impact on the Group’s business, financial conditions and results of operations. • The Group may not be able to continue to recruit, train and retain a sufficient number of qualified faculty members.
Risk Factors—Risks Related to Doing Business in China—The approval, filing or other requirements of the China Securities Regulatory Commission or other PRC government authorities may be required under PRC law in connection with our issuance of securities overseas, and if 10 required, we cannot predict whether or for how long the Group will be able to obtain such approval or complete such filing or other requirements.” Transfer of Funds and Other Assets Under relevant PRC laws and regulations, we are permitted to remit funds to the VIEs through loans rather than capital contributions.
Risk Factors—Risks Related to Doing Business in China—The approval, filing or other requirements of the China Securities Regulatory Commission or other PRC government authorities may be required under PRC law in connection with our issuance of securities overseas, and if required, we cannot predict whether or for how long the Group will be able to obtain such approval or complete such filing or other requirements.” Transfer of Funds and Other Assets Under relevant PRC laws and regulations, we are permitted to remit funds to the VIEs through loans rather than capital contributions.
For instance, the Circular on Promoting the Reform of Foreign Exchange Management and Improving Authenticity and Compliance Review, or the SAFE Circular 3, issued on January 26, 2017, provides that the banks shall, when dealing with dividend remittance transactions from domestic enterprise to its offshore shareholders of more than US$50,000, review the relevant board resolutions, original tax filing form and audited financial statements of such domestic enterprise based on the principal of genuine transaction.
For instance, the Circular on Promoting the Reform of Foreign Exchange Management and Improving Authenticity and Compliance Review, or the SAFE Circular 3, issued on January 26, 2017, provides that the banks shall, when dealing with dividend remittance transactions from domestic enterprise to its offshore shareholders of more than US$50,000, review the relevant 43 board resolutions, original tax filing form and audited financial statements of such domestic enterprise based on the principal of genuine transaction.
The Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, purport to require offshore special purpose vehicles that are controlled by PRC companies or individuals and that acquire PRC domestic companies or assets by using such offshore special purpose vehicles’ shares as a means of payment for the purpose of seeking a public listing on an overseas stock exchange, to obtain CSRC approval prior to publicly listing their securities on an overseas stock exchange.
The Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, purport to require offshore special purpose vehicles that are controlled by PRC companies or individuals and that acquire PRC domestic companies or assets by using such offshore special purpose vehicles’ shares as a means of payment for the purpose of seeking a public listing on an overseas stock exchange, to obtain CSRC approval prior to publicly listing their 40 securities on an overseas stock exchange.
Key Information—3.D Risk Factors—Risks Related to Doing Business in China—The ADSs will be delisted and the ADSs and shares will be prohibited from trading in the United States under the Holding Foreign Companies Accountable Act, or the HFCAA, if the PCAOB is unable to inspect or investigate completely auditors located in China for two consecutive years.” 3.A. [Reserved] 3.B.
Key Information—3.D Risk Factors—Risks Related to Doing Business in China—The ADSs will be delisted and the ADSs and shares will be prohibited from trading in the United States under the Holding Foreign Companies Accountable Act, or the HFCAA, if the PCAOB is unable to inspect or investigate completely auditors located in China for two consecutive years.” 17 3.A. [Reserved] 3.B.
Risks Related to Our Corporate Structure 18 • There are uncertainties regarding the interpretation and application of current and future PRC laws, regulations, and rules relating to the agreements that establish the VIE structure for the Group’s operations in China, including potential future actions by the PRC government, which could affect the enforceability of our contractual arrangements with the VIEs and, consequently, significantly affect the Group’s financial condition and results of operations.
Risks Related to Our Corporate Structure There are uncertainties regarding the interpretation and application of current and future PRC laws, regulations, and rules relating to the agreements that establish the VIE structure for the Group’s operations in China, including potential future actions by the PRC government, which could affect the enforceability of our contractual arrangements with the VIEs and, consequently, significantly affect the Group’s financial condition and results of operations.
In addition, in case where shareholders have spouses, the spouses of the shareholders of the rest VIEs also executed spousal consent letters to confirm that the equity interests of the VIEs are the own property of the shareholders and shall not constitute the jointly possessed property of the couples, and irrevocably waived any potential right or interest that may be granted by operation of applicable law in connection with the equity interests of the VIEs held by the shareholders.
In addition, in case where shareholders have spouses, the spouses of the shareholders of the VIEs also executed spousal consent letters to confirm that the equity interests of the VIEs are the own property of the shareholders and shall not constitute the jointly possessed property of the couples, and irrevocably waived any potential right or interest that may be granted by operation of applicable law in connection with the equity interests of the VIEs held by the shareholders.
Any such circumstance may subject the Group to fines and other regulatory, civil or criminal liabilities, and the Group may be ordered by the competent government authorities to suspend relevant operations, which will materially and adversely affect the Group’s business operation. For risks relating to licenses and approvals required for business operations in China, see “Item 3. Key Information—3.D.
Any such circumstance may subject the Group to fines and other regulatory, civil or criminal liabilities, and the Group may be ordered by the competent government authorities to suspend relevant operations, which will materially and adversely affect the Group’s business operation. For 8 risks relating to licenses and approvals required for business operations in China, see “Item 3. Key Information—3.D.
The Amended Implementing Rules, however, do not specify whether an online tutoring service provider like the Group shall obtain such private school operating permit and what requirements that an online tutoring service provider like the Group need to satisfy in order to obtain a private school operating permit, nor does it specify which level of government authority has the authority to accept and examine the Group’s application for the private school operating permit.
The Amended Implementing Rules, however, do not specify whether an online tutoring service provider like the Group shall obtain such private school operating permit and what requirements that an online tutoring service provider like the Group need to 22 satisfy in order to obtain a private school operating permit, nor does it specify which level of government authority has the authority to accept and examine the Group’s application for the private school operating permit.
However, on August 26, 2022, the PCAOB signed a Statement of Protocol with the China Securities Regulatory Commission and the Ministry of Finance of the People’s Republic of China governing inspections and investigations of audit firms based in China, which marks the first step toward providing access for the PCAOB to inspect and investigate registered public accounting firms headquartered in Mainland China and Hong Kong.
On August 26, 2022, the PCAOB signed a Statement of Protocol with the China Securities Regulatory Commission and the Ministry of Finance of the People’s Republic of China governing inspections and investigations of audit firms based in China, which marks the first step toward providing access for the PCAOB to inspect and investigate registered public accounting firms headquartered in Mainland China and Hong Kong.
The following chart illustrates the Group’s organizational structure, including our significant subsidiaries and the significant VIE as “significant” is defined under Section 1-02 of Regulation S-X under the Securities Act and certain other subsidiaries as of the date of this annual report. ———— Equity interest ------------ Contractual arrangements The Group’s corporate structure involves unique risks to investors in the ADSs.
The following chart illustrates the Group’s organizational structure, including our significant subsidiaries as “significant” is defined under Section 1-02 of Regulation S-X under the Securities Act and certain other subsidiaries and certain VIE as of the date of this annual report. ———— Equity interest ------------ Contractual arrangements 3 The Group’s corporate structure involves unique risks to investors in the ADSs.
If we are or were a PFIC for any taxable year during which a U.S. investor holds ADSs or ordinary shares, certain adverse U.S. federal income tax consequences could apply to such U.S. investor. See “Item 10. Additional Information—10.E. Taxation—Material U.S. Federal Income Tax Considerations—Passive Foreign Investment Company Rules.”
If we are or were a PFIC for any taxable year during which a U.S. investor holds ADSs or ordinary shares, certain adverse U.S. federal income tax consequences could apply to such U.S. investor. See “Item 10. Additional Information—10.E. Taxation—Material U.S. Federal Income Tax Considerations—Passive Foreign Investment Company Rules.” 54
The decrease was mainly due to the students’ preference for lump-sum payment for interest, professional skills and professional certification preparation courses. However, the Group plans to continue to make the interest payments for students under their loans and pay service fees to the credit providers, which may place strains on the Group’s financial resources in the future.
The decrease was mainly due to the students’ preference for lump-sum payment for interest, professional skills and professional certification preparation courses. However, the Group plans to continue to make the interest payments for students under their loans and pay service 27 fees to the credit providers, which may place strains on the Group’s financial resources in the future.
If the Group is unsuccessful in pursuing course and educational content development and upgrading opportunities due to the financial constraints, failure to attract qualified faculty, or other factors, the Group’s ability to 26 attract and retain students could be impaired and the Group’s financial results could suffer. The Group faces risks associated with the online live streaming course delivery model.
If the Group is unsuccessful in pursuing course and educational content development and upgrading opportunities due to the financial constraints, failure to attract qualified faculty, or other factors, the Group’s ability to attract and retain students could be impaired and the Group’s financial results could suffer. The Group faces risks associated with the online live streaming course delivery model.
In addition, network platform operators holding over one million users’ personal information shall apply with the Cybersecurity Review Office for a cybersecurity review before listing abroad. On January 4, 2022, the CAC published the Administrative Provisions on Internet Information Service Algorithm Recommendation on its website, which became effective on March 1, 2022.
In addition, network platform operators holding over one million users’ personal information shall apply with the Cybersecurity Review Office for a cybersecurity review before listing abroad. On January 4, 2022, the CAC published the Administrative Provisions on 30 Internet Information Service Algorithm Recommendation on its website, which became effective on March 1, 2022.
Furthermore, the PRC government has also recently indicated an 42 intent to exert more oversight and regulation over securities offerings and other capital markets activities that are conducted overseas and foreign investment in China-based issuers like us. For details, see “Item 3. Key Information—D.
Furthermore, the PRC government has also recently indicated an intent to exert more oversight and regulation over securities offerings and other capital markets activities that are conducted overseas and foreign investment in China-based issuers like us. For details, see “Item 3. Key Information—D.
However, there are still significant uncertainties relating to the interpretation and implementation of the Audio-Visual Program Provisions, in particular, the scope of “internet audio-visual programs.” See “Item 4. Information on the Company—4.B. 24 Business Overview—Regulation—Regulations Relating to Online Transmission of Audio-Visual Programs.” The Group delivers courses in live streaming format.
However, there are still significant uncertainties relating to the interpretation and implementation of the Audio-Visual Program Provisions, in particular, the scope of “internet audio-visual programs.” See “Item 4. Information on the Company—4.B. Business Overview—Regulation—Regulations Relating to Online Transmission of Audio-Visual Programs.” The Group delivers courses in live streaming format.
If the Group is unable to manage these risks, the Group could become subject to penalties, fines, suspension of business and revocation of required licenses, 31 and the Group’s reputation and results of operations could be materially and adversely affected. Tuition refunds or potential refund disputes may negatively affect the Group’s cash flow, financial condition, and reputation.
If the Group is unable to manage these risks, the Group could become subject to penalties, fines, suspension of business and revocation of required licenses, and the Group’s reputation and results of operations could be materially and adversely affected. Tuition refunds or potential refund disputes may negatively affect the Group’s cash flow, financial condition, and reputation.
Each of our PRC subsidiaries is required to set aside at least 10% of its after-tax profits each year, after making up previous 16 years’ accumulated losses, if any, to fund certain statutory reserve funds, until the aggregate amount of such a fund reaches 50% of its registered capital.
Each of our PRC subsidiaries is required to set aside at least 10% of its after-tax profits each year, after making up previous years’ accumulated losses, if any, to fund certain statutory reserve funds, until the aggregate amount of such a fund reaches 50% of its registered capital.
If CSRC approval under the M&A Rules is required, it is uncertain whether it would be possible for the Group to obtain the approval, and any failure to obtain or delay in obtaining CSRC approval for our future issuance of securities overseas would subject 40 the Group to sanctions imposed by the CSRC and other PRC regulatory agencies.
If CSRC approval under the M&A Rules is required, it is uncertain whether it would be possible for the Group to obtain the approval, and any failure to obtain or delay in obtaining CSRC approval for our future issuance of securities overseas would subject the Group to sanctions imposed by the CSRC and other PRC regulatory agencies.
If the Group is found to be in violation of any existing or 8 future PRC laws or regulations, or fails to obtain or maintain any of the required licenses, permits, filings, registrations or approvals, the relevant PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures.
If the Group is found to be in violation of any existing or future PRC laws or regulations, or fails to obtain or maintain any of the required licenses, permits, filings, registrations or approvals, the relevant PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures.
As the Revised Cybersecurity Review Measures is newly promulgated, it is uncertain how the measures will be interpreted or implemented and how they will affect the Group. We cannot predict the impact of the Revised Cybersecurity Review 9 Measures, if any, at this stage, and we will closely monitor and assess any development in the rule-making process.
As the Revised Cybersecurity Review Measures is newly promulgated, it is uncertain how the measures will be interpreted or implemented and how they will affect the Group. We cannot predict the impact of the Revised Cybersecurity Review Measures, if any, at this stage, and we will closely monitor and assess any development in the rule-making process.
To the extent the Group’s independent registered public accounting firm is required to attest to, and report on, the effectiveness of the Group’s internal control over financial reporting in the future, it may not be able to conclude that the Group has effective internal control over financial reporting 34 at a reasonable assurance level.
To the extent the Group’s independent registered public accounting firm is required to attest to, and report on, the effectiveness of the Group’s internal control over financial reporting in the future, it may not be able to conclude that the Group has effective internal control over financial reporting at a reasonable assurance level.
If any PRC shareholder of such SPV fails to make the required registration or to update the previously filed registration, the subsidiary of such SPV in China may be prohibited from distributing its profits or the proceeds from any capital reduction, share transfer or liquidation to the SPV, and the SPV may also be prohibited from making additional capital contributions into its subsidiary in China.
If any PRC shareholder of such SPV fails to make the required registration or to update the previously filed registration, the subsidiary of such SPV in China may be prohibited from distributing its profits or the proceeds from any capital reduction, share transfer or liquidation to the SPV, and the SPV may also be prohibited from 45 making additional capital contributions into its subsidiary in China.
Furthermore, on July 7, 2022, the CAC promulgated the Security Assessment Measures for Outbound Data Transfer, effective from September 1, 2022, to regulate outbound data transfer activities, protect the rights and interests of personal 30 information, safeguard national security and social public interests, and promote the cross-border security and free flow of data.
Furthermore, on July 7, 2022, the CAC promulgated the Security Assessment Measures for Outbound Data Transfer, effective from September 1, 2022, to regulate outbound data transfer activities, protect the rights and interests of personal information, safeguard national security and social public interests, and promote the cross-border security and free flow of data.
The Group’s need to significantly increase the number of qualified employees and retain key employees may cause the 32 Group to materially increase compensation-related costs, including share-based compensation. If the Group cannot maintain the corporate culture as the Group grows, the Group could lose the innovation, collaboration and focus that contribute to the Group’s business.
The Group’s need to significantly increase the number of qualified employees and retain key employees may cause the Group to materially increase compensation-related costs, including share-based compensation. If the Group cannot maintain the corporate culture as the Group grows, the Group could lose the innovation, collaboration and focus that contribute to the Group’s business.
Shareholders of Cayman Islands exempted companies like us have no general rights under Cayman Islands law to inspect or obtain copies of register of members or corporate records (other than copies of the memorandum and articles of 51 association, the register of mortgages and charges, and any special resolutions passed by the shareholders) of these companies.
Shareholders of Cayman Islands exempted companies like us have no general rights under Cayman Islands law to inspect or obtain copies of register of members or corporate records (other than copies of the memorandum and articles of association, the register of mortgages and charges, and any special resolutions passed by the shareholders) of these companies.
We cannot assure you that when conflicts of interest arise any or all of these shareholders will act in the best interests of our company or such conflicts will be resolved in our favor. Currently, we do not have any arrangements to address potential conflicts of interest between these shareholders and our company.
We cannot assure you that when conflicts of interest arise any or all of these shareholders will act in the best interests of our company or such conflicts will be resolved 39 in our favor. Currently, we do not have any arrangements to address potential conflicts of interest between these shareholders and our company.
We cannot predict what effect, if any, market sales of securities held by our significant shareholders 50 or any other shareholder or the availability of these securities for future sale will have on the market price of the ADSs. Techniques employed by short sellers may drive down the market price of the ADSs.
We cannot predict what effect, if any, market sales of securities held by our significant shareholders or any other shareholder or the availability of these securities for future sale will have on the market price of the ADSs. Techniques employed by short sellers may drive down the market price of the ADSs.
Some U.S. states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands. In addition, Cayman Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States.
Some U.S. states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands. In 51 addition, Cayman Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States.
In addition, if the government authorities deem printing and providing physical education materials to users as “publication distribution” under Administrative Provisions on the Publications 25 Market, we, the VIEs or their operating subsidiaries may be required to obtain the Publication License.
In addition, if the government authorities deem printing and providing physical education materials to users as “publication distribution” under Administrative Provisions on the Publications Market, we, the VIEs or their operating subsidiaries may be required to obtain the Publication License.
Furthermore, offering new courses or content or upgrading existing ones may require the Group to make significant investments in educational content development, increase sales and marketing efforts and reallocate resources from other uses, all of which may not be successful.
Furthermore, offering new courses or content or upgrading existing ones may require the Group to make significant investments in educational content 26 development, increase sales and marketing efforts and reallocate resources from other uses, all of which may not be successful.
The Group expects that these areas will receive greater attention and focus from regulators, and attract continued or greater public scrutiny and attention going forward, which could increase compliance costs and subject the Group to heightened risks and challenges associated with data security and protection.
The Group expects that these areas will receive greater attention and focus from regulators, and 31 attract continued or greater public scrutiny and attention going forward, which could increase compliance costs and subject the Group to heightened risks and challenges associated with data security and protection.
The Group has limited access to alternative networks or services in the event of disruptions, 36 failures or other problems with China’s internet infrastructure or the telecommunications networks provided by telecommunications service providers. The Group’s platform regularly serves a large number of users and advertisers.
The Group has limited access to alternative networks or services in the event of disruptions, failures or other problems with China’s internet infrastructure or the telecommunications networks provided by telecommunications service providers. The Group’s platform regularly serves a large number of users and advertisers.
If we cannot resolve any conflict of interest or dispute between us and these shareholders, we would have to rely on legal proceedings, which could result in disruption of the Group’s business and subject us to 39 substantial uncertainty as to the outcome of any such legal proceedings.
If we cannot resolve any conflict of interest or dispute between us and these shareholders, we would have to rely on legal proceedings, which could result in disruption of the Group’s business and subject us to substantial uncertainty as to the outcome of any such legal proceedings.
Department of the Treasury issued a final rule on outbound investment, effective January 2, 2025, which restricts or requires notification of certain investments by U.S. persons in Chinese entities involved in semiconductors, quantum technologies, and artificial intelligence.
Department of the Treasury issued a final rule on outbound investment, 41 effective January 2, 2025, which restricts or requires notification of certain investments by U.S. persons in Chinese entities involved in semiconductors, quantum technologies, and artificial intelligence.
If the Group ceases to do so due to increases in interest rates or for other reasons, the 27 Group’s course packages may become more costly for students to purchase, which could in turn negatively impact the Group’s business, financial condition and reputation.
If the Group ceases to do so due to increases in interest rates or for other reasons, the Group’s course packages may become more costly for students to purchase, which could in turn negatively impact the Group’s business, financial condition and reputation.
The company can regain compliance at any time during the 49 cure period if on the last trading day of any calendar month during the cure period the company has a closing share price of at least US$1.00 and an average closing share price of at least US$1.00 over the 30 trading-day period ending on the last trading day of that month.
The company can regain compliance at any time during the cure period if on the last trading day of any calendar month during the cure period the company has a closing share price of at least US$1.00 and an average closing share price of at least US$1.00 over the 30 trading-day period ending on the last trading day of that month.
The Group’s growth in a relatively short period of time is not necessarily indicative of results that the Group may achieve in the future. If the Group does not effectively manage the growth of the Group’s business and operations, the Group’s reputation, results of operations and overall business and prospects could be negatively impacted.
The Group’s growth in a relatively short period of time is not necessarily indicative of results that the Group may achieve in the future. If the Group does not effectively manage the growth of the Group’s business and operations, the Group’s reputation, results of operations and 20 overall business and prospects could be negatively impacted.
The Group and/or third parties post information on the Group’s mobile apps and websites that may be viewed as news information, and the release of such information on the Group’s mobile apps and websites may be deemed as Internet news information services and therefore require the VIEs or their operating subsidiaries to obtain Internet news information licenses.
The Group and/or third parties post information on the Group’s mobile apps and websites that may be viewed as news information, and the release of such 25 information on the Group’s mobile apps and websites may be deemed as Internet news information services and therefore require the VIEs or their operating subsidiaries to obtain Internet news information licenses.
If the Group’s security measures are breached or fail as a result of third-party action, employee error, malfeasance or otherwise, the Group could be subject to liability or the Group’s business could be interrupted, potentially over an extended period of time.
If the Group’s 29 security measures are breached or fail as a result of third-party action, employee error, malfeasance or otherwise, the Group could be subject to liability or the Group’s business could be interrupted, potentially over an extended period of time.
Any or all of these issues could harm the Group’s reputation, adversely affect the Group’s ability to attract and enroll prospective 29 students, cause prospective students not to enroll or stay enrolled, or subject the Group to third-party lawsuits, regulatory fines or other action or liability.
Any or all of these issues could harm the Group’s reputation, adversely affect the Group’s ability to attract and enroll prospective students, cause prospective students not to enroll or stay enrolled, or subject the Group to third-party lawsuits, regulatory fines or other action or liability.
If the PRC government finds such agreements non-compliant with relevant PRC laws, regulations, and rules, or if these laws, regulations and rules or the interpretation thereof change in the future, we could be subject to severe penalties or be forced to relinquish our interests in the VIEs.
If the PRC government finds such agreements non-compliant with relevant PRC laws, regulations, and rules, or if these laws, regulations and rules or the interpretation thereof change in the future, we could be subject to 37 severe penalties or be forced to relinquish our interests in the VIEs.
Under SAFE Notice 13, applications for foreign exchange registration of inbound foreign direct investments and outbound overseas direct investments, including those required under SAFE Circular 37, will be filed with qualified banks instead of SAFE. The qualified banks will directly examine the applications and accept 45 registrations under the supervision of SAFE.
Under SAFE Notice 13, applications for foreign exchange registration of inbound foreign direct investments and outbound overseas direct investments, including those required under SAFE Circular 37, will be filed with qualified banks instead of SAFE. The qualified banks will directly examine the applications and accept registrations under the supervision of SAFE.
The Group’s future success is also dependent on the Group’s ability to attract a significant number of qualified employees and retain existing key employees. If the Group is unable to do so, the Group’s business and growth may be materially and adversely affected.
The Group’s future success is 32 also dependent on the Group’s ability to attract a significant number of qualified employees and retain existing key employees. If the Group is unable to do so, the Group’s business and growth may be materially and adversely affected.
Any limitation on the ability of our PRC subsidiaries to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to the Group’s 43 business, pay dividends, or otherwise fund and conduct the Group’s business.
Any limitation on the ability of our PRC subsidiaries to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to the Group’s business, pay dividends, or otherwise fund and conduct the Group’s business.
One of our subsidiaries, Wuhan Shangde, has registered “computer technology training” and “art training” in its authorized scope of business. However, we, the VIEs and certain of their operating subsidiaries currently do not include “occupational training” and “educational facilitation services” in their authorized scope of business.
One of our subsidiaries, Wuhan Shangde, has registered “computer technology training” and “art training” in its authorized scope of business. However, the VIEs and certain of their operating subsidiaries currently do not include “occupational training” and “educational facilitation services” in their authorized scope of business.
The Group will endeavor to maintain an effective internal control system, but any failure may cause the Group’s management not be able to conclude that the Group has effective internal control over financial reporting at a reasonable assurance level.
The Group will endeavor to maintain an effective internal control system, but any failure may cause the Group’s management not be able to conclude that the Group has effective internal 34 control over financial reporting at a reasonable assurance level.
Moreover, the Group has entered into contracts with various subsidiaries of a limited number of telecommunications service providers at provincial level and rely on them to provide the Group with data communications capacity through local telecommunications lines.
Moreover, the 36 Group has entered into contracts with various subsidiaries of a limited number of telecommunications service providers at provincial level and rely on them to provide the Group with data communications capacity through local telecommunications lines.
The enacted Foreign Investment Law does not touch upon the relevant concepts and regulatory regimes of “actual control” in determining whether a company is considered a foreign invested enterprise, and thus this regulatory topic remains unclear under the Foreign Investment Law.
The enacted Foreign Investment Law does not touch upon the relevant concepts and regulatory regimes of “actual control” in determining whether a company is considered a foreign invested enterprise, and thus this regulatory 47 topic remains unclear under the Foreign Investment Law.
Capitalization and Indebtedness Not applicable. 3.C. Reason for the Offer and Use of Proceeds 17 Not applicable. 3.D. Risk Factors The Group faces various legal and operational risks and uncertainties as a group based in and primarily operating in China.
Capitalization and Indebtedness Not applicable. 3.C. Reason for the Offer and Use of Proceeds Not applicable. 3.D. Risk Factors The Group faces various legal and operational risks and uncertainties as a group based in and primarily operating in China.
Under the Group’s current corporate structure, our Cayman Islands holding company primarily relies on dividend payments from our PRC subsidiaries to fund any cash and financing requirements we may have.
Under the Group’s current corporate structure, our Cayman Islands holding company primarily relies on dividend payments from our 44 PRC subsidiaries to fund any cash and financing requirements we may have.
Risks Related to the ADSs If the market price for the ADSs falls below US$1.00 for an extended period of time, or falls to US$0.16 at any time, the ADSs may be delisted from the NYSE.
Risks Related to the ADSs If the market price for the ADSs falls below US$1.00 for an extended period of time, or falls to US$0.16 at any time, the 49 ADSs may be delisted from the NYSE.
Investors Sunlands Technology Group’s ability to pay dividends, if any, to its shareholders and ADS holders and to service any debt it may incur will depend upon dividends paid by our PRC subsidiaries.
Investors 16 Sunlands Technology Group’s ability to pay dividends, if any, to its shareholders and ADS holders and to service any debt it may incur will depend upon dividends paid by our PRC subsidiaries.
Sub-category No. 5 of the first category and sub-category No. 7 of the second category cover the live broadcasting of important political, martial, economic, social, cultural, sports activities or events or general social or community cultural activities, sports games and other organized activities.
Sub-category No. 5 of the first category and sub-category No. 24 7 of the second category cover the live broadcasting of important political, martial, economic, social, cultural, sports activities or events or general social or community cultural activities, sports games and other organized activities.
The PRC government has significant oversight and discretion over the conduct of the Group’s business and may intervene with or influence the Group’s operations as the government deems appropriate to further regulatory, political and societal goals.
The PRC government has significant oversight and discretion over the conduct of the Group’s business and may 42 intervene with or influence the Group’s operations as the government deems appropriate to further regulatory, political and societal goals.
Furthermore, we be required to withhold a 10% withholding tax from dividends we pay to our shareholders that are non-resident enterprises, including the holders of the ADSs.
Furthermore, we are required to withhold a 10% withholding tax from dividends we pay to our shareholders that are non-resident enterprises, including the holders of the ADSs.
Class A ordinary shares are not convertible into Class B ordinary shares or Class C ordinary shares, Class B ordinary shares are not convertible into Class C ordinary shares, and Class C ordinary shares 52 are not convertible into Class B ordinary shares under any circumstances. Mr. Peng Ou, our founder and chairman of our board of directors, Mr.
Class A ordinary shares are not convertible into Class B ordinary shares or Class C ordinary shares, Class B ordinary shares are not convertible into Class C ordinary shares, and Class C ordinary shares are not convertible into Class B ordinary shares under any circumstances. Mr. Peng Ou, our founder and chairman of our board of directors, Mr.
The Group’s management has concluded that the Group’s internal control over financial reporting was effective as of December 31, 2024. See “Item 15. Controls and Procedures—Management’s Annual Report on Internal Control over Financial Reporting.” We are exempt from the requirement of an attestation report issued by our registered public accounting firm because we are a non-accelerated filer.
The Group’s management has concluded that the Group’s internal control over financial reporting was effective as of December 31, 2025. See “Item 15. Controls and Procedures—Management’s Annual Report on Internal Control over Financial Reporting.” We are exempt from the requirement of an attestation report issued by our registered public accounting firm because we are a non-accelerated filer.
The Group may be involved in disputes with the affected students, especially if the Group is not able to fulfil the Group’s obligations under the agreements between the Group and the students.
The Group may be 21 involved in disputes with the affected students, especially if the Group is not able to fulfil the Group’s obligations under the agreements between the Group and the students.
We cannot assure you that the PRC government will not in the future require the Group to obtain a 22 private school operating permit.
We cannot assure you that the PRC government will not in the future require the Group to obtain a private school operating permit.
However, since the Foreign Investment Law and the Implementation Rules of Foreign Investment Law are relatively new, uncertainties still exist in 47 relation to its interpretation and implementation.
However, since the Foreign Investment Law and the Implementation Rules of Foreign Investment Law are relatively new, uncertainties still exist in relation to its interpretation and implementation.
The past lack of the PCAOB inspections in mainland China prevented the PCAOB from fully evaluating audits and quality control procedures of our independent registered public accounting firm, which made it more difficult to evaluate the effectiveness of our independent registered public accounting firm’s audit procedures or quality control procedures as compared to auditors outside of mainland China that were subject to the PCAOB inspections.
Notwithstanding the foregoing, the past lack of the PCAOB inspections in mainland China prevented the PCAOB from fully evaluating audits and quality control procedures of our independent registered public accounting firm, which made it more difficult to evaluate the effectiveness of our independent registered public accounting firm’s audit procedures or quality control procedures as compared to auditors outside of mainland China that were subject to the PCAOB inspections.
For details, please see pages 41 to 42. • Changes in China’s economic, political or social conditions or government policies could have a material adverse effect on the Group’s business and operations. For details, please see page 42. • Evolution of the PRC legal system, including changes in policies, laws and regulations in China, could adversely affect the Group.
For details, please see page 41 and 42. • Changes in China’s economic, political or social conditions or government policies could have a material adverse effect on the Group’s business and operations. For details, please see page 42. • Evolution of the PRC legal system, including changes in policies, laws and regulations in China, could adversely affect the Group.
For details, please see pages 48 to 49. • The ADSs will be delisted and the ADSs and shares will be prohibited from trading in the United States under the Holding Foreign Companies Accountable Act, or the HFCAA, if the PCAOB is unable to inspect or investigate completely auditors located in China for two consecutive years.
For details, please see page 48 and 49. • The ADSs will be delisted and the ADSs and shares will be prohibited from trading in the United States under the Holding Foreign Companies Accountable Act, or the HFCAA, if the PCAOB is unable to inspect or investigate completely auditors located in China for two consecutive years.
Any future lack of the PCAOB inspections in mainland China would prevent the PCAOB from fully evaluating audits and quality control procedures of our auditor, as a result of which we and investors will be deprived of the benefits of such PCAOB inspections, which could cause investors to lose confidence in our audit procedures and the quality of the Group’s financial statements.
Any future lack of the PCAOB inspections in mainland China would prevent the PCAOB from fully evaluating audits and quality control procedures of our auditor, as a result of which the Group and investors will be deprived of the benefits of such PCAOB inspections, which could cause investors to lose confidence in our audit procedures and the quality of the Group’s financial statements.
PV PLUTO LIMITED, an entity wholly owned and controlled by Primavera Capital Fund, beneficially owns all of our issued and outstanding Class B ordinary shares, which constitutes approximately 12.2% of our total issued and outstanding share capital and 13.9% of the aggregate voting power of our total issued and outstanding share capital as of the date of this annual report.
PV PLUTO LIMITED, an entity wholly owned and controlled by Primavera Capital Fund, beneficially owns all of our issued and outstanding Class B ordinary shares, which constitutes approximately 12.3% of our total issued and outstanding share capital and 13.9% of the aggregate voting power of our total issued and outstanding share capital as of the date of this annual report.
(Subsidiary of a VIE) Obtained Filing for Class II Medical Device Business Operation Wuhan Yilisu Technology Co., Ltd. (Subsidiary of a VIE) Obtained Wuhan Houduan Yuanli Technology Co., Ltd.
(Subsidiary of a VIE) Obtained Filing for Class II Medical Device Business Operation Wuhan Yilisu Technology Co., Ltd. (Subsidiary of a VIE) Obtained Hubei Houduan Yuanli Technology Co., Ltd.
Investors.” and “—Governmental control of currency conversion may limit the Group’s ability to utilize the Group’s net revenues effectively and affect the value of your investment.” The custodians or authorized users of the Group’s controlling non-tangible assets, including chops and seals, may fail to fulfill their responsibilities, or misappropriate or misuse these assets.
Investors.” and “—Governmental regulation of currency conversion may limit the Group’s ability to utilize the Group’s net revenues effectively and affect the value of your investment.” The custodians or authorized users of the Group’s controlling non-tangible assets, including chops and seals, may fail to fulfill their responsibilities, or misappropriate or misuse these assets.
Consolidated Statements and Other Financial Information—Dividend Policy.” On December 5, 2024, Wuhan Shangde declared a cash dividend of RMB100.0 million (US$13.7 million) to its sole shareholder, Wuhan Zhibo, which had been fully paid by December 31, 2024.
Consolidated Statements and Other Financial Information—Dividend Policy.” On December 5, 2024, Wuhan Shangde declared a cash dividend of RMB100.0 million (US$13.7 million) to its sole shareholder, Wuhan Zhibo, which has been fully paid by December 31, 2024.
Foreign investment in the value-added telecommunication services industry in China is extensively regulated and 37 subject to numerous restrictions.
Foreign investment in the value-added telecommunication services industry in China is extensively regulated and subject to numerous restrictions.
We have adopted a triple-class share structure such that our ordinary shares consist of Class A ordinary shares, Class B ordinary shares and Class C ordinary shares.
We have adopted a triple-class share structure such that our ordinary shares consist of Class A ordinary shares, Class 52 B ordinary shares and Class C ordinary shares.
Certain of our existing shareholders have substantial influence over our company, and their interests may not be aligned with the interests of our other stockholders. Mr. Peng Ou, our founder and the chairman of our board of directors, owns approximately 65.5% of our voting power and Mr.
Certain of our existing shareholders have substantial influence over our company, and their interests may not be aligned with the interests of our other stockholders. Mr. Peng Ou, our founder and the chairman of our board of directors, owns approximately 65.7% of our voting power and Mr.
Pursuant to the powers of attorney executed by the shareholders of Beijing Sunlands, the shareholders of Beijing Sunlands each irrevocably authorized Wuhan Zhibo to act on their respective behalf as exclusive agent and attorney with respect to all rights of shareholders concerning all equity interests held by each of them in Beijing Sunlands, including but not limited to propose to convene shareholder meetings, accept any notice with respect to the convening and proceeding of the shareholder meeting, attend shareholder meetings, sign the shareholders resolutions on their behalf, exercise all the shareholder’s rights according to laws and regulations and Beijing Sunlands’s articles of 5 association (including but not limited to voting rights and the sale transfer, pledge or dispose of all equity interests held in part or in whole) and designate and appoint on their respective behalf the president, directors, supervisors, chief executive officer, chief financial officer and other senior management members of Beijing Sunlands.
Pursuant to the powers of attorney executed by the shareholders of the VIEs, the shareholders of the VIEs each irrevocably authorized Wuhan Zhibo to act on their respective behalf as exclusive agent and attorney with 5 respect to all rights of shareholders concerning all equity interests held by each of them in the VIEs, including but not limited to propose to convene shareholder meetings, accept any notice with respect to the convening and proceeding of the shareholder meeting, attend shareholder meetings, sign the shareholders resolutions on their behalf, exercise all the shareholder’s rights according to laws and regulations and the VIEs’ articles of association (including but not limited to voting rights and the sale transfer, pledge or dispose of all equity interests held in part or in whole) and designate and appoint on their respective behalf the president, directors, supervisors, chief executive officer, chief financial officer and other senior management members of the VIEs.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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On the same day, the CSRC also held a press conference for the release of the Overseas Listing Trial Measures and issued the Notice on Administration for the Filing of Overseas Offering and Listing by Domestic Companies, which, among others, clarifies that (1) domestic companies that have been listed on a foreign stock exchange prior to the effective date of the Overseas Listing Trial Measures are not required to go through the filing procedure immediately but may be required to go through the filing procedure if future fund raising activities are involved; (2) a six-month transition period will be granted to domestic companies which, prior to the effective date of the Overseas Listing Trial Measures, have already obtained the approval from overseas regulatory authorities or stock exchanges (such as the completion of hearing in the market of Hong Kong or the completion of registration in the market of the United States), but have not completed the indirect overseas listing; if domestic companies fail to complete the overseas listing within such six-month transition period, they shall file with the CSRC according to the requirements; and (3) the CSRC will solicit opinions from relevant regulatory authorities and complete the filing of the overseas listing of companies with contractual arrangements which duly meet the compliance requirements, and support the development and growth of these companies by enabling them to utilize two markets and two kinds of resources.
On the same day, the CSRC also held a press conference for the release of the Overseas Listing Trial Measures and issued the Notice on Administration for the Filing of Overseas Offering and Listing by Domestic Companies, which, among others, clarifies that (1) domestic companies that have been listed on a foreign stock exchange prior to the effective date of the Overseas Listing Trial Measures are not required to go through the filing procedure immediately but may be required to go through the filing procedure if future fund raising activities are involved; (2) a six-month transition period will be granted to domestic companies which, prior to the effective date of the Overseas Listing Trial Measures, have already obtained the approval from overseas regulatory authorities or stock exchanges (such as the completion of hearing in the 67 market of Hong Kong or the completion of registration in the market of the United States), but have not completed the indirect overseas listing; if domestic companies fail to complete the overseas listing within such six-month transition period, they shall file with the CSRC according to the requirements; and (3) the CSRC will solicit opinions from relevant regulatory authorities and complete the filing of the overseas listing of companies with contractual arrangements which duly meet the compliance requirements, and support the development and growth of these companies by enabling them to utilize two markets and two kinds of resources.
Risk Factors—Risks Related to the Group’s Business—The Group faces risks associated with the lack of a private school operating permit for online education services as well as uncertainties surrounding PRC laws and regulations governing the education industry in general, including the Law for Promoting Private Education and its Implementation Rules.” Regulations on Online and Distance Education The MOE, jointly with certain other PRC government authorities, promulgated the Opinions on Guiding and Regulating the Orderly and Healthy Development of Educational Mobile Apps on August 10, 2019, or the Opinions on Educational Apps, which requires, among others, mobile apps that provide services for school teaching and management, student learning and student life, or home-school interactions, with school faculty, students or parents as the main users, and with education or learning as the main application scenarios, or the Educational Apps, be filed with competent 70 provincial regulatory authorities for education before the end of 2019.
Risk Factors—Risks Related to the Group’s Business—The Group faces risks associated with the lack of a private school operating permit for online education services as well as uncertainties surrounding PRC laws and regulations governing the education industry in general, including the Law for Promoting Private Education and its Implementation Rules.” Regulations on Online and Distance Education The MOE, jointly with certain other PRC government authorities, promulgated the Opinions on Guiding and Regulating the Orderly and Healthy Development of Educational Mobile Apps on August 10, 2019, or the Opinions on Educational Apps, which requires, among others, mobile apps that provide services for school teaching and management, student learning and student life, or home-school interactions, with school faculty, students or parents as the main users, and with education or learning as the main application scenarios, or the Educational Apps, be filed with competent provincial regulatory authorities for education before the end of 2019.
Pursuant to the Ninth Amendment to the Criminal Law issued by the Standing Committee of the National People’s Congress in August 2015, which became effective in November 2015, any internet service provider that fails to fulfill the obligations related to internet information security administration as required by applicable laws and refuses to rectify upon orders, shall be subject to criminal penalty for the result of (i) any dissemination of illegal information in large scale; (ii) any severe effect due to the leakage of the client’s information; (iii) any serious loss of criminal evidence; or (iv) other severe situation, and any individual or entity that (i) sells or provides personal information to others in a way violating the applicable law, or (ii) steals or illegally obtains any personal information, shall be subject to criminal penalty in severe situation.
Pursuant to the Ninth Amendment to the Criminal Law issued by the Standing Committee of the National People’s Congress in 73 August 2015, which became effective in November 2015, any internet service provider that fails to fulfill the obligations related to internet information security administration as required by applicable laws and refuses to rectify upon orders, shall be subject to criminal penalty for the result of (i) any dissemination of illegal information in large scale; (ii) any severe effect due to the leakage of the client’s information; (iii) any serious loss of criminal evidence; or (iv) other severe situation, and any individual or entity that (i) sells or provides personal information to others in a way violating the applicable law, or (ii) steals or illegally obtains any personal information, shall be subject to criminal penalty in severe situation.
Failure to comply with the registration procedures set forth in Circular 37, or making misrepresentation on or failure to disclose controllers of foreign-invested enterprise that is established through round-trip investment, may result in restrictions on the foreign exchange activities of the relevant foreign-invested enterprises, including payment of dividends and other 77 distributions, such as proceeds from any reduction in capital, share transfer or liquidation, to its offshore parent or affiliate, and the capital inflow from the offshore parent, and may also subject relevant PRC residents or entities to penalties under PRC foreign exchange administration regulations.
Failure to comply with the registration procedures set forth in Circular 37, or making misrepresentation on or failure to disclose controllers of foreign-invested enterprise that is established through round-trip investment, may result in restrictions on the foreign exchange activities of the relevant foreign-invested enterprises, including payment of dividends and other distributions, such as proceeds from any reduction in capital, share transfer or liquidation, to its offshore parent or affiliate, and the capital inflow from the offshore parent, and may also subject relevant PRC residents or entities to penalties under PRC foreign exchange administration regulations.
However, there are still significant uncertainties relating to the interpretation and implementation of the Audio-Visual Program Provisions, in particular, the scope of “internet audio-visual programs.” 72 Regulations Relating to Internet Live Streaming Services On November 4, 2016, the CAC issued Administrative Regulation on Internet Live Streaming Services, effective from December 1, 2016, according to which, “internet live streaming” refers to the activities of continuously releasing real-time information to the public based on the Internet in forms such as videos, audios, images and texts, and “internet live-streaming service providers” refers to the operators that provide Internet live-streaming platform service.
However, there are still significant uncertainties relating to the interpretation and implementation of the Audio-Visual Program Provisions, in particular, the scope of “internet audio-visual programs.” Regulations Relating to Internet Live Streaming Services On November 4, 2016, the CAC issued Administrative Regulation on Internet Live Streaming Services, effective from December 1, 2016, according to which, “internet live streaming” refers to the activities of continuously releasing real-time information to the public based on the Internet in forms such as videos, audios, images and texts, and “internet live-streaming service providers” refers to the operators that provide Internet live-streaming platform service.
Pursuant to the Notice of the State Administration of Taxation on the Issues concerning the Application of the Dividend Clauses of Tax Agreements, or SAT Circular 81, a Hong Kong resident enterprise must meet the following conditions, among others, in order to apply the reduced withholding tax rate: (i) it must be a company; (ii) it must directly own the required percentage of equity interests and voting rights in the PRC resident enterprise; and (iii) it must have directly owned such required percentage in the PRC resident enterprise throughout the 12 months prior to receiving the dividends.
Pursuant to the Notice 79 of the State Administration of Taxation on the Issues concerning the Application of the Dividend Clauses of Tax Agreements, or SAT Circular 81, a Hong Kong resident enterprise must meet the following conditions, among others, in order to apply the reduced withholding tax rate: (i) it must be a company; (ii) it must directly own the required percentage of equity interests and voting rights in the PRC resident enterprise; and (iii) it must have directly owned such required percentage in the PRC resident enterprise throughout the 12 months prior to receiving the dividends.
Foreign investor or relevant parties in China must declare the security review to the Office of the Working Mechanism prior to (i) the investments in the military industry, military industrial supporting and other fields relating to the security of national defense, and investments in areas surrounding military facilities and military industry facilities; and (ii) investments in important agricultural products, important energy and resources, important equipment manufacturing, important infrastructure, important transport services, important cultural products and services, important information technology and internet products and services, important financial services, key technologies and other important fields relating to national security, and obtain control in the target enterprise.
Foreign investor or relevant parties in China must declare the security review to the Office of the Working Mechanism prior to (i) the investments in the military industry, military industrial supporting and other fields relating to the security of national defense, and investments in areas surrounding military facilities and military industry facilities; and (ii) 66 investments in important agricultural products, important energy and resources, important equipment manufacturing, important infrastructure, important transport services, important cultural products and services, important information technology and internet products and services, important financial services, key technologies and other important fields relating to national security, and obtain control in the target enterprise.
The mentors’ roles and responsibilities typically include: • understanding and responding to student inquiries and concerns; 61 • monitoring students’ learning progress as well as their overall academic and personal development; • providing psychological support to help students cope with the challenging aspects of their studies, particularly in a rigorous academic environment; and • encouraging students to share ideas and learning experience and achievements with peers and faculty to foster a sense of community and teamwork spirit.
The mentors’ roles and responsibilities typically include: • understanding and responding to student inquiries and concerns; • monitoring students’ learning progress as well as their overall academic and personal development; • providing psychological support to help students cope with the challenging aspects of their studies, particularly in a rigorous academic environment; and • encouraging students to share ideas and learning experience and achievements with peers and faculty to foster a sense of community and teamwork spirit.
We believe that the principal competitive factors in China’s adult online education market and adult personal interest 64 learning market include the following: • brand awareness and reputation; • scope of course offerings; • course pricing; • interactive, engaging and customized learning experience; • teaching quality and level of academic and administrative student support; • ease of deployment and use of the course delivery format; and • expertise in sales and marketing, and student acquisition and retention; and • proven track record of performance.
We believe that the principal competitive factors in China’s adult online education market and adult personal interest learning market include the following: • brand awareness and reputation; • scope of course offerings; • course pricing; • interactive, engaging and customized learning experience; • teaching quality and level of academic and administrative student support; • ease of deployment and use of the course delivery format; and • expertise in sales and marketing, and student acquisition and retention; and • proven track record of performance.
As part of our efforts to streamline our corporate structure, the VIE Contractual Arrangements between Wuhan Zhibo and (i) Wuhan Xiaoyan, (ii) Beijing Odysseus, (iii) Guangzhou Wudawei, (iv) Guangzhou Tianyong, (v) Wuhan Hadeliang, (vi) Wuhan Jiayan and (vii) Tianjin Shangde, as well as their 55 shareholders, were terminated respectively through a series of transactions from April 2021 to October 2023.
As part of our efforts to streamline our corporate structure, the VIE Contractual Arrangements between Wuhan Zhibo and (i) Wuhan Xiaoyan, (ii) Beijing Odysseus, (iii) Guangzhou Wudawei, (iv) Guangzhou Tianyong, (v) Wuhan Hadeliang, (vi) Wuhan Jiayan and (vii) Tianjin Shangde, as well as their shareholders, were terminated respectively through a series of transactions from April 2021 to October 2023.
Otherwise, such online transaction operator may be subject to fines and consequences under related laws and regulations, including without limitation suspension of business for rectification and revocation of permits and licenses. On June 10, 2021, the SCNPC promulgated the Data Security Law of the PRC, which came into effect on September 1, 2021.
Otherwise, such online transaction operator may be subject to fines and consequences under related laws and regulations, including without limitation suspension of business for rectification and revocation of permits and licenses. On June 10, 2021, the SCNPC promulgated the Data Security Law of the PRC, which came into effect on September 74 1, 2021.
Risk Factors—Risks Related to the Group’s Business—To the extent the Group relies on certain types of course offerings to generate revenues, the Group will be subject to concentration risks, including risks resulting from changes in government policies.” In addition to the course offerings discussed above, the Group also offers exam preparation “crash courses” for exam-taking students.
Risk Factors—Risks Related to the Group’s Business—To the extent the Group relies on certain types of course offerings to generate revenues, the Group will be subject to concentration risks, including risks resulting from changes in government policies.” 58 In addition to the course offerings discussed above, the Group also offers exam preparation “crash courses” for exam-taking students.
The employee interface is specifically customized to provide the employees with information and data most relevant to their responsibilities. In addition, Genesis supports a centralized database allowing its users, including students and employees, to contribute, share and store content and data across various applications and platforms. The Group launched the personalized study programs in 2018.
The employee interface is specifically customized to provide the employees with information and data most relevant to their responsibilities. In addition, Genesis supports a centralized database allowing its users, including students and employees, to contribute, share and store content and data 63 across various applications and platforms. The Group launched the personalized study programs in 2018.
Upon discovery of any information whose release or transmission is prohibited by applicable laws or regulations, the private 69 school shall immediately cease the transmission of that information and take further remedial actions, such as deleting that information, to prevent it from spreading. Records pertaining to the situation shall be kept and reported to the appropriate authorities.
Upon discovery of any information whose release or transmission is prohibited by applicable laws or regulations, the private school shall immediately cease the transmission of that information and take further remedial actions, such as deleting that information, to prevent it from spreading. Records pertaining to the situation shall be kept and reported to the appropriate authorities.
To help them meet their aspirations and understand the potential educational solutions, the Group focuses marketing and sales practices on counseling-oriented interactions and 60 strive to deliver the courses and educational content in a highly engaging and student-friendly manner. Faculty The Group maintains a team of full-time faculty dedicated to helping students succeed.
To help them meet their aspirations and understand the potential educational solutions, the Group focuses marketing and sales practices on counseling-oriented interactions and strive to deliver the courses and educational content in a highly engaging and student-friendly manner. Faculty The Group maintains a team of full-time faculty dedicated to helping students succeed.
In addition, the Group uses mock lessons to assess a teacher’s teaching skills and ability to engage students in a live streaming course setting, especially in instances where multiple teachers are competing to teach the same course. The Group pays teachers base salaries and service fees generally on a per-lesson basis.
In addition, the Group uses mock lessons to assess a teacher’s teaching skills and ability to engage students in a live streaming course setting, especially in instances where multiple teachers are 61 competing to teach the same course. The Group pays teachers base salaries and service fees generally on a per-lesson basis.
Moreover, the competent supervisory departments of relevant important industries abovementioned shall organize the recognition of the CII and promptly notify the operators and Public Security Department of The State Council of the results of the identification. 74 On August 20, 2021, the SCNPC promulgated the Personal Information Protection Law, which became effective on November 1, 2021.
Moreover, the competent supervisory departments of relevant important industries abovementioned shall organize the recognition of the CII and promptly notify the operators and Public Security Department of The State Council of the results of the identification. On August 20, 2021, the SCNPC promulgated the Personal Information Protection Law, which became effective on November 1, 2021.
Organizational Structure The following chart illustrates the Group’s organizational structure, including our significant subsidiaries and the significant VIE as “significant” is defined under Section 1-02 of Regulation S-X under the Securities Act and certain other subsidiaries as of the date of this annual report. ———— Equity interest ------------ Contractual arrangements See “Item 3.
Organizational Structure The following chart illustrates the Group’s organizational structure, including our significant subsidiaries as “significant” is defined under Section 1-02 of Regulation S-X under the Securities Act and certain other subsidiaries and certain VIE as of the date of this annual report. 81 ———— Equity interest ------------ Contractual arrangements See “Item 3.
It was renamed as Tianjin Alaman Education Technology Co., Ltd. in February 2021 and was deregistered in March 2024. In August 2017, Wuhan Studyvip Online Education Co. Limited, or Wuhan Zhibo, our wholly-owned subsidiary, was incorporated in the PRC. Wuhan Zhibo is wholly owned by Sunlands HK. In June 2019, Wuhan Zhidao Online Education Technology Co., Ltd.
It was renamed as Tianjin Alaman Education Technology Co., Ltd. in February 2021 and was deregistered in March 2024. In August 2017, Wuhan Studyvip Online Education Co. Limited, or Wuhan Zhibo, our wholly-owned subsidiary, was incorporated in the PRC. Wuhan Zhibo is wholly owned by Sunlands HK. In June 2019, Hubei Zhidao Online Education Technology Co., Ltd.
Business Overview Mission We believe education should nurture and spread new ideas to enrich lives. High-quality education should be available to everyone. We all share a common aspiration to improve ourselves through education. The Group’s mission is to transform education through technology and innovation, making learning experiences enjoyable and rewarding.
Business Overview Mission We believe education should nurture and spread new ideas to enrich lives. High-quality education should be available 56 to everyone. We all share a common aspiration to improve ourselves through education. The Group’s mission is to transform education through technology and innovation, making learning experiences enjoyable and rewarding.
Students are assigned to different schools and divisions based on the major and number of students enrolled for a given academic period. Students in the same division are further assigned to different “classes” for administrative purposes. Educational Content Development and Offerings 59 Content Development The Group maintains an experienced team of course and educational content development professionals.
Students are assigned to different schools and divisions based on the major and number of students enrolled for a given academic period. Students in the same division are further assigned to different “classes” for administrative purposes. Educational Content Development and Offerings Content Development The Group maintains an experienced team of course and educational content development professionals.
The Patent Law was latest amended on October 17, 2020 which came into effect on June 1, 2021, pursuant to which a patent is valid for a twenty-year term for an invention and a utility model, and a fifteen-year term for a design, all starting from the application date.
The Patent Law was latest amended on October 17, 2020 which came into effect on June 1, 2021, pursuant to which a patent is valid for a twenty-year term for an invention and a utility model, and a fifteen-year 76 term for a design, all starting from the application date.
Any person applying for the registration of a trademark may not prejudice the existing right first obtained by others, nor may any person register in advance a trademark that has already been used by another 76 party and has already gained a “sufficient degree of reputation” through such party’s use.
Any person applying for the registration of a trademark may not prejudice the existing right first obtained by others, nor may any person register in advance a trademark that has already been used by another party and has already gained a “sufficient degree of reputation” through such party’s use.
Pursuant to these rules and regulations, the maximum amount of the aggregate of (i) the outstanding balance of foreign debts with a term not longer than one year, and (ii) the accumulated amount of foreign debts with a term longer than one year, of an FIE shall not exceed the difference between its registered total investment and its registered capital, or Total Investment and Registered Capital Balance.
Pursuant to these rules and regulations, the maximum amount of the aggregate of (i) the outstanding balance of foreign debts with a term not longer than one year, and (ii) the accumulated 78 amount of foreign debts with a term longer than one year, of an FIE shall not exceed the difference between its registered total investment and its registered capital, or Total Investment and Registered Capital Balance.
In the event of a successful claim of infringement and the Group’s failure or inability to develop non-infringing intellectual property or license the infringed or similar intellectual property on a timely basis, the Group’s business could be harmed. See “Item 3. Key Information—3.D.
In the event 64 of a successful claim of infringement and the Group’s failure or inability to develop non-infringing intellectual property or license the infringed or similar intellectual property on a timely basis, the Group’s business could be harmed. See “Item 3. Key Information—3.D.
We believe a highly interactive virtual student community drives the existing students’ level of engagement and significantly enhances the Group’s attractiveness to prospective students. Community-Oriented Class Setup The Group’s classes are set up to cultivate an interactive learning environment.
We believe a highly interactive virtual student community drives the existing students’ level of engagement and significantly enhances the Group’s attractiveness to prospective students. Community-Oriented Class Setup 59 The Group’s classes are set up to cultivate an interactive learning environment.
The Group puts ads on strategically chosen mobile applications that generate premium traffic quality to maximize return of investment from mobile marketing channels. The Group’s search engine marketing channels effectively target students who possess preliminary interest in the Group’s services.
The Group puts ads on strategically chosen mobile applications that generate premium traffic quality to maximize return of investment from mobile marketing channels. The Group’s search engine marketing channels effectively target students who possess preliminary interest in the 62 Group’s services.
A transition period from September 2023 to March 2024 will be granted to the apps that have carried out business before the promulgation of this Notice, or the Existing Apps, within which Existing Apps shall conduct and complete the apps filling.
A transition period from September 2023 to March 2024 will be granted to the apps that have carried out business before the promulgation of this Notice, or the Existing Apps, 68 within which Existing Apps shall conduct and complete the apps filling.
ITEM 4. INFORMATION ON THE COMPANY 4.A. History and Development of the Company The Group commenced education service business in August 2003. The Group remained an offline, classroom-based 54 education service provider until the Group transitioned to an exclusively online education model in 2014.
ITEM 4. INFORMATION ON THE COMPANY 4.A. History and Development of the Company The Group commenced education service business in August 2003. The Group remained an offline, classroom-based education service provider until the Group transitioned to an exclusively online education model in 2014.
The Group leases all of the facilities that the Group currently occupies from independent third parties. We believe that 81 the facilities that the Group currently leases are adequate to meet the Group’s needs for the foreseeable future. ITEM 4A. UNRESOLV ED STAFF COMMENTS Not applicable.
The Group leases all of the facilities that the Group currently occupies from independent third parties. We believe that the facilities that the Group currently leases are adequate to meet the Group’s needs for the foreseeable future. ITEM 4A. UNRESOLV ED STAFF COMMENTS Not applicable.
Nevertheless, it remains unclear whether the local PRC government authorities would adopt a different practice. In addition, it remains uncertain whether the PRC government authorities would issue more explicit interpretation and rules or promulgate new laws and regulations.
Nevertheless, it remains unclear whether the local PRC government authorities would 71 adopt a different practice. In addition, it remains uncertain whether the PRC government authorities would issue more explicit interpretation and rules or promulgate new laws and regulations.
Pursuant to the Foreign Debts Measures, PRC enterprises are not allowed to raise medium and long-term foreign 78 debts unless and until they have completed the review and registration process and obtained the review and registration certificate issued by NDRC.
Pursuant to the Foreign Debts Measures, PRC enterprises are not allowed to raise medium and long-term foreign debts unless and until they have completed the review and registration process and obtained the review and registration certificate issued by NDRC.
In addition, it also provides that for-profit private training institutes shall be analogically governed by these Implementation Rules on the Supervision and Administration of For-profit Private Schools.
In addition, it also provides that for-profit private training institutes shall be analogically governed by these Implementation Rules on the Supervision 70 and Administration of For-profit Private Schools.
According to these regulations, non-state-owned capital and foreign investors are not allowed to engage in the business of transmitting audio-visual programs through information networks.
According to these regulations, non-state-owned capital and foreign investors are not allowed to engage in the business of transmitting audio-visual programs through 72 information networks.
The PRC Foreign Investment Law On March 15, 2019, the Standing Committee of the National People’s Congress published the Foreign Investment 65 Law, or the FIL, which became effective on January 1, 2020.
The PRC Foreign Investment Law On March 15, 2019, the Standing Committee of the National People’s Congress published the Foreign Investment Law, or the FIL, which became effective on January 1, 2020.
In addition, it remains uncertain whether the PRC government authorities would issue more explicit interpretation and rules or promulgate new 71 laws and regulations.
In addition, it remains uncertain whether the PRC government authorities would issue more explicit interpretation and rules or promulgate new laws and regulations.
As of December 31, 2024, the Group offered professional skills and interest courses such as Wealth Management, Voice Acting, Chinese Painting and Calligraphy. In addition, the Group also offers professional certification preparation courses designed to give students the skills, knowledge and abilities that are commonly required or helpful for a broad range of professions.
As of December 31, 2025, the Group offered professional skills and interest courses such as Wealth Management, Voice Acting, Chinese Painting and Calligraphy. In addition, the Group also offers professional certification preparation courses designed to give students the skills, knowledge and abilities that are commonly required or helpful for a broad range of professions.
(formerly known as “Wuhan Hadeliang Online Education Technology Co., Ltd.” and “Wuhan Xingui Online Technology Co., Ltd.”), or Wuhan Hadeliang, and (vii) Tianjin Shangde, as well as their shareholders.
(formerly known as “Wuhan Hadeliang Online Education Technology Co., Ltd.,” “Wuhan Xingui Online Technology Co., Ltd.” and “Wuhan Yuanji Online Technology Co., Ltd.”), or Wuhan Hadeliang, and (vii) Tianjin Shangde, as well as their shareholders.
The 57 following table sets forth the Group’s net revenues, gross billings and new student enrollments attributable to each type of course offering.
The following table sets forth the Group’s net revenues, gross billings and new student enrollments attributable to each type of course offering.
The employment market is becoming increasingly competitive, motivating workers to enhance their career competitiveness through vocational education. As of December 31, 2024, the professional certification preparation courses covered various industries and professions, including Accounting, Human Resources and Teaching.
The employment market is becoming increasingly competitive, motivating workers to enhance their career competitiveness through vocational education. As of December 31, 2025, the professional certification preparation courses covered various industries and professions, including Accounting, Human Resources and Teaching.
The enterprises with serious difficulties in production and operation due to COVID-19 may continue to postpone the payment of social insurance premiums until the end of December 2020, and there will be no overdue fine during the period of suspension.
The enterprises with serious difficulties in production and operation due to COVID-19 may continue to postpone the payment of social insurance premiums until the end of December 2020, and there will be no overdue fine during the period of suspension. 4.C.
As of December 31, 2024, STE courses covered 11 majors, including Administrative Management, Chinese Language and Literature, Accounting, Business Management, Human Resource Management, Law, Public Administration, Computer Information Management, Pre-School Education, Marketing and 58 English. Other degree- or diploma-oriented post-secondary course offerings include preparation courses for the entrance examinations of Master of Business Administration (“MBA”) in China and overseas.
As of December 31, 2025, STE courses covered 11 majors, including Administrative Management, Chinese Language and Literature, Accounting, Business Management, Human Resource Management, Law, Public Administration, Computer Information Management, Pre-School Education, Marketing and English. Other degree- or diploma-oriented post-secondary course offerings include preparation courses for the entrance examinations of Master of Business Administration (“MBA”) in China and overseas.
According to ICP Measures, any company that engages in the provision of commercial ICP services shall obtain a sub-category VAT License for Internet Information Services, or ICP License, from the relevant government authorities before providing any commercial internet content services within the PRC, and when the ICP services involve areas of news, publication, education, medical treatment, health, pharmaceuticals and medical equipment, and if required by law or relevant regulations, specific approval from the respective regulatory authorities must be obtained prior to applying for the ICP License from the MIIT or its provincial level counterpart.
According to ICP Measures, any company that engages in the provision of commercial ICP services shall obtain a sub-category VAT License for Internet Information Services, or ICP License, from the relevant government authorities before providing any commercial internet content services within the PRC, and when the ICP services involve areas of news, publication, and education, and if required by law or relevant regulations, specific approval from the respective regulatory authorities must be obtained prior to applying for the ICP License from the MIIT or its provincial level counterpart.
In addition, degree- or diploma-oriented post-secondary courses represented approximately 9.6%, 5.0% and 2.4%, respectively, of the Group’s new student enrollments for the years ended December 31, 2022, 2023 and 2024. Interactive Learning Process Live streaming course delivery The Group’s teachers deliver courses in a live streaming format through the Group’s websites and mobile application.
In addition, degree- or diploma-oriented post-secondary courses represented approximately 5.0%, 2.4% and 1.9%, respectively, of the Group’s new student enrollments for the years ended December 31, 2023, 2024 and 2025. Interactive Learning Process Live streaming course delivery The Group’s teachers deliver courses in a live streaming format through the Group’s websites and mobile application.
The Group has built the integrated IT infrastructure primarily based on tools, technologies and platforms that the Group has developed in-house and, to a lesser extent, third-party software and applications that the Group has licensed or purchased. The Group maintains a dedicated IT development and support team. As of December 31, 2024, the Group had 114 technology development personnel.
The Group has built the integrated IT infrastructure primarily based on tools, technologies and platforms that the Group has developed in-house and, to a lesser extent, third-party software and applications that the Group has licensed or purchased. The Group maintains a dedicated IT development and support team. As of December 31, 2025, the Group had 115 technology development personnel.
Revenues from sales of goods for the years ended December 31, 2022 and 2023 were previously included in "others" of net revenues for the respective years. (2) Include commissions received for providing referral services to third-party companies.
Revenues from sales of goods for the year ended December 31, 2023 were previously included in "others" of net revenues for the respective years. (2) Include commissions received for providing referral services to third-party companies.
See “Item 3. Key Information—3.D. Risk Factors—Risks Related to the Group’s Business—The Group may face risks associated with the installment tuition payment plan the Group offers to its students.” In 2022, 2023 and 2024, the Group’s student loan coverage ratios were 5.1%, 1.3% and 1.9%, respectively.
See “Item 3. Key Information—3.D. Risk Factors—Risks Related to the Group’s Business—The Group may face risks associated with the installment tuition payment plan the Group offers to its students.” In 2023, 2024 and 2025, the Group’s student loan coverage ratios were 1.3%, 1.9% and 1.7%, respectively.
As of December 31, 2024, the Group had a total of 1,674 sales and marketing personnel. The Group maintains sales and marketing personnel in major regional markets, such as Beijing, Wuhan, Shenzhen and Guangzhou. The Group’s sales and marketing force adopt sales and marketing strategies customized based on the needs and profile of prospective students in different markets.
As of December 31, 2025, the Group had a total of 1,151 sales and marketing personnel. The Group maintains sales and marketing personnel in major regional markets, such as Beijing, Wuhan, Shenzhen and Guangzhou. The Group’s sales and marketing force adopt sales and marketing strategies customized based on the needs and profile of prospective students in different markets.
Accordingly, Sunlands HK and FireSky Investment may be able to benefit from the 5% withholding tax rate for the dividends it receives from Wuhan Zhibo and Wuhan Zhongtudao, respectively, if it satisfies the conditions prescribed under SAT Circular 81 and other relevant tax rules and regulations.
Accordingly, Sunlands HK may be able to benefit from the 5% withholding tax rate for the dividends it receives from Wuhan Zhibo if it satisfies the conditions prescribed under SAT Circular 81 and other relevant tax rules and regulations.
During the same periods, the Group made interest payments of RMB6.0 million, RMB1.5 million and RMB1.7 million (US$0.2 million), respectively, to the credit providers. The Group generally offers students a full, unconditional refund within 24 hours upon enrollment.
During the same periods, the Group made interest payments of RMB1.5 million, RMB1.7 million and RMB1.9 million (US$0.3 million), respectively, to the credit providers. The Group generally offers students a full, unconditional refund within 24 hours upon enrollment.
The Group also maintains offices in Wuhan, China, with an aggregate of approximately 17,721 square meters, to support part of the Group’s sales and marketing activities. In addition, the Group maintains offices in Guangzhou, China, with an aggregate of approximately 4,485 square meters, to support the sales and marketing activities as well as general and administrative activities.
The Group also maintains offices in Wuhan, China, with an aggregate of approximately 17,721 square meters, to support part of the Group’s sales and marketing activities. In addition, the Group maintains offices in Guangzhou, China, with an aggregate of approximately 1,880 square meters, to support the sales and marketing activities as well as general and administrative activities.
For the same years, the Group’s new student enrollments were 534,280, 616,341 and 674,649, respectively. Solutions The Group offers adult online education and adult personal interest learning education through extensive courses and educational content offerings. As of December 31, 2024, the Group offered interest, professional skills and professional certification preparation courses, and degree- or diploma-oriented post-secondary courses.
For the same years, the Group’s new student enrollments were 616,341, 674,649 and 579,788, respectively. Solutions The Group offers adult online education and adult personal interest learning education through extensive courses and educational content offerings. As of December 31, 2025, the Group offered interest, professional skills and professional certification preparation courses, and degree- or diploma-oriented post-secondary courses.
Pursuant to the above-mentioned regulations, “commercial ICP services” generally refers to provision of specific information content, online advertising, web page construction and other online application services through internet for profit making purpose. Operating the Group’s online platform to provide information and services to students is classified as commercial ICP services.
Pursuant to the above-mentioned regulations, “commercial ICP services” generally refers to provision of specific information content, web page construction and other services through internet for profit making purpose. Operating the Group’s online platform to provide information and services to students may be classified as commercial ICP services.
Regulation Regulations Relating to Foreign Investment Restrictions According to the latest Special Administrative Measures for the Entry of Investment (Negative List), or the Negative List, promulgated by the Ministry of Commerce, or MOFCOM and the National Development and Reform Commission, or NDRC, effective on November 1, 2024, foreign investors shall not engage in the prohibited activities listed in the Negative List.
Key Information—Licenses and Approvals” for details. 65 Regulation Regulations Relating to Foreign Investment Restrictions According to the latest Special Administrative Measures for the Entry of Investment (Negative List), or the Negative List, promulgated by the Ministry of Commerce, or MOFCOM and the National Development and Reform Commission, or NDRC, effective on November 1, 2024, foreign investors shall not engage in the prohibited activities listed in the Negative List.
As of December 31, 2024, the Group’s faculty primarily consisted of 56 teachers and 30 mentors based in Beijing and Wuhan, China. Teachers and mentors assume different roles and responsibilities. Generally, teachers are responsible for delivering courses and educational content to students, while mentors focus on providing academic and administrative support throughout the students’ learning process.
As of December 31, 2025, the Group’s faculty primarily consisted of 57 teachers and 18 mentors based in Beijing and Wuhan, China. Teachers and mentors assume different roles and responsibilities. Generally, teachers are responsible for delivering courses and educational content to students, while mentors focus on providing academic and administrative support throughout the students’ learning process.
However, the Audio-Visual Measures was repealed according to the Administrative Provisions on Audio-Visual Program Service through Special Network and Directed Transmission that was promulgated by the SAPPRFT on May 4, 2016, effective as of June 1, 2016.
However, the Audio-Visual Measures was repealed according to the Administrative Provisions on Audio-Visual Program Service through Special Network and Directed Transmission that was promulgated by the SAPPRFT on May 4, 2016, effective as of June 1, 2016 and last amended on March 23, 2021.
Consistent with customary industry practice in China, the Group does not maintain business interruption insurance, nor does it maintain key-man insurance. Licenses and Approvals See “Item 3. Key Information—Licenses and Approvals” for details.
Consistent with customary industry practice in China, the Group does not maintain business interruption insurance, nor does it maintain key-man insurance. Licenses and Approvals See “Item 3.
To comply with the above-mentioned foreign ownership restrictions, the Group operates its online platform in China through Beijing Sunlands, all of the shareholders of Beijing Sunlands are PRC domestically funded entities, and Beijing Sunlands is controlled by Wuhan Zhibo, our PRC subsidiary, through a series of contractual arrangements.
To comply with the above-mentioned foreign ownership restrictions, the Group operates its online platform in China through the VIEs and their subsidiaries, all of the shareholders of the VIEs are PRC domestically funded entities, and the VIEs are controlled by Wuhan Zhibo, our PRC subsidiary, through a series of contractual arrangements.
Based on our PRC legal counsel’s understanding of the current PRC law, rules and regulations, the contractual arrangements among Wuhan Zhibo, Beijing Sunlands and its shareholders and subsidiaries are valid, binding and enforceable under PRC laws and regulations currently in effect.
Based on our PRC legal counsel’s understanding of the current PRC law, rules and regulations, the contractual arrangements among Wuhan Zhibo, the VIEs and the VIEs’ shareholders and subsidiaries are valid, binding and enforceable under PRC laws and regulations currently in effect.
The Group has been successful in addressing the unmet demand of a large, growing market and served approximately 4,753,000 students across China since the Group transitioned to an online education model in 2014. The number of the Group’s students was 1,067,042, 1,131,435 and 1,067,128, respectively, in 2022, 2023 and 2024.
The Group has been successful in addressing the unmet demand of a large, growing market and served approximately 4,940,000 students across China since the Group transitioned to an online education model in 2014. The number of the Group’s students was 1,131,435, 1,067,128 and 979,741, respectively, in 2023, 2024 and 2025.
Pursuant to the PRC Cyber Security Law issued by the Standing Committee of the National People’s Congress and effective on June 1, 2017, “personal information” refers to all kinds of information recorded by electronic or otherwise that can be used to independently identify or be combined with other information to identify individuals’ personal information 73 including but not limited to: individuals’ names, dates of birth, ID numbers, biologically identified personal information, addresses and telephone numbers, etc.
Pursuant to the PRC Cyber Security Law issued by the Standing Committee of the National People’s Congress, last amended on October 28, 2025 and effective on January 1, 2026, “personal information” refers to all kinds of information recorded by electronic or otherwise that can be used to independently identify or be combined with other information to identify individuals’ personal information including but not limited to: individuals’ names, dates of birth, ID numbers, biologically identified personal information, addresses and telephone numbers, etc.
Regulations Relating to Foreign Exchange Registration of Overseas Investment by PRC Residents SAFE Circular on Relevant Issues Relating to Domestic Resident’s Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, or Circular 37, issued by SAFE and effective in July 4, 2014, regulates foreign exchange matters in relation to the use of special purpose vehicles, or SPVs, by PRC residents or entities to seek offshore investment and financing and conduct round trip investment in China.
These reserves are not distributable as cash dividends. 77 Regulations Relating to Foreign Exchange Registration of Overseas Investment by PRC Residents SAFE Circular on Relevant Issues Relating to Domestic Resident’s Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, or Circular 37, issued by SAFE and effective in July 4, 2014, regulates foreign exchange matters in relation to the use of special purpose vehicles, or SPVs, by PRC residents or entities to seek offshore investment and financing and conduct round trip investment in China.
In addition, the interest, professional skills and professional certification preparation courses represented approximately 90.4%, 95.0% and 97.6%, respectively, of the Group’s new student enrollments in 2022, 2023 and 2024. See also “Item 3. Key Information—3.D.
In addition, the interest, professional skills and professional certification preparation courses represented approximately 95.0%, 97.6% and 98.1%, respectively, of the Group’s new student enrollments in 2023, 2024 and 2025. See also “Item 3. Key Information—3.D.
We believe the live streaming format and highly interactive learning experience makes the Group’s services highly attractive to students. In 2022, 2023 and 2024, the Group’s new student enrollments were 534,280, 616,341 and 674,649, respectively.
We believe the live streaming format and highly interactive learning experience makes the Group’s services highly attractive to students. In 2023, 2024 and 2025, the Group’s new student enrollments were 616,341, 674,649 and 579,788, respectively.
The Administrative Measures on Internet Information Services, or ICP Measures, also promulgated by the PRC State Council on September 25, 2000 and most recently amended on January 8, 2011, set forth more specific rules on the provision of ICP services.
The Administrative Measures on Internet Information Services, or ICP Measures, also promulgated by the PRC State Council on September 25, 2000 and most recently amended on December 6, 2024, set forth more specific rules on the provision of ICP services.
In 2022, 2023 and 2024, the interest, professional skills and professional certification preparation courses represented approximately 47.9%, 67.1% and 75.3%, respectively, of the Group’s net revenues, and approximately 83.1%, 98.4% and 99.1%, respectively, of the Group’s gross billings.
In 2023, 2024 and 2025, the interest, professional skills and professional certification preparation courses represented approximately 67.1%, 75.3% and 74.2%, respectively, of the Group’s net revenues, and approximately 98.4%, 99.1% and 99.9%, respectively, of the Group’s gross billings.
For learning and education apps, the basic functional services are “online tutoring, online classes, etc.” and the necessary personal information is mobile phone numbers of registered users. The SAMR promulgated the Measures for the Supervision and Administration of Online Transactions, which became effective on May 1, 2021.
For learning and education apps, the basic functional services are “online tutoring, online classes, etc.” and the necessary personal information is mobile phone numbers of registered users. The SAMR promulgated the Measures for the Supervision and Administration of Online Transactions, which was last amended on March 18, 2025 and effective on May 1, 2025.
It remains to be seen how this regulation will be interpreted and implemented, and to what extent it will affect our operations. 75 Provisions on Talent Market Administration Provisions on Talent Market Administration promulgated by Ministry of Human Resources and Social Security on April 30, 2015 and last amended on December 31, 2019, provides that “job agencies”, which means the organizations specializing in the provision of intermediary services or other related services for the employers and job seekers, either as their core business or as a sideline, shall obtain the approval and the Job Agency Service License from the personnel administration department of the local government before it engages in the business of providing intermediary job services; the Internet information service providers engaged in Internet-based intermediary job services, either as their core business or as a sideline, must apply for the License.
Provisions on Talent Market Administration Provisions on Talent Market Administration promulgated by Ministry of Human Resources and Social Security on April 30, 2015 and last amended on December 31, 2019, provides that “job agencies”, which means the organizations specializing in the provision of intermediary services or other related services for the employers and job seekers, either as their core business or as a sideline, shall obtain the approval and the Job Agency Service License from the personnel administration department of the local government before it engages in the business of providing intermediary job services; the Internet information service providers engaged in Internet-based intermediary job services, either as their core business or as a sideline, must apply for the License.
In 2022, 2023 and 2024, degree- or diploma-oriented post-secondary courses represented approximately 46.7%, 24.8% and 10.3%, respectively, of the Group’s net revenues, and approximately 16.9%, 1.6% and 0.9%, respectively, of the Group’s gross billings.
In 2023, 2024 and 2025, degree- or diploma-oriented post-secondary courses represented approximately 24.8%, 10.3% and 13.5%, respectively, of the Group’s net revenues, and approximately 1.6%, 0.9% and 0.1%, respectively, of the Group’s gross billings.
The Group’s deferred revenues were RMB1,690.9 million, RMB1,113.9 million and RMB916.5 million (US$125.6 million), respectively, as of December 31, 2022, 2023 and 2024. Business Model and Online Education Services The Group offers adult online education services and adult personal interest learning courses through online and mobile platforms to adult students.
The Group’s deferred revenues were RMB1,113.9 million, RMB916,5 million and RMB585.3 million (US$83.7 million), respectively, as of December 31, 2023, 2024 and 2025. Business Model and Online Education Services The Group offers adult online education services and adult personal interest learning courses through online and mobile platforms to adult students.
In addition, these companies also may allocate a portion of their after-tax profits based on PRC accounting standards to employee welfare and bonus funds at their discretion. These reserves are not distributable as cash dividends.
In addition, these companies also may allocate a portion of their after-tax profits based on PRC accounting standards to employee welfare and bonus funds at their discretion.
Students The Group has a large student base, primarily as a result of the Group’s well-established brand and effective sales and marketing efforts. In 2022, 2023 and 2024, the Group had 1,067,042, 1,131,435 and 1,067,128 students, respectively, and the Group’s new student enrollments were 534,280, 616,341 and 674,649, respectively.
Students 60 The Group has a large student base, primarily as a result of the Group’s well-established brand and effective sales and marketing efforts. In 2023, 2024 and 2025, the Group had 1,131,435, 1,067,128 and 979,741 students, respectively, and the Group’s new student enrollments were 616,341, 674,649 and 579,788, respectively.
Beijing Sunlands is the holder of the domain names, trademarks and facilities necessary for daily operations of the Group’s online platforms in compliance with the MIIT Circular 2006.
The VIEs hold the domain names, trademarks and facilities necessary for daily operations of the Group’s online platforms in compliance with the MIIT Circular 2006.
Regulations on Television Program Industry Television program productions and distribution businesses are mainly regulated by Regulations on Administration of Radio and Television, which came into effect on August 11, 1997 and was last amended on November 11, 2020, and the Administrative Regulations on Production and Operation of Radio and Television Program which came into effect on August 20, 2004 and was last amended on October 29, 2020.
Regulations on Television Program Industry Television program productions and distribution businesses are mainly regulated by Regulations on Administration of Radio and Television, which came into effect on August 11, 1997 and was last amended on December 6, 2024, and the Administrative Regulations on Production and Operation of Radio and Television Program which came into effect on August 20, 2004 and was last amended on June 3, 2025.
As of December 31, 2024, the Group has registered 320 trademarks with the Trademark Office of the PRC State Administration of Industry and Commerce, registered 150 software copyrights with the PRC State Copyright Bureau, and registered 273 domain names.
As of December 31, 2025, the Group has registered 380 trademarks with the Trademark Office of the PRC State Administration of Industry and Commerce, registered 143 software copyrights with the PRC State Copyright Bureau, and registered 252 domain names.
According to the Guidelines on Security Assessment Report for Outbound Data Transfer promulgated by the CAC, outbound data transfer means (i) a data processor transfers or stores the data collected or generated during its operation within the PRC abroad, (ii) data collected and generated by a data processor is stored within the PRC while offshore institutions or individuals are able to inquire, retrieve, download and obtain such data; and (iii) other outbound data transfer activities prescribed by the CAC.
According to the Guidelines on Security Assessment Report for Outbound Data Transfer promulgated by the CAC, outbound data transfer means (i) a data processor transfers or stores the data collected or generated during its operation within the PRC abroad, (ii) data collected and generated by a data processor is stored within the PRC while offshore institutions or individuals are able to inquire, retrieve, download and obtain such data; and (iii) other outbound data transfer activities prescribed by the CAC. 75 On March 22, 2024, the CAC published the Provisions on Promoting and Regulating Cross-bound Data Flows, which streamline and provide clarity to the governance framework for outbound data transfer.
All employers must compensate their employees equal to at least the local minimum wage standards. All employers are required to establish a system for labor safety and sanitation, strictly abide by state rules and standards and provide employees with appropriate workplace safety training. In addition, the government has continued to introduce various new labor-related regulations after the Labor Contract Law.
All employers must compensate their employees equal to at least the local minimum wage standards. All employers are required to establish a system for labor safety and sanitation, strictly abide by state rules and 80 standards and provide employees with appropriate workplace safety training.
The providers of mobile internet applications are subject to requirements under these provisions, including acquiring the qualifications and complying with other requirements provided by laws and regulations and being responsible for information security. The Group currently, through Beijing Sunlands, the VIE, holds an ICP License. The ICP License of Beijing Sunlands is valid until July 2, 2024.
The providers of mobile internet applications are subject to requirements under these provisions, including acquiring the qualifications and complying with other requirements provided by laws and regulations and being responsible for information security. The Group currently, through subsidiaries of the VIEs, holds ICP Licenses.
If the data have not been informed or publicly announced as important data by relevant authorities or region, data processors are not required to report security assessment for its outbound data transfer as important data. This Provisions also establish specific exemptions for the outbound data transfer.
According to this Provisions, the data processors shall identify and declare important data in accordance with relevant provisions. If the data have not been informed or publicly announced as important data by relevant authorities or region, data processors are not required to report security assessment for its outbound data transfer as important data.
The Group offers online professional courses and educational content, including various interest courses, aimed at preparing students for professional certification exams, enhancing their professional skills, and catering to their personal interests.
The Group offers online professional courses and educational content, including various interest courses, aimed at preparing students for professional certification exams, enhancing their professional skills, and catering to their personal interests. In addition, the Group offers various degree- or diploma-oriented post-secondary courses through the Group’s online platforms.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

73 edited+9 added−11 removed96 unchanged
Risk Factors—Risks Related to Doing Business in China—We may rely on dividends and other distributions on equity paid by our PRC and Hong Kong subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of these subsidiaries in the PRC, including Hong Kong, to make payments to us could have a material and adverse effect on our ability to conduct the Group’s business.” For the purpose of illustration, the below table reflects the hypothetical taxes that might be required to be paid within China, assuming that: (i) we have taxable earnings, and (ii) we determine to pay a dividend in the future: 93 Taxation Scenario (1) Statutory Tax and Standard Rates Hypothetical pre-tax earnings (2) 100 % Tax on earnings at statutory rate of 25% (3) (25 )% Net earnings available for distribution 75 % Withholding tax at standard rate of 10% (4) (7.5 )% Net distribution to Parent/Shareholders 67.5 % Notes: (1) The tax calculation has been simplified for the purpose of this example.
Risk Factors—Risks Related to Doing Business in China—We may rely on dividends and other distributions on equity paid by our PRC and Hong Kong subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of these subsidiaries in the PRC, including Hong Kong, to make payments to us could have a material and adverse effect on our ability to conduct the Group’s business.” For the purpose of illustration, the below table reflects the hypothetical taxes that might be required to be paid within China, assuming that: (i) we have taxable earnings, and (ii) we determine to pay a dividend in the future: 94 Taxation Scenario (1) Statutory Tax and Standard Rates Hypothetical pre-tax earnings (2) 100 % Tax on earnings at statutory rate of 25% (3) (25 )% Net earnings available for distribution 75 % Withholding tax at standard rate of 10% (4) (7.5 )% Net distribution to Parent/Shareholders 67.5 % Notes: (1) The tax calculation has been simplified for the purpose of this example.
Risk 90 Factors—Risks Related to Doing Business in China—We may rely on dividends and other distributions on equity paid by our PRC and Hong Kong subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of these subsidiaries in the PRC, including Hong Kong, to make payments to us could have a material and adverse effect on our ability to conduct the Group’s business” and “Item 3.
Risk Factors—Risks Related to Doing Business in China—We may rely on dividends and other distributions on equity paid by our PRC and Hong Kong subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of these subsidiaries in the PRC, including Hong Kong, to make payments to us could have a material and adverse effect on our ability to conduct the Group’s business” and “Item 3.
The cost of revenues also included cost of printed books and learning materials, service fees paid to educational institutions, cooperation costs, related rental expenses, server management costs, bandwidth costs, payment processing costs, depreciations for property and equipment and amortizations for intangible assets. See “Item 4. Information on the Company—4.B.
The cost of revenues also included cost of printed books and learning materials, service fees paid to educational institutions, cooperation costs, related rental expenses, server management costs, bandwidth costs, payment processing costs, insurance cost, depreciations for property and equipment and amortizations for intangible assets. See “Item 4. Information on the Company—4.B.
Notwithstanding the foregoing, our PRC subsidiaries may use their own retained earnings (rather than Renminbi converted from foreign currency denominated capital) to provide financial support to the VIEs either through entrustment loans from our PRC subsidiaries to the VIEs or direct loans to the VIEs’ nominee shareholders, which would be contributed to the VIEs as capital injections.
Notwithstanding the foregoing, our PRC subsidiaries may use their own retained 95 earnings (rather than Renminbi converted from foreign currency denominated capital) to provide financial support to the VIEs either through entrustment loans from our PRC subsidiaries to the VIEs or direct loans to the VIEs’ nominee shareholders, which would be contributed to the VIEs as capital injections.
We believe the following accounting estimates involve the most significant judgments and estimates used in the preparation of the Group’s financial statements. For further information on our critical accounting estimates, see Note 2 to the consolidated financial statements. Revenue recognition The preparation of financial statements in conformity with U.S.
We believe the following accounting estimates involve the most significant judgments and estimates used in the preparation of the Group’s financial statements. For further information on our critical accounting estimates, see Note 2 to the consolidated financial statements. Revenue recognition 90 The preparation of financial statements in conformity with U.S.
GAAP requires management to make estimates and 89 assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
The ability of our subsidiaries in China to make dividends or other cash payments to us is subject to various restrictions under PRC laws and regulations. See “Item 3. Key Information—3.D.
The ability of our subsidiaries in China to make dividends or other cash payments 91 to us is subject to various restrictions under PRC laws and regulations. See “Item 3. Key Information—3.D.
Operating Results Major Factors Affecting Results of Operations The Group operates in China’s adult online education market and adult personal interest learning market, and the Group’s results of operations and financial condition are significantly affected by general factors affecting this market.
Operating Results Major Factors Affecting Results of Operations The Group operates in China’s adult online education market and adult personal interest learning market, and the 82 Group’s results of operations and financial condition are significantly affected by general factors affecting this market.
As gross billings and EBITDA have material limitations as analytical metrics and may not be calculated in the same manner by all companies, they may not be comparable to other similarly titled measures used by other companies.
As gross billings, EBITDA and adjusted EBITDA have material limitations as analytical metrics and may not be calculated in the same manner by all companies, they may not be comparable to other similarly titled measures used by other companies.
Risk Factors—Risks Related to the Group’s Business—If the Group fails to manage its business growth effectively, the success of the Group’s business model will be compromised.” The Group’s ability to continue to increase the number of students and new student enrollments is primarily driven by 82 factors including the quality of the Group’s education services, the range and attractiveness of the Group’s course offerings, the brand reputation, the ability to convert leads into student enrollments cost-effectively, and the availability of loans from third-party credit providers to students.
Risk Factors—Risks Related to the Group’s Business—If the Group fails to manage its business growth effectively, the success of the Group’s business model will be compromised.” The Group’s ability to increase the number of students and new student enrollments is primarily driven by factors including the quality of the Group’s education services, the range and attractiveness of the Group’s course offerings, the brand reputation, the ability to convert leads into student enrollments cost-effectively, and the availability of loans from third-party credit providers to students.
The tuition the Group collects from a student is initially recorded as deferred revenue and is generally recognized proportionally throughout the duration of the programs that student has enrolled in.
The tuition the Group collects from a student is initially recorded as deferred revenue and is generally recognized proportionally throughout the duration of the programs 83 that student has enrolled in.
The Group’s contracts with customers may include promises to transfer multiple services and goods. Determining whether different services and goods are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. For the year ended December 31, 2024, the Group derived revenue primarily from the online education services.
The Group’s contracts with customers may include promises to transfer multiple services and goods. Determining whether different services and goods are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. For the year ended December 31, 2025, the Group derived revenue primarily from the online education services.
As a result, there is uncertainty with respect to our ability to provide prompt financial support to our PRC 94 subsidiaries and the VIEs when needed.
As a result, there is uncertainty with respect to our ability to provide prompt financial support to our PRC subsidiaries and the VIEs when needed.
Other than those shown above, the Group did not have any significant capital and other commitments, long-term obligations, or guarantees as of December 31, 2024. Transfer of Funds and Other Assets Under relevant PRC laws and regulations, we are permitted to remit funds to the VIEs through loans rather than capital contributions.
Other than those shown above, the Group did not have any significant capital and other commitments, long-term obligations, or guarantees as of December 31, 2025. Transfer of Funds and Other Assets Under relevant PRC laws and regulations, we are permitted to remit funds to the VIEs through loans rather than capital contributions.
We did not have any off-balance sheet arrangements as of December 31, 2024. As a holding company with no material operations of our own, the Group’s operations are primarily conducted through our subsidiaries and the VIEs in China.
We did not have any off-balance sheet arrangements as of December 31, 2025. As a holding company with no material operations of our own, the Group’s operations are primarily conducted through our subsidiaries and the VIEs in China.
The outstanding balance of service fees owed by the VIEs to our PRC subsidiaries was nil as of each of December 31, 2022, 2023 and 2024. There were no other assets transferred between us and the VIEs in 2022, 2023 and 2024.
The outstanding balance of service fees owed by the VIEs to our PRC subsidiaries was nil as of each of December 31, 2023, 2024 and 2025. There were no other assets transferred between us and the VIEs in 2023, 2024 and 2025.
PRC 88 Our subsidiaries and the VIEs and their subsidiaries in China are companies incorporated under PRC law and, as such, are subject to PRC enterprise income tax on their taxable income in accordance with the relevant PRC income tax laws.
PRC 89 Our subsidiaries and the VIEs and their subsidiaries in China are companies incorporated under PRC law and, as such, are subject to PRC enterprise income tax on their taxable income in accordance with the relevant PRC income tax laws.
Business Overview—Licenses and Approvals.” 5.D.Trend Information Other than as disclosed elsewhere in this annual report on Form 20-F, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended December 31, 2024 that are reasonably likely to have a material and adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial condition. 5.E.
Business Overview—Licenses and Approvals.” 5.D.Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended December 31, 2025 that are reasonably likely to have a material and adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial condition. 5.E.
In 2022, 2023 and 2024, the percentage of the Group’s sales and marketing expenses divided by the Group’s gross billings was 75.5%, 75.9% and 78.2%, respectively. The Group has acquired many of the existing students through search engine marketing channels, mobile marketing channels and, to a lesser extent, offline channels.
In 2023, 2024 and 2025, the percentage of the Group’s sales and marketing expenses divided by the Group’s gross billings was 75.9%, 78.2% and 77.5%, respectively. The Group has acquired many of the existing students through search engine marketing channels, mobile marketing channels and, to a lesser extent, offline channels.
The fees paid are recognized as a tax deduction by the VIEs and as income by our PRC subsidiaries and are tax neutral. (3) Certain of our subsidiaries and VIEs qualifies for a 15% preferential income tax rate in China. However, such rate is subject to qualification, is temporary in nature, and may not be available in a future period.
The fees paid are recognized as a tax deduction by the VIEs and as income by our PRC subsidiaries and are tax neutral. (3) Certain of our subsidiaries qualifies for a 15% preferential income tax rate in China. However, such rate is temporary in nature, and may not be available in a future period.
Operating and Financial Review and Prospects—5.B. Liquidity and Capital Resources—Cash Flows and Working Capital” beginning on page 91 of our Form 20-F for the fiscal year ended December 31, 2022 filed with the Securities and Exchange Commission on April 25, 2023 (Securities Act File No. 001-38423).
Operating and Financial Review and Prospects—5.B. Liquidity and Capital Resources—Cash Flows and Working Capital” beginning on page 90 of our Form 20-F for the fiscal year ended December 31, 2023 filed with the Securities and Exchange Commission on April 25, 2024 (Securities Act File No. 001-38423).
Accordingly, Sunlands Online Education HK Limited and FireSky Investment HK Limited may be able to benefit from the 5% withholding tax rate for the dividends it receives from Wuhan Zhibo and Wuhan Zhongtudao, respectively, if it satisfies the conditions prescribed under SAT Circular 81 and other relevant tax rules and regulations.
Accordingly, Sunlands Online Education HK Limited may be able to benefit from the 5% withholding tax rate for the dividends it receives from Wuhan Zhibo if it satisfies the conditions prescribed under SAT Circular 81 and other relevant tax rules and regulations.
Deferred revenue consisted primarily of tuition paid upfront by students at the time of purchase of course packages. Deferred cost consisted primarily of the incremental sales commissions and service fees relating to obtaining of customer contracts which is expected to be recovered and capitalized. Net cash generated from operating activities was RMB140.8 million in 2023.
Deferred revenue consisted primarily of tuition paid upfront by students at the time of purchase of course packages. Deferred cost consisted primarily of the incremental sales commissions and service fees relating to obtaining of customer contracts which is expected to be recovered and capitalized. Net cash generated from operating activities was RMB195.5 million in 2024.
The tuition the Group collects from a student is initially recorded as deferred revenue and is generally recognized proportionally over a weighted average service period of 5 months for the interest, professional skills and professional certification preparation courses and a weighted average service period of 17 months for the degree- or diploma-oriented post-secondary courses for the year ended December 31, 2024.
The tuition the Group collects from a student is initially recorded as deferred revenue and is generally recognized proportionally over a weighted average service period of 4 months for the interest, professional skills and professional certification preparation courses and a weighted average service period of 16 months for the degree- or diploma-oriented post-secondary courses for the year ended December 31, 2025.
Under the agreements, the Group is obligated to repay the loans in equal instalment every three months with maturity terms ranging from eight years to ten years. The Group repaid RMB38.7 million, RMB38.7 million and RMB101.8 million (US$13.9 million) for the principals of loans during the years ended December 31, 2022, 2023 and 2024, respectively.
Under the agreements, the Group is obligated to repay the loans in equal installment every three months with maturity terms ranging from eight years to ten years. The Group repaid RMB38.7 million, RMB101.8 million and RMB41.5 million (US$5.9 million) for the principals of loans during the years ended December 31, 2023, 2024 and 2025, respectively.
Material Cash Requirements The Group’s material cash requirements as of December 31, 2024 and any subsequent interim period primarily include the Group’s operating lease commitments, long-term loans, capital expenditures and working capital requirements. The Group’s operating lease commitments consist of the commitments under the lease agreements for office premises.
Material Cash Requirements The Group’s material cash requirements as of December 31, 2025 and any subsequent interim period primarily include the Group’s operating lease commitments, capital expenditures and working capital requirements. The Group’s operating lease commitments consist of the commitments under the lease agreements for office premises.
Our PRC subsidiaries maintained certain personnel for sales and marketing, research and development, and general and administrative functions to support the operations of the VIEs. In 2022, 2023 and 2024, the VIEs transferred RMB51.6 million, RMB26.8 million and RMB60.1 million (US$8.2 million) of service fees to our PRC subsidiaries pursuant to the contractual arrangements, respectively.
Our PRC subsidiaries maintained certain personnel for sales and marketing, research and development, and general and administrative functions to support the operations of the VIEs. In 2023, 2024 and 2025, the VIEs transferred RMB26.8 million, RMB60.1 million and RMB132.6 million (US$19.0 million) of service fees to our PRC subsidiaries pursuant to the contractual arrangements, respectively.
For the year ended December 31, 2024, the weighted average service period of the Group’s interest, professional skills and professional certification preparation courses was approximately 5 months, and the weighted average service period of the Group’s degree- or diploma-oriented post-secondary courses was approximately 17 months.
For the year ended December 31, 2025, the weighted average service period of the Group’s interest, professional skills and professional certification preparation courses was approximately 4 months, and the weighted average service period of the Group’s degree- or diploma-oriented post-secondary courses was approximately 16 months.
Financing Activities 91 Net cash used in financing activities in 2024 was RMB112.7 million (US$15.4 million), which was primarily attributable to repayment of bank debt of RMB101.8 million (US$13.9 million) and repurchase Class A ordinary shares of RMB10.9 million (US$1.5 million).
Net cash used in financing activities in 2024 was RMB112.7 million, which was primarily attributable to repayment of bank debt of RMB101.8 million and repurchase Class A ordinary shares of RMB10.9 million.
As of the date of this annual report, no transfers, dividends, or distributions between Sunlands Technology Group, our PRC subsidiaries, and the VIEs, other than those described in this annual report, have been made.
Consolidated Statements and Other Financial Information—Dividend Policy.” As of the date of this annual report, no transfers, dividends, or distributions between Sunlands Technology Group, our PRC subsidiaries, and the VIEs, other than those described in this annual report, have been made.
The difference between the Group’s net income of RMB342.1 million (US$46.9 million), after netting non-cash reconciliation items, and the net cash used in operating activities was mainly due to (i) a decrease in deferred revenue of RMB194.0 million (US$26.6 million), (ii) an increase in deferred tax assets of RMB24.7 million (US$3.4 million), (iii) a decrease in lease liability of RMB19.9 million (US$2.7 million) resulting from termination of certain leased spaces; partially offset by (i) depreciation and amortization of RMB29.5 million (US$4.0 million), (ii) non-cash lease expenses of RMB18.1 million (US$2.5 million), (iii) a decrease in deferred costs of RMB18.1 million (US$2.5 million), (iv) loss from an equity method investment of RMB13.5 million (US$1.9 million), (v) a decrease in right-of-use assets of RMB8.9 million (US$1.2 million).
The difference between the Group’s net income of RMB342.1 million, after netting non-cash reconciliation items, and the net cash used in operating activities was mainly due to (i) a decrease in deferred revenue of RMB194.0 million, (ii) an increase in deferred tax assets of RMB24.7 million, (iii) a decrease in lease liability of RMB19.9 million; partially offset by (i) depreciation and amortization of RMB29.5 million, (ii) non-cash lease expenses of RMB18.1 million, (iii) a decrease in deferred costs of RMB18.1 million, (iv) loss from an equity method investment of RMB13.5 million.
As of December 31, 2024, the Group had RMB507.2 million (US$69.5 million) in cash and cash equivalents, the majority of which were held by our company, our PRC subsidiaries, the VIEs and the VIEs’ subsidiaries in China. The Group’s cash and cash equivalents consist primarily of bank deposits and are primarily denominated in U.S. dollars and Renminbi.
As of December 31, 2025, the Group had RMB575.7 million (US$82.3 million) in cash and cash equivalents, the majority of which were held by our company, our PRC subsidiaries, the VIEs and the VIEs’ subsidiaries in China. The Group’s cash and cash equivalents consist primarily of bank deposits and are primarily denominated in U.S. dollars and Renminbi.
Sales and marketing expenses have historically represented a substantial portion of the Group’s total operating expenses. In 2022, 2023 and 2024, the Group’s sales and marketing expenses were RMB1,129.5 million, RMB1,142.2 million and RMB1,216.9 million (US$166.7 million), respectively.
Sales and marketing expenses have historically represented a substantial portion of the Group’s total operating expenses. In 2023, 2024 and 2025, the Group’s sales and marketing expenses were RMB1,142.2 million, RMB1,216.9 million and RMB1,137.6 million (US$162.7 million), respectively.
Under the current law of the Cayman Islands, we are not subject to income, corporate or capital gains tax. In addition, dividend payments are not subject to withholding tax in the Cayman Islands.
Under the current law of the Cayman Islands, we are not subject to income, corporate or capital gains tax. In addition, dividend payments are not subject to withholding tax in the Cayman Islands. Singapore Our subsidiary, Sunlands Online Education Singapore Pte.
In 2022, 2023 and 2024, salaries and benefits paid to teachers and mentors that the Group recorded as cost of revenues were RMB160.5 million, RMB91.4 million and RMB62.1 million (US$8.5 million), respectively, accounting for 46.1%, 34.4% and 19.6%, respectively, of the cost of revenues for the same periods.
In 2023, 2024 and 2025, salaries and benefits paid to teachers and mentors that the Group recorded as cost of revenues were RMB91.4 million, RMB62.1 million and RMB52.9 million (US$7.6 million), respectively, accounting for 34.4%, 19.6% and 20.0%, respectively, of the cost of revenues for the same periods.
Operating and Financial Review and Prospects—5.A. Operating Results—Year Ended December 31, 2023 Compared to Year Ended December 31, 2022” beginning on page 87 of our Form 20-F for the fiscal year ended December 31, 2023 filed with the Securities and Exchange Commission on April 25, 2024 (Securities Act File No. 001-38423).
Operating Results—Year Ended December 31, 2024 Compared to Year Ended December 31, 2023” beginning on page 86 of our Form 20-F for the fiscal year ended December 31, 2024 filed with the Securities and Exchange Commission on April 25, 2025 (Securities Act File No. 001-38423).
As of December 31, 2022, 2023 and 2024, the Group’s deferred revenues were RMB1,690.9 million, RMB1,113.9 million and RMB916.5 million (US$125.6 million), respectively. The Group continually evaluates the mix of course length.
As of December 31, 2023, 2024 and 2025, the Group’s deferred revenues were RMB1,113.9 million, RMB916.5 million and RMB585.3 million (US$83.7 million), respectively. The Group continually evaluates the mix of course length.
In 2022, 2023 and 2024, the Group generated net revenues of RMB2,323.1 million, RMB2,159.6 million and RMB1,990.2 million (US$272.7 million), respectively. 83 The Group generally bills students for the entire course tuition upfront at the time of sale of the course packages.
In 2023, 2024 and 2025, the Group generated net revenues of RMB2,159.6 million, RMB1,990.2 million and RMB2,019.9 million (US$288.8 million), respectively. The Group generally bills students for the entire course tuition upfront at the time of sale of the course packages.
Sales and marketing expenses The Group’s sales and marketing expenses increased by 6.5% from RMB1,142.2 million in 2023 to RMB1,216.9 million (US$166.7 million) in 2024. The increase was mainly due to the increase of compensation for sales personnel and the spending on branding and marketing activities focused on interest courses offerings.
Sales and marketing expenses The Group’s sales and marketing expenses decreased by 6.5% from RMB1,216.9 million in 2024 to RMB1,137.6 million (US$162.7 million) in 2025. The decrease was mainly due to the decreases in compensation for sales personnel and the spending on branding and marketing activities focused on interest courses offerings.
For a reconciliation of the Group’s gross billings and net revenues, see “—Non-GAAP Financial Measures.” The following table sets forth a breakdown of the Group’s total net revenues for the years indicated: For the Year Ended December 31, 2022 2023 2024 RMB % RMB % RMB US$ % (in thousands, except for percentages) Interest, professional skills and professional certification preparation courses 1,112,707 47.9 1,449,858 67.1 1,498,058 205,233 75.3 Degree- or diploma-oriented post-secondary courses 1,084,857 46.7 534,041 24.8 205,578 28,164 10.3 Sales of goods (1) 75,240 3.2 144,233 6.7 244,901 33,551 12.3 Others (2) 50,297 2.2 31,452 1.4 41,667 5,709 2.1 Total net revenues 2,323,101 100.0 2,159,584 100.0 1,990,204 272,657 100.0 Note: (1) Include revenues from sales of goods such as printed books and learning materials associated with the courses we offer.
For a reconciliation of the Group’s gross billings and net revenues, see “—Non-GAAP Financial Measures.” The following table sets forth a breakdown of the Group’s total net revenues for the years indicated: 84 For the Year Ended December 31, 2023 2024 2025 RMB % RMB % RMB US$ % (in thousands, except for percentages) Interest, professional skills and professional certification preparation courses 1,449,858 67.1 1,498,058 75.3 1,499,704 214,455 74.2 Degree- or diploma-oriented post-secondary courses 534,041 24.8 205,578 10.3 272,138 38,915 13.5 Sales of products (1) 144,233 6.7 244,901 12.3 213,344 30,508 10.6 Others (2) 31,452 1.4 41,667 2.1 34,695 4,961 1.7 Total net revenues 2,159,584 100.0 1,990,204 100.0 2,019,881 288,839 100.0 Note: (1) Include revenues from sales of products such as printed books and learning materials associated with the courses we offer.
In light of the foregoing limitations, you should not consider gross billings and EBITDA as a substitute for, or superior to, their respective most directly comparable financial measures prepared in accordance with GAAP. We encourage investors and others to review the Group’s financial information in its entirety and not rely on a single financial measure.
In light of the foregoing limitations, you should not consider gross billings, EBITDA and adjusted EBITDA as a substitute for, or superior to, their respective most directly comparable financial measures prepared in accordance with GAAP.
The Group recorded net income of RMB643.0 million, RMB640.8 million and RMB342.1 million (US$46.9 million) for the years ended December 31, 2022, 2023 and 2024, respectively. The Group had positive working capital of RMB21.6 million and RMB82.9 million (US$11.4 million) as of December 31, 2023 and 2024, respectively.
The Group recorded net income of RMB640.8 million, RMB342.1 million and RMB365.6 million (US$52.3 million) for the years ended December 31, 2023, 2024 and 2025, respectively. The Group had positive working capital of RMB82.9 million and RMB157.9 million (US$22.6 million) as of December 31, 2024 and 2025, respectively.
As of December 31, 2022, 2023 and 2024, the Group had deferred revenue of RMB1,690.9 million, RMB1,113.9 million and RMB916.5 million (US$125.6 million), respectively.
As of December 31, 2023, 2024 and 2025, the Group had deferred revenue of RMB1,113.9 million, RMB916.5 million and RMB585.3 million (US$83.7 million), respectively.
Investing Activities Net cash used in investing activities was RMB358.9 million (US$49.2 million) in 2024, which was primarily attributable to purchase of short-term investments of RMB1,738.7 million (US$238.2 million) and the purchase of long-term investments of RMB235.3 million (US$32.2 million), partially offset by proceeds from maturity of short-term investments of RMB1,607.1 million (US$220.2 million).
Net cash used in investing activities was RMB358.9 million in 2024, which was primarily attributable to purchase of short-term investments of RMB1,738.7 million and the purchase of long-term investments of RMB235.3 million, partially offset by proceeds from maturity of short-term investments of RMB1,607.1 million. 92 Financing Activities Net cash used in financing activities in 2025 was RMB47.7 million (US$6.8 million), which was primarily attributable to repayment of bank debt of RMB61.5 million (US$8.8 million), and partially offset by the proceeds from bank loans of RMB20.0 million (US$2.9 million).
A reconciliation of the historical non-GAAP financial measures to their respective most directly comparable GAAP measure has been provided in the tables included below. Investors are encouraged to review the reconciliation of the historical non-GAAP financial measures to their respective most directly comparable GAAP financial measures.
Investors are encouraged to review the reconciliation of the historical non-GAAP financial measures to their respective most directly comparable GAAP financial measures.
The Group does not have retained or contingent interests in assets transferred. The Group has not entered into contractual arrangements that support the credit, liquidity or market risk for transferred assets.
The Group has not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. The Group does not have retained or contingent interests in assets transferred. The Group has not entered into contractual arrangements that support the credit, liquidity or market risk for transferred assets.
The following table sets forth the Group’s operating expenses, in absolute amounts and as percentages of total operating expenses, for the years indicated: For the Year Ended December 31, 2022 2023 2024 RMB % RMB % RMB US$ % (in thousands, except for percentages) Sales and marketing 1,129,508 83.2 1,142,154 86.6 1,216,912 166,716 88.5 General and administrative 185,667 13.7 143,286 10.9 132,809 18,195 9.7 Product development 42,834 3.1 33,723 2.5 25,008 3,426 1.8 Total operating expenses 1,358,009 100.0 1,319,163 100.0 1,374,729 188,337 100.0 Sales and marketing expenses The following table sets forth a breakdown of the Group’s sales and marketing expenses, in absolute amounts and as percentages of total sales and marketing expenses, for the years indicated: 84 For the Year Ended December 31, 2022 2023 2024 RMB % RMB % RMB US$ % (in thousands, except for percentages) Expenses incurred in relation to sales and marketing personnel 564,666 50.0 518,040 45.4 548,630 75,162 45.1 Marketing spending 511,931 45.3 590,565 51.7 611,610 83,790 50.3 Rentals and related expenses 9,313 0.8 5,158 0.5 13,699 1,877 1.1 Others 43,598 3.9 28,391 2.4 42,973 5,887 3.5 Total sales and marketing expenses 1,129,508 100.0 1,142,154 100.0 1,216,912 166,716 100.0 The Group’s expenses incurred in relation to sales and marketing personnel consist of (i) salaries paid to the sales and marketing personnel; (ii) commissions for the sales and marketing personnel; and (iii) business process outsourcing service fees and commissions.
Business Overview—Tuition and Fees.” Operating expenses The following table sets forth the Group’s operating expenses, in absolute amounts and as percentages of total operating expenses, for the years indicated: For the Year Ended December 31, 2023 2024 2025 RMB % RMB % RMB US$ % (in thousands, except for percentages) Sales and marketing 1,142,154 86.6 1,216,912 88.5 1,137,631 162,679 86.8 General and administrative 143,286 10.9 132,809 9.7 143,796 20,563 11.0 Product development 33,723 2.5 25,008 1.8 29,553 4,226 2.2 Total operating expenses 1,319,163 100.0 1,374,729 100.0 1,310,980 187,468 100.0 Sales and marketing expenses The following table sets forth a breakdown of the Group’s sales and marketing expenses, in absolute amounts and as percentages of total sales and marketing expenses, for the years indicated: 85 For the Year Ended December 31, 2023 2024 2025 RMB % RMB % RMB US$ % (in thousands, except for percentages) Expenses incurred in relation to sales and marketing personnel 518,040 45.4 548,630 45.1 519,654 74,310 45.7 Marketing spending 590,565 51.7 611,610 50.3 564,351 80,701 49.6 Rentals and related expenses 5,158 0.5 13,699 1.1 14,617 2,090 1.3 Others 28,391 2.4 42,973 3.5 39,009 5,578 3.4 Total sales and marketing expenses 1,142,154 100.0 1,216,912 100.0 1,137,631 162,679 100.0 The Group’s expenses incurred in relation to sales and marketing personnel consist of (i) salaries paid to the sales and marketing personnel; (ii) commissions for the sales and marketing personnel; and (iii) business process outsourcing service fees and commissions.
Risk Factors—Risks Related to Doing Business in China—If we are classified as a PRC resident enterprise for PRC enterprise income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders and ADS holders.” The following table sets forth a summary of the Group’s cash flows for the years indicated: For the Year Ended December 31, 2023 2024 RMB RMB US$ (in thousands) Net cash generated from operating activities 140,798 195,519 26,788 Net cash used in investing activities (71,818 ) (358,860 ) (49,164 ) Net cash used in financing activities (74,658 ) (112,728 ) (15,444 ) Effect of exchange rate changes 14,652 16,920 2,317 Net increase/(decrease) in cash, cash equivalents and restricted cash 8,974 (259,149 ) (35,503 ) Cash, cash equivalents and restricted cash at beginning of the year 757,404 766,378 104,993 Cash, cash equivalents and restricted cash at end of the year 766,378 507,229 69,490 For a summary of the Group’s cash flows in 2022, see “Item 5.
Risk Factors—Risks Related to Doing Business in China—If we are classified as a PRC resident enterprise for PRC enterprise income tax purposes, such classification could result in unfavorable tax consequences to the Group and our non-PRC shareholders and ADS holders.” The following table sets forth a summary of the Group’s cash flows for the years indicated: For the Year Ended December 31, 2024 2025 RMB RMB US$ (in thousands) Net cash generated from operating activities 195,519 146,809 20,994 Net cash used in investing activities (358,860 ) (12,735 ) (1,821 ) Net cash used in financing activities (112,728 ) (47,708 ) (6,822 ) Effect of exchange rate changes 16,920 (16,832 ) (2,408 ) Net (decrease)/increase in cash, cash equivalents and restricted cash (259,149 ) 69,534 9,943 Cash, cash equivalents and restricted cash at beginning of the year 766,378 507,229 72,533 Cash, cash equivalents and restricted cash at end of the year 507,229 576,763 82,476 For a summary of the Group’s cash flows in 2023, see “Item 5.
Revenues from sales of goods for the years ended December 31, 2022 and 2023 were previously included in "others" of net revenues for the respective years. (2) Include commissions received for providing referral services to third-party companies.
Revenues from sales of goods for the year ended December 31, 2023 were previously included in "others" of net revenues for the respective years. (2) Include commissions received for providing referral services to third-party companies. Cost of revenues The Group recorded cost of revenues of RMB265.5 million, RMB317.6 million and RMB264.4 million (US$37.8 million) in 2023, 2024 and 2025, respectively.
As of December 31, 2024, Sunlands Technology Group had made cumulative capital contributions of US$200.0 million to our PRC subsidiaries through an intermediate holding company. These funds have been used by our PRC subsidiaries for their operations.
Key Information—Condensed Consolidating Schedule,” and consolidated financial statements included elsewhere in this annual report. As of December 31, 2025, Sunlands Technology Group had made cumulative capital contributions of US$200.2 million to our PRC subsidiaries through an intermediate holding company. These funds have been used by our PRC subsidiaries for their operations.
As of December 31, 2024, the Group’s cash and cash equivalents denominated in U.S. dollars and Renminbi amounted to RMB358.8 million (US$49.2 million) and RMB147.7 million (US$20.2 million), respectively.
As of December 31, 2025, the Group’s cash and cash equivalents denominated in U.S. dollars and Renminbi amounted to RMB364.0 million (US$52.0 million) and RMB211.2 million (US$30.2 million), respectively.
Product development expenses The Group’s product development expenses decreased by 25.8% from RMB33.7 million in 2023 to RMB25.0 million (US$3.4 million) in 2024. The decrease was primarily due to declined compensation expenses related to headcount reduction of the product development personnel. Other income Other income for 2024 was RMB26.3 million (US$3.6 million), compared with RMB34.1 million in 2023.
Product development expenses The Group’s product development expenses increased by 18.2% from RMB25.0 million in 2024 to RMB29.6 million (US$4.2 million) in 2025. The increase was primarily due to increased compensation expenses related to headcount expansion of our product development personnel. Other income, net Other income, net for 2025 was RMB30.1 million (US$4.3 million), compared with RMB26.3 million in 2024.
In 2022, 2023 and 2024, the Group’s new student enrollments were 534,280, 616,341 and 674,649, respectively, and the numbers of students were 1,067,042, 1,131,435 and 1,067,128, respectively.
In 2023, 2024 and 2025, the Group’s new student enrollments were 616,341, 674,649 and 579,788, respectively, and the numbers of students were 1,131,435, 1,067,128 and 979,741, respectively. The Group’s new student enrollments remained relatively stable in 2023 and 2024, followed by a decrease in 2025.
Non-GAAP Financial Measures We use gross billings and EBITDA, each a non-GAAP financial measure, in evaluating the Group’s operating results and for financial and operational decision-making purposes. We define gross billings for a specific period as the total amount of cash received for the sale of course packages, net of the total amount of refunds paid in such period.
Non-GAAP Financial Measures We use gross billings, EBITDA and adjusted EBITDA, each a non-GAAP financial measure, in evaluating the Group’s operating results and for financial and operational decision-making purposes.
As of December 31, 2024, the Group has fully repaid outstanding amount under the two loan agreements dated August 29, 2018 and November 21, 2018.
During the year ended December 31, 2024, the Group has fully repaid outstanding amount under the two loan agreements dated August 29, 2018 and November 21, 2018. During the year ended December 31, 2025, the Group had fully repaid outstanding loan principals before maturity date for the loan dated July 5, 2021.
Operating Activities Net cash generated from operating activities was RMB195.5 million (US$26.8 million) in 2024.
Operating Activities Net cash generated from operating activities was RMB146.8 million (US$21.0 million) in 2025.
For the Year Ended December 31, 2022 2023 2024 RMB RMB RMB US$ (in thousands) Net revenues 2,323,101 2,159,584 1,990,204 272,657 Less: other revenues (1) (125,864 ) (176,014 ) (287,179 ) (39,343 ) Add: tax and surcharges 66,638 62,352 77,734 10,650 Add: ending deferred revenue 1,690,946 1,113,923 916,510 125,561 Add: deferred revenue in connection with disposal of subsidiaries 259 23,220 3,423 469 Add: ending refund liability 133,066 143,744 112,342 15,391 Less: beginning deferred revenue (2,348,179 ) (1,690,946 ) (1,113,923 ) (152,607 ) Less: beginning refund liability (243,236 ) (133,066 ) (143,744 ) (19,693 ) Less: beginning refund liability in connection with disposal of subsidiaries — 1,820 — — Gross billings (non-GAAP) 1,496,731 1,504,617 1,555,367 213,085 Note: (1) Include commissions received for providing referral services to third-party companies and revenues from sales of goods such as printed books and learning materials associated with the courses we offer.
We encourage investors and others to review the Group’s financial information in its entirety and not rely on a single financial measure. 88 For the Year Ended December 31, 2023 2024 2025 RMB RMB RMB US$ (in thousands) Net revenues 2,159,584 1,990,204 2,019,881 288,839 Less: other revenues (1) (176,014 ) (287,179 ) (248,650 ) (35,556 ) Add: tax and surcharges 62,352 77,734 75,322 10,771 Add: ending deferred revenue 1,113,923 916,510 585,294 83,696 Add: deferred revenue in connection with disposal of subsidiaries 23,220 3,423 — — Add: ending refund liability 143,744 112,342 64,393 9,208 Less: beginning deferred revenue (1,690,946 ) (1,113,923 ) (916,510 ) (131,059 ) Less: beginning refund liability (133,066 ) (143,744 ) (112,342 ) (16,065 ) Less: beginning refund liability in connection with disposal of subsidiaries 1,820 — — — Gross billings (non-GAAP) 1,504,617 1,555,367 1,467,388 209,834 Note: (1) Include commissions received for providing referral services to third-party companies and revenues from sales of goods such as printed books and learning materials associated with the courses we offer.
The increase in the sales and marketing expenses from 2023 to 2024 was mainly due to increased spending on sales activities, including enhanced compensation for sales personnel as well as increased spending on branding and marketing activities focused on interest courses offerings.
The decrease in the sales and marketing expenses from 2024 to 2025 was mainly due to the decreases in compensation for sales personnel and the spending on branding and marketing activities focused on interest courses offerings. The Group’s sales and marketing expenses are primarily composed of marketing spending and expenses incurred in relation to sales and marketing personnel.
In 2022, 2023 and 2024, the net amounts of working capital support provided by the VIEs to our PRC subsidiaries were RMB538.3 million, RMB602.9 million and RMB924.6 million (US$126.7 million), respectively. For more information, see “Item 3. Key Information—Condensed Consolidating 92 Schedule,” and consolidated financial statements included elsewhere in this annual report.
In 2023 and 2024, the net amounts of working capital support provided by the VIEs to our PRC subsidiaries were RMB602.9 million and RMB924.6 million, respectively. In 2025, the net amounts of working capital support provided by our PRC subsidiaries to the VIEs were RMB148.4 million (US$21.2 93 million). For more information, see “Item 3.
For a more detailed discussion of our tuition refund policy, see “Item 4. Information on the Company—4.B. Business Overview—Tuition and Fees.” The Group’s management uses gross billings as a performance measurement because the Group generally bills students for the entire course tuition at the time of sale of course packages and recognize revenue proportionally over a period.
Business Overview—Tuition and Fees.” The Group’s management uses gross billings as a performance measurement because the Group generally bills students for the entire course tuition at the time of sale of course packages and recognize revenue proportionally over a period. EBITDA is defined as net loss/income excluding depreciation and amortization, interest expense, interest income, and income tax expenses.
The decrease was primarily due to the decreased government subsidy that the Group received and recognized in 2024. Net income As a result of the foregoing, the Group’s net income for 2024 was RMB342.1 million (US$46.9 million), compared with RMB640.8 million in 2023. Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 See “Item 5.
Net income As a result of the foregoing, the Group’s net income for 2025 was RMB365.6 million (US$52.3 million), compared with RMB342.1 million in 2024. Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 See “Item 5. Operating and Financial Review and Prospects—5.A.
The difference between the Group’s net income of RMB640.8 million, after netting non-cash reconciliation items, and the net cash used in operating activities was mainly due to (i) a decrease in deferred revenue of RMB553.8 million, (ii) a decrease in lease liability of RMB168.6 million, (iii) non-cash gain from disposal of subsidiaries of RMB43.7 million; partially offset by (i) a decrease in right-of-use asset of RMB142.3 million, (ii) a decrease in deferred costs of RMB37.3 million, (iii) an increase in accrued expenses and other current liabilities of RMB35.1 million, (iv) depreciation and amortization of RMB30.6 million.
The difference between the Group’s net income of RMB365.6 million (US$52.3 million), after netting non-cash reconciliation items, and the net cash used in operating activities was mainly due to (i) a decrease in deferred revenue of RMB331.2 million (US$47.4 million), (ii) a decrease in accrued expenses and other current liabilities of RMB38.4 million (US$5.5 million), (iii) a decrease in lease liability of RMB6.7 million (US$1.0 million); partially offset by (i) impairment loss on long-lived assets of RMB67.9 million (US$9.7 million), (ii) depreciation and amortization of RMB28.8 million (US$4.1 million), (iii) a decrease in deferred costs of RMB27.8 million (US$4.0 million), (iv) non-cash lease expenses of RMB12.2 million (US$1.7 million), (v) a decrease in prepaid expenses and other current assets of RMB12.4 million (US$1.8 million).
Gross profit As a result of the foregoing, the Group’s gross profit decreased by 11.7% from RMB1,894.1 million in 2023 to RMB1,672.6 million (US$229.2 million) in 2024, and gross margin decreased from 87.7% in 2023 to 84.0% in 2024. Operating expenses The Group’s operating expenses increased by 4.2% from RMB1,319.2 million in 2023 to RMB1,374.7 million (US$188.3 million) in 2024.
Gross profit As a result of the foregoing, the Group’s gross profit increased by 5.0% from RMB1,672.6 million in 2024 to RMB1,755.5 million (US$251.0 million) in 2025, and gross margin increased from 84.0% in 2024 to 86.9% in 2025.
We believe that gross billings and EBITDA provide valuable insight into the sales of course packages and the performance of business. 87 These non-GAAP financial measures should not be considered in isolation from, or as a substitute for, their respective most directly comparable financial measure prepared in accordance with GAAP.
These non-GAAP financial measures should not be considered in isolation from, or as a substitute for, their respective most directly comparable financial measure prepared in accordance with GAAP. A reconciliation of the historical non-GAAP financial measures to their respective most directly comparable GAAP measure has been provided in the tables included below.
For the Year Ended December 31, 2022 2023 2024 RMB RMB RMB US$ (in thousands) Net income 643,009 640,831 342,082 46,866 Add: Income tax expenses 11,992 25,166 1,300 178 Depreciation and amortization 46,684 30,648 29,467 4,037 Interest expense 10,059 7,657 5,293 725 Less: Interest income (16,248 ) (31,094 ) (38,824 ) (5,319 ) EBITDA (non-GAAP) 695,496 673,208 339,318 46,487 Taxation The Cayman Islands We are incorporated in the Cayman Islands.
For the Year Ended December 31, 2023 2024 2025 RMB RMB RMB US$ (in thousands) Net income 640,831 342,082 365,631 52,284 Add: Income tax expenses 25,166 1,300 59,297 8,479 Depreciation and amortization 30,648 29,467 28,792 4,117 Interest expense 7,657 5,293 852 122 Less: Interest income (31,094 ) (38,824 ) (23,643 ) (3,381 ) EBITDA (non-GAAP) 673,208 339,318 430,929 61,621 Add: Impairment loss on long-lived assets — — 67,931 9,714 Adjusted EBITDA (non-GAAP) 673,208 339,318 498,860 71,335 Taxation The Cayman Islands We are incorporated in the Cayman Islands.
The operating results in any period are not necessarily indicative of the results that may be expected for any future period. 85 For the Year Ended December 31, 2022 2023 2024 RMB RMB RMB US$ (in thousands, except for share and per share data) Net revenues 2,323,101 2,159,584 1,990,204 272,657 Cost of revenues (1) (348,150 ) (265,528 ) (317,570 ) (43,507 ) Gross profit 1,974,951 1,894,056 1,672,634 229,150 Operating expenses Sales and marketing expenses (1) (1,129,508 ) (1,142,154 ) (1,216,912 ) (166,716 ) Product development expenses (1) (42,834 ) (33,723 ) (25,008 ) (3,426 ) General and administrative expenses (1) (185,667 ) (143,286 ) (132,809 ) (18,195 ) Total operating expenses (1,358,009 ) (1,319,163 ) (1,374,729 ) (188,337 ) Income from operations 616,942 574,893 297,905 40,813 Interest income 16,248 31,094 38,824 5,319 Interest expense (10,059 ) (7,657 ) (5,293 ) (725 ) Other income, net 24,527 34,097 26,296 3,603 Impairment loss on long-term investments (500 ) (61 ) — — Gain/(loss) on disposal of subsidiaries 1,390 43,715 (838 ) (115 ) Income before income tax expenses and gain/(loss) from equity method investments 648,548 676,081 356,894 48,895 Income tax expenses (11,992 ) (25,166 ) (1,300 ) (178 ) Gain/(loss) from equity method investments 6,453 (10,084 ) (13,512 ) (1,851 ) Net income 643,009 640,831 342,082 46,866 Less: Net (loss)/income attributable to non-controlling interest (950 ) 1 — — Net income attributable to Sunlands Technology Group 643,959 640,830 342,082 46,866 Net income per share attributable to ordinary shareholders of Sunlands Technology Group—basic and diluted 94.14 92.88 50.12 6.87 Weighted average shares used in calculating net income per ordinary share— basic and diluted 6,840,079 6,899,456 6,824,824 6,824,824 Note: (1) Share-based compensation expenses are included in: For the Year Ended December 31, 2022 2023 2024 RMB RMB RMB US$ (in thousands) Cost of revenues 33 — — — Sales and marketing expenses 4,166 — — — Product development expenses — — — — General and administrative expenses 2,982 — — — Total 7,181 — — — Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Net revenues The Group’s net revenues decreased by 7.8% from RMB2,159.6 million in 2023 to RMB1,990.2 million (US$272.7 million) in 2024, primarily due to the decrease in the new students enrollments and gross billings from degree- or diploma-oriented post-secondary courses.
The operating results in any period are not necessarily indicative of the results that may be expected for any future period. 86 For the Year Ended December 31, 2023 2024 2025 RMB RMB RMB US$ (in thousands, except for share and per share data) Net revenues 2,159,584 1,990,204 2,019,881 288,839 Cost of revenues (265,528 ) (317,570 ) (264,424 ) (37,812 ) Gross profit 1,894,056 1,672,634 1,755,457 251,027 Operating expenses Sales and marketing expenses (1,142,154 ) (1,216,912 ) (1,137,631 ) (162,679 ) Product development expenses (33,723 ) (25,008 ) (29,553 ) (4,226 ) General and administrative expenses (143,286 ) (132,809 ) (143,796 ) (20,563 ) Impairment loss on long-lived assets (1) — — (67,931 ) (9,714 ) Total operating expenses (1,319,163 ) (1,374,729 ) (1,378,911 ) (197,182 ) Income from operations 574,893 297,905 376,546 53,845 Interest income 31,094 38,824 23,643 3,381 Interest expense (7,657 ) (5,293 ) (852 ) (122 ) Other income, net 34,097 26,296 30,121 4,307 Impairment loss on long-term investments (61 ) — — — Gain/(loss) on disposal of subsidiaries 43,715 (838 ) — — Income before income tax expenses and loss from equity method investments 676,081 356,894 429,458 61,411 Income tax expenses (25,166 ) (1,300 ) (59,297 ) (8,479 ) Loss from equity method investments (10,084 ) (13,512 ) (4,530 ) (648 ) Net income 640,831 342,082 365,631 52,284 Less: Net income attributable to non-controlling interest 1 — — — Net income attributable to Sunlands Technology Group 640,830 342,082 365,631 52,284 Net income per share attributable to ordinary shareholders of Sunlands Technology Group—basic and diluted 92.88 50.12 54.28 7.76 Weighted average shares used in calculating net income per ordinary share— basic and diluted 6,899,456 6,824,824 6,736,373 6,736,373 Note: (1) The Group has included the impairment loss on long-lived assets within the income from operations as the amount was recognized for a long-lived asset to be held and used.
Net cash used in investing activities was RMB71.8 million in 2023, which was primarily attributable to purchase of short-term investments of RMB773.3 million, partially offset by proceeds from maturity of short-term investments of RMB701.7 million.
Investing Activities Net cash used in investing activities was RMB12.7 million (US$1.8 million) in 2025, which was primarily attributable to purchase of short-term investments of RMB1,491.4 million (US$213.3 million) and the payment for long-term investments of RMB84.6 million (US$12.1 million), partially offset by proceeds from maturity of short-term investments of RMB1,553.0 million (US$222.1 million) and proceeds received from disposal of long-term investments of RMB6.9 million (US$1.0 million).
Cost of revenues The Group recorded cost of revenues of RMB348.2 million, RMB265.5 million and RMB317.6 (US$43.5 million) in 2022, 2023 and 2024, respectively. Salaries and benefits paid to teachers and mentors accounted for a primary portion of cost of revenues.
Salaries and benefits paid to teachers and mentors accounted for a primary portion of cost of revenues.
We intend to fund our future working capital requirements and capital expenditures from the Group’s existing cash balance, cash generated from operating activities and funds raised from financing activities. The Group has not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties.
The Group’s capital expenditures were RMB6.4 million, RMB0.4 million and RMB0.7 million (US$0.1 million), respectively, for the years ended December 31, 2023, 2024 and 2025. We intend to fund our future working capital requirements and capital expenditures from the Group’s existing cash balance, cash generated from operating activities and funds raised from financing activities.
EBITDA is defined as net loss/income excluding depreciation and amortization, interest expense, interest income, and income tax expenses.
Adjusted EBITDA is defined as net income excluding depreciation and amortization, interest expense, interest income, income tax expenses and impairment loss on long-lived assets. We believe that gross billings, EBITDA and adjusted EBITDA provide valuable insight into the sales of our course packages and the performance of our business.
Cost of revenues The Group’s cost of revenues increased by 19.6% from RMB265.5 million in 2023 to RMB317.6 million (US$43.5 million) in 2024. The increase was primarily due to an increase in the cost of revenues from the growing sales of goods such as printed books and learning materials associated with the courses we offer.
The decrease was primarily due to declined cost of revenues from sales of goods such as learning materials and books, and declined cooperation costs.
General and administrative expenses The Group's general and administrative expenses decreased by 7.3% from RMB143.3 million in 2023 to RMB132.8 million ($18.2 million) in 2024, driven primarily by RMB5.1 million decline in rental expenses resulting from termination of certain leased spaces before the end of their lease terms for cost savings purpose.
General and administrative expenses The Group’s general and administrative expenses increased by 8.3% from RMB132.8 million in 2024 to RMB143.8 million (US$20.6 million) in 2025, driven primarily by compensation expenses related to the Group’s general and administrative personnel.
The following table sets forth the Group’s contractual obligations as of December 31, 2024: Payment due by period Total Less than 1 year 1-3 years 3-5 years More than 5 years (RMB in thousands) Operating lease commitments 207,065 18,192 36,456 38,381 114,036 Long-term loans 47,646 7,802 14,828 13,794 11,222 The Group made an early and full repayment of the outstanding amount under the loan agreement dated July 2021 in March 2025, and the Group's loan has been fully repaid to date.
The following table sets forth the Group’s contractual obligations as of December 31, 2025: Payment due by period Total Less than 1 year 1-3 years 3-5 years More than 5 years (RMB in thousands) Operating lease commitments 190,411 18,319 38,237 38,876 94,979 The Group’s capital expenditures are incurred primarily in connection with purchases of IT infrastructure equipment necessary to support the Group’s operations.
Removed
The Group’s new student enrollments remained relatively stable, primarily due to the increase in professional skills and general interest courses catering to growing demands for diverse personal education, partially offset by the decrease in degree- or diploma-oriented post-secondary courses.
Added
This trend was primarily attributable to the Group’s disciplined customer acquisition strategies and continued optimization of its business focus.
Removed
The Group’s sales and marketing expenses are primarily composed of marketing spending and expenses incurred in relation to sales and marketing personnel.
Added
This represents a reclassification from the unaudited full-year 2025 financial results released on March 19, 2026, where the amount was not previously presented within that subtotal. The adjustment is made to comply with the presentation requirements for impairment loss and has no impact on net income.
Removed
Business Overview—Tuition and Fees.” The Group expects the cost of revenues to increase in an absolute amount in line with the expansion of business and student base growth. Operating expenses The Group’s operating expenses consist of sales and marketing expenses and, to a lesser extent, general and administrative expenses and product development expenses.
Added
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 Net revenues The Group’s net revenues increased by 1.5% from RMB1,990.2 million in 2024 to RMB2,019.9 million (US$288.8 million) in 2025, primarily due to the increase in revenues generated from degree- or diploma-oriented post-secondary courses.
Removed
Despite that gross billings from degree- or diploma-oriented post-secondary courses decreased to RMB13.4 million in 2024 from RMB23.5 million in 2023, gross billings from interest, professional skills and professional certification preparation courses increased to RMB1,542.0 million (US$211.2 million) in 2024 from RMB1,481.1 million in 2023.

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Item 6. [Reserved]

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

24 edited+1 added−1 removed66 unchanged
A general notice given to the directors by any director to the effect that (i) he is a member or officer of any specified company or firm and is to be regarded as interested in any contract or transaction with that company or firm, or (ii) he is to be regarded as interested in any contract or transaction which may, after the date of such notice, be made with a specified person who is connected with him, shall be deemed a sufficient declaration of interest for the purposes of voting on a resolution in respect to a contract or transaction in which he/she has an interest.
A general notice given to the directors by any director to the effect that (i) he is a member or officer of any specified company or firm and is to be regarded as interested in any contract or transaction with that company or firm, or (ii) he is to be regarded as interested in any contract or transaction which may, after the date of such notice, be made with a specified person who is connected with him, shall be deemed a sufficient declaration of interest for the purposes of 98 voting on a resolution in respect to a contract or transaction in which he/she has an interest.
A director may vote in respect 97 of any contract or proposed contract or arrangement notwithstanding that he may be interested therein and if he does so, his vote shall be counted and he may be counted in the quorum at any meeting of the directors at which any such contract or proposed contract or arrangement is considered, subject to any separate requirement for Audit Committee approval under applicable laws or the rules of the New York Stock Exchange, and unless disqualified by the chairman of the relevant board meeting.
A director may vote in respect of any contract or proposed contract or arrangement notwithstanding that he may be interested therein and if he does so, his vote shall be counted and he may be counted in the quorum at any meeting of the directors at which any such contract or proposed contract or arrangement is considered, subject to any separate requirement for Audit Committee approval under applicable laws or the rules of the New York Stock Exchange, and unless disqualified by the chairman of the relevant board meeting.
The compensation committee is also responsible for, among other things: • reviewing and approving the compensation of our chief executive officer and each of our other executive officers; • in consultation with our chief executive officer, periodically reviewing our management succession planning; • reviewing and evaluating our executive compensation and benefits policies generally (subject, if applicable, to shareholder approval), including the review and recommendation of any incentive-compensation and equity-based plans that are subject to the approval of our board of directors; 98 • reviewing and reassessing the adequacy of the committee charter; • selecting compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person’s independence from management; and • reporting regularly to our board of directors.
The compensation committee is also responsible for, among other things: • reviewing and approving the compensation of our chief executive officer and each of our other executive officers; • in consultation with our chief executive officer, periodically reviewing our management succession planning; • reviewing and evaluating our executive compensation and benefits policies generally (subject, if applicable, to shareholder approval), including the review and recommendation of any incentive-compensation and equity-based 99 plans that are subject to the approval of our board of directors; • reviewing and reassessing the adequacy of the committee charter; • selecting compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person’s independence from management; and • reporting regularly to our board of directors.
Li received his MBA from Central University of Finance and Economics in 2013 and his bachelor's degree in accounting from Nanjing University in 2005. He is a member of Chinese Institute of Certified Public Accountant (“CICPA”) and a Certified Tax Accountant in China. He also holds CMA (Certified Management Accountant) certificate.
Li received his MBA from Central University of Finance and Economics in 2013 and his bachelor's degree in accounting from Nanjing University in 2005. He is a member of Chinese Institute of Certified Public Accountant (“CICPA”) and a Certified Tax Accountant in China. He also holds CMA (Certified Management Accountant) certificate. Mr.
A director will be removed from office automatically if, among other things, the director (i) becomes bankrupt or makes any arrangement or composition with his creditors; (ii) dies or is found by our company to be of unsound mind; (iii) resigns by notice in writing to our company; (iv) is prohibited by law or the rules of the New York Stock Exchange from being a director; or (v) is removed from office pursuant to any other provisions of our fourth amended and restated memorandum and articles of association. 99 6.D.
A director will be removed from office automatically if, among other things, the director (i) becomes bankrupt or makes any arrangement or composition with his creditors; (ii) dies or is found by our company to be of unsound mind; (iii) resigns by notice in writing to our company; (iv) is prohibited by law or the rules of the New York Stock Exchange from being a director; or (v) is removed from office pursuant to any other provisions of our fourth amended and restated memorandum and articles of association. 100 6.D.
(5) Represents (i) 309,326 Class A ordinary shares directly held by Diamond Tower Investments Limited; and (ii) 43,450 Class A ordinary shares in the form of ADSs beneficially owned Ms. Lam Lai Ming. Diamond Tower Investments Limited is part of Orchid Asia V Group, Limited, an investment complex that focuses on companies in Asia and China in particular.
(4) Represents (i) 309,326 Class A ordinary shares directly held by Diamond Tower Investments Limited; and (ii) 43,450 Class A ordinary shares in the form of ADSs beneficially owned Ms. Lam Lai Ming. Diamond Tower Investments Limited is part of Orchid Asia V Group, Limited, an investment complex that focuses on companies in Asia and China in particular.
Wang also serves as a director at Yum China Holdings, Inc., a leading restaurant company in China, and a director of Geely Automobile Holdings Limited, an auto manufacturing company in China. Mr. Wang received both his master’s and bachelor’s degrees from Shanghai Jiao Tong University. 95 Hangyu Li has served as our finance director since August 2017.
Wang also serves as a director at Yum China Holdings, Inc., a leading restaurant company in China, and a director of Geely Automobile Holdings Limited, an auto manufacturing company in China. Mr. Wang received both his master’s and bachelor’s degrees from Shanghai Jiao Tong University. 96 Hangyu Li has served as our finance director since August 2017.
Peng Ou as the beneficiaries. The business address of MARBLE FAITH LIMITED is Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG 1110, the British Virgin Islands. (9) Represents 355,306 Class C ordinary shares held of record by SCuPt Global Limited, a British Virgin Islands company wholly owned by TheTwinPeak Limited.
Peng Ou as the beneficiaries. The business address of MARBLE FAITH LIMITED is Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG 1110, the British Virgin Islands. (8) Represents 355,306 Class C ordinary shares held of record by SCuPt Global Limited, a British Virgin Islands company wholly owned by TheTwinPeak Limited.
(7) Represents 2,084,772 Class C ordinary shares held of record by Studyvip Online Education Limited, a British Virgin Islands company wholly owned by MARBLE FAITH LIMITED. The business address of Studyvip Online Education Limited is Start Chambers, Wickham Cay II, P. O. Box 2221, Road Town, Tortola, the British Virgin Islands.
(6) Represents 2,084,772 Class C ordinary shares held of record by Studyvip Online Education Limited, a British Virgin Islands company wholly owned by MARBLE FAITH LIMITED. The business address of Studyvip Online Education Limited is Start Chambers, Wickham Cay II, P. O. Box 2221, Road Town, Tortola, the British Virgin Islands.
(6) Represents 826,389 Class B ordinary shares held of record by PV PLUTO LIMITED, a British Virgin Islands company. The sole shareholder of PV PLUTO LIMITED is Primavera Capital Fund II L.P. The business address of PV PLUTO LIMITED is Wickhams Cay II, Road Town, Tortola, VG1110, the British Virgin Islands.
(5) Represents 826,389 Class B ordinary shares held of record by PV PLUTO LIMITED, a British Virgin Islands company. The sole shareholder of PV PLUTO LIMITED is Primavera Capital Fund II L.P. The business address of PV PLUTO LIMITED is Wickhams Cay II, Road Town, Tortola, VG1110, the British Virgin Islands.
Share Ownership The following table sets forth information concerning the beneficial ownership of our ordinary shares as of March 31, 2025 by: • each of our directors and executive officers; and • each person known to the Group to beneficially own more than 5% of each class of our ordinary shares.
Share Ownership The following table sets forth information concerning the beneficial ownership of our ordinary shares as of March 31, 2026 by: • each of our directors and executive officers; and • each person known to the Group to beneficially own more than 5% of each class of our ordinary shares.
These shares, however, are not included in the computation of the percentage ownership of any other person. 100 Ordinary Shares Beneficially Owned Class A Class B Class C % of Voting Power Number Percentage Number Percentage Number Percentage ** Directors and Executive Officers:† Peng Ou (1) 111,120 4.3 — — 2,721,904 81.7 65.5 Tongbo Liu (2) 30,385 1.2 — — 482,732 14.5 11.6 Jing Gao (3) 60,383 2.3 — — — — * Yang Wang — — — — — — — Hangyu Li * * — — — — * Zheng Zhao — — — — — — — Yingda Song — — — — — — — All directors and executive officers as a group 208,119 8.0 — — 3,204,636 96.2 77.3 Principal Shareholders: ELITE CONCEPT HOLDINGS LIMITED (4) 564,209 21.7 — — — — 1.4 Affiliates of Orchid Asia (5) 352,776 13.6 — — — — * PV PLUTO LIMITED (6) — — 826,389 100.0 — — 13.9 Studyvip Online Education Limited (7) — — — — 2,084,772 62.6 50.0 MARBLE FAITH LIMITED (8) — — — — 637,132 19.1 15.3 SCuPt Global Limited (9) — — — — 355,306 10.7 8.5 Notes: * Less than 1% of our total outstanding shares on an as-converted basis. ** For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our ordinary shares as a single class. † The address of our directors and executive officers Mr.
These shares, however, are not included in the computation of the percentage ownership of any other person. 101 Ordinary Shares Beneficially Owned Class A Class B Class C % of Voting Power Number Percentage Number Percentage Number Percentage ** Directors and Executive Officers:† Peng Ou (1) 111,120 4.4 — — 2,721,904 81.7 65.7 Tongbo Liu (2) 30,385 1.2 — — 482,732 14.5 11.7 Jing Gao (3) 60,383 2.4 — — — — 0.1 Yang Wang — — — — — — — Hangyu Li 6,231 0.2 — — — — 0.0 Zheng Zhao — — — — — — — Yingda Song — — — — — — — All directors and executive officers as a group 208,119 8.2 — — 3,204,636 96.2 77.6 Principal Shareholders: Affiliates of Orchid Asia (4) 352,776 13.9 — — — — 0.8 PV PLUTO LIMITED (5) — — 826,389 100.0 — — 13.9 Studyvip Online Education Limited (6) — — — — 2,084,772 62.6 50.1 MARBLE FAITH LIMITED (7) — — — — 637,132 19.1 15.3 SCuPt Global Limited (8) — — — — 355,306 10.7 8.5 Notes: * Less than 1% of our total outstanding shares on an as-converted basis. ** For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our ordinary shares as a single class. † The address of our directors and executive officers Mr.
As of the same date, options to purchase an aggregate number of 31,550 ordinary shares are outstanding, all of which had vested and become exercisable. 96 The following paragraphs summarize the terms of the 2017 Plan. Types of Awards .
As of the same date, options to purchase an aggregate number of 97 31,550 ordinary shares are outstanding, all of which had vested and become exercisable. The following paragraphs summarize the terms of the 2017 Plan. Types of Awards .
(8) Represents 637,132 Class C ordinary shares held of record by MARBLE FAITH LIMITED, a British Virgin Islands company ultimately wholly owned by Vistra Trust (Hong Kong) Limited, as trustee of an irrevocable trust constituted under the laws of the British Virgin Islands, 101 with Mr. Peng Ou as the settlor and certain family members of Mr.
(7) Represents 637,132 Class C ordinary shares held of record by MARBLE FAITH LIMITED, a British Virgin Islands company ultimately wholly owned by Vistra Trust (Hong Kong) Limited, as trustee of an irrevocable trust constituted under the laws of the British Virgin Islands, with Mr. Peng Ou as the settlor and certain family members of Mr.
Employees The Group had 2,318, 2,113 and 2,071 full-time employees as of December 31, 2022, 2023 and 2024, respectively. The decrease in the number of full-time employees was mainly driven by the strategic contraction of the business. As of December 31, 2024, most of the Group’s employees were in Beijing, Guangzhou and Wuhan.
Employees The Group had 2,113, 2,071 and 1,567 full-time employees as of December 31, 2023, 2024 and 2025, respectively. The decrease in the number of full-time employees was mainly driven by the strategic contraction of the business. As of December 31, 2025, most of the Group’s employees were in Beijing, Guangzhou and Wuhan.
Directors and Executive Officers Age Position/Title Peng Ou (also known as Jianhong Yin) 47 Founder, Chairman, Director Tongbo Liu 38 Chief Executive Officer, Director Jing Gao 40 Vice President, Director Yang Wang 50 Director Hangyu Li 42 Finance Director Zheng Zhao (also known as Ching Chiu) 46 Independent Director Yingda Song 39 Independent Director Peng Ou is our Founder and the Chairman of our board of directors.
Directors and Executive Officers Age Position/Title Peng Ou (also known as Jianhong Yin) 48 Founder, Chairman, Director Tongbo Liu 39 Chief Executive Officer, Director Jing Gao 41 Vice President, Director Yang Wang 51 Director Hangyu Li 43 Finance Director Zheng Zhao (also known as Ching Chiu) 47 Independent Director Yingda Song 40 Independent Director Peng Ou is our Founder and the Chairman of our board of directors.
The calculations in the table below are based on 6,758,124 issued and outstanding ordinary shares as of March 31, 2025, comprising (i) 2,599,673 Class A ordinary shares (excluding 5,200 Class A ordinary shares issued to our depositary bank for bulk issuance of ADSs reserved for future issuances upon the exercise or vesting of awards under our share incentive plans), (ii) 826,389 Class B ordinary shares, and (iii) 3,332,062 Class C ordinary shares.
The calculations in the table below are based on 6,696,498 issued and outstanding ordinary shares as of March 31, 2026, comprising (i) 2,538,047 Class A ordinary shares (excluding 5,200 Class A ordinary shares issued to our depositary bank for bulk issuance of ADSs reserved for future issuances upon the exercise or vesting of awards under our share incentive plans), (ii) 826,389 Class B ordinary shares, and (iii) 3,332,062 Class C ordinary shares.
The business address of SCuPt Global Limited is Trinity Chambers, PO Box 4301, Road Town, Tortola, the British Virgin Islands. To our knowledge, as of March 31, 2025, 1,621,685 of our Class A ordinary shares were held by one record holder in the United States, which was the Bank of New York Mellon, the depositary of our ADR program.
The business address of SCuPt Global Limited is Trinity Chambers, PO Box 4301, Road Town, Tortola, the British Virgin Islands. 102 To our knowledge, as of March 31, 2026, 2,122,594 of our Class A ordinary shares were held by one record holder in the United States, which was the Bank of New York Mellon, the depositary of our ADR program.
The payment of compensation to our independent directors for their services rendered for the year ended December 31, 2024 is in a total amount of RMB1.1 million (US$0.2 million), which has been fully paid in cash.
The payment of compensation to our independent directors for their services rendered for the year ended December 31, 2025 is in a total amount of RMB0.9 million (US$0.1 million), which has been fully paid in cash.
Compensation Compensation of Directors and Senior Management For the fiscal year ended December 31, 2024, we paid an aggregate of RMB1.7 million (US$0.2 million) in cash to our executive officers.
Compensation Compensation of Directors and Senior Management For the fiscal year ended December 31, 2025, we paid an aggregate of RMB1.8 million (US$0.3 million) in cash to our executive officers.
Zhao was a senior auditor at Ernst & Young. Mr. Zhao currently serves as an independent director of CLOOPEN GROUP HOLDING LIMITED. (a company listed on NYSE with stock ticker: RAAS) Mr. Zhao holds a master’s degree in finance, and a bachelor’s degree in economics, both from Peking University’s School of Economics.
Zhao currently serves as an independent director of CLOOPEN GROUP HOLDING LIMITED. (a company listed on NYSE with stock ticker: RAAS) Mr. Zhao holds a master’s degree in finance, and a bachelor’s degree in economics, both from Peking University’s School of Economics. Yingda Song has served as our independent director since May 2024. Mr.
Zheng Zhao has served as our independent director since June 2019. Mr. Zhao is currently the special assistant to the president and general manager of New Oriental Industry Funds, where he leads the company’s strategic development, mergers and acquisitions and strategic collaboration efforts, as well as maintains domestic and international customer relations. Prior to that, Mr.
Zhao is currently the special assistant to the president and general manager of New Oriental Industry Funds, where he leads the company’s strategic development, mergers and acquisitions and strategic collaboration efforts, as well as maintains domestic and international customer relations. Prior to that, Mr. Zhao was a senior auditor at Ernst & Young. Mr.
Yingda Song has served as our independent director since May 2024. Mr. Song currently serves as an associate professor in the Antai College of Economics and Management of Shanghai Jiao Tong University, where he also served as an assistant professor from 2017 to 2019.
Song currently serves as an associate professor in the A ntai College of Economics and Management of Shanghai Jiao Tong University, where he also served as an assistant professor from 2017 to 2019.
The following table sets forth the number of the Group’s employees as of December 31, 2024: Function Number of Full-Time Employees Percentages Academic and administrative faculty (1) 146 7.0 % Sales and marketing staff 1,252 60.5 % Sales operation 422 20.4 % General and administrative 137 6.6 % Technology development 114 5.5 % Total 2,071 100.0 % Note: (1) Consists of teachers, mentors, course and educational content development professionals, and other administrative faculty members.
The following table sets forth the number of the Group’s employees as of December 31, 2025: Function Number of Full-Time Employees Percentages Academic and administrative faculty (1) 148 9.4 % Sales and marketing staff 874 55.8 % Sales operation 277 17.7 % General and administrative 153 9.8 % Technology development 115 7.3 % Total 1,567 100.0 % Note: (1) Consists of teachers, mentors, course and educational content development professionals, and other administrative faculty members.
Removed
(4) Represents 564,209 Class A ordinary shares directly held of record by ELITE CONCEPT HOLDINGS LIMITED, a Hong Kong company. The business address of ELITE CONCEPT HOLDINGS LIMITED is Flat/RM 4308B 43 AIA Tower, 183 Electric Road North Point, Hong Kong.
Added
Li is a member of the American Institute of Certified Public Accountants and a member of the State of Washington Certified Public Accountants. Zheng Zhao has served as our independent director since June 2019. Mr.

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