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QUHUO Ltd

QUHUO LtdQH财报

Nasdaq

QUHUO Ltd. operates an on-demand lifestyle service platform focused on the Chinese mainland market. Its core offerings include gig workforce solutions, community group-buy services, and local life service matching for merchants and individual users, covering household services, catering operation support, and community retail segments to effectively connect service providers with end consumers.

What changed in QUHUO Ltd's 20-F — 2022 vs 2023

Top changes in QUHUO Ltd's 2023 20-F

466 paragraphs added · 408 removed · 333 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

143 edited+67 added−26 removed578 unchanged
Pursuant to the Protocol, the PCAOB has the sole discretion in selecting the subject of its inspections and investigations without input from the Chinese authorities, and procedures are in place to allow PCAOB inspectors and investigators to review complete audit working papers of accounting firms located in mainland China and Hong Kong.
Pursuant to the Protocol, the PCAOB has the sole discretion in selecting the subject of its inspections and investigations without input from the Chinese authorities, and procedures are in place to allow PCAOB inspectors and investigators to review complete audit working papers of accounting firms located in mainland China and Hong Kong.
On December 15, 2022, the PCAOB announced that it was able to secure complete access to inspect and investigate PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong in 2022, and the PCAOB Board vacated its previous determinations that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong.
On December 15, 2022, the PCAOB announced that it was able to secure complete access to inspect and investigate PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong in 2022, and the PCAOB Board vacated its previous determinations that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong.
Marcum Asia is headquartered in New York, New York, and, as of the date of this annual report, has not been determined by the PCAOB as being unable to be inspected or investigated completely.
Marcum Asia is headquartered in New York, New York, and, as of the date of this annual report, has not been determined by the PCAOB as being unable to be inspected or investigated completely.
If we fail to meet the new listing standards specified in the HFCAA, we could face possible delisting from the Nasdaq Stock Market, cessation of trading in over-the-counter market, deregistration from the SEC and/or other risks, which may materially and adversely affect the trading price of the ADSs or terminate the trading of the ADSs in the United States.
If we fail to meet the new listing standards specified in the HFCAA, we could face possible delisting from the Nasdaq Stock Market, cessation of trading in over-the-counter market, deregistration from the SEC and/or other risks, which may materially and adversely affect the trading price of the ADSs or terminate the trading of the ADSs in the United States.
We conduct our business in China through Beijing Quhuo Technology Co., Ltd., or the VIE, and its subsidiaries, or collectively the affiliated entities, in China, and may in the future commence or acquire businesses that are subject to the restrictions with respect to value-added telecommunications services.
We conduct our business in China through Beijing Quhuo Technology Co., Ltd., or the VIE, and its subsidiaries, or collectively the affiliated entities, in China, and may in the future commence or acquire businesses that are subject to the restrictions with respect to value-added telecommunications services.
Any such class action suit, whether or not successful, could harm our reputation and restrict our ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse effect on our financial condition and results of operations.
Any such class action suit, whether or not successful, could harm our reputation and restrict our ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse effect on our financial condition and results of operations.
The PCAOB has indicated that it will act immediately to consider the need to issue new determinations with the HFCAA if needed. 9 Table of Contents Our financial statements contained in the annual report on Form 20-F for the fiscal year ended December 31, 2022 have been audited by an independent registered public accounting firm, Marcum Asia CPAs LLP, or Marcum Asia, which is registered with the PCAOB and subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards.
The PCAOB has indicated that it will act immediately to consider the need to issue new determinations with the HFCAA if needed. 9 Table of Contents Our financial statements contained in the annual report on Form 20-F for the fiscal year ended December 31, 2023 have been audited by an independent registered public accounting firm, Marcum Asia CPAs LLP, or Marcum Asia, which is registered with the PCAOB and subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards.
We cannot assure you that we will be able to generate net profit or generate positive cash flow from operating activities in the future. Our ability to achieve profitability will depend in large part on our ability to control expenses and manage our growth effectively.
We cannot assure you that we will be able to generate net profit or generate positive cash flow from operating activities in the future. Our ability to achieve and maintain profitability will depend in large part on our ability to control expenses and manage our growth effectively.
Based on the Overseas Listing Trial Measures and the clarification issued by at a press conference held by CSRC, we believe that we will be required to complete the filing procedures with the CSRC in connection with our future offshore offerings, in any.
Based on the Overseas Listing Trial Measures and the clarification issued by at a press conference held by CSRC, we believe that we will be required to complete the filing procedures with the CSRC in connection with our future offshore offerings, if any.
See “—Risks Related to Our Business and Industry—We may require additional capital to support the growth of our business, and this capital might not be available on reasonable terms or at all.” 29 Table of Contents Accordingly, government actions in the future, including any decision to intervene or influence the operations of our PRC subsidiary or the affiliated entities at any time, or to exert control over an offering of securities conducted overseas and/or foreign investment in China-based issuers, may cause us to make material changes to the operations of our PRC subsidiary or the affiliated entities, may limit or completely hinder our ability to offer or continue to offer securities to investors, and/or may cause the value of such securities to significantly decline or be worthless.
See “—Risks Related to Our Business and Industry—We may require additional capital to support the growth of our business, and this capital might not be available on reasonable terms or at all.” Accordingly, government actions in the future, including any decision to intervene or influence the operations of our PRC subsidiary or the affiliated entities at any time, or to exert control over an offering of securities conducted overseas and/or foreign investment in China-based issuers, may cause us to make material changes to the operations of our PRC subsidiary or the affiliated entities, may limit or completely hinder our ability to offer or continue to offer securities to investors, and/or may cause the value of such securities to significantly decline or be worthless.
(4) The remaining 45% of the equity interest of Haikou Chengtu Network Technology Co., Ltd. is owned by three independent third parties. 3 Table of Contents (5) In November 2020, we acquired a 54.22% equity interest in Lailai Information Technology (Shenzhen) Co., Ltd., an on-demand workforce platform that specializes in housekeeping solutions for hotels and B&Bs.
(5) The remaining 45% of the equity interest of Haikou Chengtu Network Technology Co., Ltd. is owned by three independent third parties. 3 Table of Contents (6) In November 2020, we acquired a 54.22% equity interest in Lailai Information Technology (Shenzhen) Co., Ltd., an on-demand workforce platform that specializes in housekeeping solutions for hotels and B&Bs.
A public perception of misconduct by us, workers on our platform or our industry customers, even if factually incorrect or based on isolated incidents, could damage our reputation and harm our brand, and our business, financial condition, results of operations and prospects may be materially and adversely affected. 20 Table of Contents Any significant disruption to or failures of our technology infrastructure could materially and adversely affect our business, financial condition, results of operations and prospects.
A public perception of misconduct by us, workers on our platform or our industry customers, even if factually incorrect or based on isolated incidents, could damage our reputation and harm our brand, and our business, financial condition, results of operations and prospects may be materially and adversely affected. 21 Table of Contents Any significant disruption to or failures of our technology infrastructure could materially and adversely affect our business, financial condition, results of operations and prospects.
As a result of these contractual arrangements, we are considered the primary beneficiary of the VIE and consolidate the VIE as required by Topic 810, Consolidation of Accounting Standards Codification, or the ASC. 42 Table of Contents In the opinion of our PRC counsel, Commerce & Finance Law Offices, (1) the ownership structures of WFOE and the VIE in China currently do not result in any violation of the applicable PRC laws or regulations currently in effect; and (2) the contractual arrangements between WFOE, the VIE and its registered shareholders governed by PRC laws and regulations are currently valid and legally binding on each party thereto and enforceable in accordance with the terms thereof, subject, as to enforceability, to applicable bankruptcy, insolvency, moratorium, reorganization and similar laws affecting creditors’ rights generally, the discretion of relevant governmental authorities in exercising their authority in connection with the interpretation and implementation thereof, and the application of relevant PRC laws and policies thereto, and to general equity principles.
As a result of these contractual arrangements, we are considered the primary beneficiary of the VIE and consolidate the VIE as required by Topic 810, Consolidation of Accounting Standards Codification, or the ASC. 42 Table of Contents In the opinion of our PRC counsel, Yuan Tai Law Offices, (1) the ownership structures of WFOE and the VIE in China currently do not result in any violation of the applicable PRC laws or regulations currently in effect; and (2) the contractual arrangements between WFOE, the VIE and its registered shareholders governed by PRC laws and regulations are currently valid and legally binding on each party thereto and enforceable in accordance with the terms thereof, subject, as to enforceability, to applicable bankruptcy, insolvency, moratorium, reorganization and similar laws affecting creditors’ rights generally, the discretion of relevant governmental authorities in exercising their authority in connection with the interpretation and implementation thereof, and the application of relevant PRC laws and policies thereto, and to general equity principles.
Risk Factors—Risks Related to Doing Business in China — Failure to comply with governmental regulations and other legal obligations concerning data protection and cybersecurity may materially and adversely affect our business, as we routinely process data during the conduct of our business.” 21 Table of Contents Increases in labor, energy and other costs in China could materially and adversely affect our business and profitability.
Risk Factors—Risks Related to Doing Business in China — Failure to comply with governmental regulations and other legal obligations concerning data protection and cybersecurity may materially and adversely affect our business, as we routinely process data during the conduct of our business.” 22 Table of Contents Increases in labor, energy and other costs in China could materially and adversely affect our business and profitability.
Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof, while Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. Mr. Leslie Yu, our chairman and chief executive officer, has control over us and our corporate matter. As of April 10, 2023, Mr.
Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof, while Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. Mr. Leslie Yu, our chairman and chief executive officer, has control over us and our corporate matter. As of April 10, 2024, Mr.
EY audited our financial statements for the fiscal years ended December 31, 2020 and 2021, included elsewhere in this annual report. Our former auditor is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards.
EY audited our financial statements for the fiscal years ended December 31, 2021 included elsewhere in this annual report. Our former auditor is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards.
As our business continues to grow, we expect to continue to be involved in legal or administrative proceedings related to labor disputes. 19 Table of Contents Our strategic investments or acquisitions may turn out to be unsuccessful and materially and adversely affect our financial condition and results of operations.
As our business continues to grow, we expect to continue to be involved in legal or administrative proceedings related to labor disputes. 20 Table of Contents Our strategic investments or acquisitions may turn out to be unsuccessful and materially and adversely affect our financial condition and results of operations.
Risk Factors—Risks Related to Doing Business in China—The approval of and the filing with the CSRC or other PRC government authorities may be required in connection with our future offshore offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing.” Cash and Asset Flows through Our Organization Quhuo Limited transfers cash to Quhuo Investment Limited, its wholly-owned subsidiary in British Virgin Islands, by making capital contributions or providing loans, and Quhuo Investment Limited transfers cash to Quhuo Technology Investment (Hong Kong) Limited, or Quhuo Technology, a wholly-owned subsidiary of Quhuo Investment Limited incorporated in Hong Kong, by making capital contributions or providing loans.
Risk Factors—Risks Related to Doing Business in China—The approval of and the filing with the CSRC or other PRC government authorities are required in connection with our offshore offerings under PRC law, and we cannot predict whether or for how long we will be able to obtain such approval or complete such filing.” Cash and Asset Flows through Our Organization Quhuo Limited transfers cash to Quhuo Investment Limited, its wholly-owned subsidiary in British Virgin Islands, by making capital contributions or providing loans, and Quhuo Investment Limited transfers cash to Quhuo Technology Investment (Hong Kong) Limited, or Quhuo Technology, a wholly-owned subsidiary of Quhuo Investment Limited incorporated in Hong Kong, by making capital contributions or providing loans.
Our market capitalization has fluctuated significantly during the fiscal year ended December 31, 2022. If our market capitalization does not increase or continues to decline, we could be or become classified as a PFIC for the current taxable year or future taxable years.
Our market capitalization has fluctuated significantly during the fiscal year ended December 31, 2023. If our market capitalization does not increase or continues to decline, we could be or become classified as a PFIC for the current taxable year or future taxable years.
In the worst-case scenario, we may be required to unwind our existing contractual arrangements and/or dispose of the relevant business operations, which could have a material adverse effect on our current corporate structure, corporate governance, business, financial condition, results of operations and prospects. 45 Table of Contents We may rely on dividends paid by our PRC subsidiary to fund cash and financing requirements.
In the worst-case scenario, we may be required to unwind our existing contractual arrangements and/or dispose of the relevant business operations, which could have a material adverse effect on our current corporate structure, corporate governance, business, financial condition, results of operations and prospects. We may rely on dividends paid by our PRC subsidiary to fund cash and financing requirements.
China’s economy has experienced significant growth, which has resulted in and may further lead to inflation and increased labor costs, energy costs, and vehicle purchase, rental and maintenance costs. According to the National Bureau of Statistics of China, the year-over-year percent changes in the consumer price index for 2020, 2021 and 2022 were increases of 2.5%, 0.9% and 2.0%, respectively.
China’s economy has experienced significant growth, which has resulted in and may further lead to inflation and increased labor costs, energy costs, and vehicle purchase, rental and maintenance costs. According to the National Bureau of Statistics of China, the year-over-year percent changes in the consumer price index for 2021, 2022 and 2023 were increases of 0.9%, 2.0% and 0.2%, respectively.
Any uncertainties or negative publicity regarding such approval requirement could materially and adversely affect our business, prospects, financial condition, reputation, and the trading price of our listed securities. Substantial uncertainties exist with respect to the interpretation and implementation of cybersecurity related regulations and cybersecurity review as well as any impact these may have on our business operations.
Any uncertainties or negative publicity regarding such approval requirement could materially and adversely affect our business, prospects, financial condition, reputation, and the trading price of our listed securities. 32 Table of Contents Substantial uncertainties exist with respect to the interpretation and implementation of cybersecurity related regulations and cybersecurity review as well as any impact these may have on our business operations.
On September 22, 2021, the PCAOB adopted a final rule implementing the HFCAA, which provides a framework for the PCAOB to determine, as contemplated under the HFCAA, whether the PCAOB is unable to 34 Table of Contents inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction.
On September 22, 2021, the PCAOB adopted a final rule implementing the HFCAA, which provides a framework for the PCAOB to determine, as contemplated under the HFCAA, whether the PCAOB is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction.
We use third-party cloud computing services. We do not control the operations of our third-party cloud computing service providers. The operations of these third-party cloud computing service providers may experience break-ins, computer viruses, denial-of-service attacks, sabotage, acts of vandalism, and other misconduct.
We do not control the operations of our third-party cloud computing service providers. The operations of these third-party cloud computing service providers may experience break-ins, computer viruses, denial-of-service attacks, sabotage, acts of vandalism, and other misconduct.
The SEC, U.S. Department of Justice and other authorities often have substantial difficulties in bringing and enforcing actions against non-U.S. companies and non-U.S. persons, including company directors and officers, in certain emerging markets, including China.
Department of Justice and other authorities often have substantial difficulties in bringing and enforcing actions against non-U.S. companies and non-U.S. persons, including company directors and officers, in certain emerging markets, including China.
As a result of the foregoing, our public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a company incorporated in the United States. Certain judgments obtained against us by our shareholders may not be enforceable.
As a result of the foregoing, our public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a company incorporated in the United States. 53 Table of Contents Certain judgments obtained against us by our shareholders may not be enforceable.
For example, we had a dispute with a major industry customer as we extracted and downloaded operating data from its system by using certain technical 13 Table of Contents means not permitted by such customer. We also acquired customer relationships from other service providers of certain major industry customers without seeking their prior written consent.
For example, we had a dispute with a major industry customer as we extracted and downloaded operating data from its system by using certain technical means not permitted by such customer. We also acquired customer relationships from other service providers of certain major industry customers without seeking their prior written consent.
These measures aim to regulate cross-border transfers of data, requiring among other things, that data processors that provide data to overseas apply to CAC for security assessments if: (1) data processors provide important data to overseas; (2) critical information infrastructure operators or data processors process personal information of more than a million people provide personal information to overseas; (3) data processors that have cumulatively provided personal information of 100,000 people or sensitive personal information of 10,000 people to overseas since January 1 of the previous year, provide personal information to overseas; or (4) other scenarios required by the CAC to apply for security assessments occur.
These measures aim to regulate cross-border transfers of data, requiring among other things, that data processors that provide data to overseas apply to CAC for security assessments if: (1) data processors provide important data to overseas; (2) critical information infrastructure operators provide personal information to overseas; (3) data processors (other than critical information infrastructure operators) that have cumulatively provided personal information of more than one million people or sensitive personal information of more than 10,000 people to overseas since January 1 of the previous year, provide personal information to overseas; or (4) other scenarios required by the CAC to apply for security assessments occur.
Our Operations in China and Permissions Required from the PRC Authorities for Our Operations We are a company registered in the Cayman Islands, and WFOE, our PRC subsidiary, is a foreign-invested enterprise under PRC laws.
Our Operations in China and Permissions Required from the PRC Authorities for Our Operations We are a company incorporated in the Cayman Islands, and WFOE, our PRC subsidiary, is a foreign-invested enterprise under PRC laws.
In addition, our industry customers may amend their standard form contracts to include more stringent terms and conditions. Any of the foregoing could materially and adversely affect our business, financial condition, results of operations and prospects. We may not compete effectively.
In addition, our industry customers may amend their standard form contracts to include more stringent terms and conditions. Any of the foregoing could materially and adversely affect our business, financial condition, results of operations and prospects. 15 Table of Contents We may not compete effectively.
An employer is required to pay the Employee Benefits for its employees in accordance with the rates provided under relevant regulations and withhold the Employee Benefits that should be assumed by the employees. The VIE and its subsidiaries have not made sufficient contribution of the Employee Benefits for some employees.
An employer is required to pay the Employee Benefits for its employees in accordance with the rates provided under relevant regulations and withhold the Employee Benefits that should be assumed by the employees. 28 Table of Contents The VIE and its subsidiaries have not made sufficient contribution of the Employee Benefits for some employees.
It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between Renminbi and the U.S. dollar in the future. Significant revaluation of the Renminbi may have a material adverse effect on your investment.
It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between Renminbi and the U.S. dollar in the future. 37 Table of Contents Significant revaluation of the Renminbi may have a material adverse effect on your investment.
Although the law in this regard is not entirely clear, we treat the VIE (and its subsidiaries) as being owned by us for U.S. federal income tax purposes because we direct its activities that most significantly impact its economic performance and are entitled to substantially all of the economic benefits associated with it.
Although the law in this regard is not entirely clear, we treat the affiliated entities as being owned by us for U.S. federal income tax purposes because we direct its activities that most significantly impact its economic performance and are entitled to substantially all of the economic benefits associated with it.
You may not realize a return on your investment in the ADSs or even lose your entire investment in the ADSs. You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law and conduct our operations primarily in China.
You may not realize a return on your investment in the ADSs or even lose your entire investment in the ADSs. 52 Table of Contents You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law and conduct our operations primarily in China.
In these cases, the depositary may decide not to distribute such property to you. 52 Table of Contents We and the depository are entitled to amend the deposit agreement and to change the rights of ADSs holders under the terms of such agreement, and we may terminate the deposit agreement, without the prior consent of the ADSs holders.
In these cases, the depositary may decide not to distribute such property to you. We and the depository are entitled to amend the deposit agreement and to change the rights of ADSs holders under the terms of such agreement, and we may terminate the deposit agreement, without the prior consent of the ADSs holders.
Although we generally managed to renew agreements with our major customers in the past, we cannot assure you that we can maintain relationships with existing industry customers on commercially desirable terms, or at all. Industry customers may also terminate business relationships with us due to contractual disputes.
Although we generally managed to renew agreements with our major customers in the past, we cannot assure you that we can maintain relationships with existing industry customers on commercially desirable terms, or at all. 13 Table of Contents Industry customers may also terminate business relationships with us due to contractual disputes.
For example, we recorded goodwill impairment of RMB52.0 million in 2021 and RMB4.9 million (US$0.7 million) in 2022. Our goodwill impairment in 2021 was related to the business we acquired for our housekeeping solutions and was primarily due to the impact of the COVID-19 pandemic, which delayed the business integration progress and impacted the business growth rate.
For example, we recorded goodwill impairment of RMB52.0 million in 2021, RMB4.9 million in 2022 and nil in 2023. Our goodwill impairment in 2021 was related to the business we acquired for our housekeeping solutions and was primarily due to the impact of the COVID-19 pandemic, which delayed the business integration progress and impacted the business growth rate.
If any dispute arises between our current or former senior management and us, we may have to incur substantial costs and expenses in order to enforce such agreements in China or we may not be able to enforce them at all. 23 Table of Contents We have incurred and may continue to incur substantial share-based compensation expenses.
If any dispute arises between our current or former senior management and us, we may have to incur substantial costs and expenses in order to enforce such agreements in China or we may not be able to enforce them at all. We have incurred and may continue to incur substantial share-based compensation expenses.
See “—The approval of and the filing with the CSRC or other PRC government authorities may be required in connection with our future offshore offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing” for details.
See “—The approval of and the filing with the CSRC or other PRC government authorities are required in connection with our offshore offerings under PRC law, and we cannot predict whether or for how long we will be able to obtain such approval or complete such filing” for details.
Some of 14 Table of Contents these lawsuits ruled in favor of the claimants based on the unfavorable determination that the workers should be deemed as our employees or dispatched employees under the facts of each particular case.
Some of these lawsuits ruled in favor of the claimants based on the unfavorable determination that the workers should be deemed as our employees or dispatched employees under the facts of each particular case.
The approval of and the filing with the CSRC or other PRC government authorities may be required in connection with our future offshore offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing.
The approval of and the filing with the CSRC or other PRC government authorities are required in connection with our offshore offerings under PRC law, and we cannot predict whether or for how long we will be able to obtain such approval or complete such filing.
We have used our best efforts to notify PRC residents or entities who directly or indirectly hold shares in our Cayman Islands holding company and who are known to us as being PRC residents to complete the foreign exchange registrations.
We have used our best efforts to notify PRC residents or entities who directly or indirectly hold shares in our Cayman Islands holding company and who are known to us as being PRC residents to complete the foreign exchange registrations and update the same where necessary.
Holders of Class A ordinary shares are entitled to one vote per share, while holders of Class B ordinary shares are entitled to 15 votes per share.
Holders of Class A ordinary shares are entitled to one vote per share, while holders of Class B ordinary shares are entitled to 480 votes per share.
We generated approximately 93% and 93% of our total revenues from three major industry customers in 2021 and 2022, respectively, including Meituan and Ele.me.
We generated approximately 92%, 93% and 90% of our total revenues from three major industry customers in 2021, 2022 and 2023, respectively, including Meituan and Ele.me.
On February 17, 2023, the CSRC promulgated Trial Administrative Measures of the Overseas Securities Offering and Listing by Domestic Companies, or the Overseas Listing Trial Measures, and five supporting guidelines, which became effective on March 31, 2023.
On February 17, 2023, the CSRC promulgated Trial Administrative Measures of the Overseas Securities Offering and Listing by Domestic Companies, or the Overseas Listing Trial Measures, and five supporting guidelines, which became effective on March 31, 2023, or, collectively, the Guidance Rules and Notice.
See “Item 4. Information on the Company—B. Business Overview—Regulations—Regulations Relating to Internet Information Security and Privacy Protection.” The CSRC or other PRC regulatory authorities also may take actions requiring us, or making it advisable for us, to halt our offshore offerings before settlement and delivery of the shares offered.
See “Item 4. Information on the Company—B. Business Overview—Regulations—Regulations Relating to Internet Information Security and Privacy Protection” in this annual report. The CSRC or other PRC regulatory authorities also may take actions requiring us, or making it advisable for us, to halt our offshore offerings before settlement and delivery of the shares offered.
As of the date of this annual report, our subsidiaries in China and the VIE have obtained the requisite licenses and permits from the PRC government authorities that are material for the business operations of our holding company, our subsidiaries and the VIE in China, including, among others, the ICP license.
As of the date of this annual report, our subsidiaries in China and the VIE have obtained the requisite licenses and permits from the PRC government authorities that are material for the business operations of our holding company, our subsidiaries and the VIE in China.
In 2020, 2021 and 2022, WFOE charged financial support fees under the exclusive business cooperation agreement of RMB16.6 million, RMB13.8 million and RMB13.9 million (US$2.0 million), respectively, and the total amount of service fees that the VIE paid to WFOE were RMB14.1 million, RMB16.2 million and RMB19.3 million (US$2.8 million), respectively.
In 2021, 2022 and 2023, WFOE charged financial support fees under the exclusive business cooperation agreement of RMB13.8 million, RMB13.9 million and RMB13.0 million (US$1.8 million), respectively, and the total amount of service fees that the VIE paid to WFOE were RMB16.2 million, RMB19.3 million and RMB28.4 million (US$4.0 million), respectively.
Although the PRC economy has grown significantly in the past decade, that growth may not continue, as evidenced by the slowing of the growth of the PRC economy since 2012. In addition, China’s economic condition has been, and may continue to be, impacted by the recent global outbreak of COVID-19 and the corresponding government-mandated quarantine measures.
Although the PRC economy has grown significantly in the past decade, that growth may not continue, as evidenced by the slowing of the growth of the PRC economy since 2012. In addition, China’s economic condition has been, and may continue to be, impacted by the global outbreak of COVID-19.
Our management has concluded that, as of December 31, 2022, our existing disclosure controls and procedures and internal control over financial reporting were effective after the remediation. See “Item 15. Disclosure Controls and Procedures” for details.
Our management has concluded that, as of December 31, 2023, our existing disclosure controls and procedures and internal control over financial reporting were effective. See “Item 15. Disclosure Controls and Procedures” for details.
The amounts restricted include the paid-up capital and the statutory reserve funds of our PRC subsidiary and the VIE, totaling RMB382.7 million, RMB395.5 million and RMB191.0 million (US$27.7 million) as of December 31, 2020, 2021 and 2022, respectively. Furthermore, cash transfers from our PRC subsidiary to entities outside of China are subject to PRC government control of currency conversion.
The amounts restricted include the paid-up capital and the statutory reserve funds of our PRC subsidiary and the VIE, totaling RMB395.5 million, RMB191.0 million and RMB227.4 million (US$32.0 million) as of December 31, 2021, 2022 and 2023, respectively. Furthermore, cash transfers from our PRC subsidiary to entities outside of China are subject to PRC government control of currency conversion.
Because we are a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including: ● the rules under the Exchange Act requiring the filing of quarterly reports on Form 10-Q or current reports on Form 8-K with the SEC; ● the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; ● the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and ● the selective disclosure rules by issuers of material nonpublic information under Regulation FD. 46 Table of Contents We are required to file an annual report on Form 20-F within four months of the end of each fiscal year.
Because we are a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including: ● the rules under the Exchange Act requiring the filing of quarterly reports on Form 10-Q or current reports on Form 8-K with the SEC; ● the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; ● the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and ● the selective disclosure rules by issuers of material nonpublic information under Regulation FD.
Yu beneficially owned all of our issued Class B ordinary shares. These Class B ordinary shares constitute approximately 10.2% of our total issued and outstanding share capital and 63.0% of the aggregate voting power of our total issued and outstanding share capital due to the disparate voting powers associated with our dual-class share structure. See “Item 6.
Yu beneficially owned all of our issued Class B ordinary shares. These Class B ordinary shares constitute approximately 6.1% of our total issued and outstanding share capital and 96.9% of the aggregate voting power of our total issued and outstanding share capital due to the disparate voting powers associated with our dual-class share structure. See “Item 6.
The inability of the PCAOB to conduct inspections of auditors with presence in China in the past made it more difficult to evaluate the effectiveness of our prior independent registered public accounting firm’s audit procedures or quality control procedures as compared to auditors outside of China that were subject to the PCAOB inspections, which 35 Table of Contents could cause investors and potential investors in our securities to lose confidence in our audit procedures and reported financial information and the quality of our financial statements.
The inability of the PCAOB to conduct inspections of auditors with presence in China in the past made it more difficult to evaluate the effectiveness of our prior independent registered public accounting firm’s audit procedures or quality control procedures as compared to auditors outside of China that were subject to the PCAOB inspections, which could cause investors and potential investors in our securities to lose confidence in our audit procedures and reported financial information and the quality of our financial statements. 36 Table of Contents It may be difficult for overseas regulators to conduct investigation or collect evidence within China.
Some of our current and potential competitors may be able to devote greater financial, technical, marketing and other resources to facilitating their business growth, and may also have longer operating histories, greater brand recognition and stronger customer loyalty than we do.
Some of our current and potential competitors may be able to devote greater financial, technical, marketing and other resources to facilitating their business growth, and may also have longer operating histories, greater brand recognition and stronger customer loyalty than we do. Mergers or strategic alliances among our current or potential competitors may present additional challenges.
However, if PRC government authorities determine otherwise, and if we and the VIE fail to obtain such permits as required, we and the VIE could be subject to fines, sanctions or injunction orders, and we may be forced to alter our business model.
If we and the VIE fail to obtain such permits as required, we and the VIE could be subject to fines, sanctions or injunction orders, and we may be forced to alter our business model.
For details, see “—Failure to comply with governmental regulations and other legal obligations concerning data protection and cybersecurity may materially and adversely affect our business.” Any failure to obtain or delay in obtaining such approval or completing such filing procedures for our offshore offerings, or a rescission of any such approval or filing if obtained by us, may subject us to sanctions by the CSRC or other PRC regulatory authorities, which could materially and adversely affect our business, results of operations, financial condition and prospects, as well as the trading price of our listed securities.
Any failure to obtain or delay in obtaining such approval or completing such filing procedures for our offshore offerings, or a rescission of any such approval or filing if obtained by us, may subject us to sanctions by the CSRC or other PRC regulatory authorities, which could materially and adversely affect our business, results of operations, financial condition and prospects, as well as the trading price of our listed securities.
The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. 26 Table of Contents Commencing with our fiscal year ended December 31, 2021, we must perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting in our Form 20-F filing for that year, as required by Section 404 of the Sarbanes-Oxley Act.
Commencing with our fiscal year ended December 31, 2021, we must perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting in our Form 20-F filing for that year, as required by Section 404 of the Sarbanes-Oxley Act.
We recorded share-based compensation expenses of RMB82.7 million, RMB68.9 million and RMB19.8 million (US$2.9 million) in 2020, 2021 and 2022, for options granted under a previous share incentive plan, respectively. As of the date of this annual report, we have granted options to purchase 7,857,974 ordinary shares under our 2019 Share Incentive Plan. See “Item 6—Directors, Senior Management and Employees—B.
We recorded share-based compensation expenses of RMB68.9 million, RMB19.8 million and RMB(0.5) million (US$(0.07) million) in 2021, 2022 and 2023 for options granted under a previous share incentive plan, respectively. As of the date of this annual report, we have granted options to purchase 9,502,550 ordinary shares under our 2019 Share Incentive Plan. See “Item 6—Directors, Senior Management and Employees—B.
If we are a PFIC for any tax year during which a U.S. Holder (as defined in “Item 10. Additional Information—E. Taxation—U.S. Federal Income Taxation—General”) holds an ADS or a Class A ordinary share, certain adverse U.S. federal income tax consequences could apply to the U.S. Holder. See “Item 10. Additional Information—E. Taxation—U.S. Federal Income Taxation—Passive foreign investment company considerations.”
Holder (as defined in “Item 10. Additional Information—E. Taxation—U.S. Federal Income Taxation—General”) holds an ADS or an ordinary share, certain adverse U.S. federal income tax consequences could apply to the U.S. Holder. See “Item 10. Additional Information—E. Taxation—U.S. Federal Income Taxation—Passive foreign investment company considerations.”
We may have to take corporate or legal action, which could involve significant time and resources to resolve and divert management from our operations, and we may not be able to recover our loss due to such misuse or misappropriation if the third party relies on the apparent authority of such employees and acts in good faith. 36 Table of Contents Fluctuations in exchange rates could have a material adverse effect on our results of operations and the value of your investment.
We may have to take corporate or legal action, which could involve significant time and resources to resolve and divert management from our operations, and we may not be able to recover our loss due to such misuse or misappropriation if the third party relies on the apparent authority of such employees and acts in good faith.
If we are found to be in violation of cybersecurity requirements in China, the relevant governmental authorities may, at their discretion, conduct investigations, levy fines, or require us to change business practices in a manner materially adverse to our business.
If we are found to be in violation of cybersecurity requirements in China, the relevant governmental authorities may, at their discretion, conduct investigations, levy fines, or require us to change business practices in a manner materially adverse to our business. Any of these actions may disrupt our operations and adversely affect our business, results of operations and financial condition.
We may be subject to intellectual property infringement claims, which may be expensive to defend and may disrupt our business and operations. We cannot assure you that our operations or any aspects of our business do not or will not infringe upon or otherwise violate trademarks, patents, copyrights, know-how or other intellectual property rights held by third parties.
We cannot assure you that our operations or any aspects of our business do not or will not infringe upon or otherwise violate trademarks, patents, copyrights, know-how or other intellectual property rights held by third parties. From time to time, we may be subject to legal proceedings and claims relating to the intellectual property rights of others.
Under circumstances where our revenue from activities that produce passive income significantly increases relative to our revenue from activities that produce non-passive income, or where we determine not to deploy significant amounts of cash for active purposes, our risk of becoming classified as a PFIC may substantially increase.
Under circumstances where our revenue from activities that produce passive income significantly increases relative to our revenue from activities that produce non-passive income, or where we determine not to deploy significant amounts of cash for active purposes, our risk of becoming classified as a PFIC may substantially increase. 56 Table of Contents If we are a PFIC for any tax year during which a U.S.
Any actions by the Chinese government, including any decision to intervene or influence the operations of our PRC subsidiary or the affiliated entities or to exert control over any offering of securities conducted overseas and/or foreign investment in China-based issuers, may cause us to make material changes to the operations of our PRC subsidiary or the affiliated entities, may limit or completely hinder our ability to offer or continue to offer securities to investors, and may cause the value of such securities to significantly decline or be worthless.
These uncertainties may impede our contractual, property and procedural rights, which could adversely affect our business, financial condition and results of operations. 29 Table of Contents Any actions by the Chinese government, including any decision to intervene or influence the operations of our PRC subsidiary or the affiliated entities or to exert control over any offering of securities conducted overseas and/or foreign investment in China-based issuers, may cause us to make material changes to the operations of our PRC subsidiary or the affiliated entities, may limit or completely hinder our ability to offer or continue to offer securities to investors, and may cause the value of such securities to significantly decline or be worthless.
Under the circumstances that we decide to make an amendment to the deposit agreement that is disadvantageous to ADSs holders or terminate the deposit agreement, the ADSs holders may choose to sell their ADSs or surrender their ADSs and become direct holders of the underlying Class A ordinary shares, but will have no right to any compensation whatsoever.
Under the circumstances that we decide to make an amendment to the deposit agreement that is disadvantageous to ADSs holders or terminate the deposit agreement, the ADSs holders may choose to sell their ADSs or surrender their ADSs and become direct holders of the underlying Class A ordinary shares, but will have no right to any compensation whatsoever. 54 Table of Contents You may experience dilution of your holdings due to inability to participate in rights offerings.
The Overseas Listing Trial Measures also provides that if the issuer meets both the following criteria, the overseas securities offering and listing conducted by such issuer will be deemed as indirect overseas offering by PRC domestic companies: (1) 50% or more of any of the issuer’s operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent fiscal year is accounted for by domestic companies; and (2) the main parts of the issuer’s business activities are conducted in mainland China, or its main place(s) of business are located in mainland China, or the majority of senior management staff in charge of its business operations and management are PRC citizens or have their usual material events in mainland China. 30 Table of Contents The Overseas Listing Trial Measures further provides that, initial public offerings or listings in overseas markets by domestic companies, either in direct or indirect form shall be filed with the CSRC pursuant to the requirements of the Overseas Listing Trial Measures within three business days after the relevant application is submitted overseas.
The Overseas Listing Trial Measures also provides that if the issuer meets both the following criteria, the overseas securities offering and listing conducted by such issuer will be deemed as indirect overseas offering by PRC domestic companies: (1) 50% or more of any of the issuer’s operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent fiscal year is accounted for by domestic companies; and (2) the main parts of the issuer’s business activities are conducted in China, or its main place(s) of business are located in China, or the majority of senior management staff in charge of its business operations and management are PRC citizens or have their usual material events in China.
We had 55,379,583 Class A ordinary shares and 6,296,630 Class B ordinary shares outstanding as of April 10, 2023, including 18,430,669 Class A ordinary shares represented by ADSs. 50 Table of Contents All of the ADSs are freely tradable without restriction or further registration under the Securities Act of 1933, as amended, or the Securities Act.
We had 96,785,263 Class A ordinary shares and 6,296,630 Class B ordinary shares outstanding as of April 10, 2024, including 72,868,199 Class A ordinary shares represented by ADSs. 50 Table of Contents All of the ADSs are freely tradable without restriction or further registration under the Securities Act of 1933, as amended, or the Securities Act.
If the prices we pay for telecommunications and internet services rise significantly, our financial condition may be adversely affected. 25 Table of Contents We may not be able to adequately protect our intellectual property, which could cause us to be less competitive. We regard our intellectual property as critical to our success.
If the prices we pay for telecommunications and internet services rise significantly, our financial condition may be adversely affected. We may not be able to adequately protect our intellectual property, which could cause us to be less competitive. We regard our intellectual property as critical to our success. Such intellectual property includes trademarks, domain names, copyrights, know-how and proprietary technologies.
We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from requirements applicable to other public companies that are not emerging growth companies including, most significantly, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 for so long as we remain an emerging growth company.
We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from requirements applicable to other public companies that are not emerging growth companies including, most significantly, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 for so long as we remain an emerging growth company. 46 Table of Contents The JOBS Act also provides that an emerging growth company does not need to comply with any new or revised financial accounting standards until such date that a private company is otherwise required to comply with such new or revised accounting standards.
Holders of such intellectual property rights may seek to enforce such intellectual property rights against us in China, the United States or other jurisdictions. If any third-party infringement claims are brought against us, we may be forced to divert management’s time and other resources from our business and operations to defend against these claims, regardless of their merits.
If any third-party infringement claims are brought against us, we may be forced to divert management’s time and other resources from our business and operations to defend against these claims, regardless of their merits.
As a result, period-to-period comparisons of our results of operations may not be meaningful, especially given our limited operating history. 16 Table of Contents If the industries our solutions serve or the business of industry customers develop more slowly than we expect, or stagnate or shrink, our growth may slow or even stall, and our business, financial condition, results of operations and prospects could be materially and adversely affected.
If the industries our solutions serve or the business of industry customers develop more slowly than we expect, or stagnate or shrink, our growth may slow or even stall, and our business, financial condition, results of operations and prospects could be materially and adversely affected.
If it were determined, however, that we are not the owner of the VIE (and its subsidiaries) for U.S. federal income tax purposes, we would likely be treated as a PFIC for the current taxable year and any subsequent taxable year. 54 Table of Contents Assuming that we are the owner of the VIE (and its subsidiaries) for U.S. federal income tax purposes, and based upon our current and projected income and assets and projections as to the value of our assets, we believe it is reasonable to take the position that we were not classified as a PFIC for the taxable year ended December 31, 2022.
Assuming that we are the owner of the affiliated entities for U.S. federal income tax purposes, and based upon our current and projected income and assets and projections as to the value of our assets, we believe it is reasonable to take the position that we were not classified as a PFIC for the taxable year ended December 31, 2023.
We incurred net loss of RMB5.6 million, RMB191.2 million and RMB16.4 million (US$2.4 million) in 2020, 2021 and 2022, respectively. We recorded net cash generated from operating activities of RMB11.1 million and RMB74.7 million (US$10.8 million) in 2020 and 2022, respectively, and net cash used in operating activities of RMB30.9 million in 2021.
We incurred net loss of RMB191.2 million and RMB16.4 million in 2021 and 2022, respectively, and we recorded net income of RMB6.0 million (US$0.8 million) in 2023. We recorded net cash generated from operating activities of RMB74.7 million in 2022, and net cash used in operating activities of RMB30.9 million and RMB97.3 million (US$13.7 million) in 2021 and 2023, respectively.
We may from time to time enter into strategic partnerships or cooperation agreements with other businesses to expand our platform. For instance, for our housekeeping and accommodation solutions, we have established collaboration with a local village in China since 2023, so as to expand our coverage of rural B&Bs.
For instance, for our housekeeping and accommodation solutions, we have established collaboration with a local village in China since 2023, so as to expand our coverage of rural B&Bs.
The PCAOB continues to demand complete access in mainland China and Hong Kong moving forward and is making plans to conduct regular inspections in early 2023 and beyond, as well as to continue pursuing ongoing investigations and initiate new investigations as needed.
The PCAOB continues to demand complete access in mainland China and Hong Kong moving forward and will continue pursuing ongoing investigations and initiate new investigations as needed.
Mergers or strategic alliances among our current or potential competitors may present additional challenges. 15 Table of Contents Our industry customers are not obligated to use our solutions on an exclusive basis. For example, on-demand delivery platforms may engage multiple service suppliers to fulfill their services to consumers in a single city.
Our industry customers are not obligated to use our solutions on an exclusive basis. For example, on-demand delivery platforms may engage multiple service suppliers to fulfill their services to consumers in a single city.
Complying with the requirements of the above-mentioned regulations and other relevant rules to complete such transactions could be time-consuming, and any required approval processes, including obtaining approval from MOFCOM or its local counterparts may delay or inhibit our ability to complete such transactions, which could affect our ability to expand our business or maintain our market share.
Complying with the requirements of the above-mentioned regulations and other relevant rules to complete such transactions could be time-consuming, and any required approval processes, including obtaining approval from MOFCOM or its local counterparts may delay or inhibit our ability to complete such transactions, which could affect our ability to expand our business or maintain our market share. 38 Table of Contents PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may affect our ability to capitalize or otherwise fund our PRC operations.
However, the information we are required to file with or furnish to the SEC will be less extensive and less timely than that required to be filed with the SEC by U.S. domestic issuers.
Press releases relating to financial results and material events will also be furnished to the SEC on Form 6-K. However, the information we are required to file with or furnish to the SEC will be less extensive and less timely than that required to be filed with the SEC by U.S. domestic issuers.
Such exclusive jurisdiction may, among other things, discourage lawsuits against or involving us or the depositary, lead to increased costs to bring a claim or limit your ability to bring a claim in a judicial forum you find favorable. 53 Table of Contents In addition, the depositary may, in its sole discretion, require that any claim or dispute arising from the relationship created by the deposit agreement, including any claims under the U.S. federal securities laws and claims not in connection with our initial public offering in July 2020, be referred to and finally settled by an arbitration conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association.
In addition, the depositary may, in its sole discretion, require that any claim or dispute arising from the relationship created by the deposit agreement, including any claims under the U.S. federal securities laws and claims not in connection with our initial public offering in July 2020, be referred to and finally settled by an arbitration conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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On the one hand, each delivery rider on our platform, after being assigned to a certain industry customer, obtains access to that customer’s mobile app and dispatch portal to receive and complete delivery orders. We, on the other, offer onboarding logistics support and training, and manage delivery riders on our platform through Quhuo+ .
On the one hand, each delivery rider on our platform, after being assigned to a certain industry customer, obtains access to that customer’s mobile app and dispatch portal to receive and complete delivery orders. We, on the other hand, offer onboarding logistics support and training, and manage delivery riders on our platform through Quhuo+ .
Pursuant to the power of attorney dated as of August 23, 2019 executed and issued by the VIE’s shareholders, each of them irrevocably appointed and authorized WFOE or its designee(s) to act on their respective behalf as exclusive agent and attorney-in-fact, to the extent permitted by PRC law, with respect to all rights of shareholders concerning all the equity interest held by each of these shareholders in the VIE, including but not limited to the power to vote on its behalf on all matters of the VIE requiring shareholder approval under PRC laws and regulations and the articles of association of the VIE, rights to information relating to all business aspects of the VIE, proposing to convene or attend shareholder meetings, signing the resolutions and minutes of such meetings, exercising all the other rights as shareholders, such as nomination rights, appointment rights, the right to receive dividends and the right to sell, transfer, pledge or dispose of all the equity held in part or in whole. 79 Table of Contents Equity Interest Pledge Agreements .
Pursuant to the power of attorney dated as of August 23, 2019 executed and issued by the VIE’s shareholders, each of them irrevocably appointed and authorized WFOE or its designee(s) to act on their respective behalf as exclusive agent and attorney-in-fact, to the extent permitted by PRC law, with respect to all rights of shareholders concerning all the equity interest held by each of these shareholders in the VIE, including but not limited to the power to vote on its behalf on all matters of the VIE requiring shareholder approval under PRC laws and regulations and the articles of association of the VIE, rights to information relating to all business aspects of the VIE, proposing to convene or attend shareholder meetings, signing the resolutions and minutes of such meetings, exercising all the other rights as shareholders, such as nomination rights, appointment rights, the right to receive dividends and the right to sell, transfer, pledge or dispose of all the equity held in part or in whole. 81 Table of Contents Equity Interest Pledge Agreements .
Where the amount of investment made by each investor is the same, one of the investors shall be selected by consensus to apply for the approval or record-filing. 76 Table of Contents Regulations on Foreign Debt A loan made by a foreign entity as direct or indirect shareholder in a foreign-invested enterprise is considered to be foreign debt in China and is regulated by various laws and regulations, including the Regulation of the People’s Republic of China on Foreign Exchange Administration, the Interim Provisions on the Management of Foreign Debts, the Statistical Monitoring of Foreign Debts Tentative Provisions, and the Administrative Measures for Registration of Foreign Debts.
Where the amount of investment made by each investor is the same, one of the investors shall be selected by consensus to apply for the approval or record-filing. 78 Table of Contents Regulations on Foreign Debt A loan made by a foreign entity as direct or indirect shareholder in a foreign-invested enterprise is considered to be foreign debt in China and is regulated by various laws and regulations, including the Regulation of the People’s Republic of China on Foreign Exchange Administration, the Interim Provisions on the Management of Foreign Debts, the Statistical Monitoring of Foreign Debts Tentative Provisions, and the Administrative Measures for Registration of Foreign Debts.
As of December 31, 2022, our industry customers comprised many top market players in their respective industries, such as Meituan and Ele.me in the on-demand delivery industry and other chain restaurants such as KFC , Didi and Hello in the mobility-as-a-service sector (including bike-sharing and ride-hailing), and Hilton Hotels and Resorts , Kingkey Group and Marriott International in the hotel industry.
As of December 31, 2023, our industry customers comprised many top market players in their respective industries, such as Meituan and Ele.me in the on-demand delivery industry and other chain restaurants such as KFC , Didi and Hello in the mobility-as-a-service sector (including bike-sharing and ride-hailing), and Hilton Hotels and Resorts , Kingkey Group and Marriott International in the hotel industry.
SAT Bulletin 45 provides for procedures and administration details of determination on resident status and administration on post-determination matters. 71 Table of Contents Value-added tax The Provisional Regulations of the PRC on Value-added Tax, the VAT Regulation, were promulgated by the State Council on December 13, 1993 and came into effect on January 1, 1994 which were subsequently amended from time to time.
SAT Bulletin 45 provides for procedures and administration details of determination on resident status and administration on post-determination matters. 74 Table of Contents Value-added tax The Provisional Regulations of the PRC on Value-added Tax, the VAT Regulation, were promulgated by the State Council on December 13, 1993 and came into effect on January 1, 1994 which were subsequently amended from time to time.
As of the date of this annual report, we hold or otherwise have legal right to use 47 registered copyrights for software and 48 registered trademarks in China. We intend to protect our technology and proprietary rights vigorously, but there can be no assurance that our efforts will be successful.
As of the date of this annual report, we hold or otherwise have legal right to use 49 registered copyrights for software and 48 registered trademarks in China. We intend to protect our technology and proprietary rights vigorously, but there can be no assurance that our efforts will be successful.
Mobility service solutions Our mobility service solutions comprise ride-hailing solutions, shared-bike maintenance solutions and freight service solutions. Ride-hailing solutions We launched our ride-hailing solutions in October 2018. Under the current regulatory regime in China, ride-hailing drivers are required to obtain licenses both for themselves and for the vehicles they steer.
Mobility service solutions Our mobility service solutions comprise ride-hailing solutions, shared-bike maintenance solutions, freight service solutions, and vehicle export solutions. Ride-hailing solutions We launched our ride-hailing solutions in October 2018. Under the current regulatory regime in China, ride-hailing drivers are required to obtain licenses both for themselves and for the vehicles they steer.
We and the VIE are required to hold certain licenses and permits and to make certain filings with the relevant PRC governmental authorities in connection with various aspects of our and the VIE’s business, including the following: Value-added Telecommunications Business Operating Licenses The PRC Telecommunications Regulations, or the Telecom Regulations, which were issued by the State Council in 2000 and were most recently amended in February 2016 are the primary governing law on telecommunications services.
We and the VIE are required to hold certain licenses and permits and to make certain filings with the relevant PRC governmental authorities in connection with various aspects of our and the VIE’s business, including the following: 67 Table of Contents Value-added Telecommunications Business Operating Licenses The PRC Telecommunications Regulations, or the Telecom Regulations, which were issued by the State Council in 2000 and were most recently amended in February 2016 are the primary governing law on telecommunications services.
Our agent for service of process in the United States is Cogency Global Inc., located at 122 East 42nd Street, 18th Floor, New York, New York 10168. 55 Table of Contents The SEC maintains an Internet site, http://www.sec/gov, which contains reports, proxy and information statements, and other information regarding us. We also maintain an Internet site, http://ir.quhuo.cn/, for investors’ information.
Our agent for service of process in the United States is Cogency Global Inc., located at 122 East 42nd Street, 18th Floor, New York, New York 10168. The SEC maintains an Internet site, http://www.sec/gov, which contains reports, proxy and information statements, and other information regarding us. We also maintain an Internet site, http://ir.quhuo.cn/, for investors’ information.
The conversion of Renminbi into other currencies and remittance of the converted foreign currency outside the PRC for of capital account items, such as direct equity investments, loans and repatriation of investment, requires the prior approval from SAFE or its local office. 74 Table of Contents Payments for transactions that take place within the PRC must be made in Renminbi.
The conversion of Renminbi into other currencies and remittance of the converted foreign currency outside the PRC for of capital account items, such as direct equity investments, loans and repatriation of investment, requires the prior approval from SAFE or its local office. Payments for transactions that take place within the PRC must be made in Renminbi.
In the opinion of Commerce & Finance Law Offices, our PRC legal counsel, the ownership structures of the VIE and WFOE currently do not result in any violation of applicable PRC laws and regulations currently in effect; and the contractual arrangements between WFOE, the VIE and its shareholders governed by PRC law currently are valid and legally binding on each party thereto and enforceable in accordance with the terms thereof, subject as to enforceability to applicable bankruptcy, insolvency, moratorium, reorganization and similar laws affecting creditors’ rights generally, the discretion of relevant governmental authorities in exercising their authority in connection with the interpretation and implementation thereof, and the application of relevant PRC laws and policies thereto, and to general equity principles. 80 Table of Contents However, our PRC legal counsel has also advised us that there are substantial uncertainties regarding the interpretation and application of current and future PRC laws, regulations and rules.
In the opinion of Yuan Tai Law Offices, our PRC legal counsel, the ownership structures of the VIE and WFOE currently do not result in any violation of applicable PRC laws and regulations currently in effect; and the contractual arrangements between WFOE, the VIE and its shareholders governed by PRC law currently are valid and legally binding on each party thereto and enforceable in accordance with the terms thereof, subject as to enforceability to applicable bankruptcy, insolvency, moratorium, reorganization and similar laws affecting creditors’ rights generally, the discretion of relevant governmental authorities in exercising their authority in connection with the interpretation and implementation thereof, and the application of relevant PRC laws and policies thereto, and to general equity principles. 82 Table of Contents However, our PRC legal counsel has also advised us that there are substantial uncertainties regarding the interpretation and application of current and future PRC laws, regulations and rules.
No entity or individual within the territory of the PRC may provide foreign judicial or law enforcement authorities with the data stored within the territory of the PRC without the approval of competent PRC authorities. In April 2020, the CAC and several other administrations jointly promulgated the Cybersecurity Review Measures, which became effective on June 1, 2020.
No entity or individual within the territory of the PRC may provide foreign judicial or law enforcement authorities with the data stored within the territory of the PRC without the approval of competent PRC authorities. 70 Table of Contents In April 2020, the CAC and several other administrations jointly promulgated the Cybersecurity Review Measures, which became effective on June 1, 2020.
We currently provide the following industry-tailored operational solutions, including on-demand delivery solutions, mobility service solutions, and housekeeping and accommodation solutions. On-demand delivery solutions We launched our on-demand delivery solutions in February 2013 with a focus on prepared food, and recently expanded our service scope to the delivery of other items, such as grocery and fresh food.
We currently provide the following industry-tailored operational solutions, including on-demand delivery solutions, mobility service solutions, and housekeeping and accommodation solutions. 59 Table of Contents On-demand delivery solutions We launched our on-demand delivery solutions in February 2013 with a focus on prepared food, and recently expanded our service scope to the delivery of other items, such as grocery and fresh food.
Risk Factors—Risks Related to Our Business—We have limited insurance coverage which could expose us to significant costs and business disruption.” Regulations This section sets forth a summary of the most significant rules and regulations that affect our business and operations in China.
Risk Factors—Risks Related to Our Business—We have limited insurance coverage which could expose us to significant costs and business disruption.” 65 Table of Contents Regulations This section sets forth a summary of the most significant rules and regulations that affect our business and operations in China.
With our on-demand delivery solutions, industry customers are able to scale up their delivery coverage quickly and complete additional deliveries at low incremental costs. 57 Table of Contents Our industry customers typically divide their intra-city delivery network into a number of delivery areas.
With our on-demand delivery solutions, industry customers are able to scale up their delivery coverage quickly and complete additional deliveries at low incremental costs. Our industry customers typically divide their intra-city delivery network into a number of delivery areas.
In addition, we have implemented various measures to enhance the safety of delivery riders on our platform, including assistance in obtaining insurance and handling emergency situations. The following flowchart illustrates the typical transaction process of our on-demand delivery solutions: 58 Table of Contents As of December 31, 2022, we delivered our on-demand delivery solutions in 85 cities in China.
In addition, we have implemented various measures to enhance the safety of delivery riders on our platform, including assistance in obtaining insurance and handling emergency situations. 60 Table of Contents The following flowchart illustrates the typical transaction process of our on-demand delivery solutions: As of December 31, 2023, we delivered our on-demand delivery solutions in 85 cities in China.
In addition to inviting qualified ride-hailing drivers to join us, we also motivate workers with driving skills on our platform to obtain the required permit so that they could become qualified ride-hailing drivers and take part in our ride-hailing solutions. As of December 31, 2022, we had over 400 full-time ride-hailing drivers on our platform.
In addition to inviting qualified ride-hailing drivers to join us, we also motivate workers with driving skills on our platform to obtain the required permit so that they could become qualified ride-hailing drivers and take part in our ride-hailing solutions. As of December 31, 2023, we had over 490 full-time ride-hailing drivers on our platform.
We had reached 109 cities across 30 provinces, municipalities and autonomous regions in China as of December 31, 2022. To the workers on our platform, we provide them with diversified, flexible earning opportunities. We empower workers with minimal work experience to begin their career and progress with us.
We had reached 123 cities across 30 provinces, municipalities and autonomous regions in China as of December 31, 2023. To the workers on our platform, we provide them with diversified, flexible earning opportunities. We empower workers with minimal work experience to begin their career and progress with us.
We also encourage workers on our platform to bring in their friends, relatives and acquaintances to continually and organically expand our workforce network and minimize worker turnovers, making our platform more stable. 56 Table of Contents Leveraging Quhuo+ , our proprietary technology infrastructure, we are able to centralize our operational management and streamline our solution process.
We also encourage workers on our platform to bring in their friends, relatives and acquaintances to continually and organically expand our workforce network and minimize worker turnovers, making our platform more stable. Leveraging Quhuo+ , our proprietary technology infrastructure, we are able to centralize our operational management and streamline our solution process.
We believe our operational managers are able to help team leaders become more adaptive to the management role and develop and improve their effective managerial skills by applying the data and functions on Quhuo+ . As of December 31, 2022, we had a team of 396 operational managers, all employed by us.
We believe our operational managers are able to help team leaders become more adaptive to the management role and develop and improve their effective managerial skills by applying the data and functions on Quhuo+ . As of December 31, 2023, we had a team of 323 operational managers, all employed by us.
Profits retained from prior fiscal years may be distributed together with distributable profits from the current fiscal year. 77 Table of Contents C.
Profits retained from prior fiscal years may be distributed together with distributable profits from the current fiscal year. 79 Table of Contents C.
The telephone number of our principal executive office is (+86-10) 5923 6208. Investors should contact us for any inquiries through the address and telephone number of our principal executive office. Our main website is www.quhuo.cn. The information contained on our website is not a part of this annual report.
The telephone number of our principal executive office is (+86-10) 8576 5328. Investors should contact us for any inquiries through the address and telephone number of our principal executive office. Our main website is www.quhuo.cn. The information contained on our website is not a part of this annual report.
The service fees comprise base 60 Table of Contents pay calculated based on the number of fulfilled orders and adjustments calculated based on other criteria that follow the KPIs required by our industry customers.
The service fees comprise base pay calculated based on the number of fulfilled orders and adjustments calculated based on other criteria that follow the KPIs required by our industry customers.
As of December 31, 2022, we leased properties in other cities with an aggregate of over 6,300 square meters to support our business operations, with lease terms primarily ranging from one to two years. We lease all of the facilities that we currently occupy, which we believe are adequate to meet our needs for the foreseeable future. ​ ITEM 4A.
As of December 31, 2023, we leased properties in other cities with an aggregate of over 7,000 square meters to support our business operations, with lease terms primarily ranging from one to two years. We lease all of the facilities that we currently occupy, which we believe are adequate to meet our needs for the foreseeable future. ​ ITEM 4A.
PRC ​ Our Contractual Arrangements Current PRC laws and regulations impose restrictions or prohibitions on foreign ownership and investment in companies that engage in value-added telecommunications services. We are a company registered in the Cayman Islands, and WFOE, our PRC subsidiary, is a foreign-invested enterprise under PRC laws.
PRC Hainan Quxing Holdings Co., Ltd. PRC ​ Our Contractual Arrangements Current PRC laws and regulations impose restrictions or prohibitions on foreign ownership and investment in companies that engage in value-added telecommunications services. We are a company registered in the Cayman Islands, and WFOE, our PRC subsidiary, is a foreign-invested enterprise under PRC laws.
In the three months ended December 31, 2021 and 2022, we had approximately 59,400 and 57,000 average monthly active workers on our platform, respectively. We believe that the size of our workforce allows us to better serve our industry customers when they enter new geographical markets or new on-demand consumer service industries.
In the three months ended December 31, 2022 and 2023, we had approximately 57,000 and 53,500 average monthly active workers on our platform, respectively. We believe that the size of our workforce allows us to better serve our industry customers when they enter new geographical markets or new on-demand consumer service industries.
As of December 31, 2022, our geographic footprint reached 109 cities across 30 provinces, municipalities and autonomous regions in China, among which we provided solutions for multiple industries in 33 cities. We generally focus on each city’s primary business districts and then gradually expand to adjacent areas to optimize our operational efficiency and cost management.
As of December 31, 2023, our geographic footprint reached 123 cities across 30 provinces, municipalities and autonomous regions in China, among which we provided solutions for multiple industries in 39 cities. We generally focus on each city’s primary business districts and then gradually expand to adjacent areas to optimize our operational efficiency and cost management.
We derive revenue from service fees paid by bike-sharing companies based on specific indicators for maintenance and transportation services, respectively. As of December 31, 2022, we delivered shared-bike maintenance solutions in 41 cities. 59 Table of Contents Freight service solutions We commenced our freight service solutions for industry customers in July 2021 by fulfilling end-to-end intra-city and long-distance transportation orders.
We derive revenue from service fees paid by bike-sharing companies based on specific indicators for maintenance and transportation services, respectively. As of December 31, 2023, we delivered shared-bike maintenance solutions in 24 cities. Freight service solutions We commenced our freight service solutions for industry customers in July 2021 by fulfilling end-to-end intra-city and long-distance transportation orders.
As of December 31, 2022, we delivered our ride-hailing solutions to a major ride-hailing company in four cities. Drivers on our platform fulfilled approximately 1.6 million rides in 2022. Shared-bike maintenance solutions We launched our shared-bike maintenance solutions in January 2018 to address the imminent demand for maintenance and distribution services from bike-sharing companies.
As of December 31, 2023, we delivered our ride-hailing solutions to a major ride-hailing company in three cities. Drivers on our platform fulfilled approximately 1.6 million rides in 2023. 61 Table of Contents Shared-bike maintenance solutions We launched our shared-bike maintenance solutions in January 2018 to address the imminent demand for maintenance and distribution services from bike-sharing companies.
We encourage workers on our platform with referral bonuses to bring in their relatives, friends and acquaintances to join our platform for our housekeeping solutions, which we believe helps us grow our workforce organically and enhance the stability and sustainability of our worker community.
Housekeeping and accommodation solutions and other services We launched our housekeeping solutions in January 2019. We encourage workers on our platform with referral bonuses to bring in their relatives, friends and acquaintances to join our platform for our housekeeping solutions, which we believe helps us grow our workforce organically and enhance the stability and sustainability of our worker community.
In the three months ended December 31, 2020, 2021 and 2022, our average monthly delivery riders were over 48,900, 52,800 and 48,700 respectively, and the average monthly delivery orders fulfilled by those delivery riders were approximately 36.5 million, 52.8 million and 47.5 million, respectively.
In the three months ended December 31, 2021, 2022 and 2023, our average monthly delivery riders were over 52,800, 48,700 and 45,000 respectively, and the average monthly delivery orders fulfilled by those delivery riders were approximately 52.8 million, 47.5 million and 48.8 million, respectively.
Property, plants and equipment Our principal executive offices are located in Beijing, China, where we lease premises of approximately 1,280 square meters, with a lease term of two years.
Property, plants and equipment Our principal executive offices are located in Beijing, China, where we lease premises of approximately 995 square meters, with a lease term of three years.
Furthermore, as we have expanded our customer portfolio and rendered services to B&Bs, we provide accommodation solutions, primarily focusing on facilitating B&B operations for our customers. We derive revenue primarily from service fees paid by industry customers based on the number of fulfilled orders.
As of December 31, 2023, we delivered housekeeping solutions in 57 cities. Furthermore, as we have expanded our customer portfolio and rendered services to B&Bs, we provide accommodation solutions, primarily focusing on facilitating B&B operations for our customers. We derive revenue primarily from service fees paid by industry customers based on the number of fulfilled orders.
Our principal executive offices are located at 3rd Floor, Block A, Tonghui Building, No. 1132 Huihe South Street, Chaoyang District, Beijing, People’s Republic of China. Our registered office in the Cayman Islands is located at the offices of Maples Corporate Services Limited at PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands.
Our principal executive offices are located at 3F, Building A, Xin'anmen, No. 1 South Bank, Huihe South Street, Chaoyang District, Beijing, People’s Republic of China. Our registered office in the Cayman Islands is located at the offices of Maples Corporate Services Limited at PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands.
We filed our annual report on Form 20-F for the fiscal year ended December 31, 2021 on September 9, 2022. B. Business Overview We are a leading gig economy platform focusing on community-centered services in China. We operate a platform of large, flexible and standardized workforce. As of December 31, 2022, we had 540,000 registered workers on our platform.
We filed our annual report on Form 20-F for the fiscal year ended December 31, 2021 on September 9, 2022. B. Business Overview We are a leading gig economy platform focusing on local life services in China. We operate a platform of large, flexible and standardized workforce.
The number of our average monthly active workers increased from approximately 54,500 in the three months ended December 31, 2020 to 59,400 in the three months ended December 31, 2021, and slightly decreased to 57,000 in the three months ended December 31, 2022.
The number of our average monthly active workers decreased from approximately 59,400 in the three months ended December 31, 2021 to 57,000 in the three months ended December 31, 2022, and further to 53,500 in the three months ended December 31, 2023.
The applicants will become the holder of such domain names upon the completion of the registration procedure. 68 Table of Contents Copyright The PRC Copyright Law, or the Copyright Law, which took effect on June 1, 1991 and was latest amended in 2020, provides that Chinese citizens, legal persons, or other organizations shall, whether published or not, own copyright in their copyrightable works, which include, among others, works of literature, art, science, social science, engineering technology and computer software.
Copyright The PRC Copyright Law, or the Copyright Law, which took effect on June 1, 1991 and was latest amended in 2020, provides that Chinese citizens, legal persons, or other organizations shall, whether published or not, own copyright in their copyrightable works, which include, among others, works of literature, art, science, social science, engineering technology and computer software.
According to the Foreign Investment Law, the State Council will publish or approve to publish a catalogue for special administrative measures, or the “negative list.” The Foreign Investment Law grants national treatment to foreign invested entities, except for those foreign invested entities that operate in industries deemed to be either “restricted” or “prohibited” in the “negative list.” The Foreign Investment Law provides that foreign invested entities shall not operate foreign prohibited industries and foreign invested entities operating in foreign restricted industries shall meet the investment conditions stipulated under the negative list.
The Foreign Investment Law establishes the basic framework for the access to, and the promotion, protection and administration of foreign investments in view of investment protection and fair competition. 66 Table of Contents According to the Foreign Investment Law, the State Council will publish or approve to publish a catalogue for special administrative measures, or the “negative list.” The Foreign Investment Law grants national treatment to foreign invested entities, except for those foreign invested entities that operate in industries deemed to be either “restricted” or “prohibited” in the “negative list.” The Foreign Investment Law provides that foreign invested entities shall not operate foreign prohibited industries and foreign invested entities operating in foreign restricted industries shall meet the investment conditions stipulated under the negative list.
Applicants for registration of domain names must provide the true, accurate and complete information of their identities to domain name registration service institutions.
Applicants for registration of domain names must provide the true, accurate and complete information of their identities to domain name registration service institutions. The applicants will become the holder of such domain names upon the completion of the registration procedure.
In addition, the Interpretations of the Supreme People’s Court and the Supreme People’s Procuratorate of the PRC on Several Issues Concerning the Application of Law in Handling Criminal Cases of Infringing Personal Information, issued in May 2017 and implemented in June 2017, clarified certain standards for the conviction and sentencing of the criminals in relation to personal information infringement. 66 Table of Contents In November 2016, the SCNPC promulgated the Cyber Security Law of the PRC, or the Cyber Security Law, which became effective on June 1, 2017.
In addition, the Interpretations of the Supreme People’s Court and the Supreme People’s Procuratorate of the PRC on Several Issues Concerning the Application of Law in Handling Criminal Cases of Infringing Personal Information, issued in May 2017 and implemented in June 2017, clarified certain standards for the conviction and sentencing of the criminals in relation to personal information infringement.
PRC Ningbo Dagong Network Technology Co., Ltd. PRC Jiangxi Youke Automobile Rental Service Co., Ltd. PRC Haikou Chengtu Network Technology Co., Ltd PRC Lailai Information Technology (Shenzhen) Co., Ltd. PRC Hainan Xinying Technology Co., Ltd. PRC Hainan Quhuo Technology Co., Ltd. PRC Hainan Quxing Holdings Co., Ltd.
PRC Nantong Runda Marketing Planning Co., Ltd. PRC Shanghai Yijida Network Technology Co., Ltd. PRC Ningbo Dagong Network Technology Co., Ltd. PRC Jiangxi Youke Automobile Rental Service Co., Ltd. PRC Haikou Chengtu Network Technology Co., Ltd PRC Lailai Information Technology (Shenzhen) Co., Ltd. PRC Hainan Xinying Technology Co., Ltd. PRC Hainan Quhuo Technology Co., Ltd.
Employers are allowed to use dispatched workers for temporary, auxiliary or substitutive positions, and the number of dispatched workers may not exceed 10% of the total number of employees. 69 Table of Contents PRC Civil Code Pursuant to the PRC Civil Code, which was promulgated by the National People’s Congress on May 28, 2020 and became effective on January 1, 2021, employers shall bear tortious liability for any injury or damage caused to other people by their employees in the course of their work.
PRC Civil Code Pursuant to the PRC Civil Code, which was promulgated by the National People’s Congress on May 28, 2020 and became effective on January 1, 2021, employers shall bear tortious liability for any injury or damage caused to other people by their employees in the course of their work.
Our Geographic Footprint We operate across multiple industries within a single city in an efficient manner as we consolidate the management of each business line based on Quhuo+ and our offline business support team.
In addition, we continuously tap into new industries to provide diversified, flexible earning opportunities for workers on our platform. Our Geographic Footprint We operate across multiple industries within a single city in an efficient manner as we consolidate the management of each business line based on Quhuo+ and our offline business support team.
We take the privacy of personal data and confidential information seriously and have implemented an internal data security management policy. We have also implemented a combination of various industry-standard encryption algorithms to protect sensitive personal information. In addition, we utilize a system of firewalls to prevent unauthorized access to our internal systems.
We also have access to certain operating data related to our performance from industry customers. We take the privacy of personal data and confidential information seriously and have implemented an internal data security management policy. We have also implemented a combination of various industry-standard encryption algorithms to protect sensitive personal information.
In January 2022, we acquired the remaining 45.78% equity interest in Lailai. 78 Table of Contents The following table sets out the details of our subsidiaries and the affiliated entities that are significant to us. Subsidiaries Place of Incorporation Quhuo Investment Limited BVI Quhuo Technology Investment (Hong Kong) Limited Hong Kong Beijing Quhuo Information Technology Co., Ltd.
In January 2022, we acquired the remaining 45.78% equity interest in Lailai. 80 Table of Contents The following table sets out the details of our subsidiaries and the affiliated entities that are significant to us.
(5) In November 2020, we acquired a 54.22% equity interest in Lailai Information Technology (Shenzhen) Co., Ltd., an on-demand workforce platform that specializes in housekeeping solutions for hotels and B&Bs.
(5) The remaining 45% of the equity interest of Haikou Chengtu Network Technology Co., Ltd. is owned by three independent third parties. (6) In November 2020, we acquired a 54.22% equity interest in Lailai Information Technology (Shenzhen) Co., Ltd., an on-demand workforce platform that specializes in housekeeping solutions for hotels and B&Bs.
We primarily utilize third-party cloud service providers to host our network infrastructure for core operational functionality, data backup, and artificial intelligence application. Data Privacy and Security We process a large amount of data from workers on our platform. We also have access to certain operating data related to our performance from industry customers.
We have developed reliable and stable network infrastructure to ensure high availability and a low risk of downtime. We primarily utilize third-party cloud service providers to host our network infrastructure for core operational functionality, data backup, and artificial intelligence application. Data Privacy and Security We process a large amount of data from workers on our platform.
This circular further provides that applicants who intend to prove his or her status of the “beneficial owner” shall submit the relevant documents to the relevant tax bureau according to the Announcement on Issuing the Measures for the Administration of Non-Resident Taxpayers’ Enjoyment of the Treatment under Tax Agreements. 72 Table of Contents On February 3, 2015, SAT issued the Bulletin on Issues of Enterprise Income Tax on Indirect Transfers of Assets by Non-PRC Resident Enterprises, or SAT Bulletin 7.
This circular further provides that applicants who intend to prove his or her status of the “beneficial owner” shall submit the relevant documents to the relevant tax bureau according to the Announcement on Issuing the Measures for the Administration of Non-Resident Taxpayers’ Enjoyment of the Treatment under Tax Agreements.
Going forward, we plan to enhance our solution offerings with AI chatbot technologies by introducing Baidu’s ERNIE Bot to our SaaS system, which is expected to assist industry customers for our housekeeping and accommodation solutions with online information maintenance, smart check-in and self-check-out processes for guests.
Going forward, we plan to enhance our solution offerings with AI chatbot technologies by introducing Baidu’s ERNIE Bot to our SaaS system, which is expected to assist industry customers for our housekeeping and accommodation solutions with online information maintenance, smart check-in and self-check-out processes for guests. 62 Table of Contents We derive revenue from service fees paid by our industry customers based on service hours and/or the number of fulfilled orders, subject to KPI-based adjustments.
Quhuo+ We have developed Quhuo+ to centralize our operational management and streamline our solution process by eliminating middle-layer information gathering and reporting, which we believe is a key differentiator from many competitors that utilize a traditional model featuring multiple layers of management.
As their past job performance and other work information can be tracked down and retrieved, we are able to streamline the process for returnees. 63 Table of Contents Quhuo+ We have developed Quhuo+ to centralize our operational management and streamline our solution process by eliminating middle-layer information gathering and reporting, which we believe is a key differentiator from many competitors that utilize a traditional model featuring multiple layers of management.
Interim Provision on Labor Dispatch Pursuant to the Interim Provisions on Labor Dispatch promulgated by the Ministry of Human Resources and Social Security on January 24, 2014 and became effective on March 1, 2014, dispatched workers are entitled to equal pay with full-time employees for equal work.
In addition, employee wages shall be no lower than local standards on minimum wages and must be paid to employees in a timely manner. 72 Table of Contents Interim Provision on Labor Dispatch Pursuant to the Interim Provisions on Labor Dispatch promulgated by the Ministry of Human Resources and Social Security on January 24, 2014 and became effective on March 1, 2014, dispatched workers are entitled to equal pay with full-time employees for equal work.
The infringing party may also be held liable for the right holder’s damages, which will be equal to the gains obtained by the infringing party or the losses suffered by the right holder as a result of the infringement, including reasonable expenses incurred by the right holder for stopping the infringement.
The infringing party may also be held liable for the right holder’s damages, which will be equal to the gains obtained by the infringing party or the losses suffered by the right holder as a result of the infringement, including reasonable expenses incurred by the right holder for stopping the infringement. 71 Table of Contents Domain name MIIT promulgated the Measures on Administration of Internet Domain Names on August 24, 2017, which took effect on November 1, 2017.
We provide tech-enabled, end-to-end operational solutions primarily to consumer service businesses, including on-demand delivery solutions, mobility service solutions, housekeeping and accommodation solutions, and other services.
As of December 31, 2023, we had approximately 700,000 registered workers on our platform. We provide tech-enabled, end-to-end operational solutions primarily to consumer service businesses, including on-demand delivery solutions, mobility service solutions, housekeeping and accommodation solutions, and other services.
Offshore investment Under the Circular of the State Administration of Foreign Exchange on Issues Concerning the Foreign Exchange Administration over the Overseas Investment and Financing and Round-trip Investment by Domestic Residents via Special Purpose Vehicles, or SAFE Circular 37, issued by SAFE and effective on July 4, 2014, PRC residents are required to register with the local SAFE branch prior to contributing assets or equity interests in an offshore special purpose vehicle, or the SPV, which is defined as offshore enterprises directly established or indirectly controlled by PRC residents for investment and financing purposes, with the enterprise assets or interests they hold in China or overseas.
Pursuant to the Circular on Further Promoting the Cross-border Trade and Investment Facilitation, or SAFE Circular 28, which was promulgated by SAFE on October 23, 2019, non-investment foreign-invested companies are allowed to conduct domestic equity investment with settled capital from foreign exchange if such investment projects are true and compliant and do not otherwise violate the existing Special Management Measures (Negative List) for the Access of Foreign Investment. 77 Table of Contents Offshore investment Under the Circular of the State Administration of Foreign Exchange on Issues Concerning the Foreign Exchange Administration over the Overseas Investment and Financing and Round-trip Investment by Domestic Residents via Special Purpose Vehicles, or SAFE Circular 37, issued by SAFE and effective on July 4, 2014, PRC residents are required to register with the local SAFE branch prior to contributing assets or equity interests in an offshore special purpose vehicle, or the SPV, which is defined as offshore enterprises directly established or indirectly controlled by PRC residents for investment and financing purposes, with the enterprise assets or interests they hold in China or overseas.
The Draft Overseas Listing Regulations also set forth certain regulatory red lines for overseas offerings and listings by PRC enterprises. 73 Table of Contents On February 17, 2023, the CSRC promulgated Trial Administrative Measures of the Overseas Securities Offering and Listing by Domestic Companies, or the Overseas Listing Trial Measures, and five supporting guidelines, which became effective on March 31, 2023.
Regulations Relating to Overseas Listing On February 17, 2023, the CSRC promulgated Trial Administrative Measures of the Overseas Securities Offering and Listing by Domestic Companies, or the Overseas Listing Trial Measures, and five supporting guidelines, which became effective on March 31, 2023.
We deploy truck fleets to serve our industry customers and pay service fees to such fleets. As of December 31, 2022, we delivered our freight service solutions to two industry customers. We fulfilled approximately 54,100 orders in 2022. Housekeeping and accommodation solutions and other services We launched our housekeeping solutions in January 2019.
We deploy truck fleets to serve our industry customers and pay service fees to such fleets. As of December 31, 2023, we delivered our freight service solutions to one industry customer. We fulfilled approximately 70,900 orders in 2023.
We believe that we can compete favorably on the basis of: ● capability to attract, retain and manage a sufficient number of workers; ● capability to establish and maintain partnerships with industry customers; ● technology infrastructure and data analytics capabilities; ● scope and quality of our solution offerings; ● industry-specific know-how and operational experience; ● geographical coverage; ● and brand recognition. 62 Table of Contents Intellectual Property We regard our trademarks, domain names, know-how, proprietary technologies and other similar intellectual properties as critical to our success, and we rely on trademark and trade secret laws and confidentiality and non-compete agreements with our employees and others to protect our proprietary rights.
We believe that we can compete favorably on the basis of: ● capability to attract, retain and manage a sufficient number of workers; ● capability to establish and maintain partnerships with industry customers; ● technology infrastructure and data analytics capabilities; ● scope and quality of our solution offerings; ● industry-specific know-how and operational experience; ● geographical coverage; ● and brand recognition.
On October 17, 2017, SAT issued the Announcement of the State Administration of Taxation on Issues Concerning the Withholding of Non-resident Enterprise Income Tax at Source, or SAT Bulletin 37, which came into effect on December 1, 2017.
Both the transferor and the transferee may be subject to penalties under PRC tax laws if the transferee fails to withhold the taxes and the transferor fails to pay the taxes. 75 Table of Contents On October 17, 2017, SAT issued the Announcement of the State Administration of Taxation on Issues Concerning the Withholding of Non-resident Enterprise Income Tax at Source, or SAT Bulletin 37, which came into effect on December 1, 2017.
Pursuant to the Circular of the State Administration of Foreign Exchange on Issues Concerning the Foreign Exchange Administration over the Overseas Investment and Financing and Round-trip Investment by Domestic Residents via Special Purpose Vehicles, or SAFE Circular 37, issued by SAFE and effective on July 4, 2014, if a non-listed special purpose vehicle grants equity-based incentives to its directors, supervisors, senior officers in the domestic enterprise directly or indirectly controlled by it, as well as other employees in employment or labor relations with the company by using the company’s stock rights or options, the relevant domestic individual residents may apply for going through foreign exchange registration of a special purpose vehicle before exercise of its rights. 70 Table of Contents Flexible Employment On July 14, 2020, 13 PRC governmental departments, including but not limited to the NDRC, MOFCOM, the SMAR, the Ministry of Human Resources and the Social Security of the PRC, jointly issued the Opinions on Supporting the Healthy Development of New Industry and New Models to Activate the Consuming Market and Drive the Expansion of Employment, according to which the establishment of flexible employment and shared employment service platforms is encouraged.
If the employees fail to pay or the PRC subsidiaries fail to withhold income tax in accordance with relevant laws and regulations, the PRC subsidiaries may face sanctions imposed by the tax authorities or other PRC governmental authorities. 73 Table of Contents Pursuant to the Circular of the State Administration of Foreign Exchange on Issues Concerning the Foreign Exchange Administration over the Overseas Investment and Financing and Round-trip Investment by Domestic Residents via Special Purpose Vehicles, or SAFE Circular 37, issued by SAFE and effective on July 4, 2014, if a non-listed special purpose vehicle grants equity-based incentives to its directors, supervisors, senior officers in the domestic enterprise directly or indirectly controlled by it, as well as other employees in employment or labor relations with the company by using the company’s stock rights or options, the relevant domestic individual residents may apply for going through foreign exchange registration of a special purpose vehicle before exercise of its rights.
Replications and backups are performed once every week on our server. Our IT department monitors the performance of our websites, technology systems and network infrastructure to enable us to respond promptly to potential problems. We also continuously review, improve and iterate our data privacy policies and security foundation.
In addition, we utilize a system of firewalls to prevent unauthorized access to our internal systems. Replications and backups are performed once every week on our server. Our IT department monitors the performance of our websites, technology systems and network infrastructure to enable us to respond promptly to potential problems.
Zhen Ba, Ningbo Maiken Investment Management LLP and Mr. Tongtong Li, holding 25.7264%, 24.9784%, 9.6547%, 38.8250% and 0.8154% of the equity interests of Beijing Quhuo, respectively. (2) The remaining 30% of the equity interests of Nantong Runda Marketing Planning Co., Ltd. is owned by two independent individuals.
Tongtong Li, holding 25.7264%, 24.9784%, 9.6547%, 38.8250% and 0.8154% of the equity interests of the VIE, respectively. (3) The remaining 30% of the equity interests of Nantong Runda Marketing Planning Co., Ltd. is owned by two independent individuals. (4) The remaining 49% of the equity interests of Jiangxi Youke Automobile Rental Service Co., Ltd. is owned by an independent individual.
We primarily attract new industry customers with testimonials of our solutions and referrals by existing customers. We also approach prospective industry customers by attending key account meetings and industry conferences, or through introduction by our investors. We conduct KPI reviews with industry customers and take measures to maintain close rapport with them.
We also approach prospective industry customers by attending key account meetings and industry conferences, or through introduction by our investors. We conduct KPI reviews with industry customers and take measures to maintain close rapport with them. Competition We believe that we have pioneered innovation serving on-demand consumer service businesses.
Branding, Marketing and Customer Relationship We believe word-of-mouth marketing has helped us achieve, and will continue to drive, organic growth in our workers. We also believe brand recognition is critical to our ability to retain or establish partnership with existing or new industry customers, and our general marketing efforts are designed to enhance our brand awareness and reputation among them.
We also believe brand recognition is critical to our ability to retain or establish partnership with existing or new industry customers, and our general marketing efforts are designed to enhance our brand awareness and reputation among them. We primarily attract new industry customers with testimonials of our solutions and referrals by existing customers.
The Negative List (2021 version) further provides that where a domestic enterprise engaged in the business in the prohibited category seeks to issue and list its shares overseas, it shall complete an examination process and obtain approval from the relevant competent authorities of the State Council. 63 Table of Contents Pursuant to the Provisions on Administration of Foreign-Invested Telecommunications Enterprises promulgated by the State Council in December 2001 and most recently amended in 2022, or the FITE Regulations, the ultimate foreign equity ownership in a value-added telecommunications services provider may not exceed 50% unless otherwise allowed by the competent PRC governmental authorities.
Pursuant to the Provisions on Administration of Foreign-Invested Telecommunications Enterprises promulgated by the State Council in December 2001 and most recently amended in 2022, or the FITE Regulations, the ultimate foreign equity ownership in a value-added telecommunications services provider may not exceed 50% unless otherwise allowed by the competent PRC governmental authorities.
In February 2015, the State Council has issued the Decisions on Cancelling and Adjusting a Batch of Administrative Approval Items, which, among others, replaced the pre-registration approval requirement for telecommunications business with post-registration approval requirement. 65 Table of Contents The Provisions on the Administration of Foreign-Invested Telecommunications Enterprises was promulgated by the State Council on December 11, 2001 and was last amended on March 29, 2022 with effect from May 1, 2022.
In February 2015, the State Council has issued the Decisions on Cancelling and Adjusting a Batch of Administrative Approval Items, which, among others, replaced the pre-registration approval requirement for telecommunications business with post-registration approval requirement.
Under the Several Provisions on Regulating the Market Order of Internet Information Services, issued by MIIT in December 2011 and implemented in March 2012, an internet information service provider may not collect any user personal information or provide any such information to third parties without the consent of the user.
If an internet information service provider violates these measures, the MPS and its local branches may issue warning, confiscate the illegal gains, impose fines, and, in severe cases, advice competent authority to revoke its operating license or shut down its websites. 69 Table of Contents Under the Several Provisions on Regulating the Market Order of Internet Information Services, issued by MIIT in December 2011 and implemented in March 2012, an internet information service provider may not collect any user personal information or provide any such information to third parties without the consent of the user.
Regulations Relating to Foreign Exchange General administration of foreign exchange Under the PRC Foreign Currency Administration Rules promulgated on January 29, 1996 and most recently amended on August 5, 2008 and various regulations issued by SAFE and other relevant PRC government authorities, Renminbi is convertible into other currencies for current account items, such as trade-related receipts and payments and payment of interest and dividends.
If there is any material change of the principal business of the listed company after the overseas offering and listing so that the listed company is no longer required to file with the CSRC, it shall file a specific report and a legal opinion issued by a domestic law firm to the CSRC within three business days after the occurrence thereof. 76 Table of Contents Regulations Relating to Foreign Exchange General administration of foreign exchange Under the PRC Foreign Currency Administration Rules promulgated on January 29, 1996 and most recently amended on August 5, 2008 and various regulations issued by SAFE and other relevant PRC government authorities, Renminbi is convertible into other currencies for current account items, such as trade-related receipts and payments and payment of interest and dividends.
On December 26, 2019, the State Council promulgated the Implementation Regulations on the Foreign Investment Law which came into effect on January 1, 2020.
On December 26, 2019, the State Council promulgated the Implementation Regulations on the Foreign Investment Law which came into effect on January 1, 2020. It further requires that foreign-invested enterprises and domestic enterprises shall be treated equally with respect to policy making and implementation.
The Draft Security Assessment Measures provide that, among others, data processors shall apply to competent authorities for security assessment when transferring important data abroad or when, in the case of a personal information processor that has processed personal information of more than one million individuals, transferring personal information abroad.
These measures and provisions provide that, among others, data processors (other than operators of critical information infrastructure) shall apply to competent authorities for security assessment when transferring important data abroad or when, in the case of data processors who have accumulatively provided more than one million personal information or 10,000 sensitive personal information to overseas since January 1 for the previous year, transferring personal information abroad.
To the on-demand consumer service companies that we serve, our platform helps them mobilize a large team of workers who can follow industry-specific, standardized and highly efficient service procedures through a combination of training, performance monitoring and refinement, and incentives. As such, our industry customers can focus more on their business strategy and operational and financial performance.
We generate revenue primarily from service fees paid by our industry customers, and to a lesser extent, from rental fees under our car leasing agreements with drivers engaged in our ride-hailing solutions. 58 Table of Contents To the on-demand consumer service companies that we serve, our platform helps them mobilize a large team of workers who can follow industry-specific, standardized and highly efficient service procedures through a combination of training, performance monitoring and refinement, and incentives.
As a result, we can scale our operations and replicate our success into greenfield regions or industries quickly and cost-effectively with minimal incremental costs on infrastructure.
As a result, we can scale our operations and replicate our success into greenfield regions or industries quickly and cost-effectively with minimal incremental costs on infrastructure. The team leader who operates in multiple industries can review the operating income and the staffing of multiple operational solutions in one management account. Our Technology Quhuo+ forms the backbone of our business operations.
However, the scope of network products or data processing activities that affect or may affect national security is still unclear, and there remains significant uncertainty in the interpretation and enforcement of relevant regulations. 67 Table of Contents The Personal Information Protection Law was promulgated by the SCNPC on August 20, 2021, which integrates the scattered rules with respect to personal information rights and privacy protection and took effect on November 1, 2021.
However, the scope of network products or data processing activities that affect or may affect national security is still unclear, and there remains significant uncertainty in the interpretation and enforcement of relevant regulations.
As of December 31, 2022, we had a dedicated team of 53 technology research and development professionals with an average of seven years of the relevant industry experience. We have developed reliable and stable network infrastructure to ensure high availability and a low risk of downtime.
We strategically designed Quhuo+ to be flexible and scalable with modularized functions. See “—Quhuo+” for details. As of December 31, 2023, we had a dedicated team of 53 technology research and development professionals with an average of seven years of the relevant industry experience.
Organizational Structure The following diagram illustrates our simplified corporate structure, including our principal subsidiaries, the VIE and its subsidiaries, as of the date of this annual report: (1) The shareholders of Beijing Quhuo Technology Co., Ltd., or Beijing Quhuo, include Ms. Lili Sun, spouse of Mr. Leslie Yu, Mr. Shuyi Yang, Mr.
Organizational Structure The following diagram illustrates our simplified corporate structure, including our principal subsidiaries, the VIE and its subsidiaries, as of the date of this annual report: (1) The remaining 49% of the ownership interests of Quhuo International Trade (HK) Limited is owned by Mr.
It further requires that foreign-invested enterprises and domestic enterprises shall be treated equally with respect to policy making and implementation. 64 Table of Contents According to the Foreign Investment Law, foreign investors or foreign-invested enterprises shall submit investment information to the competent commerce departments.
According to the Foreign Investment Law, foreign investors or foreign-invested enterprises shall submit investment information to the competent commerce departments.
PRC ​ Affiliated Entities Place of Incorporation Beijing Quhuo Technology Co., Ltd. PRC Shanghai Quhuo Network Technology Co., Ltd. PRC Ningbo Xinying Network Technology Co., Ltd. PRC Nantong Runda Marketing Planning Co., Ltd. PRC Shanghai Yijida Network Technology Co., Ltd. PRC Ningbo Desheng Wanchun Network Technology Co., Ltd. PRC Ningbo Quhuo Network Technology Co., Ltd.
Subsidiaries Place of Incorporation Quhuo Investment Limited BVI Quhuo Technology Investment (Hong Kong) Limited Hong Kong Quhuo International Trade (HK) Limited Hong Kong Beijing Quhuo Information Technology Co., Ltd. PRC ​ Affiliated Entities Place of Incorporation Beijing Quhuo Technology Co., Ltd. PRC Shanghai Quhuo Network Technology Co., Ltd. PRC Ningbo Xinying Network Technology Co., Ltd.
SAFE Circular 16 also provides an integrated standard for conversion of foreign exchange under capital account items (including but not limited to foreign currency capital and foreign debts) on self-discretionary basis, which applies to all enterprises registered in the PRC. 75 Table of Contents Pursuant to the Circular on Further Promoting the Cross-border Trade and Investment Facilitation, or SAFE Circular 28, which was promulgated by SAFE on October 23, 2019, non-investment foreign-invested companies are allowed to conduct domestic equity investment with settled capital from foreign exchange if such investment projects are true and compliant and do not otherwise violate the existing Special Management Measures (Negative List) for the Access of Foreign Investment.
SAFE Circular 16 also provides an integrated standard for conversion of foreign exchange under capital account items (including but not limited to foreign currency capital and foreign debts) on self-discretionary basis, which applies to all enterprises registered in the PRC.
We also make it possible for those who have temporarily left our platform to return to our platform. As their past job performance and other work information can be tracked down and retrieved, we are able to streamline the process for returnees.
We also make it possible for those who have temporarily left our platform to return to our platform.
Removed
We generate revenue primarily from service fees paid by our industry customers, and to a lesser extent, from rental fees under our car leasing agreements with drivers engaged in our ride-hailing solutions.
Added
On January 5, 2024, we entered into the Purchase Agreement with VG, as amended and restated on February 8, 2024, pursuant to which VG has committed to purchasing up to US$2,072,070 of the ADSs.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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We continually seek to diversify our customer portfolio to reduce the concentration of our revenue stream through competitive solution offerings. In addition, we launched mobility service and housekeeping and accommodation solutions in recent years, and we plan to continue to expand into new industries.
We continually seek to diversify our customer portfolio to reduce the concentration of our revenue stream through competitive solution offerings. In addition, we launched mobility service solutions and housekeeping and accommodation solutions in recent years, and we plan to continue to expand into new industries.
In evaluating our business, you should carefully consider the information provided under the caption “Item 3. Key Information—D. Risk Factors” in this annual report. We caution you that our businesses and financial performance are subject to substantial risks and uncertainties. 81 Table of Contents A. Operating Results Overview We are a gig economy platform focusing on community-centered services in China.
In evaluating our business, you should carefully consider the information provided under the caption “Item 3. Key Information—D. Risk Factors” in this annual report. We caution you that our businesses and financial performance are subject to substantial risks and uncertainties. 83 Table of Contents A. Operating Results Overview We are a gig economy platform focusing on community-centered services in China.
We may incur significant cost and experience a prolonged ramp-up period, and our ability to apply our accumulated industry knowledge and operational experience to these new industries is critical to our business growth and prospects. 82 Table of Contents Our ability to attract, retain and manage workers cost-effectively Our operational cost is affected by the number of workers on our platform and the amount of service fees we paid to workers and third-party labor service companies.
We may incur significant cost and experience a prolonged ramp-up period, and our ability to apply our accumulated industry knowledge and operational experience to these new industries is critical to our business growth and prospects. 84 Table of Contents Our ability to attract, retain and manage workers cost-effectively Our operational cost is affected by the number of workers on our platform and the amount of service fees we paid to workers and third-party labor service companies.
Risk Factors—Risks Related to Doing Business in China—If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders or the ADSs holders.” Results of Operations The following table sets forth a summary of our consolidated results of operations for the years indicated.
Risk Factors—Risks Related to Doing Business in China—If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders or the ADSs holders.” 91 Table of Contents Results of Operations The following table sets forth a summary of our consolidated results of operations for the years indicated.
Critical Accounting Policies and Estimate We prepare our financial statements in accordance with U.S. GAAP, which requires our management to make judgment, estimates and assumptions.
E. Critical Accounting Policies and Estimate We prepare our financial statements in accordance with U.S. GAAP, which requires our management to make judgment, estimates and assumptions.
Our strategic alliances, investments and acquisitions may affect our business growth. 83 Table of Contents COVID-19 outbreak Since the outbreak of COVID-19 throughout China and other countries and regions, a series of precautionary and control measures have been implemented worldwide to contain the virus.
Our strategic alliances, investments and acquisitions may affect our business growth. 85 Table of Contents COVID-19 outbreak Since the outbreak of COVID-19 throughout China and other countries and regions, a series of precautionary and control measures have been implemented worldwide to contain the virus.
We believe that such non-GAAP financial measures also provide useful information about our operating results, enhance the overall understanding of our past performance and future prospects and allow for greater visibility with respect to key metrics used by our management in its financial and operational decision-making. 84 Table of Contents The non-GAAP financial measures are not defined under U.S.
We believe that such non-GAAP financial measures also provide useful information about our operating results, enhance the overall understanding of our past performance and future prospects and allow for greater visibility with respect to key metrics used by our management in its financial and operational decision-making. The non-GAAP financial measures are not defined under U.S.
Hainan Quhuo, Hainan Xinying, Haikou Chengtu, Hainan Huiliu, and Haikou Chengjing are enterprises registered in the Hainan free trade port and engaged in substantial business in encouraged industries and are therefore entitled to preferential tax rate of 15%.
Hainan Quhuo, Hainan Xinying and Haikou Chengtu are enterprises registered in the Hainan free trade port and engaged in substantial business in encouraged industries and are therefore entitled to preferential tax rate of 15%.
If the fair value of the modified award is lower than the fair value of the original award immediately before modification, the minimum compensation cost we recognize is the cost of the original award. Goodwill impairment In accordance with ASC 350, Intangibles-Goodwill and Others (“ASC 350”), we assign and assess goodwill for impairment at the reporting unit level.
If the fair value of the modified award is lower than the fair value of the original award immediately before modification, the minimum compensation cost we recognize is the cost of the original award. 101 Table of Contents Goodwill impairment In accordance with ASC 350, Intangibles-Goodwill and Others (“ASC 350”), we assign and assess goodwill for impairment at the reporting unit level.
Investing activities Net cash generated from investing activities was RMB77.2 million (US$11.2 million) in 2022, which was primarily attributable to (1) proceeds from sales of short-term investments of RMB1,616.7 million (US$234.4 million) and (2) proceeds from disposals of intangible assets of RMB20.8 million (US$3.0 million) and other investing, partially offset by (1) purchase of short-term investments of RMB1,549.7 million (US$224.7 million), (2) acquisitions of intangible assets of RMB8.1 million (US$1.2 million) and (3) acquisition of business, net of cash acquired of RMB5.0 million (US$0.7 million).
Net cash generated from investing activities was RMB77.2 million in 2022, which was primarily attributable to (1) proceeds from sales of short-term investments of RMB1,616.7 million and (2) proceeds from disposals of intangible assets of RMB20.8 million and other investing, partially offset by (1) purchase of short-term investments of RMB1,549.7 million, (2) acquisitions of intangible assets of RMB8.1 million and (3) acquisition of business, net of cash acquired of RMB5.0 million.
Revenues are variable based on services we performed, and we recognize revenues as the services are rendered. Income taxes We follow the liability method of accounting for income taxes in accordance with ASC 740, Income Taxes , or ASC 740.
Revenues are variable based on services we performed, and we recognize revenues as the services are rendered. 100 Table of Contents Income taxes We follow the liability method of accounting for income taxes in accordance with ASC 740, Income Taxes , or ASC 740.
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 2022 that are reasonably likely to have a material adverse effect on our net revenue, income, profitability, liquidity or capital resources, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial condition. 97 Table of Contents E.
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 2023 that are reasonably likely to have a material adverse effect on our net revenue, income, profitability, liquidity or capital resources, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial condition.
Our car rental and maintenance costs were RMB7.9 million, RMB17.7 million and RMB10.2 million (US$1.5 million) in 2020, 2021 and 2022, respectively. Platform commissions Platform commissions represented commission charges paid to B&B reservation platforms in relation to our accommodation services. Our platform commissions were RMB1.8 million, RMB7.9 million and RMB1.4 million (US$0.2 million), respectively.
Our car rental and maintenance costs were RMB17.7 million, RMB10.2 million and RMB13.8 million (US$1.9 million) in 2021, 2022 and 2023, respectively. Platform commissions Platform commissions represented commission charges paid to B&B reservation platforms in relation to our accommodation services. Our platform commissions were RMB7.9 million, RMB1.4 million and RMB5.2 million (US$0.7 million) in 2021, 2022 and 2023, respectively.
Different industry customers may use different formulas to calculate such adjustments, which may change from time to time in line with their specific requirement and assessment of our services. 85 Table of Contents Mobility service solutions Our mobility service solutions comprise ride-hailing solutions, shared-bike maintenance solutions and freight service solutions.
Different industry customers may use different formulas to calculate such adjustments, which may change from time to time in line with their specific requirement and assessment of our services. Mobility service solutions Our mobility service solutions comprise ride-hailing solutions, shared-bike maintenance solutions, freight service solutions and vehicle export solutions.
Cost of revenues Our cost of revenues decreased by 7.3% from RMB3,849.7 million in 2021 to RMB3,567.7 million (US$517.3 million) in 2022, primarily due to the following reasons. ● Service fees paid to workers and team leaders decreased by 7.7% from RMB3,452.9 million in 2021 to RMB3,187.6 million (US$462.2 million) in 2022, generally in line with the decrease in the number of delivery orders resulting from regional resurgence of COVID-19 in multiple localities in 2022. ● Hiring expenses increased by 7.4 % from RMB127.6 million in 2021 to RMB137.1 million (US$19.9 million) in 2022, primarily relating to our enhanced efforts to maintain the workforce scale on our platform. ● Insurance expenses decreased by 18.0% from RMB108.1 million in 2021 to RMB88.7 million (US$12.9 million) in 2022, primarily due to the decrease in the number of traffic accidents involving workers on our platform. ● Office and equipment expenses decreased by 5.6% from RMB93.5 million in 2021 to RMB88.3 million (US$12.8 million) in 2022, primarily due to our procurement of bicycle transportation equipment in 2021 and the decrease in such procurement in 2022. ● Freight service costs increased significantly from RMB10.4 million in 2021 to RMB27.3 million (US$4.0 million) in 2022, primarily due to the increase in the business volume of our freight service solutions, which we launched in July 2021. ● Car rental and maintenance expenses decreased by 42.6% from RMB17.7 million in 2021 to RMB10.2 million (US$1.5 million) in 2022, primarily due to the decrease in the number of rented vehicles. ● Platform commissions decreased by 82.0% from RMB7.9 million in 2021 to RMB1.4 million (US$0.2 million) in 2022, primarily due to the decrease in commissions paid to aggregation platforms for web traffic resulting from the reduced customer demand amid the regional resurgence of COVID-19 in multiple localities in 2022 .
The geographical coverage of our on-demand delivery solutions decreased from 1,273 delivery areas as of December 31, 2021 to 1,118 delivery areas as of December 31, 2022 . ● Revenues from mobility service solutions decreased by 1.9 % from RMB110.2 million in 2021 to RMB108.1 million (US$15.7 million) in 2022, primarily due to the reduced customer demand resulting from regional resurgence of COVID-19 in multiple localities in 2022. ● Revenues from housekeeping and accommodation solutions and other services decreased by 14.6 % from RMB86.2 million in 2021 to RMB73.6 million (US$10.7 million) in 2022, primarily due to the reduced customer demand resulting from regional resurgence of COVID-19 in multiple localities in 2022. 94 Table of Contents Cost of revenues Our cost of revenues decreased by 7.3% from RMB3,849.7 million in 2021 to RMB3,567.7 million (US$517.3 million) in 2022, primarily due to the following reasons. ● Service fees paid to workers and team leaders decreased by 7.7% from RMB3,452.9 million in 2021 to RMB3,187.6 million (US$462.2 million) in 2022, generally in line with the decrease in the number of delivery orders resulting from regional resurgence of COVID-19 in multiple localities in 2022. ● Hiring expenses increased by 7.4 % from RMB127.6 million in 2021 to RMB137.1 million (US$19.9 million) in 2022, primarily relating to our enhanced efforts to maintain the workforce scale on our platform. ● Insurance expenses decreased by 18.0% from RMB108.1 million in 2021 to RMB88.7 million (US$12.9 million) in 2022, primarily due to the decrease in the number of traffic accidents involving workers on our platform. ● Office and equipment expenses decreased by 5.6% from RMB93.5 million in 2021 to RMB88.3 million (US$12.8 million) in 2022, primarily due to our procurement of bicycle transportation equipment in 2021 and the decrease in such procurement in 2022. ● Freight service costs increased significantly from RMB10.4 million in 2021 to RMB27.3 million (US$4.0 million) in 2022, primarily due to the increase in the business volume of our freight service solutions, which we launched in July 2021. ● Car rental and maintenance expenses decreased by 42.6% from RMB17.7 million in 2021 to RMB10.2 million (US$1.5 million) in 2022, primarily due to the decrease in the number of rented vehicles. ● Platform commissions decreased by 82.0% from RMB7.9 million in 2021 to RMB1.4 million (US$0.2 million) in 2022, primarily due to the decrease in commissions paid to aggregation platforms for web traffic resulting from the reduced customer demand amid the regional resurgence of COVID-19 in multiple localities in 2022 .
Gain/(loss) on disposal of assets, net We recorded gain on disposal of assets, net of RMB3.2 million and RMB14.0 million (US$2.0 million) in 2020 and 2022, respectively, and we recorded loss on disposal of assets, net of RMB2.6 million in 2021, which primarily related to the transfer of certain customer relationships related to our on-demand delivery solutions to third parties.
(Loss)/gain on disposal of assets, net We recorded gain on disposal of assets, net of RMB14.0 million and RMB22.3 million (US$3.1 million) in and 2022 and 2023, respectively, and we recorded loss on disposal of assets, net of RMB2.6 million in 2021, which primarily related to the transfer of certain customer relationships related to our on-demand delivery solutions to third parties.
Financing activities Net cash used in financing activities was RMB82.1 million (US$11.9 million) in 2022, which was primarily attributable to (1) repayments of short-term debt of RMB552.5 million (US$80.1 million) and (2) repayments of long-term debt of RMB3.1 million (US$0.5 million), partially offset by proceeds from short-term debt of RMB473.5 million (US$68.6 million).
Net cash used in financing activities was RMB82.1 million in 2022, which was primarily attributable to (1) repayments of short-term debt of RMB552.5 million and (2) repayments of long-term debt of RMB3.1 million, partially offset by proceeds from short-term debt of RMB473.5 million.
Excluding the effect of share-based compensation expenses, we recorded adjusted net income of RMB77.1 million and RMB3.3 million (US$0.5 million) in 2020 and 2022, respectively, and adjusted net loss of RMB122.3 million in 2021.
Excluding the effect of share-based compensation expenses, we recorded adjusted net income of RMB3.3 million and RMB5.5 million (US$0.8 million) in 2022 and 2023, respectively, and adjusted net loss of RMB122.3 million in 2021.
Our revenues generated from mobility solutions were RMB31.6 million, RMB110.2 million and RMB108.1 million (US$15.7 million) in 2020, 2021 and 2022, respectively. For shared-bike maintenance solutions, we derive revenue from service fees paid by bike-sharing companies based on service hours and/or the number of shared-bikes we transported and identified as malfunctioned.
Our revenues generated from mobility service solutions were RMB110.2 million, RMB108.1 million and RMB233.8 million (US$32.9 million) in 2021, 2022 and 2023, respectively. For shared-bike maintenance solutions, we derive revenue from service fees paid by bike-sharing companies based on service hours and/or the number of shared-bikes we transported and identified as malfunctioned.
Gross Profit As a result of the foregoing, our gross profit was RMB192.5 million, RMB175.6 million and RMB252.7 million (US$36.6 million) in 2020, 2021 and 2022, respectively, and our gross profit margin was 7.5%, 4.4% and 6.6% in 2020, 2021 and 2022, respectively.
Gross Profit As a result of the foregoing, our gross profit was RMB175.6 million, RMB252.7 million and RMB166.6 million (US$23.5 million) in 2021, 2022 and 2023, respectively, and our gross profit margin was 4.4%, 6.6% and 4.5% in 2021, 2022 and 2023, respectively.
Material Cash Requirements Our material cash requirements as of December 31, 2022 and any subsequent interim period primarily include working capital needs, capital expenditures, operating lease obligations, and long-term and short-term debt. 96 Table of Contents Our capital expenditures were RMB3.4 million, RMB9.3 million and RMB4.7 million (US$0.7 million) in 2020, 2021 and 2022, respectively.
Material Cash Requirements Our material cash requirements as of December 31, 2023 and any subsequent interim period primarily include working capital needs, capital expenditures, operating lease obligations, and long-term and short-term debt. Our capital expenditures were RMB9.3 million, RMB4.7 million and RMB0.1 million (US$0.02 million) in 2021, 2022 and 2023, respectively.
Goodwill impairment We recorded goodwill impairment of RMB0.3 million, RMB52.0 million and RMB4.9 million (US$0.7 million) in 2020, 2021 and 2022, respectively, which was primarily related to the businesses we acquired and the reduced service scope of our shared-bike maintenance solutions.
Goodwill impairment We recorded goodwill impairment of RMB52.0 million and RMB4.9 million in 2021 and 2022, respectively, which was primarily related to the businesses we acquired and the reduced service scope of our shared-bike maintenance solutions. We did not record goodwill impairment in 2023.
Interest income Our interest income remained relatively stable at RMB0.6 million in 2021 and RMB0.7 million (US$0.1 million) in 2022. Interest expense Our interest expense decreased by 19.1% from RMB7.0 million in 2021 to RMB5.7 million (US$0.8 million) in 2022, primarily due to the decrease in our short-term bank borrowings.
Interest expense Our interest expense decreased by 19.1% from RMB7.0 million in 2021 to RMB5.7 million (US$0.8 million) in 2022, primarily due to the decrease in our short-term bank borrowings.
Operating expenses General and administrative expenses Our general and administrative expenses decreased by 11.3% from RMB240.7 million in 2021 to RMB213.6 million (US$31.0 million) in 2022, primarily due to (1) the decrease in share-based compensation in relation to our share incentive plan from RMB68.9 million in 2021 to RMB19.8 million (US$2.9 million) in 2022, and (2) a decrease in impairment losses from RMB8.5 million in 2021 to RMB2.5 million (US$0.4 million) in 2022, and (3) a slight decrease in staff costs from RMB66.8 million in 2021 to RMB66.0 million (US$9.6 million) in 2022, partially offset by an increase in professional service fees and other expenditures, including office rent expenses, welfare and business development expenses, from RMB96.5 million in 2021 to RMB125.2 million (US$18.2 million) in 2022, in connection with our business expansion plan. 91 Table of Contents Research and Development Expenses Our research and development expenses decreased by 37.7% from RMB20.1 million in 2021 to RMB12.5 million (US$1.8 million) in 2022, primarily due to the decreases in the headcount and average compensation level for our research and development personnel from RMB16.3 million in 2021 to RMB6.7 million (US$1.0 million) in 2022 as we restructured our R&D team.
Operating expenses General and administrative expenses Our general and administrative expenses decreased by 11.3% from RMB240.7 million in 2021 to RMB213.6 million (US$31.0 million) in 2022, primarily due to (1) the decrease in share-based compensation in relation to our share incentive plan from RMB68.9 million in 2021 to RMB19.8 million (US$2.9 million) in 2022, and (2) a decrease in impairment losses from RMB8.5 million in 2021 to RMB2.5 million (US$0.4 million) in 2022, and (3) a slight decrease in staff costs from RMB66.8 million in 2021 to RMB66.0 million (US$9.6 million) in 2022, partially offset by an increase in professional service fees and other expenditures, including office rent expenses, welfare and business development expenses, from RMB96.5 million in 2021 to RMB125.2 million (US$18.2 million) in 2022, in connection with our business expansion plan.
Net loss As a result of the foregoing, we had net loss of RMB5.6 million and RMB191.2 million in 2020 and 2021, respectively. 94 Table of Contents B. Liquidity and Capital Resources Liquidity and Capital Resources Our principal sources of liquidity have been cash generated from our operations and external financing.
Net loss As a result of the foregoing, we had net loss of RMB191.2 million and RMB16.4 million (US$2.4 million) in 2021 and 2022, respectively. B. Liquidity and Capital Resources Liquidity and Capital Resources Our principal sources of liquidity have been cash generated from our operations and external financing.
Our general and administrative expenses consist primarily of (1) salaries and benefits for our operational staff, (2) share-based compensation expenses and (3) office expenses. 87 Table of Contents Research and development expenses We recorded research and development expenses of RMB13.1 million, RMB20.1 million and RMB12.5 million (US$1.8 million) in 2020, 2021 and 2022, respectively.
Our general and administrative expenses consist primarily of (1) salaries and benefits for our operational staff, (2) professional service fees, (3) share-based compensation expenses and (4) office expenses. 89 Table of Contents Research and development expenses We recorded research and development expenses of RMB20.1 million, RMB12.5 million and RMB12.4 million (US$1.7 million) in 2021, 2022 and 2023, respectively.
Gain/(Loss) on disposal of assets, net We recorded loss on disposal of assets of RMB2.6 million in 2021 and gain on disposal of assets, net, of RMB14.0 million (US$2.0 million) in 2022, in relation to the transfer of certain customer relationships related to our on-demand delivery solutions to third parties.
Gain/(Loss) on disposal of assets, net We recorded loss on disposal of assets of RMB2.6 million in 2021 and gain on disposal of assets, net, of RMB14.0 million (US$2.0 million) in 2022, in relation to the transfer of certain customer relationships related to our on-demand delivery solutions to third parties. 95 Table of Contents Goodwill impairment We recorded goodwill impairment of RMB52.0 million in 2021, as compared to RMB4.9 million (US$0.7 million) in 2022.
Ride-hailing solutions We generate revenue from ride-hailing solutions primarily from car rental fees paid by drivers on our platform according to our car leasing agreements with them. These arrangements are classified as operating leases as defined within ASC 840, Leases .
Ride-hailing solutions We generate revenue from ride-hailing solutions primarily from car rental fees paid by drivers on our platform according to our car leasing agreements with them. These arrangements are classified as operating leases as defined within ASC 840, Leases . We recognize revenues from such arrangements on a straight-line basis over the lease term.
Service fees paid to workers and team leaders We incurred service fees paid to workers and team leaders in relation to our on-demand delivery solutions, mobility service solutions and housekeeping and accommodation solutions and other services. Our service fees were RMB2,177.4 million, RMB3,452.9 million and RMB3,187.6 million (US$462.2 million) in 2020, 2021 and 2022, respectively.
Service fees paid to workers and team leaders We incurred service fees paid to workers and team leaders in relation to our on-demand delivery solutions, mobility service solutions and housekeeping and accommodation solutions and other services. Our service fees were RMB3,452.9 million, RMB3,187.6 million and RMB3,029.8 million (US$426.7 million) in 2021, 2022 and 2023, respectively.
As of December 31, 2021 and 2022, we had RMB28.6 million and RMB95.4 million (US$13.8 million), respectively, in cash. Our cash consists primarily of cash and demand deposits.
As of December 31, 2022 and 2023, we had RMB95.4 million and RMB45.2 million (US$6.4 million), respectively, in cash. Our cash consists primarily of cash and demand deposits.
Freight service solutions We commenced our freight service solutions in July 2021, under which we fulfill end-to-end intra-city and long-distance transportation orders by deploying truck fleets to serve each industry customers and pay service fees to such trucker fleets.
Freight service solutions We commenced our freight service solutions in July 2021, under which we fulfill end-to-end intra-city and long-distance transportation orders by deploying truck fleets to serve each industry customers and pay service fees to such trucker fleets. Vehicle export solutions We generate revenue from vehicle export solutions primarily by selling vehicles to third-party buyers.
The following table sets forth the components of operating expenses, in absolute amounts and as a percentage of our total revenues, for the periods indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2020 ​ 2021 ​ 2022 ​ ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Operating expenses: ​ ​ ​ ​ ​ ​ ​ General and administrative expenses ​ (202,963) ​ (7.9) ​ (240,749) ​ (6.0) ​ (213,592) ​ (30,968) ​ (5.6) Research and development expenses (13,095) (0.5) (20,122) (0.5) (12,540) (1,818) (0.3) Gain/(loss) on disposal of assets, net 3,243 0.1 (2,564) (0.1) 13,975 2,026 0.3 Goodwill impairment (336) (0.0) (51,971) (1.3) (4,882) (708) (0.1) Total operating expenses (213,151) (8.3) (315,406) (7.8) (217,039) (31,468) (5.7) ​ General and administrative expenses We recorded general and administrative expenses of RMB203.0 million, RMB240.7 million and RMB213.6 million (US31.0 million) in 2020, 2021 and 2022, respectively.
The following table sets forth the components of operating expenses, in absolute amounts and as a percentage of our total revenues, for the periods indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Operating expenses: ​ ​ ​ ​ ​ ​ ​ General and administrative expenses ​ (240,749) ​ (6.0) ​ (213,592) ​ (5.6) ​ (184,336) ​ (25,963) ​ (5.0) Research and development expenses (20,122) (0.5) (12,540) (0.3) (12,378) (1,743) (0.3) Gain/(loss) on disposal of assets, net (2,564) (0.1) 13,975 0.3 22,317 3,143 0.6 Goodwill impairment (51,971) (1.3) (4,882) (0.1) — — — Total operating expenses (315,406) (7.8) (217,039) (5.7) (174,397) (24,563) (4.7) ​ General and administrative expenses We recorded general and administrative expenses of RMB240.7 million, RMB213.6 million and RMB184.3 million (US$26.0 million) in 2021, 2022 and 2023, respectively.
We are nonetheless closely monitoring the development of the COVID-19 outbreak and continuously evaluating any potential impact on our business, results of operations and financial condition. See “Item 3. Key Information—D.
Except for the impact discussed above, we do not anticipate any prolonged material adverse impact on our business, results of operations and financial condition from the COVID-19 outbreak. We are nonetheless closely monitoring the development of the COVID-19 outbreak and continuously evaluating any potential impact on our business, results of operations and financial condition. See “Item 3. Key Information—D.
We recognize revenues from such arrangements on a straight-line basis over the lease term. 98 Table of Contents To a lesser extent, we also generate revenues from provision of ride-hailing driver management services to certain ride-hailing platforms as an agent and recognize such revenues on a net basis.
To a lesser extent, we also generate revenues from provision of ride-hailing driver management services to certain ride-hailing platforms as an agent and recognize such revenues on a net basis.
We have grown rapidly in recent years to achieve greater economies of scale. Our revenues were RMB2,580.8 million, RMB4,025.3 million and RMB3,820.4 million (US$553.9 million) in 2020, 2021 and 2022, respectively. We recorded net loss of RMB5.6 million, RMB191.2 million and RMB16.4 million (US$2.4 million) in 2020, 2021 and 2022, respectively.
We have grown rapidly in recent years to achieve greater economies of scale. Our revenues were RMB4,025.3 million, RMB3,820.4 million and RMB3,702.4 million (US$521.5 million) in 2021, 2022 and 2023, respectively. We recorded net loss of RMB191.2 million and RMB16.4 million in 2021 and 2022, respectively, and we recorded net income of RMB6.0 million (US$0.8 million) in 2023.
Our goodwill impairment in 2022 was related to the reduced service scope of our shared-bike maintenance solutions. Operating (loss)/income As a result of the foregoing, we recorded operating loss of RMB139.8 million in 2021 and operating income of RMB35.6million (US$5.2 million) in 2022.
Our goodwill impairment in 2022 was related to the reduced service scope of our shared-bike maintenance solutions. There was no indicator for goodwill impairment in 2023. Operating income/(loss) As a result of the foregoing, we recorded operating income of RMB35.6 million in 2022 and operating loss of RMB7.8 million (US$1.1 million) in 2023.
Net cash generated from operating activities was RMB11.1 million in 2020, primarily due to a net loss of RMB5.6 million, adjusted for (1) certain non-cash items, mainly including share-based compensation of RMB82.7 million, changes in fair value of short-term investment of RMB35.5 million and amortization of RMB13.7 million, and (2) changes in certain working capital items that positively impact the cash flow from operating activities, mainly including an increase of RMB31.8 million in accounts payable, an increase of RMB17.6 million in other non-current liabilities, and a decrease of RMB18.4 million in amounts due from related parties, partially offset by (3) changes in certain working capital items that negatively impact the cash flow from operating activities, mainly including an increase of RMB97.2 million in accounts receivable, an increase of RMB8.2 million in prepayments and other current assets, and an increase of RMB6.6 million in other non-current assets.
Net cash generated from operating activities was RMB74.7 million in 2022, primarily due to a net loss of RMB16.4 million, adjusted for (1) certain non-cash items, mainly including change in fair value of short-term investment of RMB41.8 million, amortization of RMB21.1 million and share-based compensation of RMB19.8 million, and (2) changes in certain working capital items that positively impact the cash flow from operating activities, mainly including an increase in other non-current liabilities of RMB16.2 million, a decrease in prepayments and other current assets of RMB5.9 million and an increase in income taxes payable of RMB5.8 million, partially offset by (3) changes in certain working capital items that negatively impact the cash flow from operating activities, mainly including a decrease in accounts payable of RMB40.8 million, an increase in other non-current assets of RMB20.3 million and an increase in accounts receivable of RMB13.1 million.
On the other hand, government efforts to contain the spread of COVID-19, including “stay-at-home” advice, widespread business closures, travel restrictions and emergency quarantines, adversely affected the customer demand of our other solutions, including mobility service solutions and housekeeping and accommodation solutions.
On the other hand, government efforts to contain the spread of COVID-19 adversely affected the customer demand of our other solutions, including mobility service solutions and housekeeping and accommodation solutions.
The following table sets forth the breakdown of our total revenues, both in absolute amounts and as a percentage of total revenues, for the periods indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2020 ​ 2021 ​ 2022 ​ ​ RMB % RMB % RMB US$ % ​ ​ (RMB in thousands, except for percentages) Revenues: ​ ​ ​ ​ ​ ​ ​ On-demand delivery solutions ​ 2,536,818 ​ 98.3 ​ 3,828,956 ​ 95.1 ​ 3,638,729 ​ 527,566 ​ 95.3 Mobility service solutions 31,587 1.2 110,168 2.7 108,081 15,670 2.8 Housekeeping solutions 12,405 0.5 79,735 2.0 72,576 10,523 1.9 Others — — 6,420 0.2 992 144 0.0 Total revenues 2,580,810 100.0 4,025,279 100.0 3,820,378 553,903 100.0 ​ On-demand delivery solutions In 2020, 2021 and 2022, our revenues generated from on-demand delivery solutions were RMB2,536.8 million, RMB3,829.0 million and RMB3,638.7 million (US$527.6 million), representing 98.3%, 95.1% and 95.3% of our total revenues in the same periods, respectively.
The following table sets forth the breakdown of our total revenues, both in absolute amounts and as a percentage of total revenues, for the periods indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ ​ RMB % RMB % RMB US$ % ​ ​ (RMB in thousands, except for percentages) Revenues: ​ ​ ​ ​ ​ ​ ​ On-demand delivery solutions ​ 3,828,956 ​ 95.1 ​ 3,638,729 ​ 95.3 ​ 3,412,802 ​ 480,683 ​ 92.2 Mobility service solutions 110,168 2.7 108,081 2.8 233,837 ​ 32,935 6.3 Housekeeping solutions 79,735 2.0 72,576 1.9 48,670 ​ 6,855 1.3 Others 6,420 0.2 992 0.0 7,078 ​ 997 0.2 Total revenues 4,025,279 100.0 3,820,378 100.0 3,702,387 ​ 521,470 100.0 ​ On-demand delivery solutions In 2021, 2022 and 2023, our revenues generated from on-demand delivery solutions were RMB3,829.0 million, RMB3,638.7 million and RMB3,412.8 million (US$480.7 million), representing 95.1%, 95.3% and 92.2% of our total revenues in the same periods, respectively.
The global outbreak has also caused market panics, which materially and negatively affected the global financial markets, such as the plunge of global stocks on major stock exchanges in the middle of March 2020.
The outbreak of COVID-19 had certain negative impact on the overall economy of the regions where we delivered our solutions. The global outbreak has also caused market panics, which materially and negatively affected the global financial markets, such as the plunge of global stocks on major stock exchanges in the middle of March 2020.
Goodwill impairment We recorded goodwill impairment of RMB52.0 million in 2021, as compared to RMB4.9 million (US$0.7 million) in 2022. Our goodwill impairment in 2021 was related to the business we acquired for our housekeeping solutions and was primarily due to the impact of the COVID-19 pandemic, which delayed the business integration progress and impacted the business growth rate.
Our goodwill impairment in 2021 was related to the business we acquired for our housekeeping solutions and was primarily due to the impact of the COVID-19 pandemic, which delayed the business integration progress and impacted the business growth rate. Our goodwill impairment in 2022 was related to the reduced service scope of our shared-bike maintenance solutions.
The following table sets forth the components of cost of revenues, both in absolute amount and as a percentage of our total revenues, for the periods indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2020 ​ 2021 ​ 2022 ​ ​ RMB % RMB % RMB US$ % ​ (in thousands, except for percentages) Cost of revenues: ​ ​ ​ ​ ​ ​ ​ Service fees paid to workers and team leaders ​ 2,177,376 ​ 84.4 ​ 3,452,926 ​ 85.8 ​ 3,187,567 ​ 462,152 ​ 83.5 Hiring expenses 60,744 2.4 ​ 127,649 3.2 ​ 137,066 19,873 ​ 3.6 Insurance expenses 65,133 2.5 ​ 108,114 2.7 ​ 88,669 12,856 ​ 2.3 Office and equipment expenses 54,706 2.1 ​ 93,484 2.3 ​ 88,258 12,796 ​ 2.3 Freight services costs — — ​ 10,361 0.3 ​ 27,276 3,955 ​ 0.7 Car rental and maintenance expenses 7,885 0.3 ​ 17,746 0.4 ​ 10,195 1,478 ​ 0.3 Platform commissions 1,767 0.1 ​ 7,942 0.2 ​ 1,431 208 ​ 0.0 Others(1) 20,688 0.8 ​ 31,460 0.8 ​ 27,228 3,948 ​ 0.7 Total 2,388,299 92.5 ​ 3,849,682 95.6 ​ 3,567,690 517,266 ​ 93.4 ​ (1) Represents depreciation and amortization, taxes and surcharges and other costs.
The following table sets forth the components of cost of revenues, both in absolute amount and as a percentage of our total revenues, for the periods indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ ​ RMB % RMB % RMB US$ % ​ ​ (in thousands, except for percentages) Cost of revenues: ​ ​ ​ ​ ​ ​ ​ Service fees paid to workers and team leaders ​ 3,452,926 ​ 85.8 ​ 3,187,567 ​ 83.5 ​ 3,029,775 ​ 426,736 ​ 81.8 Vehicle export expenses ​ — ​ — ​ — ​ — ​ 151,856 ​ 21,388 ​ 4.1 Hiring expenses 127,649 3.2 ​ 137,066 3.6 ​ 117,964 16,615 ​ 3.2 Office and equipment expenses 93,484 2.3 ​ 88,258 2.3 ​ 92,171 12,982 ​ 2.5 Insurance expenses 108,114 2.7 ​ 88,669 2.3 ​ 83,405 11,747 ​ 2.3 Freight services costs 10,361 0.3 ​ 27,276 0.7 ​ 15,131 2,131 ​ 0.4 Car rental and maintenance expenses 17,746 0.4 ​ 10,195 0.3 ​ 13,788 1,942 ​ 0.4 Platform commissions 7,942 0.2 ​ 1,431 0.0 ​ 5,196 732 ​ 0.1 Others(1) 31,460 0.8 ​ 27,228 0.7 ​ 26,492 3,731 ​ 0.7 Total 3,849,682 95.6 ​ 3,567,690 93.4 ​ 3,535,778 498,004 ​ 95.5 (1) Represents depreciation and amortization, taxes and surcharges and other costs.
Tax positions that meet the “more likely than not” recognition threshold are measured at the largest amount of tax benefit that has a greater than fifty percent likelihood of being realized upon settlement. Share-based compensation We apply ASC 718, Compensation-Stock Compensation (“ASC 718”) to account for our employee share-based payments.
Tax positions that meet the “more likely than not” recognition threshold are measured at the largest amount of tax benefit that has a greater than fifty percent likelihood of being realized upon settlement.
The following table sets forth the details of our material cash requirements (other than capital expenditure) as of December 31, 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ Payment due by ​ ​ ​ ​ Less ​ one – ​ ​ ​ ​ than ​ three ​ ​ Total one year years ​ ​ ​ ​ (RMB in thousands) ​ ​ Operating lease commitments ​ 4,379 ​ 3,276 ​ 1,103 Long-term debt 1,737 434 1,303 Short-term loans 65,000 65,000 — ​ Other than as shown above, we did not have any material capital and other commitments, long-term obligations, guarantees or other reasonably likely material cash requirements (even if not contractual and not recognized as liabilities) as of December 31, 2022.
The following table sets forth the details of our material cash requirements (other than capital expenditure) as of December 31, 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ Payment due by ​ ​ ​ ​ Less ​ one – ​ ​ ​ ​ than ​ three ​ ​ Total one year years ​ ​ ​ ​ (RMB in thousands) ​ ​ Operating lease commitments ​ 5,340 ​ 3,906 ​ 1,434 Long-term debt 10,266 2,733 7,533 Short-term loans 89,920 89,920 — ​ Other than as shown above, we did not have any material capital and other commitments, long-term obligations, guarantees or other reasonably likely material cash requirements (even if not contractual and not recognized as liabilities) as of December 31, 2023. 98 Table of Contents Off-Balance Sheet Arrangements We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties.
The non-GAAP financial measures presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to our data. We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure.
The non-GAAP financial measures presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to our data.
The table below sets forth a reconciliation of the non-GAAP financial measures for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2020 ​ 2021 ​ 2022 ​ ​ RMB RMB RMB US$ ​ ​ (in thousands) GAAP net loss ​ (5,604) ​ (191,230) ​ (16,414) ​ (2,380) Reconciliation item: ​ ​ ​ ​ Add: Share-based compensation expenses, net of tax impact of nil 82,667 68,932 19,762 2,865 Non-GAAP adjusted net income/(loss) 77,063 (122,298) 3,348 485 Add: Income tax expense 25,428 12,027 21,002 3,045 Depreciation 6,257 5,233 7,513 1,089 Amortization 13,749 25,278 21,094 3,058 Interest expense 8,068 7,026 5,683 824 Non-GAAP adjusted EBITDA 130,565 (72,734) 58,640 8,501 ​ Key Components of Our Results of Operations Revenues We generate revenues from on-demand delivery solutions, mobility service solutions and housekeeping solutions and other services.
We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure. 86 Table of Contents The table below sets forth a reconciliation of the non-GAAP financial measures for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ ​ RMB RMB RMB US$ ​ ​ (in thousands) GAAP (net loss)/income ​ (191,230) ​ (16,414) ​ 6,008 ​ 846 Reconciliation item: ​ ​ ​ ​ ​ ​ ​ ​ Add: ​ ​ ​ ​ Share-based compensation expenses, net of tax impact of nil 68,932 19,762 (495) (70) Non-GAAP adjusted net (loss)/income (122,298) 3,348 5,513 776 Add: ​ ​ ​ ​ Income tax expense/(benefit) 12,027 21,002 (927) (131) Depreciation 5,233 7,513 5,316 749 Amortization 25,278 21,094 20,430 2,878 Interest expense 7,026 5,683 4,882 688 Non-GAAP adjusted EBITDA (72,734) 58,640 35,214 4,960 ​ Key Components of Our Results of Operations Revenues We generate revenues from on-demand delivery solutions, mobility service solutions and housekeeping solutions and other services.
In 2020, 2021 and 2022, our total revenues were RMB2,580.8 million, RMB4,025.3 million and RMB3,820.4 million (US$553.9 million), respectively.
In 2021, 2022 and 2023, our total revenues were RMB4,025.3 million, RMB3,820.4 million and RMB3,702.4 million (US$521.5 million), respectively.
We believe that our current cash and cash equivalents, time deposits and anticipated cash flow from operations will be sufficient to meet our anticipated cash needs from operations and other commitments for at least the next 12 months from the date of the issuance of the consolidated financial statements.
We believe that our current cash and cash equivalents, time deposits and anticipated cash flow from operations will be sufficient to meet our anticipated cash needs from operations and other commitments for at least the next 12 months from the date of the issuance of the consolidated financial statements. 96 Table of Contents We intend to finance our future working capital requirements and capital expenditures from cash generated from operating activities and financing activities, including the net proceeds we received from our initial public offering.
Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity.
We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder’s equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity.
Our office and equipment expenses were RMB54.7 million, RMB93.5 million and RMB88.3 million (US$12.8 million) in 2020, 2021 and 2022, respectively. Freight services costs Freight services costs were related to our freight service solutions and primarily represented service fees paid to the fleets. Our freight services costs were nil, RMB10.4 million and RMB27.3 million (US$4.0 million), respectively.
Freight services costs Freight services costs were related to our freight service solutions and primarily represented service fees paid to the fleets. Our freight services costs were RMB10.4 million, RMB27.3 million and RMB15.1 million (US$2.1 million) in 2021, 2022 and 2023, respectively.
The following table sets forth a summary of our cash flows for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2020 ​ 2021 ​ 2022 ​ ​ RMB RMB RMB US$ ​ ​ (in thousands) Net cash generated from/(used in) operating activities ​ 11,110 ​ (30,893) ​ 74,723 ​ 10,833 Net cash (used in)/generated from investing activities ​ (187,083) ​ (110,413) ​ 77,211 ​ 11,196 Net cash generated/(used in) from financing activities 153,093 68,673 (82,140) (11,909) Effect of exchange rate changes on cash and restricted cash (144) (214) 321 46 Net (decrease)/increase in cash and restricted cash (23,024) (72,847) 70,115 10,166 Cash and restricted cash at beginning of the year 126,779 103,755 30,908 4,481 Cash and restricted cash at end of the year 103,755 30,908 101,023 14,647 ​ Operating activities Net cash generated from operating activities was RMB74.7 million (US$10.8 million) in 2022, primarily due to a net loss of RMB16.4 million (US$2.4 million), adjusted for (1) certain non-cash items, mainly including change in fair value of short-term investment of RMB41.8 million (US$6.1 million), amortization of RMB21.1 million (US$3.1 million) and share-based compensation of RMB19.8 million (US$2.9 million), and (2) changes in certain working capital items that positively impact the cash flow from operating activities, mainly including an increase in other non-current liabilities of RMB16.2 million (US$2.3 million), a decrease in prepayments and other current assets of RMB5.9 million (US$0.9 million) and an increase in income taxes payable of RMB5.8 million (US$0.8 million), partially offset by (3) changes in certain working capital items that negatively impact the cash flow from operating activities, mainly including a decrease in accounts payable of RMB40.8 million (US$5.9 million), an increase in other non-current assets of RMB20.3 million (US$2.9 million) and an increase in accounts receivable of RMB13.1 million (US$1.9 million). 95 Table of Contents Net cash used in operating activities was RMB30.9 million in 2021, primarily due to a net loss of RMB191.2 million, adjusted for (1) certain non-cash items, mainly including share-based compensation of RMB68.9 million, changes in fair value of short-term investment of RMB52.9 million, goodwill impairment of RMB52.0 million, and amortization of RMB25.3 million, and (2) changes in certain working capital items that positively impact the cash flow from operating activities, mainly including an increase of RMB65.1 million in accounts payable and an increase of RMB31.8 million in accrued expenses and other current liabilities, partially offset by (3) changes in certain working capital items that negatively impact the cash flow from operating activities, mainly including an increase of RMB134.2 million in accounts receivable and an increase of RMB22.6 million in other non-current assets.
The following table sets forth a summary of our cash flows for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ ​ RMB RMB RMB US$ ​ ​ (in thousands) Net cash (used in)/generated from operating activities ​ (30,893) ​ 74,723 ​ (97,282) ​ (13,703) Net cash (used in)/generated from investing activities ​ (110,413) ​ 77,211 ​ 18,384 ​ 2,590 Net cash generated from/(used in) financing activities 68,673 (82,140) 24,221 3,412 Effect of exchange rate changes on cash and restricted cash (214) 321 110 15 Net (decrease)/increase in cash and restricted cash (72,847) 70,115 (54,567) (7,686) Cash and restricted cash at beginning of the year 103,755 30,908 101,023 14,229 Cash and restricted cash at end of the year 30,908 101,023 46,456 6,543 ​ Operating activities Net cash used in operating activities was RMB97.3 million (US$13.7 million) in 2023, primarily due to a net income of RMB6.0 million (US$0.8 million), adjusted for (1) certain non-cash items, mainly including gain on disposals of assets, net of RMB22.3 million (US$3.1 million) and amortization of RMB20.4 million (US$2.9 million), and (2) changes in certain working capital items that negatively impact the cash flow from operating activities, mainly including an increase in prepayments and other current assets of RMB42.4 million (US$6.0 million), a decrease in account payables of RMB39.2 million (US$5.5 million) and a decrease in accrued expenses and other current liabilities of RMB24.6 million (US$3.5 million), partially offset by (3) changes in certain working capital items that positively impact the cash flow from operating activities, mainly including a decrease in accounts receivable of RMB19.7 million (US$2.8 million).
However, according to SAT Circular 81 and SAT Circular 35, if the relevant tax authorities consider the transactions or arrangements that we have are for the primary purpose of enjoying a favorable tax treatment, the relevant tax authorities may adjust the favorable withholding tax in the future. 89 Table of Contents If our holding company in the Cayman Islands or any of our subsidiaries outside of China were deemed to be a “resident enterprise” under the EIT Law, it would be subject to enterprise income tax on its worldwide income at a rate of 25%, which could result in unfavorable tax consequences to us and our non-PRC shareholders.
If our holding company in the Cayman Islands or any of our subsidiaries outside of China were deemed to be a “resident enterprise” under the EIT Law, it would be subject to enterprise income tax on its worldwide income at a rate of 25%, which could result in unfavorable tax consequences to us and our non-PRC shareholders. See “Item 3.
If the qualitative factors indicate a potential impairment, we compare the carrying amount of a reporting unit to its fair value, which is based on a discounted future cash flow approach.
If the qualitative factors indicate a potential impairment, we compare the carrying amount of a reporting unit to its fair value, which is based on a discounted future cash flow approach. We recognized goodwill impairment charge of RMB52.0 million, RMB4.9 million and nil for the years ended December 31, 2021, 2022 and 2023, respectively. ​
In accordance with ASC 718, we determine whether an award should be classified and accounted for as a liability award or equity award. All of our share-based awards to employees were classified as equity awards and are recognized in the consolidated financial statements based on their grant date fair values.
All our share-based awards to employees were classified as equity awards and are recognized in the consolidated financial statements based on their grant date fair values.
Our insurance costs were RMB65.1 million, RMB108.1 million and RMB88.7 million (US$12.9 million) in 2020, 2021 and 2022, respectively. 86 Table of Contents Office and equipment expenses Office and equipment expenses related to rental fees and property management fees in relation to our service stations and on-demand delivery supplies purchased for riders.
Our hiring expenses were RMB127.6 million, RMB137.1 million and RMB118.0 million (US$16.6 million) in 2021, 2022 and 2023, respectively. Office and equipment expenses Office and equipment expenses related to rental fees and property management fees in relation to our service stations and on-demand delivery supplies purchased for riders.
Housekeeping solutions and other services We generate revenue from housekeeping solutions for hotels and other services, primarily including maintenance services for short-term rental properties. We charge monthly service fees to industry customers based on the service hours and/or the number of fulfilled orders, as adjusted based on KPI performance.
We charge monthly service fees to industry customers based on the service hours and/or the number of fulfilled orders, as adjusted based on KPI performance.
We primarily derived revenue from service fees paid by industry customers based on the number of fulfilled orders. Cost of revenues Our cost of revenues was RMB2,388.3 million, RMB3,849.7 million and RMB3,567.7 million (US$517.3 million) in 2020, 2021 and 2022, respectively.
We generated revenues of RMB79.7 million, RMB72.6 million and RMB48.7 million (US$6.9 million) from housekeeping solutions in 2021, 2022 and 2023, respectively. We primarily derived revenue from service fees paid by industry customers based on the number of fulfilled orders.
The results of operations in any period are not necessarily indicative of the results that may be expected for any future years or periods. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2020 ​ 2021 ​ 2022 ​ ​ RMB RMB RMB US$ ​ ​ (in thousands, except for share and per share data) Revenues ​ 2,580,810 ​ 4,025,279 ​ 3,820,378 ​ 553,903 Cost of revenues ​ (2,388,299) ​ (3,849,682) ​ (3,567,690) ​ (517,266) General and administrative expenses (202,963) (240,749) (213,592) (30,968) Research and development expenses (13,095) (20,122) (12,540) (1,818) Gain/(loss) on disposal of assets, net 3,243 (2,564) 13,975 2,026 Goodwill impairment (336) (51,971) (4,882) (708) Total operating expenses (213,151) (315,406) (217,039) (31,468) Operating (loss)/income (20,640) (139,809) 35,649 5,169 Interest income 824 644 690 100 Interest expense (8,068) (7,026) (5,683) (824) Other income, net 49,218 (33,964) (26,068) (3,780) Foreign exchange (loss)/gain (1,510) 952 — — Income/(loss) before income tax 19,824 (179,203) 4,588 665 Income tax expense (25,428) (12,027) (21,002) (3,045) Net loss (5,604) (191,230) (16,414) (2,380) Net loss attributable to non-controlling interests 9,034 33,323 3,284 476 Net income/(loss) attributable to ordinary shareholders of Quhuo Limited 3,430 (157,907) (13,130) (1,904) Non-GAAP Financial Data(1) Adjusted net income/(loss) 77,063 (122,298) 3,348 485 Adjusted EBITDA 130,565 (72,734) 58,640 8,501 ​ ​ ​ (1) See “-Non-GAAP Financial Measures.” Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 Revenues Our revenues decreased by 5.1% from RMB4,025.3 million in 2021 to RMB3,820.4 million (US$553.9 million) in 2022, primarily due to the following reasons. ● Revenues from on-demand delivery solutions decreased by 5.0% from RMB3,829.0 million in 2021 to RMB3,638.7 million (US$527.6 million) in 2022, primarily due to the decrease in the number of delivery orders resulting from regional resurgence of COVID-19 in multiple localities in 2022.
The results of operations in any period are not necessarily indicative of the results that may be expected for any future years or periods. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2021 ​ 2022 ​ 2023 ​ ​ RMB RMB RMB US$ ​ ​ (in thousands, except for share and per share data) Revenues ​ 4,025,279 ​ 3,820,378 ​ 3,702,387 ​ 521,470 Cost of revenues ​ (3,849,682) ​ (3,567,690) ​ (3,535,778) ​ (498,004) General and administrative expenses (240,749) (213,592) (184,336) (25,963) Research and development expenses (20,122) (12,540) (12,378) (1,743) (Loss)/gain on disposal of assets, net (2,564) 13,975 22,317 3,143 Goodwill impairment (51,971) (4,882) - - Total operating expenses (315,406) (217,039) (174,397) (24,563) Operating (loss)/income (139,809) 35,649 (7,788) (1,097) Interest income 644 690 1,047 147 Interest expense (7,026) (5,683) (4,882) (688) Other income, net (33,964) (26,068) 16,704 2,353 Foreign exchange gain 952 — — — (Loss)/income before income tax (179,203) 4,588 5,081 715 Income tax (expense)/benefit (12,027) (21,002) 927 131 Net (loss)/income (191,230) (16,414) 6,008 846 Net loss/(income) attributable to non-controlling interests 33,323 3,284 (2,674) (377) Net income/(loss) attributable to ordinary shareholders of Quhuo Limited (157,907) (13,130) 3,334 469 Non-GAAP Financial Data(1) ​ ​ ​ ​ Adjusted net (loss)/income (122,298) 3,348 5,513 776 Adjusted EBITDA (72,734) 58,640 35,214 4,960 ​ ​ ​ (1) See “-Non-GAAP Financial Measures.” Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Revenues Our revenues decreased by 3.1% from RMB3,820.4 million in 2022 to RMB3,702.4 million (US$521.5 million) in 2023, primarily due to the following reasons. ● Revenues from on-demand delivery solutions decreased by 6.2% from RMB3,638.7 million in 2022 to RMB3,412.8 million (US$480.7 million) in 2023, primarily because (1) we enjoyed more preferential policies during 2022 amid the COVID-19 pandemic, which was significantly reduced in 2023 following the relief of the pandemic, and (2) the geographical coverage of our on-demand delivery solutions decreased from 1,118 delivery areas as of December 31, 2022 to 1,082 delivery areas as of December 31, 2023. ● Revenues from mobility service solutions increased significantly from RMB108.1 million in 2022 to RMB233.8 million (US$32.9 million) in 2023, primarily attributable to the business growth of our vehicle export solutions.
This assumes that Quhuo Investment Limited does not hold an interest in real estate in the British Virgin Islands.
This assumes that Quhuo Investment Limited does not hold an interest in real estate in the British Virgin Islands. There are currently no withholding taxes or exchange control regulations in the British Virgin Islands applicable to Quhuo Investment Limited or its members.
In 2020, Beijing Quhuo was designated as a High Tech Enterprise and, therefore, has been eligible for a preferential tax rate of 15% from 2020 to 2023.
Beijing Quhuo, a subsidiary of the VIE, was recognized as high and new technology enterprise, or the HNTE, in 2020 and renewed in 2023, and thus is eligible for a preferential tax rate of 15% from 2020 to 2025.
PRC Our WFOE, VIE and VIE’s subsidiaries in China are subject to PRC enterprise income tax on their taxable income in accordance with the relevant PRC income tax laws.
No provision for Hong Kong profits tax was made in the consolidated financial statements for the years ended December 31, 2021 and 2022, respectively. 90 Table of Contents PRC Our WFOE, VIE and VIE’s subsidiaries in China are subject to PRC enterprise income tax on their taxable income in accordance with the relevant PRC income tax laws.
The incurrence of indebtedness would result in increased fixed obligations and could result in operating covenants that would restrict our operations. We cannot assure you that financing will be available in the amounts we need or on terms acceptable to us, if at all.
We cannot assure you that financing will be available in the amounts we need or on terms acceptable to us, if at all. If we are unable to obtain additional equity or debt financing as required, our business operations and prospects may suffer.
Housekeeping solutions We launched our housekeeping solutions in January 2019, and continuously tapped into new industries to provide diversified, flexible earning opportunities for workers on our platform. We generated revenues of RMB12.4 million, RMB79.7 million and RMB72.6 million (US$10.5 million) from housekeeping solutions in 2020, 2021 and 2022, respectively.
For vehicle export solutions, we derive revenue from sales of vehicles. 87 Table of Contents Housekeeping solutions We launched our housekeeping solutions in January 2019, and continuously tapped into new industries to provide diversified, flexible earning opportunities for workers on our platform.
If our existing cash resources are insufficient to meet our requirements, we may seek to issue equity or debt securities or obtain credit facilities. The issue of additional equity securities, including convertible debt securities, would result in further dilution to our shareholders.
We may, however, require additional cash resources due to changing business conditions or other future developments, including acquisitions or investments we may decide to selectively pursue. If our existing cash resources are insufficient to meet our requirements, we may seek to issue equity or debt securities or obtain credit facilities.
Other income/(loss), net We recorded other loss, net of RMB34.0 million in 2021, as compared to other income, net of RMB49.2 million in 2020, primarily because we recorded fair value losses of RMB52.9 in 2021 as a result of the fluctuation in the fair value of our investment in a mutual fund.
Other (loss)/income, net/ We recorded other loss, net of RMB26.1 million in 2022 and other income, net of RMB16.7 million (US$2.4 million) in 2023, primarily in relation to the fluctuation in the fair value of our investment in a mutual fund.
We recognize revenues when the variable consideration becomes fixed at the end of the month when the uncertainty on monthly performance evaluation is resolved. Mobility solutions Our mobility service solutions comprise shared-bike maintenance solutions, ride-hailing solutions and freight service solutions. Bike-sharing maintenance solutions We derive revenue from service fees paid by the bike-sharing company for daily maintenance services we provided.
The anticipated relationship period is generally eight years and will be reassessed on an annual basis. Mobility service solutions Our mobility service solutions comprise shared-bike maintenance solutions, ride-hailing solutions, freight service solutions and vehicle export solutions. Bike-sharing maintenance solutions We derive revenue from service fees paid by the bike-sharing company for daily maintenance services we provided.
We early adopted ASU No. 2018-7, Compensation—Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting on January 1, 2017. Share-based awards to non-employees were classified as equity awards and are recognized in the consolidated financial statements based on their grant date fair value.
We early adopted ASU No. 2018-7, Compensation-Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting (“ASU 2018-7”) on January 1, 2017 and apply ASC 718 to account for share-based payments for acquiring goods and services from non-employees.
In 2022, Nantong Runda was qualified for the requirements of small and microsized enterprise, and the first RMB1.0 million in its annual taxable income was eligible for 12.5% reduction and the taxable income between RMB1.0 million and RMB3.0 million was eligible for 50% reduction and the applicable corporate income tax rate was 20%.
In 2022, Nantong Runda qualified for the requirements of small and micro-sized enterprise, so 12.5% of the first RMB1.0 million of the assessable profit before tax is subject to preferential tax rate of 20%, and the 25% of the assessable profit before tax exceeding RMB1.0 million but not exceeding RMB3.0 million is subject to preferential tax rate of 20%.
We have elected to recognize share-based compensation using the accelerated method, for all share-based awards granted with graded vesting based on service conditions. 99 Table of Contents In determining the value of share options granted to employees and non-employees, we have used the binomial option pricing model, with assistance from an independent third-party valuation firm.
We elected to recognize share-based compensation using the accelerated method, for all share-based awards granted with graded vesting based on service conditions and performance conditions. For share-based payment awards with market conditions, such market conditions are included in the determination of the estimated grant-date fair value.
Net cash generated from financing activities was RMB153.1 million in 2020, which was primarily attributable to (1) proceeds from initial public offering of RMB244.2 million, and (2) proceeds from short-term debt of RMB151.0 million, partially offset by (1) repayments of short-term debt of RMB222.6 million, (2) payments of deferred IPO costs of RMB11.0 million, and (3) repayments of long-term debt of RMB8.6 million.
Financing activities Net cash generated from financing activities was RMB24.2 million (US$3.4 million) in 2023, which was primarily attributable to proceeds from short-term loans of RMB271.5 million (US$38.2 million), partially offset by repayments of short-term loans of RMB246.5 million (US$34.7 million).
In 2020, Nantong Runda was qualified for the requirements of small and micro-sized enterprise, and its first one million yuan of annual taxable income was eligible for 75% reduction and the taxable income between one million yuan and three million yuan was eligible for 50% reduction. The applicable corporate income tax rate is 20%.
In 2023, Shanghai Quhuo and Nantong Runda qualified for the requirements of small and micro-sized enterprise, so 25% of its first RMB3.0 million of the assessable profit before tax is subject to the tax rate of 20%.
Hiring expenses Hiring expenses related to service fees paid to third-party labor service companies and feral fees paid to existing workers on our platform. Our hiring expenses were RMB60.7 million, RMB127.6 million and RMB137.1 million (US$19.9 million) in 2020, 2021 and 2022, respectively. Insurance expenses Insurance costs were incurred for purchasing relevant insurance policies for workers on our platform.
Vehicle export expenses Vehicle export expenses consisted of our cost of procurement, technical preparation and upgrade, and exportation of vehicles paid to third-party companies. Our vehicle export expenses were RMB151.9 million (US$21.4 million) in 2023. Hiring expenses Hiring expenses related to service fees paid to third-party labor service companies and feral fees paid to existing workers on our platform.
The geographical coverage of our on-demand delivery solutions decreased from 1,273 delivery areas as of December 31, 2021 to 1,118 delivery areas as of December 31, 2022 . ● Revenues from mobility service solutions decreased by 1.9 % from RMB110.2 million in 2021 to RMB108.1 million (US$15.7 million) in 2022, primarily due to the reduced customer demand resulting from regional resurgence of COVID-19 in multiple localities in 2022. 90 Table of Contents ● Revenues from housekeeping and accommodation solutions and other services decreased by 14.6 % from RMB86.2 million in 2021 to RMB73.6 million (US$10.7 million) in 2022, primarily due to the reduced customer demand resulting from regional resurgence of COVID-19 in multiple localities in 2022.
Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 Revenues Our revenues decreased by 5.1% from RMB4,025.3 million in 2021 to RMB3,820.4 million (US$553.9 million) in 2022, primarily due to the following reasons. ● Revenues from on-demand delivery solutions decreased by 5.0% from RMB3,829.0 million in 2021 to RMB3,638.7 million (US$527.6 million) in 2022, primarily due to the decrease in the number of delivery orders resulting from regional resurgence of COVID-19 in multiple localities in 2022.
(Loss)/gains on disposal of assets, net We recorded gains on disposal of assets, net of RMB3.2 million in 2020 and loss on disposal of assets of RMB2.6 million in 2021, in relation to transfer of customer relationships in certain delivery areas of, and transfer of smart food cabinets used in, our on-demand delivery solutions to third parties.
Gain on disposal of assets, net We recorded gain on disposal of assets, net, of RMB14.0 million and RMB22.3 million (US$3.1 million) in 2022 and 2023, respectively, in relation to the transfer of certain customer relationships related to our on-demand delivery solutions to third parties. 93 Table of Contents Goodwill impairment We recorded goodwill impairment of RMB4.9 million in 2022, compared to nil in 2023.
Operating loss As a result of the foregoing, our operating loss increased significantly from RMB20.6 million in 2020 to RMB139.8 million in 2021. Interest income Our interest income decreased by 21.8% from RMB0.8 million in 2020 to RMB0.6 million in 2021, primarily due to a decrease in our bank deposits.
Operating (loss)/income As a result of the foregoing, we recorded operating loss of RMB139.8 million in 2021 and operating income of RMB35.6million (US$5.2 million) in 2022. Interest income Our interest income remained relatively stable at RMB0.6 million in 2021 and RMB0.7 million (US$0.1 million) in 2022.
Removed
The outbreak of COVID-19 has had certain negative impact on the overall economy of the regions where we deliver our solutions. Many businesses and social activities in China and other countries and regions have been severely disrupted, including those of our industry customers.
Added
Cost of revenues Our cost of revenues was RMB3,849.7 million, RMB3,567.7 million and RMB3,535.8 million (US$498.0 million) in 2021, 2022 and 2023, respectively.
Removed
Except for the impact discussed above, we do not anticipate any prolonged material adverse impact on our business, results of operations and financial condition from the COVID-19 outbreak, as the Chinese government has strategically adjusted pandemic prevention policies, and economic activities have begun to recover and return to normal nationwide.
Added
Our office and equipment expenses were RMB93.5 million, RMB88.3 million and RMB92.2 million (US$13.0 million) in 2021, 2022 and 2023, respectively. 88 Table of Contents Insurance expenses Insurance expenses were incurred for purchasing relevant insurance policies for workers on our platform. Our insurance expenses were RMB108.1 million, RMB88.7 million and RMB83.4 million (US$11.7 million) in 2021, 2022 and 2023, respectively.
Removed
There are currently no withholding taxes or exchange control regulations in the British Virgin Islands applicable to Quhuo Investment Limited or its members. 88 Table of Contents Hong Kong Our wholly-owned subsidiary in Hong Kong, Quhuo Technology Investment (Hong Kong) Limited, is subject to an income tax rate of 16.5% for taxable income earned in Hong Kong.

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Item 6. [Reserved]

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

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The audit committee is responsible for, among other things: ● selecting the independent registered public accounting firm and pre-approving all auditing and non-auditing services permitted to be performed by the independent registered public accounting firm; ● reviewing with the independent registered public accounting firm any audit problems or difficulties and management’s response; 105 Table of Contents ● reviewing and approving all proposed related party transactions, as defined in Item 404 of Regulation S-K under the Securities Act; ● discussing the annual audited financial statements with management and the independent registered public accounting firm; ● reviewing major issues as to the adequacy of our internal controls and any special audit steps adopted in light of material control deficiencies; ● reviewing and reassessing annually the adequacy of our audit committee charter; ● meeting separately and periodically with management and the independent registered public accounting firm; ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance; and ● reporting regularly to the board.
The audit committee is responsible for, among other things: ● selecting the independent registered public accounting firm and pre-approving all auditing and non-auditing services permitted to be performed by the independent registered public accounting firm; ● reviewing with the independent registered public accounting firm any audit problems or difficulties and management’s response; 106 Table of Contents ● reviewing and approving all proposed related party transactions, as defined in Item 404 of Regulation S-K under the Securities Act; ● discussing the annual audited financial statements with management and the independent registered public accounting firm; ● reviewing major issues as to the adequacy of our internal controls and any special audit steps adopted in light of material control deficiencies; ● reviewing and reassessing annually the adequacy of our audit committee charter; ● meeting separately and periodically with management and the independent registered public accounting firm; ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance; and ● reporting regularly to the board.
The nominating and corporate governance committee is responsible for, among other things: ● recommending nominees to the board for election or re-election to the board, or for appointment to fill any vacancy on the board; ● reviewing annually with the board the current composition of the board with regards to characteristics such as independence, age, skills, experience and availability of service to us; 106 Table of Contents ● selecting and recommending to the board the names of directors to serve as members of the audit committee and the compensation committee, as well as of the nominating and corporate governance committee itself; ● developing and reviewing the corporate governance principles adopted by the board and advising the board with respect to significant developments in the law and practice of corporate governance and our compliance with such laws and practices; and ● evaluating the performance and effectiveness of the board as a whole.
The nominating and corporate governance committee is responsible for, among other things: ● recommending nominees to the board for election or re-election to the board, or for appointment to fill any vacancy on the board; ● reviewing annually with the board the current composition of the board with regards to characteristics such as independence, age, skills, experience and availability of service to us; 107 Table of Contents ● selecting and recommending to the board the names of directors to serve as members of the audit committee and the compensation committee, as well as of the nominating and corporate governance committee itself; ● developing and reviewing the corporate governance principles adopted by the board and advising the board with respect to significant developments in the law and practice of corporate governance and our compliance with such laws and practices; and ● evaluating the performance and effectiveness of the board as a whole.
To the extent permitted under the Plan and applicable law and regulations, the trustee shall follow the instruction of the Board or a committee of the Board consisting of one or more members of the Board in respect of the exercise of voting rights (if any) and powers in relation to the Class A ordinary shares held by Quhuo Holding (BVI) Limited until they have been transferred outside of the trust and/or the nominee to the personal accounts of the relevant grant recipient. 104 Table of Contents C.
To the extent permitted under the Plan and applicable law and regulations, the trustee shall follow the instruction of the Board or a committee of the Board consisting of one or more members of the Board in respect of the exercise of voting rights (if any) and powers in relation to the Class A ordinary shares held by Quhuo Holding (BVI) Limited until they have been transferred outside of the trust and/or the nominee to the personal accounts of the relevant grant recipient. 105 Table of Contents C.
(4) Represents 5,950,290 Class A ordinary shares held by Baidu Online Network Technology (Beijing) Co., Ltd., a limited liability company incorporated under the laws of the PRC and is ultimately wholly-owned by Baidu, Inc., a Cayman Island company listed on the Nasdaq Global Select Market under the symbol “BIDU.” The registered office of Baidu Online Network Technology (Beijing) Co., Ltd. is Baidu Campus, No. 10 Shangdi 10th Street, Haidian District, Beijing, the PRC.
(3) Represents 5,950,290 Class A ordinary shares held by Baidu Online Network Technology (Beijing) Co., Ltd., a limited liability company incorporated under the laws of the PRC and is ultimately wholly-owned by Baidu, Inc., a Cayman Island company listed on the Nasdaq Global Select Market under the symbol “BIDU.” The registered office of Baidu Online Network Technology (Beijing) Co., Ltd. is Baidu Campus, No. 10 Shangdi 10th Street, Haidian District, Beijing, the PRC.
In respect of all matters upon which the ordinary shares are entitled to vote, each Class A ordinary share is entitled to one vote, and each Class B ordinary share is entitled to 15 votes, voting together as one class. Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof.
In respect of all matters upon which the ordinary shares are entitled to vote, each Class A ordinary share is entitled to one vote, and each Class B ordinary share is entitled to 480 votes, voting together as one class. Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof.
Awards may not be transferred in any manner by the recipient except under limited circumstances, including by will or the laws of descent and distribution, unless otherwise provided by the plan administrator. Termination and amendment . Unless terminated earlier, the 2019 Plan has a term of 10 years.
Awards may not be transferred in any manner by the recipient except under limited circumstances, including by will or the laws of descent and distribution, unless otherwise provided by the plan administrator. 104 Table of Contents Termination and amendment . Unless terminated earlier, the 2019 Plan has a term of 10 years.
Lyu received her bachelor’s degree in 2010 from the University of Virginia and an MBA degree from the Wharton School of the University of Pennsylvania in 2015. 101 Table of Contents Fan Pan has served as our chief technology officer since May 2015. Prior to joining us, Mr.
Lyu received her bachelor’s degree in 2010 from the University of Virginia and an MBA degree from the Wharton School of the University of Pennsylvania in 2015. Fan Pan has served as our chief technology officer since May 2015. Prior to joining us, Mr.
Pursuant to the second memorandum and articles of association, an appointment of a director may be on terms that the director shall automatically retire from office (unless he has sooner vacated office) at the next or a subsequent annual general meeting or upon any specified event or after any specified period in a written agreement between the company and the director, if any; but no such term shall be implied in the absence of express provision.
Pursuant to our third amended and restated memorandum and articles of association, an appointment of a director may be on terms that the director shall automatically retire from office (unless he has sooner vacated office) at the next or a subsequent annual general meeting or upon any specified event or after any specified period in a written agreement between the company and the director, if any; but no such term shall be implied in the absence of express provision.
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES A Directors and Senior Management The following table sets forth information regarding our directors and senior management as of the date of this annual report. ​ ​ ​ ​ ​ Directors and Executive Officers Age Position/Title Leslie Yu 47 Chairman of the Board of Directors, Director and Chief Executive Officer Zhen Ba 43 Director, Vice President and Chief Financial Officer Gang Wang 48 Director and Chief Operating Officer Chenxi Zhao 34 Director Wenying Lyu 35 Director Fan Pan 45 Chief Technology Officer Jingchuan Li 49 Independent Director Jing Zhou 48 Independent Director Jie Jiao 42 Independent Director ​ Leslie Yu is our founder and has served as chairman of our board of directors since June 2019 and our chief executive officer since the inception of Beijing Quhuo Technology Co., Ltd. in March 2012.
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES A Directors and Senior Management The following table sets forth information regarding our directors and senior management as of the date of this annual report. ​ ​ ​ ​ ​ Directors and Executive Officers Age Position/Title Leslie Yu 48 Chairman of the Board of Directors, Director and Chief Executive Officer Zhen Ba 44 Director, Vice President and Chief Financial Officer Gang Wang 49 Director and Chief Operating Officer Chenxi Zhao 35 Director Wenying Lyu 36 Director Fan Pan 46 Chief Technology Officer Jingchuan Li 50 Independent Director Jing Zhou 49 Independent Director Jie Jiao 43 Independent Director ​ Leslie Yu is our founder and has served as chairman of our board of directors since June 2019 and our chief executive officer since the inception of Beijing Quhuo Technology Co., Ltd. in March 2012.
Ba received his bachelor’s degree in English from China Foreign Affairs University (formerly known as Foreign Affairs College) in 2002 and his master’s degree in management from Lancaster University in 2003. Gang Wang has served as our chief operating officer since September 2014 and our director since July 2022.
Ba received his bachelor’s degree in English from China Foreign Affairs University (formerly known as Foreign Affairs College) in 2002 and his master’s degree in management from Lancaster University in 2003. 102 Table of Contents Gang Wang has served as our chief operating officer since September 2014 and our director since July 2022.
Our officers are elected by and serve at the discretion of the board of directors. Employment Agreements and Indemnification Agreements We have entered into employment agreements with our executive officers.
Our officers are elected by and serve at the discretion of the board of directors. 108 Table of Contents Employment Agreements and Indemnification Agreements We have entered into employment agreements with our executive officers.
These shares, however, are not included in the computation of the percentage ownership of any other person. 109 Table of Contents See “—B.
These shares, however, are not included in the computation of the percentage ownership of any other person. See “—B.
The following paragraphs describe the principal terms of the 2019 Plan: Types of awards. The 2019 Plan permits the awards of options, restricted shares, restricted share unit or any other type of awards that the committee decides. Plan administration . Our board of directors or a committee of one or more members of the board will administer the 2019 Plan.
The 2019 Plan permits the awards of options, restricted shares, restricted share unit or any other type of awards that the committee decides. Plan administration . Our board of directors or a committee of one or more members of the board will administer the 2019 Plan.
Employees As of December 31, 2020, 2021 and 2022, we had 708, 685 and 495 full-time employees, respectively.
Employees As of December 31, 2021, 2022 and 2023, we had 685, 495 and 490 full-time employees, respectively.
None of our employees are represented by labor unions. E. Share Ownership The following table sets forth information concerning the beneficial ownership of our ordinary shares as of April 10, 2023 by: ● each of our directors and executive officers; and ● each person known to us to beneficially own 5.0% or more of our ordinary shares.
Share Ownership The following table sets forth information concerning the beneficial ownership of our ordinary shares as of April 10, 2024 by: ● each of our directors and executive officers; and ● each person known to us to beneficially own 5.0% or more of our ordinary shares.
A director will cease to be a director if, among other things, the director (1) becomes bankrupt or makes any arrangement or composition with his creditors; (2) dies or is found by our company to be or becomes of unsound mind; (3) resigns his office by notice in writing to the company; (4) without special leave of absence from our board, is absent from three consecutive board meetings and our board of directors resolve that his office be vacated; or (5) is removed from office pursuant to any other provision of our second amended and restated memorandum and articles of association.
A director will cease to be a director if, among other things, the director (1) becomes bankrupt or makes any arrangement or composition with his creditors; (2) dies or is found by our company to be or becomes of unsound mind; (3) resigns his office by notice in writing to the company; or (4) is removed from office pursuant to any other provision of our third amended and restated memorandum and articles of association.
To the best of our knowledge, as of April 10, 2023, a total of 27,197,869 Class A ordinary shares were held by one record holder in the United States, which is Deutsche Bank Trust Company Americas, the depositary of our ADS program, representing 44.1% of our total outstanding shares.
To the best of our knowledge, as of April 10, 2024, a total of 72,868,199 Class A ordinary shares were held by one record holder in the United States, which is Deutsche Bank Trust Company Americas, the depositary of our ADS program, representing 70.7% of our total outstanding shares.
However, no such action may adversely affect in any material way any awards previously granted unless agreed by the recipient. 103 Table of Contents The following table sets forth information on restricted shares that we have awarded or have agreed to award as of April 10, 2023 pursuant to the 2019 Plan. ​ ​ ​ ​ ​ ​ ​ Number of ​ ​ ​ ​ Class A ​ ​ ​ ​ Shares ​ ​ ​ ​ Ordinary ​ ​ ​ ​ underlying ​ ​ ​ ​ the awards ​ ​ ​ awarded Grant Date Directors and Executive Officers ​ ​ Leslie Yu ​ 1,458,192 ​ January 1, 2019 Zhen Ba ​ — ​ Gang Wang ​ 1,135,883 ​ September 20, 2017, August 23, 2019 and April 19, 2021 Chenxi Zhao ​ — ​ — Wenying Lyu — — Fan Pan * September 20, 2017 and August 23, 2019 Jingchuan Li — — Jing Zhou — — Jie Jiao — — Total 7,857,974 ​ * Less than 1% of our total outstanding shares on an as-converted basis.
The following table sets forth information on restricted shares that we have awarded or have agreed to award as of April 10, 2024 pursuant to the 2019 Plan. ​ ​ ​ ​ ​ ​ ​ Number of ​ ​ ​ ​ Class A ​ ​ ​ ​ Shares ​ ​ ​ ​ Ordinary ​ ​ ​ ​ underlying ​ ​ ​ ​ the awards ​ ​ ​ awarded Grant Date Directors and Executive Officers ​ ​ Leslie Yu ​ 1,458,192 ​ January 1, 2019 Zhen Ba ​ — ​ Gang Wang ​ 1,135,883 ​ September 20, 2017, August 23, 2019 and April 19, 2021 Chenxi Zhao ​ — ​ — Wenying Lyu — — Fan Pan * September 20, 2017 and August 23, 2019 Jingchuan Li — — Jing Zhou — — Jie Jiao — — Total 9,502,550 * Less than 1% of our total outstanding shares on an as-converted basis.
Compensation” for more details on options and restricted shares granted to our directors and executive officers. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage Percentage ​ ​ ​ ​ ​ ​ of ​ of ​ ​ ​ Class A ​ Class B ​ Beneficial ​ Aggregate ​ ​ ​ Ordinary ​ Ordinary ​ Ownership ​ Voting ​ ​ ​ Shares ​ Shares ​ † ​ Power †† ​ Directors and Executive Officers** ​ ​ ​ ​ Leslie Yu(1) ​ 1,458,192 ​ 6,296,630 ​ 12.6 % 64.0 % Zhen Ba(2) 2,363,030 — 3.8 % 1.6 % Gang Wang 664,333 — 1.1 % 0.6 % Chenxi Zhao — — — — ​ Wenying Lyu — — — — ​ Fan Pan * — * * ​ Jingchuan Li — — — — ​ Jing Zhou — — — — ​ Jie Jiao — — — — ​ Directors and executive officers as a group 5,229,059 6,296,630 18.7 % 66.5 % Principal Shareholders ​ LESYU Investments Limited(1) — 6,296,630 10.2 % 63.0 % Shuyi Yang 6,113,540 — 9.9 % 4.1 % BZB Investment Limited(2) 2,363,030 — 3.8 % 1.6 % Quhuo Holding (BVI) Limited(3) 6,739,923 — 10.9 % — ​ Baidu Online Network Technology (Beijing) Co., Ltd.(4) 5,950,290 — 9.6 % 4.0 % SBCVC Fund IV, L.P.(5) 5,673,780 — 9.2 % 3.8 % ClearVue YummyExpress Holdings, Ltd.(6) 3,616,630 — 5.9 % 2.4 % * Less than 1% of our total outstanding shares as of April 10, 2023. ** The business address for our directors and executive officers is 3rd Floor, Block A, Tonghui Building, No. 1132 Huihe South Street, Chaoyang District, Beijing, People’s Republic of China. † For each person and group included in this column, percentage ownership is calculated by dividing the number of shares beneficially owned by such person or group by the sum of the total number of shares outstanding as of April 10, 2023. †† For each person and group included in this column, the 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 Class A and Class B ordinary shares as a single class.
Compensation” for more details on options and restricted shares granted to our directors and executive officers. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage Percentage ​ ​ ​ ​ ​ ​ of ​ of ​ ​ ​ Class A ​ Class B ​ Beneficial ​ Aggregate ​ ​ ​ Ordinary ​ Ordinary ​ Ownership ​ Voting ​ ​ ​ Shares ​ Shares ​ † ​ Power †† ​ Directors and Executive Officers** ​ ​ ​ ​ Leslie Yu(1) ​ 1,458,192 ​ 6,296,630 ​ 7.5 % 96.9 % Zhen Ba(2) 2,363,030 — 2.3 % 0.0 % Gang Wang * — * % * ​ Chenxi Zhao — — — — ​ Wenying Lyu — — — — ​ Fan Pan * — * * ​ Jingchuan Li — — — — ​ Jing Zhou — — — — ​ Jie Jiao — — — — ​ Directors and executive officers as a group 5,428,587 6,296,630 11.4 % 97.1 % Principal Shareholders ​ ​ ​ ​ ​ LESYU Investments Limited(1) — 6,296,630 6.1 % 96.9 % Shuyi Yang 6,113,540 — 5.9 % 0.2 % BZB Investment Limited(2) 2,363,030 — 2.3 % 0.0 % Baidu Online Network Technology (Beijing) Co., Ltd.(3) 5,950,290 — 5.8 % 0.2 % SBCVC Fund IV, L.P.(4) 5,827,980 — 5.7 % 0.2 % Cloud Alliance Inc./Zhifa Liu(5) 25,250,000 — 24.5 % 0.8 % * Less than 1% of our total outstanding shares as of April 10, 2024. ** The business address for our directors and executive officers is 3F, Building A, Xin'anmen, No. 1 South Bank, Huihe South Street, Chaoyang District, Beijing, People’s Republic of China. † For each person and group included in this column, percentage ownership is calculated by dividing the number of shares beneficially owned by such person or group by the sum of the total number of shares outstanding as of April 10, 2024. †† For each person and group included in this column, the 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 Class A and Class B ordinary shares as a single class.
The functions and powers of our board of directors include, among others: ● convening shareholders’ annual general meetings and reporting its work to shareholders at such meetings; ● declaring dividends and distributions; ● appointing officers and determining the term of office and its responsibilities of the officers; ● exercising the borrowing powers of our company and mortgaging the property of our company; and ● approving the transfer of shares in our company, including the registration of such shares in our share register. 107 Table of Contents Terms of Directors and Officers Our directors are not subject to a term of office and hold office until such time as they are removed from office by ordinary resolution of the shareholders.
The functions and powers of our board of directors include, among others: ● convening shareholders’ annual general meetings and reporting its work to shareholders at such meetings; ● declaring dividends and distributions; ● appointing officers and determining the term of office and its responsibilities of the officers; ● exercising the borrowing powers of our company and mortgaging the property of our company; and ● approving the transfer of shares in our company, including the registration of such shares in our share register.
Compensation Compensation of Directors and Executive Officers In 2022, the aggregate cash compensation to directors and executive officers was approximately RMB4.5 million (US$0.7 million). This amount consisted only of cash and did not include any share-based compensation or benefits in kind.
No family relationship exists between any of our directors and executive officers. B. Compensation Compensation of Directors and Executive Officers In 2023, the aggregate cash compensation to directors and executive officers was approximately RMB3.9 million (US$0.5 million). This amount consisted only of cash and did not include any share-based compensation or benefits in kind.
The calculation in the table below is based on 61,676,213 ordinary shares outstanding as of April 10, 2023, including 55,379,583 Class A ordinary shares and 6,296,630 Class B ordinary shares. Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
The calculation in the table below is based on 103,081,893 ordinary shares outstanding as of April 10, 2024, including 96,785,263 Class A ordinary shares and 6,296,630 Class B ordinary shares. Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
(1) Represents (i) 6,296,630 Class B ordinary shares that are held by LESYU Investments Limited, a British Virgin Islands company wholly-owned by Mr. Leslie Yu. The registered office of LESYU Investments Limited is Craigmuir Chambers, Road Town, Tortola, VG 1110, British Virgin Islands; and (ii) 1,458,192 Class A ordinary shares issuable to Mr.
The registered office of LESYU Investments Limited is Craigmuir Chambers, Road Town, Tortola, VG 1110, British Virgin Islands; and (ii) 1,458,192 Class A ordinary shares in the form of ADSs. (2) Represents 2,363,030 Class A ordinary shares that are held by BZB Investment Limited, a British Virgin Islands company wholly-owned by Mr. Zhen Ba.
(5) Represents 5,673,780 Class A ordinary shares held by SBCVC Fund IV, L.P., a Cayman Islands company. The general partner of SBCVC Fund IV, L.P. is SBCVC Management IV, L.P., a Cayman Islands company. The registered office of SBCVC Fund IV, L.P. is Cricket Square, Hutchins Drive, PO Box 2681, Grand Cayman, KY1-1111, Cayman Islands.
The registered office of SBCVC Fund IV, L.P. is Cricket Square, Hutchins Drive, PO Box 2681, Grand Cayman, KY1-1111, Cayman Islands.
See “—Share Incentive Plan.” We do not pay or set aside any amounts for pension, retirement or other benefits for our directors and officers, except our contributions on behalf of our officers located in China to a government-mandated multi-employer defined contribution plan. 102 Table of Contents Share Incentive Plan In August 2019, our board of directors approved our 2019 Share Incentive Plan, or the 2019 Plan, replacing the 2017 share incentive plan adopted by our affiliated company, to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants and promote the success of our business.
See “—Share Incentive Plan.” We do not pay or set aside any amounts for pension, retirement or other benefits for our directors and officers, except our contributions on behalf of our officers located in China to a government-mandated multi-employer defined contribution plan.
Jiao received her bachelor’s degree in law and economics from Peking University in 2003, and her master’s degree in law from Oxford University in 2005. Ms. Jiao is a Chartered Financial Analyst and obtained her PRC Legal Profession Qualification Certificate in 2010.
Jiao received her bachelor’s degree in law and economics from Peking University in 2003, and her master’s degree in law from Oxford University in 2005. Ms.
Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. The trustee of our equity incentive trust does not have any voting power in relation to the Class A ordinary shares held by Quhuo Holding (BVI) Limited.
The trustee of our equity incentive trust does not have any voting power in relation to the Class A ordinary shares held by Quhuo Holding (BVI) Limited. 110 Table of Contents (1) Represents (i) 6,296,630 Class B ordinary shares that are held by LESYU Investments Limited, a British Virgin Islands company wholly-owned by Mr. Leslie Yu.
The following table sets forth the numbers of our full-time employees by functions as of December 31, 2022. ​ ​ ​ ​ As of the ​ ​ December 31, ​ ​ 2022 Information technology research and development ​ 53 Operating ​ 376 General and administrative 66 Total 495 ​ We enter into employment contracts with our full-time employees, which contain standard confidentiality provisions. 108 Table of Contents We are required under PRC law to make contributions to employee benefit plans at specified percentages of salaries, bonuses and certain allowances of our employees, up to a maximum amount specified by the local government from time to time.
The following table sets forth the numbers of our full-time employees by functions as of December 31, 2023. ​ ​ ​ ​ As of the ​ ​ December 31, ​ ​ 2023 Information technology research and development ​ 53 Operating ​ 370 General and administrative 67 Total 490 ​ We enter into employment contracts with our full-time employees, which contain standard confidentiality provisions.
We assumed all the options granted by our affiliated company prior to the adoption of the 2019 Plan. As of the date of this annual report, 7,857,974 options have been granted, excluding, if any, awards that were forfeited or canceled after the relevant grant dates and awards that have been vested.
As of the date of this annual report, 9,502,550 options have been granted, excluding, if any, awards that were forfeited or canceled after the relevant grant dates and awards that have been vested, and no shares remain available for grant under the 2019 Plan. The following paragraphs describe the principal terms of the 2019 Plan: Types of awards.
The business address of our directors and executive officers is: 3rd Floor, Block A, Tonghui Building, No. 1132 Huihe South Street, Chaoyang District, Beijing, People’s Republic of China. No family relationship exists between any of our directors and executive officers. B.
Jiao is a Chartered Financial Analyst and obtained her PRC Legal Profession Qualification Certificate in 2010. 103 Table of Contents The business address of our directors and executive officers is: 3rd Floor, Block A, Xin'anmen, No. 1 South Bank Huihe South Street, Chaoyang District, Beijing, People’s Republic of China.
The registered office of BZB Investment Limited is Craigmuir Chambers, Road Town, Tortola, VG 1110, British Virgin Islands. 110 Table of Contents (3) Represents 6,739,923 Class A ordinary shares that are held by Quhuo Holding (BVI) Limited, of which 5,237,899 Class A ordinary shares are held in the form of the ADSs.
The registered office of BZB Investment Limited is Craigmuir Chambers, Road Town, Tortola, VG 1110, British Virgin Islands.
Our board of directors has the authority to amend or terminate the plan.
Our board of directors has the authority to amend or terminate the plan. However, no such action may adversely affect in any material way any awards previously granted unless agreed by the recipient.
Removed
Leslie Yu upon exercise of the share options granted under our 2019 Plan that have vested or are expected to vest within 60 days from the date of this annual report, which are held by The Core Trust Company Limited, as the trustee of share awards.
Added
Share Incentive Plan In August 2019, our board of directors approved our 2019 Share Incentive Plan, or the 2019 Plan, replacing the 2017 share incentive plan adopted by our affiliated company, to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants and promote the success of our business.
Removed
(2) Represents 2,363,030 Class A ordinary shares that are held by BZB Investment Limited, a British Virgin Islands company wholly-owned by Mr. Zhen Ba.
Added
We assumed all the options granted by our affiliated company prior to the adoption of the 2019 Plan.
Removed
Quhuo Holding (BVI) Limited is a British Virgin Islands company and the nominee of Quhuo Trust, which holds these shares for the benefits of the Company and participants thereunder. Quhuo Holding (BVI) Limited is wholly-owned by The Core Trust Company Limited, a trust company acting as the trustee of Quhuo Trust.
Added
Terms of Directors and Officers Our directors are not subject to a term of office and hold office until such time as they are removed from office by ordinary resolution of the shareholders.
Removed
The investment power and voting power of Quhuo Trust are retained by the Company, and/or after duly exercise of the options by the grantees, the participants thereunder.
Added
We are required under PRC law to make contributions to employee benefit plans at specified percentages of salaries, bonuses and certain allowances of our employees, up to a maximum amount specified by the local government from time to time.
Removed
The trustee and the nominee will not and have no right or power to exercise the voting rights attached to these shares, unless as otherwise instructed by the Company and/or, after duly exercise of options, the participants thereunder. The registered office of Quhuo Holding (BVI) Limited is Craigmuir Chambers, Road Town, Tortola, VG 1110, British Virgin Islands.
Added
None of our employees are represented by labor unions. 109 Table of Contents E.
Removed
(6) Represents 3,616,630 Class A ordinary shares held by ClearVue YummyExpress Holdings, Ltd., a Cayman Islands company, of which 960,000 Class A ordinary shares are held in the form of the ADSs, according to a Schedule 13G filed on February 5, 2021.
Added
Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances.
Removed
ClearVue YummyExpress Holdings, Ltd. is controlled by ClearVue Partner II, L.P., the general partner of which is ClearVue Partners II GP, L.P. and ultimately controlled by Harry Chi Hui and William Apollo Chen. The registered office of ClearVue YummyExpress Holdings, Ltd. is 4th Floor, Harbour Place, 103 South Church Street, P.O. Box 10240, Cayman Islands.
Added
(4) Represents 5,673,780 Class A ordinary shares and 154,200 Class A ordinary shares in the form of ADSs held by SBCVC Fund IV, L.P., a Cayman Islands company. The general partner of SBCVC Fund IV, L.P. is SBCVC Management IV, L.P., a Cayman Islands company.
Added
(5) Represents 14,000,000 Class A ordinary shares in the form of ADSs held by Cloud Alliance Inc. and 11,250,000 Class A ordinary shares in the form of ADSs held by Zhifa Liu, based on a Schedule 13D filed by the reporting persons on April 8, 2024 and amended on April 10, 2024.
Added
Zhifa Liu holds a 51% ownership stake in Cloud Alliance Inc., serves as its chief executive officer and is responsible for its management. Cloud Alliance Inc. has another executive officer and minority owner, Mr. Yang Li, who is the President of Cloud Alliance Inc.
Added
The address of the principal office of Cloud Alliance Inc. is 8609 Westwood Center Drive, Suite 110, Tysons Corner, VA 22182. The business address of Mr. Zhifa Liu is 8609 Westwood Center Drive, Suite 110, Tysons Corner, VA 22182. The business address of Mr. Yang Li is 8609 Westwood Center Drive, Suite 110, Tysons Corner, VA 22182.

Item 7. Management's Discussion & Analysis

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

5 edited+0 added−2 removed6 unchanged
We had amounts due from Hainan Huiliu of nil, RMB4.8 million and RMB3.9 million (US$0.6 million) as of December 31, 2020, 2021 and 2022, respectively, representing service fees in relation to the labor consulting services we received from Hainan Huiliu, which we recorded as labor service income in other income.
We had amounts due from Hainan Huiliu of RMB4.8 million, RMB3.9 million and RMB0.3 million (US$36,000) as of December 31, 2021, 2022 and 2023, respectively, representing service fees in relation to the labor consulting services we received from Hainan Huiliu, which we recorded as labor service income in other income.
Amounts due from Hainan Huiliu were unsecured, interest-free and have fixed terms of repayment, which were settled in February 2023. Transaction with Shenyang Bokai Shenyang Bokai Network Technology Co., Ltd., or Shenyang Bokai, is a company controlled by a manager, and is primarily engaged in labor recruitment services.
Amounts due from Hainan Huiliu were unsecured, interest-free and have fixed terms of repayment, which were RMB3.9 million and RMB0.3 million (US$36,000) as of December 31, 2022 and 2023, respectively. Transaction with Shenyang Bokai Shenyang Bokai Network Technology Co., Ltd., or Shenyang Bokai, is a company controlled by a manager, and is primarily engaged in labor recruitment services.
Private Placements See “Item 4. Information on the Company—A. History and Development of the Company.” Share Incentive Plan See “Item 6. Directors, Senior Management and Employees—B. Compensation—Share Incentive Plan.” C. Interests of Experts and Counsel Not applicable. ​ 112 Table of Contents
We received labor consulting service from Shenyang Bokai of RMB1.5 million, RMB1.6 million and nil in 2021, 2022 and 2023, respectively. Private Placements See “Item 4. Information on the Company—A. History and Development of the Company.” Share Incentive Plan See “Item 6. Directors, Senior Management and Employees—B. Compensation—Share Incentive Plan.” C. Interests of Experts and Counsel Not applicable. ​
All the preferential rights have been terminated or waived upon the completion of our initial public offering in July 2020. Transactions with Ningbo Nuannuan Ningbo Nuannuan Network Technology Co., Ltd., or Ningbo Nuannuan, is a company controlled by Lili Sun, spouse of Mr. Leslie Yu, and is primarily engaged in on-demand food delivery business.
All the preferential rights have been terminated or waived upon the completion of our initial public offering in July 2020. Transaction with Hainan Huiliu Hainan Huiliu Tianxia Network Technology Co., Ltd., or Hainan Huiliu, is a company controlled by a principal shareholder and is engaged in labor recruitment services.
Transaction with Hainan Huiliu Hainan Huiliu Tianxia Network Technology Co., Ltd., or Hainan Huiliu, is a company controlled by a principal shareholder and is engaged in labor recruitment services. We received labor consulting service from Hainan Luiliu of nil, RMB54.5 million and RMB63.5 million (US$9.2 million) in 2020, 2021 and 2022, respectively.
We received labor consulting service from Hainan Huiliu of RMB54.5 million, RMB63.5 million and RMB25.0 million (US$3.5 million) in 2021, 2022 and 2023, respectively.
Removed
We had amounts due from Ningbo Nuannuan of RMB2.9 million and nil as of December 31, 2020 and 2021, respectively, representing working capital advanced to Ningbo Nuannuan. Amounts due from Ningbo Nuannuan were unsecured, interest-free and have fixed terms of repayment. The amounts were repaid in April 2021.
Removed
We received labor consulting service from Shenyang Bokai of nil, RMB1.5 million and RMB1.6 million (US$0.2 million) in 2020, 2021 and 2022, respectively. We had amounts due to Shenyang Bokai of RMB245,000 as of December 31, 2021 for labor recruitment services it provided to us. We settled the amount due to Shenyang Bokai in March 2022.

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