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LEASES

12 Months Ended

Dec. 31, 2025

12.LEASES

The Group has operating leases for corporate offices and company-owned teahouses with the lease terms from within 3 months to 11 years, some of which include options to terminate the leases within certain periods. For operating leases with terms greater than 12 months, the Group records the related assets and lease liabilities at the present value of lease payments over the terms. Certain leases include rental escalation clauses, renewal options and/or termination option, which are factored into the Group’s determination of lease payments when appropriate.


		As of December 31,
		2024		2025
		RMB		RMB
Right-of-use assets, net		542,202		1,275,805
Operating lease liabilities, current		195,438		424,363
Operating lease liabilities, non-current		352,618		849,936

The following table provides a summary of the Group’s operating lease expenses and short-term lease expenses for the years ended December 31, 2023, 2024 and 2025:


		For the Years Ended
		December 31,
		2023		2024		2025
		RMB		RMB		RMB
Operating lease expenses		46,775		152,682		311,619
Short-term lease expenses		5,734		14,697		23,290
Cash paid for amounts included in the measurement of lease liabilities		50,871		144,651		323,239
Right-of-use assets obtained in exchange for new operating lease liabilities		95,476		552,682		1,052,922

Short-term leases represent the leases with a term of 12 months or less.

The operating lease expenses and short-term lease expenses were recognized in company-owned teahouse operating costs, other operating costs, sales and marketing, and general and administrative expenses.

The following table provides a summary of the Group’s weighted average operating lease terms and weighted average discount rates as of December 31, 2024 and 2025:


		As of December 31,
		2024		2025
		RMB		RMB
Weighted average remaining lease term (in years)		3.32		3.61
Weighted average discount rate		4.14	%	4.85	%

12.LEASES (CONTINUED)

Maturities of operating lease liabilities as of December 31, 2025 are as follows:


		RMB
For the year ending December 31, 2026		472,680
For the year ending December 31, 2027		402,880
For the year ending December 31, 2028		273,154
For the year ending December 31, 2029		121,321
For the year ending December 31, 2030		55,384
Thereafter		78,173
Total remaining undiscounted lease payments		1,403,592
Less: imputed interest		(129,293)
Present value of operating lease liabilities		1,274,299

As of December 31, 2025, the Group has no significant lease contract that have been entered into but not yet commenced. The Group’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.