Share-based Compensation

12 Months Ended

Dec. 31, 2022

Share-based Payment Arrangement [Abstract]

16.	Share-based Compensation

In order to provide additional incentives to employees and to promote the success of the Group’s business, the Group adopted a share incentive plan that was approved by the Board of Directors on December 23, 2016 (the “2015 Plan”). Under the 2015 Plan, the aggregate number of ordinary shares that may be issued pursuant to all share-based awards (including restricted shares, RSUs and share options) is 8,867,053 ordinary shares and can be increased up to a number that is equal to 15% of the then total outstanding shares on a fully diluted basis at the discretion of the Company’s Board of Directors.

In September 2019, the Company’s Board of Directors approved the 2019 Share Incentive Plan (the “2019 Plan”), which become effective upon the completion of the Company’s IPO on December 12, 2019. Under the 2019 Plan, the aggregate number of ordinary shares that may be issued pursuant to all share-based awards (including restricted shares, RSUs and share options) is 7,747,019 ordinary shares and can be increased up to a number that is equal to 15% of the then total outstanding shares on a fully diluted basis at the discretion of the Company’s Board of Directors.

Pursuant to both 2015 Plan and 2019 Plan (collectively, the “Plans

”),

the members of the Board, consultant or employees are entitled to be granted share-based awards.

The Company granted a total of 750,000, nil and nil RSU to the Group’s employees under the 2015 Plan and a total of 1,613,000, 4,790,000 and 876,380 RSUs to the Group’s employees under the 2019 Plan for the years ended December 31, 2020, 2021 and 2022. A total of 5,000 RSUs are subject to service conditions and vest over one-year period starting from the vesting inception date. A total of 451,380 RSUs are subject to service conditions and vest over a two-year period starting from the vesting inception date. A total of 7,573,000 RSUs are subject to service conditions and vest over a four-year period starting from the vesting inception date.

RSUs

The following table summarizes the Company’s RSUs activity under the Plans:


	Number of RSUs			Weighted average grant date fair value		Weighted average remaining contractual life
				(US$)		(Years)
Unvested, December 31, 2019		735,476			4.7523		3.02
Granted		2,363,000			4.2912
Vested		(1,819,726	)		4.1359
Forfeited		—			—
Unvested, December 31, 2020		1,278,750			4.7774		2.68
Granted		4,790,000			10.6200
Vested		(1,949,250	)		9.2469
Forfeited		—			—
Unvested, December 31, 2021		4,119,500			9.4561		2.67
Granted		876,380			1.8800
Vested		(2,034,880	)		7.2254
Forfeited		(283,000	)		7.5431

Unvested, December 31, 2022		2,678,000			8.8740		1.90

Expected to vest as of December 31, 2022		2,678,000

The total share-based compensation expenses relating to RSUs for the years ended December 31, 2020, 2021 and 2022 were RMB54,036, RMB121,131 and RMB96,898 (US$14,049

), r

espectively. Total share-based compensation expense capitalized to inventory was not material for any of the periods presented.

As of December 31, 2022, there was RMB158,870 (US$23,034

)

of unrecognized share-based compensation expenses related to RSUs which is expected to be recognized over a weighted average vesting period of 1.90 years. Total unrecognized compensation cost may be adjusted for actual forfeitures occurring in the future.

Share options

The following table summarizes the Company’s share options activity under the 2015 Plan:


	Number of share options		Weighted average grant date fair value		Weighted average exercise price
			(US$)		(US$)
Outstanding as of January 1 and December 31, 2022		53,737		2.2624		5.8853

Vested and expected to vest as of December 31, 2022		53,737		2.2624		5.8853

Exercisable as of December 31, 2022		53,737		2.2624		5.8853

The share-based compensation expense relating to the share options recognized were RMB821, nil and nil for the years ended December 31, 2020, 2021 and 2022.There was no unrecognized share-based compensation expenses relating to the shares options as of December 31, 2020, 2021 and 2022.

The Group calculated the estimated fair value of the share options under the 2015 Plan on the grant date using the Black-Scholes valuation model. Assumptions used to determine the fair value of the share options granted under the 2015 Plan is summarized in the following table:


	For the year ended December 31, 2020

Term in years		5
Volatility		53.73	%
Discount rate		0.85	%
Fair value per ordinary share	US$	5.24

Total share-based compensation expenses relating to RSUs and options granted to employees recognized for the years ended December 31, 2020, 2021 and 2022 were as follows:


	For the year ended December 31,
	2020		2021		2022
	RMB		RMB		RMB		US$
Cost of revenues		2,443		—		—		—
Sales and marketing expenses		10,883		18,327		22,125		3,208
General and administrative expenses		14,453		71,147		38,452		5,575
Research and development expenses		27,078		31,657		36,321		5,266

		54,857		121,131		96,898		14,049