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Share based compensation (Tables)

12 Months Ended

Dec. 31, 2024

Share-Based Payment Arrangement [Abstract]

Share-based payment arrangement, activity

The following table summarizes activities of the Company’s RSUs for the year ended December 31, 2024:

			Number of RSUs						Weighted Average Exercise Price						Weighted Average Fair value at grant date						Weighted remaining contractual years						Aggregate intrinsic value
									US$						US$												US$
Outstanding at January 1, 2024			15,033,854						0.69						4.91						—						—
Granted (new RSUs)			1,256,490						—						1.83						—						—
Granted (replacement RSUs)			4,935,321						0.53						2.02						—						—
Replaced			(4,935,321)						1.87						2.02						—						—
Exercised			(4,427,306)						0.03						6.53						—						—
Outstanding at December 31, 2024			11,863,038						0.31						4.04						8.55						36,658
Exercisable as of December 31, 2024			10,708,243						0.28						4.07						8.53						34,652

The following table summarizes activities of the Company’s PSUs for the year ended December 31, 2024:

.

			Number of PSUs						Weighted Average Fair value at grant date
									US$
Outstanding at January 1, 2024
Granted			2,000,000						1.69
Vested			—						—
Forfeited			—						—
Outstanding at December 31, 2024			2,000,000						1.69
Vested and expected to vest as of December 31, 2024			2,000,000						1.69

The following table summarizes activities of the options for the year ended December 31, 2024.

			Number of options						Weighted Average Exercise Price						Weighted Average Fair value at grant date						Weighted remaining contractual years
									US$						US$
Outstanding at January 1, 2024			11,260,718						9.62						3.11						—
Granted			5,821,580						0.50						1.24						—
Forfeited			(950,819)						5.40						1.35						—
Exercised			(196,423)						0.50						1.19						—
Outstanding at December 31, 2024			15,935,056						6.65						2.57						7.55
Exercisable as of December 31, 2024			11,638,041						8.26						2.70						7.13

Summary of fair value of options granted that are estimated using the binomial model

The fair value of the RSUs granted in 2022, 2023 and 2024 was estimated using the binomial model with the following assumptions used:

			Year ended December 31,
			2022						2023						2024
Risk-free rate of return (1)			1.61% - 4.12%						2.65% - 4.25%						4.06%
Volatility (2)			44.15% - 48.12%						44.58% - 44.73%						44.56%
Expected dividend yield (3)			0.0%						0.0%						0.0%
Fair value of underlying ordinary share (4)			US$7.57-US$9.05 (equivalent to RMB48.29-RMB64.98)						US$3.68 - US$6.91 (equivalent to RMB26.46-RMB49.90)						US$0.96 - US$1.60 (equivalent to RMB6.92 - RMB11.52)
Expected terms (5)			10 years						10 years						10 years

___________________________

(1)With respect to the RSUs issued in US$ or RMB, the risk-free interest rate was separately estimated based on the yield to maturity of U.S. Treasury bonds or China Government Bond for a term consistent with the expected term of the Company’s RSUs in effect at the valuation date.

(2)Expected volatility was estimated based on the historical volatility of comparable peer public companies with a time horizon close to the expected term of the Company’s RSUs.

(3)Expected dividend yield is zero as the Company does not anticipate any dividend payments in the foreseeable future.

(4)Prior to IPO, the estimated fair value of the ordinary shares at the grant dates was estimated by management with the assistance of an independent valuation firm. The Company first determined its enterprise value by using income approach, which required the estimation of future cash flows, and the application of an appropriate discount rate with reference to comparable listed companies engaged in the similar industry to convert such future cash flows to a single present value. After the Company’s IPO, the fair value of the underlying ordinary share is the closing price of the Company’s ordinary shares traded in the open market as of the grant date.

(5)Expected term is the contract life of the RSUs.

The fair value of the PSUs granted in 2024 was estimated using the Monte Carlo simulation with the following assumptions used:

Grant date:			July 2024
Risk-free rate of return (1)			4.26		%
Volatility (2)			43.25		%
Expected dividend yield (3)			0.0		%
Fair value of underlying ordinary share (4)			US$1.69 (equivalent to RMB12.25)
Expected terms (5)			10 years

______________________

(1)The risk-free interest rate was estimated based on the yield to maturity of U.S. Treasury bonds for a term consistent with the expected term of the Company’s PSUs in effect at the valuation date.

(2)Expected volatility was estimated based on the historical volatility of comparable peer public companies with a time horizon close to the expected term of the Company’s PSUs.

(3)Expected dividend yield is zero as the Company does not anticipate any dividend payments in the foreseeable future.

(4)Fair value of underlying ordinary share is the closing price of the Company’s ordinary shares traded in the open market as of the grant date.

(5)Expected term is the contract life of the PSUs.

The fair value of the options granted in 2022, 2023 and 2024 was estimated using the binomial model with the following assumptions used:

			Year ended December 31,
			2022						2023						2024
Risk-free rate of return (1)			1.63% – 3.83%						3.79% - 3.88%						4.48% - 4.69%
Volatility (2)			44.18% – 45.07%						44.37% - 44.95%						47.09% - 47.34%
Expected dividend yield (3)			0.0		%				0.0		%				0.0		%
Fair value of underlying ordinary share (4)			US$7.57 - US$9.30						US$3.16 - US$8.02						US$1.14 - US$1.84
Expected terms (5)			10 years						10 years						10 years

(1)The risk-free interest rate was estimated based on the yield to maturity of U.S. Treasury bonds for a term consistent with the expected term of the Company’s options in effect at the valuation date.

(2)Expected volatility was estimated based on the historical volatility of comparable peer public companies with a time horizon close to the expected term of the Company’s options.

(3)Expected dividend yield is zero as the Company does not anticipate any dividend payments in the foreseeable future.

(4)Prior to the IPO, the estimated fair value of the ordinary shares at the grant dates was estimated by management with the assistance of an independent valuation firm. The Company first determined its enterprise value by using income approach, which required the estimation of future cash flows, and the application of an appropriate discount rate with reference to comparable listed companies engaged in the similar industry to convert such future cash flows to a single present value. After the Company’s IPO, the fair value of the underlying ordinary share is the closing price of the Company’s ordinary shares traded in the open market as of the grant date.

(5)Expected term is the contract life of the option awards.

Summary of compensation expense recognized for RSUs

Compensation expense recognized for RSUs for the years ended December 31, 2022, 2023 and 2024 is allocated as follows:

			Year ended December 31,
			2022						2023						2024
			RMB						RMB						RMB
Research and development expenses			42,986						26,590						2,842
Selling, general and administrative expenses			481,567						139,340						90,725
Total			524,553						165,930						93,567

Compensation expense recognized for options for the years ended December 31, 2022, 2023 and 2024 is allocated as follows.

			Year ended December 31,
			2022			2023			2024
			RMB			RMB			RMB
Selling, general and administrative expenses			107,274			6,890			20,524
Research and development expenses			93,824			1,205			13,136
Total			201,098			8,095			33,660

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Tabular disclosure of allocation of amount expensed and capitalized for award under share-based payment arrangement to statement of income or comprehensive income and statement of financial position. Includes, but is not limited to, corresponding line item in financial statement.

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Tabular disclosure of activity for award under share-based payment arrangement. Includes, but is not limited to, outstanding award at beginning and end of year, granted, exercised, forfeited, and weighted-average grant date fair value.

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Tabular disclosure of the significant assumptions used during the year to estimate the fair value of stock options, including, but not limited to: (a) expected term of share options and similar instruments, (b) expected volatility of the entity's shares, (c) expected dividends, (d) risk-free rate(s), and (e) discount for post-vesting restrictions.

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