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Share-based compensation
 12 Months Ended
Dec. 31, 2025
Share-Based Payment Arrangement [Abstract]  
Share-based compensation

18. Share-based compensation

 

(a) Description of stock option plan

 

2019 Incentive Plan

 

In January 2020, the Company permitted the grant of options and restricted shares to relevant directors, officers, senior management, employees and non-employees of the Group (the “2019 Incentive Plan”). Option awards are granted with an exercise price determined by the Board of Directors.

 

The stock options granted under the 2019 Incentive Plan have a contractual term of 10 years and will expire the earlier of (i) three months after termination of service with the Group, or (ii) upon the tenth anniversary of the grant date.

 

 

18. Share-based compensation (Continued)

 

(a) Description of stock option plan (Continued)

 

The stock options granted under the 2019 Incentive Plan could either be granted with terms that (i) immediately vested upon grant; (ii) 50% vested on grant date and another 50% vested on anniversary; or (iii) 25% vested on each anniversary for vesting schedule of four years.

 

The restricted shares granted under the 2019 Incentive Plan could either be granted with terms that (i) immediately vested upon grant; (ii) 25% vested on each anniversary or 6.25% vested on each quarter for vesting schedule of four years; or (iii) 50% vested on each anniversary for vesting schedule of two years.

 

2023 Incentive Plan

 

In September 2023, the Company permitted the grant of options, restricted shares or any other type of awards to relevant directors, employees and non-employees of the Group (the “2023 Incentive Plan”). Option awards are granted with an exercise price determined by the Board of Directors.

 

In accordance with ASC 718 Stock Compensation, the Group recorded share-based compensation expense on the grant date of the equity interests to its employees equal to the estimated fair-value of such equity interests at the measurement date. The share-based compensation expense was recorded in cost of revenues, selling and marketing expenses, general and administrative expenses and research and development expenses on the consolidated statements of operations and comprehensive loss.

 

The stock options granted under the 2023 Incentive Plan could either be granted with terms that (i) immediately vested upon grant; (ii) 50% vested on grant date and another 50% vested on anniversary; or (iii) 25% vested on each anniversary for vesting schedule of four years.

 

The restricted shares granted under the 2023 Incentive Plan could either be granted with terms that (i) immediately vested upon grant; (ii) 25% vested on each quarter for vesting schedule of one year; or (iii) 100% vested on one-year anniversary.

 

Stock option replacement (the “Replacement”)

 

On January 1, 2023 and July 1, 2023, a total of 86,871,800 and 20,359,900 vested options were replaced by 86,871,800 and 20,359,900 restricted shares of CCT, which were converted into restricted shares of the Company upon the completion of the Reverse Recapitalization (Note 3). The restricted shares awards are subject to the original vesting schedule of the replaced share options. The Company concluded the cancellation and replacement of awards is a modification, and determined the modification is a probable-to-probable (Type I) modification. The Company has recognized the portion of incremental value of RMB26.2 million and RMB26.3 million as cost of revenues and expenses immediately for those vested options.

 

(b) Valuation assumptions

 

The Group uses binomial option pricing model and adopted fair value per share of ordinary share to determine fair value of the share-based awards. The estimated fair value of each option or each restricted share granted is estimated on the date of grant using the binomial option-pricing model or fair value per share of ordinary share with the following assumptions:

 

   For the years ended December 31, 
Options  2023   2024   2025 
Fair value per share (US$)  6.33-6.37   0.79~0.80   0.68~1.04 
Discount rate (after tax)   Not applicable    Not applicable    Not applicable 
Risk-free interest rate   3.88%   4.58%   

4.11%~4.24%

 
Expected volatility   64.2%   65.7%   

59.65%~73.81%

 
Contractual term (in years)   10    10    10 

 

 

18. Share-based compensation (Continued)

 

(b) Valuation assumptions (Continued)

 

   For the years ended December 31,
Restricted shares  2023(prior to the Business Combination)  2024  2025
Fair value per share (US$)  4.90-5.45  Not applicable  Not applicable
Discount rate (after tax)  15.0%-16.0%  Not applicable  Not applicable
Discount for lack of marketability (“DLOM”)  5%-10%  Not applicable  Not applicable

 

The expected volatility at the grant date and each option valuation date was estimated based on the annualized standard deviation of the daily return embedded in historical share prices of comparable peer companies with a time horizon close to the expected expiry of the term of the options. The weighted average volatility is the expected volatility at the grant date weighted by number of options. The Company has never declared or paid any cash dividends on its shares, and the Group does not anticipate any dividend payments in the foreseeable future. The contractual term is the contract life of the options. The Group estimated the risk-free interest rate based on the market yield of US Government Bonds with maturities of ten years as of the valuation date.

 

(c) Stock options activities

 

The following table presents a summary of the Company’s stock options activities for the years ended December 31, 2023, 2024 and 2025.

 

   Number of Options Outstanding*   Weighted
Average exercise		   Weighted average
remaining
contractual		   Aggregated 
   Employees   Consultant   Total   price   life   intrinsic value 
   (in thousands)   (in thousands)   (in thousands)   US$   (in years)   RMB in thousands 
                         
Outstanding at January 1, 2023   7,618    331    7,949    1.7905    4.67    65,572 
Replacement   (7,545)   (331)   (7,876)   1.3119    -    - 
Granted   528    -    528    0.1000    -    - 
Forfeited   (28)   -    (28)   8.1954    -    - 
Outstanding at December 31, 2023   573    -    573    0.6675    9.73    23,775 
Exercisable as of December 31, 2023   295    -    295    1.1978    9.48    11,367 
                               
Outstanding at January 1, 2024   573    -    573    0.6675    9.73    23,775 
Replacement   (22)   -    (22)   7.3437    -    - 
Granted   899    -    899    0.1000    -    - 
Exercised   (1)   -    (1)   0.1000    -    - 
Forfeited   (47)   -    (47)   0.9706    -    - 
Outstanding at December 31, 2024   1,402    -    1,402    0.1785    9.32    7,990 
Exercisable as of December 31, 2024   733    -    733    0.2498    9.27    4,147 
                               
Outstanding at January 1, 2025   1,402    -    1,402    0.1785    9.32    7,990 
Granted   323    431    754    0.0486    -    - 
Exercised   (148)   -    (148)   0.1000    -    - 
Forfeited   (24)   -    (24)   0.1000    -    - 
Outstanding at December 31, 2025   1,553    431    1,984    0.1358    8.81    10,332 
Exercisable as of December 31, 2025   1,076    431    1,507    0.1471    8.86    7,894 

 

* Shares outstanding for all periods reflect the adjustment for Reverse Recapitalization (Note 3).

 

The weighted average grant date fair value of options granted for the years ended December 31, 2023, 2024 and 2025 were RMB42.1761 (US$5.9404), RMB15.1110 (US$2.0702) and RMB17.6163 (US$2.5191) per option, respectively.

 

 

18. Share-based compensation (Continued)

 

(d) Restricted shares activities

 

The following table sets forth the summary of restricted share activities for the years ended December 31, 2023, 2024 and 2025:

   Number of Restricted
Shares Granted*		  

Weighted-Average

Grant Date

Fair Value

 
   (in thousands)   (US$) 
Unvested as of January 1, 2023   786    4.8435 
Replacement   7,876    4.9821 
Awarded   703    6.4017 
Vested   (8,938)   5.0743 
Forfeited   (97)   5.5168 
Outstanding at December 31, 2023   330    5.0233 
Unvested as of January 1, 2024   330    5.0233 
Replacement   22    4.2700 
Awarded   1,589    1.6553 
Vested   (1,757)   1.9938 
Forfeited   (77)   4.9078 
Outstanding at December 31, 2024   107    4.6904 
Unvested as of January 1, 2025   107    4.6904 
Awarded   1,835    0.9875 
Vested   (1,191)   1.3719 
Forfeited   (731)   0.8407 
Outstanding at December 31, 2025   20    3.3155 

 

* Shares outstanding for all periods reflect the adjustment for Reverse Recapitalization (Note 3).

 

On March 31, 2026, the Group granted 99,000 options to its employees under the 2023 Incentive Plan. The options are granted with an exercise price determined by the Board of Directors, and with terms that immediately vested upon grant.