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As filed with the Securities and Exchange Commission on April 30, 2021

Registration No. 333-            


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM F-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

Qiniu Limited
(Exact name of Registrant as specified in its charter)

Not Applicable
(Translation of Registrant's name into English)

British Virgin Islands
(State or other jurisdiction of
incorporation or organization)
  7372
(Primary Standard Industrial
Classification Code Number)
  Not Applicable
(I.R.S. Employer
Identification Number)

Floor 1-5, Building Q, No.66 Boxia Road
PuDong New District
Shanghai, 201203, People's Republic of China
+86 21 20703999

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices)



Cogency Global Inc.
122 East 42nd Street, 18th Floor New York, NY 10168
+1 800-221-0102

(Name, address, including zip code, and telephone number, including area code, of agent for service)




Copies to:

Li He, Esq.
James C. Lin, Esq.
Davis Polk & Wardwell LLP
c/o 18th Floor, The Hong Kong Club Building
3A Chater Road, Central
Hong Kong
+852 2533-3300

 

Fang Liu, Esq.
Jonathan Zonis, Esq.
Clifford Chance US LLP
c/o 27/F, Jardine House
One Connaught Place
Hong Kong
+852 2825-8888



Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

           If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.    o

           If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

           If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

           If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

           Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.

           Emerging growth company    ý

           If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act.    o



CALCULATION OF REGISTRATION FEE

       
 
Title of each class of securities
to be registered

  Proposed maximum
aggregate offering
price(2)(3)

  Amount of
registration fee

 

Class A ordinary shares, par value US$0.0001 per share(1)(2)

  US$100,000,000   US$10,910

 

(1)
American depositary shares issuable upon deposit of Class A ordinary shares registered hereby will be registered under a separate registration statement on Form F-6 (Registration No. 333-            ). Each American depositary share represents            Class A ordinary shares.

(2)
Includes Class A ordinary shares initially offered and sold outside the United States that may be resold from time to time in the United States either as part of their distribution or within 40 days after the later of the effective date of this registration statement and the date the shares are first bona fide offered to the public, and also includes Class A ordinary shares that are issuable upon the exercise of the underwriters' over-allotment option. These Class A ordinary shares are not being registered for the purpose of sales outside the United States.

(3)
Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933.

           The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the United States Securities and Exchange Commission, acting pursuant to such Section 8(a), may determine.

   


The term "new or revised financial accounting standard" refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.


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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to Completion
Preliminary Prospectus Dated            , 2021

American Depositary Shares

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Qiniu Limited

Representing      Class A Ordinary Shares

        This is an initial public offering of        American depositary shares, or ADSs, of Qiniu Limited. Each ADS represents            of our Class A ordinary shares, par value US$0.0001 per share. The underwriters may also purchase up to            additional ADSs within 30 days to cover over-allotments, if any.

        Prior to this offering, there has been no public market for the ADSs. We expect the initial public offering price will be between US$            and US$            per ADS. We intend to apply to list the ADSs representing our Class A ordinary shares on the Nasdaq Global Select Market under the symbol "QNIU."

        Following the completion of this offering, our issued and outstanding shares will consist of Class A ordinary shares and Class B ordinary shares. Mr. Shiwei Xu, will beneficially own all of our issued Class B ordinary shares and will be able to exercise        % of the total voting power of our issued and outstanding ordinary shares immediately following the completion of this offering, assuming the underwriters do not exercise their option to purchase additional ADSs. Holders of Class A ordinary shares and Class B ordinary shares have the same rights except for voting and conversion rights. Each Class A ordinary share is entitled to one vote and each Class B ordinary share is entitled to 10 votes. 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. Upon any sale, transfer, assignment or disposition of any Class B ordinary shares by a holder thereof to any non-affiliate to such holder, each of such Class B ordinary shares will be automatically and immediately converted into one Class A ordinary share. See "Description of Share Capital."

        Neither the United States Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

        We are an "emerging growth company" under the U.S. federal securities laws and will be subject to reduced public company reporting requirements. Investing in the ADSs involves risks. See "Risk Factors" beginning on page 18 of this prospectus.

       
 
 
  Per ADS
  Total
 

Public offering price

  US$               US$            
 

Underwriting discounts and commissions(1)

  US$               US$            
 

Proceeds, before expenses, to us

  US$               US$            

 

(1)
For a description of the compensation payable to the underwriters, see "Underwriting."

        The underwriters expect to deliver the ADSs against payment in U.S. dollars in New York, New York on              , 2021.

BofA Securities   UBS Investment Bank   Jefferies
(in alphabetical order)                            

BOCOM International

 

FUTU

 

Tiger Brokers

The date of this prospectus is                , 2021.


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TABLE OF CONTENTS

 
  Page  

Prospectus Summary

    1  

The Offering

    10  

Our Summary Consolidated Financial and Operating Data

    12  

Risk Factors

    18  

Cautionary Statement Regarding Forward-Looking Statements

    66  

Use of Proceeds

    67  

Dividend Policy

    68  

Capitalization

    69  

Dilution

    71  

Enforceability of Civil Liabilities

    73  

Our History and Corporate Structure

    75  

Selected Consolidated Financial Data

    80  

Management's Discussion and Analysis of Financial Condition and Results of Operations

    85  

Industry Overview

    112  

Business

    118  

Regulation

    138  

Management

    151  

Principal Shareholders

    158  

Related Party Transactions

    161  

Description of Share Capital

    164  

Description of American Depositary Shares

    178  

Shares Eligible for Future Sale

    189  

Taxation

    190  

Underwriting

    196  

Expenses Relating to this Offering

    206  

Legal Matters

    207  

Experts

    208  

Where You Can Find Additional Information

    209  

Index to the Consolidated Financial Statements

    F-1  

        Unless otherwise indicated or the context otherwise requires, all references in this prospectus to "Qiniu Limited" or the "Company," "we," "our," "ours," "us" or similar terms refer to Qiniu Limited, together with its subsidiaries, and, in the context of describing our operations and consolidated financial information, its consolidated variable interest entities, or VIEs.

        We have not authorized anyone to provide any information other than that contained in this prospectus or in any free writing prospectus prepared by or on behalf of us or to which we may have referred you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We and the underwriters have not authorized any other person to provide you with different or additional information. Neither we nor the underwriters are making an offer to sell the ordinary shares in any jurisdiction where the offer or sale is not permitted. This offering is being made in the United States and elsewhere solely on the basis of the information contained in this prospectus. You should assume that the information appearing in this prospectus is accurate only as of the date on the front cover of this prospectus, regardless of the time of delivery of this prospectus or any sale of the ADSs representing our Class A ordinary shares. Our business, financial condition, results of operations and prospects may have changed since the date on the front cover of this prospectus.

        Until                    , 2021 (the 25th day after the date of this prospectus), all dealers that buy, sell or trade the ADSs, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the obligation of dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

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PROSPECTUS SUMMARY

        The following summary is qualified in its entirety by, and should be read in conjunction with, the more detailed information and financial statements and the related notes appearing elsewhere in this prospectus. In addition to this summary, we urge you to read the entire prospectus carefully, especially the risks of investing in the ADSs discussed under "Risk Factors," "Business," and information contained in "Management's Discussion and Analysis of Financial Condition and Results of Operations" before deciding whether to buy the ADSs.

Our Mission

        To empower every organization with intelligent cloud and data services.

Overview

        We are China's leading cloud-based Platform-as-a-Service ("PaaS") provider as measured by revenue in 2020, focusing on media and machine data, pioneering an integrated, one-stop "cloud + data" platform that empowers enterprise customers across a wide spectrum of industries. We are China's largest pure-play PaaS provider with a 4.4% market share and China's largest independent Media Platform-as-a-Service, or MPaaS, provider with a 7.5% market share by revenue in 2020 according to Frost & Sullivan. Our platform provides superior, end-to-end intelligent media cloud and analytics solutions as well as machine data analytics solutions. Underpinning these solutions is our proprietary cloud technology that features data lake, industry-leading media and machine data storage, distribution and analytics capabilities.

        We primarily offer MPaaS for intelligent media solutions and Data Platform-as-a-Service, or DPaaS, for machine data solutions. We have been dedicated to providing intelligent media cloud services since inception and have served over one million customers. As we continued to invest in data technology and deepened understanding of customers' needs, we have successfully established an industry-leading machine data analytics platform. Our agile technology architecture supports the rapid scaling of both MPaaS and DPaaS to meet increasing customer demands.

        The rapid development of cutting-edge technologies and increasing popularity of video streaming internet usage, lead to soaring demand for reliable video cloud services and powerful developer tools for video applications to support the explosion of media data. Our MPaaS integrates core technologies such as data collection, storage, distribution, interactive live streaming, and cloud-based media data processing and analytics. These comprehensive features and compatibility enable developers and customers to develop and use media applications with high efficiency and reliability, low cost and superior user experience and without the need to develop the underlying technologies or infrastructure by themselves. For different use cases, we have optimized our MPaaS to offer end-to-end intelligent media solutions to customers from different industries.

        The rollout of 5G networks and the proliferation of IoT technologies create more and more use cases and thus bring significant growth potential for businesses capitalizing on massive machine data. Supported by our data lake and powered by multi-storage engine and schema-on-read technologies, our DPaaS is able to directly collect, index, store and ingest all types of machine data, including structured, semi-structured and unstructured data. With high-efficiency and easy-to-use data analytics capabilities, we provide an open, user-friendly data collection and analytics platform.

        We have established an integrated "cloud + data" platform offering comprehensive product portfolio. Supported by data lake and cloud-native architecture, our MPaaS and DPaaS solutions have achieved strong synergies when serving our customers. Our MPaaS solutions enable our customers to capture large volume of valuable and definitive data such as customer behavior information and

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operating metrics. Our customers can use our DPaaS solution to analyze such data, drawing unique business insights and providing superior user experience.

        Openness is an inherent benefit of our platform. At the core of our platform is an open technology architecture equipped with proprietary media and data analytics engines. By offering extensive and easy-to-use development tools, we help developers integrate our products into their applications in various use cases. As an independent PaaS provider, we are dedicated to building a developer-friendly platform and embracing ecosystem partners. As a result, we are able to upgrade and expand the features of our platform, attracting customers from more industry verticals and thereby penetrating into new use cases.

        Our products and solutions cover a wide spectrum of industries, including pan-entertainment, social networking, healthcare, e-commerce, education, media, financial services, automobiles, telecommunications and intelligent manufacturing, among others. We have established a diverse and high quality customer base, with 61.5 thousand MPaaS customers and 775 MPaaS Premium Customers as of December 31, 2020. In 2020, the dollar-based net expansion rate of our MPaaS customers was 112%. We have achieved EB-level data storage as of March 31, 2021 and have empowered an average of approximately 230 million minutes on a daily basis of live streaming and real-time engagement for the three months ended March 31, 2021.

        As a result, we have rapidly scaled our business in recent periods. Our revenues increased by 32.0% from RMB825.0 million in 2019 to RMB1,089.2 million (US$166.2 million) in 2020, and increased by 12.9% from RMB285.6 million for the three months ended March 31, 2020 to RMB322.5 million (US$49.2 million) for the three months ended March 31, 2021. We incurred a net loss of RMB128.2 million and RMB19.3 million (US$2.9 million) in 2019 and 2020, and incurred a net income of RMB23.7 million and a net loss of RMB27.5 million (US$4.2 million) for the three months ended March 31, 2020 and 2021, respectively.

Our Market Opportunities

    Technology advancements and innovations are driving the strong and steady growth of the global cloud service market. According to Frost & Sullivan, China's public cloud service market has reached RMB121.9 billion (US$17.7 billion) in 2020 and is forecasted to grow to RMB480.3 million (US$69.6 billion) by 2025, implying a CAGR of 31.6%, outpacing the forecasted CAGR of global public cloud service market for the same period, which is 24.0%. This brings tremendous opportunities for leading cloud service providers in China.

    PaaS has emerged as a powerful way to improve the efficiencies of software development and leverage the full scalability and performance of IaaS cloud infrastructure for organizations and developers. Development of mobile internet brings rapid growth in use cases such as online education, social networking and entertainment, e-commerce live streaming and video conferencing. High-performance and reliable media transmission and interactive technologies are the backbone for application development in such use cases. The deployment of 5G technology, the development of IoT and augmented reality (AR)/virtual reality (VR) technologies, and the proliferation of real-time interaction use cases further increase the need for powerful MPaaS tools.

    The deployment of 5G and IoT technologies brings increasing demand for data intelligence. The significant increase in machine data is offering richer and more valuable insights to organizations, including key business and performance metrics, customer attributes and behavior, product strengths and capabilities, among others, enabling organizations to gain visibility into customer behavior, increase operation efficiency, enhance security and optimize decision-making. Machine data analytics has been widely adopted in use cases such as intelligent maintenance management, business intelligence, safety analytics and IoT data analytics.

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    Cloud adoption is accelerating and diversifying as organizations migrate from on-premise IT architectures to dynamic and multi-cloud architectures. Cloud services are penetrating into more traditional industries and use cases across the world. We have witnessed innovations in data application and transmission as a result of cloud adoptions.

The Qiniu Platform

Our Technology Architecture

        Our technology is built upon our proprietary cloud-native architecture, which includes container computing, object storage and distribution network technologies. We have developed features including media data collecting, interactive live streaming, media data processing, machine data real-time search and analytics engine, and machine data indexing, thereby establishing an integrated "cloud + data" platform.

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Our Solutions

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    MPaaS.  Our industry-leading end-to-end intelligent media cloud platform offers comprehensive solutions including interactive live streaming products, intelligent media data analytics platform ("Dora"), Qiniu content deliver network ("QCDN") and storage ("Kodo"). Our MPaaS solutions effectively address the pain points faced by customers such as significant investment in IT resources, high technology barriers and difficulties in optimizing user experiences.

    DPaaS.  Our DPaaS solution, Pandora, primarily empowers enterprise customers from financial services, automobile, telecommunications, intelligent manufacturing and internet industries with capabilities of machine data collection, indexing, ingestion, analytics and application. Powered by our proprietary data analytics engine and schema-on-read and search processing language ("SPL") technologies, we provide customers from various industries with powerful and easy-to-use data analytics and processing solutions and various open APIs. Pandora enables customers to achieve intelligent full life-cycle data management with features such as real-time data collection, intelligent data processing, machine learning algorithms and data visualization.

    Other Cloud Services.   Complementary to our MPaaS and DPaaS solutions, to a lesser extent, we also offer other cloud services, which primarily include QVM, a comprehensive suite of solutions including cloud servers, databases, network, security and storage. QVM supports multi-cloud deployment and is featured with high elasticity, stability, scalability, performance and security.

        Our MPaaS and DPaaS solutions have achieved strong synergies when serving our customers. Our MPaaS solutions enable our customers to capture large volume of valuable and definitive data such as customer behavior information and operating metrics. Our customers can use our DPaaS solution to analyze such data, drawing unique business insights and providing superior user experience.

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Our Strengths

        We believe the following competitive strengths are essential for our continued leadership and differentiate us from our competitors:

    Leading cloud PaaS provider in China focusing on integrated "cloud + data" solutions;

    Comprehensive solutions with superior service capabilities;

    Cutting-edge technologies and prominent research and development capabilities;

    Far-reaching developer influence and open ecosystem;

    Premium and loyal customer base and strong customer acquisition capabilities; and

    Experienced management team.

Our Growth Strategy

        The key elements of our growth strategy include the followings, which we believe would empower us to further achieve superior growth and strengthen our market position:

    Invest in technology and innovation;

    Proactively expand industry verticals and use cases;

    Deepen our relationship within existing customers and attract new customers;

    Enhance our ecosystem; and

    Expand internationally.

Summary of Risks Affecting Our Company

        Investing in the ADSs involves significant risks. You should carefully consider all of the information in this prospectus before making an investment in the ADSs. Below please find a summary of the principal risks and uncertainties we face, organized under relevant headings. These risks are discussed in more details in the section titled "Risk factors," which you should read in its entirety.

Risks Relating to Our Business and Industry

    If we fail to maintain and enhance the functions, performance, reliability, design, security, and scalability of our platform to meet our customers' evolving needs, we may lose our customers;

    If we fail to maintain and grow our customer base, keep our customers engaged through our products and solutions, our business growth may not be sustainable;

    If our products and solutions do not achieve sufficient market acceptance, our business and competitive position will suffer; and

    If our expansion into new verticals is not successful, our business, prospects and growth momentum may be materially and adversely affected.

Risks Relating to Our Corporate Structure

    If the PRC government finds that the agreements that establish the structure for operating some of our businesses in China do not comply with applicable PRC laws and regulations, or if these regulations or their interpretations change in the future, we could be subject to severe consequences, including the nullification of the contractual arrangements and the relinquishment of our interest in those businesses; and

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    We rely on contractual arrangements with our VIEs and their shareholders for substantially all of our business operations, which may not be as effective as direct ownership in providing operational control.

Risks Relating to Doing Business in China

    A severe or prolonged downturn in the PRC or global economy could materially and adversely affect our business, results of operations and financial condition; and

    Changes in China's economic, political or social conditions or government policies could have a material adverse effect on our business, financial condition and results of operations.

Risks Relating to the ADSs and this Offering

    An active trading market for our ordinary shares or the ADSs may not develop and the trading price for the ADSs may fluctuate significantly; and

    The trading price of the ADSs is likely to be volatile, which could result in substantial losses to investors.

Contractual Arrangements and Corporate Structure

        We are a business company incorporated in the British Virgin Islands. Our PRC subsidiary, Kongshan Internet Technology (Shanghai) Co., Ltd., or Shanghai Kongshan, is considered as a foreign-invested enterprise. To comply with PRC laws and regulations, we conduct substantially all of our business in China through our VIEs, Shanghai Qiniu Information Technology Co., Ltd., or Qiniu Information, Beijing Kongshan Information Technology Co., Ltd., or Beijing Kongshan, and Shanghai Qiniu Internet Technology Co., Ltd., or Qiniu Internet, based on a series of contractual arrangements. As a result of these contractual arrangements, we have control over, and are considered the primary beneficiary of, our VIEs and consolidate their financial statements in our consolidated financial statements under U.S. GAAP.

        The following chart illustrates our corporate structure, including our significant subsidiaries as that term is defined under Section 1-02 of Regulation S-X under the Securities Act, and our VIEs

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immediately upon the completion of this offering, assuming no exercise of underwriters' option to purchase additional ADS.

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Note:

(1)
The Shareholders of each of our VIEs, namely Qiniu Information, Beijing Kongshan, and Qiniu Internet are Shiwei Xu (our chairman and chief executive officer) and Guihua Lyu (our director and president), who are the founders of the Company.

Our Corporate Information

        Our principal executive offices are located at Floor 1-5, Building Q, No.66 Boxia Road, PuDong New District, Shanghai, 201203, People's Republic of China. Our telephone number at this address is +86 21 20703999. Our registered office in the British Virgin Islands is located at Maples Corporate Services (BVI) Limited at Kingston Chambers, P.O. Box 173, Road Town, Tortola, British Virgin Islands. Our agent for service of process in the United States is Cogency Global Inc., located at 122 East 42nd Street, 18th Floor New York, NY 10168.

        Investors should contact us for any inquiries through the address and telephone number of our principal executive office. Our principal website is www.qiniu.com. The information contained on our website is not a part of this prospectus.

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Implications of Being an Emerging Growth Company

        As a company with less than US$1.07 billion in revenue for the last fiscal year, we qualify as an "emerging growth company" pursuant to the Jumpstart Our Business Startups Act of 2012 (as amended by the Fixing America's Surface Transportation Act of 2015), or the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, in the assessment of the emerging growth company's internal control over financial reporting. 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. We have elected to take advantage of such exemptions. Accordingly, the information contained herein may be different than the information you receive from other public companies. References to an "emerging growth company" in this prospectus shall have the meaning associated with that term in the JOBS Act.

        We will remain an emerging growth company until the earliest of (i) the last day of our fiscal year during which we have total annual gross revenues of at least US$1.07 billion; (ii) the last day of our fiscal year following the fifth anniversary of the completion of this offering; (iii) the date on which we have, during the previous three-year period, issued more than US$1.0 billion in non-convertible debt; or (iv) the date on which we are deemed to be a "large accelerated filer" under the Securities Exchange Act of 1934, as amended, or the Exchange Act, which would occur if the market value of the ADSs that are held by non-affiliates exceeds US$700 million as of the last business day of our most recently completed second fiscal quarter. Once we cease to be an emerging growth company, we will not be entitled to the exemptions provided in the JOBS Act discussed above. See "Risk Factors—Risks Relating to the ADSs and This Offering—We are an emerging growth company within the meaning of the Securities Act and may take advantage of certain reduced reporting requirements."

Conventions Which Apply to This Prospectus

        Unless we indicate otherwise, all information in this prospectus reflects the following:

    no exercise by the underwriters of their over-allotment option to purchase up to                    additional ADSs representing                     Class A ordinary shares from us; and

        Except where the context otherwise requires and for purposes of this prospectus only:

    "active users" refers to persons or entities who have used our services during a certain period;

    "ADSs" refers to the American depositary shares, each representing                    Class A ordinary shares;

    "Annualized Revenues" is calculated by dividing the revenues from a customer for the current period by the number of months in the current period and multiplying that amount by 12;

    "BVI" refers to the British Virgin Islands;

    "BVI Act" refers to the BVI Business Companies Act (as amended);

    "China" or "PRC" refers to the People's Republic of China, excluding, for the purpose of this prospectus only, Taiwan, Hong Kong and Macau;

    "Class A ordinary share" refers to our Class A ordinary shares, par value US$0.0001 per share;

    "Class B ordinary share" refers to our Class B ordinary shares, par value US$0.0001 per share;

    "dollar-based net expansion rate" refers to the quotient obtained by dividing the MPaaS revenue from a cohort in the current period by the MPaaS revenue from the same cohort in the previous

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      corresponding period. "Cohort" is defined as the population of MPaaS customers for the previous corresponding period.

    "DPaaS" refers to Data Platform-as-a-Service;

    "EB" refers to exabyte, which equals to 1,000,000,000 gigabytes;

    "independent PaaS providers" refer to PaaS providers that are not belonging to any large-scale conglomerates that are involved in a wide range of businesses where they could potentially compete with their customers;

    "MIIT" refers to Ministry of Industry and Information Technology of the People's Republic of China

    "MOFCOM" refers to Ministry of Commerce of the People's Republic of China

    "MPaaS" refers to Media Platform-as-a-Service;

    "MPaaS Premium Customer" refers to, (i) for a historical year, a customer with annual revenues from MPaaS solutions of over RMB100,000, or (ii) for the current period, a customer with Annualized Revenues from MPaaS solutions of over RMB100,000;

    "PB" refers to petabyte, which equals to 1,000,000 gigabytes;

    "RMB" or "Renminbi" refers to the legal currency of the People's Republic of China;

    "US$," "dollars" or "U.S. dollars" refers to the legal currency of the United States;

    "Qiniu," "we," "us," "our company," and "our" refer to Qiniu Limited, a British Virgin Islands business company and its subsidiaries and, in the context of describing our operations and consolidated financial information, its consolidated variable interest entities;

    "variable interest entities" or "VIEs" refer to the PRC entities of which we have power to control the management, and financial and operating policies and have the right to receive substantially all the economic benefits and in which we have an exclusive option to purchase all or part of the equity interests at the minimum price possible to the extent permitted by PRC law;

        Unless otherwise noted, all translations from Renminbi to U.S. dollars and from U.S. dollars to Renminbi in this prospectus are made at RMB6.5518 to US$1.00, the exchange rate set forth in the H.10 statistical release of the Federal Reserve Board on March 31, 2021. We make no representation that any Renminbi or U.S. dollar amounts could have been, or could be, converted into U.S. dollars or Renminbi, as the case may be, at any particular rate, the rates stated below, or at all. On April 23, 2021, the noon buying rate for Renminbi was RMB6.4945 to US$1.00.

        This prospectus contains information derived from various public sources and certain information from an industry report commissioned by us and prepared by Frost & Sullivan, a third-party industry research firm, to provide information regarding our industry and market position. Such information involves a number of assumptions and limitations, and you are cautioned not to give undue weight to these estimates. We have not independently verified the accuracy or completeness of the data contained in these industry publications and reports. The industry in which we operate is subject to a high degree of uncertainty and risk due to variety of factors, including those described in the "Risk Factors" section. These and other factors could cause results to differ materially from those expressed in these publications and reports.

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THE OFFERING

Offering price range   We currently estimate that the initial public offering price will be between US$            and US$            per ADS.

ADSs offered by us

 

            ADSs (or            ADSs if the underwriters exercise their over-allotment option in full).

The ADSs

 

Each ADS represents            Class A ordinary shares, par value US$0.0001 per share. The depositary will hold the ordinary shares underlying the ADSs. You will have rights as provided in the deposit agreement.

 

 

We do not expect to pay dividends in the foreseeable future. If, however, we declare dividends on our Class A ordinary shares, the depositary will pay you the cash dividends and other distributions it receives on our Class A ordinary shares, after deducting its fees and expenses in accordance with the terms set forth in the deposit agreement.

 

 

You may turn in the ADSs to the depositary in exchange for our Class A ordinary shares. The depositary will charge you fees for any exchange.

 

 

We may amend or terminate the deposit agreement without your consent. If you continue to hold the ADSs after an amendment to the deposit agreement, you agree to be bound by the deposit agreement as amended.

 

 

To better understand the terms of the ADSs, you should carefully read the "Description of American Depositary Shares" section of this prospectus. You should also read the deposit agreement, which is filed as an exhibit to the registration statement that includes this prospectus.

Ordinary shares

 

We will issue            Class A ordinary shares represented by the ADSs in this offering.

 

 

Our ordinary shares will be divided into Class A ordinary shares and Class B ordinary shares immediately prior to the completion of this offering. Holders of Class A ordinary shares and Class B ordinary shares have the same rights except for voting and conversion rights. Each Class A ordinary share is entitled to one vote and each Class B ordinary share is entitled to 10 votes. 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. Upon any sale, transfer, assignment or disposition of any Class B ordinary shares by a holder thereof to any non-affiliate of such holder, each of such Class B ordinary shares will be automatically and immediately converted into one Class A ordinary share.

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    All options, regardless of grant dates, will entitle holders to the equivalent number of Class A ordinary shares once the vesting and exercising conditions on such share-based compensation awards are met.

 

 

See "Description of Share Capital."

Ordinary shares outstanding immediately after this offering

 

            Class A ordinary shares, par value US$0.0001 per share (or            Class A ordinary shares if the underwriters exercise their option to purchase additional ADSs in full).

Over-allotment option

 

We have granted the underwriters the right to purchase up to an additional            ADSs from us within 30 days of the date of this prospectus, to cover over-allotments, if any, in connection with the offering.

Listing

 

We intend to apply to list the ADSs representing our Class A ordinary shares on the Nasdaq under the symbol "QNIU."

Use of proceeds

 

We estimate that the net proceeds to us from the offering will be approximately US$            . We intend to use the net proceeds from the offering for research and development, investment in technology infrastructure such as self-operated edge nodes, strategic investments and acquisitions complementary to our business, as well as other general corporate purposes. See "Use of Proceeds."

Lock-up

 

We, [our directors and officers, all of our shareholders and all holders of our share-based awards] have agreed with the underwriters, subject to certain exceptions, not to offer, sell, or dispose of any shares of our share capital or securities convertible into or exchangeable or exercisable for any shares of our share capital during the 180-day period following the date of this prospectus. See "Shares Eligible for Future Sale" and "Underwriting" for more information.

Payment and settlement

 

The underwriters expect to deliver the ADSs against payment therefor through the facilities of The Depository Trust Company on                        , 2021.

Depositary

 

Deutsche Bank Trust Company Americas

Taxation

 

For British Virgin Islands, PRC and U.S. federal income tax considerations with respect to the ownership and disposition of the ADSs, see "Taxation."

Risk Factors

 

See "Risk Factors" and other information included in this prospectus for discussions of the risks relating to investing in the ADSs. You should carefully consider these risks before deciding to invest in the ADSs.

        Unless otherwise indicated, all information contained in this prospectus assumes no exercise of the option granted to the underwriters to purchase up to            additional Class A ordinary shares to cover over-allotments, if any, in connection with the offering.

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OUR SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA

        The following summary consolidated statement of operations data for the years ended December 31, 2019 and 2020, summary consolidated balance sheet data as of December 31, 2019 and 2020 and summary consolidated cash flow data for the years ended December 31, 2019 and 2020, have been derived from audited consolidated financial statements included elsewhere in this prospectus. The following summary consolidated statement of operations data for the three months ended March 31, 2020 and 2021, the summary consolidated balance sheet data as of March 31, 2021 and summary consolidated cash flow data for the three months ended March 31, 2020 and 2021 have been derived from our unaudited condensed consolidated financial statements appearing elsewhere in this prospectus and have been prepared on the same basis as the audited consolidated financial statements. Our consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP. Our historical results are not necessarily indicative of results expected for future periods. You should read this Summary Consolidated Financial and Operating Data section together with our consolidated financial statements and the related notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this prospectus.

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        The following table presents our summary consolidated statements of operations data for the years ended December 31, 2019 and 2020 and the three months ended March 31, 2020 and 2021.

 
  For the Year Ended
December 31,
  For the Three Months
Ended March 31,
 
 
  2019   2020   2020   2021  
 
  RMB   %   RMB   US$   %   RMB   %   RMB   US$   %  
 
  (in thousands, except for percentages, shares and per share data)
   
 

Summary Consolidated Statements of Operations Data:

                                                             

Revenues

    824,963     100.0     1,089,214     166,247     100.0     285,597     100.0     322,535     49,228     100.0  

Cost of revenues(1)

   
(639,476

)
 
(77.5

)
 
(852,132

)
 
(130,061

)
 
(78.2

)
 
(199,782

)
 
(70.0

)
 
(248,217

)
 
(37,885

)
 
(77.0

)

Gross profit

    185,487     22.5     237,082     36,186     21.8     85,815     30.0     74,318     11,343     23.0  

Operating expenses

                                                             

Research and development expenses(1)

    (108,216 )   (13.1 )   (96,928 )   (14,794 )   (8.9 )   (22,074 )   (7.7 )   (29,137 )   (4,447 )   (9.0 )

Selling and marketing expenses(1)

    (108,432 )   (13.2 )   (100,675 )   (15,366 )   (9.3 )   (19,529 )   (6.8 )   (45,789 )   (6,989 )   (14.1 )

General and administrative expenses(1)

    (97,302 )   (11.8 )   (79,565 )   (12,144 )   (7.3 )   (20,839 )   (7.3 )   (27,920 )   (4,262 )   (8.7 )

Total operating expenses

    (313,950 )   (38.1 )   (277,168 )   (42,304 )   (25.5 )   (62,442 )   (21.8 )   (102,846 )   (15,698 )   (31.8 )

Operating (loss)/income

    (128,463 )   (15.6 )   (40,086 )   (6,118 )   (3.7 )   23,373     8.2     (28,528 )   (4,355 )   (8.8 )

Interest expenses

    (7,492 )   (0.9 )   (4,233 )   (646 )   (0.4 )   (1,429 )   (0.5 )   (263 )   (40 )   (0.1 )

Interest income

    4,384     0.6     5,298     809     0.5     1,177     0.4     1,049     160     0.3  

Investment (losses)/income, net

    (1,080 )   (0.1 )   1,089     166     0.1     467     0.2              

Foreign currency exchange (losses)/gains, net

    (624 )   (0.1 )   4,028     615     0.4     (1,084 )   (0.4 )   (1,155 )   (176 )   (0.3 )

Gain from disposal of an equity method investment

            673     103     0.1                      

Change in fair value of a long-term investment

            1,396     213     0.1             318     49     0.1  

Share of (losses)/profit of equity method investments

    (266 )   (0.0 )   76     12     0.0     (14 )   (0.0 )   (13 )   (2 )   (0.0 )

Other income

    5,297     0.6     12,476     1,904     1.1     1,233     0.4     1,101     168     0.3  

(Loss)/income before income taxes

    (128,244 )   (15.5 )   (19,283 )   (2,942 )   (1.8 )   23,723     8.3     (27,491 )   (4,196 )   (8.5 )

Income tax expense

                                         

Net (loss)/income

    (128,244 )   (15.5 )   (19,283 )   (2,942 )   (1.8 )   23,723     8.3     (27,491 )   (4,196 )   (8.5 )

Accretion of Redeemable Convertible Preferred Shares

    (42,772 )   (5.2 )   (151,837 )   (23,175 )   (13.9 )                    

Net (loss)/income attributable to Qiniu Limited

    (171,016 )   (20.7 )   (171,120 )   (26,117 )   (15.7 )   23,723     8.3     (27,491 )   (4,196 )   (8.5 )

Note:

(1)
Includes share-based compensation expenses as follows:

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  For the Year Ended
December 31,
  For the
Three Months Ended
March 31,
 
 
  2019   2020   2020   2021  
 
  RMB   RMB   US$   RMB   RMB   US$  
 
  (in thousands)
 

Cost of revenues

    (585 )   487     74     (15 )   400     61  

Research and development expenses

    4,432     5,506     840     1,104     199     30  

Selling and marketing expenses

    3,825     4,886     746     1,265     10,194     1,556  

General and administrative expenses

    15,814     610     93     1,150     3,554     542  

Total

    23,486     11,489     1,753     3,504     14,347     2,189  

        The following table presents our summary consolidated balance sheet data as of December 31, 2019 and 2020 and March 31, 2021.

 
  As of December 31,   As of March 31,  
 
  2019   2020   2021  
 
  RMB   RMB   US$   RMB   US$  
 
  (in thousands)
 

Summary Consolidated Balance Sheet Data:

                               

Cash

    120,009     140,129     21,388     176,372     26,920  

Time deposits

    104,643     398,019     60,750     298,994     45,635  

Accounts receivable, net

    154,003     161,959     24,720     184,435     28,150  

Total current assets

    448,182     751,378     114,684     734,388     112,090  

Total non-current assets

    222,433     206,164     31,467     230,505     35,181  

Total assets

    670,615     957,542     146,151     964,893     147,271  

Accounts payable

    40,107     43,408     6,625     67,183     10,254  

Contract liabilities

    105,196     99,473     15,183     96,713     14,761  

Total current liabilities

    390,680     408,099     62,289     395,704     60,395  

Total non-current liabilities

    10,509     3,660     559     3,059     467  

Total liabilities

    401,189     411,759     62,848     398,763     60,862  

Total mezzanine equity

    2,564,622     2,855,456     435,828     2,875,762     438,927  

Total shareholders' deficit

    (2,295,196 )   (2,309,673 )   (352,525 )   (2,309,632 )   (352,518 )

Total liabilities, mezzanine equity and shareholders' deficit

    670,615     957,542     146,151     964,893     147,271  

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        The following table presents our summary consolidated cash flow data for the years ended December 31, 2019 and 2020 and the three months ended March 31, 2020 and 2021.

 
  For the Year Ended
December 31,
  For the
Three Months Ended
March 31,
 
 
  2019   2020   2020   2021  
 
  RMB   RMB   US$   RMB   RMB   US$  
 
  (in thousands)
  (in thousands)
 

Summary Consolidated Cash Flow Data

                                     

Net cash (used in)/provided by operating activities

    (89,923 )   82,410     12,578     (1,435 )   (33,478 )   (5,110 )

Net cash (used in)/provided by investing activities

    (161,348 )   (297,352 )   (45,384 )   26,491     92,918     14,182  

Net cash provided by/(used in) financing activities

    75,125     269,325     41,107     (7,968 )   (22,613 )   (3,451 )

Effect of foreign currency exchange rate changes on cash

    (1,092 )   (34,263 )   (5,230 )   1,681     (584 )   (89 )

Net (decrease)/increase in cash

    (177,238 )   20,120     3,071     18,769     36,243     5,532  

Cash at the beginning of the year/period

    297,247     120,009     18,317     120,009     140,129     21,388  

Cash at the end of the year/period

    120,009     140,129     21,388     138,778     176,372     26,920  

Non-GAAP Financial Measures

        In evaluating our business, we consider and use certain non-GAAP measures, including adjusted net (loss)/income, adjusted net (loss)/income margin, adjusted EBITDA and adjusted EBITDA margin, as supplemental measures to review and assess our operating performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. We define adjusted net (loss)/income as net (loss)/income excluding share-based compensation and foreign exchange losses/(gains) and we define adjusted net (loss)/income margin as adjusted net (loss)/income as a percentage of revenues. We define adjusted EBITDA as adjusted net (loss)/income excluding interest income, interest expenses, income tax expense and depreciation and amortization, and we define adjusted EBITDA margin as adjusted EBITDA as a percentage of revenues. We present these non-GAAP financial measures because they are used by our management to evaluate our operating performance and formulate business plans. We also believe that the use of these non-GAAP measures facilitates investors' assessment of our operating performance.

        These non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. These non-GAAP financial measures have limitations as analytical tools. One of the key limitations of using these non-GAAP financial measures is that they do not reflect all items of income and expense that affect our operations. Further, these non-GAAP measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited.

        We compensate for these limitations by reconciling these non-GAAP financial measures to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating our performance. We encourage you to review our financial information in its entirety and not rely on a single financial measure.

        The following tables reconcile our adjusted net (loss)/income, adjusted EBITDA for the years ended December 31, 2019 and 2020 and the three months ended March 31, 2020 and 2021, to the most

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directly comparable financial measures calculated and presented in accordance with U.S. GAAP, which are net (loss)/income:

 
  For the Year Ended
December 31,
  For the
Three Months Ended
March 31,
 
 
  2019   2020   2020   2021  
 
  RMB   RMB   US$   RMB   RMB   US$  
 
  (in thousands)
 

Net (loss)/income

    (128,244 )   (19,283 )   (2,942 )   23,723     (27,491 )   (4,196 )

Adjustments:

                                     

Share-based compensation

    23,486     11,489     1,753     3,504     14,347     2,189  

Foreign exchange losses/(gains)

    624     (4,028 )   (615 )   1,084     1,155     176  

Adjusted net (loss)/income

    (104,134 )   (11,822 )   (1,804 )   28,311     (11,989 )   (1,831 )

Adjustments:

   
 
   
 
   
 
   
 
   
 
   
 
 

Interest income

    (4,384 )   (5,298 )   (809 )   (1,177 )   (1,049 )   (160 )

Interest expenses

    7,492     4,233     646     1,429     263     40  

Income tax expense

                         

Depreciation and amortization

    73,095     67,569     10,313     16,876     16,308     2,489  

Adjusted EBITDA

    (27,931 )   54,682     8,346     45,439     3,533     538  

 

 
  For the Year Ended
December 31,
  For the
Three Months Ended
March 31,
 
 
  2019   2020   2020   2021  
 
  %
 

Net (loss)/income margin

    (15.5 )   (1.8 )   8.3     (8.5 )

Adjusted net (loss)/income margin

    (12.6 )   (1.1 )   9.9     (3.7 )

Adjusted EBITDA margin

    (3.4 )   5.0     15.9     1.1  

Key Operating Metrics

        In 2019 and 2020, revenue generated from our MPaaS Premium Customers accounted for 89.8% and 91.5% of our total MPasS revenues in the same periods, respectively. The following table sets forth certain of our key operating metrics of our MPaaS solutions that we use to measure our business for the periods indicated.

 
  For the Year Ended
December 31,
 
 
  2019   2020  

MPaaS solutions

             

Number of MPaaS Premium Customers

    682     775  

Average revenue per MPaaS Premium Customer (RMB'000)

    1,026.5     1,212.5  

        As a result of our business expansion efforts and increasing demands for our MPaaS solutions, our MPaaS Premium Customers increased from 682 in 2019 to 775 in 2020, and the average revenue per

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MPaaS Premium Customer increased from RMB1,026.5 thousand in 2019 to RMB1,212.5 thousand in 2020.

 
  For the Year Ended
December 31,
 
 
  2019   2020  

MPaaS solutions

             

Number of MPaaS customers

    54,256     61,502  

Dollar-based net expansion rate

    N/A     112 %

        Our dollar-based net expansion rate of MPaaS customers was 112% in 2020, which indicates our ability to retain and grow revenue from our MPaaS customers.

        The following table sets forth certain of our key operating metrics of our DPaaS solution that we use to measure our business for the periods indicated.

 
  For the Year Ended
December 31,
 
 
  2019   2020  

DPaaS solution

             

Number of DPaaS customers

    306     240  

Average revenue per DPaaS customer (RMB'000)

    18.5     48.7  

        As our DPaaS solution is still at its early stage of development, since 2020, we started to focus on developing business relationships with industry-leading customers to demonstrate the quality of our services and enhance our brand awareness. In 2020, we completed various lighthouse projects with industry leaders such as Littlegenius. Accordingly, our average revenue per DPaaS customer increased significantly from RMB18.5 thousand in 2019 to RMB48.7 thousand in 2020.

        For the three months ended March 31, 2020 and 2021, we had 38,281 and 47,540 MPaaS customers, respectively, which reflected our business expansion efforts. As a result, revenue from our MPaaS solutions increased by 11.4% from RMB270.3 million for the three months ended March 31, 2020 to RMB301.1 million (US$46.0 million) for the three months ended March 31, 2021.

        For the three months ended March 31, 2020 and 2021, we had 179 and 158 DPaaS customers, respectively. In line with our efforts to develop business relationships with industry-leading customers to demonstrate the quality of our services and enhance our brand awareness, our average revenue per DPaaS customer increased significantly from RMB6.5 thousand for the three months ended March 31, 2020 to RMB50.3 thousand for the three months ended March 31, 2021.

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RISK FACTORS

        You should consider carefully all of the information in this prospectus, including the risks and uncertainties described below and our consolidated financial statements and related notes, before making an investment in the ADSs. Any of the following risks and uncertainties could have a material adverse effect on our business, financial condition and results of operations. The market price of the ADSs could decline significantly as a result of any of these risks and uncertainties, and you may lose all or part of your investment. When determining whether to invest, you should also refer to the other information contained in this prospectus, including our financial statements and the related notes thereto. You should also carefully review the cautionary statements referred to under "Forward-looking Statements." Our actual results could differ materially and adversely from those anticipated in this prospectus.

RISKS RELATING TO OUR BUSINESS AND INDUSTRY

If we fail to maintain and enhance the functions, performance, reliability, design, security, and scalability of our platform to meet our customers' evolving needs, we may lose our customers.

        The market for cloud and data services in China is constantly changing with innovations. Our success has been based on our dedication to the development of innovative and high quality products and solutions on our platform. Our ability to continue to attract and retain customers and increase sales depends largely on our ability to continue improving and enhancing the functions, performance, reliability, design, security, and scalability of our platform.

        We may experience difficulties in developing new technologies as it is costly and time consuming, which in turn could delay or prevent the development, introduction or implementation of new products and solutions. While we have invested a significant amount of time and money in cloud service development to date, we may not have sufficient resources to invest at the same level going forward. To the extent we are unable to improve and enhance the functions, performance, reliability, design, security, and scalability of our platform in a manner that timely and effectively responds to our customers' evolving needs, we may lose our customers and our business, financial condition, results of operations, and prospects may be materially and adversely affected.

If we fail to maintain and grow our customer base, keep our customers engaged through our products and solutions, our business growth may not be sustainable.

        To achieve the sustainable growth of our business, we must continuously attract new customers, retain existing customers and increase their incremental spending on our products and solutions. To keep pace with our customers' evolving demands, we need to improve our existing products and solutions, and launch new products and solutions, on a timely basis. If we fail to accurately identify our customers' demands or continuously provide them with products and solutions that add value to their businesses, our customers may be reluctant to increase their spending on our platform, and as a result, the growth of our business may be stalled.

        In addition, our future success largely depends on our ability to upgrade our PaaS solutions. In 2020, we had 63.0 thousand paying customers, representing an increase of 12.7% from 2019. We cannot assure you that we will achieve similar growth rates for our customer base in the future. Despite our efforts in researching and developing technology-driven PaaS products and solutions, we cannot assure you that our existing and future PaaS solutions will sustain the current level of popularity. Customers may not choose or continue to use our PaaS solutions if they become outdated or if our competitors offer superior PaaS solutions. As a result, our PaaS business may not grow at a rate we anticipate or at all, which may, in turn, materially and adversely affect our business, results of operations, financial condition and prospects.

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If our products and solutions do not achieve sufficient market acceptance, our business and competitive position will suffer.

        To meet our customers' rapidly evolving demands, we invest substantial resources in research and development to enhance our products and solutions, as well as in improving our platform. When we develop or acquire new or enhanced products and solutions, we typically incur significant expenses and expend resources upfront to develop, market, promote and sell the new offerings. Therefore, when we develop or acquire and introduce new or enhanced products and solutions, they must achieve high levels of market acceptance in order to justify the amount of our investment in developing and bringing them to market. Our new products and solutions, or enhancements and changes to our existing products and solutions, could fail to attain sufficient market acceptance for many reasons, including, among others:

    failure to predict market demand accurately in terms of functionality and a failure to supply products and solutions that meet this demand in a timely manner;

    defects, errors, or disruptions;

    negative publicity about our platform's performance or effectiveness;

    changes in the legal or regulatory requirements, or increased legal or regulatory scrutiny, adversely affecting our platform;

    emergence of competitors that achieve market acceptance before we do;

    delays in releasing enhancements to our platform to the market; and

    introduction or anticipated introduction of competing products or solutions by our competitors.

        If our new products and solutions, or any enhancements, do not achieve adequate acceptance in the market, or if products and solutions developed by others achieve greater acceptance in the market, our business could be harmed.

If our expansion into new verticals is not successful, our business, prospects and growth momentum may be materially and adversely affected.

        Our products and solutions are specifically designed to address the diversified needs of our customers across different verticals. Through our top-notch platform resources and years of technology accumulation, we have a track record of successful expansion into and becoming a leader in new verticals. We cannot assure you, however, that we will be able to maintain this momentum in the future. Expanding into new verticals involves new risks and challenges. Our lack of familiarity with new verticals may make it more difficult for us to keep pace with the evolving customer needs and preferences. In addition, there may be one or more existing market leaders in any vertical that we decide to expand into. Such companies may be able to compete more effectively than us by leveraging their experience in doing business in that market as well as their deeper industry insight and greater brand recognition among customers. We will need to comply with new laws and regulations applicable to these businesses, the failure of which would adversely affect our reputation, business, results of operations and financial condition. Expansion into any new vertical may place significant strain on our management and resources, and failure to expand successfully could have a material adverse effect on our business and prospects.

We have experienced significant growth and expect our growth to continue, but if we fail to effectively manage our growth, our business, results of operations and financial condition could be adversely affected.

        We have experienced significant growth in our business. Our total revenues have increased by 32.0% from approximately RMB825.0 million in 2019 to approximately RMB1,089.2 million

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(US$166.2 million) in 2020, and have increased by 12.9% from approximately RMB285.6 million for the three months ended March 31, 2020 to approximately RMB322.5 million (US$49.2 million) for the three months ended March 31, 2021. This growth has placed and may continue to place significant demands on our managerial, administrative, operational, financial and other resources. Furthermore, we intend to grow by expanding our business, increasing market penetration of our existing products and solutions and developing new ones. To maintain our growth, we need to attract more customers, hire more qualified R&D staff and other staff, scale up our offerings and strengthen our technology infrastructure. If we fail to efficiently manage the expansion of our business, our costs and expenses may increase faster than we planned and we may not successfully attract a sufficient number of customers and users in a cost-effective manner, respond to competitive challenges, or otherwise execute our business strategies. These activities require significant capital expenditures and investment of valuable management and financial resources, and our growth will continue to place significant demands on our management. There is no guarantee that we will be able to effectively manage any future growth in an efficient, cost-effective and timely manner, or at all.

        Moreover, our results of operations may fluctuate in the future due to a variety of factors, many of which are outside of our control, and the variability and unpredictability of such factors could result in our failure to meet or exceed our financial expectations for a given period. As a result, our past results may not be indicative of our future performance.

The market in which we participate is competitive, and if we do not compete effectively, our business, operating results and financial condition could be harmed.

        The cloud service and PaaS markets are competitive and rapidly evolving. The principal competitive factors in our market include research and development capabilities, industry know-how, continuous capital investment, product portfolio, among others. Some of our existing competitors might have substantial competitive advantages, including larger scale, longer operating history, greater brand recognition, more established relationships with customers, suppliers and partners, and greater financial, research and development, marketing and other resources. As a result, our competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards or customer requirements. In addition, some competitors may offer products, solutions and services that address one or more number of functions at lower prices, with greater depth than our products, solutions and services or in different geographies. Our existing and potential competitors may develop and market new products, solutions and services with functionality comparable to ours, and this could force us to decrease prices in order to remain competitive. If we are unable to compete successfully against our current or potential competitors, our business, financial condition, and results of operations may be materially and adversely impacted.

If we fail to adapt and respond effectively to rapidly changing technology, evolving industry standards, changing regulations, and changing customer needs, requirements or preferences, our business may be materially and adversely affected.

        The PaaS market is subject to rapid technological changes, evolving industry standards, regulations and customer needs, requirements and preferences. The success of our business will depend, in part, on our ability to adapt and respond to these changes on an effective and timely basis. If we fail to upgrade products and solutions that satisfy customers and end-users and provide enhancements and new features for existing products that keep pace with rapid technological and industry changes, our business, operating results and financial condition could be adversely affected. If new technologies emerge that are able to deliver competitive products, solutions and services at lower prices, more efficiently, more conveniently or more securely, such technologies could adversely impact our ability to compete effectively.

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        Our platform must integrate with a variety of network, hardware, mobile and software platforms and technologies, and we need to continuously modify and enhance our products and solutions to adapt to changes and innovation in these technologies. Any failure of our products and solutions to function effectively with evolving technologies could reduce the demand for our products and solutions. If we are unable to respond to these changes in a cost-effective and timely manner, our products and solutions may become less marketable and less competitive or obsolete, and our business, operating results and financial condition could be adversely affected.

To support our business growth, we continue to invest heavily in our research and development efforts, the expenses of which may negatively impact our cash flow, and may not generate the results we expect to achieve.

        Our technological capabilities are critical to our success, and we have been continuously investing heavily in our research and development efforts. Our R&D expenses incurred were approximately RMB108.2 million, RMB96.9 million (US$14.8 million), RMB22.1 million and RMB29.1 million (US$4.4 million), respectively, for the years ended December 31, 2019 and 2020 and for the three months ended March 31, 2020 and 2021, accounting for approximately 34.5%, 35.0%, 35.4% and 28.3% of the operating expenses for each of the corresponding periods. The industry in which we operate is subject to rapid technological changes and is evolving quickly in terms of technological innovation. We need to invest significant resources, including financial and human resources, in research and development to lead technological advances in order to make our products and solutions innovative and competitive in the market. As a result, we expect that our research and development expenses will continue to increase.

        Furthermore, development activities are inherently uncertain, and we might encounter practical difficulties in commercializing our development results. Our significant expenditures on research and development may not generate corresponding benefits. Given the fast pace with which the technology has been and will continue to be developed, we may not be able to timely upgrade our technologies in an efficient and cost-effective manner, or at all. New technologies in our industry could render our platform, our products and solutions that we are developing or expect to develop in the future obsolete, not commercially viable or unattractive, thereby limiting our ability to recover related development costs, which could result in a decline in our revenues, profitability and market share.

If our platform experiences material errors, defects or security issues, we may lose our customers, fail to honor our obligations in respect of our contract liabilities, and incur significant remedial costs.

        Despite repeated testing, our products and solutions by their nature may contain technical errors, defects or security issues that are difficult to detect and rectify, particularly when first introduced or when new versions or upgrades are implemented. Due to the complexity of our products and solutions, we may not be able to fix these errors, defects and security issues in a timely manner or at all. We may incur significant expenses rectifying any material error or defect and compensating our customers who are affected by such error or defect. In addition, if we fail to provide the prescribed products or solutions to our customers in time or at all due to such material errors, defects or security issues, we may not be able to honor our obligations in respect of our contract liabilities, which totaled RMB105.2 million, RMB99.5 million (US$15.2 million) and RMB96.7 million (US$14.8 million) as of December 31, 2019 and 2020 and March 31, 2021, respectively.

        Given that many of our customers use our products and solutions in critical parts of their businesses, any error, defect or service interruption on our platform could result in significant losses for our customers. Our customers may seek significant compensation from us for any losses they incur as result of such errors or cease using our products and solutions altogether. Such claims, even if unsuccessful, could be costly, time-consuming and distracting to management, result in a diversion of significant resources, and have an adverse effect on our business, operating results and financial condition. We cannot assure you that the disclaimers limiting our exposure to claims, which we typically

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include in the agreements with our customers, will be enforceable or give us adequate protections against liabilities. Moreover, our customers may share information about their poor experiences in the community, resulting in negative publicity about us. Such negative publicity could damage our reputation and hurt our future sales.

Our brand is integral to our success. If we fail to effectively maintain, promote and enhance our brand, our business and competitive advantage may be harmed.

        We believe that maintaining, promoting and enhancing our Qiniu Cloud brand is critical to maintaining and expanding our business. Maintaining and enhancing our brand depend largely on our ability to continue to provide high quality, well-designed, useful, reliable, and innovative products and solutions, which we cannot assure you we will do successfully.

        We believe the importance of brand recognition will increase as competition in our market increases. In addition to our ability to provide reliable and useful PaaS solutions at competitive prices, the successful promotion of our brand will also depend on the effectiveness of our marketing efforts. We primarily market our products and solutions through our sales and marketing force, and a number of free traffic sources including developers' word-of-mouth referrals. Our efforts to market our brand have incurred significant costs and expenses and we intend to continue such efforts. We cannot assure you, however, that our selling and marketing expenses will lead to increasing revenue, and even if they did, such increases in revenue might not be sufficient to offset the expenses incurred.

Security breaches and attacks against our systems and network, and any failure to otherwise protect personal, confidential and proprietary information, could damage our reputation and negatively impact our business, as well as materially and adversely affect our financial condition and results of operations.

        We have implemented various cybersecurity measures, but such measures may not detect, prevent or control all attempts to compromise our systems, including distributed denial-of-service attacks, viruses, Trojan horses, malicious software, break-ins, phishing attacks, third-party manipulation, security breaches, employee misconduct or negligence or other attacks, risks, data leakage and similar disruptions that may cause service interruptions or jeopardize the security of data stored in and transmitted by our systems or that we otherwise maintain. Breaches of our cybersecurity measures could result in unauthorized access to our systems, misappropriation of information or data, deletion or modification of user information, or a denial-of-service or other interruption to our business operations. As techniques used to obtain unauthorized access to or sabotage systems change frequently and may not be known until launched against us or our third-party service providers, there can be no assurance that we will be able to anticipate, or implement adequate measures to protect against these attacks. If we are unable to avert these attacks and security breaches, we could be subject to significant legal and financial liabilities, our reputation and business would be harmed and we could sustain substantial revenue loss from lost of sales and customer dissatisfaction.

We partially rely on third-party service providers to conduct our business and any interruption or delay in such third parties or our own failure may impair our customers' experience.

        We partially rely on third-party service providers with respect to our PaaS business. For example, we use various third-party cloud-hosting providers or other generic IT services to provide cloud infrastructure, including data center facilities, for our platform. Customers need to be able to access our platform at any time, without interruption or degradation of performance, and we provide some customers with service-level commitments with respect to uptime. Any limitation on the capacity of our data centers or cloud infrastructure could impede our ability to onboard new customers or expand the usage of our existing customers, host our products or serve our customers, which could adversely affect our business, financial condition and results of operations. In addition, any incident affecting our data centers or cloud infrastructure that may be caused by cyberattacks, natural disasters, fire, flood, severe

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storm, earthquake, power loss, outbreaks of contagious diseases, telecommunications failures, terrorist or other attacks, or other events beyond our control could negatively affect our platform. A prolonged service disruption affecting our data centers or technology infrastructure for any of the foregoing reasons would negatively impact our ability to serve our customers and could damage our reputation with current and potential customers, expose us to liability, cause us to lose customers or otherwise harm our business. We may also incur significant costs for using alternative providers or taking other actions in preparation for, or in response to, events that damage the third-party hosting services we use.

        Furthermore, these third-party service providers may not continue to be available to us on commercially reasonable terms, or at all. If we lose our right to use any of these service providers, it could lead to significant increase in our expenses or otherwise result in a delay or disruption in our solutions until equivalent technology is developed by us, or obtained from another third party, and integrated into our solutions. If performance of the third parties that we work with proves unsatisfactory, or if any of them violates its contractual obligations to us, we may need to replace such third party and/or take other remedial action, which could result in additional costs and materially and adversely affect our offerings to customers. Moreover, the financial condition of our third-party service providers may deteriorate over the course of our contract term, which may also impact the ability of such third party to continue providing their services to us.

Our products and solutions rely on the stable performance of servers, and any disruption to our servers due to internal and external factors could diminish demand for our products and solutions, harm our business, our reputation and results of operations and subject us to liability.

        We rely in part upon the stable performance of servers for provision of our products and solutions. Those servers may incur disruptions due to internal and external factors, such as inappropriate maintenance, defects in the servers, cyberattacks, occurrence of catastrophic events or human errors. Such disruptions could result in negative publicity, loss of or delay in market acceptance of our products and solutions, loss of competitive position, lower customer retention or claims by customers for losses sustained by them. In such an event, we may need to expend additional resources to help with recovering. In addition, we may not carry insurance to compensate us for any losses that may result from claims arising from disruption in third-party servers. As a result, our reputation and our brand could be harmed, and our business, results of operations and financial condition may be adversely affected.

Our and our business partners' business operations have been adversely affected by the COVID-19 outbreak, and may in the future continue to be affected by the COVID-19 outbreak.

        On January 30, 2020, the International Health Regulations Emergency Committee of the World Health Organization declared the novel coronavirus disease 2019, or COVID-19, outbreak a public health emergency of international concern, and on March 11, 2020 the World Health Organization declared the global COVID-19 outbreak a pandemic. The COVID-19 virus continues to spread rapidly worldwide, including where our customers, suppliers and other business partners are located and where we have business operations. During the COVID-19 pandemic, government authorities around the world have ordered businesses to close and people to remain at home while imposing significant restrictions on traveling and social gatherings. Our customers and suppliers are also affected by COVID-19 related restrictions and closures. These measures have impacted, and may further impact, our workforce and operations, the operations of our customers and suppliers and other business partners. There continues to be significant uncertainties associated with the COVID-19 pandemic, including with respect to the ultimate spread of the virus, the severity of the disease, the duration of the outbreak, the possibility of successive waves of outbreaks, further actions that may be taken by governmental authorities around the world to contain the virus or to treat its impact, and the scope and length of the resulting economic downturn.

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        Furthermore, we may in the future experience additional disruptions that could materially and adversely impact our business operations, financial condition and results of operations, including but not limited to:

    decrease in number of customers;

    decrease in demand for our products and solutions;

    delays in the timing of purchasing decisions and sales and implementation cycles of our products and solutions by our existing or prospective customers;

    inefficiencies, delays and additional costs in our product development, sales, marketing and customer service efforts;

    service interruptions or impaired system performance due to failures of or delays in our systems or resources in light of increasing usage of our cloud services;

    delays or failure to collect receivables from our customers impacted by the COVID-19 outbreak;

    negative impact on the operation of other third parties, including but not limited to suppliers, deposit / loan banks, regulatory authorities and financial intermediaries, which may indirectly have a negative impact on our business and the capital market environment;

    the possibility that one or more clusters of COVID-19 cases could occur at one of our locations, affecting our employees or the systems or employees of our customers or other third parties on which we depend; and

    challenges to our systems supporting our remote workforce, due to the higher demand of such systems and the related software and hardware to support such remote working conditions.

        We may also take further actions as may be required by government authorities or as we determine are in the best interests of our employees, customers and business partners which could further adversely impact our business operations.

        Failure to contain the further spread of COVID-19 will prolong and exacerbate the general economic downturn. In addition, while the potential impact and duration of the COVID-19 pandemic on the global economy and our business in particular may be difficult to assess or predict, the pandemic has resulted in, and may continue to result in, significant disruption of global financial markets, which may reduce our ability to access capital or our customers' ability to pay us for past or future purchases, which could negatively affect our liquidity. The COVID-19 pandemic could also reduce the demand for our products and solutions. Additionally, throughout the first three quarters of 2020, the travel restrictions and social distancing guidelines imposed by governments globally have reduced the amount of international travels and in-person meetings, which in turn limited our ability to engage in in-person marketing events. There is no guarantee that the prolonged pandemic will not affect the demands for our products and solutions in the future. In addition, a recession or financial market correction resulting from the spread of COVID-19 could decrease overall technology spending, adversely affecting demand for our products and solutions, our business and the value of the ADSs.

        The global pandemic of COVID-19 continues to rapidly evolve, and we will continue to monitor the COVID-19 situation closely. The ultimate impact of the COVID-19 pandemic or a similar health epidemic is highly uncertain and subject to change. The extent of the impact of the COVID-19 pandemic on our operational and financial performance, including our ability to execute our business strategies and initiatives, will depend on future developments, including, but not limited to, the duration and spread of the pandemic, its severity, the actions to contain the disease or treat its impact, related restrictions on travel, and the duration, timing and severity of the impact on customer spending, including any recession resulting from the pandemic, all of which are uncertain and cannot be predicted. To the extent the COVID-19 pandemic adversely affects our business and financial results, it

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may also heighten other risks described in this "Risk Factors" section. For additional information of the impact of COVID-19 on our business, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Impact of COVID-19."

If the adoption of our products and solutions by our customers are slower than we expected, our business, results of operations and financial condition may be adversely affected.

        Our business has relied on the adoption of our products and solutions by a broad array of customers. Our ability to further increase our customer base, and achieve broader market acceptance of our products and solutions will depend, in part, on our ability to effectively organize, focus and train our sales and marketing personnel. Our ability to achieve significant revenue growth in the future will depend, in part, on our ability to recruit, train and retain a sufficient number of experienced sales professionals. Our recent hires and planned hires may not become as productive and efficient as we expect and we may be unable to hire or retain sufficient numbers of qualified individuals in the future in the markets where we do business.

        As we seek to increase the adoption of our products and solutions by our customers, we may incur higher costs and longer sales cycles. The decision to adopt our products and solutions may require the review and approval of multiple departments including product, human resources, financial and legal departments. In addition, while customers may quickly deploy our products and solutions on a limited basis before they will commit to deploying our products and solutions at scale, they often require extensive education about our products and solutions and significant customer support time, engage in protracted pricing negotiations and seek to secure readily available development resources.

We may fail to conduct our sales and marketing activities in a cost-effective manner and we are subject to limitations in promoting our products and solutions.

        Due to the technical nature of PaaS solutions, we mainly rely on our sales and marketing forces to conduct marketing activities and drive sales of our products and solutions. If we fail to conduct our sales and marketing activities in a cost-effective way, we may incur considerable marketing expenses, which could adversely affect our business and operating results. Additionally, our brand promotion and marketing activities may not be well received by customers and potential customers, and may not result in the levels of sales that we anticipate. Meanwhile, marketing approaches and tools in the market for PaaS solutions in China are evolving, which may further require us to enhance our marketing approaches and experiment with new marketing methods to keep pace with industry developments and customer preferences. Failure to introduce new marketing approaches in an efficient and effective manner could reduce our market share and materially and adversely affect our financial condition, results of operations and profitability.

If we fail to provide high quality customer services, our brand, business, and results of operations may be harmed.

        We believe our focus on customer services and support is critical to attracting new customers, retaining existing customers and growing our business. We have invested in training our customer support team and improving the quality of our customer services. However, our customer services team may not be able to maintain a high standard for themselves going forward for reasons such as budgetary constraints and employee losses, which could adversely affect our reputation and ability to retain and bring in customers. As a result, our brand, business, and results of operations may be harmed.

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We employ a pricing model and strategy that subjects us to various challenges that could make it difficult for us to derive sufficient value from our customers.

        We generally charge cloud service customers based on usage, and to a lesser extent, on a project basis. Such pricing model requires us to undertake significant projections and planning on our costs. If our projections and plans differ significantly from those actually incurred, our business could be harmed. We do not know whether our current or potential customers or the market in general will continue to accept this pricing model going forward and, if it fails to gain acceptance, our business could be harmed. In addition, if our competitors adopt new pricing models that become more attractive to customers, our business could be harmed.

        We also generally rely on telecommunication operators and third parties' servers or server racks based on expected usage from our customers. If our customers use our platform in a manner that is inconsistent with our cost expenditure, our business could be harmed. To the extent that such strategy helps us increase revenues, the increased revenues still may not be enough to offset the increased cost and expenses we incur. Moreover, we may have to keep the price of our products and solutions on par with our competitors to remain in our competitive position. If we are not able to advance our technologies and effectively control costs, our business, results of operation and financial condition may be negatively affected.

We may not be able to maintain the pricing terms for our products and solutions or enhance our customer retention rates going forward.

        We may need to decrease prices of our products and solutions to stay competitive. As the markets for our products and solutions mature, or as new competitors introduce new products or solutions that compete with ours, we may be unable to attract new customers at the same price or based on the same pricing model as we have adopted historically. Moreover, certain customers may demand greater price concessions. As a result, in the future we may be required to reduce our prices, which could materially and adversely affect our revenues, profitability, financial position, and cash flow.

        In addition, our customers have no obligation to renew their contracts for our products and solutions. Our customers may renew for fewer elements of our products and solutions or on pricing terms less favorable to us. Our historical customer retention rates may not be indicative of our customer retention rates in the future. Our customers' retention rates may decline or fluctuate as a result of a number of factors, including their dissatisfaction with our pricing or our products and solutions, and their ability to continue their operations and spending levels. In addition, over time the average term of our contracts could change based on retention rates or for other reasons. If our customers do not renew their subscriptions for our products and solutions on similar terms, our revenues may decline, and our business could suffer.

We are exposed to credit risk from our customers and the recoverability of our accounts receivables is subject to uncertainties. If we fail to collect account receivables from our customers in a timely manner, our business operations and financial results may be materially and adversely affected.

        We normally allow a credit period of 30 to 90 days to our customers, and are therefore exposed to credit risk from our customers. We had accounts receivables of RMB154.0 million, RMB162.0 million (US$24.7 million) and RMB184.4 million (US$28.2 million) as of December 31, 2019 and 2020 and March 31, 2021, respectively, which were in line with our overall business growth during such periods.

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        Although we conduct credit evaluations on our customers prior to delivery of our products and services, a customer's ability to make payments on timely basis depends on various factors such as general economic and market conditions and the customer's cash flow position, which are out of our control. Delays in receiving payments from our customers may adversely affect our cash flow position and our ability to meet our working capital requirements. Defaults in making payments to us on projects for which we have already incurred significant costs and expenditures can materially and adversely affect our results of operations and reduce our financial resources that would otherwise be available for other purposes. There is no assurance that our customers will pay us on a timely basis or at all, which may adversely affect the recoverability of our accounts receivable, or that we will be able to efficiently manage the level of bad debt arising from staged payments. We have granted payment extensions in connection with COVID-19 to certain customers, which may adversely affect our financial condition.

We use software licensed from third parties to provide our products and solutions. Failure to maintain these licenses or any error in such software could adversely affect our business.

        We incorporate certain software licensed from third parties into our products and solutions to offer attractive user experience and drive customer acceptance of our products and services. For example, we use intelligent software and tools on our platform so that we can provide tailored services to our end customers to meet their specific needs. We anticipate that we will continue to rely on such third-party software in the future. Although we believe that commercially reasonable alternatives to the third-party software we currently use are available, this may not always be the case and it may be difficult or costly to find such alternatives, and there is no guarantee that the licensing terms for such alternatives will be similar to or more favorable than the ones we currently use.

        Integrating new third-party software into our existing software system may consume a significant amount of our time and resources. Our products and solutions depend on successful operation of third-party software in conjunction with our platform, so any undetected errors or defects in the third-party software could impair our products and solutions, and thus adversely affect our customer experience.

The loss of, or a significant reduction in usage by, one or more of our major customers would result in lower revenue and could harm our business.

        Our future success is dependent on establishing and maintaining successful relationships with a diverse set of customers. For example, one customer individually represented 10.5% and 10.5% of our total revenues in 2020 and for the three months ended March 31, 2021, respectively. As of December 31, 2020 and March 31, 2021, two customers individually represented greater than 10% of our total accounts receivable. Although the identity of the customers may vary from period to period, it is likely that we will continue to be dependent upon a limited number of customers for a significant portion of our revenue for the foreseeable future and, in some cases, the portion of our revenue attributable to individual customers may increase in the future. The loss of one or more key customers or a reduction in usage by any major customers would reduce our revenue. If we fail to maintain existing customers or develop relationships with new customers, our business would be harmed.

        Moreover, we generated the majority of our revenues from customers that use our MPaaS products and solutions. The popularity of particular use cases and our customers' use of specific products or solutions, as well as the development of new use cases and products and solutions, depend on many factors beyond our control, and a decline in our customers' use of our MPaaS products and solutions could harm our business, operating results and financial condition.

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The intensifying competition, change in sector trend and landscape and government policies may have a direct impact on the industries where our clients operate their businesses, and negatively affect the stability of our clients, which may subsequently have negative impact on our business.

        A significant portion of our revenues were derived from customers engaged in a few industries in China, some of which are emerging and highly competitive, such as the media industry. Any change in the competitive landscape, market trend or user behaviors in such sectors may have a negative impact on our customers, thus harm their ability to make payments and maintain and increase the usage of our products and solutions. In addition, some of these industries in China are highly regulated by the PRC government and numerous regulatory authorities of the central PRC government are empowered to issue and implement regulations governing various aspects of these industries. As the laws and regulations are evolving and some of them are relatively new, changes to the current laws and regulations may harm our business and results of operation. In addition, interpretation and enforcement of such laws and regulations involve significant uncertainty. As a result, in certain circumstances, it may be difficult to determine what actions or omissions may be deemed to be in violations of applicable laws and regulations. If these laws and regulations or the uncertainty associated with their interpretation negatively impact the industries where our customers operate, our business may be adversely affected as well.

Our reliance on a limited number of suppliers for certain essential services could adversely affect our ability to manage our business effectively and subsequently harm our business.

        We rely on a limited number of suppliers for certain essential services to operate our network and provide products and solutions to our customers. Due to the limited number of relevant suppliers available in China, we rely on a limited number of suppliers for cloud, internet data center services and hardware. Our purchase from two suppliers in aggregate accounted for 56.7%, 54.7%, 58.9% and 59.4% of our cost of revenues for the years ended December 31, 2019 and 2020 and for the three months ended March 31, 2020 and 2021, respectively. We may experience shortages in components or delays in delivery as a result of natural disasters, increased demand in the industry or our suppliers' lacking sufficient rights to supply the servers or other products or services.

        Our reliance on these suppliers exposes us to risks, including reduced control over costs and constraints based on the then current availability, terms, and pricing of these services. We generally do not have any long-term contracts guaranteeing supply with these suppliers. If our supply of certain services is disrupted or delayed, there can be no assurance that additional supplies or services can serve as adequate replacements or that supplies will be available on terms that are favorable to us, if at all. Moreover, even if we can identify adequate replacements on substantially similar terms, our business could be adversely affected until those efforts were completed. Any disruption or delay in the supply of our hardware may cause delay or other constraints on our operations that could damage our customer relationships.

We may fail to obtain or maintain all required licenses, permits and approvals to operate our business.

        Our business and operations have been subject to extensive regulations. We are required to obtain and maintain applicable licenses, permits and approvals from different regulatory authorities in order to conduct our existing or future business in connection with our provision of value-added telecommunication services. As we have been continually expanding into new business operations in the area of value-added telecommunication services, and the interpretation and application of existing PRC laws and regulations and possible new laws and regulations relating to the telecommunication services have created substantial uncertainties regarding the legality of existing and future foreign investments in, and the businesses and activities of telecommunication services in China, including our business, we cannot assure you that we have obtained all the approvals, permits or licenses required for conducting our business in China or areas where we operate, or will be able to maintain our existing approvals,

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permits or licenses or obtain new ones. The government authorities may require us to obtain additional licenses, permits or approvals so that we can continue to operate our existing or future businesses or otherwise prohibit our operation of the types of businesses to which the new requirements apply. In addition, new regulations or new interpretations of existing regulations may increase our costs of doing business and prevent us from efficiently delivering services and expose us to potential penalties and fines. Lastly, our existing licenses may expire without proper renewal or be revoked due to violations of relevant licensure maintenance requirements. If any of our entities is deemed by governmental authorities to be operating without appropriate permits and licenses or outside of their authorized scopes of business or otherwise fail to comply with relevant laws and regulations, we may be subject to penalties and our business, financial condition, and results of operation may be materially and adversely affected.

The deterioration of the relationships, including the trade dispute, between China and the U.S., and international sanctions and export controls may have an adverse effect on our business and operations.

        The U.S. administration has recently taken various steps towards imposing restrictions on business dealings and trade with China, including but not limited to transfer of data and protection of intellectual property. Our business and prospect may be negatively affected by changes in governmental policies including sanctions and export controls administered by U.S. government authorities, including those imposed as a result of a material deterioration of the political or economic relations between China and the United States and other geopolitical challenges. For example, On November 12, 2020, the U.S. government issued Executive Order 13959, "Addressing the Threat from Securities Investments that Finance Communist Chinese Military Companies" (Executive Order), and issued an "Executive Order Amending Executive Order 13959—Addressing the Threat from Securities Investments that Finance Communist Chinese Military Companies" on January 13, 2021 (collectively, the Executive Orders). Under the Executive Orders, transactions by any United States person in publicly traded securities, or any securities that are derivative of, or are designed to provide investment exposure to such securities of Communist China military companies (CCMCs) may be restricted, and the U.S. stock exchanges may be prohibited from allowing trading of ADSs of such CCMCs. Such and other similar restrictions may negatively affect our business prospect. There is no assurance that the governmental authorities in the United States will not take any such actions to restrict any general U.S.-based companies from dealing with Chinese companies like us, which could result in an adverse impact on our business and prospect if we were not able to find alternative services with the same quality and prices in China or from other countries. In addition, China may further retaliate, in response to new trade policies implemented by the U.S. government. Such retaliation measures may further escalate the tensions between the two countries, which may have negative impact on the economies of not merely the two countries concerned, but the global economy as a whole. As a result of any major economic downturn, our business, financial condition and results of operations could be adversely affected.

We have continually conducted business collaborations with some business partners who are on the U.S. Entity List. Though our business ties with those partners are mostly based on technology cooperation and application penetration, the uncertainty regarding EAR supervision and the relationship between China and the U.S. may negatively impact our business pipeline and deteriorate our market reputation.

        The U.S. government has added several Chinese companies and institutions to the Entity List under the Export Administration Regulations, and imposed targeted economic and trade restrictions on them that, if not waived, will limit their access to U.S.-origin goods and technologies, as well as goods and technologies that contain a significant portion of U.S.-origin goods and technologies. We believe the immediate and direct impacts on our business resulting from such restrictions are limited, because our transactions with the entities on the Entity List have represented a negligible portion of our results of operations. Nonetheless, given the important role played by such Chinese high-tech companies on the Entity List in the global supply chain or in China for technology industries, prolonged restrictions

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against such companies could cause a material negative impact to all such industries, which may in turn materially and adversely affect our business, financial condition and results of operations. Similar or more expansive restrictions that may be imposed on our business partners or their suppliers by the U.S. or other jurisdictions in the future may materially and adversely affect such business partners or their suppliers, which would in turn affect our business.

        Although we have adopted procedures to comply with U.S. trade laws and regulations, such laws and regulations are complex and likely subject to frequent changes, and the interpretation and enforcement of the relevant regulations involve substantial uncertainties, which may be driven by political and/or other factors that are out of our control or heightened by national security concerns. Such potential restrictions, as well as any associated inquiries or investigations or any other government actions, may be difficult or costly to comply with and may, among other things, delay or impede the development of our technology, products and solutions, hinder the stability of our supply chain, and may result in negative publicity, require significant management time and attention and subject us to fines, penalties or orders that we cease or modify our existing business practices, any of which may have a material and adverse effect on our business, financial condition and results of operations.

We may fail to obtain, maintain and protect our intellectual property rights and proprietary information or prevent third parties from any unauthorized use of our technologies.

        Our trade secrets, trademarks, copyrights, patents, and other intellectual property rights are critical to our success. We rely on, and expect to continue to rely on, confidentiality agreements and noncompete agreements with our employees and third parties to protect our intellectual properties. However, events beyond our control may pose threats to our intellectual property rights and the integrity of our products and brand. Effective protection of our trademarks, copyrights, domain names, patent rights, and other intellectual property rights is expensive and challenging. While we have taken measures to protect our intellectual property rights, including implementing a set of comprehensive internal policies to establish robust management over our intellectual property rights, and deploying a special team to guide, manage, supervise and monitor our daily work regarding intellectual property rights, we cannot assure you that such efforts are adequate to guard against any potential infringement and misappropriation. In addition, our intellectual property rights may be declared invalid or unenforceable by the courts. We cannot assure you that any of our intellectual property rights applications will ultimately proceed to registration or will result in registration with adequate scope for our business. Some of our pending applications or registrations may be successfully challenged or invalidated by others. If our intellectual property rights applications are not successful, we may have to use different intellectual property rights for our affected products or services, or seek to enter into arrangements with any third parties who may have prior registrations, applications or rights, which might not be available on commercially reasonable terms, if at all. If we fail to protect or enforce our intellectual property rights, our competitors may copy or reverse-engineer our products and services without authorization and compete with us. As a result, our customers and partners may devalue our services, and our ability to compete effectively may be impaired, which could have a material adverse effect on our business, financial condition and results of operations.

        Similarly, to protect our unpatented proprietary information and technology, such as trade secrets, we rely on our agreements with employees and third parties that contain restrictions on the use and disclosure of such information or technology. For example, our employees and third parties are required to keep confidential of any unpatented proprietary information and technology during the contract term and after the termination of the employment agreement. In addition, the agreements with our employees and third parties explicitly provide for all rights and obligations regarding the ownership and protection of intellectual property rights. These agreements may be inadequate or may be breached, either of which could potentially result in unauthorized use or disclosure of our trade secrets and other proprietary information to third parties, including our competitors. As a result, we

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may lose our competitive advantages derived from such intellectual property. Significant impairments on our intellectual property rights may result in a material and adverse effect on our business.

We may become subject to intellectual property disputes, which are costly and may subject us to significant liability and increased costs of business.

        We compete in markets where there are a large number of patents, copyrights, trademarks, trade secrets, and other intellectual and proprietary rights, as well as disputes regarding infringement of these rights. Our competitors and other third parties may, whether rightly or falsely, bring legal claims against us for infringing on their intellectual property rights. The intellectual property laws in China, which cover the validity, enforceability and scope of protection of intellectual property rights, are evolving, and litigation is becoming a more popular means to resolve commercial disputes. We are exposed to a higher litigation risk. Any intellectual property lawsuits against us, whether successful or not, may harm our brand and reputation.

        Defending intellectual property claims is costly and can impose a significant burden on our management and resources. Any intellectual property litigation to which we become a party may require us to do one or more of the following:

    cease selling, licensing, or using products or features that incorporate the intellectual property rights that we allegedly infringe, misappropriate, or violate;

    make substantial payments for legal fees, settlement payments, or other costs or damages, including indemnification of third parties;

    obtain a license or enter into a royalty agreement, either of which may not be available on reasonable terms or at all, in order to obtain the right to sell or use the relevant intellectual property; or

    redesign the allegedly infringing products to avoid infringement, misappropriation, or violation, which could be costly, time-consuming, or impossible.

        Further, there is no guarantee that we can obtain favorable judgment in all legal cases, in which case we may need to pay damages or be forced to cease using certain technologies or content that are critical to our products and solutions. Any resulting liabilities or expenses or any changes to our products or solutions that we have to make to limit future liabilities may have a material adverse effect on our business, results of operations, and prospects.

We and our management may from time to time be subject to claims, disputes, lawsuits and other legal and administrative proceedings.

        We are currently not party to any material legal or administrative proceedings. However, in light of the nature of our business, we and our management are susceptible to potential claims or disputes. We and our management have been, and may from time to time in the future be, subject to or involved in various claims, disputes, lawsuits and other legal and administrative proceedings. Lawsuits and litigations may cause us to incur defense costs, utilize a significant portion of our resources and divert management's attention from our day-to-day operations, any of which could harm our business. Claims arising out of actual or alleged violations of law, breach of contract or torts could be asserted against us by customers, business partners, suppliers, competitors, employees or governmental entities in investigations and legal proceedings. In particular, according to the PRC Social Insurance Law and the Administrative Measures on Housing Fund, employers are required, together with their employees or separately, to pay the social insurance premiums and housing funds for their employees. Employers that fail to make adequate social insurance and housing fund contributions may be subject to fines and legal sanctions. A few of our PRC operating entities engaged third-party human resources agencies to pay social insurance premium and housing funds for some of their employees. This is because such

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employees worked outside of the cities where the operating entities are registered and third-party human resources agencies were engaged to pay social insurance premium and housing provident funds for such employees in cities where they worked. If the relevant PRC authorities determine that this third-party agency arrangement does not satisfy the requirements under the relevant PRC laws and regulations, that we shall make supplemental contributions, that we are not in compliance with labor laws and regulations, or that we are subject to fines or other legal sanctions, such as order of timely rectification, and our business, financial condition and results of operation may be adversely affected.

Under certain conditions, we agree to indemnify customers and other third parties, which exposes us to substantial potential liability.

        Our contracts with customers, investors, and other third parties may include indemnification provisions under which we agree to defend and indemnify them against claims and losses arising from alleged infringement, misappropriation, or other violation of intellectual property rights, data protection violations, breaches of representations and warranties, damage to property or persons, or other liabilities arising from our products or solutions. Although we attempt to limit our indemnity obligations, an event triggering our indemnity obligations could give rise to multiple claims involving multiple customers or other third parties. We may be liable for up to the full amount of the indemnified claims, which could result in substantial liability or material disruption to our business or could negatively impact our relationships with customers or other third parties, reduce demand for our products and solutions, and adversely affect our business, financial condition, and results of operations.

Changes in laws and regulations related to the internet or changes in the internet infrastructure itself may diminish the demand for our products and solutions and have a negative impact on our business.

        The future success of our business depends upon the continued use of the internet as a primary medium for commerce, communication and business solutions. The PRC government has in the past adopted, and may in the future adopt, laws or regulations affecting the use of the internet as a commercial medium. Changes in these laws or regulations could require us to modify our products in order to comply with these changes. In addition, government agencies may begin to impose taxes, fees or other charges for accessing the internet or e-commerce. These laws and changes could limit the growth of internet-related commerce or communications generally and reduce the demand for internet-based services such as ours.

        In addition, use of the internet as a business tool could be adversely affected. The performance of the internet and its acceptance as a business tool has been adversely affected by "viruses," "worms" and similar malicious programs and the internet has experienced a variety of outages and other delays as a result of damage to portions of its infrastructure. If the use of the internet is adversely affected by the above issues, our business, financial condition, and results of operations could suffer.

Complying with evolving privacy and other data related laws and requirements may be expensive and force us to make adverse changes to our business, and failure to comply with such laws and requirements could result in substantial harm to our business and results of operations.

        Laws and regulations governing data privacy and protection, the use of the internet as a commercial medium, the use of data in artificial intelligence and machine learning, and data sovereignty requirements are rapidly evolving, extensive, complex, and include inconsistencies and uncertainties. These and other similar legal and regulatory developments could contribute to legal and economic uncertainty, affect how we design, market, sell, and operate our platform, how our customers process and share data, how we process and use data, and how we transfer personal data from one jurisdiction to another, which could negatively impact demand for our platform. We may incur substantial costs to comply with such laws and regulations, to meet the demands of our customers

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relating to their own compliance with applicable laws and regulations, and to establish and maintain internal compliance policies.

        We have established privacy policies and other documentation regarding our collection, processing, use, and disclosure of personal information or other confidential information. Although we endeavor to comply with our policies, we may at times fail to do so or may be perceived to have failed to do so. Moreover, despite our efforts, we may not be successful in achieving compliance if our employees or vendors fail to comply with our policies. Such failures could subject us to claims and proceedings, which could be costly and time-consuming. Our business, financial condition and results of operations could be adversely affected.

We are dependent on the continuous services of our senior management and other key employees. If we fail to attract, retain and motivate qualified personnel, our business could be materially and adversely affected.

        Our future performance depends on the continued services and contributions of our senior management to oversee and execute our business plans and to identify and pursue new opportunities and innovations. Any loss of service of our senior management or other key employees can significantly delay or prevent us from achieving our strategic business objectives, and adversely affect our business, financial condition and operating results. From time to time, there may be changes in our senior management team, resulting from the hiring or departure of executives, which could also disrupt our business. Hiring suitable replacements and integrating them into our existing teams also requires significant amount of time, training and resources, and may impact our existing corporate culture.

Negative publicity and allegations involving us, our shareholders, directors, officers, employees, associates and business partners may affect our reputation and, as a result, our business, financial condition, and results of operations may be negatively affected.

        We, our shareholders, directors, officers, employees, associates and business partners may be subject to negative media coverage and publicity from time to time. Such negative coverage in the media and publicity could change market perception that we are a trustworthy cloud service provider. In addition, to the extent our employees and business partners were incompliant with any laws or regulations, we may also suffer negative publicity or harm to our reputation. As a result, we may be required to spend significant time and incur substantial costs in response to allegations and negative publicity, and may not be able to diffuse them to the satisfaction of our investors and customers.

Future strategic acquisitions and investments may fail and may result in material and adverse impact on our financial condition and results of operations.

        We may, in the future, acquire businesses or platforms that we believe can improve our products and solutions, enhance our technological capacities, and expand our customer coverage. Our ability to implement our acquisition strategy will depend on our ability to identify suitable targets, our ability to reach agreements with them on commercially reasonable terms, and within a desired timeframe, and the availability of financing to complete acquisitions, as well as our ability to obtain any required shareholder or government approvals. Our strategic acquisitions and investments could subject us to uncertainties and risks, including high acquisition and financing costs, potential ongoing financial obligations and unforeseen or hidden liabilities, failure to achieve our intended objectives, benefits or revenue-enhancing opportunities, uncertainty of entering into markets in which we have limited or no experience, costs associated with and difficulties in integrating acquired businesses, and diversion of our resources and management attention. Our failure to address these uncertainties and risks may have a material adverse effect on our business, financial condition, and results of operations. Even if we are able to successfully acquire or invest in suitable businesses, we cannot assure you that we will achieve our expected returns on such acquisitions or investments through successful integration. As of the date of this prospectus, we had not identified or pursued any acquisition or investment targets. If we fail to

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achieve our expected returns on such acquisitions or investments in the future, our business, financial conditions, results of operations and prospects may be materially and adversely affected.

        Acquisitions also pose the risk that we may be exposed to successor liability relating to the actions by an acquired company and its management before and after the acquisition. The due diligence that we conduct in connection with an acquisition or investment may not be sufficient to discover unknown liabilities, and any contractual guarantees or indemnities that we receive from the sellers of the acquired companies or investment target companies or their shareholders may not be sufficient to protect us from, or compensate us for, actual liabilities. A material liability associated with an acquisition or investment could adversely affect our reputation and reduce the benefits of the acquisition or investment. In addition, if the management team or key employees of an acquired company fail to perform as expected, this may affect the business performance of such acquired company and, in turn, have a material adverse effect on our business, financial conditions, and results of operations.

We may, in the future, grow and expand our international operations, which may expose us to significant risks.

        We may, in the future, further expand our operations and customer base worldwide. We may adapt to and develop strategies to address international markets but there is no guarantee that such efforts will have the desired effect. As a result, we may be required to devote significant management attention and financial resources worldwide. In connection with such expansion, we may face difficulties including costs associated with varying seasonality patterns, potential adverse movement of currency exchange rates, longer payment cycle difficulties in collecting accounts receivable in some countries, tariffs and trade barriers, a variety of regulatory or contractual limitations on our ability to operate, adverse tax events, reduced protection of intellectual property rights in some countries, political risks and a geographically and culturally diverse workforce and customer base. Failure to overcome any of these difficulties could harm our business.

        In some cases, compliance with the laws and regulations of one country could violate the laws and regulations of another country. We cannot assure you that we are able to fully comply with the legal requirements of each foreign jurisdiction and successfully adapt our business models to local market conditions. Due to the complexity involved in our international business expansion, we cannot assure you that we are or will be in compliance with all local laws.

We have granted share-based awards in the past under our share incentive plan and may continue to grant share-based awards in the future, which may result in increased share-based compensation expenses and have an adverse effect on our future profitability.

        We adopted a share incentive plan in January 2013, or the 2013 Share Plan, for the purpose of granting share-based compensation awards to our officers, directors, employees and other eligible persons to incentivize their performance and align their interests with ours. As of the date of this prospectus, the maximum aggregate number of ordinary shares we are authorized to issue pursuant to the 2013 Share Plan is 14,854,577 ordinary shares, and options to purchase a total of 12,487,730 ordinary shares have been granted to 133 of our employees pursuant to the 2013 Share Plan. See "Management—Share Incentive Plan."

        We believe the granting of share-based compensation awards is of significant importance to our ability to attract and retain key personnel and employees, and we may continue to grant share-based compensation awards in the future. As a result, our expenses associated with share-based compensation may increase, which may have a material and adverse effect on our financial condition and results of operations. Our ability to attract or retain highly skilled employees may be adversely affected by declines in the perceived value of our equity or equity awards. Furthermore, there are no assurances

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that the number of shares reserved for issuance under our share incentive plan will be sufficient to grant equity awards adequate to recruit new employees and to compensate existing employees. In case we decide to reserve and issue additional shares under our share incentive plan, your interests in our Company will be further diluted by such issuance.

We face certain risks relating to the properties that we lease, which may adversely affect our business.

        We lease properties for our office and other uses in China. Some of the ownership certificates or other similar proofs of certain leased properties have not been provided to us by the relevant lessors. Therefore, we cannot assure you that such lessors are entitled to lease the relevant properties to us. If the lessors are not entitled to lease the properties to us and the owners of such properties decline to ratify the lease agreements between us and the respective lessors, we may not be able to enforce our rights to lease such properties under the respective lease agreements against the owners. As of the date of this prospectus, we are not aware of any claim or challenge brought by any third parties concerning the use of our leased properties without obtaining proper ownership proof. If our lease agreements are claimed as null and void by third parties who are the real owners of such leased properties, we could be required to vacate the properties, in which event we could only initiate the claim against the lessors under relevant lease agreements for indemnities for their breach of the relevant leasing agreements. We cannot assure you that suitable alternative locations are readily available on commercially reasonable terms, or at all, and if we are unable to relocate our operations in a timely manner, our operations may be interrupted.

        The lease agreements for some of our leased properties have not been registered with the PRC governmental authorities as required by the PRC laws. Although the failure to do so does not in itself invalidate the leases, we may be ordered by the PRC government authorities to rectify such noncompliance and, if such noncompliance were not rectified within a given period of time, we may be subject to fines imposed by PRC government authorities ranging from RMB1,000 and RMB10,000 for each of our lease agreements that have not been registered with the relevant PRC governmental authorities. As of the date of this prospectus, we are not aware of any regulatory or governmental actions, claims or investigations being contemplated or any challenges by third parties to our use of our leased properties the lease agreements of which have not been registered with the government authorities. However, we cannot assure you that the government authorities will not impose fines on us due to our failure to register any of our lease agreements, which may negatively impact our financial condition.

        Furthermore, we may not be able to extend or renew such leases on commercially reasonable terms, if at all. For instance, we compete with other businesses for premises at certain locations. Rental payments may significantly increase as a result of the high demand for the leased properties. Moreover, we may not be able to extend or renew such leases upon expiration of the current term and may therefore be forced to relocate the affected operations. This could disrupt our operations and result in significant relocation expenses. We may not be able to locate desirable alternative sites for our offices. For the leased sites registered as the address of our PRC subsidiaries, we may face the risk of being included in the list of enterprises with abnormal business operations if we fail to extend such leases or relocate the registered address and file such leases with the local authorities. The occurrence of such events could materially and adversely affect our business, financial condition, results of operations, and prospects.

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If we fail to implement and maintain an effective system of internal controls to remediate our material weakness over financial reporting, we may be unable to accurately report our results of operations, meet our reporting obligations or prevent fraud, and investor confidence and the market price of the ADSs may be materially and adversely affected.

        Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, requires that we establish and maintain internal control over financial reporting and disclosure controls and procedures. An effective internal control environment is necessary to enable us to produce reliable financial reports and is an important component of our efforts to prevent and detect financial reporting errors and fraud. Upon the completion of this offering, we will become a public company subject to the Sarbanes-Oxley Act of 2002. Section 404 requires that we include a report from management on the effectiveness of our internal control over financial reporting in our annual report on Form 20-F beginning with our annual report for the fiscal year ending December 31, 2022. In addition, once we cease to be an "emerging growth company" as such term is defined in the JOBS Act, our independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial reporting. In addition, after we become a public company, our reporting obligations may place a significant strain on our management, operational and financial resources and systems for the foreseeable future. We may be unable to timely complete our evaluation testing and any required remediation.

        In the course of auditing our consolidated financial statements as of and for the year ended December 31, 2020, we and our independent registered public accounting firm identified a material weakness in our internal control over financial reporting. According to the U.S. Public Company Accounting Oversight Board, a "material weakness" is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our company's annual or interim consolidated financial statements will not be prevented or detected on a timely basis. The material weakness identified relates to the lack of sufficient financial reporting and accounting personnel with appropriate knowledge of U.S. GAAP and the SEC reporting requirements to formalize, design, implement and operate key controls over financial reporting process to address complex U.S. GAAP accounting issues and related disclosures in accordance with U.S. GAAP and financial reporting requirements set forth by the SEC.

        We are in the process of implementing a number of measures to address the material weakness. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Internal Control Over Financial Reporting." However, we cannot assure you that these measures may fully address the material weakness and deficiencies in our internal control over financial reporting or that we may conclude that they have been fully remediated.

        During the course of documenting and testing our internal control procedures, in order to satisfy the requirements of Section 404, we or our auditor may identify other deficiencies in our internal control over financial reporting that are deemed to be material weaknesses and render our internal control over financial reporting ineffective. In addition, if we fail to maintain the adequacy of our internal control over financial reporting, as these standards are modified, supplemented or amended from time to time, we may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404. If we fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information. This could in turn limit our access to capital markets, harm our results of operations, and lead to a decline in the trading price of the ADSs. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions. We may also be required to restate our financial statements for prior periods.

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Any non-compliance with applicable anti-bribery and anti-corruption laws and other forms of illegal acts and misconduct by our employees or our business partners may materially and adversely affect our reputation and operations.

        Our business operations are subject to anti-bribery and anti-corruption laws and regulations which prohibit companies and their intermediaries from making improper payments or other benefits to government or other parties for the purpose of obtaining or retaining business. While we have adopted and implemented internal controls and procedures to monitor both internal and external compliance with anti-bribery and anti-corruption laws, regulations and policies, we cannot guarantee that such internal controls and procedures will always be effective in preventing non-compliance and exculpating us from penalties or liabilities that may be imposed by relevant government authorities due to violations committed by our employees or our regional channel partners. If our employees are found or alleged to have violated anti-bribery or anti-corruption laws and regulations, we may face or be involved in fines, lawsuits and damage to our reputation, which could have a material adverse effect on our business, financial condition and results of operations.

Any future occurrence of force majeure events, natural disasters or outbreaks of contagious diseases, may materially and adversely affect our business, financial condition and results of operations.

        Any future occurrence of force majeure events, natural disasters or outbreaks of epidemics and contagious diseases and global or regional pandemics, including avian influenza, severe acute respiratory syndrome, H1N1 influenza, Ebola virus and the recent COVID-19 outbreak and other epidemics in regions across China, may materially and adversely affect our business, financial condition and results of operations. An outbreak of an epidemic or contagious disease or other adverse public health developments in China or elsewhere in the world could result in a widespread health crisis and restrict the level of business activities in affected areas, which may in turn materially and adversely affect our business.

        Moreover, the PRC has experienced natural disasters such as earthquakes, floods and droughts in the past few years. Any future occurrence of severe natural disasters in the PRC may materially and adversely affect its economy and therefore our business. We cannot assure you that any future occurrence of natural disasters or outbreaks of epidemics and contagious diseases, or the measures taken by the PRC government or other countries in response to such contagious diseases, will not seriously disrupt our operations or those of our customers, which may materially and adversely affect our business, financial condition and results of operations.

We may not have sufficient insurance coverage to cover our potential liability or losses, and our business, financial conditions, results of operations and prospects may be materially and adversely affected should any such liability or losses arise.

        We face various risks in connection with our business, and may lack adequate insurance coverage or have no relevant insurance coverage. Insurance companies in China do not currently offer as extensive an array of insurance products as insurance companies in other more developed economies do. As of the date of this prospectus, we had not obtained any business liability or disruption insurance to cover our operations. We have determined that the costs of insuring against these risks, and the difficulties associated with acquiring such insurances on commercially reasonable terms render these insurances impractical for our business. However, any uninsured business disruptions may result in our incurring substantial costs and the diversion of resources, which could have an adverse effect on our business and results of operations.

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We may be unable to obtain any additional capital required in a timely manner or on acceptable terms, or at all. Moreover, our future capital needs may require us to sell additional equity or debt securities that may dilute our shareholders' shareholdings or subject us to covenants that may restrict our operations or our ability to pay dividends.

        To grow our business and remain competitive, we may require additional capital from time to time for our daily operations. Our ability to obtain additional capital is subject to a variety of uncertainties, including:

    our market position and competitiveness in the industries in which we operate;

    our future profitability, overall financial condition, results of operations and cash flows;

    general market conditions for capital-raising activities by our competitors in China; and

    economic, political and other conditions in China and internationally.

        We may be unable to obtain additional capital in a timely manner or on acceptable terms, or at all. In addition, our future capital or other business needs could require us to sell additional equity or debt securities, or to obtain a credit facility. The sale of additional equity or equity-linked securities could dilute our shareholders' shareholdings. Any incurrence of indebtedness will also lead to increased debt service obligations, and could result in operating and financing covenants that may restrict our operations or our ability to pay dividends to our shareholders.

The estimates of market opportunity, forecasts of market growth included in this prospectus may prove to be inaccurate, and any real or perceived inaccuracies may harm our reputation and negatively affect our business.

        Market opportunity estimates and growth forecasts included in this prospectus are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate. The variables that go into the calculation of our market opportunity are subject to change over time, and there is no guarantee that any particular number or percentage of addressable companies or end users covered by our market opportunity estimates will purchase our products and services at all or generate any particular level of revenue for us. Even if the market in which we compete meets the size estimates and growth forecasted in this prospectus, our business could fail to grow for a variety of reasons, including reasons outside of our control, such as competition in our industry.

RISKS RELATING TO OUR CORPORATE STRUCTURE

If the PRC government finds that the agreements that establish the structure for operating some of our businesses in China do not comply with applicable PRC laws and regulations, or if these regulations or their interpretations change in the future, we could be subject to severe consequences, including the nullification of the contractual arrangements and the relinquishment of our interest in those businesses.

        Current PRC laws and regulations impose certain restrictions and prohibitions on foreign ownership of companies that engage in the internet and other related businesses, such as the provision of value-added communication services.

        We are a business company incorporated in the British Virgin Islands, and Kongshan Internet Technology (Shanghai) Co., Ltd., our PRC subsidiary, is considered foreign-invested enterprises. To comply with PRC laws and regulations, we conduct substantially all of our business in China through our VIEs based on the Contractual Arrangements which enable us to (i) have the power to direct the activities that most significantly affect the economic performance of our VIEs, (ii) receive all of the economic benefits from the VIEs that are potentially significant to the VIEs, and (iii) have an exclusive option to purchase all or part of the equity interests in the VIEs held by the relevant shareholders when and to the extent permitted by PRC law, or request any relevant shareholders to transfer any or

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part of the equity interest in the VIEs to another person or entity designated by us at any time at our discretion. Because of these contractual arrangements, we are the primary beneficiary of the VIEs and consolidate their financial results into ours. Our VIEs hold certain licenses, approvals and assets that are essential to our business operations.

        If the PRC government finds that our contractual arrangements do not comply with its restrictions on foreign ownership of businesses, or if the PRC government otherwise finds that we or the VIEs are in violation of PRC laws or regulations or lack the necessary permits or licenses to operate our business, the relevant PRC regulatory authorities, including the MOFCOM and MIIT, would have broad discretion in dealing with such violations or failures, including, without limitation:

    revoking our business and operating licenses;

    discontinuing or restricting our operations;

    imposing fines or confiscating any of our income that they deem to have been obtained through illegal operations;

    imposing conditions or requirements with which our PRC subsidiaries or our VIEs may not be able to comply;

    requiring us to restructure our ownership structure or operations, including terminating the contractual arrangements with our VIEs;

    restricting or prohibiting our use of the proceeds of this offering to finance our business and operations in China; or

    taking other regulatory or enforcement actions that could be harmful to our business.

        Any of these actions could cause significant disruption to our business operations, and may materially and adversely affect our business, financial condition and results of operations. In addition, it is unclear what impact the PRC government actions would have on us and on our ability to consolidate the financial results of our VIEs in our consolidated financial statements, if the PRC governmental authorities find our corporate structure and contractual arrangements to be in violation of PRC laws, rules and regulations. If any of these penalties results in our inability to direct the activities of the VIEs that most significantly impact their economic performance and/or our failure to receive the economic benefits from the VIEs, we may not be able to consolidate the VIEs into our consolidated financial statements in accordance with U.S. GAAP.

We rely on contractual arrangements with our VIEs and their shareholders for substantially all of our business operations, which may not be as effective as direct ownership in providing operational control.

        We have relied and expect to continue to rely on contractual arrangements with our VIEs and their shareholders to operate our business in China. These contractual arrangements, however, may not be as effective as direct ownership in providing us with control over our VIEs. For example, our VIEs and their shareholders could breach their contractual arrangements with us by, among other things, failing to conduct the operations of our VIEs in an acceptable manner or taking other actions that are detrimental to our interests.

        If we had direct ownership of our VIEs in China, we would be able to exercise our rights as a shareholder to effect changes in the board of directors of our VIEs, which in turn could implement changes, subject to any applicable fiduciary obligations, at the management and operational level. However, under the current contractual arrangements, we rely on the performance by our VIEs and their shareholders of their obligations under the contracts to exercise control over our VIEs. If any dispute relating to these contracts remains unresolved, we will have to enforce our rights under these contracts through the operations of PRC law and arbitration, litigation and other legal proceedings and

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therefore will be subject to uncertainties in the PRC legal system. See "—Any failure by our VIEs or their shareholders to perform their obligations under our contractual arrangements with them would have a material and adverse effect on part of our business."

Any failure by our VIEs or their shareholders to perform their obligations under our contractual arrangements with them would have a material and adverse effect on part of our business.

        If our VIEs or their shareholders fail to perform their respective obligations under the contractual arrangements, we could be limited in our ability to enforce the contractual arrangements that give us effective control over our business operations in China and may have to incur substantial costs and expend additional resources to enforce such arrangements. We may also have to rely on legal remedies under PRC law, including seeking specific performance or injunctive relief, and contractual remedies, which we cannot assure you will be sufficient or effective under PRC law. For example, if the shareholders of our VIEs were to refuse to transfer their equity interests in our VIEs to us or our designee when we exercise the purchase option pursuant to these contractual arrangements, or if they were otherwise to act in bad faith toward us, then we may have to take legal actions to compel them to perform their contractual obligations.

Our contractual arrangements are governed by PRC law. Accordingly, these contracts would be interpreted in accordance with PRC law, and any disputes would be resolved in accordance with PRC legal procedures, which may not protect you as much as those of other jurisdictions, such as the United States.

        All the agreements under our contractual arrangements are governed by PRC law and provide for the resolution of disputes through arbitration in China. Accordingly, these contracts would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures. The legal system in the PRC is not as developed as in some other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal system could limit our ability to enforce these contractual arrangements. Meanwhile, there are very few precedents and little formal guidance as to how contractual arrangements in the context of a VIE should be interpreted or enforced under PRC law. There remain significant uncertainties regarding the ultimate outcome of such arbitration should legal action become necessary. In addition, under PRC law, rulings by arbitrators are final, parties cannot appeal the arbitration results in courts, and if the losing parties fail to carry out the arbitration awards within a prescribed time limit, the prevailing parties may only enforce the arbitration awards in PRC courts through arbitration award recognition proceedings, which would require additional expenses and delay. In the event we are unable to enforce these contractual arrangements, or if we suffer significant delay or other obstacles in the process of enforcing these contractual arrangements, we may not be able to exert effective control over our VIEs, and our ability to conduct our business may be negatively affected. See "—Risks Relating to Doing Business in China—Uncertainties with respect to the PRC legal system could materially and adversely affect us."

The shareholders of our VIEs may have actual or potential conflicts of interest with us, which may materially and adversely affect our business and financial condition.

        We have designated individuals who are PRC nationals to be the shareholders of our VIEs holding 100% equity interests. These individuals may have conflicts of interest with us. Each of our VIEs is 73.5% owned by Shiwei Xu and 26.5% owned by Guihua Lyu. Conflicts of interest may arise between Shiwei Xu and Guihua Lyu as indirect shareholders and directors of our Company and as shareholders and directors of our VIEs. We rely on these individuals to abide by the laws of the British Virgin Islands which impose fiduciary duties upon directors and officers of our company. Such duties include the duty to act bona fide in what they consider to be in the best interest of our company as a whole and not to place themselves in a position in which there is a conflict between their duties to our company and their personal interests. PRC laws also provide that a director or a management officer

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owes a loyalty and fiduciary duty to the company he or she directs or manages. We cannot assure you that when conflicts arise, shareholders of our VIEs will act in the best interest of our company or that conflicts will be resolved in our favor. These individuals may breach or cause the VIEs to breach the existing contractual arrangements. If we cannot resolve any conflicts of interest or disputes between us and these shareholders, we would have to rely on legal proceedings, which may be expensive, time-consuming and disruptive to our operations. There is also substantial uncertainty as to the outcome of any such legal proceedings.

Contractual arrangements we have entered into with our VIEs may be subject to scrutiny by the PRC tax authorities. A finding that we owe additional taxes could negatively affect our financial condition and the value of your investment.

        Under applicable PRC laws and regulations, arrangements and transactions among related parties may be subject to audit or challenge by the PRC tax authorities. We could face material and adverse tax consequences if the PRC tax authorities determine that the contractual arrangements in relation to our VIEs were not entered into on an arm's-length basis in such a way as to result in an impermissible reduction in taxes under applicable PRC laws, rules and regulations, and adjust income of our VIEs in the form of a transfer pricing adjustment. A transfer pricing adjustment could, among other things, result in a reduction of expense deductions recorded by our VIEs for PRC tax purposes, which could in turn increase their tax liabilities without reducing our PRC subsidiaries' tax expenses. In addition, the PRC tax authorities may impose late payment fees and other administrative sanctions on our VIEs for the adjusted but unpaid taxes according to the applicable regulations. Our financial position could be materially and adversely affected if our VIEs' tax liabilities increase or if they are required to pay late payment fees and other penalties.

We may lose the ability to use and benefit from assets held by our VIEs that are material or supplementary to the operation of our business if any of our VIEs goes bankrupt or become subject to dissolution or liquidation proceeding.

        As part of our contractual arrangements with our VIEs, such entity may in the future hold certain assets that are material or supplementary to the operation of our business. If any of our VIEs goes bankrupt and all or part of its assets become subject to liens or rights of creditors, we may be unable to continue some or all of our business activities we currently conduct through the contractual arrangement, which could materially and adversely affect our business, financial condition and results of operations. Under the contractual arrangements, our VIEs may not, in any manner, sell, transfer, mortgage or dispose of their assets or legal or beneficial interests in the business without our prior consent. If any of our VIEs undergoes voluntary or involuntary liquidation proceeding, unrelated creditors may claim rights to some or all of these assets, thereby hindering our ability to operate part of our business, which could materially and adversely affect our business, financial condition and results of operations.

Substantial uncertainties exist with respect to the interpretation and implementation of the newly enacted Foreign Investment Law and its implementing rules and how they may impact the viability of our current corporate structure, corporate governance, business, financial condition and results of operations.

        The variable interest entity structure has been adopted by many PRC-based companies, including us, to obtain necessary licenses and permits in the industries that are currently subject to foreign investment restrictions in China. The MOFCOM published a discussion draft of the proposed Foreign Investment Law in January 2015, or the 2015 Draft FIL, according to which, variable interest entities that are controlled via contractual arrangements would also be deemed as foreign-invested entities, if they are ultimately "controlled" by foreign investors.

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        In March 2019, the National People's Congress promulgated the Foreign Investment Law of the PRC, or the Foreign Investment Law, and in December 2019, the State Council promulgated the Implementing Rules of the Foreign Investment Law of the People's Republic of China, or the Implementing Rules, to further clarify and elaborate the relevant provisions of the Foreign Investment Law. The Foreign Investment Law and the Implementing Rules both became effective from January 1, 2020 and replaced the Sino-Foreign Equity Joint Venture Enterprise Law, the Sino-Foreign Cooperative Joint Venture Enterprise Law and the Wholly Foreign-Owned Enterprise Law to become the legal foundation for foreign investment in the PRC. Pursuant the Foreign Investment Law, "foreign investments" refer to investment activities conducted by foreign investors (including foreign natural persons, foreign enterprises or other foreign organizations) directly or indirectly in the PRC, which include any of the following circumstances: (i) foreign investors setting up foreign-invested enterprises in the PRC solely or jointly with other investors, (ii) foreign investors obtaining shares, equity interests, property portions or other similar rights and interests of enterprises within the PRC, (iii) foreign investors investing in new projects in the PRC solely or jointly with other investors, and (iv) investment in other methods as specified in laws, administrative regulations, or as stipulated by the State Council. The Foreign Investment Law and the Implementing Rules do not introduce the concept of "control" in determining whether a company would be considered as a foreign-invested enterprise, nor do they explicitly provide whether the variable interest entity structure would be deemed as a method of foreign investment. However, the Foreign Investment Law has a catch-all provision that includes into the definition of "foreign investments" made by foreign investors in China in other methods as specified in laws, administrative regulations, or as stipulated by the State Council, and as the Foreign Investment Law and the Implementing Rules are newly adopted and relevant government authorities may promulgate more laws, regulations or rules on the interpretation and implementation of the Foreign Investment Law, the possibility cannot be ruled out that the concept of "control" as stated in the 2015 Draft FIL may be embodied in, or the variable interest entity structure adopted by us may be deemed as a method of foreign investment by, any of such future laws, regulations and rules. If our consolidated VIEs were deemed as a foreign-invested enterprise under any of such future laws, regulations and rules, and any of the businesses that we operate would be in the "negative list" for foreign investment and therefore be subject to foreign investment restrictions or prohibitions, further actions required to be taken by us under such laws, regulations and rules may materially and adversely affect our business, financial condition and results of operations. Furthermore, if future laws, administrative regulations or rules mandate further actions to be taken by companies with respect to existing contractual arrangements, we may face substantial uncertainties as to whether we can complete such actions in a timely manner, or at all. Failure to take timely and appropriate measures to cope with any of these or similar regulatory compliance challenges could materially and adversely affect our current corporate structure, business, financial condition and results of.

Our post-offering amended and restated memorandum and articles of association designate the courts of the British Virgin Islands as the sole and exclusive judicial forum for certain legal actions related to us, which may discourage lawsuits with respect to such claims.

        Our post-offering amended and restated memorandum and articles of association provide that the courts of the British Virgin Islands will be the sole and exclusive forum for lawsuits asserting certain claims (including claims asserted derivatively for our benefit), such as claims against directors and officers for breach of a fiduciary duty, claims arising under any provision of the BVI Act or our post-offering amended and restated memorandum and articles of association, or claims governed by the internal affairs doctrine; additionally, the federal courts of the United States of America shall have exclusive jurisdiction for claims arising under the federal securities laws of the United States, unless otherwise agreed by us in writing. This is a general summary of the article; you should refer to the language of our post-offering amended and restated memorandum and articles of association for details.

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        Because the applicability of the exclusive forum provision is limited to the extent permitted by applicable law, we do not intend for the exclusive forum provision to apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction, and acknowledge that federal courts have concurrent jurisdiction over all suits brought to enforce any duty or liability created by the Securities Act. We note that there is uncertainty as to whether a court would enforce the provision as it applies to the Securities Act and that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder may have the effect of discouraging lawsuits against our directors and officers.

RISKS RELATING TO DOING BUSINESS IN CHINA

A severe or prolonged downturn in the PRC or global economy could materially and adversely affect our business, results of operations and financial condition.

        The global macroeconomic environment is facing challenges, including the economic slowdown in the Eurozone since 2014, impact of the United Kingdom's exit from the EU on January 31, 2020, and the adverse impact on the global economies and financial markets as the COVID-19 outbreak continues to evolve into a worldwide health crisis in 2020. The growth of the PRC economy has slowed down since 2012 compared to the previous decade and the trend may continue. There is considerable uncertainty over the long-term effects of the expansionary monetary and fiscal policies adopted by the central banks and financial authorities of some of the world's leading economies, including the United States and China. There have been concerns over unrest and terrorist threats in the Middle East, Europe and Africa and over the conflicts involving Ukraine, Syria and North Korea. There have also been concerns on the relationship among China and other Asian countries, which may result in or intensify potential conflicts in relation to territorial disputes, and the trade and other disputes between the United States and China. The ongoing trade tensions between the United States and China may have tremendous negative impact on the economies of not merely the two countries concerned, but the global economy as a whole. It is unclear whether these challenges and uncertainties will be contained or resolved, and what effects they may have on the global political and economic conditions in the long term.

        Economic conditions in China are sensitive to global economic conditions, changes in domestic economic and political policies, and the expected or perceived overall economic growth rate in China. While the economy in China has grown significantly over the past decades, growth has been uneven, both geographically and among various sectors of the economy, and the rate of growth has been slowing in recent years. Although growth of China's economy remained relatively stable, there is a possibility that China's economic growth may materially decline in the near future. Any severe or prolonged slowdown in the global or PRC economy may materially and adversely affect our business, results of operations and financial condition.

Changes in China's economic, political or social conditions or government policies could have a material adverse effect on our business, financial condition and results of operations.

        Substantially all of our assets and operations are located in China. Accordingly, our business, financial condition, results of operations and prospects may be influenced to a significant degree by political, economic and social conditions in China generally. The Chinese economy differs from the economies of most developed countries in many respects, including the level of government involvement, level of development, growth rate, control of foreign exchange and allocation of resources. Although the Chinese government has implemented measures emphasizing the utilization of market forces for economic reform, the reduction of state ownership of productive assets, and the establishment of improved corporate governance in business enterprises, a substantial portion of productive assets in China is still owned by the government. In addition, the Chinese government continues to play a significant role in regulating industry development by imposing industrial policies.

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The Chinese government also exercises significant control over China's economic growth through allocating resources, controlling payment of foreign currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries or companies.

        While the Chinese economy has experienced significant growth over past decades, growth has been uneven, both geographically and among various sectors of the economy. Any adverse changes in economic conditions in China, in the policies of the Chinese government or in the laws and regulations in China could have a material adverse effect on the overall economic growth of China. Such developments could adversely affect our business and results of operations, lead to a reduction in demand for our services and adversely affect our competitive position. The Chinese government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures may benefit the overall Chinese economy, but may have a negative effect on us. For example, our financial condition and results of operations may be adversely affected by government control over capital investments or changes in tax regulations. In addition, in the past the Chinese government has implemented certain measures, including interest rate adjustment, to control the pace of economic growth. These measures may cause decreased economic activity in China, which may adversely affect our business and results of operations.

Uncertainties with respect to the PRC legal system could materially and adversely affect us.

        The PRC legal system is a civil law system based on written statutes. Unlike the common law system, prior court decisions under the civil law system may be cited for reference but have limited precedential value.

        In the late 1970s, the PRC government began to promulgate a comprehensive system of laws and regulations governing economic matters in general. The overall effect of legislation over the past three decades has significantly enhanced the protections afforded to various forms of foreign investments in China. However, China has not developed a fully integrated legal system, and recently enacted laws and regulations may not sufficiently cover all aspects of economic activities in China. In particular, the PRC legal system is based on written statutes and prior court decisions have limited value as precedents. Since these laws and regulations are relatively new and the PRC legal system continues to rapidly evolve, the interpretations of many laws, regulations and rules may not be uniform and enforcement of these laws, regulations and rules involves uncertainties. These uncertainties may affect our judgment on the relevance of legal requirements and our ability to enforce our contractual rights or tort claims. In addition, the regulatory uncertainties may be exploited through unmerited or frivolous legal actions or threats in attempts to extract payments or benefits from us. Furthermore, the PRC legal system is based in part on government policies and internal rules, some of which are not published on a timely basis or at all and may have a retroactive effect. As a result, we may not be aware of our violation of any of these policies and rules until sometime after the violation. In addition, any administrative and court proceedings in China may be protracted, resulting in substantial costs and diversion of resources and management attention.

        In particular, PRC laws and regulations concerning the cloud service industry are developing and evolving. Although we have taken measures to comply with the laws and regulations that are applicable to our business operations and avoid conducting any non-compliant activities under the applicable laws and regulations, the PRC government authorities may promulgate new laws and regulations regulating the cloud service industry in the future. We cannot assure you that our practice would not be deemed to violate any new PRC laws or regulations relating to cloud services. Moreover, developments in the cloud service industry may lead to changes in PRC laws, regulations and policies or in the interpretation and application of existing laws, regulations and policies that may limit or restrict cloud service market players like us, which could materially and adversely affect our business and operations.

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You may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing actions in China against us or our management named in the prospectus based on foreign laws.

        We are a business company incorporated under the laws of the British Virgin Islands. We conduct substantially all of our operations in China, and substantially all of our assets are located in China. In addition, some of our senior executive officers reside within China for a significant portion of the time and are PRC nationals. As a result, it may be difficult for our shareholders to effect service of process upon us or those persons inside China. In addition, China does not have treaties providing for the reciprocal recognition and enforcement of judgments of courts with the British Virgin Islands and many other countries and regions. Therefore, recognition and enforcement in China of judgments of a court in any of these non-PRC jurisdictions in relation to any matter not subject to a binding arbitration provision may be difficult or impossible.

        Shareholder claims that are common in the United States, including securities law class actions and fraud claims, generally are difficult to pursue as a matter of law or practicality in China. For example, in China, there are significant legal and other obstacles to obtaining information needed for shareholder investigations or litigation outside China or otherwise with respect to foreign entities. Although the local authorities in China may establish a regulatory cooperation mechanism with the securities regulatory authorities of another country or region to implement cross-border supervision and administration, such regulatory cooperation with the securities regulatory authorities in the Unities States have not been efficient in the absence of mutual and practical cooperation mechanism. According to Article 177 of the PRC Securities Law which became effective in March 2020, no overseas securities regulator is allowed to directly conduct investigation or evidence collection activities within the territory of the PRC. Accordingly, without the consent of the competent PRC securities regulators and relevant authorities, no organization or individual may provide the documents and materials relating to securities business activities to overseas parties. See also "—Risks Relating to the ADSs and This Offering—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 British Virgin Islands law" for risks associated with investing in us as a British Virgin Islands company.

We may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business.

        We are a British Virgin Islands holding company and we may rely on dividends and other distributions on equity from our PRC subsidiaries for our cash requirements, including for services of any debt we may incur. Our PRC subsidiaries' ability to distribute dividends is based upon their distributable earnings. Current PRC regulations permit our PRC subsidiaries to pay dividends to their respective shareholders only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, each of our PRC subsidiaries are required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of each of their registered capitals. These reserves are not distributable as cash dividends. If our PRC subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments to us. Any limitation on the ability of our PRC subsidiaries to distribute dividends or other payments to their respective shareholders could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our businesses, pay dividends or otherwise fund and conduct our business.

        To address the persistent capital outflow and the RMB's depreciation against the U.S. dollar in the fourth quarter of 2016, the People's Bank of China and the State Administration of Foreign Exchange, or SAFE, have implemented a series of capital control measures in the subsequent months, including stricter vetting procedures for China-based companies to remit foreign currency for overseas

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acquisitions, dividend payments and shareholder loan repayments. For instance, the Circular on Promoting the Reform of Foreign Exchange Management and Improving Authenticity and Compliance Review, or the SAFE Circular 3, issued on January 26, 2017, provides that the banks shall, when dealing with dividend remittance transactions from domestic enterprise to its offshore shareholders of more than US$50,000, review the relevant board resolutions, original tax filing form and audited financial statements of such domestic enterprise based on the principal of genuine transaction. The PRC government may continue to strengthen its capital controls and our PRC subsidiaries' dividends and other distributions may be subject to tightened scrutiny in the future. Any limitation on the ability of our PRC subsidiaries to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.

        In addition, the Enterprise Income Tax Law and its implementation rules provide that a withholding tax at a rate of 10% will be applicable to dividends payable by Chinese companies to non-PRC-resident enterprises unless reduced under treaties or arrangements between the PRC central government and governments of other countries or regions where the non-PRC resident enterprises are tax resident. Pursuant to the tax agreement between Mainland China and the Hong Kong Special Administrative Region, the withholding tax rate in respect to the payment of dividends by a PRC enterprise to a Hong Kong enterprise may be reduced to 5% from a standard rate of 10% if the Hong Kong enterprise directly holds at least 25% of the PRC enterprise. Under administrative guidance, a Hong Kong resident enterprise must meet the following conditions, among others, in order to apply the reduced withholding tax rate: (i) it must be a company; (ii) it must directly own the required percentage of equity interests and voting rights in the PRC resident enterprise; and (iii) it must have directly owned such required percentage in the PRC resident enterprise throughout the 12 months prior to receiving the dividends. Nonresident enterprises are not required to obtain preapproval from the relevant tax authority in order to enjoy the reduced withholding tax. Instead, nonresident enterprises and their withholding agents may, by self-assessment and on confirmation that the prescribed criteria to enjoy the tax treaty benefits are met, directly apply the reduced withholding tax rate, and file necessary forms and supporting documents when performing tax filings, which will be subject to post-tax filing examinations by the relevant tax authorities. Accordingly, our Hong Kong subsidiary may be able to benefit from the 5% withholding tax rate for the dividends it receives from our PRC subsidiaries, if it satisfies the conditions prescribed under SAT Circular 81 and other relevant tax rules and regulations. However, if the relevant tax authorities consider the transactions or arrangements 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. Accordingly, there is no assurance that the reduced 5% will apply to dividends received by our Hong Kong subsidiary from our PRC subsidiaries. This withholding tax will reduce the amount of dividends we may receive from our PRC subsidiaries.

The custodians or authorized users of our controlling non-tangible assets, including chops and seals, may fail to fulfill their responsibilities, or misappropriate or misuse these assets.

        Under the PRC law, legal documents for corporate transactions, including agreements and contracts are executed using the chop or seal of the signing entity or with the signature of a legal representative whose designation is registered and filed with relevant PRC market regulation authorities.

        In order to secure the use of our chops and seals, we have established internal control procedures and rules for using these chops and seals. In any event that the chops and seals are intended to be used, the responsible personnel will submit the application which will then be verified and approved by authorized employees in accordance with our internal control procedures and rules. In addition, in order to maintain the physical security of our chops, we generally have them stored in secured locations

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accessible only to authorized employees. Although we monitor such authorized employees, the procedures may not be sufficient to prevent all instances of abuse or negligence. There is a risk that our employees could abuse their authority, for example, by entering into a contract not approved by us or seeking to gain control of one of our subsidiaries or VIEs. If any employee obtains, misuses or misappropriates our chops and seals or other controlling non-tangible assets for whatever reason, we could experience disruption to our normal business operations. We may have to take corporate or legal action, which could involve significant time and resources to resolve and divert management from our operations.

PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may restrict or delay us from using the proceeds of this offering to make loans or additional capital contributions to our PRC subsidiaries and making loans to our VIEs or their subsidiaries, which could adversely affect our liquidity and our ability to fund and expand our business.

        We are an offshore holding company conducting our operations in China through our PRC subsidiaries and our VIEs. We may make loans to our PRC subsidiaries and VIEs subject to the approval from governmental authorities and limitation of amount, or we may make additional capital contributions to our PRC subsidiaries in China.

        Any loans to our PRC subsidiaries in China are subject to PRC regulations and foreign exchange loan registrations. For example, loans by us to our PRC subsidiaries in China to finance their activities cannot exceed statutory limits and must be registered with the local counterpart of SAFE. In addition, a foreign invested enterprise shall use its capital pursuant to the principle of authenticity and self-use within its business scope. The capital of a foreign invested enterprise shall not be used for the following purposes: (i) directly or indirectly used for payment beyond the business scope of the enterprises or the payment prohibited by relevant laws and regulations; (ii) directly or indirectly used for investment in securities investments other than banks' principal-secured products unless otherwise provided by relevant laws and regulations; (iii) the granting of loans to non-affiliated enterprises, except where it is expressly permitted in the business license; and (iv) paying the expenses related to the construction or the purchase of real estate that is not for self-use (except for the foreign-invested real estate enterprises).

        SAFE promulgated the Notice of the State Administration of Foreign Exchange on Reforming the Administration of Foreign Exchange Settlement of Capital of Foreign-invested Enterprises, or SAFE Circular 19, effective from June 2015, in replacement of the Circular on the Relevant Operating Issues Concerning the Improvement of the Administration of the Payment and Settlement of Foreign Currency Capital of Foreign-Invested Enterprises, the Notice from the State Administration of Foreign Exchange on Relevant Issues Concerning Strengthening the Administration of Foreign Exchange Businesses, and the Circular on Further Clarification and Regulation of the Issues Concerning the Administration of Certain Capital Account Foreign Exchange Businesses. Although SAFE Circular 19 allows RMB capital converted from foreign currency-denominated registered capital of a foreign-invested enterprise to be used for equity investments within China, it also reiterates the principle that RMB converted from the foreign currency-denominated capital of a foreign-invested company may not be directly or indirectly used for purposes beyond its business scope. Thus, it is unclear whether SAFE will permit such capital to be used for equity investments in China in actual practice. SAFE promulgated the Notice of the State Administration of Foreign Exchange on Reforming and Standardizing the Foreign Exchange Settlement Management Policy of Capital Account, or SAFE Circular 16, effective on June 9, 2016, which reiterates some of the rules set forth in SAFE Circular 19, but changes the prohibition against using RMB capital converted from foreign currency- denominated registered capital of a foreign-invested company to issue RMB entrusted loans to a prohibition against using such capital to issue loans to non-associated enterprises. Violations of SAFE Circular 19 and SAFE Circular 16 could result in administrative penalties. SAFE Circular 19 and SAFE Circular 16 may significantly limit our ability to transfer any foreign currency we hold, including the net proceeds

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from this offering, to our PRC subsidiaries, which may adversely affect our liquidity and our ability to fund and expand our business in China.

        On October 23, 2019, SAFE issued the Circular on Further Promoting Cross-border Trade and Investment Facilitation, or Circular 28, which took effect on the same day. Circular 28, subject to certain conditions, allows foreign-invested enterprises whose business scope does not include investment, or non-investment foreign-invested enterprises, to use their capital funds to make equity investments in China. Since Circular 28 was issued only recently, its interpretation and implementation in practice are still subject to substantial uncertainties.

        In addition, our PRC subsidiaries are also required to withhold a 10% (or 7% if paid to a Hong Kong resident who qualifies for the benefits of the tax treaty between China and Hong Kong) tax on interest paid under any cross-border shareholder loan. Prior to the payment of any interest and principal on any such shareholder loan, our PRC subsidiaries must present evidence of registration with SAFE regarding any such shareholder loan and may be required to provide evidence of payment of withholding tax on the interest payable on that.

        In light of the various requirements imposed by PRC regulations on loans to and direct investment in PRC entities by offshore holding companies, we cannot assure you that we will be able to complete the necessary government registrations or obtain the necessary government approvals on a timely basis, if at all, with respect to future loans to our PRC subsidiaries or VIEs or future capital contributions by us to our wholly foreign-owned subsidiaries in China. As a result, uncertainties exist as to our ability to provide prompt financial support to our PRC subsidiaries or VIEs when needed. If we fail to complete such registrations or obtain such approvals, our ability to use the proceeds we expect to receive from this offering and to capitalize or otherwise fund our PRC operations may be negatively affected, which could materially and adversely affect our liquidity and our ability to fund and expand our business.

Governmental control of currency conversion may limit our ability to utilize our cash generated from operations effectively and affect the value of your investment.

        The PRC government imposes controls on the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. We receive substantially all of our revenues in Renminbi. Under our current corporate structure, our British Virgin Islands holding company primarily relies on dividend payments from our PRC subsidiaries to fund any cash and financing requirements we may have. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and trade- and service-related foreign exchange transactions, can be made in foreign currencies without prior approval of SAFE by complying with certain procedural requirements. Specifically, under the existing exchange restrictions, without prior approval of SAFE, cash generated from the operations of our PRC subsidiaries in China may be used to pay dividends to our company. However, approval from or registration with appropriate government authorities is required where Renminbi is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. As a result, we need to obtain SAFE approval to use cash generated from the operations of our PRC subsidiaries and VIEs to pay off their respective debt in a currency other than Renminbi owed to entities outside China, or to make other capital expenditure payments outside China in a currency other than Renminbi. The PRC government may at its discretion restrict access to foreign currencies for current account transactions in the future. If the foreign exchange control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to pay dividends in foreign currencies to our shareholders, including holders of the ADSs.

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Certain PRC regulations may make it more difficult for us to pursue growth through acquisitions.

        Among other things, the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, adopted by six PRC regulatory agencies in 2006 and amended in 2009, established additional procedures and requirements that could make merger and acquisition activities by foreign investors more time-consuming and complex. Such regulation requires, among other things, that MOFCOM be notified in advance of any change of control transaction in which a foreign investor takes control of a PRC domestic enterprise, if (i) any important industry is concerned, (ii) such transaction involves factors that have or may have impact on the national economic security, or (iii) such transaction will lead to a change in control of a domestic enterprise which holds a famous trademark or PRC time-honored brand. Moreover, the Anti-Monopoly Law promulgated by the Standing Committee of the NPC which became effective in 2008 requires that transactions which are deemed concentrations and involve parties with specified turnover thresholds must be cleared by the relevant anti-monopoly authority before they can be completed. In addition, the Notice of the General Office of State Council on Establishment of Security Review System Pertaining to Mergers and Acquisitions of Domestic Enterprises by Foreign Investors which became effective in March 2011, and the Measures for the Security Review of Foreign Investment, promulgated by the NDRC and the MOFCOM on December 19, 2020 and effective as of January 18, 2021, require acquisitions or investments by foreign investors that would result in obtaining control of the invested PRC enterprises in certain key sectors, such as critical information technology, critical Internet products and services, critical financial services and other critical technology sectors which may raise "national defense and security" concerns, to obtain approval from competent governmental authorities in advance. We may pursue potential strategic acquisitions that are complementary to our business and operations. Complying with the requirements of these regulations to complete such transactions could be time-consuming, and any required approval processes, including obtaining approval or clearance from the competent governmental authority, may delay or inhibit our ability to complete such transactions, which could affect our ability to expand our business or maintain our market share.

PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident beneficial owners or our PRC subsidiaries to liability or penalties, limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries' ability to increase their registered capital or distribute profits to us, or may otherwise adversely affect us.

        In July 2014, SAFE promulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents' Offshore Investment and Financing and Roundtrip Investment Through Special Purpose Vehicles, or SAFE Circular 37, to replace the Notice on Relevant Issues Concerning Foreign Exchange Administration for Domestic Residents' Financing and Roundtrip Investment Through Offshore Special Purpose Vehicles, or SAFE Circular 75, which ceased to be effective upon the promulgation of SAFE Circular 37. SAFE Circular 37 requires PRC residents (including PRC individuals and PRC corporate entities) to register with SAFE or its local branches in connection with their direct or indirect offshore investment activities. SAFE Circular 37 is applicable to our shareholders who are PRC residents and may be applicable to any offshore acquisitions that we make in the future.

        SAFE Circular 37 requires registration with, and approval from, Chinese government authorities in connection with direct or indirect control of an offshore entity by PRC residents. The term "control" under SAFE Circular 37 is broadly defined as the operation rights, beneficiary rights or decision-making rights acquired by PRC residents in the offshore special purpose vehicles, or SPVs, by means of acquisition, trust, proxy, voting rights, repurchase, convertible bonds or other arrangements. In addition, any PRC resident who is a direct or indirect shareholder of an SPV is required to update its filed registration with the local branch of SAFE with respect to that SPV, to reflect any material change. On February 13, 2015, the SAFE promulgated a Notice on Further Simplifying and Improving Foreign

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Exchange Administration Policy on Direct Investment, or SAFE Notice 13, which became effective on June 1, 2015. Under SAFE Notice 13, applications for foreign exchange registration of inbound foreign direct investments and outbound overseas direct investments, including those required under SAFE Circular 37, will be filed with qualified banks instead of SAFE. The qualified banks will directly examine the applications and accept registrations under the supervision of SAFE.

        These regulations may have a significant impact on our present and future structuring and investment. We intend to structure and execute our future offshore acquisitions in a manner consistent with these regulations and any other relevant legislation. However, because it is presently uncertain how the SAFE regulations and any future legislation concerning offshore or cross-border transactions will be interpreted and implemented by the relevant government authorities in connection with our future offshore financings or acquisitions, we cannot provide any assurances that we will be able to comply with, qualify under, or obtain any approvals required by the regulations or other legislation. Furthermore, we cannot assure you that any PRC shareholders of our company or any PRC company into which we invest will be able to comply with those requirements. Any failure or inability by such individuals or entities to comply with SAFE regulations may subject us to fines or legal sanctions, such as restrictions on our cross-border investment activities or our PRC subsidiaries' ability to distribute dividends to, or obtain foreign exchange-denominated loans from, our company or prevent us from making distributions or paying dividends. As a result, our business operations and our ability to make distributions to you could be materially and adversely affected.

        Furthermore, as these foreign exchange regulations are still relatively new and their interpretation and implementation has been constantly evolving, it is unclear how these regulations, and any future regulation concerning offshore or cross-border transactions, will be interpreted, amended and implemented by the relevant government authorities. For example, we may be subject to a more stringent review and approval process with respect to our foreign exchange activities, such as remittance of dividends and foreign-currency-denominated borrowings, which may adversely affect our financial condition and results of operations. In addition, if we decide to acquire a PRC domestic company, we cannot assure you that we or the owners of such company, as the case may be, will be able to obtain the necessary approvals or complete the necessary filings and registrations required by the foreign exchange regulations. This may restrict our ability to implement our acquisition strategy and could adversely affect our business and prospects.

Any failure to comply with PRC regulations regarding the registration requirements for employee stock incentive plans may subject the PRC plan participants or us to fines and other legal or administrative sanctions.

        In February 2012, SAFE promulgated the Notices on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Publicly Listed Company, replacing earlier rules promulgated in 2007. Pursuant to these rules, PRC citizens and non-PRC citizens who reside in China for a continuous period of not less than one year who participate in any stock incentive plan of an overseas publicly listed company, subject to a few exceptions, are required to register with SAFE through a domestic qualified agent, which could be the PRC subsidiaries of such overseas-listed company, and complete certain other procedures. In addition, an overseas-entrusted institution must be retained to handle matters in connection with the exercise or sale of stock options and the purchase or sale of shares and interests. In addition, SAFE Circular 37 stipulates that PRC residents who participate in a share incentive plan of an overseas non-publicly listed special purpose company may register with SAFE or its local branches before they obtain the incentive shares or exercise the share options. We and our executive officers and other employees who are PRC citizens or who reside in the PRC for a continuous period of not less than one year and who have been or will be granted incentive shares or options are or will be subject to these regulations. Failure to complete the SAFE registrations may subject them to fines and legal sanctions, and there

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may be additional restrictions on the ability of them to exercise their stock options or remit proceeds gained from sale of their stock into the PRC. We also face regulatory uncertainties that could restrict our ability to adopt additional incentive plans for our directors, executive officers and employees under PRC law. See "Regulation—Regulations on Foreign Exchange—Regulations on Stock Incentive Plans."

If we are classified as a PRC resident enterprise for PRC enterprise income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders and ADS holders.

        Under the PRC Enterprise Income Tax Law and its implementation rules, an enterprise established outside of the PRC with its "de facto management body" within the PRC is considered a "resident enterprise" and will be subject to the enterprise income tax on its global income at the rate of 25%. The implementation rules define the term "de facto management body" as the body that exercises full and substantial control and overall management over the business, productions, personnel, accounts and properties of an enterprise. In 2009, the State Administration of Taxation, or SAT, issued a circular, known as SAT Circular 82, which provides certain specific criteria for determining whether the "de facto management body" of a PRC-controlled enterprise that is incorporated offshore is located in China. Although this circular only applies to offshore enterprises controlled by PRC enterprises or PRC enterprise groups, not those controlled by PRC individuals or foreigners, the criteria set forth in the circular may reflect the SAT's general position on how the "de facto management body" text should be applied in determining the tax resident status of all offshore enterprises. According to SAT Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be regarded as a PRC tax resident by virtue of having its "de facto management body" in China, and will be subject to PRC enterprise income tax on its global income only if all of the following conditions are met: (i) the primary location of the day-to-day operational management is in the PRC; (ii) decisions relating to the enterprise's financial and human resource matters are made or are subject to approval by organizations or personnel in the PRC; (iii) the enterprise's primary assets, accounting books and records, company seals, and board and shareholder resolutions are located or maintained in the PRC; and (iv) at least 50% of voting board members or senior executives habitually reside in the PRC.

        We believe our company is not a PRC resident enterprise for PRC tax purposes. However, the tax resident status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term "de facto management body." If the PRC tax authorities determine that our company or any of our offshore subsidiaries is a PRC resident enterprise for enterprise income tax purposes, our company or the relevant offshore subsidiaries will be subject to PRC enterprise income on its worldwide income at the rate of 25%. Furthermore, if we are treated as a PRC tax resident enterprise, we will be required to withhold a 10% withholding tax from dividends we pay to our shareholders that are non-resident enterprises, including the holders of the ADSs. In addition, non-resident enterprise shareholders (including our ADS holders) may be subject to PRC tax at a rate of 10% on gains realized on the sale or other disposition of ADSs or ordinary shares if such gains are treated as derived from a PRC source. Furthermore, if we are deemed a PRC resident enterprise, dividends paid to our non-PRC individual shareholders (including our ADS holders) and any gain realized on the transfer of ADSs or ordinary shares by such shareholders may be subject to PRC tax at a rate of 20% (which, in the case of dividends, may be withheld at source by us). These rates may be reduced by an applicable tax treaty, but it is unclear whether our non-PRC shareholders would, in practice, be able to obtain the benefits of any tax treaties between their country of tax residence and the PRC in the event that we are treated as a PRC resident enterprise. Any such tax may reduce the returns on your investment in the ADSs or ordinary shares.

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We face uncertainty with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC resident companies.

        On February 3, 2015, the SAT issued the Public Notice Regarding Certain Corporate Income Tax Matters on Indirect Transfer of Properties by Non-Tax Resident Enterprises, or SAT Bulletin 7, which came into effect on February 3, 2015, but will also apply to cases where their PRC tax treatment has not yet concluded. SAT Bulletin 7 redefines the applicable scope to expand the subject of the indirect share transfers to China taxable assets which includes equity investments in PRC resident enterprises, assets of Chinese establishment and immoveable properties in China. In addition, SAT Bulletin 7 has introduced safe harbors for internal group restructurings and the purchase and sale of equity through a public securities market. SAT Bulletin 7 also brings challenges to both foreign transferor and transferee (or other person who is obligated to pay for the transfer) of taxable assets.

        On October 17, 2017, the 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. The SAT Bulletin 37 further clarifies the practice and procedure of the withholding of non-resident enterprise income tax.

        Where a non-resident enterprise transfers taxable assets in China indirectly by disposing of the equity interests of an overseas holding company, which is an Indirect Transfer, the non-resident enterprise as either transferor or transferee, or the PRC entity whose equity is transferred, may report such Indirect Transfer to the relevant tax authority. Using a "substance over form" principle, the PRC tax authority may disregard the existence of the overseas holding company if it lacks a reasonable commercial purpose and was established for the purpose of reducing, avoiding or deferring PRC tax. As a result, gains derived from such Indirect Transfer may be subject to PRC enterprise income tax, and the transferee or other person who is obligated to pay for the transfer is obligated to withhold the applicable taxes, currently at a rate of 10% for the transfer of equity interests in a PRC resident enterprise. 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.

        We face uncertainties as to the reporting and other implications of certain past and future transactions where PRC taxable assets are involved, such as offshore restructuring, sale of the shares in our offshore subsidiaries and investments. Our company may be subject to filing obligations or taxes if our company is transferor in such transactions, and may be subject to withholding obligations if our company is transferee in such transactions, under SAT Bulletin 7 and/or SAT Bulletin 37. For transfer of shares in our company by investors who are non-PRC resident enterprises, our PRC subsidiaries may be requested to assist in the filing under SAT Bulletin 7 and/or SAT Bulletin 37. As a result, we may be required to expend valuable resources to comply with SAT Bulletin 7 and/or SAT Bulletin 37 or to request the relevant transferors from whom we purchase taxable assets to comply with these circulars, or to establish that our company should not be taxed under these circulars, which may have a material adverse effect on our financial condition and results of operations.

The audit report included in this prospectus is prepared by an accounting firm that is not inspected by the Public Company Accounting Oversight Board and, as such, our investors are deprived of the benefits of such inspection.

        Our audit report included in this prospectus is prepared by an accounting firm that is not inspected by the PCAOB. Companies that are publicly traded in the United States must have their financial statements audited by an independent public accounting firm registered with the PCAOB. This lack of the PCAOB inspections in China prevents the PCAOB from fully evaluating audits and quality control procedures of our auditor. As a result, we and investors in our ADSs are deprived of the benefits of such PCAOB inspections, which could cause investors in our ADSs to lose confidence in our audit and the quality of our financial statements.

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The continued impasse on the ability of the PCAOB to inspect or investigate PCAOB-registered accounting firms in China and U.S. regulatory and legislative focus, including recent enactment of the Holding Foreign Companies Accountable Act, may (i) adversely affect the market price of our ADSs and (ii) eventually require us to delist our securities from the U.S. markets.

        Over the past decade, the U.S. securities regulators (SEC and PCAOB) and their Chinese counterparts (the China Securities Regulatory Commission, or CSRC, and the PRC Ministry of Finance) have been in an impasse over the PCAOB's ability to inspect or investigate the audit work of accounting firms that audit the financial statements of China-based companies. Under U.S. securities laws, publicly listed companies are required to have their financial statements audited by independent public accounting firms registered with the PCAOB. Under the Sarbanes-Oxley Act of 2002, the PCAOB is required to inspect the PCAOB-registered accounting firms to assess compliance with auditing standards and bring enforcement actions for non-compliance with such standards. If requested by the PCAOB or the SEC, PCAOB-registered accounting firms are required to provide the audit work papers and other related information for inspection. However, the PCAOB currently does not have free access to inspect the work of auditors of China-based companies, including our company. Article 177 of the revised PRC Securities Law prohibits, without the approval of the securities regulatory authority in China, (i) foreign securities regulators from engaging in any inspection activities within China and (ii) anyone from providing any documents or materials relating to capital markets activities to foreign parties.

        To seek a framework for cooperation, in May 2013, the PCAOB entered into a Memorandum of Understanding on Enforcement Cooperation, or the MOU, with the CSRC and the PRC Ministry of Finance, which establishes a cooperative framework among the parties for the production and exchange of audit documents relevant to investigations undertaken by the PCAOB, the CSRC or the PRC Ministry of Finance in the United States and the PRC, respectively. Despite the MOU, the Chairmen of each of the SEC and the PCAOB issued a joint statement in December 2018 alleging continuing, significant issues relating to the ability of the PCAOB to inspect the audit work papers and practices of PCAOB-registered accounting firms in China with respect to their audit work of U.S.-listed companies with operations in China. The SEC and the PCAOB reiterated these allegations and highlighted such risks in another joint statement in April 2020.

        As part of the continued regulatory scrutiny in the United States on access to audit and other information currently protected by laws in China, in December 2020, the U.S. Congress passed the Holding Foreign Companies Accountable Act, or the HFCAA, which had passed the U.S. Senate in May 2020. The HFCAA was signed into law by the President in December 2020. The HFCAA would amend the Sarbanes-Oxley Act to require the SEC to determine each company that is required to file periodic reports with the SEC that has retained an accounting firm: (i) that is located in a foreign jurisdiction and (ii) whom the PCAOB is unable to inspect or investigate due to the position taken by an authority in the foreign jurisdiction (as determined by the PCAOB). If the SEC determines that the PCAOB has been unable to inspect or investigate such accounting firm for three consecutive years, it will prohibit such company from trading its securities on a U.S. securities exchange or in any "over-the-counter" exchange. On March 24, 2021, SEC announced it has adopted interim final amendments to implement congressionally mandated submission and disclosure requirements of the Act. The interim final amendments will apply to registrants that the SEC identifies as having filed an annual report on Forms 10-K, 20-F, 40-F or N-CSR with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that the PCAOB has determined it is unable to inspect or investigate completely because of a position taken by an authority in that jurisdiction.

        In addition, in August 2020, the President's Working Group on Financial Markets, or the PWG, released a report recommending that the SEC take certain steps, including adopting enhanced listing standards on U.S. stock exchanges, to protect U.S. investors from the perceived risks of Chinese

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companies. This would require, as a condition to initial and continued listing on a U.S. stock exchange, PCAOB access to work papers of the principal audit firm for the audit of the listed company. Companies unable to satisfy this standard as a result of governmental restrictions may satisfy this standard by providing a co-audit from an audit firm with comparable resources and experience where the PCAOB determines it has sufficient access to audit work papers and practices to conduct an appropriate inspection of the co-audit firm. There is currently no legal framework under which such a co-audit may be legally conducted for companies based in China. The proposed new listing standards would allow for a transition period until January 1, 2022 for listed companies, but would apply immediately to ban new listings once the necessary rulemakings and standard-setting are effective.

        It is unclear if and when the SEC will make rules to implement the recommendations proposed in the PWG report, especially in light of its rulemaking pursuant to the HFCAA. Upon the effectiveness of the SEC implementation rules relating to the HFCAA (and PWG report, if applicable), we will be subject to the requirement to have our financial statements audited by an accounting firm for which the PCAOB can inspect and investigate. Failure to comply with such requirements could ultimately result in a delisting of the ADSs from Nasdaq. In addition, the uncertainty around the HFCAA and PWG report could adversely affect the market price of the ADSs.

Proceedings instituted by the SEC against Chinese affiliates of the "big four" accounting firms, including our independent registered public accounting firm, could result in financial statements being determined to not be in compliance with the requirements of the Exchange Act.

        In December 2012, the SEC instituted administrative proceedings against the Big Four PRC-based accounting firms, including our independent registered public accounting firm, alleging that these firms had violated U.S. securities laws and the SEC's rules and regulations thereunder by failing to provide to the SEC the firms' audit work papers with respect to certain PRC-based companies that are publicly traded in the United States.

        On January 22, 2014, the administrative law judge, or the ALJ, presiding over the matter rendered an initial decision that each of the firms had violated the SEC's rules of practice by failing to produce audit papers and other documents to the SEC. The initial decision censured each of the firms and barred them from practicing before the SEC for a period of six months.

        On February 6, 2015, the four China-based accounting firms each agreed to a censure and to pay a fine to the SEC to settle the dispute and avoid suspension of their ability to practice before the SEC and audit U.S.-listed companies. The settlement required the firms to follow detailed procedures and to seek to provide the SEC with access to Chinese firms' audit documents via the CSRC. Under the terms of the settlement, the underlying proceeding against the four China-based accounting firms was deemed dismissed with prejudice four years after entry of the settlement. The four-year mark occurred on February 6, 2019.

        While we cannot predict if the SEC will further challenge the four China-based accounting firms' compliance with U.S. laws in connection with U.S. regulatory requests for audit work papers or if the results of such a challenge would result in the SEC imposing penalties such as suspensions, if the accounting firms are subject to additional remedial measures, our ability to file our financial statements in compliance with SEC requirements could be adversely affected. If our independent registered public accounting firm was denied, even temporarily, the ability to practice before the SEC and we were unable to timely find another registered public accounting firm to audit and issue an opinion on our financial statements, our financial statements could be determined not to be in compliance with the requirements of the Exchange Act. Such a determination could ultimately lead to the delisting of the ADSs from the Nasdaq or deregistration from the SEC, or both, which would substantially reduce or effectively terminate the trading of the ADSs in the United States.

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It may be difficult for overseas regulators to conduct investigation or collect evidence within China.

        Shareholder claims or regulatory investigation that are common in the United States generally are difficult to pursue as a matter of law or practicality in China. For example, in China, there are significant legal and other obstacles to providing information needed for regulatory investigations or litigation initiated outside China. Although the authorities in China may establish a regulatory cooperation mechanism with the securities regulatory authorities of another country or region to implement cross-border supervision and administration, such cooperation with the securities regulatory authorities in the Unities States may not be efficient in the absence of mutual and practical cooperation mechanism. Furthermore, according to Article 177 of the PRC Securities Law, or Article 177, which became effective in March 2020, no overseas securities regulator is allowed to directly conduct investigation or evidence collection activities within the territory of the PRC. While detailed interpretation of or implementation rules under Article 177 have yet to be promulgated, the inability for an overseas securities regulator to directly conduct investigation or evidence collection activities within China may further increase difficulties faced by you in protecting your interests.

RISKS RELATING TO THE ADSs AND THIS OFFERING

An active trading market for our ordinary shares or the ADSs may not develop and the trading price for the ADSs may fluctuate significantly.

        We have submitted an application to list the ADSs on the Nasdaq. We have no current intention to seek a listing for our ordinary shares on any stock exchange. Prior to the completion of this offering, there has been no public market for the ADSs or our ordinary shares, and we cannot assure you that a liquid public market for the ADSs will develop or if it does develop, will sustain. If an active public market for the ADSs does not develop following the completion of this offering, the market price and liquidity of the ADSs may be materially and adversely affected. The initial public offering price for the ADSs was determined by negotiation between us and the underwriters based upon several factors, and we can provide no assurance that the trading price of the ADSs after this offering will not decline below the initial public offering price. As a result, investors in our securities may experience a significant decrease in the value of their ADSs.

The trading price of the ADSs is likely to be volatile, which could result in substantial losses to investors.

        The trading price of the ADSs could fluctuate widely due to factors beyond our control. This may happen because of broad market and industry factors, including the performance and fluctuation of the market prices of other companies with business operations located mainly in China that have listed their securities in the United States. Furthermore, the stock market in general has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies like us. These broad market and industry factors may materially reduce the market price of the ADSs, regardless of our operating performance. In addition to market and industry factors, the price and trading volume for the ADSs may be highly volatile for factors specific to our own operations, including but not limited to the following:

    macro-economic factors in China;

    variations in our net revenues, earnings and cash flows;

    announcements of new investments, acquisitions, strategic partnerships or joint ventures by us or our competitors;

    announcements of new offerings, solutions and expansions by us or our competitors;

    changes in financial estimates by securities analysts;

    detrimental adverse publicity about us, our services or our industry;

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    announcements of new regulations, rules or policies relevant to our business;

    additions or departures of key personnel;

    allegations of a lack of effective internal control over financial reporting, inadequate corporate governance policies, or allegations of fraud, among other things, involving China-based issuers;

    our major shareholders' business performance and reputation;

    release of lock-up or other transfer restrictions on our outstanding equity securities or sales of additional equity securities;

    political or trade tensions between the United States and China; and

    actual or potential litigation or regulatory investigations.

        Any of these factors may result in large and sudden changes in the volume and price at which the ADSs will trade.

Because our initial public offering price is substantially higher than our net tangible book value per share, you will experience immediate and substantial dilution.

        If you purchase ADSs in this offering, you will pay more for your ADSs than the amount paid by our existing shareholders for their ordinary shares on a per ADS basis. As a result, you will experience immediate and substantial dilution of approximately US$            per ADS, based on an assumed initial public offering price of US$            per ADS, the midpoint of the estimated public offering price range shown on the front cover of this prospectus. See "Dilution" for a more complete description of how the value of your investment in the ADSs will be diluted upon completion of this offering.

If securities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendations regarding the ADSs, the market price for the ADSs and trading volume could decline.

        The trading market for the ADSs depends in part on the research and reports that securities or industry analysts publish about us or our business. If research analysts do not establish and maintain adequate research coverage or if one or more of the analysts who covers us downgrades the ADSs or publishes inaccurate or unfavorable research about our business, the market price for the ADSs would likely decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which, in turn, could cause the market price or trading volume for the ADSs to decline.

The sale or availability for sale of substantial amounts of ADSs could adversely affect their market price.

        Sales of substantial amounts of ADSs in the public market after the completion of this offering, or the perception that these sales could occur, could adversely affect the market price of the ADSs and could materially impair our ability to raise capital through equity offerings in the future. The ADSs sold in this offering will be freely tradable without restriction or further registration under the Securities Act. There will be              ADSs (representing              ordinary shares) issued and outstanding immediately after this offering, or              ADSs (representing              ordinary shares) if the underwriters exercise their option to purchase additional ADSs in full. In connection with this offering, we, our directors, executive officers, existing shareholders [and holders of share awards] have agreed, subject to certain customary exceptions, not to sell any ordinary shares or ADSs for 180 days after the date of this prospectus without the prior written consent of the representative of the underwriters. However, the underwriters may release these securities from these restrictions at any time, subject to applicable regulations of the Financial Industry Regulatory Authority, Inc. We cannot predict what effect, if any, market sales of securities held by our significant shareholders or any other

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shareholder or the availability of these securities for future sale will have on the market price of the ADSs. See "Underwriting" and "Shares Eligible for Future Sale" for a more detailed description of the restrictions on selling our securities after this offering.

Techniques employed by short sellers may drive down the market price of the ADSs.

        Short selling is the practice of selling securities that the seller does not own but rather has borrowed from a third party with the intention of buying identical securities back at a later date to return to the lender. The short seller hopes to profit from a decline in the value of the securities between the sale of the borrowed securities and the purchase of the replacement shares, as the short seller expects to pay less in that purchase than it received in the sale. As it is in the short seller's interest for the price of the security to decline, many short sellers publish, or arrange for the publication of, negative opinions regarding the relevant issuer and its business prospects in order to create negative market momentum and generate profits for themselves after selling a security short. These short attacks have, in the past, led to selling of shares in the market.

        Public companies that have substantially all of their operations in China have been the subject of short selling. Much of the scrutiny and negative publicity has centered on allegations of a lack of effective internal control over financial reporting resulting in financial and accounting irregularities and mistakes, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud. As a result, many of these companies are now conducting internal and external investigations into the allegations and, in the interim, are subject to shareholder lawsuits and/or enforcement actions by the SEC or other U.S. authorities.

        It is not clear what effect such negative publicity could have on us. If we were to become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we could have to expend a significant amount of resources to investigate such allegations and/or defend ourselves. While we would strongly defend against any such short seller attacks, we may be constrained in the manner in which we can proceed against the relevant short seller by principles of freedom of speech, applicable state law or issues of commercial confidentiality. Such a situation could be costly and time-consuming, and could distract our management from growing our business. Even if such allegations are ultimately proven to be groundless, allegations against us could severely impact our business operations, and any investment in the ADSs could be greatly reduced or even rendered worthless.

Because we do not expect to pay dividends in the foreseeable future after this offering, you must rely on a price appreciation of the ADSs for a return on your investment.

        We currently intend to retain most, if not all, of our available funds and any future earnings to fund the development and growth of our business. As a result, we do not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in the ADSs as a source for any future dividend income.

        Our board of directors has complete discretion as to whether to distribute dividends, subject to certain requirements of British Virgin Islands law, namely that our company may only pay dividends if our directors are satisfied on reasonable grounds that we are solvent immediately after the dividend payment in the sense that we will be able to pay our debts as they become due in the ordinary course of business, and the value of assets of our company will exceed our total liabilities. In addition, our shareholders may by ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by our directors. Even if our board of directors decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on our future results of operations and cash flow, our capital requirements and surplus, the amount of distributions, if any, received by us from our subsidiaries, our financial condition, contractual restrictions and other factors deemed

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relevant by our board of directors. Accordingly, the return on your investment in the ADSs will likely depend entirely upon any future price appreciation of the ADSs. There is no guarantee that the ADSs will appreciate in value after this offering or even maintain the price at which you purchased the ADSs. You may not realize a return on your investment in the ADSs and you may even lose your entire investment in the ADSs.

The approval of the China Securities Regulatory Commission may be required in connection with this offering under PRC law.

        The M&A Rules purport to require offshore special purpose vehicles that are controlled by PRC companies or individuals and that have been formed for the purpose of seeking a public listing on an overseas stock exchange through acquisitions of PRC domestic companies or assets to obtain CSRC approval prior to publicly listing their securities on an overseas stock exchange. The interpretation and application of the regulations remain unclear. If CSRC approval is required, it is uncertain whether it would be possible for us to obtain the approval, and any failure to obtain or delay in obtaining CSRC approval for this offering would subject us to sanctions imposed by the CSRC and other PRC regulatory agencies.

        Fangda Partners, our PRC legal counsel, has advised us that, based on its understanding of the current PRC laws and regulations, we will not be required to submit an application to the CSRC for the approval of this offering and the listing and trading of our ADSs on the Nasdaq because (i) the CSRC currently has not issued any definitive rule or interpretation concerning whether offerings like ours under this prospectus are subject to this regulation, (ii) we established the wholly foreign-owned enterprise, or the WFOE, by means of direct investment and not through a merger or acquisition of the equity or assets of a "PRC domestic company" as such term is defined under the M&A Rules; and (iii) no provision in the M&A Rules classifies the contractual arrangements under the VIE Agreements as a type of acquisition transaction falling under the M&A Rules.

        However, our PRC legal counsel has further advised us that there remains some uncertainty as to how the M&A Rules will be interpreted or implemented in the context of an overseas offering, and its opinions summarized above are subject to any new laws, rules and regulations or detailed implementations and interpretations in any form relating to the M&A Rules. We cannot assure you that relevant PRC government agencies, including the CSRC, would reach the same conclusion as our PRC legal counsel, and hence we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies. These regulatory agencies may impose fines and penalties on our operations in China, limit our ability to pay dividends outside of China, limit our operating privileges in China, delay or restrict the repatriation of the proceeds from this offering into China or take other actions that could have a material adverse effect on our business, financial condition, results of operations and prospects, as well as the trading price of the ADSs. The CSRC or other PRC regulatory agencies also may take actions requiring us, or making it advisable for us, to halt this offering before settlement and delivery of the ADSs offered hereby. Consequently, if you engage in market trading or other activities in anticipation of and prior to settlement and delivery, you do so at the risk that settlement and delivery may not occur. In addition, if the CSRC or other regulatory agencies later promulgate new rules or explanations requiring that we obtain their approvals for this offering, we may be unable to obtain a waiver of such approval requirements, if and when procedures are established to obtain such a waiver. Any uncertainties and/or negative publicity regarding such approval requirement could have a material adverse effect on the trading price of 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 British Virgin Islands law.

        We are incorporated in the British Virgin Islands and conduct substantially all of our operations in China through our wholly foreign-owned enterprise and the VIEs. Most of our directors and

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substantially all of our executive officers reside outside the United States and a substantial portion of their assets are located outside of the United States. As a result, it may be difficult or impossible for our shareholders to bring an action against us or against these individuals in the British Virgin Islands or in China in the event that they believe that their rights have been infringed under the securities laws of the United States or otherwise. Even if shareholders are successful in bringing an action of this kind, the laws of the British Virgin Islands and China may render them unable to enforce a judgment against our assets or the assets of our directors and officers. There is no statutory recognition in the British Virgin Islands of judgments obtained in the United States of China, although the courts of the British Virgin Islands will in certain circumstances recognize such a foreign judgment and treat it as a cause of action in itself which may be sued upon as a debt at common law so that no retrial of the issues would be necessary. For more information, see "Enforceability of Civil Liabilities."

        Under the provisions of the BVI Act, the memorandum and articles of association of a company are binding as between the company and its members and between the members. In general, members are bound by the decision of the majority or special majorities as set out in the articles of association or in the BVI Act. As for voting, the usual rule is that with respect to normal commercial matters members may act from self-interest when exercising the right to vote attached to their shares. If the majority members have infringed a minority member's rights, the minority may seek to enforce its rights either by derivative action or by personal action. The BVI Act provides that any member of a company is entitled to payment of the fair value of his shares upon dissenting from certain matters. For more information, see "Description of Share Capital—Differences in Corporate Law—Shareholders' Suits." Generally any other claims against a company by its members must be based on the general laws of contract or tort applicable in the BVI or their individual rights as members as established by the company's memorandum and articles of association, which are more limited than the rights afforded investors under the laws of many states in the United States.

        In particular, the British Virgin Islands has a less developed body of securities laws as compared to the United States, and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law. As a result of the foregoing, holders of our ordinary shares may have more difficulty in protecting their interests through actions against our management, directors or major shareholders than they would as shareholders of a U.S. company and whose management, directors and/or major shareholders were also incorporated, resident, or otherwise established in a United States jurisdiction.

        As a result of the foregoing, our public shareholders may have more difficulty in protecting their interests through actions against us, our management, our directors or our major shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States.

Certain judgments obtained against us by our shareholders may not be enforceable.

        We are a business company limited by shares incorporated under the laws of the British Virgin Islands and substantially all of our assets are located outside of the United States. Substantially all of our current operations are conducted in China. In addition, some of our current directors and officers are nationals and residents of countries other than the United States. Most of the assets of these persons are located outside the United States. As a result, it may be difficult or impossible for you to bring an action against us or against these individuals in the United States in the event that you believe that your rights have been infringed under the U.S. federal securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of the British Virgin Islands and of China may render you unable to enforce a judgment against our assets or the assets of our directors and officers. For more information regarding the relevant laws of the British Virgin Islands and China, see "Enforceability of Civil Liabilities." However, the deposit agreement gives you the right to submit claims against us to binding arbitration, and arbitration awards may be enforceable against us and our assets in China even when court judgments are not.

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You may not receive cash dividends if the depositary decides it is impractical to make them available to you.

        The depositary will pay cash dividends on the ADSs only to the extent that we decide to distribute dividends on our ordinary shares or other deposited securities, and we do not have any present plan to pay any cash dividends on our ordinary shares in the foreseeable future. To the extent that there is a distribution, the depositary of the ADSs has agreed to pay to you the cash dividends or other distributions it or the custodian receives on our ordinary shares or other deposited securities after deducting its fees and expenses. You will receive these distributions in proportion to the number of ordinary shares your ADSs represent. However, the depositary may, at its discretion, decide that it is inequitable or impractical to make a distribution available to any holders of ADSs. For example, the depositary may determine that it is not practicable to distribute certain property through the mail, or that the value of certain distributions may be less than the cost of mailing them. In these cases, the depositary may decide not to distribute such property to you.

ADSs holders may not be entitled to a jury trial with respect to claims arising under the deposit agreement, which could result in less favorable outcomes to the plaintiff(s) in any such action.

        The deposit agreement governing the ADSs representing our Class A ordinary shares provides that, to the fullest extent permitted by law, ADS holders waive the right to a jury trial for any claim they may have against us or the depositary arising out of or relating to our shares, the ADSs or the deposit agreement, including any claim under the U.S. federal securities laws.

        If we or the depositary were to oppose a jury trial based on this waiver, the court would have to determine whether the waiver was enforceable based on the facts and circumstances of the case in accordance with applicable state and federal law. To our knowledge, the enforceability of a contractual pre-dispute jury trial waiver in connection with claims arising under the federal securities laws has not been finally adjudicated by the United States Supreme Court. However, we believe that a contractual pre-dispute jury trial waiver provision is generally enforceable, including under the laws of the State of New York, which govern the deposit agreement, or by a federal or state court in the City of New York, which has non-exclusive jurisdiction over matters arising under the deposit agreement. In determining whether to enforce a contractual pre-dispute jury trial waiver, courts will generally consider whether a party knowingly, intelligently and voluntarily waived the right to a jury trial. We believe that this would be the case with respect to the deposit agreement and the ADSs. It is advisable that you consult legal counsel regarding the jury waiver provision before investing in the ADSs.

        If you or any other owners or holders of ADSs bring a claim against us or the depositary in connection with matters arising under the deposit agreement or the ADSs, including claims under federal securities laws, you or such other owners or holders may not be entitled to a jury trial with respect to such claims, which may have the effect of limiting and discouraging lawsuits against us or the depositary. If a lawsuit is brought against us or the depositary under the deposit agreement, it may be heard only by a judge or justice of the applicable trial court, which would be conducted according to different civil procedures and may result in different outcomes than a trial by jury would have, including outcomes that could be less favorable to the plaintiff(s) in any such action.

        Nevertheless, if this jury trial waiver is not permitted by applicable law, an action could proceed under the terms of the deposit agreement with a jury trial. No condition, stipulation or provision of the deposit agreement or the ADSs serves as a waiver by any owners or holders of ADSs or by us or the depositary of compliance with any substantive provision of the U.S. federal securities laws and the rules and regulations promulgated thereunder.

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Our dual-class share structure with different voting rights will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class A ordinary shares and the ADSs may view as beneficial.

        We have adopted a dual-class share structure such that our ordinary shares will consist of Class A ordinary shares and Class B ordinary shares, which will become effective immediately upon the completion of this offering. In respect of matters requiring the votes of shareholders, each Class A ordinary share is entitled to one vote and each Class B ordinary share is entitled to 10 votes. Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof. Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. We will sell Class A ordinary shares represented by the ADSs in this offering. For more information, see "Description of Share Capital."

        Mr. Shiwei Xu, will beneficially own all of our issued and outstanding Class B ordinary shares immediately upon the completion of this offering. These Class B ordinary shares will constitute approximately        % of our total issued and outstanding share capital and        % of the aggregate voting power of our total issued and outstanding share capital immediately following the completion of this offering, assuming the underwriters do not exercise their option to purchase additional ADSs.

        As a result of this dual-class share structure and the concentration of control, upon completion of this offering, Mr. Shiwei Xu will have significant influence over our business, including decisions regarding mergers, consolidations, liquidations and the sale of all or substantially all of our assets, election of directors and other significant corporate actions. The holders of Class B ordinary shares may take actions that are not in the best interest of us or our other shareholders. This concentration of control may discourage, delay or prevent a change in control of our company, which could have the effect of depriving our other shareholders of the opportunity to receive a premium for their shares as part of a sale of our company and may reduce the price of the ADSs. It will also limit your ability to influence corporate matters and could discourage others from pursuing any potential merger, takeover or other change of control transactions that holders of Class A ordinary shares and ADSs may view as beneficial.

The voting rights of holders of ADSs are limited by the terms of the deposit agreement, and you may not be able to exercise your right to direct the voting of the Class A ordinary shares underlying your ADSs.

        Holders of ADSs do not have the same rights as our registered shareholders. As a holder of ADSs, you will not have any direct right to attend general meetings of our shareholders or to cast any votes at such meetings. You will only be able to exercise the voting rights which attach to the Class A ordinary shares underlying your ADSs indirectly by giving voting instructions to the depositary in accordance with the provisions of the deposit agreement. Upon receipt of your voting instructions, the depositary may try to vote the Class A ordinary shares underlying your ADSs in accordance with your instructions. If we do not instruct the depositary to ask for your instructions, the depositary may still vote in accordance with instructions you give, but it is not required to do so. You will not be able to directly exercise any right to vote with respect to the underlying Class A ordinary shares unless you cancel the ADSs, withdraw the shares and become the registered holder of such shares prior to the record date for the general meeting. When a general meeting is convened, you may not receive sufficient advance notice of the meeting to enable you to cancel the ADSs, withdraw the shares underlying your ADSs and become the registered holder of such shares prior to the record date for the general meeting to allow you to attend the general meeting and to vote directly with respect to any specific matter or resolution to be considered and voted upon at the general meeting. In addition, under our memorandum and articles of association, for the purposes of determining those shareholders who are entitled to attend and vote at any general meeting, our directors may close our register of members and/or fix in advance a record date for such meeting, and such closure of our register of members or the setting of such a record date may prevent you from canceling the ADSs, withdrawing

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the Class A ordinary shares underlying your ADSs and becoming the registered holder of such shares prior to the record date, so that you would not be able to attend the general meeting or to vote directly.

        Where any matter is to be put to a vote at a general meeting, the depositary will notify you of the upcoming vote and to deliver our voting materials to you, if we ask it to do so. We cannot assure you that you will receive the voting material in time to ensure you can direct the depositary to vote the shares underlying your ADSs. In addition, the depositary and its agents are not responsible for failing to carry out voting instructions or for their manner of carrying out your voting instructions. This means that you may not be able to exercise your right to direct how the shares underlying your ADSs are voted and you may have no legal remedy if the shares underlying your ADSs are not voted as you requested.

You may experience dilution of your holdings due to the inability to participate in rights offerings.

        We may, from time to time, distribute rights to our shareholders, including rights to acquire securities. However, we cannot make such rights available to you in the United States unless we register both the rights and the securities to which the rights relate under the Securities Act or an exemption from the registration requirements is available. Under the deposit agreement, the depositary will not distribute rights to holders of ADSs unless the distribution and sale of rights and the securities to which these rights relate are either exempt from registration under the Securities Act with respect to all holders of ADSs, or are registered under the provisions of the Securities Act. The depositary may, but is not required to, attempt to sell these undistributed rights to third parties, and may allow the rights to lapse. We may be unable to establish an exemption from registration under the Securities Act, and we are under no obligation to file a registration statement with respect to these rights or underlying securities or to endeavor to have a registration statement declared effective. Accordingly, holders of the ADSs may be unable to participate in our rights offerings and may experience dilution of their holdings as a result.

You may be subject to limitations on the transfer of your ADSs.

        Your ADSs are transferable on the books of the depositary. However, the depositary may close its books at any time or from time to time when it deems it expedient in connection with the performance of its duties. The depositary may also close its books in emergencies, and on weekends and public holidays. The depositary may refuse to deliver, transfer or register transfers of the ADSs generally when our share register or the books of the depositary are closed, or at any time if we or the depositary thinks it is advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason.

We are an emerging growth company within the meaning of the Securities Act and may take advantage of certain reduced reporting requirements.

        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. As a result, if we elect not to comply with such auditor attestation requirements, our investors may not have access to certain information they may deem important.

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The post-offering amended and restated memorandum and articles of association that we will adopt and will become effective immediately prior to the completion of this offering contain anti-takeover provisions that could discourage a third party from acquiring us and adversely affect the rights of holders of our ordinary shares and ADSs.

        Our post-offering amended and restated memorandum and articles of association that we will adopt and will become effective immediately prior to the completion of this offering contain certain provisions to limit the ability of others to acquire control of our company or cause us to engage in change-of-control transactions, including a provision that grants authority to our board of directors to establish and issue from time to time one or more series of preferred shares without action by our shareholders and to determine, with respect to any series of preferred shares without action by our shareholders, the terms and rights of that series. These provisions could have the effect of depriving our shareholders and ADS holders of the opportunity to sell their shares or ADSs at a premium over the prevailing market price by discouraging third parties from seeking to obtain control of our company in a tender offer or similar transactions.

We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to U.S. domestic public companies.

        Because we qualify as 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 with the SEC of quarterly reports on Form 10-Q or current reports on Form 8-K;

    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.

        We are required to file an annual report on Form 20-F within four months of the end of each fiscal year. In addition, we intend to publish our results on a quarterly basis as press releases, distributed pursuant to the rules and regulations of the Nasdaq. 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 compared to that required to be filed with the SEC by U.S. domestic issuers. As a result, you may not be afforded the same protections or information that would be made available to you were you investing in a U.S. domestic issuer, which may be difficult for overseas regulators to conduct investigation or collect evidence within China.

We will incur increased costs as a result of being a public company, particularly after we cease to qualify as an emerging growth company.

        Upon completion of this offering, we will become a public company and expect to incur significant legal, accounting and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the SEC and Nasdaq, impose various requirements on the corporate governance practices of public companies. As a company with less than US$1.07 billion in revenues for our last fiscal year, we qualify as an "emerging growth company" pursuant to the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These

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provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002 in the assessment of the emerging growth company's internal control over financial reporting and permission to delay adopting new or revised accounting standards until such time as those standards apply to private companies.

        We expect these rules and regulations to increase our legal and financial compliance costs and to make some corporate activities more time-consuming and costly. After we are no longer an "emerging growth company," we expect to incur significant expenses and devote substantial management effort toward ensuring compliance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and the other rules and regulations of the SEC. For example, as a result of becoming a public company, we will need to increase the number of independent directors and adopt policies regarding internal controls and disclosure controls and procedures. We also expect that operating as a public company will make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. In addition, we will incur additional costs associated with our public company reporting requirements. It may also be more difficult for us to find qualified persons to serve on our board of directors or as executive officers. We are currently evaluating and monitoring developments with respect to these rules and regulations, and we cannot predict or estimate with any degree of certainty the amount of additional costs we may incur or the timing of such costs.

        In the past, shareholders of a public company often brought securities class action suits against the company following periods of instability in the market price of that company's securities. If we were involved in a class action suit, it could divert a significant amount of our management's attention and other resources from our business and operations, which could harm our results of operations and require us to incur significant expenses to defend the suit. 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.

As a company incorporated in the British Virgin Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the Nasdaq corporate governance listing standards. These practices may afford less protection to shareholders than they would enjoy if we complied fully with the Nasdaq corporate governance listing standards.

        As a British Virgin Islands company listed on the Nasdaq, we are subject to corporate governance listing standards of Nasdaq. However, Nasdaq rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the British Virgin Islands, which is our home country, may differ significantly from the Nasdaq corporate governance listing standards. We currently intend to follow British Virgin Islands corporate governance practices in lieu of the corporate governance requirements of the Nasdaq that listed companies must have a majority of independent directors and that the audit committee consists of at least three members. To the extent that we choose to follow home country practice in the future, our shareholders may be afforded less protection than they otherwise would enjoy under Nasdaq corporate governance listing standards applicable to U.S. domestic issuers.

There can be no assurance that we will not be a passive foreign investment company, or PFIC, for the current or any future taxable year, which generally would result in adverse U.S. federal income tax consequences to U.S. investors in the ADSs or our ordinary shares.

        In general, a non-U.S. corporation is a PFIC for U.S. federal income tax purposes for any taxable year in which (i) 50% or more of the average value of its assets (generally determined on a quarterly basis) consists of assets that produce, or are held for the production of, passive income, or (ii) 75% or

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more of its gross income consists of passive income. For purposes of the above calculations, a non-U.S. corporation that owns, directly or indirectly, at least 25% by value of the shares of another corporation is treated as if it held its proportionate share of the assets of the other corporation and received directly its proportionate share of the income of the other corporation. Passive income generally includes dividends, interest, rents, royalties and certain gains. Cash is a passive asset for these purposes. Goodwill is generally characterized as an active asset if it is associated with business activities that produce active income.

        Based on the current and expected composition of our income and assets and the expected value of our assets, including goodwill, which is based on the expected price of the ADSs in this offering, we do not expect to be a PFIC for our current taxable year. However, our PFIC status for any taxable year is an annual determination that can be made only after the end of that year. Our PFIC status for any taxable year will depend on the composition of our income and assets and the value of our assets from time to time (which as noted above may be determined, in large part, by reference to the market price of the ADSs, which could be volatile). Therefore, because we will hold a substantial amount of cash following this offering we may become a PFIC if our market capitalization declines significantly. Moreover, it is not entirely clear how the contractual arrangements among us, our VIEs and their nominal shareholders will be treated for purposes of the PFIC rules, and we may be or become a PFIC if our VIEs are not treated as owned by us for these purposes. Accordingly, there can be no assurance that we will not be a PFIC for our current or any future taxable year. If we were a PFIC for any taxable year during which a U.S. taxpayer held ADSs or ordinary shares, the U.S. taxpayer generally would be subject to adverse U.S. federal income tax consequences, including increased tax liability on disposition gains and "excess distributions" and additional reporting requirements. See "Taxation—Passive Foreign Investment Company Rules."

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

        This prospectus contains statements that constitute forward-looking statements. Many of the forward-looking statements contained in this prospectus can be identified by the use of forward-looking words such as "anticipate," "believe," "could," "expect," "should," "plan," "intend," "estimate" and "potential," among others.

        Forward-looking statements appear in a number of places in this prospectus and include, but are not limited to, statements regarding our intent, belief or current expectations. Forward-looking statements are based on our management's beliefs and assumptions and on information currently available to our management. Such statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied in the forward-looking statements due to of various factors, including, but not limited to, those identified under the section entitled "Risk Factors" in this prospectus. These risks and uncertainties include factors relating to:

    general economic, political, demographic and business conditions in China and globally;

    our ability to implement our growth strategy;

    the success of operating initiatives, including advertising and promotional efforts and new product and service development by us and our competitors;

    our ability to develop and apply our technologies to support and upgrade our product and service offerings;

    the expected growth of the PaaS industry in China and globally;

    the availability of qualified personnel and the ability to retain such personnel;

    competition in the PaaS industry;

    changes in government policies and regulation;

    other factors that may affect our financial condition, liquidity and results of operations; and

    other risk factors discussed under "Risk Factors."

        In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. Forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update them in light of new information or future developments or to release publicly any revisions to these statements in order to reflect later events or circumstances or to reflect the occurrence of unanticipated events.

        You should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to the registration statement, of which this prospectus is a part, completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

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USE OF PROCEEDS

        We expect to receive total estimated net proceeds from this offering of approximately US$             million, or approximately US$             million if the underwriters exercise their option to purchase additional ADSs in full, based on the midpoint of the estimated initial public offering price range set forth on the front cover of this prospectus, after deducting underwriting discounts and commissions and the estimated offering expenses payable by us.

        We intend to use the net proceeds from this offering for the following purposes:

    research and development;

    investment in technology infrastructure such as self-operated edge nodes;

    strategic investments and acquisitions complementary to our business; and

    other general corporate purposes.

        If an unforeseen event occurs or business conditions change, we may use the proceeds of this offering differently than as described in this prospectus. In utilizing the proceeds from this offering, we are permitted under PRC laws and regulations to provide funding to our PRC subsidiaries only through loans or capital contributions, and to our consolidated VIEs only through loans, and only if we satisfy the applicable government registration and approval requirements. We cannot assure you that we will be able to meet these requirements on a timely basis, if at all. See "Risk Factors—Risks Relating to Doing Business in China—PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may restrict or delay us from using the proceeds of this offering to make loans or additional capital contributions to our PRC subsidiaries and making loans to our VIEs or their subsidiaries, which could adversely affect our liquidity and our ability to fund and expand our business." We anticipate all of the proceeds of this offering will be available to provide funding to our PRC subsidiaries and VIEs, subject to applicable government registration or approval.

        Pending use of the net proceeds, we intend to hold our net proceeds in short-term, interest-bearing, financial instruments or demand deposits.

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DIVIDEND POLICY

        We have not previously declared or paid any cash dividend or dividend in kind and we have no plan to declare or pay any dividends in the near future on our shares or the ADSs representing our Class A ordinary shares. We currently intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business.

        We are a holding company incorporated in the British Virgin Islands. We may rely on dividends from our PRC subsidiaries for our cash requirements, including any payment of dividends to our shareholders. PRC regulations may restrict the ability of our PRC subsidiaries to pay dividends to us. See "Regulation—Regulations on Foreign Exchange—Regulations on Dividend Distribution."

        Our board of directors has discretion as to whether to distribute dividends, subject to certain requirements of British Virgin Islands law, namely that our company may only pay dividends if our directors are satisfied on reasonable grounds that we are solvent immediately after the dividend payment in the sense that we will be able to pay our debts as they become due in the ordinary course of business, and the value of assets of our company will exceed our total liabilities. There is no further British Virgin Islands law restriction on the amount of funds which may be distributed by us by dividend, including all amounts paid by way of the subscription price for Class A ordinary shares regardless of whether such amounts may be wholly or partially treated as share capital or share premium under certain accounting principles. Shareholder approval is not (except as otherwise provided in our memorandum or articles) required to pay dividends under British Virgin Islands law.

        Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant. If we pay any dividends on our ordinary shares, we will pay those dividends which are payable in respect of the Class A ordinary shares underlying the ADSs to the depositary, as the registered holder of such Class A ordinary shares, and the depositary then will pay such amounts to the ADS holders in proportion to the Class A ordinary shares underlying the ADSs held by such ADS holders, subject to the terms of the deposit agreement, including the fees and expenses payable thereunder. See "Description of American Depositary Shares."

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CAPITALIZATION

        The table below sets forth our capitalization as of March 31, 2021:

    on an actual basis;

    on a pro forma basis to give effect to (i) the automatic conversion or redesignation, as the case may be, of i) all of our outstanding 155,442,246 preferred shares and 12,005,820 issued and outstanding ordinary shares into Class A ordinary shares, on a one-for-one basis immediately prior to the completion of this offering, and (ii) the automatic conversion or redesignation of a total of 36,651,320 issued and outstanding ordinary shares into Class B ordinary shares, on a one-for-one basis, immediately prior to the completion of this offering; and

    on a pro forma as adjusted basis to give effect to (i) the automatic conversion or redesignation, as the case may be, of all of our outstanding 155,442,246 preferred shares and 12,005,820 issued and outstanding ordinary shares into Class A ordinary shares, on a one-for-one basis immediately prior to the completion of this offering, (ii) the automatic conversion or redesignation of a total of 36,651,320 issued and outstanding ordinary shares into Class B ordinary shares, on a one-for-one basis, immediately prior to the completion of this offering and (iii) the issuance and sale of            Class A ordinary shares in this offering, and the receipt of approximately US$             million in estimated net proceeds, considering an offering price of US$            per ADS (the midpoint of the estimated initial public offering price range set forth on the front cover of this prospectus), after deduction of the underwriting discounts and commissions and estimated offering expenses payable by us, and the use of proceeds therefrom.

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        You should read this table together with our consolidated financial statements and the related notes included elsewhere in this prospectus and the information under "Management's Discussion and Analysis of Financial Condition and Results of Operations."

 
  As of March 31, 2021  
 
  Actual   Pro forma   Pro forma
as
adjusted(1)
 
 
  RMB   US$   RMB   US$   RMB   US$  
 
  (in thousands)
 

Mezzanine equity

                                     

Redeemable Convertible Preferred Shares (US$0.0001 par value per share, 155,442,246 shares authorized, issued and outstanding on a actual basis, no shares authorized, issued and outstanding on a pro forma basis and on a pro forma as adjusted basis)

    2,875,762     438,927                  

Total mezzanine equity

    2,875,762     438,927                  

Ordinary Shares (US$0.0001 par value per share, 344,557,754 shares authorized, 48,657,140 shares issued and outstanding on an actual basis, no shares authorized, issued and outstanding on a pro forma basis and on a pro forma as adjusted basis)

   
31
   
5
   
   
   
   
 

Class A ordinary shares (US$0.0001 par value per share, no shares authorized, issued and outstanding on an actual basis, 463,348,680 shares authorized, 167,448,066 shares issued and outstanding on a pro forma basis, 463,348,680 shares authorized,            shares issued and outstanding on a pro forma as adjusted basis)

                                     

Class B ordinary shares (US$0.0001 par value per share, no shares authorized, issued and outstanding on an actual basis, 36,651,320 shares authorized, 36,651,320 shares issued and outstanding on a pro forma basis and on a pro forma as adjusted basis)

                                     

Additional paid-in capital(2)

    14,294     2,182                                                                              

Accumulated other comprehensive income

    54,672     8,345                                                                              

Accumulated deficit

    (2,378,629 )   (363,050 )                                                                            

Total shareholders' (deficit)/equity(2)

    (2,309,632 )   (352,518 )                                                                            

Total mezzanine equity and shareholders' (deficit)/equity

    566,130     86,409                                                                              

Note:

(1)
The pro forma as adjusted information discussed above is illustrative only. Our additional paid-in capital, total shareholders' (deficit)/equity and total capitalization following the completion of this offering are subject to adjustment based on the actual initial public offering price and other terms of this offering determined at pricing.

(2)
Assuming the number of ADSs offered by us as set forth on the cover page of this prospectus remains the same, and after deduction of underwriting discounts and commissions and the estimated offering expenses payable by us, a US$1.00 change in the assumed initial public offering price of US$            per ADS (the midpoint of the estimated initial public offering price range set forth on the front cover of this prospectus) would, in the case of an increase, increase and, in the case of a decrease, decrease each of additional paid-in capital, total shareholders' (deficit)/equity and total capitalization by US$             million.

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DILUTION

        If you invest in the ADSs, your interest will be diluted to the extent of the difference between the initial public offering price per ADS and our net tangible book value per ADS after this offering. Dilution results from the fact that the initial public offering price per Class A ordinary share is substantially in excess of the book value per ordinary share attributable to the existing shareholders for our presently outstanding ordinary shares.

        Our net tangible book value as of March 31, 2021 was US$86.2 million, or US$1.77 per ordinary share and US$            per ADS. Net tangible book value represents the amount of our total consolidated tangible assets, which represent the amount of our total consolidated assets, excluding intangible assets, less total consolidated liabilities. Dilution is determined by subtracting net tangible book value per ordinary share as adjusted from the initial public offering price per Class A ordinary share.

        Without taking into account any other changes in such net tangible book value after March 31, 2021, other than to give effect to (i) the conversion of all of our ordinary shares and preferred shares into Class A ordinary shares or Class B ordinary shares on a one-to-one basis which will occur automatically immediately prior to the completion of this offering and (ii) our issuance and sale of Class A ordinary shares represented by the              ADSs offered in this offering at an assumed initial public offering price of US$             per ADS, the midpoint of the estimated initial public offering price range set forth on the front cover of this prospectus, after deduction of the underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of March 31, 2021 would have been approximately US$             million, or US$             per ordinary share and US$            per ADS, to existing shareholders and an immediate dilution in net tangible book value of US$            per ordinary share, or US$            per ADS, to purchasers of ADSs in this offering. The following table illustrates such dilution:

Initial public offering price per Class A ordinary share

  US$                              

Net tangible book value per ordinary share as of March 31, 2021

  US$              1.77  

Pro forma net tangible book value per ordinary share after giving effect to the automatic conversion of all of our outstanding preferred shares

  US$              0.42  

Pro forma net tangible book value per ordinary share as adjusted to give effect to the automatic conversion of all of our outstanding preferred shares and this offering

  US$                              

Amount of dilution in net tangible book value per ordinary share to new investors in this offering

  US$                              

Amount of dilution in net tangible book value per ADS to new investors in this offering

  US$                              

        The pro forma information discussed above is illustrative only.

        The following table summarizes, on a pro forma basis as of March 31, 2021, the differences between the existing shareholders and the new investors with respect to the number of ordinary shares purchased from us in this offering, the total consideration paid and the average price per Class A ordinary share paid at the initial public offering price of US$             per ADS, the midpoint of the estimated initial public offering price range set forth on the front cover of this prospectus, before deducting underwriting discounts and commissions and estimated offering expenses. The total number

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of ordinary shares does not include the Class A ordinary shares underlying the ADSs issuable upon the exercise of the over-allotment option granted to the underwriters.

 
  Ordinary Shares
Purchased
  Total Consideration   Average Price
Per Ordinary
Share
  Average Price
Per ADS
 
 
  Amount (in
thousands of
US$)
   
 
 
  Number   Percent   Percent   US$   US$  

Existing shareholders

                                                                                                                   

New investors

                                                                                                                   

Total

                                                                                                                   

        The discussion and tables above also assume no exercise of any stock options outstanding as of the date of this prospectus. As of the date of this prospectus, there are 12,487,730 ordinary shares issuable upon exercise of outstanding stock options, and there are a total of 2,366,847 ordinary shares available for future issuance upon the exercise of grants under our share incentive plan. To the extent that any of these options are exercised, there will be further dilution to new investors.

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ENFORCEABILITY OF CIVIL LIABILITIES

British Virgin Islands

        We are incorporated under the laws of the British Virgin Islands as a business company with limited liability. We are incorporated in the British Virgin Islands because of certain benefits associated with being a British Virgin Islands entity, such as political and economic stability, an effective judicial system, a favorable tax system, the absence of exchange control or currency restrictions and the availability of professional and support services. However, the British Virgin Islands has a less developed body of securities laws as compared to the United States and provides protections for investors to a lesser extent. In addition, British Virgin Islands companies may not have standing to sue before the federal courts of the United States.

        Substantially all of our assets are located outside the United States. In addition, all of our directors and officers are nationals and/or residents of countries other than the United States, and all or a substantial portion of such persons' assets are located outside the United States. As a result, it may be difficult for investors to effect service of process within the United States upon us or such persons or to enforce against them or against us, judgments obtained in United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state thereof.

        We have appointed Cogency Global Inc. as our agent upon whom process may be served in any action brought against us under the securities laws of the United States.

        Fangda Partners, our counsel as to PRC law, have advised us that there is uncertainty as to whether the courts of China would:

    recognize or enforce judgments of United States courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States; or

    entertain original actions brought in each respective jurisdiction against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States.

        Maples and Calder (Hong Kong) LLP, our counsel as to BVI law, have further advised us that the courts of the BVI will not necessarily enter judgments in original actions brought in those courts predicated on U.S. federal or state securities laws. Additionally, there is no statutory enforcement in the BVI of judgments obtained in the United States, however, the courts of the BVI will in certain circumstances recognize such a foreign judgment and treat it as a cause of action in itself which may be sued upon as a debt at common law so that no retrial of the issues would be necessary provided that: (a) the U.S. court issuing the judgment had jurisdiction in the matter and the company either submitted to such jurisdiction or was resident or carrying on business within such jurisdiction and was duly served with process; (b) the judgment given by the U.S. court was not in respect of penalties, taxes, fines or similar fiscal or revenue obligations of the company; (c) in obtaining judgment there was no fraud on the part of the person in whose favor judgment was given or on the part of the U.S. court; (d) recognition or enforcement of the judgment in the BVI would not be contrary to public policy; and (e) the proceedings pursuant to which judgment was obtained were not contrary to natural justice.

PRC

        We have been advised by Fangda Partners, our PRC legal counsel, that there is uncertainty as to whether the courts of the PRC would enforce judgments of United States courts or British Virgin Islands courts obtained against us or these persons predicated upon the civil liability provisions of the United States federal and state securities laws. Fangda Partners has further advised us that the

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recognition and enforcement of foreign judgments are provided for under PRC Civil Procedures Law. PRC courts may recognize and enforce foreign judgments in accordance with the requirements of PRC Civil Procedures Law based either on treaties between China and the country where the judgment is made or on reciprocity between jurisdictions. China does not have any treaties or other form of written arrangement with the United States or the British Virgin Islands that provide for the reciprocal recognition and enforcement of foreign judgments. In addition, according to the PRC Civil Procedures Law, courts in the PRC will not enforce a foreign judgment against us or our directors and officers if they decide that the judgment violates the basic principles of PRC law or national sovereignty, security or public interest. As a result, it is uncertain whether and on what basis a PRC court would enforce a judgment rendered by a court in the United States or in the British Virgin Islands. Under the PRC Civil Procedures Law and the PRC Law on Choice of Law for Foreign-related Civil Relationships, foreign shareholders may originate actions based on PRC law against us in the PRC, if they can establish sufficient nexus to the PRC for a PRC court to have jurisdiction, and meet other procedural requirements, including, among others, the plaintiff must have a direct interest in the case, and there must be a concrete claim, a factual basis and a cause for the suit. However, it would be difficult for foreign shareholders to establish sufficient nexus to the PRC by virtue only of holding the ADSs or Class A ordinary shares.

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OUR HISTORY AND CORPORATE STRUCTURE

Our Corporate History

        In May 2011, we incorporated Qiniu Limited under the laws of the British Virgin Islands as our offshore holding company. In June 2011, we incorporated Qiniu (China) Limited as Qiniu Limited's wholly owned subsidiary in Hong Kong.

        We commenced our operations in August 2011 through Qiniu Information, and then we incorporated Beijing Kongshan in September 2011, and Qiniu Internet in November 2012.

        Shanghai Kongshan, being the WFOE, was incorporated as a company with limited liability in the PRC in January 2012, and is wholly owned by Qiniu (China) Limited for the purpose of implementation of the contractual arrangements.

        In November 2020, Shanghai Kongshan incorporated a wholly owned subsidiary, Beijing Kongyu Information Technology Co., Ltd., or Beijing Kongyu, in the PRC. See "—Our Corporate Structure."

        Shanghai Kongshan entered into a series of contractual arrangements, as amended and restated, with Qiniu Information, Beijing Kongshan, and Qiniu Internet, through which we obtained control over Qiniu Information, Beijing Kongshan, and Qiniu Internet. As a result, we are regarded as the primary beneficiary of each of Qiniu Information, Beijing Kongshan, and Qiniu Internet. We treat them as our consolidated affiliated entities under U.S. GAAP and have consolidated the financial statements of these entities in our consolidated financial statements in accordance with U.S. GAAP. We refer to Qiniu Information, Beijing Kongshan, and Qiniu Internet as our variable interest entities, or our VIEs, in this prospectus. For more details and risks related to our VIE structure, please see "—Contractual Arrangements with Our VIEs and Their Respective Shareholders" and "Risk Factors—Risks Relating to Our Corporate Structure."

Our Corporate Structure

        The following chart illustrates our corporate structure, including our significant subsidiaries as defined under Section 1-02 of Regulation S-X under the Securities Act and our VIEs immediately upon

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the completion of this offering, assuming no exercise of underwriters' option to purchase additional ADS.

GRAPHIC


Note:

(1)
The Shareholders of each of our VIEs, namely Qiniu Information, Beijing Kongshan, and Qiniu Internet are Shiwei Xu (our chairman and chief executive officer) and Guihua Lyu (our director and president), who are the founders of the Company.

Contractual Arrangements with Our VIEs and Their Respective Shareholders

        Current PRC laws and regulations impose certain restrictions or prohibitions on foreign ownership of companies that engage in value-added telecommunication services. We are a company registered in the British Virgin Islands. Our PRC subsidiary, Shanghai Kongshan, is considered as a foreign-invested enterprise. To comply with PRC laws and regulations, we primarily conduct our business in China through our VIEs, Qiniu Information, Beijing Kongshan, and Qiniu Internet, based on a series of contractual arrangements. As a result of these contractual arrangements, we exert effective control over, and are considered the primary beneficiary of, our VIEs and consolidate their financial statements in our consolidated financial statements under U.S. GAAP.

        The following is a summary of the contractual arrangements by and among Shanghai Kongshan, Qiniu Information, the shareholders of Qiniu Information, contractual arrangements by and among Shanghai Kongshan, Beijing Kongshan, the shareholders of Beijing Kongshan and the contractual arrangements by and among Shanghai Kongshan, Qiniu Internet and the shareholders of Qiniu

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Internet. For the complete text of these contractual arrangements, please see the copies filed as exhibits to the registration statement filed with the SEC of which this prospectus forms a part.

Exclusive Consultation and Technical Service Agreement

        Under the exclusive consultation and technical service agreement dated February 24, 2012, as amended and supplemented on January 28, 2013, Shanghai Kongshan has agreed to exclusively provide the following services (among others) to Qiniu Information:

    development and maintenance of software;

    internet technical support;

    the database and cyber security service; and

    the provision of other related services as required by Qiniu Information from time to time.

        Qiniu Information has agreed to pay service fees equal to 100% of its profits each month after deducting applicable taxes, and to pay service fees for certain services as required by Qiniu Information from time to time. The service fees are adjustable at the sole discretion of Shanghai Kongshan. The exclusive consultation and technical service agreement shall remain effective for 10 years from February 24, 2012 unless expressly provided otherwise or unilaterally terminated by Shanghai Kongshan in writing 30 days in advance. Shanghai Kongshan can unilaterally renew this agreement for a further period determined by itself.

        Further, (i) on February 24, 2012 Shanghai Kongshan and Beijing Kongshan entered into an exclusive consultation and technical service agreement, which was later amended and supplemented on January 28, 2013, and (ii) on January 28, 2013 Shanghai Kongshan and Qiniu Internet entered into an exclusive consultation and technical service agreement, which contain terms substantially similar to the exclusive consultation and technical service agreement described above.

Business Operation Agreement

        Under the business operation agreement dated February 24, 2012, Qiniu Information and its shareholders, Shiwei Xu and Guihua Lyu, jointly and severally, agreed and committed that, without obtaining the Shanghai Kongshan's written consent, Qiniu Information shall not, and Shiwei Xu and Guihua Lyu shall cause Qiniu Information not to, engage in any transaction which may materially affect Qiniu Information's assets, obligations, rights or operations, including without limitation:

    any activities not within its normal business scope, or operating its business in a way that is inconsistent with its past practice;

    offering any loan to any third party, incurring any debt from any third party, or assuming any debt other than in the ordinary course of business;

    engaging, changing or dismissing any director or any senior management officer;

    selling to or acquiring from any third party, mortgaging, licensing or disposing of in other ways tangible or intangible assets, other than in the ordinary course of business;

    making any amendment to its articles of association and any major internal rules and regulations, changing the business scope or the company's normal business procedures;

    selling, transferring, mortgaging or disposing of in any manner any legal or beneficial interest in its business or revenues, or allowing the encumbrance thereon of any security interest;

    making any major adjustments to its business model, marketing strategy, business policy or customer relationship;

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    making a distribution of a dividend, or share interest or sponsorship interest in any way.

        The business operation agreement shall remain effective for 10 years from February 24, 2012 unless terminated earlier as determined by Shanghai Kongshan, while the other parties thereto are not allowed to terminate such agreement without Shanghai Kongshan's prior consent. In addition, the business operation agreement shall be renewed for a further period as determined by Shanghai Kongshan if Shanghai Kongshan requires so at its sole discretion.

        Further, (i) on February 24, 2012 Shanghai Kongshan, Beijing Kongshan and its shareholders, Shiwei Xu and Guihua Lyu entered into a business operation agreement, and (ii) on January 28, 2013 Shanghai Kongshan, Qiniu Internet and its shareholders, Shiwei Xu and Guihua Lyu entered into a business operation agreement, which contain terms substantially similar to the business operation agreement described above.

Equity Pledge Agreement

        Each of Shiwei Xu and Guihua Lyu, the shareholders of Qiniu Information, has entered into an equity pledge agreement with Shanghai Kongshan on February 24, 2012, as amended and supplemented on June 17, 2014 and September 19, 2016, respectively. Under the equity pledge agreement, Shiwei Xu and Guihua Lyu pledged their respective equity interest in Qiniu Information to Shanghai Kongshan to secure obligations under the exclusive purchase option agreement, business operation agreement, and exclusive consultation and technical service agreement. Shiwei Xu and Guihua Lyu further agreed not to transfer or pledge their equity interest in Qiniu Information without the prior written consent of Shanghai Kongshan. The equity pledge agreement will remain binding until the pledgers, Shiwei Xu and Guihua Lyu, as the case may be, discharge all of their obligations under the above-mentioned agreements. As of the date of this prospectus, the equity pledges under the equity pledge agreement have been registered with competent PRC regulatory authority.

        Further, (i) on February 24, 2012, Shiwei Xu and Guihua Lyu, the shareholders of Beijing Kongshan, entered into an equity pledge agreement with Shanghai Kongshan, which was later amended and supplemented on May 22, 2017, and (ii) on January 28, 2013, Shiwei Xu and Guihua Lyu, the shareholders of Qiniu Internet, entered into an equity pledge agreement with Shanghai Kongshan, which contain terms substantially similar to the equity pledge agreement described above.

Exclusive Purchase Option Agreement

        Shiwei Xu and Guihua Lyu, the shareholders of Qiniu Information, entered into an exclusive purchase option agreement with Shanghai Kongshan on February 24, 2012, respectively. Under the exclusive purchase option agreement, Shiwei Xu granted Shanghai Kongshan or its designee an option to purchase his equity interest in Qiniu Information at a price equal to the minimum amount of consideration permitted by PRC law, and Guihua Lyu granted Shanghai Kongshan or its designee an option to purchase his equity interest in Qiniu Information at a price equal to the minimum amount of consideration permitted by PRC law. Shiwei Xu and Guihua Lyu also granted Shanghai Kongshan or its designee an option to purchase all or a portion of the assets of Qiniu Information for the minimum amount of consideration permitted by PRC law. Shiwei Xu and Guihua Lyu also agreed not to transfer or mortgage any equity interest in or dispose of or cause the management to dispose of any material assets of Qiniu Information without the prior written consent of Shanghai Kongshan. The exclusive purchase option agreement shall remain in effect until all of the equity interests in Qiniu Information have been acquired by Shanghai Kongshan or its designee.

        Further, (i) On February 24, 2012, Shiwei Xu and Guihua Lyu, the shareholders of Beijing Kongshan, respectively, entered into an exclusive purchase option agreement with Shanghai Kongshan, and (ii) on January 28, 2013 Shiwei Xu and Guihua Lyu, the shareholders of Qiniu Internet,

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respectively, entered into an exclusive purchase option agreement with Shanghai Kongshan, which contain terms substantially similar to the exclusive purchase option agreement described above.

Power of Attorney

        Shiwei Xu and Guihua Lyu, the shareholders of Qiniu Information signed a power of attorney on February 24, 2012, respectively. Under the power of attorney, Shiwei Xu and Guihua Lyu agreed to irrevocably authorize Shanghai Kongshan to represent them to exercise all the voting rights and other shareholders' rights to which they are entitled as shareholders of Qiniu Information. The power of attorney shall remain effective until Qiniu Information has been dissolved, unless the Business Operation Agreement has been terminated earlier for any reason.

        Further, (i) On February 24, 2012, Shiwei Xu and Guihua Lyu, the shareholders of Beijing Kongshan, signed a power of attorney, respectively, and (ii) on January 28, 2013 Shiwei Xu and Guihua Lyu, the shareholders of Qiniu Internet, signed a power of attorney, respectively, which contain terms substantially similar to the power of attorney described above.

Spousal Consents

        The spouses of Shiwei Xu and Guihua Lyu, the individual shareholders of Qiniu Information, Beijing Kongshan and Qiniu Internet have each signed a spousal consent letter. Under the spousal consent letter, the signing spouse unconditionally and irrevocably agreed that the equity interest in Qiniu Information, Beijing Kongshan or Qiniu Internet which is held by and registered under the name of her spouse will be disposed of pursuant to the abovementioned equity pledge agreements, exclusive purchase option agreements, the business operation agreement and the power of attorney. Moreover, the spouse confirmed she has no rights, and will not assert in the future any right, over the equity interests in Qiniu Information, Beijing Kongshan or Qiniu Internet held by her spouse, nor will she take any action in conflict with above arrangement.

        In the opinion of Fangda Partners, our PRC legal counsel:

    the ownership structures of Shanghai Kongshan with Qiniu Information, Beijing Kongshan, and Qiniu Internet respectively, currently and immediately after giving effect to the offering, do not and will not violate any applicable PRC laws, regulations, or rules currently in effect;

    the agreements (i) among Shanghai Kongshan, Qiniu Information and its shareholders, (ii) among Shanghai Kongshan, Beijing Kongshan and its shareholders, and (iii) among Shanghai Kongshan, Qiniu Internet and its shareholders, governed by PRC laws, as described above, are valid, binding and enforceable in accordance with their terms and applicable PRC laws, rules, and regulations currently in effect, and both currently and immediately after giving effect to the offering, do not and will not violate any applicable PRC laws, regulations, or rules currently in effect.

        However, there are substantial uncertainties regarding the interpretation and application of current or future PRC laws and regulations. We have been further advised by our PRC legal counsel that if the PRC government finds that the agreements that establish the structure for operating our value-added telecommunication services and related business do not comply with PRC government restrictions on foreign investment in such businesses, we could be subject to severe penalties including being prohibited from continuing operations. For a description of the risks related to these contractual arrangements and our corporate structure, please see "Risk Factors—Risks Relating to Our Corporate Structure."

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SELECTED CONSOLIDATED FINANCIAL DATA

        The following selected consolidated statement of operations data for the years ended December 31, 2019 and 2020, selected consolidated balance sheet data as of December 31, 2019 and 2020, and selected consolidated cash flow data for the years ended December 31, 2019 and 2020, have been derived from audited consolidated financial statements included elsewhere in this prospectus. The following selected consolidated statement of operations data for the three months ended March 31, 2020 and 2021, the selected consolidated balance sheet data as of March 31, 2021 and the selected consolidated cash flow data for the three months ended March 31, 2020 and 2021 have been derived from our unaudited condensed consolidated financial statements appearing elsewhere in this prospectus and have been prepared on the same basis as the audited consolidated financial statements. Our consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP. Our historical results are not necessarily indicative of results expected for future periods. You should read this Selected Consolidated Financial Data section together with our consolidated financial statements and the related notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this prospectus.

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        The following table presents our selected consolidated statements of operations data for the years ended December 31, 2019 and 2020 and the three months ended March 31, 2020 and 2021.

 
  For the Year Ended
December 31,
  For the Three Months Ended
March 31,
 
  2019   2020   2020   2021
 
  RMB   %   RMB   US$   %   RMB   %   RMB   US$   %
 
  (in thousands, except for percentages, shares and per share data)
   

Selected Consolidated Statements of Operations Data:

                                             

Revenues

  824,963   100.0   1,089,214   166,247   100.0     285,597   100.0     322,535     49,228   100.0

Cost of revenues(1)

  (639,476)   (77.5)   (852,132)   (130,061)   (78.2)     (199,782 ) (70.0)     (248,217 )   (37,885 ) (77.0)

Gross profit

  185,487   22.5   237,082   36,186   21.8     85,815   30.0     74,318     11,343   23.0

Operating expenses:

                                             

Research and development expenses(1)

  (108,216)   (13.1)   (96,928)   (14,794)   (8.9)     (22,074 ) (7.7)     (29,137 )   (4,447 ) (9.0)

Selling and marketing expenses(1)

  (108,432)   (13.2)   (100,675)   (15,366)   (9.3)     (19,529 ) (6.8)     (45,789 )   (6,989 ) (14.1)

General and administrative expenses(1)

  (97,302)   (11.8)   (79,565)   (12,144)   (7.3)     (20,839 ) (7.3)     (27,920 )   (4,262 ) (8.7)

Total operating expenses

  (313,950)   (38.1)   (277,168)   (42,304)   (25.5)     (62,442 ) (21.8)     (102,846 )   (15,698 ) (31.8)

Operating (loss)/income

  (128,463)   (15.6)   (40,086)   (6,118)   (3.7)     23,373   8.2     (28,528 )   (4,355 ) (8.8)

Interest expenses

  (7,492)   (0.9)   (4,233)   (646)   (0.4)     (1,429 ) (0.5)     (263 )   (40 ) (0.1)

Interest income

  4,384   0.6   5,298   809   0.5     1,177   0.4     1,049     160   0.3

Investment (losses)/income, net

  (1,080)   (0.1)   1,089   166   0.1     467   0.2          

Foreign currency exchange (losses)/gains, net

  (624)   (0.1)   4,028   615   0.4     (1,084 ) (0.4)     (1,155 )   (176 ) (0.3)

Gain from disposal of an equity method investment

      673   103   0.1                

Change in fair value of a long-term investment

      1,396   213   0.1           318     49   0.1

Share of (losses)/profit of equity method investments

  (266)   (0.0)   76   12   0.0     (14 ) (0.0)     (13 )   (2 ) (0.0)

Other income

  5,297   0.6   12,476   1,904   1.1     1,233   0.4     1,101     168   0.3

(Loss)/income before income taxes

  (128,244)   (15.5)   (19,283)   (2,942)   (1.8)     23,723   8.3     (27,491 )   (4,196 ) (8.5)

Income tax expense

                         

Net (loss)/income

  (128,244)   (15.5)   (19,283)   (2,942)   (1.8)     23,723   8.3     (27,491 )   (4,196 ) (8.5)

Accretion of Redeemable Convertible Preferred Shares

  (42,772)   (5.2)   (151,837)   (23,175)   (13.9)                

Net (loss)/income attributable to Qiniu Limited

  (171,016)   (20.7)   (171,120)   (26,117)   (15.7)     23,723   8.3     (27,491 )   (4,196 ) (8.5)

Net loss per ordinary share attributable to ordinary shareholders

                                             

—Basic and diluted

  (3.51)       (3.52)   (0.54)                 (0.56 )   (0.09 )  

Weighted average number of ordinary shares outstanding used in computing net loss per ordinary share

                                             

—Basic and diluted

  48,657,140       48,657,140             48,657,140         48,657,140          

Note:

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(1)
Includes share-based compensation expenses as follows:
 
  For the Year Ended
December 31,
  For the Three Months
Ended March 31,
 
 
  2019   2020   2020   2021  
 
  RMB   RMB   US$   RMB   RMB   US$  
 
  (in thousands)
 

Cost of revenues

    (585 )   487     74     (15 )   400     61  

Research and development expenses

    4,432     5,506     840     1,104     199     30  

Selling and marketing expenses

    3,825     4,886     746     1,265     10,194     1,556  

General and administrative expenses

    15,814     610     93     1,150     3,554     542  

Total

    23,486     11,489     1,753     3,504     14,347     2,189  

        The following table presents our selected consolidated balance sheet data as of December 31, 2019 and 2020 and March 31, 2021.

 
  As of December 31,   As of March 31,  
 
  2019   2020   2021  
 
  RMB   RMB   US$   RMB   US$  
 
  (in thousands)
 

Selected Consolidated Balance Sheet Data:

                               

Cash

    120,009     140,129     21,388     176,372     26,920  

Time deposits

    104,643     398,019     60,750     298,994     45,635  

Accounts receivable, net

    154,003     161,959     24,720     184,435     28,150  

Total current assets

    448,182     751,378     114,684     734,388     112,090  

Total non-current assets

    222,433     206,164     31,467     230,505     35,181  

Total assets

    670,615     957,542     146,151     964,893     147,271  

Accounts payable

    40,107     43,408     6,625     67,183     10,254  

Contract liabilities

    105,196     99,473     15,183     96,713     14,761  

Total current liabilities

    390,680     408,099     62,289     395,704     60,395  

Total non-current liabilities

    10,509     3,660     559     3,059     467  

Total liabilities

    401,189     411,759     62,848     398,763     60,862  

Total mezzanine equity

    2,564,622     2,855,456     435,828     2,875,762     438,927  

Total shareholders' deficit

    (2,295,196 )   (2,309,673 )   (352,525 )   (2,309,632 )   (352,518 )

Total liabilities, mezzanine equity and shareholders' deficit

    670,615     957,542     146,151     964,893     147,271  

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        The following table presents our selected consolidated cash flow data for the years ended December 31, 2019 and 2020 and the three months ended March 31, 2020 and 2021.

 
  For the Year Ended
December 31,
  For the Three Months Ended March 31,  
 
  2019   2020   2020   2021  
 
  RMB   RMB   US$   RMB   RMB   US$  
 
  (in thousands)
 

Selected Consolidated Cash Flow Data

                                     

Net cash (used in)/provided by operating activities

    (89,923 )   82,410     12,578     (1,435 )   (33,478 )   (5,110 )

Net cash (used in)/provided by investing activities

    (161,348 )   (297,352 )   (45,384 )   26,491     92,918     14,182  

Net cash provided by/(used in) financing activities

    75,125     269,325     41,107     (7,968 )   (22,613 )   (3,451 )

Effect of foreign currency exchange rate changes on cash

    (1,092 )   (34,263 )   (5,230 )   1,681     (584 )   (89 )

Net (decrease)/increase in cash

    (177,238 )   20,120     3,071     18,769     36,243     5,532  

Cash at the beginning of the year/period

    297,247     120,009     18,317     120,009     140,129     21,388  

Cash at the end of the year/period

    120,009     140,129     21,388     138,778     176,372     26,920  

Non-GAAP Financial Measures

        In evaluating our business, we consider and use certain non-GAAP measures, including adjusted net (loss)/income, adjusted net (loss)/income margin, adjusted EBITDA and adjusted EBITDA margin, as supplemental measures to review and assess our operating performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. We define adjusted net (loss)/income as net (loss)/income excluding share-based compensation and foreign exchange losses/(gains) and we define adjusted net (loss)/income margin as adjusted net (loss)/income as a percentage of revenues. We define adjusted EBITDA as adjusted net (loss)/income excluding interest income, interest expenses, income tax expense and depreciation and amortization, and we define adjusted EBITDA margin as adjusted EBITDA as a percentage of revenues. We present these non-GAAP financial measures because they are used by our management to evaluate our operating performance and formulate business plans. We also believe that the use of these non-GAAP measures facilitates investors' assessment of our operating performance.

        These non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. These non-GAAP financial measures have limitations as analytical tools. One of the key limitations of using these non-GAAP financial measures is that they do not reflect all items of income and expense that affect our operations. Further, these non-GAAP measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited.

        We compensate for these limitations by reconciling these non-GAAP financial measures to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating our performance. We encourage you to review our financial information in its entirety and not rely on a single financial measure.

        The following tables reconcile our adjusted net (loss)/income and adjusted EBITDA for the years ended December 31, 2019 and 2020 and for the three months ended March 31, 2020 and 2021, to the

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most directly comparable financial measure calculated and presented in accordance with U.S. GAAP, which are net (loss)/income:

 
  For the Year Ended December 31,   For the Three Months
Ended March 31,
 
 
  2019   2020   2020   2021  
 
  RMB   RMB   US$   RMB   RMB   US$  
 
  (in thousands)
 

Net (loss)/income

    (128,244 )   (19,283 )   (2,942 )   23,723     (27,491 )   (4,196 )

Adjustments:

                                     

Share-based compensation

    23,486     11,489     1,753     3,504     14,347     2,189  

Foreign exchange losses/(gains)

    624     (4,028 )   (615 )   1,084     1,155     176  

Adjusted net (loss)/income

    (104,134 )   (11,822 )   (1,804 )   28,311     (11,989 )   (1,831 )

Adjustments:

                                     

Interest income

    (4,384 )   (5,298 )   (809 )   (1,177 )   (1,049 )   (160 )

Interest expenses

    7,492     4,233     646     1,429     263     40  

Income tax expense

                         

Depreciation and amortization

    73,095     67,569     10,313     16,876     16,308     2,489  

Adjusted EBITDA

    (27,931 )   54,682     8,346     45,439     3,533     538  

 

 
  For the Year
Ended
December 31,
  For the Three
Months Ended
March 31,
 
 
  2019   2020   2020   2021  
 
  %
 

Net (loss)/income margin

    (15.5 )   (1.8 )   8.3     (8.5 )

Adjusted net (loss)/income margin

    (12.6 )   (1.1 )   9.9     (3.7 )

Adjusted EBITDA margin

    (3.4 )   5.0     15.9     1.1  

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the section entitled "Selected Consolidated Operating and Financial Data" and our consolidated financial statements and the related notes included elsewhere in this prospectus. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under "Risk Factors" and elsewhere in this prospectus.

Overview

        We are China's leading cloud-based Platform-as-a-Service ("PaaS") provider as measured by revenue in 2020, focusing on media and machine data, pioneering an integrated, one-stop "cloud + data" platform that empowers enterprise customers across a wide spectrum of industries. Our platform provides superior, end-to-end intelligent media cloud and analytics solutions as well as machine data analytics solutions. Underpinning these solutions is our proprietary cloud technology that features data lake, industry-leading media and machine data storage, distribution and analytics capabilities.

        We primarily offer Media Platform-as-a-Service, or MPaaS, for intelligent media solutions and Data Platform-as-a-Service, or DPaaS, for machine data solutions. We have been dedicated to providing intelligent media cloud services since inception and have served over one million customers. As we continued to invest in data technology and deepened understanding of customers' needs, we have successfully established an industry-leading machine data analytics platform. Our agile technology architecture supports the rapid scaling of both MPaaS and DPaaS to meet increasing customer demands.

        Our products and solutions cover a wide spectrum of industries, including pan-entertainment, social networking, healthcare, e-commerce, education, media, financial services, automobiles, telecommunications and intelligent manufacturing, among others. We have established a diverse and high quality customer base, with 61.5 thousand MPaaS customers and 775 MPaaS Premium Customers as of December 31, 2020. In 2020, the dollar-based net expansion rate of our MPaaS customers was 112%. We have achieved EB-level data storage as of March 31, 2021 and have empowered an average of approximately 230 million minutes on a daily basis of live streaming and real-time engagement for the three months ended March 31, 2021.

        We provide "cloud + data" end-to-end PaaS solutions, including MPaaS for intelligent media solutions and DPaaS for machine data solutions, to customers across a wide spectrum of industries. In addition, to a lesser extent, we also provide other complementary cloud services such as QVM.

Impact of COVID-19

        Since December 2019, the outbreak of COVID-19 has resulted in prolonged mandatory quarantines, lockdown, closures of businesses and facilities, travel restrictions and social distancing guidelines imposed by the governments worldwide. On January 30, 2020, the International Health Regulations Emergency Committee of the World Health Organization declared the COVID-19 outbreak a public health emergency of international concern, and on March 11, 2020 the World Health Organization declared the global COVID-19 outbreak a pandemic. The COVID-19 virus continues to impact countries worldwide, including where our customers are located and Shanghai, China where we conduct our main business operations.

        While the long-term impact of the COVID-19 outbreak is uncertain, we have experienced, and may continue to experience, an adverse impact on certain parts of our business following the

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implementation of travel restrictions and social distancing guidelines imposed by the governments worldwide to mitigate the outbreak of COVID-19, including lengthening of the sales cycle for some prospective customers and delays in the delivery of cloud solution projects to our customers. We have also experienced, and may continue to experience, a positive impact on other parts of our business. During the first quarter of 2020, we experienced a growth in usage and revenue, as people spent more time on online entertainment, remote working, streaming or otherwise interacting online due to work, school, travel and other restrictions. Moreover, this dynamic was particularly pronounced in China, our primary market. In the second quarter of 2020, we have continued to observe higher usage and revenue than the same period in the prior year; however, as restrictions in China have been eased, the pace of usage growth has moderated sequentially. We also observed increases in numbers of customers and amount of data processed.

        Moreover, we have seen a reduction in certain operating expenses due to reduced business travel, deferred hiring for some positions, and the virtualization or cancellation of customer and employee events. While a reduction in operating expenses may have an immediate positive impact on our results of operations, we do not yet have visibility into the full impact this will have on our business. We cannot predict how long we will continue to experience these impacts as travel restrictions and other related measures are expected to change over time. Our results of operations, cash flows, and financial condition have not been materially and adversely impacted to date. However, as certain of our customers or partners experience downturns or uncertainty in their own business operations or revenue resulting from the spread of COVID-19, they may continue to decrease or delay their spending, request pricing discounts, or seek renegotiations of their contracts, any of which may result in decreased revenue and cash receipts for us. In addition, we may experience customer losses, including due to bankruptcy or our customers ceasing operations, which may result in an inability to collect accounts receivable from these customers.

        The global impact of COVID-19 continues to rapidly evolve, and we will continue to monitor the situation and the effects on our business and operations closely. We do not yet know the full extent of potential impacts on our business or operations or on the global economy as a whole, particularly if the COVID-19 pandemic continues and persists for an extended period of time. Given the uncertainty, we cannot reasonably estimate the impact on our future results of operations, cash flows, or financial condition. For additional details, see the section titled "Risk Factors."

Key Operating Metrics

        In 2019 and 2020, revenue generated from our MPaaS Premium Customers accounted for 89.8% and 91.5% of our total MPaaS revenues in the same periods, respectively. The following table sets forth certain of our key operating metrics of our MPaaS solutions that we use to measure our business for the periods indicated.

 
  For the Year ended
December 31,
 
 
  2019   2020  

MPaaS solutions

             

Number of MPaaS Premium Customers

    682     775  

Average revenue per MPaaS Premium Customer (RMB'000)

    1,026.5     1,212.5  

        As a result of our business expansion efforts and increasing demands for our MPaaS solutions, our MPaaS Premium Customers increased from 682 in 2019 to 775 in 2020, and the average revenue per MPaaS Premium Customer increased from RMB1,026.5 thousand in 2019 to RMB1,212.5 thousand in 2020. As compared to other MPaaS customers, our MPaaS Premium Customers typically use more types of our services, and have relatively longer business relationships with us. In some cases, we offer

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certain discounts to MPaaS Premium Customers, which are determined based on various factors such as usage volume and their brand awareness.

 
  For the Year ended
December 31,
 
 
  2019   2020  

MPaaS solutions

             

Number of MPaaS customers

    54,256     61,502  

Dollar-based net expansion rate

    N/A     112 %

        MPaaS customers are all paying customers for our MPaaS solutions. Our dollar-based net expansion rate of MPaaS customers was 112% in 2020, which indicates our ability to retain and grow revenue from our MPaaS customers.

        The following table sets forth certain of our key operating metrics of our DPaaS solution that we use to measure our business for the periods indicated.

 
  For the Year ended
December 31,
 
 
  2019   2020  

DPaaS solution

             

Number of DPaaS customers

    306     240  

Average revenue per DPaaS customer (RMB'000)

    18.5     48.7  

        DPaaS customers are all paying customers for our DPaaS solution. As our DPaaS solution is still at its early stage of development, since 2020, we started to focus on developing business relationships with industry-leading customers to demonstrate the quality of our services and enhance our brand awareness. In 2020, we completed various lighthouse projects with industry leaders such as Littlegenius. Accordingly, our average revenue per DPaaS customer increased significantly from RMB18.5 thousand in 2019 to RMB48.7 thousand in 2020.

        For the three months ended March 31, 2020 and 2021, we had 38,281 and 47,540 MPaaS customers, respectively, which reflected our business expansion efforts. As a result, revenue from our MPaaS solutions increased by 11.4% from RMB270.3 million for the three months ended March 31, 2020 to RMB301.1 million (US$46.0 million) for the three months ended March 31, 2021.

        For the three months ended March 31, 2020 and 2021, we had 179 and 158 DPaaS customers, respectively. In line with our efforts to develop business relationships with industry-leading customers to demonstrate the quality of our services and enhance our brand awareness, our average revenue per DPaaS customer increased significantly from RMB6.5 thousand for the three months ended March 31, 2020, to RMB50.3 thousand for the three months ended March 31, 2021.

Factors Affecting Our Performance

        The following factors are the principal factors that have affected and will continue to affect our business, financial condition, results of operations and prospects.

Trends in China's economic conditions and development of the industries in which we operate

        Our business and results of operations are significantly affected by China's overall economic conditions and the development of the industries in which we operate. For example, the development of the MPaaS industry in China is expected to be driven by the rapid growth of media data, and the development of IoT and other technology advancements. Moreover, the development of the DPaaS industry in China is expected to be driven by technology innovations, popularity of cloud service

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business and demands for business optimization, and increasing integration with public cloud. As a market leader and an independent service provider, we have captured, and we believe that we are well positioned to continue to capture, the various market opportunities brought by the development of industries in which we operate.

Our ability to retain and expand usage by our existing customers

        We have amassed a broad and diverse customer base covering a wide spectrum of industry verticals. As a result of our business expansion efforts, the total number of paying customers increased from 55.9 thousand in 2019 to 63.0 thousand in 2020. We have fostered strong loyalty with existing customers as a result of the high quality products and solutions offered by us, as well as our ability to deliver tangible value to customers by effectively addressing their needs.

        We believe that there are significant opportunities for growth with many of our existing customers. The dollar-based net expansion rate of our MPaaS customers was 112% in 2020, which indicates our ability to retain and grow revenue from our customers. In order for us to continue to expand usage within our customer base, we will need to continue to deliver high quality and customer-centric products and solutions, and to introduce innovative products and features as well as innovative new use cases that are tailored to our customers' needs.

Our ability to acquire new customers

        We aim to acquire and retain new customers by, among others, further enhancing the quality and efficiency of our existing products and solutions, offering additional innovative products and solutions and implementing effective sales strategies tailored to the verticals in which we operate. Our operating results and growth prospects will depend in part on our ability to attract new customers.

Our ability to upgrade our products and solutions and expand use cases

        Our success has been based on our dedication to the development of innovative and high-performance PaaS products and solutions, and our ability to identify and meet the business needs of our customers. Our business prospects depends largely on our ability to continue to enhance the functions, performance, reliability, security, scalability of our products and solutions, and to expand into new use cases, which thereby will allow us to capture additional market share, enjoy better economies of scale and improve our profitability.

Our ability to enhance technology innovation and to acquire talent

        We have made, and will continue to make, significant investments in technology innovation to strengthen our market leadership. Our ability to improve our existing products and solutions and develop new ones depends on the technologies we use to develop and deliver high quality PaaS solutions to customers. It is thus crucial for us to continually invest in technology innovation to expand our resources and enhance capabilities of our products and solutions. We intend to continue to invest in attracting more talented research and development personnel and further developing and applying advanced technologies in the fields of cloud computing, data analytics, video and audio processing and AI to strengthen our technological advantage and enhance the functionalities and customer experience of our products and solutions.

Our ability to effectively control our costs and expenses

        Our profitability depends largely on our ability to manage and control our costs and expenses. We have invested heavily in developing technology capabilities in order to provide high-performance products and solutions. Also, we have been expanding into new verticals and developing innovative products and solutions, such as our DPaaS solution. As we continue to grow our business, we expect to

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benefit from economies of scale and achieve additional cost savings. We also enjoy stronger bargaining power against suppliers due to our increased scale. Moreover, we will adopt centralized procurement of equipment and network resources to obtain favorable prices.

Our ability to compete effectively

        We are committed to delivering high quality products and solutions to maintain our market leadership position. Our business and results of operations depend on our ability to compete effectively in the sectors in which we operate. Our competitive edges may be affected by, among other things, research and development capabilities, industry know-how, continuous capital investment, product portfolio, our ability to price our solutions competitively, among others. We believe that our end-to-end product offerings, increasing brand awareness, neutrality, technology leadership, supply chain management and prominent research and development capabilities differentiate us from our competitors and help us establish a high entry barrier difficult for our competitors to surpass. However, we are still subject to competition from a variety of players within our industry.

Key Components of Results of Operations

Revenues

        We generated revenue primarily from providing MPaaS solutions, DPaaS solution and other cloud services to our customers. The following table sets forth a breakdown of our revenue in absolute amounts and as a percentage of our total revenue for the periods indicated:

 
  For the Year Ended December 31,   For the Three Months Ended March 31,  
 
  2019   2020   2020   2021  
 
  RMB   %   RMB   US$   %   RMB   %   RMB   US$   %  
 
  (in thousands, except for percentages)
 

Revenues

                                                             

MPaaS solutions

    779,764     94.5     1,027,512     156,829     94.3     270,266     94.6     301,141     45,963     93.3  

DPaaS solution

    5,637     0.7     11,694     1,785     1.1     1,161     0.4     7,955     1,214     2.5  

Other cloud services

    39,562     4.8     50,008     7,633     4.6     14,170     5.0     13,439     2,051     4.2  

Total revenues

    824,963     100.0     1,089,214     166,247     100.0     285,597     100.0     322,535     49,228     100.0  

        MPaaS solutions.    Revenues from our MPaaS solutions are primarily derived from our QCDN, Kodo, interactive live streaming products and Dora. In 2020, our revenues generated from QCDN, Kodo, interactive live streaming and Dora accounted for 58.4%, 27.1%, 10.9% and 3.6% of our MPaaS revenues for the same period, respectively. In 2019, our revenues generated from QCDN, Kodo, interactive live streaming and Dora accounted for 66.0%, 22.0%, 8.2% and 3.8% of our MPaaS revenues for the same period, respectively. Our MPaaS solutions are provided to our customers either as a public cloud service, or deployed on-premise on our customers' servers. For public cloud services, we charge customers based on usage. For on-premise deployment of our MPaaS solutions, we charge customers on a project basis.

        DPaaS solution.    We derive revenues from our DPaaS solution primarily through Pandora, our simple, efficient and open one-stop data analytics solution for enterprise customers. For customers of Pandora, we either charge based on usage as part of a public cloud service, or on a project basis in order to cater to the customized needs of businesses.

        Other cloud services.    Complementary to our MPaaS and DPaaS solution, we also offer our customers other cloud services, primarily including QVM, a comprehensive suite of solutions including cloud servers, databases, network, security and storage. For our QVM service, we charge our customers based on usage.

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Cost of Revenues and Gross Margin

        Our cost of revenues consists of the costs and expenses that are directly related to providing our products and solutions to our customers. These costs and expenses primarily include (i) costs of network bandwidth and other cloud services, (ii) depreciation of servers and network equipment, (iii) IDC rack cost, and (iv) others, primarily consisted of staff costs, hardware costs and costs associated with our project-based solutions. We expect our cost of revenues to increase in absolute amount as our business continues to grow.

        Gross profit is equal to our total revenues less cost of revenues. Gross profit as a percentage of our total revenues is referred to as gross margin. For the years ended December 31, 2019 and 2020 and for the three months ended March 31, 2020 and 2021, our gross margins were 22.5%, 21.8%, 30.0% and 23.0%, respectively.

        Our cost of revenues and gross margin have been and will continue to be affected by a number of factors, including shifts in our product mix to the extent it affects our overall margin profile, the timing of acquisition of new customers and expansion of usage among existing customers, competition, and our ability to manage bandwidth and cloud infrastructure costs, among other things.

Operating expenses

        The following table sets forth a breakdown of our operating expenses, in absolute amounts and as percentages of our total revenues, for the periods indicated.

 
  For the Year Ended December 31,   For the Three Months Ended March 31,  
 
  2019   2020   2020   2021  
 
  RMB   %   RMB   US$   %   RMB   %   RMB   US$   %  
 
  (in thousands, except for percentages)
 

Operating expenses

                                                             

Research and development expenses

    108,216     34.5     96,928     14,794     35.0     22,074     35.4     29,137     4,447     28.3  

Selling and marketing expenses

    108,432     34.5     100,675     15,366     36.3     19,529     31.3     45,789     6,989     44.6  

General and administrative expenses

    97,302     31.0     79,565     12,144     28.7     20,839     33.3     27,920     4,262     27.1  

Total operating expenses

    313,950     100.0     277,168     42,304     100.0     62,442     100.0     102,846     15,698     100.0