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TABLE OF CONTENTS
Hello Inc. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

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As filed with the Securities and Exchange Commission on April 23, 2021

Registration No. 333-            


SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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

Hello Inc.
(Exact name of Registrant as specified in its charter)

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

Cayman Islands
(State or Other Jurisdiction of
Incorporation or Organization)
  7372
(Primary Standard Industrial
Classification Code Number)
  Not Applicable
(I.R.S. Employer
Identification Number)

16th Floor, Building #1
No. 28 Yuanxiu Road
Minhang District, Shanghai
People's Republic of China
+86-21-6071-2060

(Address and Telephone Number of Registrant's Principal Executive Offices)

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

(Name, address and telephone number of agent for service)

Copies to:

Yi Gao, Esq.
Simpson Thacher & Bartlett LLP
c/o 35th Floor, ICBC Tower
3 Garden Road
Central, Hong Kong
+852-2514-7600

 

David T. Zhang, Esq.
Steve Lin, Esq.
Kirkland & Ellis International LLP
c/o 26th Floor, Gloucester Tower
The Landmark
15 Queen's Road Central,
Hong Kong
+852-3761-3318

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, please 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

          † 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.

CALCULATION OF REGISTRATION FEE

       
 
Title of Each Class of Securities
to be Registered(1)

  Proposed Maximum
Aggregate Offering
Price(2)(3)

  Amount of
Registration Fee

 

Class A Ordinary shares, par value US$0.00001 per share

  US$100,000,000   US$10,910

 

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

(2)
Includes (a)                 Class A ordinary shares represented by                ADSs that may be purchased by the underwriters pursuant to their over-allotment option and (b) all Class A ordinary shares represented by ADSs initially offered and sold outside the United States that may be resold from time to time in the United States either as part of the distribution or within 40 days after the later of the effective date of this registration statement and the date the securities are first bona fide offered to the public.

(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, as amended.

          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 Securities and Exchange Commission, acting pursuant to such Section 8(a), may determine.

   


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The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the United States Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion. Dated                        , 2021.

American Depositary Shares

LOGO

Hello Inc.

Representing          Class A Ordinary Shares

        This is an initial public offering of American depositary shares, or ADSs, representing            Class A ordinary shares of Hello Inc.

        We are offering            ADSs to be sold in this offering. Each ADS represents            Class A ordinary shares, US$0.00001 par value per share. We anticipate the initial public offering price per ADS will be between US$            and US$            .

        Prior to this offering, there has been no public market for the ADSs or our shares. We will apply to list the ADSs on the Nasdaq Stock Market, or Nasdaq, under the symbol "              ."

        We are an "emerging growth company" under applicable United States federal securities laws and are eligible for reduced public company reporting requirements.

        See "Risk Factors" on page 22 to read about factors you should consider before buying the ADSs.

        Neither the United States Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

       
 
 
  Per ADS
  Total
 

Initial public offering price

  US$           US$        
 

Underwriting discounts and commissions(1)

  US$           US$        
 

Proceeds, before expenses, to us

  US$           US$        

 

(1)
For additional information on underwriting compensation, see "Underwriting."

        To the extent that the underwriters sell more than            ADSs in this offering, the underwriters have a 30-day option to purchase up to an aggregate of             additional ADSs from us at the initial public offering price less the underwriting discounts and commissions.

        Upon the completion of this offering,                                     Class A ordinary shares and 166,772,842 Class B ordinary shares (or 208,669,186 Class B ordinary shares if the CEO award as disclosed below is issued prior to this offering) will be issued and outstanding. Holders of Class A ordinary shares and Class B ordinary shares will have the same rights except for voting and conversion rights. Each Class A ordinary share will be entitled to one vote, and each Class B ordinary shares will be entitled into 20 votes and will be convertible to 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. Upon the completion of this offering, we will be a "controlled company" as defined under the Nasdaq Listing Rules because Mr. Lei Yang, our co-founder, director and chief executive officer, will beneficially own all of our issued Class B ordinary shares representing in the aggregate        % of the voting power of our total issued and outstanding shares immediately after the completion of this offering, assuming the underwriters do not exercise their option to purchase additional ADSs. [In consideration of Mr. Lei Yang's past and future services, we plan to issue 35,994,402 ordinary shares, or CEO award, to Mr. Lei Yang (or an entity wholly owned by him) at nominal value prior to this offering with certain conditions. See "Management—CEO Award."]

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

Credit Suisse   Morgan Stanley   CICC

   

Prospectus dated            , 2021


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Prospectus Summary

    1  

The Offering

    14  

Summary Consolidated Financial and Operating Data

    17  

Risk Factors

    22  

Special Note Regarding Forward Looking Statements and Industry Data

    87  

Use of Proceeds

    88  

Dividend Policy

    89  

Capitalization

    90  

Dilution

    97  

Enforcement of Civil Liabilities

    100  

Our History and Corporate Structure

    102  

Selected Consolidated Financial and Operating Data

    107  

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

    112  

Our Market Opportunities

    147  

Business

    154  

Regulations

    183  

Management

    204  

Principal Shareholders

    218  

Related Party Transactions

    221  

Description of Share Capital

    223  

Description of American Depositary Shares

    238  

Shares Eligible for Future Sale

    255  

Taxation

    257  

Underwriting

    264  

Expenses Related to This Offering

    275  

Legal Matters

    276  

Experts

    277  

Where You Can Find More Information

    278  

Index to Consolidated Financial Statements

    F-1  

        No dealer, salesperson or other person is authorized to give any information or to represent as to anything not contained in this prospectus or in any free writing prospectus we may authorize to be delivered or made available to you. You must not rely on any unauthorized information or representations. This prospectus is an offer to sell, and we are seeking offers to buy, only the ADSs offered hereby, and only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date, regardless of the time of delivery of this prospectus or any sale of the ADSs.

        Neither we nor the underwriters have done anything that would permit this offering or the possession or distribution of this prospectus or any filed free writing prospectus in any jurisdiction where other action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus or any free writing prospectus filed with the United States Securities and Exchange Commission, or SEC, must inform themselves about, and observe any restrictions relating to, the offering of the ADSs and the distribution of this prospectus or any filed free writing prospectus outside of the United States.

        Until                        , 2021 (the 25th day after the date of this prospectus), all dealers that buy, sell or trade 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

        This summary highlights selected information contained in greater detail elsewhere in this prospectus. This summary may not contain all of the information that you should consider before investing in our ADSs. You should carefully read the entire prospectus, including "Risk Factors" and the financial statements, before making an investment decision. This prospectus contains information from an industry report commissioned by us and prepared by iResearch Consulting Group, or iResearch, an independent industry research firm, to provide information regarding our industry and our market position in China.

Our Mission

        Our mission is to leverage digital technology to provide people with more convenient mobility and inclusive local services of higher quality.

        Our company was founded to build a powerful, technology-driven platform that brings our green, low-carbon, high-efficiency, convenient and inclusive local services and products to more people to improve their lifestyles and facilitate continuous social progress.

Our Business

        We are a leading local services platform in China and operate the popular mobile app Hello, which offers a range of local services. Our platform uses technology and innovation to provide our users with local services which are necessary, frequently consumed and inclusively priced to reach and serve a broad user base. Our local services currently include shared two-wheeler services, a carpooling marketplace, and emerging local services and products, including e-scooters and other services which we are pilot testing, such as an in-store services marketplace, ride-hailing, hotel reservations, mobile grocery stores and online advertising services. Our services are also supplemented by services provided by our associate that operates a battery swapping network.

        As of December 31, 2020, Hello app is China's third largest local services platform by transaction volume and China's most active local services platform by average transaction volume per ATU, according to iResearch. The following chart shows our size and scale.

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Our Value Proposition

        To maximize our value proposition to users, we innovatively designed our local services by leveraging technology to address the pain points in the consumption of local services. Our services are centered around the following characteristics:

    Necessary:  We aim to provide our users with innovative and alternative solutions to perform essential activities in their everyday life for better living.

    Frequent:  With a focus on high-frequency services, we have more touch points with our users and develop a greater understanding of them, to better serve them over the long-term.

    Inclusive:  Our services are accessible and affordable to help us reach and serve a broad user base across gender, age, social status and location.

        Specifically, our platform helps our users achieve:

    Time savings:  Our shared two-wheeler services provide a "first-mile" and "last-mile" solution unmet by traditional forms of transportation. Over 97% of our bike sharing and 99% of our e-bike sharing users have saved travel time by using our services, with over 53% and 68% having saved at least 10 minutes per trip, respectively, according to a survey conducted by iResearch in November 2020.

    Cost savings:  Our data-driven approach and focus on operating efficiency enable us to provide low-cost mobility alternatives to our users. Over 96% of our bike sharing and 93% of our e-bike sharing users have saved on travelling expenses by using our services, according to a survey conducted by iResearch in November 2020.

    Healthy lifestyle:  Our shared two-wheeler services provide a healthy and open environment alternative to other forms of transportation. Our QTUs took on average 14.4 rides a quarter on our shared two-wheelers in 2020, with an average ride time of 12.6 minutes and distance travelled of 1.7 kilometers, promoting a healthy lifestyle through habitual exercise.

    Carbon reduction:  We have consciously designed our inclusive services to be low-cost, convenient and environmentally friendly. We have facilitated low-carbon travel of over 24 billion kilometers, which equates to a reduction in CO2 emissions of approximately 667 million kilograms if compared to traveling the same distance by an average petrol car in China, according to iResearch.

Our Services

        We categorize our local services into local mobility services and emerging local services.

        Local mobility services are innovative, environmentally-friendly and convenient mobility services for the mass-market.

        Shared two-wheeler services.    We offer shared two-wheeler services, consisting of bike sharing and e-bike sharing services known as Hello Bike and Hello e-Bike, respectively. We are the largest shared two-wheeler service provider in China and the world as measured by the number of total rides in 2020, according to iResearch. We facilitated 5.1 billion bike and e-bike rides in 2020 and had over 10 million bikes and ebikes in service as of December 31, 2020. We generated 91% of our revenue from shared two-wheeler services in the year ended December 31, 2020. Our bikes and e-bikes are designed to be comfortable, environmentally-friendly and easy to ride, and our e-bikes are lithium-ion battery powered for pedal assistance. We deploy and rebalance our bikes and e-bikes within each city to complement the existing transportation infrastructure to meet demand fluctuations. Hello Bike and Hello e-Bike are designed as short to medium-distance mobility services. According to iResearch, Hello Bike is used by the majority of users to travel 0.5 - 3.0 kilometers and Hello e-Bike is generally used for trips beyond 3

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kilometers. We generate fees on a single ride basis, based on the amount of time each user uses our bike or e-bike with a minimum fee, or through ride pass, our subscription service. As of December 31, 2020, our bikes and e-bikes were deployed in over 300 cities at or above prefecture-level across China. As of December 31, 2020, 8.4% of our new Hello Bike users came from our users of other services.

        Carpooling marketplace.    We operate a carpooling marketplace, Hello Carpooling, to connect private car owners and riders with overlapping travel routes. Hello Carpooling is an environmentally-friendly four-wheeler mobility service designed to complement our shared two-wheeler services, providing convenient and cost-efficient mobility to our users. Enabled through technology, it is a "new category" of travel in China founded on trust that encourages people to share the space in their personal cars. We are the second largest carpooling marketplace in China in terms of GTV in 2020, according to iResearch. In 2020, we facilitated GTV of RMB7.0 billion (US$1.1 billion) through 94.5 million rides, representing market shares of 39% and 30%, respectively, according to iResearch. We generate service fees based on a percentage of total fees paid by riders, with a cap. As of December 31, 2020, Hello Carpooling had accumulated 26.1 million transacting users and 9.3 million registered drivers. As of December 31, 2020, 40.2% of new riders and 39.9% of new private car owners of Hello Carpooling came from our Hello Bike users.

        Emerging local services are new and innovative local services and products for everyday life designed to be inclusive and affordable for the mass-market.

        e-Scooters.    We primarily collaborate with franchised stores to sell smart e-Scooters to end-users on our platform and complement this with our self-operated online Tmall store. While our platform initially featured third-party manufactured e-scooters, starting from late 2020, we leverage user insights derived from our shared two-wheeler services to design and develop smart e-scooters under Hello brand that are built on next generation technologies and smart connectivity. We adopted an integrated business model covering the entire value chain to improve the user experience, and operate Scooter-as-a-Service (SaaS) by ourselves, which is supplemented by Battery-as-a-Service (BaaS) operated by our associate through Hi Battery. Our e-scooters are integrated with our proprietary loT device to provide security, real-time positioning, power management and safety features. We have been placing an increasing focus on e-scooters that are lithium-ion battery-powered and designed to be cost-efficient and environmentally-friendly. As of December 31, 2020, 63.2% of new Hello e-Scooter users came from our Hello Bike users. In April 2021, we launched three new models of our self-developed e-scooters. These e-scooters are installed with VVSMART, our proprietary smart e-scooter operating system, which improves the connectivity and integration between e-scooters and smart phones, provides easy access to services and optimizes riding experience.

        Battery-as-a-Service.    Hi Battery is an environmentally-friendly network of lithium-ion battery swapping stations operated under Battery-as-a-Service (BaaS) model. Launched in June 2019, Hi Battery is operated by an entity in which we invest together with Contemporary Amperex Technology Co., Limited, or CATL, and Shanghai Yunxin, a subsidiary of Ant Group Co., Ltd., or Ant Group, to supply safe, convenient and environmentally-friendly energy. Hi Battery swapping stations are located in 55 cities to provide new energy solutions primarily for our e-bike sharing services for now and to increasingly serve e-scooter users, including our Hello e-Scooter users, in the future. The battery swapping service provides significant value as it enables quick and safe replacement of low-charge lithium-ion batteries at convenient locations to save battery charging time and reduce upfront battery purchase costs. Hi Battery is part of our plan to build up a new energy supply infrastructure for the future. Hi Battery, together with Hello e-Bike and Hello e-Scooter, serves as the foray of our expansion to create a new energy platform.

        We are developing and pilot testing emerging local services and products in select cities, typically where Hello's shared two-wheeler presence is strong, including an in-store services marketplace, ride-hailing, hotel reservations, mobile grocery stores and online advertising services.

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Our Flywheel

        Our user base is our most valuable asset, and is prioritized above all else. Our guiding principle is to focus on meeting users' needs and constantly improving their experience. Our approach is summarized with the Hello Flywheel.

        We initially put our flywheel into motion through our shared two-wheeler services, which we designed to provide users with a convenient and affordable "first-mile" and "last-mile" solution through a superior user experience. This appealed to users, and as the usage of our services increased, it enabled us to scale and enhance our operating efficiency, and in turn further improving our value proposition and user experience.

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        First, the Hello Flywheel drives the growth of our services. Although the flywheel required significant effort to put into motion, once momentum is gathered, it is a self-reinforcing virtuous cycle, providing tangible and quantifiable value to our users and driving our growth, as already apparent in our earlier established local mobility services. The growth of our business scale is illustrated by the following charts.

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        Second, we utilize the Hello Flywheel to expand our service offerings. We have amassed a large and highly-engaged user base through providing necessary, frequently consumed and inclusively priced

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local services. This user base is providing us with deep insights into people's daily habits and pain points starting from mobility, and by leveraging on these consumer insights, we are able to quickly scale into new and appealing services to offer a better user experience.

        Our users have been highly supportive of our service expansion. As of December 31, 2020, existing users of Hello Bike represented more than 60% of new users who transacted for the first time for Hello e-Scooter services, and around 40% of new private car owners and riders on our Hello Carpooling marketplace. Conversely, first time users of our other services represented 8.4% of new Hello Bike users as of December 31, 2020.

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Note:

(1)
As of December 31, 2020

        With our users' support, we have continually launched new services. The following chart is a timeline of our service launches:

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    Note:

(1)
Services under pilot testing in select cities

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        Our focused expansion on inclusive, convenient and environmentally sustainable services has cultivated a positive brand image amongst our users and consumers in China. Our reputation and brand recognition in China provide us with significant organic growth opportunities through word-of-mouth, resulting in efficient and low-cost new user acquisition.

        Going forward, we will continue to expand into more local services within and outside of mobility.

Our Strengths

        We believe the following competitive strengths are key drivers to our success and set us apart from our competitors:

    industry leadership: leadership in local mobility accelerating expansion into more local services;

    technology: innovative to drive operating efficiencies and optimize user experience;

    user base: large, growing and highly-engaged as empowered by the Hello Flywheel;

    brand: trusted and preferred by consumers;

    synergies: collaborative relationships with Ant Group and CATL; and

    team: visionary management with strong execution track record.

Our Strategies

        We intend to further grow our business and enhance our market leadership by pursuing the following strategies:

    continue to solidify and enhance our Hello Flywheel effect;

    continue to invest in technology to improve operational excellence; and

    pursue strategic partnerships and investments.

Summary of Risk Factors

        An investment in our ADSs is subject to a number of risks, including risks relating to our business and industry, risks relating to our corporate structure, risks relating to doing business in China and risks relating to this offering. You should carefully consider all of the information in this prospectus before making an investment in the ADSs. The following list summarizes some, but not all, of these risks. Please read the information in the section entitled "Risk Factors" for a more thorough description of these and other risks.

Risks Relating to Our Business and Industry

    Our limited operating history and evolving business make it relatively difficult to evaluate our future prospects and the risks and challenges we may encounter.

    We operate in a rapidly evolving market and if such market does not continue to grow, our business, financial condition and results of operations would be materially and adversely affected.

    Our local services, particularly our shared two-wheeler services and carpooling marketplace, are highly regulated. Certain past and current non-compliance and potential future failure to comply with any applicable regulation or if the PRC or local government adopts new regulations or amendments to existing regulations, our business, results of operations and financial condition could be materially and adversely affected.

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    Provision of new local services and upgrade of existing local services may subject us to additional risks.

    We have incurred significant losses since inception, which may continue in the future.

    If we fail to attract and retain users, including users of our mobility and other local services as well as private car owners of our carpooling marketplace, our business, results of operations and financial condition could be materially and adversely affected.

    We face intense competition and could lose market share to our competitors, which could materially and adversely affect our business, results of operations and financial condition.

    Our results of operation may vary significantly from period to period due to the seasonality of our business.

    If we fail to adopt new technologies or adapt our mobile app and systems to changing user requirements or emerging industry standards, our business may be materially and adversely affected.

    We require a significant amount of capital to fund our operations. If we cannot obtain sufficient capital on acceptable terms to fund our operations, our business, financial condition and prospects may be materially and adversely affected.

    The COVID-19 pandemic has adversely affected, and may continue to adversely affect, our business, results of operations and financial condition.

Risks Relating to Our Corporate Structure

    If the PRC government deems that the contractual arrangements in relation to our consolidated VIEs do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.

    Our contractual arrangements with our consolidated VIEs may result in adverse tax consequences to us.

    We rely on contractual arrangements with our consolidated VIEs and their shareholders to operate our mobile apps, which may not be as effective as direct ownership in providing operational control and otherwise have a material adverse effect as to our business.

    Certain terms of the contractual arrangements with our consolidated VIEs may not be enforceable under PRC laws.

    Uncertainties exist with respect to the interpretation and implementation of the newly enacted PRC Foreign Investment Law and its implementing rules and how they may impact our business, financial condition and results of operations.

Risks Relating to Doing Business in China

    Changes in the political and economic policies of the PRC government may materially and adversely affect our business, financial condition and results of operations and may result in our inability to sustain our growth and expansion strategies.

    The audit report included in this prospectus is prepared by an auditor who is not inspected by the Public Company Accounting Oversight Board and, as such, our investors are deprived of the benefits of such inspection. In addition, the adoption of any rules, legislations or other efforts to

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      increase U.S. regulatory access to audit information could cause uncertainty, and we could be delisted if we were unable to meet any PCAOB inspection requirement in time.

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

    PRC regulations relating to investments in offshore 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 or limit our PRC subsidiaries' ability to increase their registered capital or distribute profits.

    PRC regulation of loans to, and direct investment in, PRC entities by offshore holding companies and governmental control of currency conversion may restrict or prevent us from using the proceeds of this offering to make loans or additional capital contributions to our PRC subsidiaries.

    You may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing original actions in China, based on United States or other foreign laws, against us, our directors, executive officers or the expert named in this prospectus. Therefore, you may not be able to enjoy the protection of such laws in an effective manner.

Risks Relating to This Offering

    The trading price of the ADSs may be volatile, which could result in substantial losses to you.

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

    Because we do not expect to pay cash dividends in the foreseeable future after this offering, you may not receive any return on your investment unless you sell your Class A ordinary shares or ADSs for a price greater than that which you paid for them.

    You, as holders of ADSs, may have fewer rights than holders of our Class A ordinary shares and must act through the depositary to exercise those rights.

    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.

    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 Cayman Islands law.

    As a company incorporated in the Cayman 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.

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Our History and Corporate Structure

        We commenced our operations in China through Haluo Inclusive Technology Co., Ltd., or Haluo Inclusive (previously known as Jiangsu Youon Low-Carbon Technology co., Ltd.) in August 2014. In November 2017, Shanghai Junzheng Network Technology Co., Ltd., or Shanghai Junzheng, and Shanghai Junfeng Network Technology Co., Ltd., or Shanghai Junfeng, were acquired to further expand our business.

        To facilitate offshore financing, we undertook a reorganization, or the Reorganization. As part of the Reorganization, we incorporated Hello Inc. (formerly known as HB Technologies Corporation), an exempted company incorporated under the laws of Cayman Islands, in July 2018, which became our ultimate holding company. Subsequently, Hello Inc. established Hong Kong RideTech Limited, a Hong Kong limited liability company, as its wholly owned subsidiary. Hong Kong RideTech Limited then established Shanghai Hamao Commerce Consult Co., Ltd., or Shanghai Hamao, and Shanghai Haluo Corporate Development Co., Ltd., or Shanghai Haluo, as wholly foreign-owned enterprises in the PRC. In November 2018, we obtained control of Haluo Inclusive through a series of contractual arrangements among Shanghai Hamao, Haluo Inclusive and its shareholders. In December 2019, we terminated such contractual arrangements and replaced them with similar contractual arrangements among Shanghai Haluo, Haluo Inclusive and its shareholders, through which we retained control of Haluo Inclusive.

        We also obtained control over Zhengzhou Habai Network Technology Co., Ltd., or Zhengzhou Habai, through a series of contractual arrangements among Shanghai Hamao, Zhengzhou Habai and its shareholder.

        On June 12, 2019, Shanghai Junfeng entered into an investment agreement with Shanghai Yunxin Venture Capital Co., Ltd., or Shanghai Yunxin, an affiliate of Antfin (Hong Kong) Holding Limited, one of our principal shareholders, Contemporary Amperex Technology Co., Limited, or CATL, a company listed on the Shenzhen Stock Exchange (stock code: 300750) and primarily involved in the development and manufacturing of lithium-ion batteries and Fujian Ningde Zhixiang Infinite Technology Co., Ltd., or Ningde Zhixiang, pursuant to which Shanghai Junfeng, Shanghai Yunxin and CATL invested in Ningde Zhixiang, an entity primarily engaged in operating a battery swapping network for electric two-wheelers. As of the date of this prospectus, Shanghai Junfeng holds 33.1% equity interest in Ningde Zhixiang as a result of capital increase from new investors and certain existing shareholders in 2020. For more information, see "Related Party Transactions—Transactions Relating to Ningde Zhixiang."

        In October 2019, Hong Kong RideTech Limited established Xiamen Haxing Network Technology Co., Ltd., or Xiamen Haxing, as a wholly foreign-owned enterprise in the PRC.

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        The following diagram illustrates our corporate structure of our principal entities as of the date of this prospectus. Equity interests depicted in this diagram are held as to 100%. The relationships between (i) Shanghai Hamao, and Zhengzhou Habai and its shareholder, and (2) Shanghai Haluo, and Haluo Inclusive and its shareholders, as illustrated in this diagram are governed by contractual arrangements and do not constitute equity ownership.

GRAPHIC


(1)
Xiamen Haxing, Shanghai Hamao and Shanghai Haluo are wholly foreign-owned enterprises incorporated in the PRC.

(2)
Songcheng Zha holds 100% equity interest in Zhengzhou Habai. Zhengzhou Habai is primarily involved in providing ride-hailing services.

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(3)
Shanghai Yunxin, Youon Technology Co., Ltd., or Youon Technology, a company listed on the Shanghai Stock Exchange (stock code: 603776), Ningbo Chiying Investment Management Partnership (Limited Partnership), or Ningbo Chiying, and Ningbo Juying Zhumei Investment Management Partnership (Limited Partnership), or Juying Zhumei hold 35.94%, 23.26%, 18.90% and 13.15% equity interest in Haluo Inclusive, respectively. The remaining equity interest is held by several minority shareholders of Haluo Inclusive. Shanghai Yunxin and Youon Technology are affiliates of our principal shareholders, Antfin (Hong Kong) Holding Limited and YOUON (Cayman) Investment Co., Ltd., respectively. Our co-founder, director and chief executive officer, Lei Yang, is the general partner of Ningbo Chiying and holds 99.9% equity interest. Our co-founder, Wei Jiang, our co-founder, director and president, Kaizhu Li, Songcheng Zha and Peigang Wu are limited partners of Juying Zhumei and hold 33.33%, 27.78%, 22.22% and 16.67% equity interest, respectively. The remaining 0.01% equity interest is held by our co-chief financial officer, Xiaodong Chen, who is the general partner of Juying Zhumei. The equity interest of Lei Yang, Kaizhu Li and Xiaodong Chen in Haluo Inclusive will remain the same immediately after the completion of this offering. See "Principal Shareholders" for their respective equity interest in our company immediately after the completion of this offering.

Pursuant to the exclusive call option agreement, each shareholder of Haluo Inclusive has granted an exclusive option to Shanghai Haluo to purchase, by itself or persons designated by it, at its discretion at any time and to the extent permitted under PRC law, all or part of their equity interests in Haluo Inclusive. See "Our History and Corporate Structure—Contractual Arrangements with Consolidated VIEs and Their Shareholders." Shanghai Haluo may exercise such call option in the event that any shareholders of Haluo Inclusive (or their affiliates) that are also shareholders of Hello Inc. divest their interests in the ADSs or ordinary shares of Hello Inc.

(4)
Chengdu Habai is primarily involved in operating our carpooling marketplace.

(5)
Shanghai Junzheng is primarily involved in providing information technology support to our two-wheeler services.

(6)
Shanghai Junfeng is primarily involved in providing shared two-wheeler services.

Our Corporate Information

        Our principal executive offices are located at 16th Floor, Building#1, No.28 Yuanxiu Road, Minhang District, Shanghai, People's Republic of China. Our telephone number at this address is +86-21-6071-2060. Our registered office in the Cayman Islands is located at the offices of Osiris International Cayman Limited, Suite #4-210, Governors Square, 23 Lime Tree Bay Avenue, PO Box 32311, Grand Cayman KY1-1209 Cayman Islands. Investors should submit any inquiries to the address and telephone number of our principal executive offices set forth above.

        Our main website is www.helloglobal.com. The information contained on this website is not a part of this prospectus. Our agent for service of process in the United States is Cogency Global Inc., located at 122 East 42nd Street, 18th Floor, New York, N.Y. 10168, United States.

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, 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, related to the assessment of the effectiveness 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. Pursuant to the JOBS Act, we have elected to take advantage of the benefits of this extended transition period for complying with new or revised accounting standards as required when they are adopted for public companies. As a result, our operating results and financial statements may not be comparable to the operating results and financial statements of other companies who have adopted the new or revised accounting standards.

        We will remain an emerging growth company until the earliest of (a) the last day of our fiscal year during which we have total annual gross revenues of at least US$1.07 billion; (b) the last day of our fiscal year following the fifth anniversary of the completion of this offering; (c) the date on which we have, during the previous three year period, issued more than US$1.0 billion in non-convertible debt; or (d) 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 our

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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.

Conventions That Apply to This Prospectus

        Unless we indicate otherwise, references in this prospectus to:

    "ADSs" are to our American depositary shares, each of which represents                        Class A ordinary shares, and "ADRs" refer to the American depositary receipts that evidence our ADSs;

    "battery swapping network," "Battery-as-a-Service" or "Hi Battery" are to a network of lithium-ion battery swapping stations operated by Ningde Zhixiang Infinite Technology Co., Ltd., or Ningde Zhixiang, an entity in which we made an equity investment together with Contemporary Amperex Technology Co., Limited and Shanghai Yunxin Venture Capital Co., Ltd., an affiliate of Antfin (Hong Kong) Holding Limited, one of our principal shareholders. As of the date of this prospectus, we hold 33.1% equity interest in Ningde Zhixiang. We do not consolidate Ningde Zhixiang and account for our investment in Ningde Zhixiang as an equity method investment using fair value option.

    "CAGR" are to compound annual growth rate;

    "carpooling" are to collaborative use of a private car by several individuals traveling along the same or similar route at mutually compatible times;

    "China" or "PRC" are to the People's Republic of China, excluding, for the purposes of this prospectus only, Taiwan, the Hong Kong Special Administrative Region and the Macao Special Administrative Region;

    "COVID-19" are to a highly contagious novel virus that was declared a global pandemic by the World Health Organization on March 11, 2020;

    "gross transaction value" or "GTV" are to the total dollar value, including any applicable taxes, of payments made for shared two-wheeler services, carpooling marketplace and e-scooters on our platform, regardless of whether such amounts are subsequently refunded;

    "OEM" are to original equipment manufacturer;

    "ordinary shares" are to our ordinary shares in the capital of our company, par value US$0.00001 per share, and upon and after the completion of this offering are to our Class A and Class B ordinary shares, par value US$0.00001 per share;

    "our apps" are to channels through which users can access our local services, including our standalone mobile app, Hello app, and our mini-app on Alipay;

    "our VIEs" or "our consolidated VIEs" are to Zhengzhou Habai Network Technology Co., Ltd., or Zhengzhou Habai, and Haluo Inclusive Technology Co., Ltd., or Haluo Inclusive (previously known as Jiangsu Youon Low-Carbon Technology Co., Ltd.);

    "registered driver" are to a private car owner who has registered on our platform and has his or her identity verified;

    "RMB" or "Renminbi" are to the legal currency of China;

    "shared two-wheeler services" are to our bike sharing and e-bike sharing services as a whole;

    "transacting users" are to a user account that used at least one of our local services at least once;

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      "quarterly transacting user" or "QTU" are to a user account that used at least one of our local services at least once in a given quarter, except that a purchaser of the e-scooter is only counted as a QTU in the quarter when the purchase was made;

      "annual transacting user" or "ATU" are to a user account that used at least one of our local services at least once in a given year, except that a purchaser of the e-scooter is only counted as an ATU in the year when the purchase was made;

    "transactions" or "transaction volume" are to the number of discrete local service events that our users pay for and complete in a given period, which includes (i) the total number of bike rides and e-bike rides for our shared two-wheeler services, (ii) the total number of carpooling rides by each user for our carpooling marketplace, and (iii) the total number of purchases of e-scooters; for the avoidance of doubt, e-scooter rides are not counted as transactions;

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

    "users" are to users of our shared two-wheeler services, riders of our carpooling marketplace, end users who purchase e-scooters from the franchised stores through our platform and users of our other services;

    "we," "us," "the Company," "our company," "our" or "Hello" are to Hello Inc., its subsidiaries and its consolidated VIEs and their respective subsidiaries, as the context requires.

        Unless specifically indicated otherwise or unless the context otherwise requires, all references to our ordinary shares exclude (i) ordinary shares issuable upon the exercise of outstanding options with respect to our ordinary shares under our equity incentive plans and (ii) assumes that the underwriters will not exercise the over-allotment option to purchase additional ADSs.

        This prospectus contains translations between Renminbi and U.S. dollars solely for the convenience of the reader. The translations from Renminbi to U.S. dollars and from U.S. dollars to Renminbi in this prospectus were made at a rate of RMB6.5250 to US$1.00, the exchange rate set forth in the H.10 statistical release of the Federal Reserve Board on December 31, 2020. We make no representation that the Renminbi or U.S. dollar amounts referred to in this prospectus could have been or could be converted into U.S. dollars or Renminbi, as the case may be, at any particular rate or at all. On April 16, 2021, the exchange rate set forth in the H.10 statistical release of the Federal Reserve Board was RMB6.5203 to US$1.00.

        Due to rounding, numbers in this prospectus may not add up precisely to the totals presented.

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THE OFFERING

Price per ADS

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

ADSs Offered by Us

 

          ADSs.

ADSs Outstanding Immediately After This Offering

 

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

Ordinary Shares Outstanding Immediately After This Offering

 

          Class A ordinary shares and 166,772,842 Class B ordinary shares (or          Class A ordinary shares and 166,772,842 Class B ordinary shares if the underwriters exercises in full the over-allotment option).

The ADSs

 

Each ADS represents          Class A ordinary shares.

 

The depositary will be the holder of the Class A ordinary shares underlying the ADSs and you will have the rights of an ADR holder as provided in the deposit agreement among us, the depositary and holders and beneficial owners of ADSs from time to time.

 

You may surrender your ADSs to the depositary to withdraw the Class A ordinary shares underlying your ADSs. The depositary will charge you a fee for such an exchange.

 

We and the depositary may amend or terminate the deposit agreement for any reason without your consent. Any amendment that imposes or increases fees or charges or which materially prejudices any substantial existing right you have as an ADS holder will not become effective as to outstanding ADSs until 30 days after notice of the amendment is given to ADS holders. If an amendment becomes effective, you will be bound by the deposit agreement as amended if you continue to hold your ADSs.

 

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

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Ordinary Shares

 

Our ordinary shares in the capital of our company 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 will have the same rights except for voting and conversion rights. In respect of all matters subject to a shareholder vote, each Class A ordinary share is entitled to one vote, and each Class B ordinary share is entitled to 20 votes, voting together as one class. 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. Upon any transfer of Class B ordinary shares by a holder thereof to any person or entity that is not an affiliate of such holder, such Class B ordinary shares shall be automatically and immediately converted into the same number of Class A ordinary shares. See "Description of Share Capital" for more information.

Over-Allotment Option

 

We have granted to the underwriters an option, exercisable for 30 days from the date of this prospectus, to purchase up to an aggregate of          additional ADSs at the initial public offering price, less underwriting discounts and commissions, solely for the purpose of covering over-allotments.

Use of Proceeds

 

We estimate that we will receive net proceeds of approximately US$          million from this offering, or approximately US$          million if the underwriters exercise in full the over-allotment option, assuming an initial public offering price of US$ per ADS, the mid-point of the estimated range of the initial public offering price, after deducting underwriting discounts and commissions and estimated offering expenses payable by us. We intend to use the net proceeds of this offering to enhance and expand our business offerings, research and development, and for working capital and general corporate purposes.

 

See "Use of Proceeds" for more information.

Lock-up

 

[We, our officers and directors and our existing shareholders] have agreed with the underwriters not to sell, transfer or dispose of any ADSs, Class A ordinary shares or similar securities for a period of 180 days after the date of this prospectus, subject to certain exceptions. See "Shares Eligible for Future Sale" and "Underwriting."

Risk Factors

 

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

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[Directed Share Program

 

At our request, the underwriters have reserved up to        % of the ADSs being offered by this prospectus for sale at the initial public offering price to our directors, officers, employees and other individuals associated with us and members of their families through a directed share program. We do not know if these persons will choose to purchase all or any portion of these reserved ADSs, but any purchases they do make will reduce the number of ADSs available to the general public. Any reserved ADSs not so purchased will be offered by the underwriters to the general public on the same terms as the other ADSs. Certain participants may be subject to the lock-up agreements as described in "Underwriting—Directed Share Program" elsewhere in this prospectus.]

Listing

 

We will apply to list our ADSs on Nasdaq. Our ordinary shares will not be listed on any exchange or quoted for trading on any over-the-counter trading system.

Proposed Nasdaq Trading Symbol

 

            

Payment and settlement

 

The underwriters expect to deliver the ADSs against payment on              , 2021, through the facilities of the Depositary Trust Company, or DTC.

Depositary

 

JPMorgan Chase Bank, N.A.

        The total number of ordinary shares that will be outstanding immediately after this offering will be            Class A ordinary shares and 166,772,842 Class B ordinary shares (or 208,669,186 Class B ordinary shares if the CEO award is issued prior to this offering), which is based upon (i)             Class A ordinary shares and 166,772,842 Class B ordinary shares (or 208,669,186 Class B ordinary shares if the CEO award is issued prior to this offering) outstanding as of the date of this prospectus; (ii)             Class A ordinary shares issued in connection with this offering (assuming the underwriters do not exercise the over-allotment option to purchase additional ADSs), but excludes:

                Class A ordinary shares issuable upon the exercise of outstanding share options under our equity incentive plans; and

                Class A ordinary shares reserved for future issuance under our equity incentive plans.

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SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA

        The following summary consolidated statements of operations data and summary consolidated statements of cash flows data for the years ended December 31, 2018, 2019 and 2020 and summary consolidated balance sheets data as of December 31, 2019 and 2020 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. Our consolidated financial statements are prepared and presented in accordance with the generally accepted accounting principles in the United States, or the U.S. GAAP.

        Our historical results are not necessarily indicative of results to be expected for any future period. The following summary consolidated financial data for the periods and as of the dates indicated are qualified by reference to, and should be read in conjunction with, our consolidated financial statements and related notes and the information under "Management's Discussion and Analysis of Financial Condition and Results of Operations," both of which are included elsewhere in this prospectus.

Summary Consolidated Statements of Comprehensive Loss Data

 
  Year Ended December 31,  
 
  2018   2019   2020  
 
  RMB   RMB   RMB   US$  
 
  (in thousands)
 

Revenues

    2,113,672     4,823,321     6,044,357     926,339  

Cost of revenues(1)

    (3,261,203 )   (4,404,724 )   (5,329,421 )   (816,770 )

Gross (loss)/profit

    (1,147,531 )   418,597     714,936     109,569  

Selling and marketing expenses(1)

    (90,998 )   (268,018 )   (364,473 )   (55,858 )

General and administrative expenses(1)

    (230,534 )   (466,517 )   (770,236 )   (118,044 )

Research and development expenses(1)

    (114,895 )   (501,569 )   (682,059 )   (104,530 )

Loss on disposal and write-off of property and equipment

    (595,102 )   (636,200 )   (44,396 )   (6,804 )

Operating loss

    (2,179,060 )   (1,453,707 )   (1,146,228 )   (175,667 )

Interest income

    7,401     10,925     11,275     1,728  

Interest expense

    (56,381 )   (56,842 )   (58,912 )   (9,029 )

Foreign exchange loss

    (4,247 )   (395 )   (5,366 )   (822 )

Realized gain on short-term investments

    24,125     11,327     34,195     5,241  

Change in fair value of financial instruments

    125     (20,147 )   34,121     5,229  

Other expense, net

    (8,854 )   (4,995 )   (11,694 )   (1,792 )

Net loss before income taxes

    (2,216,891 )   (1,513,834 )   (1,142,609 )   (175,112 )

Income tax benefit

    9,375     9,144     9,014     1,381  

Net loss

    (2,207,516 )   (1,504,690 )   (1,133,595 )   (173,731 )

Net loss attributable to ordinary shareholders

    (2,608,189 )   (2,998,298 )   (4,466,426 )   (684,510 )

Loss per share attributable to ordinary shareholders

                         

—basic and diluted

    12.64     14.53     21.18     3.25  

Weighted average number of ordinary shares

                         

—basic and diluted

    206,401,909     206,401,909     210,917,898     210,917,898  


Note:


(1)
Share-based compensation expenses were allocated as follows:

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  Year Ended December 31,  
   
  2018   2019   2020  
   
  RMB   RMB   RMB   US$  
   
  (in thousands)
 
 

Cost of revenues

    5,077     12,327     6,271     961  
 

Selling and marketing expenses

    202     2,043     1,987     305  
 

General and administrative expenses

    19,722     43,420     162,246     24,865  
 

Research and development expenses

    7,140     20,710     22,599     3,463  
 

Total

    32,141     78,500     193,103     29,594  

Summary Consolidated Balance Sheets Data

 
  As of December 31,  
 
  2019   2020  
 
  Actual   Actual   Pro Forma(1)   Pro Forma
As Adjusted(2)
 
 
  RMB   RMB   US$   RMB   US$   RMB   US$  
 
  (in thousands)
 

Cash and cash equivalents

    1,079,661     825,357     126,491     825,357     126,491              

Total current assets

    3,897,909     3,409,345     522,505     3,409,345     522,505              

Total non-current assets

    4,990,186     6,195,146     949,446     6,195,146     949,446              

Total assets

    8,888,095     9,604,491     1,471,951     9,604,491     1,471,951              

Total current liabilities

    3,723,995     3,913,865     599,827     3,913,865     599,827              

Total non-current liabilities

    212,466     98,391     15,080     98,391     15,080              

Total liabilities

    3,936,461     4,012,256     614,907     4,012,256     614,907              

Total mezzanine equity

    11,706,545     16,697,734     2,559,042                      

Total shareholders' (deficit) equity

    (6,754,911 )   (11,105,499 )   (1,701,998 )   6,109,874     936,377              

(1)
The consolidated balance sheets data as of December 31, 2020 are presented on a pro forma basis to reflect (i) the re-designation of 17,154,480 Series C Preferred Shares into the same number of ordinary shares and the subsequent transfer to GOLD GUARD INVESTMENTS LIMITED, an entity controlled by Mr. Lei Yang, and the transfer of 8,748,784 ordinary shares to such entity on March 8, 2021; (ii) the issuance of 28,352,367 Series G convertible redeemable preferred shares on March 31, 2021; (iii) the issuance of 32,130,104 ordinary shares upon the exercise of share options under the 2018 stock incentive plan and the 2020 stock incentive plan (including 5,901,944 ordinary shares issued to GOLD GUARD INVESTMENTS LIMITED upon the exercise of share options by Mr. Lei Yang) in 2021; (iv) the re-designation of 156,255,725 ordinary shares and the automatic conversion and re-designation of 10,517,117 convertible redeemable preferred shares beneficially owned by Mr. Lei Yang into 166,772,842 Class B ordinary shares on a one-for-one basis immediately upon the completion of this offering; (v) the re-designation of all the remaining outstanding ordinary shares and the automatic conversion of all of the remaining outstanding convertible redeemable preferred shares into 1,444,046,870 Class A ordinary shares on a one-for-one basis immediately upon the completion of this offering; and (vi) a one-time share-based compensation expenses of RMB306.6 million (US$47.0 million).

(2)
The consolidated balance sheets data as of December 31, 2020 are presented on a pro forma as adjusted basis to reflect (i) the re-designation of 17,154,480 Series C Preferred Shares into the same number of ordinary shares and the subsequent transfer to GOLD GUARD INVESTMENTS LIMITED, an entity controlled by Mr. Lei Yang, and the transfer of 8,748,784 ordinary shares to such entity on March 8, 2021; (ii) the issuance of 28,352,367 Series G convertible redeemable preferred shares on March 31, 2021; (iii) the issuance of 32,130,104 ordinary shares upon the exercise of share options under the 2018 stock incentive plan and the 2020 stock incentive plan (including 5,901,944 ordinary shares issued to GOLD GUARD INVESTMENTS LIMITED upon the exercise of share options by Mr. Lei Yang) in 2021; (iv) the re-designation of 156,255,725 ordinary shares and the automatic conversion and re-designation of 10,517,117 convertible redeemable

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    preferred shares beneficially owned by Mr. Lei Yang into 166,772,842 Class B ordinary shares on a one-for-one basis immediately upon the completion of this offering; (v) the re-designation of all the remaining outstanding ordinary shares and the automatic conversion of all of the remaining outstanding convertible redeemable preferred shares into 1,444,046,870 Class A ordinary shares on a one-for-one basis immediately upon the completion of this offering; (vi) a one-time share-based compensation expenses of RMB306.6 million (US$47.0 million); and (vii) the issuance and sale of the Class A ordinary shares in the form of ADSs offered hereby at an assumed initial public offering price of US$            per ADS, the mid-point of the estimated initial public offering price range shown on the front cover of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us and assuming no exercise of the underwriters' option to purchase additional ADSs.

Summary Consolidated Statements of Cash Flows Data

 
  Year Ended December 31,  
 
  2018   2019   2020  
 
  RMB   RMB   RMB   US$  
 
  (in thousands)
 

Net cash generated from operating activities

    293,772     1,168,342     2,198,480     336,930  

Net cash used in investing activities

    (4,189,104 )   (1,935,447 )   (4,153,016 )   (636,478 )

Net cash provided by financing activities

    3,958,980     2,664,924     1,498,455     229,649  

Net increase/(decrease) in cash, cash equivalents and restricted cash

    63,648     1,897,819     (456,081 )   (69,899 )

Cash, cash equivalents and restricted cash at the beginning of the year

    392,218     457,365     2,356,664     361,175  

Effects of exchange rate changes

    1,499     1,480     21,044     3,226  

Cash, cash equivalents and restricted cash at the end of the year

    457,365     2,356,664     1,921,627     294,502  

Key Operating Metrics

        We regularly review a number of key operating metrics to evaluate our business and measure our performance, which are set forth in the table below. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Key Operating Metrics."

 
  Three Months Ended,  
 
  Mar 31,
2018
  Jun 30,
2018
  Sep 30,
2018
  Dec 31,
2018
  Mar 31,
2019
  Jun 30,
2019
  Sep 30,
2019
  Dec 31,
2019
  Mar 31,
2020
  Jun 30,
2020
  Sep 30,
2020
  Dec 31,
2020
 
 
  (in millions, except for GTV per QTU)
 

GTV per QTU (in RMB)

    5.1     10.7     13.2     11.7     12.3     23.3     27.2     29.3     29.0     35.1     37.7     37.4  

QTUs

    30.7     60.6     66.4     59.6     53.6     82.5     98.6     89.8     56.1     90.5     115.2     101.7  

Transaction Volume

    451     1,425     1,573     1,147     731     1,481     1,860     1,508     546     1,381     1,837     1,431  

Shared two-wheeler services

    451     1,425     1,573     1,147     729     1,468     1,844     1,485     533     1,356     1,805     1,395  

Carpooling marketplace

                    2     12     15     20     12     23     29     30  

Others

                    1     1     1     2     1     2     3     5  

GTV (in RMB)

    157     646     880     699     661     1,921     2,685     2,634     1,627     3,177     4,338     3,810  

Shared two-wheeler services

    157     646     880     699     570     1,262     1,732     1,343     666     1,534     2,174     1,472  

Carpooling marketplace

                    90     656     946     1,278     951     1,598     2,115     2,304  

Others

                    1     3     8     14     10     45     49     34  

Non-GAAP Financial Measures

        We use Adjusted EBITDA and Adjusted Net (Loss)/Profit, each a non-GAAP financial measure, in evaluating our operating results and for financial and operational decision-making purposes. We believe that these measures help us identify underlying trends in our business and core results of

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operations that could otherwise be distorted by the effect of certain expenses and income that we include in net (loss)/profit, which are either non cash in nature or not directly related to our core operations. By excluding such items, the non-GAAP financial measures facilitate operating performance comparison from period-to-period. We believe that these measures provide useful information about our operating results, enhance the overall understanding of our past performance and future prospects, and allow for greater visibility with respect to key metrics used by our management in its financial and operational decision-making.

Adjusted EBITDA

        We define Adjusted EBITDA as net (loss)/profit, excluding (i) income tax benefit, (ii) interest income, (iii) interest expense, (iv) depreciation and amortization, (v) realized gain on short-term investments, (vi) changes in fair value of financial instruments, (vii) foreign exchange (loss)/gain, (viii) other income/(expense), net, (ix) loss on disposal and write-off of property and equipment, and (x) share-based compensation expenses. Reconciliation from net (loss)/profit to Adjusted EBITDA is summarized below:

 
  Year Ended December 31,  
 
  2018   2019   2020  
 
  (in RMB thousands)
 

Adjusted EBITDA Reconciliation:

                   

Net loss

    (2,207,516 )   (1,504,690 )   (1,133,595 )

Add/(deduct):

                   

Income tax benefit

    (9,375 )   (9,144 )   (9,014 )

Interest income

    (7,401 )   (10,925 )   (11,275 )

Interest expense

    56,381     56,842     58,912  

Depreciation and amortization

    1,725,863     2,093,470     2,472,872  

Realized gain on short-term investments

    (24,125 )   (11,327 )   (34,195 )

Changes in fair value of financial instruments

    (125 )   20,147     (34,121 )

Foreign exchange loss

    4,247     395     5,366  

Other expense, net

    8,854     4,995     11,694  

Loss on disposal and write-off of property and equipment

    595,102     636,200     44,396  

Share-based compensation expenses

    32,141     78,500     193,103  

Adjusted EBITDA

    174,046     1,354,463     1,564,143  

 

 
  For the Three Months Ended,  
 
  March 31,
2019
  June 30,
2019
  September 30,
2019
  December 31,
2019
  March 31,
2020
  June 30,
2020
  September 30,
2020
  December 31,
2020
 
 
  (in RMB thousands)
 

Adjusted EBITDA Reconciliation:

                                                 

Net (Loss)/Profit

    (568,783 )   (153,750 )   72,757     (854,914 )   (601,499 )   (115,429 )   177,918     (594,585 )

Add/(deduct):

                                                 

Income tax benefit

    (2,343 )   (2,344 )   (2,344 )   (2,113 )   (2,341 )   (2,343 )   (2,131 )   (2,199 )

Interest income

    (2,847 )   (3,767 )   (2,054 )   (2,257 )   (2,159 )   (2,392 )   (2,563 )   (4,161 )

Interest expense

    9,996     10,204     18,687     17,955     19,055     17,467     12,117     10,273  

Depreciation and amortization

    482,627     491,293     551,175     568,375     512,218     578,994     680,392     701,268  

Realized gain on short-term investments

    (1,452 )   (2,348 )   (7,360 )   (167 )   (9,329 )   (4,926 )   (12,469 )   (7,471 )

Changes in fair value of financial instruments

            21,379     (1,232 )   (42,539 )   40,018     (31,305 )   (295 )

Foreign exchange (loss)/gain

    3,242     (94 )   (2,335 )   (418 )   (5,738 )   (1,025 )   2,954     9,175  

Other income/(expense), net

    (1,013 )   (5 )   3,017     2,996     (5,321 )   5,477     4,929     6,609  

Loss on disposal and writeoff of property and equipment

    24,421     33,951     51,111     526,717     14,745     7,169     9,314     13,168  

Share-based compensation expenses

    14,951     20,003     21,986     21,560     17,673     16,107     14,683     144,640  

Adjusted EBITDA

    (41,201 )   393,143     726,019     276,502     (105,235 )   539,117     853,839     276,422  

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Adjusted Net (Loss)/Profit

        We define Adjusted Net (Loss)/Profit as net (loss)/profit, excluding (i) realized gain on short-term investments, (ii) changes in fair value of financial instruments, (iii) foreign exchange loss, (iv) other income/(expense), net, (v) loss on disposal and write-off of property and equipment, and (vi) share-based compensation expenses. Reconciliation from net (loss)/profit to Adjusted Net (Loss)/Profit is summarized below:

 
  Year Ended December 31,  
 
  2018   2019   2020  
 
  (in RMB thousands)
 

Adjusted Net Loss Reconciliation:

                   

Net loss

    (2,207,516 )   (1,504,690 )   (1,133,595 )

Add/(deduct):

                   

Realized gain on short-term investments

    (24,125 )   (11,327 )   (34,195 )

Changes in fair value of financial instruments

    (125 )   20,147     (34,121 )

Foreign exchange loss

    4,247     395     5,366  

Other expense, net

    8,854     4,995     11,694  

Loss on disposal and write-off of property and equipment

    595,102     636,200     44,396  

Share-based compensation expenses

    32,141     78,500     193,103  

Adjusted Net Loss

    (1,591,422 )   (775,780 )   (947,352 )
 
  For the Three Months Ended,  
 
  March 31,
2019
  June 30,
2019
  September 30,
2019
  December 31,
2019
  March 31,
2020
  June 30,
2020
  September 30,
2020
  December 31,
2020
 
 
  (in RMB thousands)
 

Adjusted Net (Loss)/Profit Reconciliation:

                                                 

Net (Loss)/Profit

    (568,783 )   (153,750 )   72,757     (854,914 )   (601,499 )   (115,429 )   177,918     (594,585 )

Add/(deduct):

                                                 

Realized gain on short-term investments

    (1,452 )   (2,348 )   (7,360 )   (167 )   (9,329 )   (4,926 )   (12,469 )   (7,471 )

Changes in fair value of financial instruments

            21,379     (1,232 )   (42,539 )   40,018     (31,305 )   (295 )

Foreign exchange (loss)/gain

    3,242     (94 )   (2,335 )   (418 )   (5,738 )   (1,025 )   2,954     9,175  

Other income/(expense), net

    (1,013 )   (5 )   3,017     2,996     (5,321 )   5,477     4,929     6,609  

Loss on disposal and writeoff of property and equipment

    24,421     33,951     51,111     526,717     14,745     7,169     9,314     13,168  

Share-based compensation expenses

    14,951     20,003     21,986     21,560     17,673     16,107     14,683     144,640  

Adjusted Net (Loss)/Profit

    (528,634 )   (102,243 )   160,555     (305,458 )   (632,008 )   (52,609 )   166,024     (428,759 )

        The presentation of the 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 present the non-GAAP financial measures because they are used by our management to evaluate operating performance and formulate business plans. We believe that the non-GAAP financial measures help identify underlying trends in our business, provide further information about our results of operations, and enhance the overall understanding of our past performance and future prospects.

        The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools. Our non-GAAP financial measures do not reflect all items of income and expense that affect our operations and do not represent the residual cash flow available for discretionary expenditures. Further, the 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 the non-GAAP financial measures to the nearest U.S. GAAP performance measure, both of which should be considered when evaluating performance. We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure.

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RISK FACTORS

        An investment in the ADSs involves significant risks. You should carefully consider all the information in this prospectus, including the risks and uncertainties described below, before making an investment in the ADSs. Any of the following risks could have a material adverse effect on our business, financial condition and results of operations. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business, prospects, financial condition, results of operations, cash flows and ability to pay dividends. In any such case, the market price of the ADSs could decline, and you may lose all or part of your investment.

Risks Relating to Our Business and Industry

Our limited operating history and evolving business make it relatively difficult to evaluate our future prospects and the risks and challenges we may encounter.

        We expanded our bike sharing service in 2017 and we have a relatively short operating history. While we were initial focused on mobility services, our business continues to evolve and we have been expanding into additional local services and solutions, such as e-scooters, an in-store services marketplace, ride-hailing, hotel reservations, mobile grocery stores and online advertising services. Our limited operating history and evolving business make it difficult to evaluate our future prospects and the risks and challenges we may encounter. These risks and challenges include our ability to:

    anticipate and respond to macroeconomic changes and changes in the markets in which we operate, including changes in user preferences and competitive landscape;

    maintain and enhance a well-recognized and respected brand;

    expand our user base in a cost-effective manner;

    successfully develop new platform features, offerings and services to enhance the experience of users;

    plan for and manage capital expenditures for our current and future service offerings;

    advance our technological capabilities to empower our operation;

    improve operating efficiency and economies of scale;

    accurately forecast our revenues and budget for our expenses;

    attract, retain and motivate our employees; and

    navigate a complex and evolving regulatory environment.

        If we fail to address the risks and difficulties that we face, including those associated with the challenges listed above as well as those described elsewhere in this "Risk Factors" section, our business, financial condition and results of operations could be adversely affected. Further, because we have limited historical financial data and operate in a rapidly evolving market, any predictions about our future revenues and expenses may not be as accurate as they would be if we had a longer operating history or operated in a more predictable market. Evolution of our business models may result in the adoption of different accounting treatments, and thus fluctuations in our revenues. We have encountered in the past, and will encounter in the future, risks and uncertainties frequently experienced by growing companies with limited operating histories in rapidly changing industries. If our assumptions regarding these risks and uncertainties, which we use to plan and operate our business, are incorrect or change, or if we do not address these risks successfully, our results of operations could differ materially from our expectations and our business, financial condition and results of operations could be adversely affected.

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We operate in a rapidly evolving market and if such market does not continue to grow, our business, financial condition and results of operations would be materially and adversely affected.

        We operate a local services platform in China, with mobility services as the initial focus. China's local services market has grown rapidly since we expanded our bike sharing service in 2017, and it is uncertain to what extent the market acceptance and demand will continue to grow. If such local services market does not continue to grow, our business, financial condition and results of operations could be adversely affected.

        For example, although shared two-wheeler services and carpooling marketplace have been widely accepted in China, there can be no assurance that such market acceptance would persist or continue to grow. The market may shrink due to various reasons, some of which may be beyond our control, such as emergence of alternative means of transportation that are affordable and convenient, new regulatory requirements that place restrictions on provision of shared two-wheeler service or operation of carpooling marketplace, or safety or other incidents related to these types of services that may negatively affect public perception. In addition, some of our local service initiatives, such as e-scooters, an in-store services marketplace and mobile grocery stores, are relatively new and the extent of market acceptance for such initiatives is uncertain. The battery swapping network operated by our associate faces the same uncertainty.

        If the market for any of our local services fails to grow or if demand for our local services declines, our business, financial condition and results of operations would be materially and adversely affected.

Our local services, particularly our shared two-wheeler services and carpooling marketplace, are highly regulated. Certain past and current non-compliance and potential future failure to comply with any applicable regulation or if the PRC or local government adopts new regulations or amendments to existing regulations, our business, results of operations and financial condition could be materially and adversely affected.

        Our shared two-wheeler services are highly regulated. We have been subject to intense regulatory scrutiny from the state and municipal regulatory authorities in China. In August 2017, the Ministry of Transport, or the MOT, issued the first national guidelines for regulating bike sharing services. Since then, numerous cities have passed local rules and regulations to regulate the development and operation of shared two-wheeler services, and the local rules and regulations as well as enforcement practice vary from city to city. Some local government authorities impose certain requirements on shared two-wheeler services, such as caps on the total amount of shared bikes and e-bikes allowed in each city, e-bike plate registration requirement, parking rules, requirement to file operation information with relevant governmental authorities, installation of GPS systems or electronic labels, real-name user registration and other various requirements. In addition, the national guidelines indicate an intention not to encourage e-bike sharing business, and some local governmental authorities have passed local regulations and policies to discourage or even prohibit e-bike sharing business. For example, some local government authorities require the operating entities of e-bike sharing business to obtain written or oral approval from local authorities and to comply with requirements such as 3C certification, quota control for deployment of e-bikes, catalog management and plate registration. Therefore, uncertainty exists as to the future development of the e-bike sharing business. Compliance with existing rules and regulations and any new rules and regulations that may be adopted in the future may increase our compliance cost and restrict the expansion of our shared two-wheeler services.

        Since the rules and regulations on shared two-wheeler services have been adopted at local levels which are very complicated and fragmented, we cannot assure you that we have been or will be in full compliance of all applicable regulations in each city where we operate. For instance, the amount of shared bikes and e-bikes we deploy in many cities significantly exceed the caps imposed by such cities. In addition, we historically failed to apply for quota on deployment of shared bikes and e-bikes in

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certain cities and we cannot assure you that we will always be able to apply for such quota in a timely manner in all cities that we deployed shared bikes and e-bikes. As a result, we may be required to take remedial actions, significantly reduce the number of shared bikes and e-bikes that we already deployed and refrain from deploying additional shared bikes and e-bikes in such cities, which could materially and negatively impact our business operations and financial condition. We have been warned and fined by certain local regulators due to our non-compliance of city caps on the deployment of shared bikes and e-bikes and we might be subject to more severe penalties including the restrictions or prohibitions of the operation of our shared two-wheeler services in such cities. In addition, we were fined by certain local regulators for an immaterial amount or were warned due to incompliant parking by our users, and some of our shared bikes and e-bikes that were not properly parked were confiscated by local regulators. Although we were able to get some of such vehicles back, the temporary loss of the vehicles caused disruption to our business operations and resulted in financial losses. If non-compliant parking persists, we may be subject to additional administrative penalties, such as restrictions or prohibitions of the operation of our shared two-wheeler services in certain cities, and may be subject to additional financial losses resulting from confiscated bikes and e-bikes. We also had some other non-compliances, such as failure to complete the pre-entry registration and/or filing, install the GPS system or electronic labels on shared two-wheeled vehicles, register bike plates, establish operating entities in some cities and file operation information with local authorities in some cities where such requirements are imposed. We had administrative penalties imposed on us for an immaterial amount for some of these non-compliances as of the date of this prospectus.

        In addition, the regulatory framework for the shared two-wheeler services has been evolving rapidly. Evolving interpretations and applications of the existing laws and regulations and any future legislation, newly promulgated implementation rules or interpretations, if any, that govern shared two-wheeler services would potentially require us to alter and adjust our shared two-wheeler services business model and daily operations. We may face increased restrictions on our operations or may be forced to exit certain local markets or even cease our shared two-wheeler services completely.

        Our business of operating a carpooling marketplace is also highly regulated, and it is uncertain whether certain laws and regulations applicable to traditional ride-hailing services also apply to carpooling marketplace. On July 26, 2016, the General Office of the State Council promulgated the Guidelines on Deepening Reform and Promoting the Healthy Development of the Taxi Industry, which distinguishes carpooling marketplaces that require private car owners to submit routes first and share cost with riders with similar routes from online ride-hailing. Laws and regulations governing ride-hailing services do not directly apply to carpooling marketplace without further legislative or regulatory action indicating otherwise. For example, the Interim Measures for the Management of Online Ride-Hailing Operation and Service, which require ride-hailing service platforms and drivers on those platforms to obtain certain licenses and permits, explicitly exclude carpooling from the prescribed licensing regime. Despite the lack of uniform central legislation, local authorities in China have promulgated various rules to regulate and monitor platforms operating carpooling marketplace. As the application, interpretation and implementation of these rules and other relevant laws and regulations remain uncertain and as applicable rules and regulations differ on local basis, we cannot assure you that we have been or will be in full compliance with these local rules and regulations. As a result, we may be subject to claims, lawsuits, arbitrations, administrative actions, government investigations and other legal and regulatory proceedings. For instance, we failed to comply with local rules and regulations in certain cities, such as prohibition on charging service fees, failure to operate carpooling marketplace through a separate app, failure to obtain requisite permits and making required filings and registrations, exceeding the limits on the number of orders that each private car owner can take on a daily basis, attracting users by providing incentives and failure to comply with local rules on pricing mechanism. We had administrative penalties imposed on us for an immaterial amount for some of these non-compliances as of the date of this prospectus and we cannot assure you that we will not be subject to more severe administrative actions or proceedings in the future.

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        In particular, we may be viewed by local regulators in some cities as failing to comply with local rules that only allow sharing of costs, such as fuel and tolls, between carpooling drivers and riders. Our platform facilitated 94.5 million carpooling transactions in over 250 cities in China in 2020. Among the top 50 cities in terms of the number of carpooling transactions, which together accounted for over 90% of our total carpooling transactions in 2020, 43 cities, representing approximately 84% of our carpooling transactions in 2020 and including the top three cities, have adopted local regulations that explicitly allow only sharing of costs between carpooling drivers and riders. There is substantial uncertainty as to the interpretation and enforcement of these local regulations. It is difficult for us to accurately calculate the fuel, toll and other costs permissible under the local regulations that are expected to be incurred by the carpooling drivers on our platform. We have therefore set fares for carpooling rides with reference to discounts to local taxi fares, intending to exclude the costs of vehicles and drivers. However, the fares we set may still be found to have exceeded local restrictions on payments to drivers. We also allow riders to give tips to drivers through our app on a voluntary basis. While local regulations are generally silent on such voluntary tips, we cannot assure you that local authorities will not view such tips as impermissible payments to carpooling drivers too. While we believe there will continue to be important incentives for drivers to offer carpooling services on our platform, such as reducing their travel costs and promoting a greener lifestyle, our platform may become less attractive and we may face increased difficulty in attracting and retaining drivers if we are required to significantly lower the fares of carpooling and/or prohibit any tips in some or all of the cities where we provide carpooling services in the future. If the various local rules on carpooling are strictly enforced to our disadvantage and we are found to be in violation, our revenue from carpooling marketplace may decrease significantly, and we may face penalties such as fines, rectifications and even termination of operation.

        In addition, we cannot assure you that the relevant regulatory authorities would not change their view regarding the current licensing regime or investigate or challenge our operations in the future for any reason, including alleged noncompliance under their enforcement policies, or that new laws and regulations would not be enacted to require licensing for carpooling marketplaces. If we fail to obtain the relevant approvals, licenses or permits in a timely manner, or at all, if and to the extent required, for operating our carpooling marketplace, or if we are found not to be in full compliance with any applicable regulatory requirements, we could be subject to fines, warnings, or even criminal liabilities, and we could also be required to substantially modify the affected portion of our business, exit certain local markets or even shut down our carpooling marketplace completely. In addition, we may incur high compliance costs due to our efforts to fully comply with laws and regulations in various localities, the provisions and interpretations of which may differ from each other. Any of the preceding could have a material and adverse effect on our business, results of operations and financial condition.

        We are in the process of exploring and launching additional new initiatives, such as e-scooters, an in-store services marketplace, ride-hailing, hotel reservations, mobile grocery stores, online advertising services and other services. The PRC government may increase the level of regulatory scrutiny on the various local services that we are offering or may offer in the future, and new laws and regulations may be enacted to the disadvantage of our business. Regulators may also view matters or interpret current laws and regulations differently than they have in the past or in a manner adverse to our business. We may fail to adapt to such changes timely and effectively, and we may incur high compliance costs in this process. Any heightened regulatory scrutiny or action may impose conflicting obligations on us, which could impede our ability to continue our operations and, in turn, materially and adversely affect our business, results of operations and financial condition.

Provision of new local services and upgrade of existing local services may subject us to additional risks.

        We may provide new local services on our platform from time to time. For instance, we have launched new local services in recent years, such as e-scooters, an in-store services marketplace,

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ride-hailing, hotel reservations, mobile grocery stores and online advertising services, and we are exploring opportunities to offer additional new initiatives in the future. However, to the extent we are unable to meet user expectations or experience difficulties in providing any such services, our reputation and business may be materially and adversely affected. There are substantial risks and uncertainties associated with our efforts to offer new local services, particularly in instances where the markets are not fully developed. In developing and marketing new local services, we may invest significant time and resources. Initial timetables for the introduction and development of new local services may not be achieved and price and profitability targets may not prove feasible. External factors, such as compliance with regulations, competitive alternatives and shifting market preferences, may also impact the successful introduction of new local services. For instance, if the government tightens regulations on certain new local services we provide, our expansion efforts may be restricted. We may need to lower our prices, offer incentives or undertake further sales and marketing efforts in order to grow such services and increase our market share, which may come at the expense of our profitability. Our efforts to offer new local services may also not succeed if we are faced with fierce competition. We may decide to halt the operation of our new initiatives if they do not achieve desired results in a short time period, in which case the resources and efforts we devoted would be in vain. Furthermore, any new local service could have a significant impact on the effectiveness of our internal control systems. Failure to successfully manage these risks in the development and implementation of new local services could have a material adverse effect on our business, results of operations and financial condition.

        In addition, improving and upgrading our existing local services may subject us to risks or losses. We continually upgrade our existing services to satisfy evolving needs and preferences of our users. However, we cannot assure you that we will be successful each time when we make our service upgrade. If we incur significant costs or losses in any service upgrade or if any such upgrade does not yield satisfactory results, it could have a material adverse effect on our business, results of operations and financial condition. For example, we phased out early models of shared bikes and e-bikes in 2018 and 2019, respectively, in favor of substantially improved newer generation bikes and e-bikes developed leveraging insights into user preferences and operating efficiency optimization. As a result, an amount of RMB477.0 million and RMB440.3 million of write-off charges to write down the assets to amounts expected to be recovered were recorded in loss on disposal and write-off of property and equipment for the years ended December 31, 2018 and 2019, respectively. We cannot assure you that such situation will not recur in the future or that we will not suffer financial losses as a result of other service upgrades, which could materially affect our business, results of operations and financial condition.

We have incurred significant losses since inception, which may continue in the future.

        We have incurred net loss since inception. We incurred net loss of RMB2,207.5 million, RMB1,504.7 million and RMB1,133.6 million (US$173.7 million) for the years ended December 31, 2018, 2019 and 2020, respectively. Certain line of our business, such as shared two-wheeler services, is capital intensive and requires significant capital investment to purchase new vehicles and expand our fleet. We also offer incentives to attract and retain qualified private car owners for our carpooling marketplace. We expect to continue to invest significantly to further expand our business, and there can be no assurance that we will successfully execute our business strategies. We may not generate sufficient revenues for a number of reasons, including lack of demand for our local services, increasing competition, challenging macro-economic environment due to the COVID-19 outbreak, as well as other risks discussed herein. Our ability to become profitable in the future will not only depend on our efforts to provide services but also to control our costs. If we are unable to adequately control the costs associated with our operations, we may continue to experience losses and negative cash flows from operating activities in the future.

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If we fail to attract and retain users, including users of our mobility and other local services as well as private car owners of our carpooling marketplace, our business, results of operations and financial condition could be materially and adversely affected.

        Our success depends on our ability to enlarge our user pool, retain existing users and increase their utilization of our platform. We plan to continue to broaden our offerings, deepen our penetration and provide superior user experience. If our efforts to attract and retain users are not successful, our business, results of operations and financial condition could be materially and adversely affected.

        To attract and retain users, we must continue to offer high-quality services and appeal to new users who have historically used other forms of local services and educate the market on the benefits of our local services. We believe that our sales and marketing initiatives have effectively promoted awareness of our offerings, which in turn drives the growth of our user pool and the utilization rate of our platform. However, our reputation, brand and ability to build trust with existing and new users may be materially and adversely affected by complaints and negative publicity about us, our offerings, other third parties on our platform, or our competitors, even if factually incorrect or based on isolated incidents. Further, if existing and new users do not perceive our offerings to be reliable, safe and affordable, or if we fail to upgrade features of our platform, we may not be able to attract or retain users or to increase their utilization of our platform.

        Our continued growth also depends in part on our ability to cost-effectively attract and retain qualified private car owners who satisfy our screening criteria and procedures, and to increase their utilization of our platform. To attract and retain qualified private car owners, we have, among other things, offered referral incentives for private car owners. However, we may fail to retain and attract qualified private car owners due to a number of reasons, such as our failure to provide incentives that are comparable or superior to those of our competitors. Other factors beyond our control, such as increases in the price of gasoline, vehicles or insurance, and the vehicle quantity control of PRC government, may also reduce the number of private car owners on our platform or their utilization of our platform.

We face intense competition and could lose market share to our competitors, which could materially and adversely affect our business, results of operations and financial condition.

        China's local services market faces intensely competitive and characterized by rapid changes in technology, shifting user preferences, and frequent introductions of new services and offerings. We expect competition to continue, both from current competitors and new entrants in the market that may be well established and enjoy greater resources or other strategic advantages. If we are unable to anticipate or react to these competitive challenges, our competitive position could weaken, or fail to improve, and we could experience growth stagnation or even a decline in revenues that could materially and adversely affect our business, results of operations and financial condition.

        Our competitors include other companies that offer shared two-wheeler services or carpooling marketplace, sell e-scooters or operate local service platforms. Certain of our competitors have greater financial, technical, marketing, research and development, manufacturing and other resources, greater name recognition, longer operating histories or a larger user base than we do. They may be able to devote greater resources to the development, promotion and sale of offerings and offer lower prices than we do, which could adversely affect our results of operations. Further, they may have greater resources to deploy towards the research, development and commercialization of new technologies, or they may have other financial, technical or resource advantages. These factors may allow our competitors to derive greater revenues and profits from their existing user bases, enlarge their user base at lower costs, or respond more quickly to new and emerging technologies and trends. Our current and potential competitors may also establish cooperative or strategic relationships amongst themselves or with third parties that may further enhance their resources and offerings.

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        Due to fierce competition, operating challenges and other reasons, some of our prior competitors in China's shared two-wheeler market have failed, ceased operations or declared bankruptcy in the past few years. Although we believe that we have made progress in overcoming the challenges faced by those prior competitors, we cannot assure you that we will always be able to maintain our competitive position.

        To obtain and maintain competitive advantage in any of our business segments would require us to divert significant managerial, financial and human resources. Increased competition has, in the past, negatively impacted our profitability and may reduce our market share and profitability and require us to increase our marketing and promotional efforts and capital commitment in the future, which could negatively affect our results of operations or force us to incur further losses. If we are unable to compete successfully and lose market share to our competitors, our business, results of operations and financial condition could be materially and adversely affected.

Our results of operations may vary significantly from period to period due to the seasonality of our business.

        Our results of operation are subject to fluctuation due to seasonality. For instance, we generally generate lower revenues in the first and fourth quarters for our shared two-wheeler services since our users are less inclined to ride bikes or e-bikes in cold weather. In addition, we generally experience spikes in carpooling rides around major holidays in China when users have more travelling needs. As a result, period-to-period comparisons of our results of operations may not be meaningful, especially given our limited operating history. Our results of operations in the future may fluctuate and deviate from the expectations of securities analysts and investors. Any occurrence that disrupts our business during any particular quarters could have a disproportionately material adverse effect on our liquidity and results of operations.

If we fail to adopt new technologies or adapt our mobile app and systems to changing user requirements or emerging industry standards, our business may be materially and adversely affected.

        The local services industry is characterized by rapid technological evolution, changes in user requirements and preferences, frequent introduction of new services and products embodying new technologies, and the emergence of new industry standards and practices, any of which could render our existing technologies and systems obsolete. Although we have successfully captured the market opportunities, we must continue to stay abreast of the constantly evolving industry trends and enhance and improve the responsiveness, functionality and features of our mobile apps, websites and systems to remain competitive. Our success will depend, in part, on our ability to identify, develop, acquire or license leading technologies useful in our business, and respond to technological advances and emerging industry standards and practices in a cost-effective and timely way. The development of mobile apps, websites and other proprietary technology entails significant technical and business risks. There can be no assurance that we will be able to use new technologies effectively or adapt our mobile apps, websites, proprietary technologies and systems to meet user requirements or emerging industry standards. If we are unable to adapt in response to changing market conditions or user preferences, whether for technical, legal, financial or other reasons, our business may be materially and adversely affected.

We require a significant amount of capital to fund our operations. If we cannot obtain sufficient capital on acceptable terms to fund our operations, our business, financial condition and prospects may be materially and adversely affected.

        Building a local services platform with scale is costly and time-consuming. We recorded negative working capital, and our current liabilities exceeded our current assets by RMB504.5 million (US$77.3 million) as of December 31, 2020. Our capital expenditures primarily in connection with purchases of property and equipment totaled RMB4,252.2 million, RMB2,332.8 million and

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RMB4,025.9 million (US$617.0 million) for the years ended December 31, 2018, 2019 and 2020, respectively. We have historically funded our capital requirements principally with capital contribution from shareholders and financing through issuance and sale of the preferred shares in private placement transactions, and through revenue generated from customers. If these resources are insufficient to satisfy our capital requirements, we may seek to sell additional equity or debt securities or obtain a credit facility. The sale of additional equity securities could result in the dilution of our existing shareholders. The incurrence of indebtedness would result in increased debt service obligations and could result in operating and financing covenants that would restrict our operations. It is uncertain whether financing will be available in amounts or on terms acceptable to us, if at all.

        The cost of continuing operations could further reduce our capital position, and a net cash outflow from operating activities could adversely affect our operations by reducing the amount of cash available to meet the cash needs for operating our businesses and to fund our investments in our business expansion. Our management reviews our forecasted cash flows on an on-going basis to ensure that we will have sufficient capital from a combination of internally generated cash flows and proceeds from financing activities, if required, in order to fund our working capital and capital expenditures.

        Our ability to obtain additional capital in the future, however, is subject to a number of uncertainties, including those relating to our future business development, financial condition and results of operations, general market conditions for financing activities by companies in our industry, and macro-economic and other conditions domestically and globally. If we cannot obtain sufficient capital to meet our capital needs, we may not be able to execute our growth strategies, and our business, financial condition and prospects may be materially and adversely affected.

If our expansion into new geographical areas is not successful, our business and prospects may be materially and adversely affected.

        We are expanding into more cities and towns across China. However, we cannot assure you that our geographic expansion would be successful. Expansion into new geographical areas involves new risks and challenges. Our lack of familiarity with, and relevant user insights relating to, these geographical areas may make it more difficult for us to keep pace with the evolving user demands and preferences. In addition, there may be one or more existing market leaders in any geographical area that we decide to expand into. Such market participants may be able to compete more effectively than us by leveraging their experience in doing business in that market as well as their deeper data insight and greater brand recognition among users. Moreover, some of our businesses are subject to local regulations and failure by us to comply with local regulations of the new geographic areas we are seeking to expand into may subject us to administrative penalties and financial losses. See "—Our local services, particularly our shared two-wheeler services and carpooling marketplace, are highly regulated. Certain past and current non-compliance and potential future failure to comply with any applicable regulation or if the PRC or local government adopts new regulations or amendments to existing regulations, our business, results of operations and financial condition could be materially and adversely affected."

Growth of our business will depend on our strong brands, and any failure to maintain, protect and enhance our brands would limit our ability to retain or expand our user base, which would materially and adversely affect our business, financial condition and results of operations.

        We believe that strong recognition of our brands among existing users has reduced our user acquisition costs and contributed significantly to the growth and success of our business. Accordingly, maintaining, protecting and enhancing the recognition of our brands is critical to our business. Many

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factors, some of which are beyond our control, are important to maintaining, protecting and enhancing our brands. These factors include our ability to:

    maintain the quality and attractiveness of the local services we offer;

    increase brand awareness through marketing and brand promotion activities;

    maintain or improve satisfaction with our local services;

    compete effectively with existing or future competitors;

    defend ourselves against patent, trademark or copyright infringement claims;

    preserve our reputation generally and in the event of any negative publicity on our local services, consumer safety, internet security, or other issues affecting us or other local services companies in China; and

    maintain our cooperative relationships with various participants on our platform.

        A public perception that we or various participants on our platform do not provide satisfactory services to users, even if factually incorrect or based on isolated incidents, could damage our reputation, diminish the value of our brands, undermine the trust and credibility we have established and have a negative impact on our ability to attract and retain users, and our business, financial condition and results of operations may be materially and adversely affected.

Our shared two-wheeled vehicles and the e-scooters sold on our platform may experience quality problems from time to time, which could result in liabilities to us, decreased use of our shared two-wheeler services or decreased sales of the e-scooters, adversely affect our results of operations and harm our reputation.

        Our shared two-wheeled vehicles and the e-scooters sold on our platform may have quality issues, such as design and manufacturing defects. For example, our smart hardware may contain "bugs" that can unexpectedly interfere with its intended operation. We were also found liable in certain legal proceedings due to the quality issues of our shared two-wheeled vehicles, such as malfunction of brakes and falling off of pedals for an immaterial amount. There can be no assurance we will be able to detect and fix all defects and quality issues in the hardware, software and services we offer. Failure to do so could result in financial losses, such as loss in revenues and increase in cost, and adverse impact on our business operation, such as suspension of operation. The occurrence of real or perceived quality problems or material defects in our current or future shared two-wheeled vehicles and the e-scooters may also lead to product liabilities, recalls, market withdrawals, negative publicity or regulatory actions by governmental authorities. Any of these events could result in increased governmental and regulatory scrutiny, harm to our reputation, significant financial costs, reduced demand for our products and services, and additional safety and testing requirements. Defects of our shared two-wheeled vehicles and the e-scooters sold on our platform may also cause injuries to or even death of users of our shared two-wheeler services or purchasers of the e-scooters, which may subject us to potential lawsuits and penalties. Even if injuries to or death of users are not the result of any defects in or the failure to properly maintain or repair our shared two-wheeled vehicles and the e-scooters, we may incur expenses to defend or settle any claims and our brand and reputation may be harmed. We may also need our OEMs to do product recalls or redesigns if there are serious quality issues of the e-scooters, which is costly and time-consuming.

        Additionally, we source and purchase shared two-wheeled vehicles and their key components from certain suppliers. We cannot assure you that the quality and functions of these vehicles and key components supplied by such suppliers will be consistent with and maintained at our high standard. Any defects or quality issues in these vehicles and key components or any noncompliance incidents associated with these suppliers could result in quality issues and hence compromise our brand image and results of operations.

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If our collaboration with any of our strategic partners is terminated or curtailed, or if we are no longer able to benefit from the synergies of our business collaborations with our strategic partners, our business may be adversely affected.

        Our business has benefited from our collaborations with our strategic partners, such as Ant Group Co., Ltd., or Ant Group, one of our principal shareholders, and Contemporary Amperex Technology Co., Limited, or CATL. For instance, users can access our services through Alipay operated by Ant Group. Although we have been reducing reliance on Alipay as a traffic acquisition channel in recent years, Alipay, as a widely used digital payment app, brings a large amount of traffic to our platform. If there is any change in Ant Group's business operations or our relationship with Ant Group, our business, financial condition and results of operations may be adversely affected. In addition, we invested in an entity, Fujian Ningde Zhixiang Infinite Technology Co., Ltd., or Ningde Zhixiang, which operates a battery swapping network and supplies lithium-ion batteries to us, together with Shanghai Yunxin Venture Capital Co., Ltd., or Shanghai Yunxin, a subsidiary of Ant Group, and CATL. See "—We rely on our relationship with external suppliers. In the event that the supply of two-wheeled vehicles, lithium-ion batteries or spare parts is interrupted or there are significant increases in prices, our business, financial condition and results of operations could be adversely affected" for further details. However, we cannot assure you that we will continue to maintain our cooperative relationships with our strategic partners and their respective affiliates in the future, and we cannot assure you that the validity of the contracts or agreements we entered with third parties will not be challanged. If the services, products or resources provided by these strategic partners become limited, compromised, restricted, curtailed or less effective or become more expensive or unavailable to us for any reason, our business may be materially and adversely affected. To the extent we cannot maintain our cooperative relationships with these strategic partners, we may need to source other alternative partners to provide such services, which may divert significant management attention from existing business operations.

We rely on our relationship with external suppliers. In the event that the supply of two-wheeled vehicles, lithium-ion batteries or spare parts is interrupted or there are significant increases in prices, our business, financial condition and results of operations could be adversely affected.

        We rely on our relationship with external suppliers. A continuous, stable and cost-effective supply of two-wheeled vehicles, lithium-ion batteries and spare parts that meet our standards is critical to our operations. There can be no assurance we will be able to maintain our existing relationships with these suppliers and continue to be able to source our two-wheeled vehicles, lithium-ion batteries and spare parts on a stable basis, at a reasonable price or at all.

        We are also subject to risks of potential delivery failure or shortages. In the event that the supply of two-wheeled vehicles, lithium-ion batteries or spare parts is interrupted or there are significant increases in prices, our business, financial condition and results of operations could be adversely affected. Additionally, changes in business conditions, force majeure, governmental changes, COVID-19 and other factors beyond our control or that we do not presently anticipate could also affect our suppliers' ability to deliver on a timely basis.

        In addition, we entered into an exclusivity agreement with Ant Group, CATL and Ningde Zhixiang on June 12, 2019, pursuant to which we agreed to procure batteries only from Ningde Zhixiang and its subsidiaries and CATL and its affiliates and only use battery swapping service provided by Ningde Zhixiang and its subsidiaries for a three-year exclusivity period, which may be extended to four years if certain conditions are met. Any deterioration of our relationship with CATL, Ant Group and Ningde Zhixiang or any failure by Ningde Zhixiang and its subsidiaries to supply a sufficient number of high-quality lithium-ion batteries or provide battery swapping service on a timely basis may cause interruptions to our business operations and result in losses.

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If our safety mechanisms fail to ensure user safety while using our platform, our business, results of operations and financial condition could be materially and adversely affected.

        Safety is our top priority and we implement comprehensive safety mechanisms to minimize safety concerns. However, we cannot assure you that our safety mechanisms will always meet our expectations or the requirements under applicable laws and regulations, or timely respond to and deal with emergency matters. If our safety mechanisms fail to ensure user safety while using our platform, our business, results of operations and financial condition could be materially and adversely affected.

        For our shared two-wheeler services, users may intentionally choose not to wear protective equipment such as helmets. User negligence or error, including due to lack of necessary skills or experience for riding bikes or e-bikes, together with the failure to use protective equipment, increases the risk of injuries or death while using our platform. Non-compliance with standard traffic laws, as well as urban hazards such as unpaved or uneven roadways, increases the risk and severity of potential injuries. Although we advise our users of local requirements, including applicable helmet laws, and offer promotional codes for and occasionally give away helmets during promotions or in accordance with local regulations, we do not otherwise provide protective equipment to users using our shared two-wheeler services.

        For our carpooling marketplace, we also have strict screening procedures for both riders and private car owners in place. We conduct background checks through third-party database pursuant to applicable laws and regulations. Such laws and regulations include, for example, the Emergency Notice on Further Strengthening the Safety Management of Online Reservation of Taxis and Carpooling of Private Vehicles, or the Notice, jointly promulgated by the General Office of the Ministry of Transport and the General Office of the Ministry of Public Security on September 10, 2018. According to the Notice, carpooling platforms shall carry out background checks on all private car owners according to relevant requirements of taxi driver background check and supervision. However, we cannot assure you that our safety mechanisms will always be effective and meet our expectations, and that we will always be able to filter out unqualified or suspicious private car owners and riders, or timely respond to and deal with emergency matters. The third-party database through which we conduct our background checks may not expose all potentially relevant information. We cannot assure you the accuracy and comprehensiveness of such database. We may fail to conduct background checks adequately or identify information that could be relevant to a determination of eligibility. We also rely on the accuracy of the information provided by private car owners and riders, which may not be all true. In addition, we do not independently test private car owners' driving skills. If our safety mechanisms fail and any private car owner or rider commit any criminal or inappropriate activities, we may be subject to legal liabilities and our business and reputation may be adversely affected.

The batteries used in our e-bikes and the e-scooters sold on our platform may catch fire or vent smoke and flame on rare occasions.

        Our e-bikes and the e-scooters sold on our platform make use of batteries which on rare occasion may rapidly release the energy they contain by venting smoke and flames in a manner that can ignite nearby materials and cause fire or explosion. While batteries used in our e-bikes and the e-scooters are built with robust safety features, there can be no assurance that they will always function safely. If any safety accident occurs to any of our e-bikes or the e-scooters or if any accident causes personal injuries or deaths, we could be subject to lawsuits, product recalls or suspension of our services, all of which would result in financial losses and damage our reputation. Also, negative public perceptions regarding the safety of batteries or accidents occur to batteries used by other service providers could seriously harm users' confidence in our shared two-wheeler services and the e-scooters sold on our platform.

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Conduct of users, private car owners, riders or other third parties that are criminal, violent, inappropriate, dangerous or fraudulent may materially and adversely affect our reputation, business, results of operations and financial condition.

        The provision of our local services involves various participants, such as users, private car owners, riders and other third parties. We have limited control over the conduct of such participants and their conduct may result in fatalities, injuries, other bodily harm, fraud, invasion of privacy, property damage, discrimination, brand and reputational damage, which could create potential legal or other substantial liabilities for us.

        We may also be negatively affected by illegal or inappropriate conduct by third parties. For instance, our shared two-wheeler services was once negatively affected by a fraudulent third-party app called "Quannengche." The app allowed its users to share accounts and unlock any of the bikes that were being operated by the bike sharing platforms in the market, including us, without paying fees to such platforms. Although the app ceased operation after the local police took action in August 2020 and we have improved our security system to prevent such attacks, we cannot assure you that we would not be affected by other fraudulent conduct in the future.

        As to our carpooling marketplace, we are not able to control or predict the actions of private car owners, and we may be unable to protect or provide a safe environment for riders. If private car owners engage in criminal activities, misconduct, or inappropriate conduct or use our platform as a conduit for criminal activities, riders may consider our carpooling services as unsafe, which may adversely impact our business operations and financial positions. Similarly, we may not be able to prevent inappropriate conduct by riders, which may put private car owners in danger. In addition, private car owners may skip orders and fail to pick up riders, or circumvent our platform and complete the transaction offline and in private. We may also incur losses from various types of fraud by our users, including use of stolen or fraudulent credit card data or attempted payments with insufficient funds. Under current credit card practices, we may be liable for rides facilitated on our platform with fraudulent credit card data, even if the associated financial institution approved the credit card transaction. We have taken measures to detect and prevent fraudulent transactions by our users, such as cross-checking a driver's travel path against the proposed route to verify the authenticity of an order. Despite our efforts, our measures may not eliminate all misconducts or fraud. Our failure to adequately detect and prevent such behaviors could materially and adversely affect our reputation, business, results of operations and financial condition. We have received and expect to continue to receive complaints from riders and other users, as well as actual or threatened legal action against us.

        We offer incentives to our users to encourage them to use our shared two-wheeler services and carpooling marketplace in some cities. However, such incentives may be maliciously misappropriated or abused by users. For instance, a user may set up multiple accounts to get incentives for new users. Some private car owners may collude with others to make up fake orders to get incentives. Although we have taken measures to detect potential abuses, we cannot assure you that we will be able to detect or prevent all such abuses. Failure to prevent such conduct may negatively affect our business and results of operations and cause financial losses to us.

        In addition, as one of our new initiatives, we are collaborating with several online financing platforms to advertise their financing services on our platform. Although the online financing platforms are the ultimate financing service providers and we have not generated material revenue from such advertising services and are not involved in any financing transaction, any illegal or improper action or inaction taken by such financing platforms, such as charging exorbitant interest rates, violent collection and harassment of unrelated people, may be attributed by users to us, thus damaging our reputation and potentially affecting our results of operations. In addition, negative publicity and consumer sentiment generated from fraudulent or deceptive conduct by those financing platforms could damage our reputation, business, results of operations, and financial condition.

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Significant impairment of our long-lived assets could materially impact our financial position and results of our operations.

        We have recorded a significant amount of long-lived assets, primarily including our property and equipment and intangible assets. We evaluate our long-lived assets for impairment whenever events or changes in circumstances, such as a significant adverse change to market conditions that will impact the future use of the assets, indicate that the carrying amount of an asset may not be fully recoverable. When these events occur, we evaluate the recoverability of long-lived assets by comparing the carrying amount of the assets to the future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amount of the assets, we recognize an impairment loss based on the excess of the carrying amount of the assets over their fair value. The application of long-lived asset impairment test requires significant management judgment. If our estimates and judgments are inaccurate, the fair value determined could be inaccurate and the impairment may not be adequate, and we may need to record additional impairments in the future. We did not record any impairment of our long-lived assets for the years ended December 31, 2018, 2019 and 2020 based on the recoverability test. However, we may record impairments on long-lived assets in the future. Any significant impairment losses charged against our long-lived assets could have a material adverse effect on our results of operations.

We face risks associated with our jointly operated model and franchised model.

        Our shared two-wheeler services are provided under jointly operated model and franchised model in some cities, in addition to the company-operated model. Under the jointly operated model, we own the fleet and outsource the dispatching and maintenance of the shared two-wheelers to third-party joint operation partners in designated areas in certain cities where the company-operated model is not cost effective for us. Under the franchised model, we sell the fleet to our franchisees, who are directly responsible for provision of shared two-wheeler services through our platform. The revenue generated from the franchised model was immaterial. We also collaborate with franchised stores that sell e-scooters on our platform.

        Our supervision on the operation of our joint operation partners and franchisees may not be as effective as the company-operated model under which we are directly in charge of the operation. While we maintain clear and comprehensive operating guidelines for joint operation partners, we cannot assure you that all of our joint operation partners will fully abide by these guidelines. Our control over the franchisees is even more limited. The franchisees have full discretion in the management and operation of their two-weelers in the mutually agreed upon designated areas. We only provide general policies and do not provide specific guidelines or operating instructions to the franchisees. If our joint operation partners or franchisees fail to deliver high quality services or address user demand in a timely manner, or if any of their misconduct leads to damages to our brand image and reputation, our business, financial condition, results of operations and future prospects could be adversely affected. If our joint operation partners or franchisees violate any laws or regulations, it may cause disruptions to our business operations and damage our reputation.

        In addition, pursuant to the Administrative Regulations on Commercial Franchising Operations promulgated by the State Council in 2007 and Administrative Measures on the Record Filing of Commercial Franchises issued by MOFOCM in 2011, commercial franchising refers to the business activities where an enterprise that possesses the registered trademarks, enterprise logos, patents, proprietary technology or any other business resources, allows such business resources to be used by another business operator through contract and the franchisee follows the uniform business model to conduct business operation and pay franchising fees according to the contract. If the relationship between us and our franchisees constitute such regulated commercial franchising, we will be subject to these regulations and will be required to file such franchising arrangements with MOFCOM or its local counterparts and update the filings when there are changes to relevant information. We have not made

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any such filing as of the date of this prospectus. However, if relevant authorities determine that we should be subject to, but failed to comply with such franchising regulations, we may be subject to administrative penalities, including order to rectify, confiscation of the related revenues, fines as well as public reprimand. If we become subject to these penalties, our reputation, business, and results of operations may be materially and adversely affected. As of the date of this prospectus, we have not received any government order to rectify, confiscation of related revenues, fines or penalties from the relevant regulatory authorities.

The e-scooters sold on our platform are subject to safety standards and failure to satisfy such mandated standards would have a material adverse effect on our business and operating results.

        We collaborate with franchised stores that sell e-scooters on our platform. In China, scooters must meet or exceed all mandated safety standards, including national level and local level standards. It is required under these standards to conduct rigorous testing and use approved materials and equipment. In May 2018, the State Administration for Market Regulatory, or the SAMR, and the National Standardization Administration of China, or the NSA, jointly promulgated the Regulation on Safety Technical Specification for Electric Bicycle and announced the new standard GB17761-2018, which came into effect on April 15, 2019, or the New Standard, replacing the old standard GB17761-1999, or the Old Standard, and allowing an 11-month transition period to meet the New Standard starting from May 2018. Besides, a technical resolution on the interpretation and implementation of the New Standard was promulgated jointly by an expert group on TC12 motorcycle and component technology of Certification and Accreditation Administration of the PRC and China National Motorcycle Testing Centre (Tianjin) on March 25, 2019, which set some more specific and stricter requirements for the design of the e-scooters. Although this resolution has not been adopted by the PRC national government as a national regulation, such interpretations that may be promulgated by the government authorities from time to time may still cause uncertainty regarding the compliance of our business. The e-scooters sold on our platform may fail to meet the New Standard and relevant interpretations of the New Standard, and the certification of the e-scooters may be restricted or modified if the e-scooters are not rectified in accordance with the New Standard, the resolution or any relevant interpretations.

        There is no guarantee that the e-scooters will satisfy the relevant standard and requirements, and we may be required to satisfy additional industry standards and face regulation changes in the future. If any models of the e-scooter were found to be in violation of relevant laws and regulations, the models in question would be prohibited from being sold in the Chinese market, which would in turn materially and adversely affect our sales and revenues, and cause damage to our brand and result in liabilities.

        Furthermore, e-scooters must pass various tests, undergo a certification process and finally be affixed with China Compulsory Certification, or CCC, prior to being delivered from the factory, being sold, or being used in any commercial case, and such certification is also subject to periodic renewal. On March 14, 2019, the Opinions of the State Administration for Market Regulation, the Ministry of Industry and Information Technology and the Ministry of Public Security on Intensifying Supervision of the Execution of National Standards for Electric Bicycles, or the Opinions, was promulgated. The Opinions provides that the market supervision department should strengthen the management of CCC certification for electric bicycles, strengthen inspections of certification agencies and manufacture enterprises, and should only allow vehicles that meet the New Standards and obtained CCC certification flowing into the market. We have obtained CCC certification for all of our current e-scooters, and will try to obtain CCC certification for our future products. There is no guarantee, however, all models of our e-scooters will always comply with the CCC standard and satisfy the requirements of CCC certification, or we will be able to renew our current certification or certify timely our new products in the future. If our e-scooters were found to be in violation of the CCC standard, we would be prohibited from selling such e-scooters in the Chinese market, which would in turn

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materially and adversely affect our sales and revenues, and cause damage to our brand and result in liabilities.

From time to time we may evaluate and potentially consummate strategic investments or acquisitions, which could require significant management attention, disrupt our business and adversely affect our financial results.

        We may evaluate and consider strategic investments, combinations, acquisitions or alliances to enhance our competitive position. For instance, we invested in an entity, Ningde Zhixiang, which operates a battery swapping network and supplies lithium-ion batteries to us, together with CATL and Ant Group. These transactions often demand a significant amount of capital, which will decrease the amount of cash available for our capital expenditures. If we are unable to identify an appropriate business opportunity, we may not be able to successfully consummate the transaction and, even if we do consummate such a transaction, we may be unable to obtain the benefits or avoid the difficulties and risks of such transaction, which may result in investment losses.

        In addition, strategic investments or acquisitions could subject us to substantial limitations on our business. For instance, our investment agreement and other related agreements with CATL and Ant Group include restrictive provisions that may limit our business expansion, such as a non-compete provision that prevents us from engaging in any business that competes with the core business of Ningde Zhixiang for three-year period (which may be extended to four years if certain conditions are met), restrictions on investing or participating in other competing platforms, an exclusivity provision that prevents us from purchasing or leasing batteries from suppliers other than Ningde Zhixiang and its subsidiaries, CATL and its affiliates and prevents us from using battery swapping services provided by service providers other than Ningde Zhixiang and its subsidiaries for three-year period (which may be extended to four years if certain conditions are met), and other limitations on our business development.

        Moreover, we adopted fair value option for our investment in Ningde Zhixiang. If the fair value of such investment decreases, it will adversely affect our financial condition.

        Strategic investments or acquisitions will involve risks commonly encountered in business relationships, including:

    difficulties in assimilating and integrating the operations, personnel, systems, data, technologies, products and services of the acquired business;

    inability of the acquired technologies, products or businesses to achieve expected levels of revenues, profitability, productivity or other benefits including the failure to successfully further develop the acquired technology;

    difficulties in retaining, training, motivating and integrating key personnel;

    diversion of management's time and resources from our normal daily operations and potential disruptions to our ongoing businesses;

    strain on our liquidity and capital resources;

    difficulties in executing intended business plans and achieving synergies from such strategic investments or acquisitions;

    difficulties in maintaining uniform standards, controls, procedures and policies within the overall organization;

    difficulties in retaining relationships with existing suppliers and other partners of the acquired business;

    risks of entering markets in which we have limited or no prior experience;

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    regulatory risks, including remaining in good standing with existing regulatory bodies or receiving any necessary pre-closing or post-closing approvals such as filings and approvals under the anti-monopoly and unfair competition laws and rules, as well as being subject to new regulators with oversight over an acquired business;

    assumption of contractual obligations that contain terms that are not beneficial to us, require us to license or waive intellectual property rights or increase our risk for liability;

    liability for activities of the acquired business before the acquisition, including intellectual property infringement claims, violations of laws, commercial disputes, tax liabilities and other known and unknown liabilities; and

    unexpected costs and unknown risks and liabilities associated with strategic investments or acquisitions.

        Any future investments or acquisitions may not be successful, may not benefit our business strategy, may not generate sufficient revenues to offset the associated acquisition costs or may not otherwise result in the intended benefits.

Anti-monopoly and unfair competition claims or regulatory actions against us may result in our being subject to fines as well as constraints on our business.

        The PRC anti-monopoly enforcement agencies have in recent years strengthened enforcement under the PRC Anti-monopoly Law, including levying significant fines, with respect to concentration of undertakings and cartel activity, mergers and acquisitions, as well as abusive behavior by companies with market dominance. In March 2018, the SAMR was formed as a new governmental agency to take over, among other things, the anti-monopoly enforcement functions from the relevant departments under the MOFCOM, the National Development and Reform Commission, or the NDRC, and the State Administration for Industry and Commerce, or the SAIC, respectively. Since its inception, the SAMR has continued to strengthen its anti-monopoly enforcement. The SAMR issued a new set of guidelines with respect to merger control review in September 2018, and issued the Notice on Anti-monopoly Enforcement Authorization on December 28, 2018, which grants authorizations to the SAMR's province-level branches for anti-monopoly enforcement within their respective jurisdictions. In June 2019, the SAMR promulgated three supporting regulations of the PRC Anti-Monopoly Law, namely, the Interim Provisions on the Prohibition of Monopoly Agreements which refines the methods and procedures for the determination of monopoly agreements, the Interim Provisions on Prohibiting Acts of Abuse of Market Dominance which clarifies the identification and handling of illegal acts including the consideration for determining the market dominance of the Internet and intellectual property, and the Interim Provisions on Prohibiting Acts of Abuse of Administrative Authority to Eliminate or Restrict Competition which clarifies the types and the methods of handling. These three supporting regulations became effective on September 1, 2019. The SAMR recently has also imposed several administrative penalties on various companies for failing to duly make filings as to their transactions subject to merger control review by the SAMR. The scope of the companies that were penalized is broad, and covers a variety of different industries.

        The PRC Anti-monopoly Law also provides a private right of action for competitors, business partners or customers to bring anti-monopoly claims against companies. In recent years, an increased number of companies have been exercising their right to seek relief under the PRC Anti-monopoly Law. As public awareness of the rights under the PRC Anti-monopoly Law increases, more companies, including our competitors, business partners and customers may resort to the remedies available under the PRC Anti-monopoly Law, such as through complaints to regulators or as plaintiffs in private litigation, to hinder our business operations and improve their competitive position, regardless of the merits of their claims. Any of the above actions against us could materially and adversely affect our business, operations, reputation, brand and the trading price of our ordinary shares.

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        On February 7, 2021, the Anti-Monopoly Committee of State Council promulgated the Anti-Monopoly Guidelines for the Platform Economy Sector, which aims at specifying some of the circumstances under which an activity of Internet platform may be identified as monopolistic act as well as setting out merger controlling filing procedures involving variable interest entities. As the guidelines are newly issued, there exist high uncertainties with respect to its interpretation and implementation. Due to the uncertainties associated with the evolving legislative activities and varied local implementation practices of anti-monopoly and competition laws and regulations in the PRC, it may be costly to adjust some of our business practice in order to comply with these laws, regulations, rules, guidelines and implementations, and any incompliance or associated inquiries, investigations and other governmental actions may divert significant management time and attention and our financial resources, bring negative publicity, subject us to liabilities or administrative penalties, and/or materially and adversely affect our financial conditions, operations and business prospects. For instance, some of our cooperation agreements with colleges and scenic areas to provide our shared two-wheeler services include exclusivity clauses that may be deemed as an abuse of dominant market position.

        In light of our market share in the mobility services sector, we may receive close scrutiny from government agencies under the PRC Anti-monopoly Law in connection with our business practices, investments and acquisitions. Any anti-monopoly lawsuit, regulatory investigations or administrative proceeding initiated against us could result in us being subject to profit disgorgement, heavy fines, confiscation of our incomes, and various constraints on our business, or result in negative publicity that could harm our reputation and negatively affect the trading prices of our ADSs. These constraints could also include forced termination of any agreements or arrangements that are determined by governmental authorities to be in violation of anti-monopoly laws, required divestitures and limitations on certain pricing and business practices, which may limit our ability to continue to innovate, diminish the appeal of our services, impair our market share, increase our operating costs and prevent us from pursuing our investment and acquisition strategy. These constraints could also encourage our competitors to develop platforms, websites, products and services that mimic the functionality of our services, which could decrease the popularity of our services and platform among users, private car owners, riders and other participants, and cause our revenues and net income to decrease materially. Given the scale and rapid expansion of our business, we may be subject to greater scrutiny, which could in turn increase the likelihood that we will face regulatory action that could result in fines or restrictions on our business as well as negative publicity and adversely affect our reputation and the trading price of our ADSs. In addition, we have entered into contracts with certain local government authorities which allow only us to operate our shared two-wheeler business in designated regions. We cannot assure you that such contracts will always be held enforceable under the PRC anti-monopoly laws and regulations. Our business may be adversely affected if such contracts are declared void or terminated.

Our research and development efforts may not yield expected results.

        Technological innovation is critical to our success, and we strategically develop many key technologies in-house, such as our Hello Brain. We have been investing heavily on our research and development efforts. For the years ended December 31, 2018, 2019 and 2020, our research and development expenses amounted to RMB114.9 million, RMB501.6 million and RMB682.1 million (US$104.5 million), respectively. Our research and development expenses accounted for 5.4%, 10.4% and 11.3% of our total revenues for 2018, 2019 and 2020, respectively. The local services market is experiencing rapid technological changes, and we need to invest significant resources in research and development to lead technological advances in order to remain competitive in the market. Therefore, we expect that our research and development expenses will continue to be significant. Furthermore, research and development activities are inherently uncertain, and there can be no assurance that we will continue to achieve technological breakthroughs and successfully commercialize such breakthroughs. As a result, our significant expenditures on research and development may not generate

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corresponding benefits. If our research and development efforts fail to keep up with the latest technological developments, we would suffer a decline in our competitive position.

We may increasingly become a target for public scrutiny, including complaints to regulatory agencies, negative media coverage, and malicious allegations, all of which could severely damage our reputation and materially and adversely affect our business and prospects.

        We process an extremely large number of transactions on a daily basis on our platform, and the high volume of transactions taking place on our platform as well as publicity about our business create the possibility of heightened attention from the public, regulators and the media. Incidents on our platform or our competitors' platform may also give rise to heightened public or regulatory scrutiny or negative publicity. For example, the failure of certain bike sharing platforms to return deposit to their users in 2018 negatively affected public sentiment towards shared two-wheeler service platforms at large, including us, although we were the first to launch deposit-free initiative. In addition, there could be negative public perception surrounding bike and e-bike sharing, including the overall safety and the potential for injuries occurring as a result of accidents involving an increased number of shared two-wheeled vehicles on the road. As to carpooling marketplace, there was one vicious criminal incident that happened on a major mobility service platform in connection with its carpooling marketplace in recent years, resulting in safety concerns for carpooling among the general public, controversy over the business model and stringent supervision of carpooling from regulatory authorities.

        Moreover, our services or policies or changes thereto could result in dissatisfaction in or objections to our platform by our users, the public or the media. From time to time, these objections or allegations, regardless of their veracity, may lead to user dissatisfaction, public protests or negative publicity, which could result in government inquiry or substantial harm to our brand, reputation and business operations.

        As our business expands and grows, we may be exposed to heightened public scrutiny in jurisdictions where we already operate as well as in new jurisdictions where we may operate. There is no assurance that we would not become a target for regulatory or public scrutiny in the future or that scrutiny and public exposure would not severely damage our reputation as well as our business and prospects.

As we continue to grow, we may not be able to effectively manage our growth, which could negatively impact our brand and financial performance.

        We have experienced significant growth in the past several years. We plan to further grow our business by, among other things, expanding our service portfolio, investing in technology, strengthening our brand recognition and enhancing our sales and marketing efforts. Our future operating results will depend to a large extent on our ability to manage our expansion and growth successfully.

        Risks that we face in undertaking this expansion include, among others:

    managing a larger organization with a greater number of employees in different divisions;

    controlling expenses and investments in anticipation of expanded operations;

    implementing and enhancing administrative infrastructure, systems and processes; and

    executing our strategies and business initiatives successfully.

        Any failure to manage our growth effectively could materially and adversely affect our business, prospects, results of operations and financial condition.

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The proper functioning of our technology infrastructure is essential to our business, and any failure to maintain the satisfactory performance, security and integrity of our technology infrastructure would materially and adversely impair our ability to provide services and affect our business, reputation, financial condition and results of operations.

        Our business depends on the ability of our information technology systems to process massive amounts of information and transactions in a stable and timely manner. Specifically, the satisfactory performance, reliability and availability of our mobile apps and websites, our transaction-processing systems and our network infrastructure are critical to our success and our ability to attract and retain users and provide adequate services. Our revenues depend on the user traffic on our mobile apps and websites and the volume of activities that traffic generates.

        Furthermore, our ability to provide users with a high quality user experience depends on the continuing operation and scalability of our network infrastructure and information technology systems. The risks we face in this area include:

    our systems are potentially vulnerable to damage or interruption as a result of earthquakes, floods, fires, extreme temperatures, power loss, telecommunications failures, technical error, computer viruses, hacking and similar events;

    we may encounter problems when upgrading our systems or services and undetected programming errors could adversely affect the performance of the software we use to provide our services. The development and implementation of software upgrades and other improvements to our internet services is a complex process, and issues not identified during pre-launch testing of new services may only become evident when such services are made available to our entire user base; and

    we rely on cloud service providers and other network services provided by third parties, and the limited availability of third-party providers with sufficient capacity to house additional network broadband capacity in China may lead to higher costs or limit our ability to offer certain services or expand our business.

        These and other events may lead to interruptions, decreases in connection speed, degradation of our services or the permanent loss of user data and uploaded content. Any system interruptions caused by telecommunications failures, computer viruses, or hacking or other attempts to harm our systems that result in the unavailability of our mobile apps and websites or reduced performance would affect the attractiveness of the services offered on our platform. If we experience frequent or persistent service disruptions, whether caused by failures of our own systems or those of third-party service providers, our reputation or relationships with our users may be damaged and our users may switch to our competitors, which may have a material adverse effect on our business, financial condition and results of operations.

We depend on the interoperability of our platform across third-party applications and platforms that we do not control.

        We have integrations with Alipay, Amap and a variety of other applications and platforms. As our services expand and evolve, we may have an increasing number of integrations with other applications, products and services. These applications, products and services are constantly evolving, and we may not be able to maintain or modify our platform to ensure its compatibility with counterparty offerings following development changes. In addition, some of our competitors or technology partners may take actions which disrupt the interoperability of our platform with their own products or services, or exert strong business influence on our ability to, and the terms on which we, operate and distribute our platform. As our services continue to evolve, we expect the types and levels of competition to increase. Should any of our competitors or technology partners modify their products, standards or terms of use

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in a manner that degrades the functionality or performance of our platform or is otherwise unsatisfactory to us or gives preferential treatment to competitive products or services, our business, results of operations and financial condition could be materially and adversely affected.

Our operations depend on the performance of the internet infrastructure and fixed telecommunications networks in China.

        Almost all access to the internet in China is maintained through state-owned telecommunication operators under the administrative control and regulatory supervision of the Ministry of Industry and Information Technology, or the MIIT. Moreover, we primarily rely on a limited number of telecommunication service providers to provide us with data communications capacity through local telecommunication lines and internet data centers to host our servers. We have limited access to alternative networks or services in the event of disruptions, failures or other problems with China's internet infrastructure or the fixed telecommunications networks provided by telecommunication service providers. For instance, failure of telecommunications networks may cause connectivity issues to our shared bikes and e-bikes or service interruption to our mobile app, which may negatively affect user experience and our reputation. With the expansion of our business, we may be required to upgrade our technology and infrastructure to keep up with the increasing traffic on our Hello app and increasing use of our local services. We cannot assure you that the internet infrastructure and the fixed telecommunications networks in China will be able to support the demands associated with the continued growth in internet usage.

        In addition, we have no control over the costs of the services provided by telecommunication service providers. If the prices we pay for telecommunications and internet services rise significantly, our results of operations may be materially and adversely affected. Furthermore, if internet access fees or other charges to internet users increase, our user traffic may decline and our business may be harmed.

Any cyber-attacks, unauthorized access or control of our systems could result in loss of confidence in us and harm our business.

        Our cybersecurity measures may not detect or prevent all attempts to compromise our systems, including viruses, malicious software, break-ins, phishing attacks, social engineering, security breaches or other attacks and similar disruptions that may jeopardize the security of information stored in and transmitted by our systems or that we otherwise maintain. We encourage reporting of potential vulnerabilities in the security of our platforms, and we aim to remedy any reported and verified vulnerability. However, there can be no assurance that vulnerabilities will not be exploited in the future before they can be identified, or that our remediation efforts are or will be successful. Any cyber-attacks, unauthorized access, disruption, damage or control of our information technology networks or any loss or leakage of data or information stored in our systems could result in legal claims or proceedings. In addition, regardless of their veracity, reports of cyber-attacks to our information technology networks or data, as well as other factors that may result in the perception that our information technology networks or data are vulnerable to "hacking," could negatively affect our brand and harm our business, prospects, financial condition and results of operation.

Our business generates and processes a large amount of data, and the improper use or disclosure of such data could subject us to significant reputational, financial, legal and operational consequences, and deter current and potential users from using our services.

        Our business generates and processes a large quantity of personal, transactional, demographic and behavioral data. We face risks inherent in handling large volumes of data and in protecting the security

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of such data. In particular, we face a number of challenges relating to data from transactions and other activities on our platform, including:

    protecting the data in and hosted on our system, including against attacks on our system by outside parties or fraudulent behavior by our employees;

    addressing concerns related to privacy and sharing, safety, security and other factors; and

    complying with applicable laws, rules and regulations relating to the collection, use, disclosure or security of personal information, including any requests from regulatory and government authorities relating to such data.

        Any systems failure or security breach or lapse that results in the release of user data could harm our reputation and brand and, consequently, our business, in addition to exposing us to potential legal liability. Any failure, or perceived failure, by us to comply with our posted privacy policies or with any regulatory requirements or privacy protection-related laws, rules and regulations could result in proceedings or actions against us by governmental entities or others. These proceedings or actions may subject us to significant penalties and negative publicity, require us to change our business practices, increase our costs and severely disrupt our business.

        We are subject to various data privacy and protection laws and regulations in China, including, without limitation, the Cyber Security Law of People's Republic of China. Pursuant to these laws and regulations, a service provider is required to obtain a user's consent to collect the user's personal information. See "Regulations—Regulations Relating to Internet Information Security and Privacy Protection."

        We have adopted strict information security policies, and we use a variety of technologies to protect the data with which we are entrusted. We mainly collect and store data relating to the usage of our local services platform. To the extent we collect user information, we obtain prior consent from our users in accordance with applicable laws and regulations. We de-sensitize user data by removing personally identifiable information, when such information is not relevant to our business. We then analyze such information to improve our technologies, products and services. We use a variety of technologies to protect the data with which we are entrusted. For further information, see "Business—Data Privacy and Security." However, we cannot assure you that the measures taken will always meet our expectations or the requirements under applicable laws and regulations.

        Collection, use and transmission of user data may subject us to legislative and regulatory burdens in China, which could, among other things, require notification of data breach, restrict our use of such information and hinder our ability to acquire new users or serve existing users. If we were found to be in violation of users' rights to data privacy, we could face administrative investigation, disciplinary actions, civil or criminal claims and reputational damage. We may incur significant expenses to comply with laws and regulations relating to data privacy, data security and consumer protection, as well as relevant industry standards and contractual obligations. If third parties improperly obtain and use the personal information of our users, we may be required to expend significant resources to resolve such problems.

        In addition, the interpretation and application of personal information protection laws and regulations and standards are still uncertain and evolving. We cannot assure you that relevant governmental authorities will not interpret or implement the laws or regulations in ways that negatively affect us. We may also become subject to additional or new laws and regulations regarding the protection of personal information or privacy-related matters in connection with our methods for data collection, storage and use. In addition to the regulatory requirements, consumer attitudes towards data privacy are also evolving, and consumer concerns about the extent to which their data is collected by us may adversely affect our ability to gain access to data and improve our technologies, products and services. Furthermore, the integrity of our data protection measures could be compromised by system failures, security breaches or cyber-attacks. If we are unable to comply with the applicable laws and regulations or effectively address data privacy and protection concerns, such actual or alleged failure could damage our reputation, discourage consumers from purchasing our services and subject us to significant legal liabilities.

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The COVID-19 pandemic has adversely affected, and may continue to adversely affect, our business, results of operations and financial condition.

        Our business, results of operations and financial condition were adversely affected and may continue to be adversely affected by the COVID-19 pandemic. In an effort to contain the COVID-19 pandemic, the PRC government has imposed various strict measures across China including, but not limited to, travel restrictions, mandatory quarantine requirements, and postponed resumption of business operations. We have experienced certain disruptions in our operations as a result of the government-imposed restrictions. For instance, a delay to the opening of colleges caused the suspension of our on-campus shared two-wheeler services in many colleges that we collaborate with in the first half of 2020, which negatively affected our revenue. City lockdowns and traffic restriction have also caused the slowdown of our fleet deployment and expansion into new cities. In addition, due to safety concerns, people tended to stay at home and limit their outdoor activities, which caused reduction in the usage of some of our services, such as our shared two-wheeler services and carpooling marketplace. As a result, the total number of transactions on our platform decreased in 2020 on a year-over-year basis.

        In addition, although we have implemented preventive and control measures to protect the health of our employees, there can be no assurance that our employees will not be infected with COVID-19. Our business operations could be disrupted if our employees, in particular our executive officers and other key employees, are infected or suspected of being infected with COVID-19, since such employees as well as many of our other employees may be required to be quarantined and/or our offices to be shut down for disinfection. We may be short on workforce if a large number of our employees are diagnosed with COVID-19 or are required to be quarantined or self-isolated. Our business could also be adversely affected and our services may be suspended if any of our suppliers or business partners is negatively affected by the COVID-19 pandemic.

        Moreover, the COVID-19 pandemic had a severe and negative impact on the Chinese and the global economy since early 2020. Whether this will lead to a prolonged downturn in the economy is still unknown. Our business, results of operations and financial condition could be adversely affected to the extent that COVID-19 harms the Chinese and global economy in general, and the trading price of the ADSs may decline significantly.

        Although we resumed normal operations in the second half of 2020, it is uncertain whether we may continue to be negatively affected in the event of any resurgence of COVID-19 or any re-imposed restrictions. The extent to which our operations will continue to be impacted by the COVID-19 pandemic will depend largely on future developments, which are highly uncertain and cannot be accurately predicted, including the duration, geographic spread and severity of the COVID-19 pandemic and actions taken by government authorities and private businesses to contain the pandemic or recover from its impact, among other things. Even as travel restrictions have been and will continue to be modified or lifted, we anticipate that continued social distancing, altered consumer behavior, reduced travel and commuting and expected corporate cost cutting will be significant challenges for us.

Our business depends substantially on the continuing efforts of our executive officers, key employees and qualified personnel, and our operations may be severely disrupted if we lose their services.

        Our success depends substantially on the continued efforts of our executive officers and key employees. If one or more of our executive officers or key employees were unable or unwilling to continue their services with us, we might not be able to replace them easily, in a timely manner, or at all. As we build our brand and become more well-known, the risk that competitors or other companies may poach our talent increases. Our industry is characterized by high demand and intense competition for talent and therefore we cannot assure you that we will be able to attract or retain qualified staff or other highly skilled employees. Furthermore, as our company is relatively young, our ability to train and

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integrate new employees into our operations may not meet the growing demands of our business, which may materially and adversely affect our ability to grow our business and our results of operations.

        If any of our executive officers and key employees terminates his or her services with us, our business may be severely disrupted, our financial condition and results of operations may be materially and adversely affected and we may incur additional expenses to recruit, train and retain qualified personnel. We have not obtained any "key person" insurance on our key personnel. If any of our executive officers or key employees joins a competitor or forms a competing company, we may lose users, know-how and key professionals and staff members. Each of our executive officers and key employees has entered into an employment agreement and a non-compete agreement with us. However, if any dispute arises between our executive officers or key employees and us, the non-competition provisions contained in their non-compete agreements may not be enforceable, especially in China, where these executive officers reside, on the ground that we have not provided adequate compensation to them for their non-competition obligations, which is required under relevant PRC laws.

Misconduct by our employees during, before and after their employment with us could expose us to potentially significant legal liabilities, reputational harm and/or other damages to our business.

        Many of our employees play critical roles in ensuring the safety and reliability of our products and services and/or our compliance with relevant laws and regulations. Certain of our employees have access to sensitive information and/or proprietary technologies and know-how. While we have adopted codes of conduct for all of our employees and implemented detailed policies and procedures relating to intellectual property, proprietary information and trade secrets, we cannot assure you that our employees will always abide by these codes, policies and procedures nor that the precautions we take to detect and prevent employee misconduct will always be effective. If any of our employees engage in any misconduct, illegal or suspicious activities, including but not limited to, misappropriation or leakage of sensitive client information or proprietary information, we and such employees could be subject to legal claims and liabilities and our reputation and business could be adversely affected as a result.

Our insurance coverage strategy may not be adequate to protect us from all business risks.

        We have limited liability insurance coverage for our business operations. A successful liability claim against us due to injuries suffered by our users could materially and adversely affect our financial condition, results of operations and reputation. In addition, we do not have any business disruption insurance. Any business disruption event could result in substantial cost to us and diversion of our resources.

        We maintain cycling accident insurance and third-party personal injury insurance for users of our shared two-wheeler services and personal injury insurance for private car owners and riders of our carpooling marketplace. If our insurance coverage is insufficient for the needs of our business or our insurance providers are unable to meet their obligations, we may not be able to mitigate the risks facing our business, which could adversely affect our business, results of operations and financial condition. If we were held liable to any claim relating to our business and the amount exceeds our applicable aggregate coverage limits, we would bear the excess, in addition to amounts already incurred in connection with deductibles or otherwise paid by our insurance provider. Furthermore, insurance providers have raised premiums and deductibles for many businesses and may do so in the future. As a result, our insurance and claims expenses could increase, or we may decide to raise our deductibles when our policies are renewed or replaced. In addition, our insurance providers might be subject to regulatory actions from time to time. Our business, results of operations and financial condition could be adversely affected if cost per claim, premiums or the number of claims significantly exceeds our historical experience and coverage limits, we experience a claim in excess of our coverage limits, our

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insurance providers fail to pay on our insurance claims, we experience a claim for which coverage is not provided, or the number of claims under our deductibles differs from historic averages.

If we fail to obtain and maintain the requisite licenses and approvals required, or if we are required to take compliance actions that are time-consuming or costly, our business, results of operations and financial condition may be materially and adversely affected.

        Our business is subject to governmental supervision and regulation by the relevant PRC governmental authorities. Together, these government authorities promulgate and enforce regulations that cover many aspects of our business operations, including but not limited to our shared two-wheeler services, carpooling marketplace and other local services and products. In addition, governmental authorities are likely to continue to issue new laws, rules and regulations governing these industries, enhance enforcement of existing laws, rules and regulations, and require new and additional approvals, licenses or permits from us or participants on our platform. We have made great efforts to obtain all the applicable licenses and permits, but due to the diversified services offered on our platform and the large scale and extensive geographic coverage of our business, we cannot assure you that we have obtained or applied for all the permits and licenses required and necessary for conducting our business or will be able to maintain our existing permits and licenses or obtain any new permits and licenses if required by any future laws or regulations. For instance, while we do not believe we require any ICP Licenses to engage in shared two-wheeler services, there are substantial uncertainties and ambiguities under relevant PRC regulations as to whether we need a license for the provision of Internet information services or other value-added telecommunication services, or ICP License, for the operation of our Hello app. While we have obtained ICP Licenses through our VIEs and their subsidiaries to enhance our regulatory compliance, it's unclear whether the scope of these licenses we obtained are broad enough to cover all aspects of the services available on our platform. For example, the instant messaging function of our carpooling marketplace may need an additional ICP License and we are in the process of applying for such license. We cannot assure you that we have obtained or will be able to obtain all licenses in a timely manner, or at all, or that we will not be penalized by the relevant regulatory authorities due to any past, current or future non-compliances. As of the date of this prospectus, we have not received any request from governmental authorities to apply for or amend our ICP Licenses or received any governmental order or penalties from the relevant regulatory authorities for operation without ICP Licenses. In addition, our mobile grocery stores in Shandong Province failed to make requisite filings for selling fresh produces in violation of local regulation. We may also be required to obtain qualification of the mapping and surveying function of our Hello app. Furthermore, we have not made single-purpose commercial prepaid card filings for our ride passes. Although we do not believe that we are subject to such filing requirement, we cannot assure you that the relevant regulatory authority will reach the same conclusion. As of the date of this prospectus, we have not received any request from any governmental authorities to make any such filings or obtain such qualifications, or any governmental order or penalty resulting from such failure.

        In addition, the interpretations of many PRC laws, regulations and rules may contain inconsistencies, and enforcement of these laws, regulations and rules involves uncertainties. If the relevant authorities determine that our platform failed to timely obtain the requisite licenses or our operations are not in compliance with the relevant regulations, we may be required to suspend our operations or subject to other penalties, which may cause significant loss of our users and materially and adversely affect our business, results of operations and financial condition. If we fail to complete, obtain or maintain any of the required licenses or approvals or make the necessary filings in a timely manner, or at all, we may be subject to various activities, including the confiscation of our income, imposition of fines, warnings, which could be as high as several times of our relevant income, revocation of our licenses or permits, orders to rectify any violations, and the discontinuation or restriction of our operations. Any such penalties may disrupt our business operations and materially and adversely affect our business, results of operations and financial condition.

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We may be considered as conducting payment services as a non-financial institution without a Payment Business Permit.

        Riders on our carpooling marketplace make payments to us through our online platform, after which we deduct our service fees and settle payments with private car owners. Such settlement practices may be deemed as engaging in payment and settlement services without the requisite license. The jointly operated model and franchised model for our shared two-wheeler services and some of our new initiatives, such as sale of e-scooters and ride-hailing services, may be subject to the same risk.

        According to the Measures for the Administration of Payment Services of Non-Financial Institutions which were promulgated by the People's Bank of China, or the PBOC, on June 14, 2010, effective on September 1, 2010 and amended on April 29, 2020, non-financial institutions are required to obtain a payment business permit, or the Payment Business Permit, to provide payment services. Neither non-financial institutions nor individuals are permitted to engage in any form of payment business without the approval of the PBOC, including payment through the Internet.

        The relevant rules and regulations lack clear guidance as to what practice or process constitutes payment or settlement services without a Payment Business Permit. We cannot assure you that our settlement practice will not give rise to the risk that we may be deemed as engaging in payment and settlement services without a license, which may subject us to administrative penalties or even criminal liabilities. As of the date of this prospectus, insofar as we are aware, we were not required by the relevant regulatory authorities to obtain the Payment Business Permit for our past settlement practice, nor had we received any penalty in connection with any purported operations of payment and settlement services without a Payment Business Permit or otherwise in violation of the above-described rules and regulations. In order to rectify these issues, we have engaged a licensed commercial bank to settle payments with private car owners. However, we cannot assure you that our cooperation with this commercial bank would completely address the payment-related risk or such cooperation would suffice for all of our present or future businesses. In addition, the settlement services provided by licensed third-parties and financial institutions are subject to various rules and regulations, which may be amended or reinterpreted to encompass additional requirements. In response to that, we may have to adjust our cooperation with such licensed commercial bank or any other financial institutions and may thus incur higher transaction and compliance costs. Any of the circumstances would have a material and adverse effect on our business, results of operations and financial condition.

We may be required to register our operating offices outside of our registered addresses as branch offices under PRC law.

        Certain of our premises for business operations established along with our geographic expansion have not been registered with local administrations. In the PRC, if a company operates business outside its registered address, the company may be required to register those premises for business operation as branch offices with the relevant local authorities at the place where the premises are located and obtain business licenses for them as branch offices. We may not be able to register the main premises for business operations as branch offices in a timely manner or at all due to complex procedural requirements and relocation of branch offices from time to time. We cannot assure you that we have not been and will not be subject to administrative penalties for such non-compliance, including fines, confiscation of income and suspension of operation. If we become subject to these penalties, our reputation, business, and results of operations could be materially and adversely affected.

Our failure to fully comply with PRC labor-related laws may expose us to potential penalties.

        Companies operating in China are required to participate in mandatory employee social security schemes that are organized by municipal and provincial governments, including pension insurance, unemployment insurance, childbirth insurance, work-related injury insurance, medical insurance and

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housing provident funds. Such schemes have not been implemented consistently by the local governments in China given the different levels of economic development in different locations, but generally require us to make contributions to employee social security plans at specified percentages of the salaries, bonuses and certain allowances of our employees, up to a maximum amount specified by the local government from time to time. We did not make full contributions to social insurance and housing provident funds for some of our employees in 2018 and 2019. Although we made required contributions in 2020, we could not assure you that we will always be in compliance in the future. We have recorded accruals for the estimated underpayment of employee benefits, including late fees, in our consolidated financial statements. Our failure to make full contributions to social insurance and to comply with applicable PRC labor-related laws regarding housing funds may subject us to late payment penalties and other fines or labor disputes, and we could be required to make up the contributions for these plans, which may adversely affect our financial condition and results of operations.

        According to applicable PRC laws and regulations, employers must open social insurance registration accounts and housing provident fund accounts and pay social insurance and housing provident funds for employees. Some of our consolidated affiliated entities have engaged third-party human resources agencies to pay social insurance and housing provident funds for some of their employees. We believe the temporary dispatched workers are not our employees who do not sign the labor contracts directly with us, and therefore we do not believe we need to pay for their social insurance. However, we cannot assure you that the legal employers of these dispatched employees will duly make social insurance contributions for these employees nor that relevant regulatory authorities will not view us as the de facto employer, in which case we may be held jointly and severally liable for any deficiency in contributions by their legal employers. We may be subject to penalties imposed by the local social insurance authorities and the local housing provident fund management centers for failing to discharge our obligations in relation to payment of social insurance and housing provident funds as an employer.

        In addition, the use of employees of third-party labor dispatch agencies, who are known in China as "dispatched workers", is mainly regulated by the Interim Provisions on Labor Dispatching, which was promulgated by the Ministry of Human Resources and Social Security in January 2014. It provides that an employer may use dispatched workers only for temporary, auxiliary or substitute positions, and shall strictly control the number of workers under labor dispatching arrangements. The number of dispatched workers used by an employer shall not exceed 10% of the total number of its employees. We use temporary staff outsourced from third-party human resources agencies, which may be deemed as "dispatched workers," in which case we may exceed the 10% limit. If the governmental authorities find us to be in violation of the relevant employment regulations, we may be required to reduce the number of dispatched workers within the time period specified by the labor authority. Failure to do so would subject us to a penalty ranging from RMB5,000 to RMB10,000 per dispatched worker exceeding the 10% threshold. As a result, we may incur significant costs to find replacement for dispatched workers and experience disruptions in our operations. Furthermore, there can be no assurance that we will be able to find suitable employees to replace the dispatched workers.

Overall tightening of the labor market or any possible labor unrest may affect our business.

        We entered into labor outsourcing agreements with independent labor service providers who designate temporary staff primarily to perform operating and maintenance tasks for our shared two-wheeler services. We consider that these arrangements afford us a lean and flexible human resources structure, allowing us to focus on our core business and timely respond to industry trends.

        Under the labor outsourcing agreements, we pay service fees to the labor service providers, who then pay for the salaries and other welfare benefits for their designated staff in accordance with relevant PRC laws and regulations.

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        We did not experience any labor shortage in the years ended December 31, 2018, 2019 and 2020. However, we have observed an overall tightening and increasingly competitive labor market in China. We have experienced, and expect to continue to experience, increases in labor costs due to increases in salary, social benefits and employee headcount. We compete with other companies in our industry and other labor-intensive industries for labor, and we may not be able to offer competitive remuneration and benefits compared to them. If we are unable to manage and control our labor costs, our business, results of operations and financial condition may be materially and adversely affected.

        We have been subject to labor disputes and we cannot assure you that we will not be subject to labor disputes and related legal or administrative proceedings in the ordinary course of business in the future. For instance, a former employee brought an arbitration proceeding against us in December 2020, disputing the forfeiture of her share options at the termination of her employment. If the arbitration tribunal issues an order against us, we may be required to grant her the options at issue, which may cause a nominal amount of dilution to our shareholders. In addition, since the former employee is also a minority shareholder, disputes with such employee may cause disruptions to our operations. Any labor unrest directed against us could directly or indirectly prevent or hinder our normal operating activities, and, if not resolved in a timely manner, lead to decreases in our revenues. We are not able to predict or control any labor unrest. Further, labor unrest may affect general labor market conditions or result in changes to labor laws, which in turn could materially and adversely affect our business, results of operations and financial condition.

Our online advertising services may constitute internet advertisement, which subjects us to laws, rules and regulations applicable to advertising.

        We derive a small portion of our revenues from online advertising services. In July 2016, the SAIC, the predecessor of the SMAR promulgated the Interim Measures for the Administration of Internet Advertising, effective from September 2016, pursuant to which internet advertisements are defined as any commercial advertising that directly or indirectly promotes goods or services through internet media in any form including paid-for search results. See "Regulations—Regulations Relating to Advertising." Under the Internet Advertising Measures, our online advertising services may constitute internet advertisement.

        PRC advertising laws, rules and regulations require advertisers, advertising operators and advertising distributors to ensure that the content of the advertisements they prepare or distribute is fair and accurate and is in full compliance with applicable law. In particular, PRC laws and regulations prohibit companies from producing, distributing or publishing any advertisement with content that violates PRC laws and regulations, impairs the national dignity of China, involves using or using in a disguised form of the PRC national flag, national emblem or national anthem, or content that is considered reactionary, obscene, superstitious or absurd, is fraudulent, or disparages similar products. As advised by our PRC legal advisor, as we provide online advertising services on our platform to corporate clients, we are required to verify, record and update the identity information of those who choose to publish their advertisements with us on a regular basis. We must also review supporting documents provided by our corporate clients and verify the content of the advertisements, and may not publish any advertisement that lacks or is inconsistent with supporting documents. While we have a review procedure prior to publishing, we cannot guarantee that we can eliminate all advertisements, especially the advertisements published on our platform via the links, with content that would be deemed inappropriate or misleading in accordance with the advertising laws and regulations. If we are deemed violating PRC advertising laws, rules and regulations, we may be subject to penalties, including suspension of publishing, confiscation of the related revenues, imposition of fines and suspension or termination of our online advertising services, any of which could materially and adversely affect our business. In circumstances involving serious violations, the PRC governmental authorities may order the

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offender to terminate its advertising operation or even suspend or revoke its business license or license for operating advertising business.

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

        In light of the nature of our business, we and our management are susceptible to potential claims or disputes. We and certain of our management may from time to time 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 users, business partners, suppliers, competitors, employees or governmental entities in investigations and legal proceedings.

        We were and are currently involved in certain legal proceedings related to safety incidents including personal injury incidents and fatal incidents. We were found partially liable for certain accidents and might be found liable for the ongoing proceeding as well for an immaterial amount. We were and may continue to be subject to claims alleging that we are directly or vicariously liable for the acts of the users on our platform or for harm related to the actions of users, riders, or third parties, or the management and safety of our platform and our assets. We were and may continue to be subject to claims of liabilities based on traffic accidents, deaths, injuries, or other incidents whether or not such injury actually occurred as a result of activity on our platform. Our accident insurance and third-party personal injury insurance policies may not cover all potential claims to which we are exposed, and may not be adequate to indemnify us for all liabilities. We will also incur significant costs in investigating and defending against such claims. Regardless of the outcome of any legal proceeding, any injuries to, or deaths of, any users, riders, private car owners or third parties could result in negative publicity and harm to our brand, reputation, business, financial condition and results of operations.

        As we expand our network of shared two-wheeler services, we may be subject to an increasing number of claims, lawsuits, investigations or other legal proceedings related to injuries to, or deaths of, riders of our shared two-wheelers, including potential indemnification claims. Any such claims arising from the use of our shared two-wheelers, regardless of merit or outcome, could lead to negative publicity, harm to our reputation and brand, significant legal, regulatory or financial exposure or decreased use of our shared two-wheelers. Further, the two-wheelers we design and contract to manufacture using third-party suppliers and manufacturers, including certain assets and components we design and have manufactured for us, could contain design or manufacturing defects, which could also lead to injuries or death to riders.

        We were also named as defendants in certain intellectual property-related lawsuits. See "—We may need to defend ourselves against patent, trademark or copyright infringement claims, which may be time-consuming and would cause us to incur substantial costs" and "Business—Legal Proceedings" for more information.

        In addition, we face potential liability and expense for claims relating to the information published on our mobile app and websites, including claims for defamation, libel, negligence, copyright, patent or trademark infringement, fraud, other unlawful activity or other theories and claims based on the nature and content of information to which we link or that may be posted on our mobile apps or websites, generated by our users, or delivered or shared hypertext links to third-party websites, or video or image services, if appropriate licenses and/or third-party consents have not been obtained.

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We may need to defend ourselves against patent, trademark or copyright infringement claims, which may be time-consuming and would cause us to incur substantial costs.

        Companies, organizations or individuals, including our competitors, may hold or obtain patents, trademarks, copyright or other proprietary rights that would prevent, limit or interfere with our ability to make, use, develop, sell or market our products or services, which could make it more difficult for us to operate our business. From time to time, we may receive communications from holders of patents, copyrights or trademarks regarding their proprietary rights. Companies holding patents, copyrights, trademarks or other intellectual property rights may bring suits alleging infringement of such rights by us or our employees, unauthorized use of certain software by us or otherwise assert their rights and urge us to take licenses. For instance, we were named as a defendant in a trademark lawsuit claiming that our logo for ride-hailing and carpooling marketplace is similar to certain trademarks previously registered by the plaintiff. We were also named as a defendant in a patent lawsuit in which the plaintiff claimed that our dockless bike sharing operating system falls within the scope of protection of its patent. Although we believe that the plaintiffs' claims are frivolous, we cannot assure you that we will be able to prevail in these lawsuits. If we fail to prevail in the trademark lawsuit, we may be required to cease using such logo for our carpooling marketplace and may need to use a different logo, which may negatively affect our marketing and business development since existing and potential users may be unfamiliar with our new logo and unable to associate such logo with us. If we fail to prevail in the patent lawsuit, we may be required to pay a substantial amount of damages and/or authorization fee to the plaintiff, which may negatively affect our results of operations and financial condition. Any such intellectual property infringement claims could result in costly litigation and divert our management's attention and resources. If we choose to settle any of these lawsuits with the plaintiffs, we may be required to pay a substantial amount of settlement fee, which may negatively affect our financial condition. We cannot predict the outcome of these lawsuits, and a judgment against us, whether in whole or in part, may result in a loss, if any, and an estimate for the reasonably possible loss or a range of reasonably possible losses cannot be made at this time. See "Business—Legal Proceedings" for more information.

        In the event of a successful claim of infringement against us and our failure or inability to obtain a license to the infringed technology or other intellectual property right, our business, prospects, financial condition and results of operation could be materially and adversely affected. Any litigation or claims, whether or not valid, could result in substantial costs, negative publicity and diversion of resources and management attention. In addition, the success of our business depends to a large extent on our ability to obtain and maintain trademark protection for our brand name, and failure to protect our trademarks could adversely affect our competitive position and the value of our brand.

We may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business and competitive position.

        We rely on a combination of patents, trademarks, copyrights, trade secrets and confidentiality agreements to protect our proprietary rights. As of December 31, 2020, we had 45 copyrights, 397 patents, 38 domain names and 411 trademarks in the PRC, which we have invested significant resources to develop. We rely on trademark and patent law, trade secret protection and confidentiality and license agreements with our employees and others to protect our intellectual proprietary rights. In addition, any unauthorized use of our intellectual property by third parties may adversely affect our current and future revenues and our reputation.

        There can be no assurance that our application for the registration with competent government authorities of trademarks and other intellectual property rights related to our current or future business will be approved, or our intellectual property rights will not be challenged by third parties or found by the relevant governmental or judicial authority to be invalid or unenforceable. From time to time, we may encounter difficulties registering our trademarks or other intellectual properties or have disputes

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with third parties regarding our trademarks or other intellectual properties. If the relevant trademarks or other intellectual properties could not be registered, we may fail to prevent others from using such intellectual properties, and our business, financial condition and results of operations may be materially and adversely affected.

        Implementation and enforcement of PRC intellectual property-related laws have historically been deficient and ineffective. Accordingly, protection of intellectual property rights in China may not be as effective as in the United States or other developed countries. Furthermore, policing unauthorized use of proprietary technology is difficult and expensive. Despite our efforts to protect our proprietary rights, third parties may attempt to copy or otherwise obtain and use our intellectual property or seek court declarations that they do not infringe upon our intellectual property rights. Monitoring unauthorized use of our intellectual property is difficult and costly, and we cannot assure you that the steps we have taken or will take will prevent misappropriation of our intellectual property. From time to time, we may have to resort to litigation to enforce our intellectual property rights, which could result in substantial costs and diversion of our resources.

        In addition, as our patents may expire and may not be extended and our patent rights may be contested, circumvented, invalidated or limited in scope, our patent rights may not protect us effectively. In particular, we may not be able to prevent others from developing or exploiting competing technologies, which could have a material and adverse effect on our business operations, financial condition and results of operations.

Our leasehold interest may be defective and could result in claims, fines, increased cost of operation or otherwise harm on our business.

        We lease a number of properties, including offices and warehouses, across China. Our leasehold interest may be defective. We have not filed our lease agreements with the relevant government authorities as required by the applicable PRC laws. According to the applicable PRC laws, the failure to file lease agreements will not affect the enforceability of such agreements; however, the landlord and the tenant may be subject to administrative fines. Furthermore, certain leased properties had been mortgaged by the landlords to third parties before entering into lease agreements with us. If the mortgagees of the leased properties exercise their mortgage right, we may not be able to continue our use and lease of the properties. In addition, most of the ownership certificates or other similar proof of ownership of our leased properties have not been provided to us by our lessors and the sublessors of certain subleased properties have not obtained written consent to sublease from the property owners. Therefore, we cannot assure you that such lessors or sublessors are entitled to lease these real properties to us. If any lessor or sublessor is not entitled to lease or sublease the real properties to us and the owners of such real properties decline to ratify the lease agreements between us and the lessor or sublessor, we may not be able to enforce our rights to lease such properties under the respective lease agreements against the owners. Besides, certain leased properties are not used in accordance with the designated or approved purposes of such properties. For example, some properties are currently used for offices while the underlying land should be approved for residential use or industrial use. Under the PRC laws, any change as contemplated to the usages of land or the building shall go through relevant land or building alteration registration procedures. Failure to do so may subject the lessors to monetary fines or other penalties and may lead to the invalidation or termination of our leases by competent government authorities, and therefore we may need to move our warehouses or offices somewhere else and additional relocation costs will be incurred. Moreover, certain use of our leased properties has exceeded the lease term as stipulated in relevant lease agreements without extension or renewal, where the use of such properties may become unavailable to us. We cannot assure you that we will be able to successfully extend or renew our leases upon expiration of the current term or locate desirable alternatives for our facilities on commercially reasonable terms in a timely manner, or at all, and may therefore be forced to relocate our affected operations.

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        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 or consent to sublease. If our lease agreements are claimed as null and void by third parties who are the real owners of such leased real properties in the future, we could be required to vacate the properties, in the event of which we could only initiate the claim against the lessor or sublessor under relevant lease agreements for indemnities for its breach of the relevant leasing agreements.

We could be adversely affected by political tensions between the United States and China.

        Political tensions between the United States and China have escalated in recent years due to, among other things, the trade war between the two countries since 2018, the COVID-19 outbreak, the PRC National People's Congress' passage of Hong Kong national security legislation, the imposition of U.S. sanctions on certain Chinese officials from China's central government and the Hong Kong Special Administrative Region by the U.S. government, and the imposition of sanctions on certain individuals from the U.S. by the Chinese government, various executive orders issued by former U.S. President Donald J. Trump, such as the one issued in August 2020 that prohibits certain transactions with ByteDance Ltd., Tencent Holdings Ltd. and the respective subsidiaries of such companies, the executive order issued in November 2020 that prohibits U.S. persons from transacting publicly traded securities of certain "Communist Chinese military companies" named in such executive order, as well as the executive order issued on January 5, 2021 that prohibits such transactions as are identified by the U.S. Secretary of Commerce with certain "Chinese connected software applications," including Alipay and WeChat Pay, starting from February 19, 2021, as well as the Rules on Counteracting Unjustified Extra-territorial Application of Foreign Legislation and Other Measures promulgated by China's Ministry of Commerce, or the MOFCOM, on January 9, 2021 with immediate effect, which will apply to Chinese individuals or entities that are purportedly barred or restricted by foreign legislation or measures from engaging in normal economic, trade and related activities with a third nation or its citizens or entities . Rising political tensions between China and the U.S. could reduce levels of trades, investments, technological exchanges and other economic activities between the two major economies, which would have a material adverse effect on global economic conditions and the stability of global financial markets. The measures taken by the U.S. and Chinese governments may have the effect of restricting our ability to transact or otherwise do business with entities within or outside of China and may cause investors to lose confidence in Chinese companies and counterparties, including us. If we were unable to conduct our business as it is currently conducted as a result of such regulatory changes, our business, results of operations and financial condition would be materially and adversely affected.

        Furthermore, there have been recent media reports on deliberations within the U.S. government regarding potentially limiting or restricting China-based companies from accessing U.S. capital markets, and delisting China-based companies from U.S. national securities exchanges. In January 2021, after reversing its own delisting decision, the NYSE ultimately resolved to delist China Mobile, China Unicom and China Telecom in compliance with the executive order issued in November 2020, after receiving additional guidance from the U.S. Department of Treasury and its Office of Foreign Assets Control. These delistings have introduced greater confusion and uncertainty about the status and prospects of Chinese companies listed on the U.S. stock exchanges. If any further such deliberations were to materialize, the resulting legislation may have a material and adverse impact on the stock performance of China-based issuers listed in the United States such as us, and we cannot assure you that we will always be able to maintain the listing of our ADSs on a national stock exchange in the U.S., such as the NYSE or the Nasdaq Stock Market, or that you will always be allowed to trade our shares or ADSs.

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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.

        Prior to this offering, we have been a private company with limited accounting and financial reporting personnel and other resources with which we address our internal control over financial reporting. Our independent registered public accounting firm has not conducted an audit of our internal control over financial reporting. However, in connection with the audits of our consolidated balance sheets as of December 31, 2019 and 2020, the related consolidated statements of comprehensive loss, changes in shareholders' deficit and cash flows for the years ended December 31, 2018, 2019 and 2020, we and our independent registered public accounting firm identified a material weakness in our internal control over financial reporting. As defined in the standards established by the U.S. Public Company Accounting Oversight Board, or PCAOB, 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 annual or interim financial statements will not be prevented or detected on a timely basis. The material weakness identified is our company's lack of sufficient accounting and financial reporting personnel with requisite knowledge and experience in application of U.S. GAAP and SEC rules. 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.

        Upon completion of this offering, we will become a public company in the United States subject to the Sarbanes-Oxley Act of 2002. Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, will require that we include a report of management on the effectiveness of our internal control over financial reporting in our annual report on Form 20-F beginning with our annual report in our second annual report on Form 20-F after becoming a public company. 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. Our management may conclude that our internal control over financial reporting is not effective. Moreover, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us. In addition, as we will 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.

        During the course of documenting and testing our internal control procedures, in order to satisfy the requirements of Section 404, we may identify other weaknesses and deficiencies in our internal control over financial reporting. 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. We may not be able to anticipate and identify accounting issues, or other risks critical to financial reporting that could materially impact the consolidated financial statements. Generally speaking, if we fail to achieve and maintain an effective internal control environment, it could result in material misstatements in our financial statements and could also impair our ability to comply with applicable financial reporting requirements and related regulatory filings on a timely basis. As a result, our businesses, financial condition, results of operations and prospects, as well

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as the trading price of our ADSs, may be materially and adversely affected. 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 from prior periods.

We have granted, and may continue to grant, share incentives, which may result in increased share-based compensation expenses and negatively impact our results of operations.

        We adopted an equity incentive plan in November 2018, or the 2018 stock incentive plan. As of the date of the prospectus, there are 44,127,850 ordinary shares issuable upon the exercise of the outstanding share options and 12,489,442 ordinary shares reserved for future issuance under the 2018 stock incentive plan. In November 2020, we adopted our 2020 stock incentive plan. As of the date of this prospectus, there are 49,611,947 ordinary shares issuable upon the exercise of the outstanding share options and 26,751,199 ordinary shares reserved for future issuance under the 2020 stock incentive plan. In addition, we entered into a share restriction agreement with Mr. Lei Yang on November 2, 2020, pursuant to which a total number of 27,095,932 ordinary shares were granted to him as restricted shares. See "Management—Equity Incentive Plans."

        For the years ended December 31, 2018, 2019 and 2020, we recorded share-based compensation expenses of RMB32.1 million, RMB78.5 million and RMB193.1 million (US$29.6 million), respectively. As of December 31, 2020, there was RMB444,687 (US$68,151) of total unrecognized employee share-based compensation expenses related to the unvested awards, including RMB306,603 (US$46,989) of total unrecognized share-based compensation expenses related to the restricted shares granted to Mr. Lei Yang. The requisite service period of Mr. Lei Yang's restricted shares is the shorter of (a) the period from the grant date through July 1, 2022 and (b) the period from the grant date to the completion of this offering. Given that this offering constitutes a condition that is not considered probable until it is completed, we are recognizing share-based compensation expenses over the period from the grant date through July 1, 2022. If this offering is completed prior to July 1, 2022, we will record any unrecognized share-based compensation expenses upon the completion of this offering. We believe the granting of share-based awards is of significant importance to our ability to attract and retain key personnel and employees, and we will continue to grant share-based awards in the future. As a result, our share-based compensation expenses may increase. Any increase in our share-based compensation may have an adverse effect on our results of operations.

        [In addition, in consideration of Mr. Lei Yang's past and future services, we plan to issue 35,994,402 ordinary shares, or CEO award, to Mr. Lei Yang (or an entity wholly owned by him) at nominal value prior to this offering with certain conditions. See "Management—CEO Award." We expect to incur a substantial amount of share-based compensation expenses in connection with such CEO award, which would have a material and adverse effect on our results of operations.]

Any financial or economic crisis, or perceived threat of such a crisis, including a significant decrease in consumer confidence, may materially and adversely affect our business, prospects, financial condition and results of operation.

        The global macroeconomic environment is facing challenges. 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. There have been concerns over the downturn in economic output caused by the COVID-19 outbreak. It is unclear whether these challenges will be contained and what effects they each may have. Economic conditions in China are sensitive to global economic conditions. Recently there have been signs that the rate of China's economic growth is declining, and China's economy contracted in the first quarter of 2020 as a result of the COVID-19 outbreak. Any prolonged slowdown in China's economic

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development might lead to tighter credit markets, increased market volatility, sudden drops in business and consumer confidence and dramatic changes in business and consumer behaviors.

We face risks related to natural disasters, health epidemics and other outbreaks, which could significantly disrupt our operations.

        Our business could be adversely affected by the effects of epidemics. In recent years, there have been outbreaks of epidemics in China and globally. If any of our employees are identified as a possible source of spreading COVID-19, H1N1 flu, avian flu or another epidemic, we may be required to quarantine employees that are suspected of being infected, as well as others that have come into contact with those employees. We may also be required to disinfect our affected premises, which could cause a temporary suspension of certain business operations. A recurrence of an outbreak of COVID-19, H1N1 flu, avian flu or another epidemic could restrict the level of economic activities generally and/or slow down or disrupt our business activities, which could in turn adversely affect our results of operations.

        We are also vulnerable to natural disasters and other calamities. Although we have servers that are hosted in an offsite location, our backup system does not capture data on a real-time basis and we may be unable to recover certain data in the event of a server failure. We cannot assure you that any backup systems will be adequate to protect us from the effects of fire, floods, typhoons, earthquakes, power loss, telecommunications failures, break-ins, war, riots, terrorist attacks or similar events. Any of the foregoing events may give rise to interruptions, breakdowns, system failures, technology platform failures or internet failures, which could cause the loss or corruption of data or malfunctions of software or hardware as well as adversely affect our ability to provide services to our users.

Increasing scrutiny and changing expectations from stakeholders with respect to our environmental, social, and governance practices may impose additional costs on us or expose us to new risks.

        Companies across all industries are facing increasing scrutiny from stakeholders related to their environmental, social, and governance, or ESG, practices. Investor advocacy groups, certain institutional investors, investment funds, and other influential investors are also increasingly focused on ESG practices and in recent years have placed increasing importance on the implications and social cost of their investments. Regardless of the industry, investors' increased focus and activism related to ESG and similar matters may hinder access to capital, as investors may decide to reallocate capital or to not commit capital as a result of their assessment of a company's ESG practices.

        Furthermore, China's potential adoption of more stringent standards in these areas may also expose us to new risks. Companies that do not adapt to or comply with regulatory standards, which are evolving, or that are perceived to have not responded appropriately to the growing concern for ESG issues, may suffer from reputational damage, and the business prospectus, financial condition and results of operations could be materially and adversely effected.

        In addition, the criteria by which companies' ESG practices are assessed are evolving, which could result in greater expectations of us and cause us to undertake costly initiatives to satisfy such new criteria. We may face reputational damage in the event that our ESG procedures or standards do not meet the standards set by various constituencies. Furthermore, if our competitors' ESG performance is perceived to be greater than ours, potential or current investors may elect to invest with our competitors instead. In the event that we communicate certain initiatives and goals regarding ESG matters, we could fail, or be perceived to fail, in our achievement of such initiatives or goals, or we could be criticized for the scope of such initiatives or goals. If we fail to satisfy the expectations of investors and other stakeholders or our initiatives are not executed as planned, our reputation and financial results could be adversely affected. The occurrence of any of the foregoing could have a material adverse effect on our business, and financial condition.

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Risks Relating to Our Corporate Structure

If the PRC government deems that the contractual arrangements in relation to our consolidated VIEs do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.

        The current industry entry clearance requirements governing the foreign investment activities in the PRC are set out in two categories, namely the Encouraged Industry Catalog for Foreign Investment (2020 version), as promulgated by the National Development and Reform Commission, or the NDRC, and the MOFCOM, and taking effect on January 27, 2021, and the 2020 Negative List. Industries not listed in these two catalogs are generally deemed "permitted" for foreign investments unless specifically restricted by other PRC laws. According to the 2020 Negative List and other applicable laws and regulations, the industry of value-added telecommunications services (other than the services of electronic commerce, multiparty conferencing within the PRC, information storage and forwarding, and call center) generally falls into the restricted category with very limited exceptions in certain pilot demonstration zones.

        Because we are an exempted company incorporated in the Cayman Islands, we are classified as a foreign enterprise under PRC laws and regulations, and our PRC subsidiaries are foreign-invested enterprises, or FIEs. To comply with PRC laws and regulations, we operate our businesses related to the value-added telecommunications services through our consolidated VIEs, as defined below, that hold the required ICP license and other related licenses. Our subsidiary, Shanghai Haluo Corporate Development Co. Ltd., or Shanghai Haluo, has entered into a series of contractual arrangements with Haluo Inclusive, and its shareholders. In addition, our subsidiary, Shanghai Hamao Commerce Consult Co., Ltd., or Shanghai Hamao has entered into a series of contractual arrangements with Zhengzhou Habai Network Technology Co., Ltd., or Zhengzhou Habai, and its shareholder. Haluo Inclusive and Zhengzhou Habai are collectively referred to as our consolidated VIEs. For a detailed description of these contractual arrangements, see "Our History and Corporate Structure—Contractual Arrangements with Consolidated VIEs and Their Shareholders."

        We believe that our corporate structure and contractual arrangements comply with the current applicable PRC laws and regulations. Our PRC legal counsel, based on its understanding of the relevant laws and regulations, is of the opinion that each of the contracts among (i) Shanghai Haluo, Haluo Inclusive and Haluo Inclusive's shareholders and (ii) Shanghai Hamao, Zhengzhou Habai and Zhengzhou Habai's shareholder is valid, binding and enforceable in accordance with its terms. However, as there are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including the PRC Foreign Investment Law and its implementing rules, the Telecommunications Regulations and the relevant regulatory measures concerning the telecommunications industry and other industries we are or will be engaged in, there can be no assurance that the PRC government authorities, including the MOFCOM, or the MIIT, or other competent authorities would agree that our corporate structure or any of the above contractual arrangements comply with PRC licensing, registration or other regulatory requirements, with existing policies or with requirements or policies that may be adopted in the future. PRC laws and regulations governing the validity of these contractual arrangements are uncertain and the relevant government authorities have broad discretion in interpreting these laws and regulations.

        If our corporate structure and contractual arrangements are deemed by the MIIT or the MOFCOM or other regulators having competent authority to be illegal, either in whole or in part, we may lose control of our consolidated VIEs and have to modify such structure to comply with regulatory requirements. However, there can be no assurance that we can achieve this without material disruption to our business. Further, if our corporate structure and contractual arrangements are found to be in

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violation of any existing or future PRC laws or regulations, the relevant regulatory authorities would have broad discretion in dealing with such violations, including:

    revoking our relevant business and operating licenses;

    levying fines on us;

    confiscating any of our income that they deem to be obtained through illegal operations;

    shutting down our relevant services;

    discontinuing or restricting our operations in China;

    imposing conditions or requirements with which we may not be able to comply;

    requiring us to change our corporate structure and contractual arrangements;

    restricting or prohibiting our use of the proceeds from overseas offering to finance our PRC consolidated VIEs' business and operations; and

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

        Furthermore, new PRC laws, rules and regulations may be introduced to impose additional requirements that may be applicable to our corporate structure and contractual arrangements. See "—Uncertainties exist with respect to the interpretation and implementation of the newly enacted PRC Foreign Investment Law and its implementing rules and how they may impact our business, financial condition and results of operations." Occurrence of any of these events could materially and adversely affect our business, financial condition and results of operations. In addition, if the imposition of any of these penalties or requirement to restructure our corporate structure causes us to lose the rights to direct the activities of our consolidated VIEs or our right to receive their economic benefits, we would no longer be able to consolidate the financial results of such VIEs in our consolidated financial statements. See "Our History and Corporate Structure—Contractual Arrangements with Consolidated VIEs and Their Shareholders."

Our contractual arrangements with our consolidated VIEs may result in adverse tax consequences to us.

        We could face material and adverse tax consequences if the PRC tax authorities determine that our contractual arrangements with our consolidated VIEs were not made on an arm's length basis and adjust our income and expenses for PRC tax purposes by requiring a transfer pricing adjustment. A transfer pricing adjustment could adversely affect us by (i) increasing the tax liabilities of our consolidated VIEs without reducing the tax liability of our subsidiaries, which could further result in late payment fees and other penalties to our consolidated VIEs for underpaid taxes; or (ii) limiting the ability of our consolidated VIEs to obtain or maintain preferential tax treatments and other financial incentives.

We rely on contractual arrangements with our consolidated VIEs and their shareholders to operate our mobile apps, which may not be as effective as direct ownership in providing operational control and otherwise have a material adverse effect as to our business.

        We rely on contractual arrangements with our consolidated VIEs and their shareholders to operate our mobile app, which is important to our ability to offer a good user experience. For a description of these contractual arrangements, see "Our History and Corporate Structure—Contractual Arrangements with Consolidated VIEs and Their Shareholders." These contractual arrangements may not be as effective as direct ownership in providing us with control over our consolidated VIEs.

        If we had direct ownership of VIEs, we would be able to exercise our rights as a shareholder to effect changes in the board of directors of VIEs, which in turn could effect changes, subject to any

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applicable fiduciary obligations, at the management level. Under the current contractual arrangements, we rely on the performance by our VIEs and its shareholders of their obligations under the contracts to exercise control over our VIEs. However, the shareholders of our VIEs may not act in our best interests or may not perform their obligations under these contracts. Such risks exist throughout the period in which we intend to operate our business through the contractual arrangements with our VIEs. If any of our VIEs or their shareholders fail to perform their obligations under the contractual arrangements, we may have to incur substantial costs and expend additional resources to enforce such arrangements, and rely on legal remedies under PRC laws, including contractual remedies, which may not be sufficient or effective. All of these contractual arrangements are governed by PRC law and provide for the disputes shall be submitted to courts where the contractual arrangements were executed for resolution. Accordingly, these contracts would be interpreted in accordance with PRC laws and any disputes would be resolved in accordance with PRC legal procedures. However, the legal framework and system in China are 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. Remedies may not always be effective, particularly in light of uncertainties in the PRC legal system. Meanwhile, there are very few precedents and little formal guidance as to how contractual arrangements in the context of a variable interest entity should be interpreted or enforced under PRC law. There remain significant uncertainties regarding the ultimate outcome of such legal proceedings if legal action become necessary. Furthermore, in connection with litigation or other judicial or dispute resolution proceedings, assets under the names of any of the shareholders in our consolidated VIEs, including such equity interest, may be put under court custody. As a result, in the event that our consolidated VIEs or the shareholders of VIEs breach any of the contractual arrangements, we cannot be certain that the equity interest will be disposed pursuant to the contractual arrangement or we may not be able to obtain sufficient remedies in a timely manner, and our ability to exert effective control over our consolidated VIEs and conduct our business could be materially and adversely affected.

Certain terms of the contractual arrangements with our consolidated VIEs may not be enforceable under PRC laws.

        Our contractual arrangements with consolidated VIEs contain provisions to the effect that courts of competent jurisdictions including those in Hong Kong and Cayman Islands are empowered to grant interim remedies. However, under PRC laws, these terms may not be enforceable. In addition, interim remedies or enforcement order granted by overseas courts such as Hong Kong and Cayman Islands may not be recognizable or enforceable in the PRC.

        Under PRC laws, courts of judicial authorities in the PRC generally would not grant injunctive relief or the winding-up order against our consolidated VIEs as interim remedies for the purpose of protecting assets or equity interests in favor of any aggrieved party. In case the contractual arrangements provide that courts in competent jurisdictions may grant and/or enforce interim remedies, such interim remedies (even if granted by courts in competent jurisdictions in favor of an aggrieved party) may still not be recognized, or enforced by PRC courts. In the event that we are unable to enforce these contractual arrangements, or if we suffer significant time delays or other obstacles in the process of enforcing these contractual arrangements, it would be very difficult to exert effective control over our consolidated VIEs, and our ability to conduct our business and our financial condition and results of operations may be materially and adversely affected. See "—Risks Relating to Doing Business in China—There are uncertainties regarding the interpretation and enforcement of PRC laws, rules and regulations."

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

        In connection with our operations in China, we rely on the shareholders of our consolidated VIEs to abide by the obligations under such contractual arrangements. The interests of these shareholders in their individual capacities as the shareholders of our consolidated VIEs may differ from the interests of our company as a whole, as what is in the best interests of our consolidated VIEs, including matters such as whether to distribute dividends or to make other distributions to fund our offshore requirement, may not be in the best interests of our company. There can be no assurance that when conflicts of interest arise, any or all of these shareholders will act in the best interests of our company or those conflicts of interest will be resolved in our favor. In addition, these shareholders may breach or cause our consolidated VIEs and their subsidiaries to breach or refuse to renew the existing contractual arrangements with us, which would have a material and adverse effect on our ability to effectively control our consolidated VIEs and receive economic benefits from them, which may result in deconsolidation of our VIEs.

        Currently, we do not have arrangements to address potential conflicts of interest the shareholders of our consolidated VIEs may encounter, on one hand, and as a beneficial owner of our company, on the other hand. We, however, could, at all times, exercise our option under the exclusive call option agreements to cause them to transfer all of their equity ownership in our consolidated VIEs to a PRC entity or individual designated by us as permitted by the then applicable PRC laws. In addition, if such conflicts of interest arise, we could also, in the capacity of attorney-in-fact of the then existing shareholders of our consolidated VIEs as provided under the power of attorney agreements, directly appoint new directors of our consolidated VIEs. We rely on the shareholders of our consolidated VIEs to comply with PRC laws and regulations, which protect contracts and provide that directors and executive officers owe a duty of loyalty to our company and require them to avoid conflicts of interest and not to take advantage of their positions for personal gains, and the laws of the Cayman Islands, which provide that directors have a duty of care and a duty of loyalty to act honestly in good faith with a view to our best interests. However, the legal frameworks of China and the Cayman Islands do not provide guidance on resolving conflicts in the event of a conflict with another corporate governance regime. If we cannot resolve any conflicts of interest or disputes between us and the shareholders of our consolidated VIEs, we would have to rely on legal proceedings, which could result in disruption of our business and subject us to substantial uncertainty as to the outcome of any such legal proceedings.

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

        We, through our wholly foreign-owned enterprise in the PRC, have entered into a series of contractual arrangements with our consolidated VIEs and their shareholders. For a description of these contractual arrangements, see "Our History and Corporate Structure—Contractual Arrangements with Consolidated VIEs and Their Shareholders." If our consolidated VIEs or their shareholders fail to perform their respective obligations under these contractual arrangements, we may incur substantial costs and expend additional resources to enforce such arrangements. We may also have to rely on legal remedies under PRC laws, including seeking specific performance or injunctive relief, and claiming damages, which we cannot assure you will be effective under PRC laws. For example, if the shareholders of our consolidated VIEs were to refuse to transfer their equity interests in the consolidated 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. For additional information, see "—We rely on contractual arrangements with our consolidated VIEs and their shareholders to operate our mobile apps, which may not be as effective as direct ownership in providing operational control and otherwise have a material adverse effect as to our business."

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We may lose the ability to use and enjoy assets held by our consolidated VIEs that are material to the operation of our business if the entity goes bankrupt or becomes subject to a dissolution or liquidation proceeding.

        Our consolidated VIEs hold a substantial portion of our assets. Under the contractual arrangements, our consolidated VIEs may not and their shareholders may not cause it to, in any manner, sell, transfer, mortgage or dispose of its assets outside the ordinary course of business operation without our prior consent. However, in the event that the shareholders of our consolidated VIEs breach these contractual arrangements and voluntarily liquidate our consolidated VIEs, or our consolidated VIEs declares bankruptcy and all or part of its assets become subject to liens or rights of third-party creditors, or are otherwise disposed of without our consent, we may be unable to continue some or all of our business activities, which could materially and adversely affect our business, results of operations and financial condition. If our consolidated VIEs undergoes a voluntary or involuntary liquidation proceeding, independent third-party creditors may claim rights to some or all of these assets, thereby hindering our ability to operate our business, which could materially and adversely affect our business, financial condition and results of operations.

Our corporate actions will be substantially controlled by certain shareholders who will have the ability to control or exert significant influence over important corporate matters that require approval of shareholders, which may deprive you of an opportunity to receive a premium for your ADSs and materially reduce the value of your investment.

        [Our [tenth] amended and restated memorandum and articles of association, which will become effective immediately prior to the completion of this offering, will provide that in respect of all matters subject to a shareholders' vote, each Class A ordinary share is entitled to one vote, and each Class B ordinary share is entitled to 20 votes.] Mr. Lei Yang, our co-founder, director and chief executive officer will beneficially own all the Class B ordinary shares issued and outstanding, representing            % of the voting power of our total issued and outstanding shares immediately after the completion of this offering, assuming the underwriters do not exercise their option to purchase additional ADSs. As a result, Mr. Lei Yang will have the ability to control or exert significant influence over important corporate matters, investors may be prevented from affecting important corporate matters involving our company that require approval of shareholders, including:

    the composition of our board of directors and, through it, any determinations with respect to our operations, business direction and policies, including the appointment and removal of officers;

    any determinations with respect to mergers or other business combinations;

    our disposition of substantially all of our assets; and

    any change in control.

        These actions may be taken even if they are opposed by our other shareholders, including the holders of the ADSs. Furthermore, this concentration of ownership may also discourage, delay or prevent a change in control of our company, which could have the dual effect of depriving our shareholders of an opportunity to receive a premium for their shares as part of a sale of our company and reducing the price of the ADSs. As a result of the foregoing, the value of your investment could be materially reduced.

The dual-class structure of our share capital may render the ADSs ineligible for inclusion in certain stock market indices, and thus adversely affect the market price and liquidity of the ADSs.

        In July 2017, FTSE Russell and Standard & Poor's announced that they would cease to allow most newly public companies utilizing dual or multi-class capital structures to be included in their indices.

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Affected indices include the Russell 2000 and the S&P 500, S&P MidCap 400 and S&P SmallCap 600, which together make up the S&P Composite 1500. Under the announced policies, our dual capital structure would make the ADSs ineligible for inclusion in any of these indices, and as a result, mutual funds, exchange-traded funds and other investment vehicles that attempt to passively track these indices will not be investing in the ADSs. These policies are still relatively new and it is yet unclear what effect, if any, they have had and will have on the valuations of publicly traded companies excluded from the indices, but it is possible that they may depress these valuations compared to those of other similar companies that are included and may adversely affect the liquidity of the shares of such companies. As such, the exclusion of the ADSs from these indices could result in a less active trading market for the ADSs and adversely affect their trading price.

If the custodians or authorized users of our controlling non-tangible assets, including chops and seals, fail to fulfill their responsibilities, or misappropriate or misuse these assets, our business and operations may be materially and adversely affected.

        Under PRC law, legal documents for corporate transactions, including agreements and contracts such as the leases and sales contracts that our business relies on, 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 the relevant local branch of the SAMR. We generally execute legal documents by affixing chops or seals, rather than having the designated legal representatives sign the documents. The chops of our subsidiaries and consolidated VIEs are generally held by the relevant entities so that documents can be executed locally. Although we usually utilize chops to execute contracts, the registered legal representatives of our subsidiaries and consolidated VIEs have the apparent authority to enter into contracts on behalf of such entities without chops, unless such contracts set forth otherwise.

        In order to maintain the physical security of our chops, we generally have them stored in secured locations accessible only to the designated key employees of our legal, administrative or finance departments. Our designated legal representatives generally do not have access to the chops. Although we have approval procedures in place and monitor our key employees, including the designated legal representatives of our subsidiaries and consolidated VIEs, the procedures may not be sufficient to prevent all instances of abuse or negligence. There is a risk that our key employees or designated legal representatives could abuse their authority, for example, by binding our subsidiaries and consolidated VIEs with contracts against our interests, as we would be obligated to honor these contracts if the other contracting party acts in good faith in reliance on the apparent authority of our chops or signatures of our legal representatives. If any designated legal representative obtains control of the chop in an effort to obtain control over the relevant entity, we would need to have a shareholder or board resolution to designate a new legal representative and to take legal action to seek the return of the chop, apply for a new chop with the relevant authorities, or otherwise seek legal remedies for the legal representative's misconduct. If any of the designated legal representatives obtains and misuses or misappropriates our chops and seals or other controlling intangible 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 while distracting management from our operations, and our business and operations may be materially and adversely affected.

Uncertainties exist with respect to the interpretation and implementation of the newly enacted PRC Foreign Investment Law and its implementing rules and how they may impact our business, financial condition and results of operations.

        The VIE structure through contractual arrangements 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 PRC Foreign Investment Law in January 2015, or the 2015 Draft FIL, according to which,

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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. In March 2019, the PRC National People's Congress promulgated the PRC Foreign Investment Law, and in December 2019, the State Council promulgated the Implementing Rules of PRC Foreign Investment Law, or the Implementing Rules, to further clarify and elaborate the relevant provisions of the PRC Foreign Investment Law. The PRC Foreign Investment Law and the Implementing Rules both became effective from January 1, 2020 and replaced the major previous laws and regulations governing foreign investments in the PRC. Pursuant to the PRC 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 PRC 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 VIE structure would be deemed as a method of foreign investment. However, the PRC 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 PRC 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 PRC 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 VIE 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 VIE was 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 any "negative list" for foreign investment and therefore be subject to any 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 provisions 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 operations.

Economic substance legislations of the Cayman Islands may adversely impact us or our operations.

        The Cayman Islands have introduced legislation aimed at addressing concerns raised by the Council of the European Union in relation to offshore structures engaged in certain geographically mobile activities which attract profits without real economic activity in the jurisdiction in which they are incorporated. The International Tax Co-operation (Economic Substance) Act (as amended), or the Substance Act, became effective on January 1, 2019, together with the Regulations and Guidance Notes published by the Cayman Islands Tax Information Authority from time to time, introducing certain economic substance requirements for "relevant entities" which are engaged in certain "relevant activities," which in the case of exempted companies incorporated before January 1, 2019, will apply in respect of fiscal years commencing July 1, 2019, onwards. A "relevant entity" includes an exempted company incorporated in the Cayman Islands, and is required to comply with the economic substance requirements from July 1, 2019 and make an annual report in the Cayman Islands as to whether or not it is carrying on any relevant activities and if it is, it would be required to satisfy an economic substance

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test; however, a "relevant entity" does not include an entity that is tax resident outside the Cayman Islands. Accordingly, if the Company is a tax resident outside the Cayman Islands, it is not required to satisfy the economic substance test.

        As the legislation is relatively new and remains subject to further clarification and interpretation, it is not currently possible to ascertain the precise impact of these legislative changes on the Company.

Risks Relating to Doing Business in China

Changes in the political and economic policies of the PRC government may materially and adversely affect our business, financial condition and results of operations and may result in our inability to sustain our growth and expansion strategies.

        Our operations are mainly conducted in the PRC, and all of our revenues have historically been sourced from the PRC. Accordingly, our financial condition and results of operations are affected to a significant extent by economic, political and legal developments in the PRC.

        The PRC economy differs from the economies of most developed countries in many respects, including the extent of government involvement, level of development, growth rate, control of foreign exchange and allocation of resources. Although the PRC 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 PRC government continues to play a significant role in regulating industry development by imposing industrial policies. The PRC government also exercises significant control over China's economic growth by allocating resources, controlling payment of foreign currency-denominated obligations, setting monetary policy, regulating financial services and institutions and providing preferential treatment to particular industries or companies.

        While the PRC economy has experienced significant growth in the past three decades, growth has been uneven, both geographically and among various sectors of the economy. The PRC government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures may benefit the overall PRC economy, but may also have a negative effect on us. Our financial condition and results of operations could be materially and adversely affected by government control over capital investments or changes in tax regulations that are applicable to us. In addition, the PRC government has implemented in the past certain measures to control the pace of economic growth. These measures may cause decreased economic activity, which in turn could lead to a reduction in demand for our services and consequently have a material adverse effect on our businesses, financial condition and results of operations.

There are uncertainties regarding the interpretation and enforcement of PRC laws, rules and regulations.

        Our operations are mainly conducted in the PRC, and are governed by PRC laws, rules and regulations. Our PRC subsidiaries and consolidated VIEs are subject to laws, rules and regulations applicable to foreign investment in China. The PRC legal system is a civil law system based on written statutes. Unlike the common law system, prior court decisions may be cited for reference but have limited precedential value.

        In 1979, the PRC government began to promulgate a comprehensive system of laws, rules 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 investment in China. However, China has not developed a fully integrated legal system, and recently enacted laws, rules and regulations may not sufficiently cover all aspects of economic activities in China or may be subject to significant degrees of interpretation by PRC regulatory agencies and courts. In particular,

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because these laws, rules and regulations are relatively new, and because of the limited number of published decisions and the nonbinding nature of such decisions, and because the laws, rules and regulations often give the relevant regulator significant discretion in how to enforce them, the interpretation and enforcement of these laws, rules and regulations involve uncertainties and can be inconsistent and unpredictable. In addition, 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 which may have a retroactive effect. As a result, we may not be aware of our violation of these policies and rules until after the occurrence of the violation.

        Any administrative and court proceedings in China may be protracted, resulting in substantial costs and diversion of resources and management attention. Since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory and contractual terms, it may be more difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy than in more developed legal systems. These uncertainties may impede our ability to enforce the contracts we have entered into and could materially and adversely affect our business, financial condition and results of operations.

The audit report included in this prospectus is prepared by an auditor who is not inspected by the Public Company Accounting Oversight Board and, as such, our investors are deprived of the benefits of such inspection. In addition, the adoption of any rules, legislations or other efforts to increase U.S. regulatory access to audit information could cause uncertainty, and we could be delisted if we were unable to meet any PCAOB inspection requirement in time.

        Our independent registered public accounting firm that issues the audit report included in our prospectus filed with the SEC, as auditors of companies that are traded publicly in the U.S. and a firm registered with the U.S. Public Company Accounting Oversight Board, or the PCAOB, is required by the laws of the U.S. to undergo regular inspections by the PCAOB to assess its compliance with the laws of the U.S. and professional standards. 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. Because our auditors are located in the People's Republic of China, a jurisdiction where the PCAOB is currently unable to conduct inspections without the approval of the Chinese authorities, our auditors are not currently inspected by the PCAOB. On May 24, 2013, PCAOB announced that it had entered into a Memorandum of Understanding on Enforcement Cooperation with the CSRC and the Ministry of Finance, which establishes a cooperative framework between the parties for the production and exchange of audit documents relevant to investigations in the United States and China. PCAOB continues to be in discussions with the CSRC and the Ministry of Finance to permit joint inspections in the PRC of audit firms that are registered with PCAOB and audit Chinese companies that trade on U.S. exchanges. On December 7, 2018, the SEC and the PCAOB issued a joint statement highlighting continued challenges faced by the U.S. regulators in their oversight of financial statement audits of U.S.-listed companies with significant operations in China. The joint statement reflects the U.S. regulators' heightened interest in this issue. In a statement issued on December 9, 2019, the SEC reiterated concerns over the inability of the PCAOB to conduct inspections of the audit firm work papers with respect to U.S.-listed companies that have operations in China, and emphasized the importance of audit quality in emerging markets, such as China. On April 21, 2020, the SEC and the PCAOB issued a new joint statement, reminding the investors that in investing in companies that are based in or have substantial operations in many emerging markets, including China, there is substantially greater risk that disclosures will be incomplete or misleading, and there is also a greater risk of fraud. In the event of investor harm, there is substantially less ability to bring and enforce SEC, DOJ and other U.S. regulatory actions, in comparison to U.S. domestic companies, and the joint

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statement reinforced past SEC and PCAOB statements on matters including the difficulty to inspect audit work papers in China and its potential harm to investors. However, it remains unclear what further actions the SEC and PCAOB will take to address the concerns. On June 4, 2020, the U.S. President issued a memorandum ordering the President's Working Group on Financial Markets, or the PWG, to submit a report to the President within 60 days of the memorandum that includes recommendations for actions that can be taken by the executive branch and by the SEC or PCAOB on Chinese companies listed on the U.S. stock exchanges and their audit firms, in an effort to protect investors in the U.S. On August 6, 2020, the PWG released a report recommending that the SEC take steps to implement the five recommendations outlined in the report. In particular, to address companies from jurisdictions that do not provide the PCAOB with sufficient access to fulfill its statutory mandate, or NCJs, the PWG recommends enhanced listing standards on U.S. stock exchanges. This would require, as a condition to initial and continued exchange listing, 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 on access to audit work papers and practices in NCJs 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 process under which such a co-audit may be performed in China. The report permits the new listing standards to provide for a transition period until January 1, 2022 for listed companies, but would apply immediately to new listings once the necessary rulemakings and/or standard-setting are effective. The measures in the report are expected to be subject to the standard SEC rulemaking process before becoming effective. On August 10, 2020, the SEC announced that SEC Chairman had directed the SEC staff to prepare proposals in response to the report, and that the SEC was soliciting public comments and information with respect to these proposals. If we fail to meet the new listing standards before the deadline specified thereunder due to factors beyond our control, we could face possible de-listing from Nasdaq, deregistration from the SEC and/or other risks, which may materially and adversely affect, or effectively terminate, our ADS trading in the United States.

        Inspections of other firms that the PCAOB has conducted outside China have identified deficiencies in those firms' audit procedures and quality control procedures, which may be addressed as part of the inspection process to improve future audit quality. The inability of the PCAOB to conduct inspections of auditors in China makes it more difficult to evaluate the effectiveness of our auditor's audit procedures or quality control procedures as compared to auditors outside of China that are subject to PCAOB inspections. Investors may lose confidence in our reported financial information and procedures and the quality of our consolidated financial statements.

        As part of a continued regulatory focus in the United States on access to audit and other information currently protected by national law, in particular China's, in December 2020, the United States enacted the Holding Foreign Companies Accountable Act, or the HFCA Act, which includes requirements for the SEC to identify issuers whose audit reports are prepared by auditors that the PCAOB is unable to inspect or investigate because of restrictions imposed by non-U.S. authorities in the auditor's local jurisdiction. The HFCA Act also requires public companies on this SEC list to certify that they are not owned or controlled by a foreign government and make certain additional disclosures on foreign ownership and control of such issuers in their SEC filings. Furthermore, the HFCA Act amends the Sarbanes-Oxley Act of 2002 to require the SEC to prohibit securities of any U.S. listed companies from being traded on any of the U.S. national securities exchanges, such as NYSE and Nasdaq Stock Market, or in the U.S. "over-the-counter" markets, if the auditor of the U.S. listed companies' financial statements is not subject to PCAOB inspections for three consecutive "non-inspection" years after the law becomes effective. On March 24, 2021, the SEC adopted interim final amendments to implement the submission and disclosure requirements of the HFCA Act. We will not be required to comply with the interim final amendments until the SEC has identified us as having a "non-inspection" year under a process to be subsequently established by the SEC. The SEC is

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assessing how to implement other requirements of the HFCA Act including the identification process and the trading prohibition requirements described above. While the SEC has not yet identified a list of issuers whose auditors are not subject to PCAOB inspections, the first such list could be released in early 2022. Enactment of the HFCA Act, adoption of corresponding SEC rules and other efforts to increase the U.S. regulatory access to audit information could cause investor uncertainty for affected issuers, including us, and the market price of the ADSs could be adversely affected. We cannot assure you that we will not be identified by the SEC as an issuer whose audit report is prepared by auditors that the PCAOB is unable to inspect or investigate. We cannot assure you that, once we have a "non-inspection" year, we will be able to take remedial measures in a timely manner, and as a result, and we cannot assure you that we will always be able to maintain the listing of our ADSs on a national stock exchange in the U.S., such as the NYSE or the Nasdaq Stock Market, or that you will always be allowed to trade our shares or ADSs.

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

        On August 8, 2006, six PRC regulatory agencies, including the MOFCOM, the State-Owned Assets Supervision and Administration Commission, the State Administration of Taxation, the State Administration for Industry and Commerce, currently known as the SAMR, the China Securities Regulatory Commission, or the CSRC, and the State Administration of Foreign Exchange, or the SAFE, jointly adopted the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, which came into effect on September 8, 2006 and were amended on June 22, 2009. The M&A Rules include, among other things, provisions that purport to require that an offshore special purpose vehicle that is controlled by PRC domestic companies or individuals and that has been formed for the purpose of an overseas listing of securities through acquisitions of PRC domestic companies or assets to obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle's securities on an overseas stock exchange. On September 21, 2006, the CSRC published on its official website procedures regarding its approval of overseas listings by special purpose vehicles. However, substantial uncertainty remains regarding the scope and applicability of the M&A Rules to offshore special purpose vehicles.

        While the application of the M&A Rules remains unclear, we believe, based on the advice of our PRC legal counsel, that the CSRC approval is not required in the context of this offering because our wholly-owned PRC subsidiaries were incorporated as FIEs by means of foreign direct investments rather than by merger with or acquisition of any PRC domestic companies as defined under the M&A Rules. There can be no assurance that the relevant PRC government agencies, including the CSRC, would reach the same conclusion as our PRC legal counsel. If the CSRC or other PRC regulatory body subsequently determines that we need to obtain the CSRC's approval for this offering or if the CSRC or any other PRC government authorities promulgates any interpretation or implements rules before our listing that would require us to obtain CSRC or other governmental approvals for this offering, we may face adverse actions or sanctions by the CSRC or other PRC regulatory agencies. In any such event, these regulatory agencies may impose fines and penalties on our operations in China, limit our operating privileges in China, delay or restrict the repatriation of the proceeds from this offering into the PRC or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as our ability to complete this offering. The CSRC or other PRC regulatory agencies may also take actions requiring us, or making it advisable for us, to halt this offering before settlement and delivery of the ADSs offered by this prospectus. 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 such settlement and delivery may not occur. In addition, if the CSRC or other regulatory agencies later promulgate new rules or explanations requiring us to obtain their approvals for this offering, we may be unable to obtain waivers of such approval requirements. Any uncertainties and/or negative publicity regarding such approval

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requirements could have a material adverse effect on the trading price of the ADSs. See "Regulations—Regulations Relating to Overseas Listing and M&A."

PRC laws and regulations establish more complex procedures for some acquisitions of PRC companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in China.

        A number of PRC laws and regulations, including the M&A Rules, the Anti-monopoly Law promulgated by the Standing Committee of the National People's Congress in August 2007, and the Rules of Ministry of Commerce on Implementation of Security Review System of Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the Security Review Rules, promulgated by MOFCOM in August 2011, have established procedures and requirements that are expected to make merger and acquisition activities in China by foreign investors more time-consuming and complex. For example, the M&A rules require that the 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. The approval from the MOFCOM shall be obtained in circumstances where overseas companies established or controlled by PRC enterprises or residents acquire affiliated domestic companies. Under the PRC Anti-monopoly Law, companies undertaking certain investments and acquisitions relating to businesses in China must notify the anti-monopoly enforcement agency in advance of any transaction where the parties' revenues exceed certain thresholds and the buyer would obtain control of, or decisive influence over, the other party. In addition, the Security Review Rules issued by the MOFCOM that became effective in September 2011 specify that mergers and acquisitions by foreign investors that raise "national defense and security" concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic enterprises that raise "national security" concerns are subject to strict review by the MOFCOM, and the rules prohibit any activities attempting to bypass a security review, including by structuring the transaction through a proxy or contractual control arrangement. Furthermore, on December 19, 2020, the NDRC and MOFCOM promulgated the Measures for Security Review of Foreign Investment, or the Foreign Investment Security Review Measures, which took effect on January 18, 2021. Under the Foreign Investment Security Review Measures, investment in certain key areas which results in acquiring the actual control of the assets is required to obtain approval from designated governmental authorities in advance. As the Foreign Investment Security Review Measures are recently promulgated, there are great uncertainties with respect to its interpretation and implementation.

        We may grow our business in part by acquiring other companies operating in our industry. Complying with the requirements of the new regulations to complete such transactions could be time-consuming, and any required approval processes, including approval from the MOFCOM, the SMAR or other governmental authorities, may delay or inhibit our ability to complete such transactions, which could affect our ability to expand our business or maintain our market share. It is unclear whether our business would be deemed to be in an industry that raises "national defense and security" or "national security" concerns. However, MOFCOM or other government agencies may publish explanations in the future determining that our business is in an industry subject to the security review, in which case our future acquisitions in China, including those by way of entering into contractual control arrangements with target entities, may be closely scrutinized or prohibited. Our ability to expand our business or maintain or expand our market share through future acquisitions would as such be materially and adversely affected.

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PRC regulations relating to investments in offshore 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 or limit our PRC subsidiaries' ability to increase their registered capital or distribute profits.

        PRC residents are subject to restrictions and filing requirements when investing in offshore companies. The 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, on July 4, 2014. SAFE Circular 37 requires PRC residents to register with local branches of the SAFE in connection with their direct establishment or indirect control of an offshore entity, for the purpose of overseas investment and financing, with such PRC residents' legally owned assets or equity interests in domestic enterprises or offshore assets or interests, referred to in SAFE Circular 37 as a "special purpose vehicle." Pursuant to SAFE Circular 37, "control" refers to the act through which a PRC resident obtains the right to carry out business operation of, to gain proceeds from or to make decisions on a special purpose vehicle by means of, among others, acquisition, trusteeship, shareholding entrustment arrangement, voting rights, repurchase, or convertible bonds. SAFE Circular 37 further requires amendment to the registration in the event of any significant changes with respect to the special purpose vehicle, such as increase or decrease of capital contributed by PRC individuals, share transfer or exchange, merger, division or other material event. In the event that a PRC shareholder holding interests in a special purpose vehicle fails to fulfill the required SAFE registration, the PRC subsidiaries of that special purpose vehicle may be prohibited from making profit distributions to the offshore parent and from carrying out subsequent cross-border foreign exchange activities, and the special purpose vehicle may be restricted in its ability to contribute additional capital into its PRC subsidiary. Moreover, failure to comply with the various SAFE registration requirements described above could result in liability under PRC law for evasion of foreign exchange controls. According to the Notice on Further Simplifying and Improving Policies for the Foreign Exchange Administration of Direct Investment released on February 13, 2015 by the SAFE, local banks will examine and handle foreign exchange registration for overseas direct investment, including the initial foreign exchange registration and amendment registration, under SAFE Circular 37 from June 1, 2015. In addition, certain of our beneficial owners who are PRC residents and hold their equity interest through trust arrangements have not yet completed their SAFE Circular 37 registration.

        We may not be aware of the identities of all of our beneficial owners who are PRC residents. We do not have control over our beneficial owners and there can be no assurance that all of our PRC-resident beneficial owners will comply with SAFE Circular 37 and subsequent implementation rules, and there is no assurance that the registration under SAFE Circular 37 and any amendment will be completed in a timely manner, or will be completed at all. The failure of our beneficial owners who are PRC residents to register or amend their foreign exchange registrations in a timely manner pursuant to SAFE Circular 37 and subsequent implementation rules, or the failure of future beneficial owners of our company who are PRC residents to comply with the registration procedures set forth in SAFE Circular 37 and subsequent implementation rules, may subject such beneficial owners or our PRC subsidiaries to fines and legal sanctions. Failure to register or comply with relevant requirements may also limit our ability to contribute additional capital to our PRC subsidiaries and limit our PRC subsidiaries' ability to distribute dividends to our company. These risks may have a material adverse effect on our business, financial condition and results of operations.

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

        Pursuant to SAFE Circular 37, PRC residents who participate in share incentive plans in overseas non-publicly-listed companies due to their position as director, senior management or employees of the PRC subsidiaries of the overseas companies may submit applications to SAFE or its local branches for

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the foreign exchange registration with respect to offshore special purpose companies before they obtain the incentive shares or exercise the share options. Our directors, executive officers and other employees who are PRC residents and who have been granted options may follow SAFE Circular 37 to apply for the foreign exchange registration before we become an overseas listed company. After we become an overseas listed company upon completion of this offering, we and our directors, executive officers and other employees who are PRC citizens or who are non-PRC citizens residing in the PRC for a continuous period of not less than one year and who have been granted options will be subject to the Notice on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Publicly Listed Company, issued by SAFE in February 2012, according to which, employees, directors, supervisors and other management members participating in any stock incentive plan of an overseas publicly listed company who are PRC residents are required to register with SAFE through a domestic qualified agent, which could be a PRC subsidiary of such overseas listed company, and complete certain other procedures. We will make efforts to comply with these requirements. However, there can be no assurance that they can successfully register with SAFE in full compliance with the rules. Failure to complete the SAFE registrations may subject them to fines and legal sanctions and may also limit the ability to make payment under our share incentive plans or receive dividends or sales proceeds related thereto in foreign currencies, or our ability to contribute additional capital into our wholly-foreign owned enterprise in China and limit our wholly-foreign owned enterprise's ability to distribute dividends to us. We also face regulatory uncertainties that could restrict our ability to adopt additional share incentive plans for our directors and employees under PRC law.

We rely to a significant extent on dividends and other distributions on equity paid by our principal operating subsidiaries to fund offshore cash and financing requirements. Any limitation on the ability of our PRC operating subsidiaries to make payments to us could have a material adverse effect on our ability to conduct our business.

        We are a holding company and rely to a significant extent on dividends and other distributions on equity paid by our principal operating subsidiaries, for our offshore cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our shareholders, fund inter-company loans, service any debt we may incur outside of China and pay our expenses. When our principal operating subsidiaries incur additional debt, the instruments governing the debt may restrict their ability to pay dividends or make other distributions or remittances to us. Furthermore, the laws, rules and regulations applicable to our PRC subsidiaries and certain other subsidiaries permit payments of dividends only out of their retained earnings, if any, determined in accordance with applicable accounting standards and regulations.

        Under PRC laws, rules and regulations, each of our subsidiaries incorporated in China is required to set aside at least 10% of its net income each year to fund certain statutory reserves until the cumulative amount of such reserves reaches 50% of its registered capital. These reserves, together with the registered capital, are not distributable as cash dividends. As a result of these laws, rules and regulations, our subsidiaries incorporated in China are restricted in their ability to transfer a portion of their respective net assets to their shareholders as dividends, loans or advances. Certain of our subsidiaries did not have any retained earnings available for distribution in the form of dividends as of December 31, 2020. In addition, registered capital and capital reserve accounts are also restricted from withdrawal in the PRC. In addition, failure to register or comply with relevant requirements may also limit our ability to contribute additional capital to our PRC subsidiaries and limit our PRC subsidiaries' ability to distribute dividends to our company. See "Regulations—Regulations Relating to Dividend Distributions" and "—Risks Relating to Doing Business in China—PRC regulations relating to investments in offshore 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 or limit our PRC subsidiaries' ability to increase their registered capital or distribute profits."

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We may be treated as a resident enterprise for PRC tax purposes under the PRC Enterprise Income Tax Law, which may subject us to PRC income tax for our global income, and in which case any dividends we pay to our non-PRC shareholders, or gains from disposal of our ADSs or ordinary shares may be subject to PRC tax.

        Under the PRC Enterprise Income Tax Law and its implementing rules, enterprises established under the laws of jurisdictions outside of China with "de facto management bodies" located in China may be considered PRC tax resident enterprises for tax purposes and may be subject to the PRC enterprise income tax at the rate of 25% on their global income. "De facto management body" refers to a managing body that exercises substantial and overall management and control over the production and operations, personnel, accounting and assets of an enterprise. The State Administration of Taxation issued the Notice Regarding the Determination of Chinese-Controlled Offshore-Incorporated Enterprises as PRC Tax Resident Enterprises on the Basis of De Facto Management Bodies, or Circular 82, on April 22, 2009, with retroactive effect from January 1, 2008, which was most recently amended on December 29, 2017. Circular 82 provides certain specific criteria for determining whether the "de facto management body" of a Chinese-controlled offshore-incorporated enterprise is located in China. Although Circular 82 only applies to offshore enterprises controlled by PRC enterprises, not those controlled by foreign enterprises or individuals, the determining criteria set forth in Circular 82 may reflect the State Administration of Taxation's general position on how the "de facto management body" test should be applied in determining the tax resident status of offshore enterprises, regardless of whether they are controlled by PRC enterprises.

        We understand none of our entities which are established under laws of jurisdictions outside of China, or non-PRC entities, were recognized by the PRC tax authorities as a PRC tax resident enterprise. 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 we or any of our non-PRC entities are a PRC resident enterprise for enterprise income tax purposes, we and such non-PRC entities could be subject to PRC tax at a rate of 25% on our worldwide income, which could materially reduce our net income. Furthermore, dividends payable to our non-PRC 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 10% in the case of non-PRC enterprises or a rate of 20% in the case of non-PRC individuals if we are deemed a PRC resident enterprise or such income is otherwise deemed as income derived from the PRC, unless a reduced rate is available under applicable tax treaties or similar tax arrangements between jurisdictions. It is unclear whether non-PRC shareholders of our company would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in such event. Any such tax may reduce the returns on your investment in the ADSs or ordinary shares.

We and our shareholders face uncertainties with respect to indirect transfers of equity interests in PRC resident enterprises or other assets attributed to a Chinese establishment of a non-Chinese company, or immovable properties located in China owned by non-Chinese companies.

        On February 3, 2015, the State Administration of Taxation issued the Bulletin on Issues of Enterprise Income Tax on Indirect Transfers of Assets by Non-PRC Resident Enterprises, or Bulletin 7. Pursuant to this Bulletin 7, an "indirect transfer" of assets, including equity interests in a PRC resident enterprise, by non-PRC resident enterprises may be re-characterized and treated as a direct transfer of PRC taxable assets, if such arrangement does not have a reasonable commercial purpose and was established for the purpose of avoiding payment of PRC enterprise income tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise income tax. According to Bulletin 7, "PRC taxable assets" include assets attributed to an establishment in China, immovable properties located in China, and equity investments in PRC resident enterprises, in respect of which gains from their transfer by a direct holder, being a non-PRC resident enterprise, would be subject to PRC

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enterprise income taxes. When determining whether there is a "reasonable commercial purpose" of the transaction arrangement, features to be taken into consideration include, without limitation: whether the main value of the equity interest of the relevant offshore enterprise derives from PRC taxable assets; whether the assets of the relevant offshore enterprise mainly consists of direct or indirect investment in China or if its income mainly derives from China; whether the offshore enterprise and its subsidiaries directly or indirectly holding PRC taxable assets have real commercial nature which is evidenced by their actual function and risk exposure; the duration of existence of shareholders, the business model and organizational structure of an overseas enterprise; the income tax payable abroad due to the indirect transfer of PRC taxable assets; the replicability of the transaction by direct transfer of PRC taxable assets; and the applicable tax treaties or similar arrangements with regard to the income from such indirect transfer. In respect of an indirect offshore transfer of assets of a PRC establishment, the resulting gain is to be included with the enterprise income tax filing of the PRC establishment or place of business being transferred, and would consequently be subject to PRC enterprise income tax at a rate of 25%. Where the underlying transfer relates to the immovable properties located in China or to equity investments in a PRC resident enterprise, which is not related to a PRC establishment or place of business of a non-resident enterprise, a PRC enterprise income tax of 10% would apply, subject to available preferential tax treatment under applicable tax treaties or similar arrangements, and the party who is obligated to make the transfer payments has the withholding obligation. Bulletin 7 does not apply to transactions of sale of shares by investors through a public stock exchange where such shares were acquired from a transaction through a public stock exchange. On October 17, 2017, the State Administration of Taxation promulgated the Announcement of the State Administration of Taxation on Issues Concerning the Withholding of Non-resident Enterprise Income Tax at Source, or SAT Circular 37, which became effective on December 1, 2017 and was most recently amended on June 15, 2018. SAT Circular 37, among other things, further clarifies the practice and procedures of withholding and payment of income tax levied on non-resident enterprises.

        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 or investments. Failure to comply with Bulletin 7 and SAT Circular 37 may lead to fines, rectification or other penalties. Our company may be subject to filing obligations or taxed if our company is transferor in such transactions, and may be subject to withholding obligations if our company is transferee in such transactions under Bulletin 7 and SAT Circular 37. For transfer of shares in our company by investors that are non-PRC resident enterprises, our PRC subsidiaries may be requested to assist in the filing under Bulletin 7 and SAT Circular 37. As a result, we may be required to expend valuable resources to comply with Bulletin 7 and SAT Circular 37 or to request the relevant transferors from whom we purchase PRC taxable assets to comply with these publications, or to establish that our company should not be taxed under these publications, which may have a material adverse effect on our financial condition and results of operations.

We are subject to restrictions on currency exchange.

        All of our revenues are denominated in Renminbi. The Renminbi is currently convertible under the "current account," which includes dividends, trade and service-related foreign exchange transactions, but not under the "capital account," which includes foreign direct investment and loans, including loans we may secure from our PRC subsidiaries. Currently, our PRC subsidiaries may purchase foreign currency for settlement of "current account transactions," including payment of dividends to us, by complying with certain procedural requirements. However, the relevant PRC governmental authorities may limit or eliminate our ability to purchase foreign currencies in the future for current account transactions. Foreign exchange transactions under the capital account remain subject to limitations and require approvals from, or registration with, the SAFE and other relevant PRC governmental authorities. In addition, failure to register or comply with relevant requirements may also limit our ability to contribute additional capital to our PRC subsidiaries and limit our PRC

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subsidiaries' ability to distribute dividends to our company. See "—PRC Regulations relating to investments in offshore 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 or limit our PRC subsidiaries' ability to increase their registered capital or distribute profits." Since a significant amount of our future revenues and cash flow will be denominated in Renminbi, any existing and future restrictions on currency exchange may limit our ability to utilize cash generated in Renminbi to fund our business activities outside of the PRC or pay dividends in foreign currencies to our shareholders, including holders of the ADSs, and may limit our ability to obtain foreign currency through debt or equity financing for our onshore subsidiaries.

PRC regulation of loans to, and direct investment in, PRC entities by offshore holding companies and governmental control of currency conversion may restrict or prevent us from using the proceeds of this offering to make loans or additional capital contributions to our PRC subsidiaries.

        In utilizing the proceeds of this offering, we, as an offshore holding company, are permitted under PRC laws and regulations to provide funding to our PRC subsidiaries, which are treated as foreign-invested enterprises under PRC laws, through loans or capital contributions. However, loans by us to our PRC subsidiaries to finance their activities cannot exceed statutory limits and must be registered with the local counterpart of SAFE and capital contributions to our PRC subsidiaries are subject to the requirement of making necessary registration with competent governmental authorities in China.

        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 Circular 19, effective on June 1, 2015 and amended on December 30, 2019. According to Circular 19, the flow and use of the RMB capital converted from foreign currency-denominated registered capital of a foreign-invested company is regulated such that RMB capital may not be used for the issuance of RMB entrusted loans, the repayment of inter-enterprise loans or the repayment of banks loans that have been transferred to a third party. Although Circular 19 allows RMB capital converted from foreign currency-denominated registered capital of a foreign-invested enterprise to be used for equity investments within the PRC, 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 the PRC 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 Circular 16, effective on June 9, 2016, which reiterates some of the rules set forth in 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 Circular 16 could result in administrative penalties. Circular 19 and Circular 16 may significantly limit our ability to transfer any foreign currency we hold, including the net proceeds from this offering, to our PRC subsidiaries, which may adversely affect our liquidity and our ability to fund and expand our business in the PRC.

        On October 23, 2019, SAFE promulgated the Circular of the State Administration of Foreign Exchange on Further Promoting the Facilitation of Cross-border Trade and Investment, or SAFE Circular 28, which permits non-investment foreign-invested enterprises to use their capital funds to make equity investments in China, with genuine investment projects and in compliance with effective foreign investment restrictions and other applicable laws. However, as the SAFE Circular 28 was relatively new, there are still substantial uncertainties as to its interpretation and implementations in practice.

        In light of the various requirements imposed by PRC regulations on loans to, and direct investment in, PRC entities by offshore holding companies, including SAFE circulars referred to above,

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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 or future capital contributions by us to our PRC subsidiaries. As a result, uncertainties exist as to our ability to provide prompt financial support to our PRC subsidiaries when needed. If we fail to complete such registrations or obtain such approvals, our ability to use foreign currency, including the proceeds we received 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. In addition, failure to register or comply with relevant requirements may also limit our ability to contribute additional capital to our PRC subsidiaries and limit our PRC subsidiaries' ability to distribute dividends to our company. See "—PRC regulations relating to investments in offshore 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 or limit our PRC subsidiaries' ability to increase their registered capital or distribute profits."

Fluctuations in exchange rates could result in foreign currency exchange losses and could materially reduce the value of your investment.

        The value of the Renminbi against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economic conditions and the foreign exchange policy adopted by the PRC government. On July 21, 2005, the PRC government changed its policy of pegging the value of the Renminbi to the U.S. dollar. Following the removal of the U.S. dollar peg, the Renminbi appreciated more than 20% against the U.S. dollar over the following three years. Between July 2008 and June 2010, this appreciation halted and the exchange rate between the Renminbi and the U.S. dollar remained within a narrow band. Since June 2010, the Renminbi has fluctuated against the U.S. dollar, at times significantly and unpredictably. On November 30, 2015, the Executive Board of the International Monetary Fund, completed the regular five-year review of the basket of currencies that make up the Special Drawing Right, or the SDR, and decided that with effect from October 1, 2016, Renminbi is determined to be a freely usable currency and will be included in the SDR basket as a fifth currency, along with the U.S. dollar, the Euro, the Japanese yen and the British pound. In the fourth quarter of 2016, the Renminbi has depreciated significantly in the backdrop of a surging U.S. dollar and persistent capital outflows of China. With the development of the foreign exchange market and progress towards interest rate liberalization and Renminbi internationalization, the PRC government may in the future announce further changes to the exchange rate system, and we cannot assure you that the Renminbi will not appreciate or depreciate significantly in value against the U.S. dollar in the future. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the Renminbi and the U.S. dollar in the future.

        All of our revenues and most of our cost and expenses are denominated in Renminbi. We are a holding company and we rely on dividends paid by our operating subsidiaries in China for our cash needs. Any significant revaluation of Renminbi may materially and adversely affect our results of operations and financial position reported in Renminbi when converted into U.S. dollars, and the value of, and any dividends payable on, the ADSs in U.S. dollars. To the extent that we need to convert U.S. dollars we receive from this offering into Renminbi for our operations, appreciation of the Renminbi against the U.S. dollar would have an adverse effect on the Renminbi amount we would receive. Conversely, if we decide to convert our Renminbi into U.S. dollars for the purpose of making payments for dividends on our Class A ordinary shares or ADSs or for other business purposes, appreciation of the U.S. dollar against the Renminbi would have a negative effect on the U.S. dollar amount.

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The ability of U.S. authorities to bring actions for violations of U.S. securities law and regulations against us, our directors, executive officers or the expert named in this prospectus may be limited. Therefore, you may not be afforded the same protection as provided to investors in U.S. domestic companies.

        The SEC, the U.S. Department of Justice, or the DOJ, and other U.S. authorities often have substantial difficulties in bringing and enforcing actions against non-U.S. companies such as us, and non-U.S. persons, such as our directors and executive officers in China. Due to jurisdictional limitations, matters of comity and various other factors, the SEC, the DOJ and other U.S. authorities may be limited in their ability to pursue bad actors, including in instances of fraud, in emerging markets such as China. We conduct our operations mainly in China and our assets are mainly located in China. In addition, a majority of our directors and executive officers reside within China. There are significant legal and other obstacles for U.S. authorities to obtain information needed for investigations or litigation against us or our directors, executive officers or other gatekeepers in case we or any of these individuals engage in fraud or other wrongdoing. In addition, local authorities in China may be constrained in their ability to assist U.S. authorities and overseas investors in connection with legal proceedings. As a result, if we, our directors, executive officers or other gatekeepers commit any securities law violation, fraud or other financial misconduct, the U.S. authorities may not be able to conduct effective investigations or bring and enforce actions against us, our directors, executive officers or other gatekeepers. Therefore, you may not be able to enjoy the same protection provided by various U.S. authorities as it is provided to investors in U.S. domestic companies.

You may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing original actions in China, based on United States or other foreign laws, against us, our directors, executive officers or the expert named in this prospectus. Therefore, you may not be able to enjoy the protection of such laws in an effective manner.

        We conduct our operations mainly in China, and our assets are mainly located in China. In addition, a majority of our directors and executive officers reside within China. As a result, it may not be possible to effect service of process within the United States or elsewhere outside China upon us, our directors and executive officers, including with respect to matters arising under U.S. federal securities laws or applicable state securities laws. Even if you obtain a judgment against us, our directors, executive officers or the expert named in this prospectus in a U.S. court or other court outside China, you may not be able to enforce such judgment against us or them in China. There are no treaties and only limited reciprocity arrangements between China and the United States, the United Kingdom, Japan or most other western countries governing the recognition and enforcement of judgments. Therefore, recognition and enforcement in China of judgments of a court in any of these jurisdictions may be difficult or impossible. In addition, you may not be able to bring original actions in China based on the U.S. or other foreign laws against us, our directors, executive officers or the expert named in this prospectus. As a result, shareholder claims that are common in the U.S., including class actions based on securities law and fraud claims, are difficult or impossible to pursue as a matter of law and 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. While detailed interpretation of or implementation rules under Article 177 of the PRC Securities Law is not yet

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available, the inability for an overseas securities regulator to directly conduct investigation or evidence collection activities within China may further increase difficulties faced by investors in protecting your interests. Therefore, you may not be able to effectively enjoy the protection offered by the U.S. laws and regulations that are intended to protect public investors.

Additional remedial measures could be imposed on certain PRC-based accounting firms, including our independent registered public accounting firm, in administrative proceedings instituted by the SEC, as a result of which our financial statements may be determined to not be in compliance with the requirements of the Exchange Act, if at all.

        In December 2012, the SEC brought administrative proceedings against the PRC-based "big four" accounting firms, including our independent registered public accounting firm, alleging that they had violated U.S. securities laws by failing to provide audit work papers and other documents related to certain other PRC-based companies under investigation by the SEC. On January 22, 2014, an initial administrative law decision was issued, censuring and suspending these accounting firms from practicing before the SEC for a period of six months. The decision was neither final nor legally effective until reviewed and approved by the SEC, and on February 12, 2014, the PRC-based accounting firms appealed to the SEC against this decision. In February 2015, each of the four PRC-based accounting firms 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. The settlement required the firms to follow detailed procedures to seek to provide the SEC with access to such firms' audit documents via the CSRC. If the firms did not follow these procedures or if there is a failure in the process between the SEC and the CSRC, the SEC could impose penalties such as suspensions, or it could restart the administrative proceedings. Under the terms of the settlement, the underlying proceeding against the four PRC-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 PRC-based accounting firms' compliance with U.S. law in connection with U.S. regulatory requests for audit work papers or if the results of such challenge would result in the SEC imposing penalties such as suspensions. Our board of directors are aware of the policy restriction and regularly communicated with our independent auditor regarding the accounting firm's compliance.

        In the event that the PRC-based "big four" accounting firms become subject to additional legal challenges by the SEC or PCAOB, depending upon the final outcome, listed companies in the U.S. with major PRC operations may find it difficult or impossible to retain auditors in respect of their operations in the PRC, which could result in financial statements being determined to not be in compliance with the requirements of the Exchange Act, including possible delisting. Moreover, any negative news about any such future proceedings against these audit firms may cause investor uncertainty regarding China-based, U.S.-listed companies and the market price of the ADSs may be adversely affected.

        If our independent registered public accounting firm were 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 consolidated financial statements, our consolidated 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 delay or abandonment of this offering, delisting of the ADSs from Nasdaq or deregistration from the SEC, or both, which would substantially reduce or effectively terminate the trading of the ADSs in the U.S.

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Risks Relating to This Offering

There has been no public market for our shares or the ADSs prior to this offering, and you may not be able to resell the ADSs at or above the price you paid, or at all.

        Prior to this offering, there has been no public market for our shares or ADSs. We plan to apply for listing of the ADSs on Nasdaq. Our Class A ordinary shares will not be listed on any exchange or quoted for trading on any over-the-counter trading system. If an active trading market for the ADSs does not develop after this offering, the market price and liquidity of the ADSs will be materially and adversely affected.

        Negotiations with the underwriters will determine the initial public offering price for the ADSs which may bear no relationship to their market price after the initial public offering. There can be no assurance that an active trading market for the ADSs will develop or that the market price of the ADSs will not decline below the initial public offering price.

The trading price of the ADSs may be volatile, which could result in substantial losses to you.

        The trading prices of the ADSs are likely to be volatile and could fluctuate widely due to factors beyond our control. This may happen because of broad market and industry factors, like the performance and fluctuation in the market prices or the underperformance or deteriorating financial results of other listed companies based in China. The securities of some of these companies have experienced significant volatility since their initial public offerings, including, in some cases, substantial price declines in the trading prices of their securities. The trading performances of other Chinese companies' securities after their offerings, including technology companies, may affect the attitudes of investors toward Chinese companies listed in the U.S., which consequently may impact the trading performance of the ADSs, regardless of our actual operating performance. In addition, any negative news or perceptions about inadequate corporate governance practices or fraudulent accounting, corporate structure or matters of other Chinese companies may also negatively affect the attitudes of investors towards Chinese companies in general, including us, regardless of whether we have conducted any inappropriate activities. Furthermore, securities markets may from time to time experience significant price and volume fluctuations that are not related to our operating performance, such as the large decline in share prices in the U.S., China and other jurisdictions in late 2008, early 2009, the second half of 2011, 2015 and the first quarter of 2020. In particular, concerns about the economic impact of the coronavirus outbreak have triggered significant price fluctuations in the U.S. stock market. All these fluctuations and incidents may have a material and adverse effect on the trading price of the ADSs.

        In addition to the above factors, the price and trading volume of the ADSs may be highly volatile due to multiple factors, including the following:

    regulatory developments affecting us or our industry;

    announcements of studies and reports relating to the quality of our product offerings or those of our competitors;

    changes in the economic performance or market valuations of other providers of electric vehicles;

    actual or anticipated fluctuations in our quarterly results of operations and changes or revisions of our expected results;

    changes in financial estimates by securities research analysts;

    conditions in the local services market in China

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    announcements by us or our competitors of new product and service offerings, acquisitions, strategic relationships, joint ventures, capital raisings or capital commitments;

    additions to or departures of our senior management;

    fluctuations of exchange rates between the Renminbi and the U.S. dollar;

    release or expiry of lock-up or other transfer restrictions on our issued shares or ADSs; and

    sales or perceived potential sales of additional Class A ordinary shares or ADSs.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the market price for the ADSs and trading volume could decline.

        The trading market for the ADSs will depend 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.

As 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 (assuming no exercise of outstanding options to acquire ordinary shares and no exercise of the underwriters' option to purchase additional ADSs), representing the difference between our pro forma as adjusted net tangible book value per ADS of US$          , as of December 31, 2020, after giving effect to this offering, and the initial public offering price of US$          per ADS. In addition, you will experience further dilution to the extent that our Class A ordinary shares are issued upon the vesting of the RSUs under our share incentive plan. Class A ordinary shares issuable under our share incentive plan may be issued at a purchase price on a per ADS basis that is less than the public offering price per ADS in this offering. 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.

Because we do not expect to pay cash dividends in the foreseeable future after this offering, you may not receive any return on your investment unless you sell your Class A ordinary shares or ADSs for a price greater than that which you paid for them.

        We currently intend to retain most, if not all, of our available funds and any future earnings after this offering 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. See "Dividend Policy." 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. 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, among other things, 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 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

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realize a return on your investment in the ADSs and you may even lose your entire investment in the ADSs.

Substantial future sales or perceived potential sales of the ADSs in the public market could cause the price of the ADSs to decline.

        Sales of the ADSs in the public market after this offering, or the perception that these sales could occur, could cause the market price of the ADSs to decline significantly. Upon completion of this offering, we will have            Class A ordinary shares and 166,772,842 Class B ordinary shares (or 208,669,186 Class B ordinary shares if the CEO award is issued prior to this offering) outstanding, including            Class A ordinary shares represented by ADSs newly issued in connection with this offering, assuming the underwriters do not exercise their option to purchase additional ADSs. We, our directors, executive officers, and existing shareholders have agreed not to sell any Class A ordinary shares or ADSs for 180 days after the date of this prospectus without the prior written consent of the underwriters, subject to certain exceptions. All ADSs representing our Class A ordinary shares sold in this offering are expected to be freely transferable by persons other than our "affiliates" without restriction or additional registration under the U.S. Securities Act of 1933, as amended, or the Securities Act. All of the other ordinary shares outstanding after this offering will be available for sale, upon the expiration of the lock-up periods described above, subject to volume and other restrictions as applicable under Rule 144 and Rule 701 under the Securities Act. Any or all of these ordinary shares may be released prior to the expiration of the applicable lock-up period at the discretion of the designated representatives. To the extent shares are released before the expiration of the applicable lock-up period and sold into the market, the market price of the ADSs could decline significantly. See "Shares Eligible for Future Sale—Lock-up Agreements."

        Certain major holders of our ordinary shares after completion of this offering will have the right to cause us to register under the Securities Act the sale of their shares, subject to the applicable lock-up periods in connection with this offering. Registration of these shares under the Securities Act would result in ADSs representing these shares becoming freely tradable without restriction under the Securities Act immediately upon the effectiveness of the registration. Sales of ADSs representing these registered shares in the public market could cause the price of the ADSs to decline significantly.

You, as holders of ADSs, may have fewer rights than holders of our Class A ordinary shares and must act through the depositary to exercise those rights.

        Holders of ADSs do not have the same rights of our shareholders and may only exercise the voting rights with respect to the underlying Class A ordinary shares in accordance with the provisions of the deposit agreement. [Under our [tenth] amended and restated memorandum and articles of association, which will become effective immediately prior to the completion of this offering, the minimum notice period required to convene a general meeting will be ten calendar days.] When a general meeting is convened, you may not receive sufficient notice of a shareholders' meeting to permit you to withdraw your Class A ordinary shares to allow you to cast your vote with respect to any specific matter. In addition, the depositary and its agents may not be able to send voting materials to you or carry out your voting instructions in a timely manner. We will make all reasonable efforts to cause the depositary to extend voting rights to you in a timely manner, but there can be no assurance that you will receive the voting materials in time to ensure that you can instruct the depositary to vote your ADSs. Furthermore, the depositary and its agents will not be responsible for any failure to carry out any instructions to vote, for the manner in which any vote is cast or for the effect of any such vote. As a result, you may not be able to exercise your right to vote and you may lack recourse if your ADSs are not voted as you requested. In addition, in your capacity as an ADS holder, you will not be able to call a shareholders' meeting.

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Your rights to pursue claims against the depositary as a holder of ADSs are limited by the terms of the deposit agreement and the deposit agreement may be amended or terminated without your consent.

        Under the deposit agreement, any action or proceeding against or involving the depositary, arising out of or based upon the deposit agreement or the transactions contemplated thereby or by virtue of owning the ADSs (including any such action or proceeding that may arise under the Securities Act or Ex-change Act) may only be instituted in a state or federal court in New York, New York, and you, as a holder of our ADSs, will have irrevocably waived any objection which you may have to the laying of venue of any such proceeding, and irrevocably submitted to the exclusive jurisdiction of such courts in any such action or proceeding. Also, we may amend or terminate the deposit agreement without your consent. If you continue to hold your ADSs after an amendment to the deposit agreement, you will be deemed to have agreed to be bound by the deposit agreement as amended, unless such amendment is found to be invalid under any applicable laws, including the federal securities law. See "Description of American Depositary Shares" for more information.

Your right to participate in any future rights offerings may be limited, which may cause dilution to your holdings.

        We may, from time to time, distribute rights to our shareholders, including rights to acquire our securities. However, we cannot make rights available to you in the U.S. unless we register both the distribution and sale of 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 make rights available to you unless both the distribution and sale of the rights and the underlying securities to be distributed to ADS holders are either registered under the Securities Act or exempt from registration under the Securities Act. We are under no obligation to file a registration statement with respect to any such rights or securities or to endeavor to cause such a registration statement to be declared effective and we may not be able to establish a necessary exemption from registration under the Securities Act. Accordingly, you may be unable to participate in our rights offerings in the future and may experience dilution in your holdings.

You may not receive cash dividends or other distributions if the depositary determines it is illegal or impractical to make them available to you.

        The depositary will pay cash distribution on the ADSs only to the extent that we decide to distribute dividends on our Class A ordinary shares or other deposited securities, and we do not have any present plan to pay any cash dividends in the foreseeable future. See "Dividend Policy." 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 Class A ordinary shares or other deposited securities after deducting its fees and expenses. You will receive these distributions in proportion to the number of Class A ordinary shares your ADSs represent. However, the depositary may, at its discretion, decide that it is illegal 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.

We will incur increased costs and become subject to additional regulations and requirements as a result of becoming a public company, which could lower our profits or make it more difficult to run our business.

        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.

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        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. In addition, once 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.

        As a company with less than US$1.07 billion in net revenues for our last financial 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 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. Once 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.

        In the past, shareholders of a public company often brought securities class action suits against companies following periods of instability in the market price of those companies' 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.

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

        Your ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when it deems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generally when our books or the books of the depositary are closed, or at any time if we or the depositary deems it 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.

[Our [tenth] amended and restated memorandum and articles of association contain anti-takeover provisions that could discourage a third party from acquiring us, which could limit our shareholders' opportunity to sell their shares, including ordinary shares represented by the ADSs, at a premium.

        Our [tenth] amended and restated memorandum and articles of association, which will become effective immediately prior to the completion of this offering, contain provisions to limit the ability of others to acquire control of our company or cause us to engage in change-of-control transactions. These provisions could have the effect of depriving our shareholders of an opportunity to sell their shares at a

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premium over prevailing market prices by discouraging third parties from seeking to obtain control of our company in a tender offer or similar transaction. For example, our board of directors has the authority, without further action by our shareholders, to issue preferred shares in one or more series and to fix their designations, powers, preferences, privileges, and relative participating, optional or special rights and the qualifications, limitations or restrictions, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences, any or all of which may be greater than the rights associated with our Class A ordinary shares, in the form of ADS or otherwise. Preferred shares could be issued quickly with terms calculated to delay or prevent a change in control of our company or make removal of management more difficult. If our board of directors decides to issue preferred shares, the price of the ADSs may fall and the voting and other rights of the holders of our Class A ordinary shares and ADSs may be materially and adversely affected. In addition, our [tenth] amended and restated memorandum and articles of association contain other provisions that could limit the ability of third parties to acquire control of our company or cause us to engage in a transaction resulting in a change of control, including a provision that entitles each Class B ordinary share to 20 votes in respect of all matters subject to a shareholders' vote.]

[Our [tenth] amended and restated memorandum and articles of association provide that the courts of the Cayman Islands and the U.S. federal courts will be the exclusive forums for substantially all disputes between us and our shareholders, which could limit our shareholders' ability to obtain a favorable judicial forum for complaints against us or our directors, officers or employees.

        Our [tenth] amended and restated memorandum and articles of association that will become effective immediately prior to the completion of this offering provide that, unless otherwise agreed by us, (i) the federal courts of the United States shall have exclusive jurisdiction to hear, settle and/or determine any dispute, controversy or claim arising under the provisions of the Securities Act or the Exchange Act, which are referred to as the "US Actions;" and (ii) save for such US Actions, the courts of the Cayman Islands shall have exclusive jurisdiction to hear, settle and/or determine any dispute, controversy or claim whether arising out of or in connection with our articles of association or otherwise, including without limitation:

    any derivative action or proceeding brought on behalf of our company,

    any action asserting a claim of breach of a fiduciary duty owed by any of our director, officer or other employee to our company or our shareholders,

    any action asserting a claim under any provision of the Companies Act (Revised) of the Cayman Islands or our articles of association, or

    any action asserting a claim against our company which if brought in the United States would be a claim arising under the internal affairs doctrine (as such concept is recognized under the laws of the United State).

        These exclusive-forum provisions may increase a shareholder's cost and limit the shareholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage lawsuits against us and our directors, officers and other employees. Any person or entity purchasing or otherwise acquiring any of our shares or other security, such as the ADSs, whether by transfer, sale, operation of law or otherwise, shall be deemed to have notice of and have irrevocably agreed and consented to these provisions. There is uncertainty as to whether a court would enforce such provisions, and the enforceability of similar choice of forum provisions in other companies' charter documents has been challenged in legal proceedings. It is possible that a court could find this type of provisions to be inapplicable or unenforceable, and if a court were to find this provision in our [tenth] amended and restated memorandum and articles of association to be inapplicable or unenforceable in an action, we may incur additional costs associated

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with resolving the dispute in other jurisdictions, which could have adverse effect on our business and financial performance.]

ADS 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 our ADSs provides that, to the extent permitted by law, holders of our ADSs waive the right to a jury trial of any claim they may have against us or the depositary arising out of or relating to the ADSs or the deposit agreement, including any claim under U.S. federal securities laws. However, you will not be deemed, by agreeing to the terms of the deposit agreement, to have waived our or the depositary's compliance with U.S. federal securities laws and the rules and regulations promulgated thereunder. In fact, you cannot waive our or the depositary's compliance with U.S. federal securities laws and the rules and regulations promulgated thereunder.

        If we or the depositary oppose a jury trial demand based on the above-mentioned jury trial waiver, the court will determine whether the waiver is enforceable in the facts and circumstances of that case in accordance with applicable case law. The deposit agreement governing our ADSs provides that, (i) the deposit agreement and the ADSs will be interpreted in accordance with the laws of the State of New York, and (ii) as an owner of ADSs, you irrevocably agree that any legal action arising out of the deposit agreement and the ADSs involving us or the depositary may only be instituted in a state or federal court in the city of New York. While to our knowledge, the enforceability of a jury trial waiver under the federal securities laws has not been finally adjudicated by a federal court, we believe that a jury trial waiver provision is generally enforceable under the laws of the State of New York by a federal or state court in the City of New York. In determining whether to enforce a jury trial waiver provision, New York courts will consider whether the visibility of the jury trial waiver provision within the agreement is sufficiently prominent such that a party has knowingly waived any right to trial by jury. We believe that this is the case with respect to the deposit agreement and the ADSs. In addition, New York courts will not enforce a jury trial waiver provision in order to bar a viable setoff or counterclaim sounding in fraud or one which is based upon a creditor's negligence in failing to liquidate collateral upon a guarantor's demand, or in the case of an intentional tort claim, none of which we believe are applicable in the case of the deposit agreement or the ADSs. If you or any other holder or beneficial owner of ADSs brings 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 holder or beneficial owner 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 and / or the depositary. If a lawsuit is brought against us and / 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 had, including results that could be less favorable to the plaintiff(s) in any such action, depending on, among other things, the nature of the claims, the judge or justice hearing such claims and the venue of the hearing.

        Moreover, as the jury trial waiver relates to claims arising out of or relating to the ADSs or the deposit agreement, we believe that, as a matter of construction of the clause, the waiver would likely to continue to apply to ADS holders who withdraw the Class A ordinary shares from the ADS facility with respect to claims arising before the cancellation of the ADSs and the withdrawal of the Class A ordinary shares, and the waiver would most likely not apply to ADS holders who subsequently withdraw the Class A ordinary shares represented by ADSs from the ADS facility with respect to claims arising after the withdrawal. However, to our knowledge, there has been no case law on the applicability of the jury trial waiver to ADS holders who withdraw the Class A ordinary shares represented by the ADSs from the ADS facility.

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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 Cayman Islands law.

        We are an exempted company limited by shares incorporated under the laws of the Cayman Islands. Our corporate affairs are governed by our memorandum and articles of association, the Companies Act of the Cayman Islands (as amended) and the common law of the Cayman Islands.

        The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary duties of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from the common law of England, the decisions of whose courts are of persuasive authority, but are not binding, on a court in the Cayman Islands. The rights of our shareholders and the fiduciary duties of our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the U.S. In particular, the Cayman Islands have a less developed body of securities laws than the U.S. Some U.S. states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands. In addition, Cayman Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States.

        Shareholders of Cayman Islands exempted companies like us have no general rights under Cayman Islands law to inspect corporate records or to obtain copies of lists of shareholders of these companies. [Our directors will have discretion under the [tenth] amended and restated memorandum and articles of association expected to be effective immediately prior to completion of this offering, to determine whether or not, and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged to make them available to our shareholders.] This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder resolution or to solicit proxies from other shareholders in connection with a proxy contest.

        As a result of all of the above, our public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a company incorporated in the U.S. For a discussion of significant differences between the provisions of the Companies Act of the Cayman Islands (as amended) and the laws applicable to companies incorporated in the United States and their shareholders, see "Description of Share Capital—Differences in Corporate Law."

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 U.S. that are applicable to U.S. domestic issuers, including: (i) 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; (ii) the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; (iii) 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 (iv) 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 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

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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.

We will be a "controlled company" as defined under the Nasdaq Listing Rules. As a result, we will qualify for, and may rely on, exemptions from certain corporate governance requirements that would otherwise provide protection to shareholders of other companies.

        Upon the completion of this offering, we will be a "controlled company" as defined under the Nasdaq Listing Rules, because Mr. Lei Yang, our co-founder, director and chief executive officer, will be able to exercise            % of the aggregate voting power of our total issued and outstanding shares, assuming the underwriters do not exercise their option to purchase additional ADSs. For so long as we remain a controlled company, we may rely on exemptions from certain corporate governance rules, including (i) the requirement that a majority of the board of directors consist of independent directors, (ii) the requirement that the compensation of our officers be determined or recommended to our board of directors by a compensation committee that is comprised solely of independent directors, and (iii) the requirement that director nominees be selected or recommended to the board of directors by a majority of independent directors or a nominating committee comprised solely of independent directors. Currently, we do not plan to utilize the exemptions available for controlled companies after we complete this offering, but will rely on the exemption available for foreign private issuers to follow our home country governance practices instead. See "—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." If we cease to be a foreign private issuer or if we cannot rely on the home country governance practice exemption for any reason, we may decide to invoke the exemptions available for a controlled company as long as we remain a controlled company. As a result, you will not have the same protection afforded to shareholders of companies that are subject to all the Nasdaq corporate governance requirements.

We are an emerging growth company 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 various 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 Sarbanes-Oxley Act of 2002 for so long as we are an emerging growth company. As a result, our investors may not have access to certain information they may deem important.

        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 not to opt out of such extended transition period. This will make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible, due to the differences in accounting standards used.

If we are a passive foreign investment company for United States federal income tax purposes for any taxable year, United States holders of our ADSs or Class A ordinary shares could be subject to adverse United States federal income tax consequences.

        A non-United States corporation will be a passive foreign investment company, or PFIC, for United States federal income tax purposes for any taxable year if either (i) at least 75% of its gross income for such year is passive income or (ii) at least 50% of the value of its assets (based on an average of the quarterly values of the assets) during such year is attributable to assets that produce or

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are held for the production of passive income. A separate determination must be made after the close of each taxable year as to whether a non-United States corporation is a PFIC for that year. Based on the past and projected composition of our income and assets, and the valuation of our assets, including goodwill (which we have determined based on the expected price of our ADSs in this offering), we do not believe we were a PFIC for our most recent taxable year, and we do not expect to become a PFIC in the current taxable year or the foreseeable future, although there can be no assurance in this regard.

        It is possible that we may become a PFIC in the current or any future taxable year due to changes in our asset or income composition. The composition of our assets and income may be affected by how, and how quickly, we use our liquid assets and the cash raised in this offering. Because we have valued our goodwill based on the expected market value of our ADSs, a decrease in the price of our ADSs may also result in our becoming a PFIC.

        In addition, there is uncertainty as to the treatment of our corporate structure and ownership of our consolidated VIEs for United States federal income tax purposes. For United States federal income tax purposes, we consider ourselves to own the equity of our consolidated VIEs. If it is determined, contrary to our view, that we do not own the equity of our consolidated VIEs for United States federal income tax purposes (for instance, because the relevant PRC authorities do not respect these arrangements), we may be treated as a PFIC.

        If we are a PFIC for any taxable year during which a United States person holds ADSs or Class A ordinary shares, certain adverse United States federal income tax consequences could apply to such United States person. See "Taxation—Certain United States Federal Income Tax Considerations—Passive Foreign Investment Company."

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

        We are a company incorporated in the Cayman Islands, and we plan to apply for listing of the ADSs on Nasdaq. The Nasdaq Listing Rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the Cayman Islands, which is our home country, may differ significantly from the Nasdaq corporate governance requirements. We may consider following home country practice in lieu of the requirements under the Nasdaq Listing Rules with respect to certain corporate governance requirements which may afford less protection to investors.

        For example, the Nasdaq Listing Rules require, among others, that a majority of the board members of the listed companies be independent. The corporate governance practice in our home country, the Cayman Islands, however, does not require a majority of our board to consist of independent directors. Thus, although a director must act in the best interests of our company, it is possible that fewer board members will be exercising independent judgment and the level of board oversight on the management of our company may decrease as a result.

        In addition, the Nasdaq Listing Rules also subject the U.S. domestic issuers to the following corporate governance requirements which we, as a foreign private issuer, are not subject to:

    have a compensation committee and a nominating/corporate governance committee composed entirely of independent directors;

    have an audit committee with a minimum of three members;

    obtain shareholder approval for certain corporate matters, such as establishing or materially amending a stock option plan or certain issuance of securities;

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    hold annual meetings; or

    have regularly scheduled executive sessions of solely independent directors each year.

        We intend to follow home country practice in lieu of the corporate governance requirements under the Nasdaq Listing Rules, including those listed above, which may afford less protection to investors than they would if we fully complied with such requirements.

We are not required under Cayman Islands law or our [tenth] amended and restated memorandum and articles of association to hold an annual meeting and an annual election of directors, and we may not do so after the completion of this offering.

        Neither Cayman Islands law nor our [tenth] amended and restated memorandum and articles of association requires us to hold an annual meeting and an annual election of directors. In addition, Cayman Islands law provides shareholders with only limited rights to requisition a general meeting, and does not provide shareholders with any right to put any proposal before a general meeting. [Our [tenth] amended and restated memorandum and articles of association provide that upon the requisition of any one or more of our shareholders who together hold shares which carry in aggregate not less than one-third of all votes attaching to all issued and outstanding shares of our company entitled to vote at general meetings, our board will convene an extraordinary general meeting and put the resolutions so requisitioned to a vote at such meeting. However, our [tenth] amended and restated memorandum and articles of association do not provide our shareholders with any right to put any proposals before annual general meetings or extraordinary general meetings not called by such shareholders.]

        As a foreign private issuer, we are permitted under the Nasdaq Listing Rules to follow our home country practice in lieu of the Nasdaq corporate governance requirements, and we intend to do so after the completion of this offering. Therefore, we may not hold a shareholders' meeting on an annual basis or hold annual election of directors, and our investors may be afforded less protection.

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SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS AND INDUSTRY DATA

        This prospectus contains forward-looking statements that involve risks and uncertainties, including statements based on our current expectations, assumptions, estimates and projections about us and our industry. The forward-looking statements are contained principally in the sections entitled "Prospectus Summary," "Risk Factors," "Use of Proceeds," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Our Market Opportunities" and "Business." These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. In some cases, these forward-looking statements can be identified by words or phrases such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions. The forward-looking statements included in this prospectus relate to, among others:

    our goal and strategies;

    our expansion plans;

    our future business development, financial condition and results of operations;

    our ability to maintain and strengthen our position as a leader amongst local services platforms in China's local service market;

    our expectations regarding keeping and strengthening our relationships with users, suppliers, and strategic partners.

    our expectations regarding the use of proceeds from this offering;

    PRC laws, regulations, and policies relating to shared two-wheeler services, carpooling marketplace and other local services; and

    general economic and business conditions.

        This prospectus also contains market data relating to the local services market in China, including market position, market size, and growth rates of the markets in which we participate, that are based on industry publications and reports. This prospectus contains statistical data and estimates published by iResearch, including a report which we commissioned iResearch to prepare and for which we paid a fee. This information involves a number of assumptions, estimates and limitations. These industry publications, surveys and forecasts generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. Nothing in such data should be construed as advice. We have not independently verified the accuracy or completeness of the data contained in these industry publications and reports. The local services market in China may not grow at the rates projected by market data, or at all. The failure of these markets to grow at the projected rates may materially and adversely affect our business and the market price of our ADSs. If any one or more of the assumptions underlying the market data turns out to be incorrect, actual results may differ from the projections based on these assumptions. In addition, projections, assumptions and estimates of our future performance and the future performance of the industry in which we operate is necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in "Risk Factors" and elsewhere in this prospectus. You should not place undue reliance on these forward-looking statements.

        The forward-looking statements made in this prospectus relate only to events or information as of the date on which the statements are made in this prospectus. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statements are made or to reflect the occurrence of unanticipated events. You should read this prospectus and the documents that we have referred to 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.

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USE OF PROCEEDS

        We estimate that we will receive net proceeds from this offering of approximately US$            , or approximately US$            if the underwriters exercise the over-allotment option in full, after deducting underwriting discounts and commissions and the estimated offering expenses payable by us and based upon an assumed initial public offering price of US$            per ADS (the mid-point of the estimated initial public offering price range shown on the front cover of this prospectus). A US$1.00 increase (decrease) in the assumed initial public offering price of US$            per ADS would increase (decrease) the net proceeds to us from this offering by US$            , after deducting underwriting discounts and commissions and estimated offering expenses payable by us and assuming no change to the number of ADSs offered by us as set forth on the cover page of this prospectus.

        We intend to use the net proceeds of this offering as follows:

            % of the net proceeds to enhance and expand our business offerings;

            % of the net proceeds for research and development; and

            % of the net proceeds for working capital and general corporate purposes.

        The foregoing represents our intentions as of the date of this prospectus with respect of the use and allocation of the net proceeds of this offering based upon our present plans and business conditions, but our management will have significant flexibility and discretion in applying the net proceeds of the offering. The occurrence of unforeseen events or changed business conditions may result in application of the proceeds of this offering in a manner other than as described in this prospectus.

        To the extent that the net proceeds we receive from this offering are not immediately applied for the above purposes, we intend to invest our net proceeds in short-term, interest bearing, debt instruments or bank deposits.

        In utilizing the proceeds of this offering, we, as an offshore holding company, are permitted under PRC laws and regulations to provide funding to our PRC subsidiary only through loans or capital contributions and to our consolidated VIEs only through loans. Subject to satisfaction of applicable government registration and approval requirements, we may extend inter-company loans to our PRC subsidiary or make additional capital contributions to our PRC subsidiary to fund its capital expenditures or working capital. We cannot assure you that we will be able to obtain these government registrations or approvals on a timely basis, if at all. For further information, 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 prevent us from using the proceeds of this offering to make loans or additional capital contributions to our PRC subsidiaries."

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DIVIDEND POLICY

        Since inception, we have not declared or paid any dividends on our shares. We do not have any present plan to pay any dividends on our ordinary shares or ADSs in the foreseeable future. We intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business.

        Any other future determination to pay dividends will be made at the discretion of our board of directors and may be based on a number of factors, including 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, we will pay our ADS holders to the same extent as holders of our Class A ordinary shares, subject to the terms of the deposit agreement, including the fees and expenses payable thereunder. See "Description of American Depositary Shares." Cash dividends on our Class A ordinary shares, if any, will be paid in U.S. dollars.

        We are an exempted company incorporated in the Cayman Islands. Under the laws of the Cayman Islands and subject to the amended and restated memorandum and articles of association of our company, our company may pay a dividend out of profit and/or the credit standing in our company's share premium account, provided that in no circumstances may a dividend be paid if this would result in our company being unable to pay its debts as they fall due in the ordinary course of business immediately following the date on which the distribution or dividend is paid. In order for us to distribute any dividends to our shareholders and ADS holders, we may rely on dividends distributed by our PRC subsidiaries. Certain payments from our PRC subsidiaries to us may be subject to PRC withholding income tax. In addition, regulations in the PRC currently permit payment of dividends of a PRC company only out of accumulated distributable after-tax profits as determined in accordance with its articles of association and the accounting standards and regulations in China. Each of our PRC subsidiaries is required to set aside at least 10% of its after-tax profit based on PRC accounting standards every year to a statutory common reserve fund until the aggregate amount of such reserve fund reaches 50% of the registered capital of such subsidiary. Such statutory reserves are not distributable as loans, advances or cash dividends.

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CAPITALIZATION

        The following table sets forth our cash and cash equivalents, and capitalization as of December 31, 2020 presented on:

    an actual basis;

    a pro forma basis to reflect (i) the re-designation of 17,154,480 Series C Preferred Shares into the same number of ordinary shares and the subsequent transfer to GOLD GUARD INVESTMENTS LIMITED, an entity controlled by Mr. Lei Yang, and the transfer of 8,748,784 ordinary shares to such entity on March 8, 2021; (ii) the issuance of 28,352,367 Series G convertible redeemable preferred shares on March 31, 2021; (iii) the issuance of 32,130,104 ordinary shares upon the exercise of share options under the 2018 stock incentive plan and the 2020 stock incentive plan (including 5,901,944 ordinary shares issued to GOLD GUARD INVESTMENTS LIMITED upon the exercise of share options by Mr. Lei Yang) in 2021; (iv) the re-designation of 156,255,725 ordinary shares and the automatic conversion and re-designation of 10,517,117 convertible redeemable preferred shares beneficially owned by Mr. Lei Yang into 166,772,842 Class B ordinary shares on a one-for-one basis immediately upon the completion of this offering; (v) the re-designation of all of the remaining outstanding ordinary shares and the automatic conversion of all of the remaining outstanding convertible redeemable preferred shares into 1,444,046,870 Class A ordinary shares on a one-for-one basis immediately upon the completion of this offering; and (vi) a one-time share-based compensation expenses of RMB306.6 million (US$47.0 million); and

    a pro forma as adjusted basis to give effect to (i) the re-designation of 17,154,480 Series C Preferred Shares into the same number of ordinary shares and the subsequent transfer to GOLD GUARD INVESTMENTS LIMITED, an entity controlled by Mr. Lei Yang, and the transfer of 8,748,784 ordinary shares to such entity on March 8, 2021; (ii) the issuance of 28,352,367 Series G convertible redeemable preferred shares on March 31, 2021; (iii) the issuance of 32,130,104 ordinary shares upon the exercise of share options under the 2018 stock incentive plan and the 2020 stock incentive plan (including 5,901,944 ordinary shares issued to GOLD GUARD INVESTMENTS LIMITED upon the exercise of share options by Mr. Lei Yang) in 2021; (iv) the re-designation of 156,255,725 ordinary shares and the automatic conversion and re-designation of 10,517,117 convertible redeemable preferred shares beneficially owned by Mr. Lei Yang into 166,772,842 Class B ordinary shares on a one-for-one basis immediately upon the completion of this offering; (v) the re-designation of all of the remaining outstanding ordinary shares and the automatic conversion of all of the remaining outstanding convertible redeemable preferred shares into 1,444,046,870 Class A ordinary shares on a one-for-one basis immediately upon the completion of this offering; (vi) a one-time share-based compensation expenses of RMB306.6 million (US$47.0 million); and (vii) the issuance and sale of the Class A ordinary shares in the form of ADSs offered hereby at an assumed initial public offering price of US$            per ADS, the mid-point of the estimated initial public offering price range shown on the front cover of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us and assuming no exercise of the underwriters' option to purchase additional ADSs.

        The pro forma and pro forma as adjusted information below is illustrative only and our capitalization following the closing of this offering is subject to adjustment based on the initial public offering price of our ADSs and other terms of this offering determined at pricing. You should read this table in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and related notes included elsewhere in this prospectus.

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  As of Decembr 31, 2020  
 
  Actual   Pro Forma   Pro Forma
as Adjusted(1)
 
 
  RMB   US$   RMB   US$   RMB   US$  
 
  (in thousands)
 

Cash and Cash Equivalents

    825,357     126,491     825,357     126,491              

Mezzanine equity:

                                     

Series Seed convertible redeemable preferred shares (US$0.00001 par value per share, 34,669,890 shares authorized, issued and outstanding on an actual basis, and none authorized, issued or outstanding on a pro forma or a pro forma as adjusted basis)

    383,617     58,792                                            

Series A convertible redeemable preferred shares (US$0.00001 par value per share, 72,439,822 shares authorized, issued and outstanding on an actual basis, and none authorized, issued or outstanding on a pro forma or a pro forma as adjusted basis)

    803,177     123,092                                            

Series A1 convertible redeemable preferred shares (US$0.00001 par value per share, 55,919,284 shares authorized, issued and outstanding on an actual basis, and none authorized, issued or outstanding on a pro forma or a pro forma as adjusted basis)

    620,043     95,026                                            

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  As of Decembr 31, 2020  
 
  Actual   Pro Forma   Pro Forma
as Adjusted(1)
 
 
  RMB   US$   RMB   US$   RMB   US$  
 
  (in thousands)
 

Series A2 convertible redeemable preferred shares (US$0.00001 par value per share, 8,107,623 shares authorized, issued and outstanding on an actual basis, and none authorized, issued or outstanding on a pro forma or a pro forma as adjusted basis)

    89,175     13,667                                            

Series B convertible redeemable preferred shares (US$0.00001 par value per share, 80,539,370 shares authorized, issued and outstanding on an actual basis, and none authorized, issued or outstanding on a pro forma or a pro forma as adjusted basis)

    898,072     137,636                                            

Series C convertible redeemable preferred shares (US$0.00001 par value per share, 196,738,218 shares authorized, issued and outstanding on an actual basis, and none authorized, issued or outstanding on a pro forma or a pro forma as adjusted basis)

    2,282,096     349,747                                            

Series C+ convertible redeemable preferred shares (US$0.00001 par value per share, 16,139,184 shares authorized, issued and outstanding on an actual basis, and none authorized, issued or outstanding on a pro forma or a pro forma as adjusted basis)

    193,765     29,696                                            

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  As of Decembr 31, 2020  
 
  Actual   Pro Forma   Pro Forma
as Adjusted(1)
 
 
  RMB   US$   RMB   US$   RMB   US$  
 
  (in thousands)
 

Series D convertible redeemable preferred shares (US$0.00001 par value per share, 357,504,894 shares authorized, issued and outstanding on an actual basis, and none authorized, issued or outstanding on a pro forma or a pro forma as adjusted basis)

    4,293,285     657,975                                            

Series E1 convertible redeemable preferred shares (US$0.00001 par value per share, 2,125,044 shares authorized, issued and outstanding on an actual basis, and none authorized, issued or outstanding on a pro forma or a pro forma as adjusted basis)

    30,115     4,615                                            

Series E2 convertible redeemable preferred shares (US$0.00001 par value per share, 220,811,280 shares authorized, issued and outstanding on an actual basis, and none authorized, issued or outstanding on a pro forma or a pro forma as adjusted basis)

    3,293,798     504,797                                            

Series E3 convertible redeemable preferred shares (US$0.00001 par value per share, 22,700,042 shares authorized, issued and outstanding on an actual basis, and none authorized, issued or outstanding on a pro forma or a pro forma as adjusted basis)

    296,683     45,469                                            

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  As of Decembr 31, 2020  
 
  Actual   Pro Forma   Pro Forma
as Adjusted(1)
 
 
  RMB   US$   RMB   US$   RMB   US$  
 
  (in thousands)
 

Series F convertible redeemable preferred shares (US$0.00001 par value per share, 199,075,555 shares authorized, issued and outstanding on an actual basis, and none authorized, issued or outstanding on a pro forma or a pro forma as adjusted basis)

    3,513,908     538,530                                            

Total mezzanine equity

    16,697,734     2,559,042                                            

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  As of Decembr 31, 2020  
 
  Actual   Pro Forma   Pro Forma
as Adjusted(1)
 
 
  RMB   US$   RMB   US$   RMB   US$  
 
  (in thousands)
 

Shareholders' deficit:

                                     

Ordinary shares (US$0.00001 par value per share, 3,956,902,281 authorized, 283,567,017 issued and outstanding on an actual basis, and none outstanding on a pro forma basis or a pro forma as adjusted basis)

    15     2                                            

Class A ordinary shares (US$0.00001 par value per share, none authorized, issued or outstanding on an actual basis; 4,781,330,814 shares authorized, 1,444,046,870 shares issued and outstanding on a pro forma basis;            shares authorized,            shares issued and outstanding on a pro forma as adjusted basis)

            94     14                                    

Class B ordinary shares (US$0.00001 par value per share, none authorized, issued or outstanding on an actual basis; 208,669,186 shares authorized, 166,772,842 shares issued and outstanding on a pro forma basis;            shares authorized,            shares issued and outstanding on a pro forma as adjusted basis)

            11     2                                    

Additional paid-in capital(2)

            17,521,886     2,685,350                                    

Accumulated other comprehensive loss

    (82,178 )   (12,594 )   (82,178 )   (12,594 )                                  

Accumulated deficit(2)

    (11,023,336 )   (1,689,406 )   (11,329,939 )   (1,736,395 )                                  

Total shareholders' (deficit) equity

    (11,105,499 )   (1,701,998 )   6,109,874     936,377                                    

Total capitalization(2)(3)

    5,592,235     857,044     6,109,874     936,377                                    

(1)
The pro forma as adjusted information discussed above is illustrative only. Our additional paid-in

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    capital, total shareholders' deficit 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)
Total capitalization equals the sum of mezzanine equity and shareholders' deficit.

(3)
A US$1.00 increase/(decrease) in the assumed initial public offering price of US$            per ADS, the mid-point of the estimated range of the initial public offering price shown on the cover page of this prospectus, would increase/ (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 our 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 and holders of our convertible redeemable preferred shares which will automatically convert into our ordinary shares upon the completion of this offering.

        Our net tangible book value as of December 31, 2020 was approximately US$690.5 million, or US$2.44 per ordinary share as of that date, and US$            per ADS. Net tangible book value represents the amount of our total consolidated assets, less the amount of our intangible assets, goodwill and total consolidated liabilities. Dilution is determined by subtracting net tangible book value per ordinary share from our consolidated total assets, after giving effect to (i) the re-designation of 17,154,480 Series C Preferred Shares into the same number of ordinary shares and the subsequent transfer to GOLD GUARD INVESTMENTS LIMITED, an entity controlled by Mr. Lei Yang, and the transfer of 8,748,784 ordinary shares to such entity on March 8, 2021; (ii) the issuance of 28,352,367 Series G convertible redeemable preferred shares on March 31, 2021; (iii) the issuance of 32,130,104 ordinary shares upon the exercise of share options under the 2018 stock incentive plan and the 2020 stock incentive plan (including 5,901,944 ordinary shares issued to GOLD GUARD INVESTMENTS LIMITED upon the exercise of share options by Mr. Lei Yang) in 2021; (iv) the re-designation of 156,255,725 ordinary shares and the automatic conversion and re-designation of 10,517,117 convertible redeemable preferred shares beneficially owned by Mr. Lei Yang into 166,772,842 Class B ordinary shares on a one-for-one basis immediately upon the completion of this offering; (v) the re-designation of all of the remaining outstanding ordinary shares and the automatic conversion of all of the remaining outstanding convertible redeemable preferred shares into 1,444,046,870 Class A ordinary shares on a one-for-one basis immediately upon the completion of this offering; and (iv) the issuance and sale by us of shares in the form of ADSs in this offering at an assumed initial public offering price of US$            per ADS (the mid-point of the estimated initial public offering price range shown on the front cover page of this prospectus) after deduction of the underwriting discounts and commissions and estimated offering expenses payable by us.

        Without taking into account any other changes in net tangible book value after December 31, 2020, other than to give effect to (i) the re-designation of 17,154,480 Series C Preferred Shares into the same number of ordinary shares and the subsequent transfer to GOLD GUARD INVESTMENTS LIMITED, an entity control by Mr. Lei Yang, and the transfer of 8,748,784 ordinary shares to such entity on March 8, 2021; (ii) the issuance of 28,352,367 Series G convertible redeemable preferred shares on March 31, 2021; (iii) the issuance of 32,130,104 ordinary shares upon the exercise of share options under the 2018 stock incentive plan and the 2020 stock incentive plan (including 5,901,944 ordinary shares issued to GOLD GUARD INVESTMENTS LIMITED upon the exercise of share options by Mr. Lei Yang) in 2021; (iv) the re-designation of 156,255,725 ordinary shares and the automatic conversion and re-designation of 10,517,117 convertible redeemable preferred shares beneficially owned by Mr. Lei Yang into 166,772,842 Class B ordinary shares on a one-for-one basis immediately upon the completion of this offering; (v) the re-designation of all of the remaining outstanding ordinary shares and the automatic conversion of all of the remaining outstanding convertible redeemable preferred shares into 1,444,046,870 Class A ordinary shares on a one-for-one basis immediately upon the completion of this offering; and (iv) the issuance and sale by us of Class A ordinary shares in the form of ADSs in this offering at an assumed initial public offering price of US$            per ADS (the mid-point of the estimated initial public offering price range shown on the front cover page 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 December 31, 2020 would have been US$             million, or US$            per outstanding Class A

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ordinary share and US$            per ADS. This represents an immediate increase in net tangible book value of US$            per ordinary share and US$            per ADS to the existing shareholders and an immediate dilution in net tangible book value of US$            per ordinary share and US$            per ADS to investors purchasing ADSs in this offering.

        The following table illustrates such dilution:

 
  Per Ordinary
Share
  Per ADS  

Actual net tangible book value per share as of December 31, 2020

  US$ 2.44        

Pro forma net tangible book value per share after giving effect to (i) the re-designation of 17,154,480 Series C Preferred Shares into the same number of ordinary shares and the subsequent transfer to GOLD GUARD INVESTMENTS LIMITED, an entity controlled by Mr. Lei Yang, and the transfer of 8,748,784 ordinary shares to such entity on March 8, 2021, (ii) the issuance of 28,352,367 Series G convertible redeemable preferred shares on March 31, 2021, (iii) the issuance of 32,130,104 ordinary shares upon the exercise of share options under the 2018 stock incentive plan and the 2020 stock incentive plan; and (iv) the automatic conversion of all of our outstanding convertible redeemable preferred shares into ordinary shares

  US$ 0.43        

Pro forma as adjusted net tangible book value per share after giving effect to (i) the re-designation of 17,154,480 Series C Preferred Shares into the same number of ordinary shares and the subsequent transfer to GOLD GUARD INVESTMENTS LIMITED, an entity controlled by Mr. Lei Yang, and the transfer of 8,748,784 ordinary shares to such entity on March 8, 2021, (ii) the issuance of 28,352,367 Series G convertible redeemable preferred shares on March 31, 2021, (iii) the issuance of 32,130,104 ordinary shares upon the exercise of share options under the 2018 stock incentive plan and the 2020 stock incentive plan; (iv) the automatic conversion of 10,517,117 convertible redeemable preferred shares beneficially owned by Mr. Lei Yang into Class B ordinary shares on a one-for-one basis and the automatic conversion of the remaining convertible redeemable preferred shares into Class A ordinary shares on a one-for-one basis immediately upon the completion of this offering; and (v) this offering

             

Assumed initial public offering price

             

Dilution in net tangible book value per share to new investors in the offering

             

        The amount of dilution in net tangible book value to new investors in this offering set forth above is calculated by deducting (i) the pro forma net tangible book value after giving effect to the automatic conversion of our outstanding convertible redeemable preferred shares from (ii) the pro forma net

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tangible book value after giving effect to the automatic conversion of our convertible redeemable preferred shares and this offering.

        The following table summarizes, on a pro forma basis as of December 31, 2020, the differences between existing shareholders, including holders of our convertible redeemable preferred shares, and the new investors with respect to the number of ordinary shares (in the form of ADSs or shares) purchased from us, the total consideration paid and the average price per ordinary share and per ADS paid before deducting the underwriting discounts and commissions and estimated offering expenses. The total number of Class A ordinary shares does not include ordinary shares underlying the ADSs issuable upon the exercise of the option to purchase additional ADSs granted to the underwriters.

 
  Ordinary Shares
Total
   
   
   
   
 
 
  Total Consideration   Average
Price per
Ordinary
Share
   
 
 
  Average
Price per
ADS
 
 
  Number   Percent   Amount   Percent  

Existing shareholders

                          % US$                       % US$            US$           

New investors

                          % US$                       % US$            US$           

Total

                          % US$                       %                          

        A US$1.00 increase (decrease) in the assumed initial public offering price of US$            per ADS (the mid-point of the estimated initial public offering price range shown on the front cover page of this prospectus) would increase (decrease) our pro forma net tangible book value after giving effect to the offering by US$             million, the pro forma net tangible book value per ordinary share and per ADS after giving effect to this offering by US$            per ordinary share and US$            per ADS and the dilution in pro forma net tangible book value per ordinary share and per ADS to new investors in this offering by US$            per ordinary share and US$            per ADS, assuming no change to the number of ADS offered by us as set forth on the front cover page of this prospectus, and after deducting underwriting discounts and commissions and other estimated offering expenses.

        The pro forma information discussed above is illustrative only. Our net tangible book value following the completion of this offering is subject to adjustment based on the actual initial public offering price of our ADSs and other terms of this offering determined at pricing.

        The discussion and tables above take into consideration the automatic conversions of all of our outstanding convertible redeemable preferred shares immediately upon the completion of this offering, and they do not take into consideration of any outstanding share options. As of the date of this prospectus, there are also (i)                      Class A ordinary shares issuable upon the exercise of outstanding share options under our equity incentive plans and (ii)                     Class A ordinary shares reserved for future issuance under our equity incentive plans. If any of these options are exercised, there will be further dilution to new investors.

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ENFORCEMENT OF CIVIL LIABILITIES

        We are incorporated under the laws of the Cayman Islands as an exempted company with limited liability. We are incorporated in the Cayman Islands because of certain benefits associated with being a Cayman Islands company, such as political and economic stability, an effective judicial system, tax neutrality, the absence of foreign exchange control or currency restrictions and the availability of professional and support services. However, the Cayman 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, Cayman Islands companies may not have standing to sue before the federal courts of the United States.

        Substantially all of our operations are conducted in the PRC, and substantially all of our assets are located in the PRC. In addition, most of our directors and officers are residents of jurisdictions other than the United States and all or a substantial portion of their 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 these persons, or to enforce against us or them 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 in the United States. It may also be difficult for you to enforce in United States courts judgments obtained in United States courts based on the civil liability provisions of the United States federal securities laws against us and our officers and directors.

        We have appointed Cogency Global Inc. as our agent to receive service of process with respect to any action brought against us in the United States District Court for the Southern District of New York under the federal securities laws of the United States or of any state in the United States or any action brought against us in the Supreme Court of the State of New York in the County of New York under the securities laws of the State of New York.

        Harney Westwood & Riegels, our counsel as to Cayman Islands law, and King & Wood Mallesons, our counsel as to PRC law, have advised us that there is uncertainty as to whether the courts of the Cayman Islands or the PRC would, respectively, (1) 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 and (2) entertain original actions brought in the Cayman Islands or the PRC against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States.

        Harney Westwood & Riegels has informed us that the uncertainty with regard to Cayman Islands law relates to whether a judgment obtained from the United States courts under the civil liability provisions of the securities laws will be determined by the courts of the Cayman Islands as penal or punitive in nature. If such a determination is made, the courts of the Cayman Islands will not recognize or enforce the judgment against a Cayman company. Because the courts of the Cayman Islands have yet to rule on whether such judgments are penal or punitive in nature, it is uncertain whether they would be enforceable in the Cayman Islands.

        In addition, Harney Westwood & Riegels has advised us that although there is no statutory recognition in the Cayman Islands of judgments obtained in the United States, the Cayman Islands will generally recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without any re-examination of the merits of the underlying dispute based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the liquidated sum for which such judgment has been given, provided that such judgement (i) is final and conclusive, (ii) is one in respect of which the foreign court had jurisdiction over the defendant according to Cayman Islands conflict of law rules; (iii) is either for a liquidated sum not in respect of penalties or taxes or a fine or similar fiscal or revenue obligations or, in certain circumstances, for in personam non-money relief, and (iv) was neither obtained in a manner, nor is of a kind enforcement of which is contrary to natural justice or the public policy of the Cayman Islands.

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        King & Wood Mallesons has advised us that the recognition and enforcement of foreign judgments are provided for under the PRC Civil Procedure Law. PRC courts may recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil Procedure Law based either on treaties or similar arrangements between China and the jurisdiction where the judgment is made or on principles of reciprocity between jurisdictions. King & Wood Mallesons has advised us further that under PRC law, a foreign judgment, which does not otherwise violate basic legal principles, state sovereignty, safety or social public interest, may be recognized and enforced by a PRC court, based either on treaties or similar arrangements between China and the jurisdiction where the judgment is made or on principles of reciprocity between jurisdictions. As there is no treaties and only limited reciprocity arrangements between China and the United States governing the recognition and enforcement of judgments as of the date of this prospectus, including those predicated upon the liability provisions of the United States federal securities laws, there is uncertainty whether and on what basis a PRC court would enforce judgments rendered by United States courts.

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OUR HISTORY AND CORPORATE STRUCTURE

        We commenced our operations in China through Haluo Inclusive Technology Co., Ltd., or Haluo Inclusive (previously known as Jiangsu Youon Low-Carbon Technology co., Ltd.) in August 2014. In November 2017, Shanghai Junzheng Network Technology Co., Ltd., or Shanghai Junzheng, and Shanghai Junfeng Network Technology Co., Ltd., or Shanghai Junfeng, were acquired to further expand our business.

        To facilitate offshore financing, we undertook a reorganization, or the Reorganization. As part of the Reorganization, we incorporated Hello Inc. (formerly known as HB Technologies Corporation), an exempted company incorporated under the laws of Cayman Islands, in July 2018, which became our ultimate holding company. Subsequently, Hello Inc. established Hong Kong RideTech Limited, a Hong Kong limited liability company, as its wholly owned subsidiary. Hong Kong RideTech Limited then established Shanghai Hamao Commerce Consult Co., Ltd., or Shanghai Hamao, and Shanghai Haluo Corporate Development Co., Ltd., or Shanghai Haluo, as wholly foreign-owned enterprises in the PRC. In November 2018, we obtained control of Haluo Inclusive through a series of contractual arrangements among Shanghai Hamao, Haluo Inclusive and its shareholders. In December 2019, we terminated such contractual arrangements and replaced them with similar contractual arrangements among Shanghai Haluo, Haluo Inclusive and its shareholders, through which we retained control of Haluo Inclusive.

        We also obtained control over Zhengzhou Habai Network Technology Co., Ltd., or Zhengzhou Habai, through a series of contractual arrangements among Shanghai Hamao, Zhengzhou Habai and its shareholder.

        On June 12, 2019, Shanghai Junfeng entered into an investment agreement with Shanghai Yunxin Venture Capital Co., Ltd., or Shanghai Yunxin, an affiliate of Antfin (Hong Kong) Holding Limited, one of our principal shareholders, Contemporary Amperex Technology Co., Limited, or CATL, a company listed on the Shenzhen Stock Exchange (stock code: 300750) and primarily involved in the development and manufacturing of lithium-ion batteries and Fujian Ningde Zhixiang Infinite Technology Co., Ltd., or Ningde Zhixiang, pursuant to which Shanghai Junfeng, Shanghai Yunxin and CATL invested in Ningde Zhixiang, an entity primarily engaged in operating a battery swapping network for electric two-wheelers. As of the date of this prospectus, Shanghai Junfeng holds 33.1% equity interest in Ningde Zhixiang as a result of capital increase from new investors and certain existing shareholders in 2020. For more information, see "Related Party Transactions—Transactions Relating to Ningde Zhixiang."

        In December 2019, Hong Kong RideTech Limited established Xiamen Haxing Network Technology Co., Ltd., or Xiamen Haxing, as a wholly foreign-owned enterprise in the PRC.

        The following diagram illustrates our corporate structure of our principal entities as of the date of this prospectus. Equity interests depicted in this diagram are held as to 100%. The relationships between (i) Shanghai Hamao, and Zhengzhou Habai and its shareholder, and (2) Shanghai Haluo, and

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Haluo Inclusive and its shareholders, as illustrated in this diagram are governed by contractual arrangements and do not constitute equity ownership.

GRAPHIC


(1)
Xiamen Haxing, Shanghai Hamao and Shanghai Haluo are wholly foreign-owned enterprises incorporated in the PRC.

(2)
Songcheng Zha holds 100% equity interest in Zhengzhou Habai. Zhengzhou Habai is primarily involved in providing ride-hailing services.

(3)
Shanghai Yunxin, Youon Technology Co., Ltd., or Youon Technology, a company listed on the Shanghai Stock Exchange (stock code: 603776), Ningbo Chiying Investment Management Partnership (Limited Partnership), or Ningbo Chiying, and Ningbo Juying Zhumei Investment Management Partnership (Limited Partnership), or Juying Zhumei hold 35.94%, 23.26%, 18.90% and 13.15% equity interest in Haluo Inclusive, respectively. The remaining equity interest is held by several minority shareholders of Haluo Inclusive. Shanghai Yunxin and Youon Technology are affiliates of our principal

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    shareholders, Antfin (Hong Kong) Holding Limited and YOUON (Cayman) Investment Co., Ltd., respectively. Our co-founder, director and chief executive officer, Lei Yang, is the general partner of Ningbo Chiying and holds 99.9% equity interest. Our co-founder, Wei Jiang, our co-founder, director and president, Kaizhu Li, Songcheng Zha and Peigang Wu are limited partners of Juying Zhumei and hold 33.33%, 27.78%, 22.22% and 16.67% equity interest, respectively. The remaining 0.01% equity interest is held by our co-chief financial officer, Xiaodong Chen, who is the general partner of Juying Zhumei. The equity interest of Lei Yang, Kaizhu Li and Xiaodong Chen in Haluo Inclusive will remain the same immediately after the completion of this offering. See "Principal Shareholders" for their respective equity interest in our company immediately after the completion of this offering.

    Pursuant to the exclusive call option agreement, each shareholder of Haluo Inclusive has granted an exclusive option to Shanghai Haluo to purchase, by itself or persons designated by it, at its discretion at any time and to the extent permitted under PRC law, all or part of their equity interests in Haluo Inclusive. See "—Contractual Arrangements with Consolidated VIEs and Their Shareholders." Shanghai Haluo may exercise such call option in the event that any shareholders of Haluo Inclusive (or their affiliates) divest their interests in our ADSs or ordinary shares.

(4)
Chengdu Habai is primarily involved in operating our carpooling marketplace.

(5)
Shanghai Junzheng is primarily involved in providing information technology support to our two-wheeler services

(6)
Shanghai Junfeng is primarily involved in providing shared two-wheeler services.

Contractual Arrangements with Consolidated VIEs and Their Shareholders

        Due to PRC legal restrictions on foreign ownership and investment in, among other areas, value-added telecommunications service, or VATS, which include the operation of Internet content providers, or ICPs, we, similar to all other entities with foreign-incorporated holding company structures operating in the Internet information service industry in China, currently conduct these activities mainly through Haluo Inclusive and Zhengzhou Habai, our consolidated VIEs, and their respective subsidiaries. We effectively control each of our consolidated VIEs through a series of contractual arrangements between such VIEs, their respective shareholders, and Shanghai Hamao and Shanghai Haluo, or our WFOEs, as applicable, as described in more detail below, which collectively enable us to:

    exercise effective control over our consolidated VIEs and their subsidiaries;

    receive substantially all the economic benefits of our consolidated VIEs; and

    have an exclusive option to purchase all or part of the equity interests, in or all or part of the assets of each of our consolidated VIEs when and to the extent permitted by PRC law.

        As a result of these contractual arrangements, we are the primary beneficiary of our consolidated VIEs and their subsidiaries. We have consolidated their financial results in our consolidated financial statements in accordance with U.S. GAAP.

        In the opinion of King & Wood Mallesons, our PRC legal counsel:

    the ownership structures of each of our WFOEs and respective consolidated VIE in China, both currently and immediately after giving effect to this offering, do not and will not violate any applicable PRC law, regulation, or rule currently in effect; and

    the contractual arrangements among each of our WFOEs, respective consolidated VIE and its shareholder(s) governed by PRC laws are valid, binding and enforceable in accordance with their terms and applicable PRC laws, rules, and regulations currently in effect, and not violate any applicable PRC law, regulation, or rule currently in effect.

        However, we have been further advised by our PRC legal counsel, King & Wood Mallesons, that there are substantial uncertainties regarding the interpretation and application of current and future PRC laws, rules and regulations. Accordingly, the PRC regulatory authorities may in the future take a view that is contrary to the opinion of our PRC legal counsel. 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 business do not comply with PRC government restrictions on foreign investment in the aforesaid business we engage in, we could be subject to severe penalties including being prohibited from continuing operations. See "Risk Factors—Risks Relating to Our Corporate Structure."

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        All the agreements under our contractual arrangements are governed by PRC laws and provide that the disputes shall be submitted to courts where the contractual arrangements were executed for resolution. For additional information, see "Risk Factors—Risks Relating to Our Corporate Structure—We rely on contractual arrangements with our consolidated VIEs and their shareholders to operate our mobile apps, which may not be as effective as direct ownership in providing operational control and otherwise have a material adverse effect as to our business" and "—Certain terms of the contractual arrangements with our consolidated VIEs may not be enforceable under PRC laws."

        The following is a summary of the currently effective contractual arrangements by and among (i) our wholly owned subsidiary, Shanghai Hamao, our consolidated VIE, Zhengzhou Habai and its shareholder and (ii) our wholly owned subsidiary, Shanghai Haluo, our consolidated VIE, Haluo Inclusive and its shareholders.

Agreements and other documents that Provide Us with Effective Control over Our Consolidated VIEs and Their Subsidiaries

        Equity Interest Pledge Agreements.    Pursuant to the equity interest pledge agreements, shareholders of our consolidated VIEs have pledged all of their equity interest in our consolidated VIEs to respectively guarantee the performance of obligations by our consolidated VIEs and their shareholders under the relevant contractual arrangements, which include the power of attorney agreements, exclusive business cooperation agreements and exclusive call option agreements. If our consolidated VIEs or any of their shareholders breach their contractual obligations under these agreements, respective WFOE, as pledgee, will be entitled to all rights regarding the pledged equity interests, including forcing the auction or sale of all or part of the pledged equity interests of the applicable consolidated VIE and receiving proceeds from such auction or sale in accordance with PRC law. Each of the shareholders of our consolidated VIEs agrees that, during the term of the equity interest pledge agreements, such shareholder will not transfer the pledged equity interests or create or allow creation of any encumbrance on the pledged equity interests or any portion thereof, without the prior written consent of applicable WFOE. Each equity interest pledge agreement will remain effective until the applicable consolidated VIE and its shareholders discharge all of their obligations under the contractual arrangements or all secured indebtedness has been fully paid.

        Power of Attorney Agreements.    Pursuant to the power of attorney agreements, each shareholder of our consolidated VIEs has irrevocably appointed the WFOE or any persons designated by such WFOE as its attorney-in-fact to exercise any and all rights that each shareholder has in respect of its equity interest in the VIEs (including but not limited to executing the voting rights and the right to act as or appoint directors and executive officers of the VIEs). The agreements are effective and irrevocable unless it is terminated by all parties.

Agreements that Allow Us to Receive Economic Benefits from Our Consolidated VIEs and Their Subsidiaries

        Exclusive Business Cooperation Agreements.    Under the exclusive business cooperation agreements, each WFOE has the exclusive right to provide respective consolidated VIE with comprehensive technical support and consulting services and other services. In exchange, each WFOE is entitled to receive a service fee from respective consolidated VIE at an amount as agreed by applicable WFOE on an annual basis or otherwise agreed by the VIE and the WFOE. The WFOE has the right to unilaterally adjust the service fee. Each WFOE owns the intellectual property rights arising out of the performance of the exclusive business cooperation agreement. Unless otherwise terminated by the WFOE in writing, each exclusive business cooperation agreement continuously remains effective.

        Financial Support Letters.    Pursuant to the financial support letters, we are obligated and thereby undertake to provide unlimited financial support to our VIEs, to the extent permissible under the

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applicable laws and regulations. We agree to forego the right to seek repayment in the event if our VIE is unable to repay such funding.

Agreements that Provide Us with the Option to Purchase the Equity Interest in Our Consolidated VIEs and Their Subsidiaries

        Exclusive Call Option Agreements.    Pursuant to the exclusive call option agreements, each of our consolidated VIEs and each of their shareholders have irrevocably granted respective WFOE an exclusive option to purchase by itself or persons designated by it, at such WFOE's discretion at any time, to the extent permitted under PRC law, all or part of such shareholder's equity interests in the applicable consolidated VIE and/or all or part of the assets of the applicable consolidated VIE. The purchase price of the equity interests in a consolidated VIE should be RMB1 or the minimum price as permitted by PRC law. Each consolidated VIE and its shareholders have agreed that, without the prior written consent of applicable WFOE, such consolidated VIE shall not, among others, amend its articles of association, increase or decrease its registered capital, sell, transfer, pledge or otherwise dispose of its assets, create or allow any encumbrance thereon, provide any loans or guarantees, incur any material obligations or liabilities outside of ordinary course of business or pay any dividend or other distribution to its shareholder(s). Each exclusive call option agreement will remain effective until all equity interests of the applicable consolidated VIE held by its shareholders and all assets of applicable consolidated VIE have been transferred or assigned to respective WFOE or its designated persons.

        Spouse Consent Letters.    The spouse of the shareholder of Zhengzhou Habai, and the spouse of each of our co-founders who are indirect shareholders of Haluo Inclusive executed spouse consent letters. Each signing spouse confirmed that he or she does not enjoy and right or interest in connection with the equity interests of our consolidated VIE held directly or indirectly by his or her spouse. The spouse also irrevocably agreed that he or she would not claim in the future any right or interest in connection with the equity interests in our consolidated VIE held by his or her spouse.

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SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA

        The following summary consolidated statements of operations data and summary consolidated statements of cash flows data for the years ended December 31, 2018, 2019 and 2020 and summary consolidated balance sheets data as of December 31, 2019 and 2020 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. Our consolidated financial statements are prepared and presented in accordance with U.S. GAAP.

        Our historical results are not necessarily indicative of results to be expected for any future period. The following summary consolidated financial data for the periods and as of the dates indicated are qualified by reference to, and should be read in conjunction with, our consolidated financial statements and related notes and the information under "Management's Discussion and Analysis of Financial Condition and Results of Operations," both of which are included elsewhere in this prospectus.

Selected Consolidated Statements of Comprehensive Loss Data

 
  Year Ended December 31,  
 
  2018   2019   2020  
 
  RMB   RMB   RMB   US$  
 
  (in thousands)
 

Revenues

    2,113,672     4,823,321     6,044,357     926,339  

Cost of revenues(1)

    (3,261,203 )   (4,404,724 )   (5,329,421 )   (816,770 )

Gross (loss)/profit

    (1,147,531 )   418,597     714,936     109,569  

Selling and marketing expenses(1)

    (90,998 )   (268,018 )   (364,473 )   (55,858 )

General and administrative expenses(1)

    (230,534 )   (466,517 )   (770,236 )   (118,044 )

Research and development expenses(1)

    (114,895 )   (501,569 )   (682,059 )   (104,530 )

Loss on disposal and write-off of property and equipment

    (595,102 )   (636,200 )   (44,396 )   (6,804 )

Operating loss

    (2,179,060 )   (1,453,707 )   (1,146,228 )   (175,667 )

Interest income

    7,401     10,925     11,275     1,728  

Interest expense

    (56,381 )   (56,842 )   (58,912 )   (9,029 )

Foreign exchange loss

    (4,247 )   (395 )   (5,366 )   (822 )

Realized gain on short-term investments

    24,125     11,327     34,195     5,241  

Change in fair value of financial instruments

    125     (20,147 )   34,121     5,229  

Other expense, net

    (8,854 )   (4,995 )   (11,694 )   (1,792 )

Net loss before income taxes

    (2,216,891 )   (1,513,834 )   (1,142,609 )   (175,112 )

Income tax benefits

    9,375     9,144     9,014     1,381  

Net loss

    (2,207,516 )   (1,504,690 )   (1,133,595 )   (173,731 )

Net loss attributable to ordinary shareholders

    (2,608,189 )   (2,998,298 )   (4,466,426 )   (684,510 )