# EDGAR Filing Document

**Accession Number:** 0001742770
**File Stem:** 0001104659-25-094717
**Filing Date:** 2025-9
**Character Count:** 1209106
**Document Hash:** 11562d4f47e2699938b31c4b07754106
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001104659-25-094717.hdr.sgml**: 20250930

**ACCESSION NUMBER**: 0001104659-25-094717

**CONFORMED SUBMISSION TYPE**: 20-F

**PUBLIC DOCUMENT COUNT**: 148

**CONFORMED PERIOD OF REPORT**: 20241231

**FILED AS OF DATE**: 20250930

**DATE AS OF CHANGE**: 20250930

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Viomi Technology Co., Ltd
- **CENTRAL INDEX KEY:** 0001742770
- **STANDARD INDUSTRIAL CLASSIFICATION:** HOUSEHOLD APPLIANCES [3630]
- **ORGANIZATION NAME:** 04 Manufacturing
- **EIN:** 000000000
- **STATE OF INCORPORATION:** E9
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 20-F
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-38649
- **FILM NUMBER:** 251358100

**BUSINESS ADDRESS:**
- **ADDRESS IS A NON US LOCATION:** YES
- **STREET 1:** WANSHENG SQUARE, RM 1302 TOWER C
- **STREET 2:** XINGANG EAST ROAD, HAIZHU DISTRICT
- **CITY:** GUANGZHOU, GUANGDONG
- **PROVINCE COUNTRY:** F4
- **ZIP:** 510200
- **BUSINESS PHONE:** 86-75766833887

**MAIL ADDRESS:**
- **ADDRESS IS A NON US LOCATION:** YES
- **STREET 1:** WANSHENG SQUARE, RM 1302 TOWER C
- **STREET 2:** XINGANG EAST ROAD, HAIZHU DISTRICT
- **CITY:** GUANGZHOU, GUANGDONG
- **PROVINCE COUNTRY:** F4
- **ZIP:** 510200

?xml version='1.0' encoding='ASCII'? Viomi Technology Co., Ltd_December 31, 2024

[**Table of Contents**](#TOC)

------

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 20-F**

(Mark One)

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2024.

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report_________________

**For the transition period from__________to____________**

Commission file number: 001-38649

**Viomi Technology Co., Ltd**

(Exact Name of Registrant as Specified in Its Charter)

**N/A**

(Translation of Registrant's Name Into English)

**Cayman Islands**

(Jurisdiction of Incorporation or Organization)

**Wansheng Square, Rm 1302 Tower C, Xingang East Road, Haizhu District**

**Guangzhou, Guangdong, 510220**

**People's Republic of** **China**

(Address of Principal Executive Offices)

**Xiaoping Chen , Chief Executive Officer**

**Wansheng Square, Rm 1302 Tower C, Xingang East Road, Haizhu District**

**Guangzhou, Guangdong, 510220**

**People's Republic of** **China**

**Phone: +86 20 8930 9496**

**Email: chenxp@viomi.com**

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of Each Class** | **Trading**<br>**Symbol** | **Name of Each Exchange On Which Registered** |
| American depositary shares, each representing three Class A ordinary shares | VIOT | The Nasdaq Stock Market LLC<br>(The Nasdaq Global Select Market) |
| Class A ordinary shares, par value US$0.00001 per share\* |  | The Nasdaq Stock Market LLC<br>(The Nasdaq Global Select Market) |

---

\*Not for trading, but only in connection with the listing on the Nasdaq Stock Market of American depositary shares.

Securities registered or to be registered pursuant to Section 12(g) of the Act:

**None**

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

**None**

(Title of Class)

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report.

As of December 31, 2024, there were 203,824,094 ordinary shares issued and outstanding, being the sum of (i) 101,059,544 Class A ordinary shares, par value US$0.00001 per share (excluding 12,475,707 Class A ordinary shares that were issued to our depositary bank and reserved for future grants under our share incentive plans and 12,626,052 Class A ordinary shares that were repurchased by us), and (ii) 102,764,550 Class B ordinary shares, par value US$0.00001 per share.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. ☐ Yes ☒ No

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

[**Table of Contents**](#TOC)

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ <br> Non-accelerated filer ☒ Emerging growth company ☐

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 13(a) of the Exchange Act. ☐

†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.

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐ Yes ☒ No

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ☒ International Financial Reporting Standards as issued by the International Accounting Standards Board ☐ Other ☐

If "Other" has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. ☐ Item 17 ☐ Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. ☐ Yes ☐ No

------

[**Table of Contents**](#TOC)

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
| [INTRODUCTION](#INTRODUCTION_579982) | [INTRODUCTION](#INTRODUCTION_579982) | 1 |
| [FORWARD-LOOKING STATEMENTS](#FORWARDLOOKINGSTATEMENTS_562293) | [FORWARD-LOOKING STATEMENTS](#FORWARDLOOKINGSTATEMENTS_562293) | 3 |
| [PART I](#PARTI_634038) |  | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 1.](#ITEM1IDENTITYOFDIRECTORSSENIORMANAGEMENT) | [IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS](#ITEM1IDENTITYOFDIRECTORSSENIORMANAGEMENT) | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 2.](#ITEM2OFFERSTATISTICSANDEXPECTEDTIMETABLE) | [OFFER STATISTICS AND EXPECTED TIMETABLE](#ITEM2OFFERSTATISTICSANDEXPECTEDTIMETABLE) | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 3.](#ITEM3KEYINFORMATION_241979) | [KEY INFORMATION](#ITEM3KEYINFORMATION_241979) | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 4.](#ITEM4INFORMATIONONTHECOMPANY_958139) | [INFORMATION ON THE COMPANY](#ITEM4INFORMATIONONTHECOMPANY_958139) | 62 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 4A.](#ITEM4AUNRESOLVEDSTAFFCOMMENTS_112225) | [UNRESOLVED STAFF COMMENTS](#ITEM4AUNRESOLVEDSTAFFCOMMENTS_112225) | 90 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 5.](#ITEM5OPERATINGANDFINANCIALREVIEWANDPROSP) | [OPERATING AND FINANCIAL REVIEW AND PROSPECTS](#ITEM5OPERATINGANDFINANCIALREVIEWANDPROSP) | 90 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 6.](#ITEM6DIRECTORSSENIORMANAGEMENTANDEMPLOYE) | [DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES](#ITEM6DIRECTORSSENIORMANAGEMENTANDEMPLOYE) | 106 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 7.](#ITEM7MAJORSHAREHOLDERSANDRELATEDPARTYTRA) | [MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS](#ITEM7MAJORSHAREHOLDERSANDRELATEDPARTYTRA) | 114 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 8.](#ITEM8FINANCIALINFORMATION_520752) | [FINANCIAL INFORMATION](#ITEM8FINANCIALINFORMATION_520752) | 116 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 9.](#ITEM9THEOFFERANDLISTING_268) | [THE OFFER AND LISTING](#ITEM9THEOFFERANDLISTING_268) | 117 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 10.](#ITEM10ADDITIONALINFORMATION_753736) | [ADDITIONAL INFORMATION](#ITEM10ADDITIONALINFORMATION_753736) | 118 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 11.](#ITEM11QUANTITATIVEANDQUALITATIVEDISCLOSU) | [QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](#ITEM11QUANTITATIVEANDQUALITATIVEDISCLOSU) | 128 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 12.](#ITEM12DESCRIPTIONOFSECURITIESOTHERTHANEQ) | [DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES](#ITEM12DESCRIPTIONOFSECURITIESOTHERTHANEQ) | 129 |
| [PART II](#PARTII_58472) |  | 131 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 13.](#ITEM13DEFAULTSDIVIDENDARREARAGESANDDELIN) | [DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES](#ITEM13DEFAULTSDIVIDENDARREARAGESANDDELIN) | 131 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 14.](#ITEM14MATERIALMODIFICATIONSTOTHERIGHTSOF) | [MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS](#ITEM14MATERIALMODIFICATIONSTOTHERIGHTSOF) | 131 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 15.](#ITEM15CONTROLSANDPROCEDURES_361409) | [CONTROLS AND PROCEDURES](#ITEM15CONTROLSANDPROCEDURES_361409) | 131 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 16A.](#ITEM16AAUDITCOMMITTEEFINANCIALEXPERT_373) | [AUDIT COMMITTEE FINANCIAL EXPERT](#ITEM16AAUDITCOMMITTEEFINANCIALEXPERT_373) | 132 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 16B.](#ITEM16BCODEOFETHICS_862051) | [CODE OF ETHICS](#ITEM16BCODEOFETHICS_862051) | 133 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 16C.](#ITEM16CPRINCIPALACCOUNTANTFEESANDSERVICE) | [PRINCIPAL ACCOUNTANT FEES AND SERVICES](#ITEM16CPRINCIPALACCOUNTANTFEESANDSERVICE) | 133 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 16D.](#ITEM16DEXEMPTIONSFROMTHELISTINGSTANDARDS) | [EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES](#ITEM16DEXEMPTIONSFROMTHELISTINGSTANDARDS) | 133 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 16E.](#ITEM16EPURCHASESOFEQUITYSECURITIESBYTHEI) | [PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS](#ITEM16EPURCHASESOFEQUITYSECURITIESBYTHEI) | 133 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 16F.](#ITEM16FCHANGEINREGISTRANTSCERTIFYINGACCO) | [CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT](#ITEM16FCHANGEINREGISTRANTSCERTIFYINGACCO) | 134 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 16G.](#ITEM16GMINESAFETYDISCLOSURE_130790) | [MINE SAFETY DISCLOSURE](#ITEM16GMINESAFETYDISCLOSURE_130790) | 135 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 16H.](#ITEM16HDISCLOSUREREGARDINGFOREIGNJURISDI) | [DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS](#ITEM16HDISCLOSUREREGARDINGFOREIGNJURISDI) | 135 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 16I.](#ITEM16IINSIDERTRADINGPOLICIES_783489) | [INSIDER TRADING POLICIES](#ITEM16IINSIDERTRADINGPOLICIES_783489) | 135 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 16J.](#ITEM16JCYBERSECURITY_265510) | [CYBERSECURITY](#ITEM16JCYBERSECURITY_265510) | 136 |
| [PART III](#PARTIII_603056) |  | 137 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 17.](#ITEM17FINANCIALSTATEMENTS_300004) | [FINANCIAL STATEMENTS](#ITEM17FINANCIALSTATEMENTS_300004) | 137 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 18.](#ITEM18FINANCIALSTATEMENTS_562154) | [FINANCIAL STATEMENTS](#ITEM18FINANCIALSTATEMENTS_562154) | 137 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Item 19.](#ITEM19EXHIBITS_454751) | [EXHIBITS](#ITEM19EXHIBITS_454751) | 137 |
| [SIGNATURES](#SIGNATURES_101772) |  | 140 |

---

i

[**Table of Contents**](#TOC)

**INTRODUCTION**

Unless otherwise indicated and except where the context otherwise requires, references in this annual report on Form 20-F to:

● "2024 reorganization transaction" are to the transactions to effect the divestment of our divested IoT&Home business by termination the contractual arrangements between Yunmi Hulian Technology (Guangdong) Co., Ltd. and Foshan Yunmi Electric Appliances Technology Co., Ltd., or Foshan Viomi, which has resulted in Foshan Viomi's shareholder, Mr. Xiaoping Chen, fully controlling Foshan Viomi and its subsidiaries including Foshan Xiaoxian Hulian Electric Appliances Technology Co. Ltd., Foshan Qutansuo Electric Technology Co., Ltd., Guangdong AI Touch Technology Co., Ltd., and Zhuawa Technology (Guangdong) Co., Ltd. Additionally, Zhumeng Hulian Technology (Guangdong) Co., Ltd. and Guangzhou Interconnect Technology Co., Ltd., or Guangzhou Interconnect, have enter into a new set of contractual arrangements, as a result of which the Company has controlled Guangzhou Interconnect and consolidated its financial results.

● "**ADSs**" are to our American depositary shares, each of which represents three Class A ordinary shares of par value US$0.00001 each;

● "**AI**" are to artificial intelligence;

● "**China**" or the "**PRC**" are to the People's Republic of China, excluding, for the purposes of this annual report only, Hong Kong, Macau and Taiwan;

● "**Class A ordinary shares**" are to our Class A ordinary shares of par value US$0.00001 per share;

● "**Class B ordinary shares**" are to our Class B ordinary shares of par value US$0.00001 per share;

● "**divested IoT@Home business**" are to the businesses and assets involving certain IoT@Home portfolio products (excluding range hoods, gas stoves, and water heaters) that have been divested by us in August 2024;

● "**IoT**" are to the Internet of Things, an interconnected network of devices that can communicate with one another through the internet;

● our "**home water systems**" are to our portfolio of smart water purification systems with intelligent interconnectivity and communication capabilities , along with water heaters, smart water kettles, and electric kettle s , among others ;

● our "kitchen appliances and others are to portfolio of range hoods, gas stoves, and other small appliances, as well as product installation services and rental services ;

● our "**IoT@Home portfolio products**" are to our portfolio of smart home products with intelligent interconnectivity and communication capabilities, including our smart kitchen products and other smart products;

● "**ordinary shares**" are to Class A ordinary shares and Class B ordinary shares;

● "**VIEs**" are to variable interest entities, and "our VIEs" are to Beijing Yunmi Technology Co., Ltd., or Beijing Viomi, and Guangzhou Interconnect Technology Co., Ltd., or Guangzhou Interconnect, and, in the context of describing our VIEs prior to the completion of the 2024 reorganization transaction, Beijing Viomi and Foshan Yunmi Electric Appliances Technology Co., Ltd., or Foshan Viomi;

● "**Viomi**," "**we**," "**us**," "**our company**" or "**our**" are to Viomi Technology Co., Ltd, our Cayman Islands holding company and its subsidiaries, and, in the context of describing our operations and consolidated financial information, our VIEs and the subsidiaries of our VIEs in China;

● "**our WFOE I**" are to Lequan Technology (Beijing) Co., Ltd., or Lequan Technology;

[**Table of Contents**](#TOC)

● "**our WFOE II**" are to Zhumeng Hulian Technology (Guangdong) Co., Ltd., or Zhumeng Hulian;

● "**WFOEs**" are to wholly foreign-owned enterprises, and "our WFOEs" are to our WFOE I and our WFOE II, and, in the context of describing our WOFEs prior to the completion of the 2024 reorganization transaction, WOFE I and Yunmi Hulian Technology (Guangdong) Co., Ltd., or the former WOFE;

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

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

● "**Xiaomi**" are to Xiaomi Corporation, an internet company and a principal shareholder of our company as of the date of this annual report, and/or any of its affiliates.

In August 2024, to implement our "**Focus**" strategy for home water solutions, we divested our businesses and assets involving certain IoT@Home portfolio products (excluding range hoods, gas stoves, and water heaters) for a total consideration of RMB65 million in cash. As a result of the completion of the 2024 reorganization transaction, from September 2024, we have ceased to consolidate the divested entities, assets and businesses as well as their corresponding financial results. The historical financial results of our diverted IoT@Home business are reflected in our audited consolidated financial statements as discontinued operations. Unless otherwise stated, the financial information and non-GAAP financial measures disclosed in this annual report refer to our continuing operations.

Unless otherwise specifically stated, the information relating to the business operations is disclosed on a continuing operation basis, which excludes the divested IoT@Home business. The audited consolidated financial information presented in this annual report did not take into account the divested IoT@Home business. For the year ending December 31, 2025, we expect that our financial condition and results of operations will be materially affected by the divestiture and our historical results will not be indicative of future financial condition or results of operations.

Unless otherwise noted, all translations from Renminbi to U.S. dollars and from U.S. dollars to Renminbi in this annual report were made at a rate of RMB7.2993 to US$1.00, the exchange rate set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System as of December 31, 2024. We make no representation that any RMB or U.S. dollar amounts could have been, or could be, converted into U.S. dollars or RMB, as the case may be, at any particular rate, or at all.

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**FORWARD-LOOKING STATEMENTS**

This annual report on Form 20-F contains forward-looking statements that relate to our current expectations and views of future events. 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. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigations Reform Act of 1995.

You can identify some of these forward-looking statements by words or phrases such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "is/are likely to," "potential," "continue" or other similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward-looking statements include statements relating to:

● our operations and business prospects;

● our future business development, financial conditions and results of operations;

● our expectations regarding the home water solutions products market and the home appliances market in China;

● our expectations regarding the development of our overseas business;

● our expectations regarding the application of AI technology in home water solutions products;

● our expectations regarding our relationships with our ecosystem partners;

● our expectations regarding the success of our sales channel expansion and optimization;

● competition for, among other things, capital, technology and skilled personnel;

● our dividend policy;

● changes to regulatory and operating conditions in the industry and geographical markets in which we operate; and

● all other risks and uncertainties described in "*Item 3. Key Information—D. Risk Factors*."

You should read this annual report and the documents that we refer to in this annual report and have filed as exhibits to this annual report completely and with the understanding that our actual future results may be materially different from what we expect. Other sections of this annual report discuss factors that could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We qualify all of our forward-looking statements by these cautionary statements.

You should not rely upon forward-looking statements as predictions of future events. The forward-looking statements made in this annual report relate only to events or information as of the date on which the statements are made in this annual report. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.

[**Table of Contents**](#TOC)

**PART I**

**ITEM 1.** **IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS**

Not applicable.

**ITEM 2.** **OFFER STATISTICS AND EXPECTED TIMETABLE**

Not applicable.

**ITEM 3.** **KEY INFORMATION**

**Our Holding Company Structure and VIE Contractual Arrangements**

Viomi Technology Co., Ltd is not a Chinese operating company but rather a Cayman Islands holding company that does not conduct business directly and has no equity ownership in our VIEs. We conduct our operations in China through (i) our WFOEs and (ii) our VIEs with which we have maintained contractual arrangements. PRC laws and regulations restrict and impose conditions on foreign investment in internet and other related businesses in China. According to the Special Administrative Measures (Negative List) for Foreign Investment Access, our provision of internet information services falls within the restricted category and the equity ratio of foreign investment in the enterprises operating the business under the restricted category is subject to the cap of 50%. In addition, although our provision of e-commerce services falls within the permitted category, foreign investments in this business are still restricted by other requirements under related regulations in China. Accordingly, we operate this business in China through our VIEs, and rely on contractual arrangements among our WFOEs, our VIEs and the nominee shareholders of the VIEs to control the business operations of our VIEs. Our VIEs are consolidated for accounting purposes, but are not entities in which our Cayman Islands holding company, or our investors, own equity. Revenues contributed by our VIEs accounted for 90.2%, 88.9% and 45.0% of our total revenues for the years ended December 31, 2022, 2023 and 2024, respectively. As used in this annual report, "we," "us," "our company," "our," or "**Viomi**" refers to Viomi Technology Co., Ltd, its subsidiaries, and, in the context of describing our operations and consolidated financial information, our VIEs in China. Our VIEs currently include Beijing Yunmi Technology Co., Ltd., or Beijing Viomi, and Guangzhou Interconnect Technology Co., Ltd., or Guangzhou Interconnect, and, prior to the completion of the 2024 reorganization transaction, our VIEs include Beijing Viomi and Foshan Yunmi Electric Appliances Technology Co., Ltd., or Foshan Viomi. Prior to the completion of the 2024 reorganization transaction, we operate our internet information and e-commerce services business primarily through our former VIE, Foshan Viomi. In the 2024 reorganization transaction, Foshan Viomi agreed to transfer the websites, mobile apps, mini programs operated by it and all the related materials and rights (including but not limited to domain names, databases, codes, software, operational data, materials, documents, information) to Guangzhou Interconnect. We and Foshan Viomi are currently in the process of such transfer, and after the completion of the transfer, Guangzhou Interconnect will replace Foshan Viomi in operating internet information and e-commerce services business. Investors in our ADSs are not purchasing equity interest in our VIEs in China but instead are purchasing equity interest in a holding company incorporated in the Cayman Islands.

A series of contractual agreements have been entered into by and among our WFOEs, our VIEs and their respective shareholders, including (i) shareholder voting proxy agreements and equity pledge agreements, which provide us with effective control over our VIEs in China, (ii) exclusive consultation and service agreements, which allow us to receive economic benefits from our VIEs in China, (iii) exclusive option agreements, which provide us with the option to purchase the equity interests in, and assets of, our VIEs, and (iv) equity pledge agreements, under which the shareholders of our VIEs have pledged 100% equity interests in our VIEs to our WFOEs to secure shareholders' obligations under the exclusive option agreements, the shareholder voting proxy agreements and the equity pledge agreements. Terms contained in each set of contractual arrangements with our VIEs and their respective shareholders are substantially similar. After the completion of our 2024 reorganization transaction, we have terminated the contractual arrangements between Yunmi Hulian Technology (Guangdong) Co., Ltd., or the former WOFE, and Foshan Viomi, which has resulted in Foshan Viomi's shareholder, Mr. Xiaoping Chen, fully controlling Foshan Viomi and its subsidiaries including Foshan Xiaoxian Hulian Electric Appliances Technology Co. Ltd., Foshan Qutansuo Electric Technology Co., Ltd., Guangdong AI Touch Technology Co., Ltd., and Zhuawa Technology (Guangdong) Co., Ltd. Additionally, Zhumeng Hulian Technology (Guangdong) Co., Ltd., or **WOFE II**, and Guangzhou Interconnect, have enter into a new set of contractual arrangements, as a result of which the Company has controlled Guangzhou Interconnect and consolidated its financial results. For more details of these contractual arrangements, see "*Item 4. Information on the Company—C. Organizational Structure—Contractual Arrangements with Our VIEs and Their Shareholders*."

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However, the contractual arrangements may not be as effective as direct ownership in providing us with control over our VIEs and we may incur substantial costs to enforce the terms of the arrangements. All of the agreements under our contractual arrangements are governed by PRC laws and provide for the resolution of disputes through arbitration in China. Accordingly, these contracts would be interpreted in accordance with PRC laws and any disputes arising from these contracts would be resolved in accordance with PRC legal procedures. These arrangements have not been tested in arbitral tribunals or courts. Changes in the regulatory environment in China may limit our ability to enforce these contractual arrangements. Further, there are very few precedents and little formal guidance as to how contractual arrangements in the context of a VIE should be interpreted or enforced under PRC laws. There remain significant uncertainties regarding the ultimate outcome of such arbitration should legal action become necessary. See "*Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—We rely on contractual arrangements with our VIEs and their respective shareholders for substantially all of our business operation, which may not be as effective as direct ownership in providing operational control*" and "*Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—Any failure by our VIEs or their shareholders to perform their obligations under our contractual arrangements with them would have a material and adverse effect on our business, financial condition and results of operations*."

There are also substantial uncertainties regarding the interpretation and application of current and future PRC laws, regulations and rules regarding the status of the rights of our Cayman Islands holding company with respect to its contractual arrangements with our VIEs and its nominee shareholders. It is uncertain whether any new PRC laws or regulations relating to VIE structures will be adopted or if adopted, what they would provide. If we or any of our VIEs is found to be in violation of any existing or future PRC laws or regulations, or fail to obtain or maintain any of the required permits or approvals, the applicable PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures. If the PRC government deems that our contractual arrangements with our VIEs do not comply with PRC regulatory restrictions on foreign investment in relevant industries, or if these regulations or the interpretation of existing regulations change or are interpreted differently in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations. Our holding company, our WFOEs and VIEs, and investors of our company face uncertainty about potential future actions by the PRC government that could affect the enforceability of the contractual arrangements with our VIEs and, consequently, significantly affect the financial performance of our VIEs and their subsidiaries and our company as a whole. See "*Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure*" and "*Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—Failure to respond to changes in the regulatory environment in China could adversely affect us*."

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We face various risks and uncertainties related to doing business in China. Our business operations are primarily conducted in China, and we are subject to complex and evolving PRC laws and regulations. For example, we face risks associated with regulatory approvals on offshore offerings, anti-monopoly regulatory actions, and oversight on cybersecurity and data privacy, as well as the lack of inspection by the Public Company Accounting Oversight Board, or the PCAOB, on our auditors, which may impact our ability to conduct certain businesses, accept foreign investments, or list on a United States or other foreign exchange. Pursuant to the Holding Foreign Companies Accountable Act, which was enacted on December 18, 2020 and further amended by the Consolidated Appropriations Act, 2023 signed into law on December 29, 2022, or HFCAA, if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspections by the PCAOB for two consecutive years, the SEC will prohibit our shares or the ADSs from being traded on a national securities exchange or in the over-the-counter trading market in the United States. On December 16, 2021, the PCAOB issued a report to notify the SEC its determinations that it is unable to inspect or investigate completely registered public accounting firms headquartered in Mainland China and Hong Kong, including our auditor. In May 2022, the SEC conclusively listed us as a Commission-Identified Issuer under the HFCAA following the filing of this annual report on Form 20-F for the fiscal year ended December 31, 2021. On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms. As of the date of this annual report, the PCAOB has not issued any new determination regarding its ability to inspect or investigate registered public accounting firms headquartered in mainland China and Hong Kong. For this reason, we do not expect to be identified as a Commission-Identified Issuer under the HFCAA after we file this annual report on Form 20-F. Each year, the PCAOB will determine whether it can inspect and investigate completely audit firms in mainland China and Hong Kong, among other jurisdictions. If PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong and we continue to use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the Securities and Exchange Commission, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for the relevant fiscal year. There can be no assurance that we would not be identified as a Commission-Identified Issuer for any future fiscal year, and if we were so identified for two consecutive years, we would become subject to the prohibition on trading under the HFCAA. The delisting of our ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment. These risks could result in a material adverse change in our operations and the value of our ADSs, significantly limit or completely hinder our ability to continue to offer securities to investors, or cause the value of such securities to significantly decline or become worthless. For a detailed description of risks related to doing business in China, please refer to risks disclosed under "*Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China*."

PRC government's significant authority in regulating our operations and its oversight and control over offerings conducted overseas by, and foreign investment in, China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors. Implementation of industry-wide regulations in this nature may cause the value of such securities to significantly decline or become worthless. For more details, see "*Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—The PRC government's significant oversight and discretion over our business operation could result in a material adverse change in our operations and the value of our ADSs*."

Changes in the regulatory environment in China, including risks and challenges regarding the enforcement of laws and quickly evolving rules and regulations in China, could result in a material adverse change in our operations and the value of our ADSs. For more details, see "*Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—Failure to respond to changes in the regulatory environment in China could adversely affect us*."

**Cash Flows through Our Organization**

Viomi Technology Co., Ltd is a holding company with no operations of its own. We conduct our operations in China primarily through our subsidiaries and VIEs in China. As a result, although other means are available for us to obtain financing at the holding company level, Viomi Technology Co., Ltd.'s ability to pay dividends to the shareholders and to service any debt it may incur may depend upon dividends paid by our PRC subsidiaries and license and service fees paid by our VIEs.

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If any of our subsidiaries incurs debt on its own behalf in the future, the instruments governing such debt may restrict its ability to pay dividends to Viomi Technology Co., Ltd. In addition, our PRC subsidiaries are permitted to pay dividends to Viomi Technology Co., Ltd only out of their accumulated profits, if any, as determined in accordance with PRC accounting standards and regulations. Further, our PRC subsidiaries and VIEs and their subsidiaries are required to make appropriations to certain statutory reserve funds or may make appropriations to certain discretionary funds, which are not distributable as cash dividends except in the event of a solvent liquidation of the companies. For more details, see "*Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Holding Company Structure*." For risks relating to the fund flows of our operations in China, see "*Item 3. Key Information—Risk Factors—Risks Related to Our Corporate Structure—We may rely on dividends paid by our PRC subsidiaries to fund any cash and financing requirements we may have. Any limitation on the ability of our PRC subsidiaries to pay dividends to us could have a material adverse effect on our ability to conduct our business and to pay dividends to holders of the ADSs and our ordinary shares*."

Under PRC laws and regulations, our PRC subsidiaries and our VIEs are subject to certain restrictions with respect to paying dividends or otherwise transferring any of their net assets to us. Remittance of dividends by our PRC subsidiaries out of Mainland China is also subject to examination by the banks designated by the State Administration of Foreign Exchange and declaration and payment of withholding tax. The amounts restricted include the paid-up capital and the statutory reserve funds of our PRC subsidiaries and the net assets of our consolidated variable interest entities in which we have no legal ownership. Our PRC subsidiaries, our VIEs and their subsidiaries generate their revenue primarily in Renminbi, which is not freely convertible into other currencies. As a result, any restriction on currency exchange may limit the ability of our PRC subsidiaries to pay dividends to us. In addition, under the Enterprise Income Tax Law of the PRC and its implementation rules, undistributed profits earned by foreign-invested enterprises prior to January 1, 2008 are exempted from any withholding tax, while profits of a foreign-invested enterprise generated in or after 2008 that are distributed to its immediate holding company outside Mainland China are subject to withholding tax at a rate of 10%, unless the foreign holding company's jurisdiction of incorporation has a tax treaty with China that provides for a reduced rate of withholding tax. For example, a holding company in Hong Kong, subject to approval of the PRC local tax authority, will be eligible to a 5% withholding tax rate under the Arrangement Between the PRC and the Hong Kong Special Administrative Region on the Avoidance of Double Taxation and Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital if such holding company is considered to be a non-PRC resident enterprise and holds at least 25% of the equity interests in the PRC foreign-invested enterprise distributing the dividends. However, if the Hong Kong holding company is not considered to be the beneficial owner of such dividends under applicable PRC tax regulations, such dividend will remain subject to withholding tax at a rate of 10%. See also "*Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—Governmental control of currency conversion may limit our ability to utilize our cash balance effectively and affect the value of your investment*," and "*Item 5. Operating And Financial Review And Prospects—B. Liquidity and Capital Resources—Holding Company Structure*."

Under PRC laws, Viomi Technology Co., Ltd and its offshore subsidiaries may provide funding to our PRC subsidiaries only through capital contributions or loans, and to our VIEs only through loans, subject to satisfaction of applicable government registration and approval requirements. In the years ended December 31, 2022, 2023 and 2024, Viomi Technology Co., Ltd didn't extended any loans to our VIEs.

Our VIEs may transfer cash to our relevant WFOEs by paying service fees according to the exclusive consultation and service agreements. Our VIEs agree in the respective exclusive consultation and service agreements to pay our WFOEs an annual service fee at an amount that is equal to 100% of their respective annual net income or the amount which is adjusted in accordance with our relevant WFOE's sole discretion for the relevant year as well as the mutually agreed amount for certain other technical services, both of which should be paid within three months after the end of the relevant calendar year. Our WFOEs have the exclusive ownership of all the intellectual property rights created as a result of the performance of the exclusive consultation and service agreement, to the extent permitted by applicable PRC laws. In 2022, 2023 and 2024, our WFOE did not collect service fees from our VIEs in China under the exclusive consultation and service agreements.

For asset/cash flows other than the cash flows discussed above transferred through our organization in the years ended December 31, 2022, 2023 and 2024, please refer to "*Item 3. Key Information—A. Selected Financial Data—Selected Financial Information Related to the VIEs—Selected Condensed Consolidated Cash Flow Data*."

In the year ended December 31, 2022, 2023 and 2024, no dividends or distributions were made to U.S. investors. We do not intend to have any of its subsidiaries located in PRC distribute any undistributed earnings of such subsidiaries in the foreseeable future, but rather expect that such earnings will be reinvested by such subsidiaries in their operations or transferred by such subsidiaries to our VIEs and their subsidiaries for their operations.

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For the years ended December 31, 2022, 2023 and 2024, no dividend or distribution was made to Viomi Technology Co., Ltd or its offshore subsidiaries by our PRC subsidiaries. Accordingly, no withholding tax was recorded in the corresponding period. See "*Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Dividend Policy*." For PRC and United States federal income tax considerations of an investment in our ADSs, see "*Item 10. Additional Information—E. Taxation*."

For purposes of illustration, the following discussion reflects the hypothetical taxes that might be required to be paid within Mainland China, assuming that: (i) we have taxable earnings, and (ii) we determine to pay a dividend in the future:

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| | |
|:---|:---|
|  | **Taxation Scenario**<sup>(1)</sup> |
|  | **(Statutory Tax and Standard Rates)** |
| Hypothetical pre-tax earnings<sup>(2)</sup> | 100% |
| Tax on earnings at statutory rate of 25%<sup>(3)</sup>  | (25)% |
| Net earnings available for distribution | 75% |
| Withholding tax at standard rate of 10%<sup>(4)</sup>  | (7.5)% |
| Net distribution to Parent/Shareholders | 67.5% |

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Notes:

&nbsp;&nbsp;&nbsp;&nbsp;(1) For purposes of this example, the tax calculation has been simplified. The hypothetical book pre-tax earnings amount, not considering timing differences, is assumed to equal taxable income in China.

&nbsp;&nbsp;&nbsp;&nbsp;(2) Under the terms of the contractual arrangements between our PRC subsidiaries, our VIEs and shareholders of our VIEs, our PRC subsidiaries may charge our VIEs for services provided. These fees shall be recognized as expenses of our VIEs, with a corresponding amount as service income by our PRC subsidiaries and eliminate in consolidation. For income tax purposes, our PRC subsidiaries and VIEs file income tax returns on a separate company basis. The fees paid are recognized as a tax deduction by our VIEs and as income by our PRC subsidiaries and are tax neutral.

&nbsp;&nbsp;&nbsp;&nbsp;(3) Certain of our subsidiaries and VIEs qualifies for a 15% preferential income tax rate in China. However, such rate is subject to qualification, is temporary in nature, and may not be available in a future period when distributions are paid. For purposes of this hypothetical example, the table above reflects a maximum tax scenario under which the full statutory rate would be effective.

&nbsp;&nbsp;&nbsp;&nbsp;(4) The Enterprise Income Tax Law of the PRC imposes a withholding income tax of 10% on dividends distributed by a foreign invested enterprise to its immediate holding company outside of Mainland China. A lower withholding income tax rate of 5% is applied if the FIE's immediate holding company is registered in Hong Kong or other jurisdictions that have a tax treaty arrangement with Mainland China, subject to a qualification review at the time of the distribution. For purposes of this hypothetical example, the table above assumes a maximum tax scenario under which the full withholding tax would be applied.

The table above has been prepared under the assumption that all profits of our VIEs will be distributed as fees to our PRC subsidiaries under tax neutral contractual arrangements. If, in the future, the accumulated earnings of our VIEs exceed the fees paid to our PRC subsidiaries (or if the current and contemplated fee structure between the intercompany entities is determined to be non-substantive and disallowed by Chinese tax authorities), our VIEs could, as a matter of last resort, make a non-deductible transfer to our PRC subsidiaries for the amounts of the stranded cash in our VIEs. This would result in such transfer being non-deductible expenses for our VIEs but still taxable income for the PRC subsidiaries. Such a transfer and the related tax burdens would reduce our after-tax income to approximately 50.6% of the pre-tax income. Our management believes that there is only a remote possibility that this scenario would happen.

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**Permissions Required from the PRC Authorities for Our Operations**

We conduct our business primarily through our subsidiaries and VIEs and their subsidiaries in China. Our operations in China are governed by PRC laws and regulations. To comply with these laws and regulations, prior to the completion of 2024 reorganization transaction, our PRC subsidiaries and VIEs and their subsidiaries have obtained the requisite licenses and permits from the PRC government authorities that are material for the business operations of our holding company, our PRC subsidiaries and our VIEs in China, including, among others, the business licenses, the hygiene permits for products related to hygiene and safety of potable water, the compulsory product certification and the operating permit for e-commerce services and internet information services. After the completion of the 2024 reorganization transaction, Guangzhou Interconnect has obtained the operating permit for e-commerce services and the operating permit for internet information services. According to relevant PRC laws and regulations, we are required to renew these permits and certificates and continue to apply for permits and certificates for our new products. We cannot predict whether or for how long we will be able to obtain such permit and certificates. Given the uncertainties of interpretation and implementation of laws and regulations and the enforcement practice by government authorities, we may be required to obtain additional licenses, permits, filings or approvals for the functions and services of our platform in the future. For more detailed information, see "*Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—We may be adversely affected by the complexity, uncertainties and changes in PRC regulation of internet-related businesses and companies, and any lack of requisite approvals, licenses or permits applicable to our business may have a material adverse effect on our business and results of operations*."

Furthermore, we and our VIEs may be required to obtain permissions from or complete filings with the China Securities Regulatory Commission, or the CSRC, and may be required to go through cybersecurity review by the Cyberspace Administration of China, or the CAC, in case of any future issuance of securities to foreign investors. Any failure to obtain or delay in obtaining such approval or completing such procedures would subject us to sanctions by the CSRC, CAC or other PRC regulatory authorities. These regulatory authorities may impose fines and penalties on our operations in China, limit our ability to pay dividends outside of China, limit our operating privileges in China, delay or restrict the repatriation of the proceeds from our offshore offerings into China or take other actions that could materially and adversely affect our business, financial condition, results of operations, and prospects, as well as the trading price of our ADSs. See "*Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—The PRC government's significant oversight and discretion over our business operation could result in a material adverse change in our operations and the value of our ADSs*," and "*Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—The approval of and filing with the CSRC or other PRC government authorities may be required if we were to conduct offshore offerings in the future, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing*."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Selected Financial Data** 

**Selected Financial Information Related to the VIEs**

Set forth below are the condensed consolidated schedule showing the financial position as of December 31, 2022, 2023 and 2024, and results of operations and cash flows for the years ended December 31, 2022, 2023 and 2024 for (i) Viomi Technology Co., Ltd, or the Company; (ii) our equity subsidiaries and primary beneficiaries of VIEs (our WFOEs) and their subsidiaries; (iii) the VIEs and their subsidiaries; (iv) eliminating adjustments; and (v) consolidated totals.

On July 19, 2024, in furtherance of its "Focus" strategy for the Home water solution businesses, the Group entered into definitive agreements with Mr. Chen and an entity under his control to divest its businesses and assets related to certain Internet-of-things-enabled ("IoT-enabled") smart home portfolio products (the "Disposal"). The transfer of the IoT@Home portfolio products (excluding range hoods, gas stoves, and water heaters) to Mr. Chen was accomplished through the termination of the existing VIE contractual arrangements between Yunmi Hulian Technology (Guangdong) Co., Ltd. ("Yunmi Hulian") and Foshan Yunmi Electric Appliances Technology Co., Ltd. ("Foshan Viomi") at closing. This termination resulted in Mr. Chen, the shareholder of Foshan Viomi, obtaining full control over Foshan Viomi and its subsidiaries. As part of a pre-closing reorganization, Zhumeng Hulian Technology (Guangdong) Co. Ltd. ("Zhumeng Hulian") and Guangzhou Interconnect Technology Co., Ltd. ("Guangzhou Interconnect") entered into a new set of VIE contractual arrangements. Consequently, Zhumeng Hulian is regarded as the primary beneficiary of Guangzhou Interconnect and the Group consolidates its operational results, assets, and liabilities into the Group's consolidated financial statements. The transaction was completed on August 31, 2024.

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Prior to the Disposal, Yunmi Hulian and its subsidiaries were classified as "Primary Beneficiaries of VIEs and their Subsidiaries", while Zhumeng Hulian and its subsidiaries were classified as "Equity Subsidiaries". Following the completion of the Disposal on August 31, 2024, Yunmi Hulian and its subsidiaries were reclassified as "Equity Subsidiaries", and Zhumeng Hulian were reclassified as "Primary Beneficiaries of VIEs and their Subsidiaries". To enhance the comparability of the selected condensed consolidated financial data before and after the Disposal, we combined the condensed consolidated financial data of both "Equity Subsidiaries" and "Primary Beneficiaries of VIEs and their Subsidiaries" as of December 31, 2023 and 2024, and for the years ended December 31, 2022, 2023, and 2024.

***Selected Condensed Consolidated Statements of Operations Data***

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **For the Year Ended December 31, 2024** | **For the Year Ended December 31, 2024** | **For the Year Ended December 31, 2024** | **For the Year Ended December 31, 2024** | **For the Year Ended December 31, 2024** |
|  | <br>**The** <br>**Company** | **Equity**<br>**Subsidiaries** <br>**and Primary**<br>**Beneficiaries**<br>**of VIEs and**<br>**their**<br>**Subsidiaries** | <br>**VIEs and**<br>**their**<br>**Subsidiaries** | <br>**Eliminations** | <br>**Consolidated** |
|  | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** |
| Inter-company revenues<sup>(1)</sup> |  | 532323 | 49679 | (582002) |  |
| Related-party and third-party revenues |  | 1215580 | 903402 |  | 2118982 |
| **Total revenues** | **—** | **1747903** | **953081** | **(582002)** | **2118982** |
| **Cost of revenues** | **—** | **(1434056)** | **(845527)** | **709307** | **(1570276)** |
| Research and development expenses<sup>(1)</sup> |  | (99470) | (44692) | 1278 | (142884) |
| Selling and marketing expenses<sup>(1)</sup> |  | (155674) | (77433) | 21934 | (211173) |
| General and administrative expenses<sup>(1)</sup> | (5768) | (56513) | (11807) | 3281 | (70807) |
| **Total operating expenses** | **(5768)** | **(311657)** | **(133932)** | **26493** | **(424864)** |
| Other income |  | 21609 | 10883 |  | 32492 |
| Equity in (loss)/gain of subsidiaries/VIEs<sup>(2)</sup> | 67854 | 81687 |  | (149541) |  |
| **Income/(Loss) from operations** | **62086** | **105486** | **(15495)** | **4257** | **156334** |
| Interest (expenses)/income and investment income-net<sup>(3)</sup> | (7932) | (20471) | 23667 | 10000 | 5264 |
| **Income(Loss) before income tax expenses** | **54154** | **85015** | **8172** | **14257** | **161598** |
| Income tax (credit)/expenses |  | (16901) | (12) |  | (16913) |
| **Net income/(loss) from continuing operations** | **54154** | **68114** | **8160** | **14257** | **144685** |
| Less: Net loss from continuing operations attributable to the non-controlling interest shareholders |  | 343 | (22) |  | 321 |
| **Net income/(loss) from continuing operations attributable to the Company** | **54154** | **67771** | **8182** | **14257** | **144364** |
| Net loss from discontinued operations attributable to the Company |  |  | (80950) |  | (80950) |
| **Net income/(loss) from attributable to the Company** | **54154** | **67771** | **(72768)** | **14257** | **63414** |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **For the Year Ended December 31, 2023** | **For the Year Ended December 31, 2023** | **For the Year Ended December 31, 2023** | **For the Year Ended December 31, 2023** | **For the Year Ended December 31, 2023** |
|  | <br>**The** <br>**Company** | **Equity**<br>**Subsidiaries** <br>**and Primary**<br>**Beneficiaries**<br>**of VIEs and**<br>**their**<br>**Subsidiaries** | <br>**VIEs and**<br>**their**<br>**Subsidiaries** | <br>**Eliminations** | <br>**Consolidated** |
|  | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** |
| Inter-company revenues<sup>(1)</sup> |  | 789785 | 23344 | (813129) |  |
| Related-party and third-party revenues |  | 205664 | 1433072 |  | 1638736 |
| **Total revenues** | **—** | **995449** | **1456416** | **(813129)** | **1638736** |
| **Cost of revenues** | **—** | **(785736)** | **(1140254)** | **809270** | **(1116720)** |
| Research and development expenses |  | (59858) | (89021) |  | (148879) |
| Selling and marketing expenses<sup>(1)</sup> |  | (111961) | (182496) | 79847 | (214610) |
| General and administrative expenses<sup>(1)</sup> | (5072) | (20628) | (33746) | 2100 | (57346) |
| **Total operating expenses** | **(5072)** | **(192447)** | **(305263)** | **81947** | **(420835)** |
| Other income |  | 7370 | 1517 |  | 8887 |
| Equity in (loss)/gain of subsidiaries/VIEs<sup>(2)</sup> | (74290) | (178945) |  | 253235 |  |
| **Income/(Loss) from operations** | **(79362)** | **(154309)** | **12416** | **331323** | **110068** |
| Interest (expenses)/income and investment income-net<sup>(3)</sup> | (6152) | 2342 | 21495 | (854) | 16831 |
| Other non-operating income/(loss) | 3164 |  |  |  | 3164 |
| **Income(Loss) before income tax expenses** | **(82350)** | **(151967)** | **33911** | **330469** | **130063** |
| Income tax (credit)/expenses |  | (8723) | (4865) |  | (13588) |
| **Net income/(loss) from continuing operations** | **(82350)** | **(160690)** | **29046** | **330469** | **116475** |
| Less: Net loss from continuing operations attributable to the non-controlling interest shareholders |  |  | (293) |  | (293) |
| **Net income/(loss) from continuing operations attributable to the Company** | **(82350)** | **(160690)** | **29339** | **330469** | **116768** |
| Net income/(loss) from discontinued operations attributable to the Company |  |  | 39243 | (240685) | (201442) |
| **Net income/(loss) from attributable to the Company** | **(82350)** | **(160690)** | **68582** | **89784** | **(84674)** |

---

[**Table of Contents**](#TOC)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **For the Year Ended December 31, 2022** | **For the Year Ended December 31, 2022** | **For the Year Ended December 31, 2022** | **For the Year Ended December 31, 2022** | **For the Year Ended December 31, 2022** |
|  | <br>**The** <br>**Company** | **Equity**<br>**Subsidiaries**<br>**and Primary**<br>**Beneficiaries**<br>**of VIEs and**<br>**their**<br>**Subsidiaries** | <br>**VIEs and**<br>**their**<br>**Subsidiaries** | <br>**Eliminations** | <br>**Consolidated** |
|  | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** |
| Inter-company revenues<sup>(1)</sup> |  | 917428 | 33574 | (951002) |  |
| Related-party and third-party revenues |  | 208781 | 1581464 |  | 1790245 |
| **Total revenues** | **—** | **1126209** | **1615038** | **(951002)** | **1790245** |
| **Cost of revenues** | **—** | **(901219)** | **(1239746)** | **945223** | **(1195742)** |
| Research and development expenses |  | (75355) | (134602) |  | (209957) |
| Selling and marketing expenses<sup>(1)</sup> |  | (197310) | (256647) | 171672 | (282285) |
| General and administrative expenses | (4111) | (14096) | (42303) |  | (60510) |
| **Total operating expenses** | **(4111)** | **(286761)** | **(433552)** | **171672** | **(552752)** |
| Other income |  | 5394 | 7512 |  | 12906 |
| Equity in (loss)/gain of subsidiaries/VIEs<sup>(2)</sup> | (288409) | (522116) |  | 810525 |  |
| **Loss from operations** | **(292520)** | **(578493)** | **(50748)** | **976418** | **54657** |
| Interest (expenses)/income and investment income-net<sup>(3)</sup> | 18438 | (645) |  | (7287) | 10506 |
| Other non-operating income/(loss) | 2488 |  |  |  | 2488 |
| **Loss before income tax expenses** | **(271594)** | **(579138)** | **(50748)** | **969131** | **67651** |
| Income tax expenses |  | 3707 | (3260) |  | 447 |
| **Net Loss from continuing operations** | **(271594)** | **(575431)** | **(54008)** | **969131** | **68098** |
| Less: Net loss from continuing operations attributable to the non-controlling interest shareholders |  |  | (186) |  | (186) |
| **Net loss from continuing operations attributable to the Company** | **(271594)** | **(575431)** | **(53822)** | **969131** | **68284** |
| Net loss from discontinued operations attributable to the Company |  |  | 201389 | (545188) | (343799) |
| **Net loss from attributable to the Company** | **(271594)** | **(575431)** | **147567** | **423943** | **(275515)** |

---

Notes:

&nbsp;&nbsp;&nbsp;&nbsp;(1) It represents the elimination of inter-company transactions among the VIEs and equity subsidiaries and primary beneficiaries of VIEs and their subsidiaries. In 2022, 2023 and 2024, primary beneficiaries of VIEs and their subsidiaries did not charge any service fee from our VIEs in China under the exclusive consultation and service agreements.

&nbsp;&nbsp;&nbsp;&nbsp;(2) It represents the elimination of the investment in VIEs and subsidiaries by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;(3) It represents the elimination of finance costs of loans among the Company, the VIEs and our subsidiaries charged at the consolidation level.

[**Table of Contents**](#TOC)

***Selected Condensed Consolidated Balance Sheets Data***

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **For the Year Ended December 31, 2024** | **For the Year Ended December 31, 2024** | **For the Year Ended December 31, 2024** | **For the Year Ended December 31, 2024** | **For the Year Ended December 31, 2024** |
|  | <br>**The** <br>**Company** | **Equity**<br>**Subsidiaries and**<br>**Primary**<br>**Beneficiaries**<br>**of VIEs and**<br>**their**<br>**Subsidiaries** | <br>**VIEs and**<br>**their**<br>**Subsidiaries** | <br>**Eliminations** | <br>**Consolidated** |
|  | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** |
| **Assets** |  |  |  |  |  |
| **Current assets** |  |  |  |  |  |
| Cash and cash equivalents | 164583 | 854426 | 7179 |  | 1026188 |
| Short-term investments |  | 72500 |  |  | 72500 |
| Accounts receivable from third parties |  | 24043 | 62 |  | 24105 |
| Accounts receivable from a related party |  | 591221 |  |  | 591221 |
| Inventories |  | 112257 | 68 |  | 112325 |
| Amounts due from Group companies<sup>(1)</sup> | 542635 |  | 498455 | (1041090) |  |
| Investments in subsidiaries<sup>(2)</sup> | 695720 |  |  | (695720) |  |
| Investments in VIEs<sup>(2)</sup> |  | 506482 |  | (506482) |  |
| Other assets | 132063 | 620860 | 6438 |  | 759361 |
| **Total assets** | **1535001** | **2781789** | **512202** | **(2243292)** | **2585700** |
| **Liabilities** |  |  |  |  |  |
| Accounts and notes payable |  | 767831 | 4320 |  | 772151 |
| Accrued expenses and other liabilities | 3254 | 218820 | 1046 | (40501) | 182619 |
| Amounts due to Group companies<sup>(1)</sup> | 88497 | 911880 | 168 | (1000545) |  |
| Other liabilities |  | 180987 | 186 |  | 181173 |
| **Total Liabilities** | **91751** | **2079518** | **5720** | **(1041046)** | **1135943** |
| **Total equity attributable to shareholders of the Company** | **1443250** | **695720** | **506482** | **(1201011)** | **1444441** |
| Non-controlling interests |  | 6551 |  | (1235) | 5316 |
| **Total shareholders' equity** | **1443250** | **702271** | **506482** | **(1202246)** | **1449757** |
| **Total liabilities and shareholders' equity** | **1535001** | **2781789** | **512202** | **(2243292)** | **2585700** |

---

[**Table of Contents**](#TOC)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **For the Year Ended December 31, 2023** | **For the Year Ended December 31, 2023** | **For the Year Ended December 31, 2023** | **For the Year Ended December 31, 2023** | **For the Year Ended December 31, 2023** |
|  | <br>**The** <br>**Company** | **Equity**<br>**Subsidiaries and**<br>**Primary**<br>**Beneficiaries**<br>**of VIEs and**<br>**their**<br>**Subsidiaries** | <br>**VIEs and**<br>**their**<br>**Subsidiaries** | <br>**Eliminations** | <br>**Consolidated** |
|  | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** |
| **Assets** |  |  |  |  |  |
| **Current assets** |  |  |  |  |  |
| Cash and cash equivalents | 13343 | 193034 | 28 |  | 206405 |
| Short-term investments |  | 18505 |  |  | 18505 |
| Accounts receivable from third parties |  | 36836 |  |  | 36836 |
| Accounts receivable from a related party |  | 4365 |  |  | 4365 |
| Inventories |  | 109223 | 48794 | (714) | 157303 |
| Amounts due from Group companies<sup>(1)</sup> | 640828 | 797159 |  | (1437987) |  |
| Investments in subsidiaries<sup>(2)</sup> | 660932 |  |  | (660932) |  |
| Investments in VIEs<sup>(2)</sup> |  | 578818 |  | (578818) |  |
| Other assets | 122529 | 533737 | 42604 |  | 698870 |
| Assets held for sale |  |  | 2266196 | (634092) | 1632104 |
| **Total assets** | **1437632** | **2271677** | **2357622** | **(3312543)** | **2754388** |
| **Liabilities** |  |  |  |  |  |
| Accounts and notes payable |  | 317454 |  |  | 317454 |
| Accrued expenses and other liabilities | 3396 | 123504 | 43914 |  | 170814 |
| Amounts due to Group companies<sup>(1)</sup> | 85703 | 984000 |  | (1069703) |  |
| Other liabilities |  | 181784 | 14971 |  | 196755 |
| Liabilities held for sale |  |  | 1728171 | (1002443) | 725728 |
| **Total Liabilities** | **89099** | **1606742** | **1787056** | **(2072146)** | **1410751** |
| **Total equity attributable to shareholders of the Company** | **1348533** | **660932** | **578818** | **(1240397)** | **1347886** |
| Non-controlling interests |  | 4003 | (8252) |  | (4249) |
| **Total shareholders' equity** | **1348533** | **664935** | **570566** | **(1240397)** | **1343637** |
| **Total liabilities and shareholders' equity** | **1437632** | **2271677** | **2357622** | **(3312543)** | **2754388** |

---

[**Table of Contents**](#TOC)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **For the Year Ended December 31, 2022** | **For the Year Ended December 31, 2022** | **For the Year Ended December 31, 2022** | **For the Year Ended December 31, 2022** | **For the Year Ended December 31, 2022** |
|  | <br>**The** <br>**Company** | **Equity**<br>**Subsidiaries and** <br>**Primary**<br>**Beneficiaries**<br>**of VIEs and**<br>**their**<br>**Subsidiaries** | <br>**VIEs and**<br>**their**<br>**Subsidiaries** | <br>**Eliminations** | <br>**Consolidated** |
|  | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** |
| **Assets** |  |  |  |  |  |
| **Current assets** |  |  |  |  |  |
| Cash and cash equivalents | 90775 | 310888 | 36 |  | 401699 |
| Short-term investments |  | 7784 |  |  | 7784 |
| Accounts receivable from third parties |  | 49754 |  |  | 49754 |
| Inventories |  | 119495 | 61607 | (595) | 180507 |
| Amounts due from Group companies<sup>(1)</sup> | 659249 | 791063 |  | (1450312) |  |
| Investments in subsidiaries<sup>(2)</sup> | 766883 |  |  | (766883) |  |
| Investments in VIEs<sup>(2)</sup> |  | 684701 | **—** | (684701) |  |
| Other assets | 13043 | 350632 | 66308 | **—** | 429983 |
| Assets held for sale |  |  | 2479723 | (663756) | 1815967 |
| **Total assets** | **1529950** | **2314317** | **2607674** | **(3566247)** | **2885694** |
| **Liabilities** |  |  |  |  |  |
| Accounts and notes payable |  | 466191 |  |  | 466191 |
| Accrued expenses and other liabilities | 13028 | 65999 | 45360 |  | 124387 |
| Amounts due to Group companies<sup>(1)</sup> | 83570 | 838860 |  | (992430) |  |
| Other liabilities |  | 176384 | 7948 |  | 184332 |
| Liabilities held for sale |  |  | 1873258 | (1191637) | 681621 |
| **Total Liabilities** | **96598** | **1547434** | **1926566** | **(2114067)** | **1456531** |
| **Total equity attributable to shareholders of the Company** | **1433352** | **766883** | **684701** | **(1452180)** | **1432756** |
| Non-controlling interests |  |  | (3593) |  | (3593) |
| **Total shareholders' equity** | **1433352** | **766883** | **681108** | **(1452180)** | **1429163** |
| **Total liabilities and shareholders' equity** | **1529950** | **2314317** | **2607674** | **(3566247)** | **2885694** |

---

Notes:

&nbsp;&nbsp;&nbsp;&nbsp;(1) It represents the elimination of inter-company balances among the Company, the VIEs and our subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;(2) It represents the elimination of the investment in VIEs and subsidiaries by the Company.

[**Table of Contents**](#TOC)

***Selected Condensed Consolidated Cash Flow Data***

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **For the Year Ended December 31, 2024** | **For the Year Ended December 31, 2024** | **For the Year Ended December 31, 2024** | **For the Year Ended December 31, 2024** | **For the Year Ended December 31, 2024** |
|  | <br>**The** <br>**Company** | **Equity**<br>**Subsidiaries and**<br>**Primary**<br>**Beneficiaries**<br>**of VIEs and**<br>**their**<br>**Subsidiaries** | <br>**VIEs and their** <br>**Subsidiaries** | <br>**Eliminations** | <br>**Consolidated** |
|  | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** |
| Sales of goods and services to Group companies<sup>(1)</sup> |  | 588081 | 102924 | (691005) |  |
| Purchases of goods and services from Group companies<sup>(1)</sup> |  | (102924) | (588081) | 691005 |  |
| Other operating activities | 274797 | 185005 | 121193 |  | 580995 |
| Net cash provided by/(used in) continuing operating activities | 274797 | 670162 | (363964) |  | 580995 |
| Net cash provided by/(used in) discontinued operating activities |  |  | 135033 |  | 135033 |
| **Net cash (used in)/provided by operating activities** | **274797** | **670162** | **(228931)** | **—** | **716028** |
| Loans to Group companies | (56973) |  |  | 56973 |  |
| Repayment of loans from Group companies | 288794 | 164043 |  | (452837) |  |
| Receipt of advances repayment from Group companies |  | 464180 | 556535 | (1020715) |  |
| Other investing activities | (290757) | (11055) |  |  | (301812) |
| Net cash provided by/(used in) continuing investing activities | (58936) | 617167 | 556535 | (1416579) | (301812) |
| Net cash provided by/(used in) discontinued investing activities |  |  | 136918 |  | 136918 |
| **Net cash provided by/(used in) investing activities** | **(58936)** | **617167** | **693453** | **(1416579)** | **(164894)** |
| Repayment for advances from Group companies | (78617) | (556536) | (385563) | 1020716 |  |
| Repayment for loans from Group companies |  |  | (452836) | 452836 |  |
| Borrowings under loans from Group companies |  | 56973 |  | (56973) |  |
| Other financing activities | (4173) | (485) |  |  | (4658) |
| Net cash provided by/(used in) continuing financing activities | (82790) | (500048) | (838399) | 1416579 | (4658) |
| Net cash provided by/(used in) discontinued financing activities |  |  | (30000) |  | (30000) |
| **Net cash (used in)/provided by financing activities** | **(82790)** | **(500048)** | **(868399)** | **1416579** | **(34658)** |
| Effect of exchanges rates on cash and cash equivalents | 18169 | (3520) |  |  | 14649 |
| Net increase in cash and cash equivalents | 151240 | 783762 | (403877) |  | 531125 |
| Cash and cash equivalents and restricted cash at beginning of year | 13343 | 211956 | 411056 |  | 636355 |
| **Cash and cash equivalents and restricted cash at end of year** | **164583** | **995718** | **7179** | **—** | **1167480** |

---

[**Table of Contents**](#TOC)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **For the Year Ended December 31, 2023** | **For the Year Ended December 31, 2023** | **For the Year Ended December 31, 2023** | **For the Year Ended December 31, 2023** | **For the Year Ended December 31, 2023** |
|  | <br>**The**<br>**Company** | **Equity**<br>**Subsidiaries and**<br>**Primary**<br>**Beneficiaries**<br>**of VIEs and**<br>**their**<br>**Subsidiaries** | <br>**VIEs and their**<br>**Subsidiaries** | <br>**Eliminations** | <br>**Consolidated** |
|  | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** |
| Sales of goods and services to Group companies<sup>(1)</sup> |  | 692027 |  | (692027) |  |
| Purchases of goods and services from Group companies<sup>(1)</sup> |  | (94673) |  | 94673 |  |
| Other operating activities | (93378) | (642085) | 776782 |  | 41319 |
| Net cash provided by/(used in) continuing operating activities | (93378) | (44731) | 776782 | (597354) | 41319 |
| Net cash provided by/(used in) discontinued operating activities |  |  | (741901) | 597354 | (144547) |
| **Net cash (used in)/provided by operating activities** | **(93378)** | **(44731)** | **34881** | **—** | **(103228)** |
| Repayment of loans from Group companies | 35845 |  |  | (35845) |  |
| Receipt of advances repayment from Group companies |  | 44574 |  | (44574) |  |
| Other investing activities | (14600) | (102291) | (174058) |  | (290949) |
| Net cash provided by/(used in) continuing investing activities | 21245 | (57717) | (174058) | (80419) | (290949) |
| Net cash provided by/(used in) discontinued investing activities |  |  | 108889 | (16866) | 92023 |
| **Net cash provided by/(used in) investing activities** | **21245** | **(57717)** | **(65169)** | **(97285)** | **(198926)** |
| Repayment for advances from Group companies |  |  | (44574) | 44574 |  |
| Repayment for loans from Group companies |  | (35845) |  | 35845 |  |
| Borrowings under loans from Group companies |  | (16866) |  | 16866 |  |
| Other financing activities | (6421) | 22078 |  |  | 15657 |
| Net cash provided by/(used in) continuing financing activities | (6421) | (30633) | (44574) | 97285 | 15657 |
| Net cash provided by/(used in) discontinued financing activities |  |  | 100000 |  | 100000 |
| **Net cash (used in)/provided by financing activities** | **(6421)** | **(30633)** | **55426** | **97285** | **115657** |
| Effect of exchanges rates on cash and cash equivalents | 1122 | 7639 | 882 |  | 9643 |
| Net increase in cash and cash equivalents | (77432) | (125442) | 26020 |  | (176854) |
| Cash and cash equivalents and restricted cash at beginning of year | 90775 | 337398 | 385036 |  | 813209 |
| **Cash and cash equivalents and restricted cash at end of year** | **13343** | **211956** | **411056** | **—** | **636355** |

---

[**Table of Contents**](#TOC)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **For the Year Ended December 31, 2022** | **For the Year Ended December 31, 2022** | **For the Year Ended December 31, 2022** | **For the Year Ended December 31, 2022** | **For the Year Ended December 31, 2022** |
|  | <br>**The** <br>**Company** | **Equity**<br>**Subsidiaries and** <br>**Primary**<br>**Beneficiaries**<br>**of VIEs and**<br>**their**<br>**Subsidiaries** | <br>**VIEs and their** <br>**Subsidiaries** | <br>**Eliminations** | <br>**Consolidated** |
|  | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** |
| Sales of goods and services to Group companies<sup>(1)</sup> |  | 967101 |  | (967101) |  |
| Purchases of goods and services from Group companies<sup>(1)</sup> |  | (8804) |  | 8804 |  |
| Other operating activities | (17055) | (804182) | 955934 |  | 134697 |
| Net cash provided by/(used in) continuing operating activities | (17055) | 154115 | 955934 | (958297) | 134697 |
| Net cash provided by/(used in) discontinued operating activities |  |  | (1377163) | 958297 | (418866) |
| **Net cash (used in)/provided by operating activities** | **(17055)** | **154115** | **(421229)** | **—** | **(284169)** |
| Loans to Group companies |  |  |  |  |  |
| Repayment of loans from Group companies | 94621 |  |  | (94621) |  |
| Receipt of advances repayment from Group companies |  | 60361 |  | (60361) |  |
| Investment in subsidiaries |  |  |  |  |  |
| Other investing activities |  | (146773) | (8161) |  | (154934) |
| Net cash provided by/(used in) continuing investing activities | 94621 | (86412) | (8161) | (154982) | (154934) |
| Net cash provided by/(used in) discontinued investing activities |  |  | 476761 | (7280) | 469481 |
| **Net cash provided by/(used in) investing activities** | **94621** | **(86412)** | **468600** | **(162262)** | **314547** |
| Repayment for advances from Group companies |  |  |  |  |  |
| Repayment for loans from Group companies |  | (98221) |  | 98221 |  |
| Borrowings under loans from Group companies |  | (3680) |  | 3680 |  |
| Other financing activities | (5099) | 118662 |  |  | 113563 |
| Net cash provided by/(used in) continuing financing activities | (5099) | 16761 |  | 101901 | 113563 |
| Net cash provided by/(used in) discontinued financing activities |  |  | (60361) | 60361 |  |
| **Net cash (used in)/provided by financing activities** | **(5099)** | **16761** | **(60361)** | **162262** | **113563** |
| Effect of exchanges rates on cash and cash equivalents | 7287 | 22909 | 16286 |  | 46482 |
| Net increase in cash and cash equivalents | 79754 | 107373 | 3296 |  | 190423 |
| Cash and cash equivalents and restricted cash at beginning of year | 11021 | 230025 | 381740 |  | 622786 |
| **Cash and cash equivalents and restricted cash at end of year** | **90775** | **337398** | **385036** | **—** | **813209** |

---

Note:

&nbsp;&nbsp;&nbsp;&nbsp;(1) Cash flows within our group in operating activities

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** |
|  | **2022** | **2023** | **2024** |
|  | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** |
| Cash paid by VIEs to equity subsidiaries and primary beneficiaries of VIEs and their subsidiaries for purchasing of goods and service |  |  | 588081 |
| Cash received by VIEs from equity subsidiaries and primary beneficiaries of VIEs and their subsidiaries for rendering of goods and service |  |  | 102924 |

---

**B.** **Capitalization and Indebtedness**

Not applicable.

**C.** **Reasons for the Offer and Use of Proceeds**

Not applicable.

[**Table of Contents**](#TOC)

**D.** **Risk Factors**

**Summary of Risk Factors**

An investment in our ADSs involves risks. Below is a summary of material risks we may face, organized under relevant headings. These risks are discussed more fully below in this Item 3. Key Information—D. Risk Factors.

***Risks Related to Our Business and Industry***

Risks and uncertainties related to our business include, but not limited to, the following:

● Xiaomi is our strategic partner and our most important customer. A significant portion of our revenue derive from sales to Xiaomi. Changes in our relationship with Xiaomi could have a material adverse effect on our operating results;

● We operate in highly competitive markets, and the scale and resources of some of our competitors may allow them to compete more effectively than we can, which could result in a loss of our market share and a decrease in our net revenues and profitability;

● We may not be able to effectively manage our growth and the increased complexity of our business, which could negatively impact our brand and financial performance;

● Our future success depends on our ability to promote our brand and protect our reputation. Our failure to establish and promote our brand and any damage to our reputation will hinder our growth;

● If we fail to successfully develop and commercialize new products, services and technologies that are well received by consumers in a timely manner, our operating results may be materially and adversely affected;

● Our expansion into new product categories and scenarios and substantial increases in product lines may expose us to new challenges and more risks;

● We operate in the emerging and evolving home water solutions market in China, which may develop more slowly or differently than we expect. If the home water solutions market does not grow as we expect, or if we cannot expand our products and services to meet consumer demands, our results of operations may be materially and adversely affected;

● If our user engagement ceases to grow or declines, our business and operating results may be materially and adversely affected;

● Our business is subject to complex and evolving Chinese and international laws and regulations, including those regarding data privacy and cybersecurity, many of which are subject to change and uncertain interpretation. Any changes in these laws could cause changes to our business practices and increased cost of operations, and any security breaches and our actual or perceived failure to comply with such laws could result in claims, penalties, damages to our reputation and brand, declines in user growth or engagement or otherwise harm our business;

● We are susceptible to supply shortages and interruptions, long lead times, and price fluctuations for raw materials and components, any of which could disrupt our supply chain and have a material adverse impact on our results of operations;

● We rely on certain contract manufacturers to produce some of our products. If we encounter issues with them, our business and results of operations could be materially and adversely affected;

● Our business may be adversely impacted by product defects or other quality issues;

● We rely on a limited number of third-party e-commerce platforms to sell our products online. If our cooperation with such platforms terminates, deteriorates or becomes more costly, our business and results of operations may be materially and adversely affected; and

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● We face risks associated with our network partners and their personnel for our network of Viomi offline stores.

***Risks Related to Our Corporate Structure***

Risks and uncertainties related to our corporate structure include, but not limited to, the following:

● We are a Cayman Islands holding company with no equity ownership in our VIEs and we conduct our operations in China through (i) our PRC subsidiaries and (ii) our VIEs, with which we have maintained contractual arrangements. Investors in our ADSs thus are not purchasing equity interest in our VIEs in China but instead are purchasing equity interest in a Cayman Islands holding company. If the PRC government finds that the agreements that establish the structure for operating our business do not comply with PRC laws and regulations, or if these regulations or their interpretations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations. Our holding company, our PRC subsidiaries, our VIEs, and investors of our company face uncertainty about potential future actions by the PRC government that could affect the enforceability of the contractual arrangements with our VIEs and, consequently, significantly affect the financial performance of our VIEs and our company as a whole. The PRC regulatory authorities could disallow the VIEs structure, which would likely result in a material adverse change in our operations, and our Class A ordinary shares or our ADSs may decline significantly in value;

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

● Any failure by our VIEs or their shareholders to perform their obligations under our contractual arrangements with them would have an adverse effect on our business, financial condition and results of operations.

***Risks Related to Doing Business in China***

We are also subject to risks and uncertainties relating to doing business in China in general, including, but not limited to, the following:

● The PCAOB had historically been unable to inspect our auditor in relation to their audit work performed for our financial statements and the inability of the PCAOB to conduct inspections over our auditor in the past has deprived our investors with the benefits of such inspections;

● Our ADSs may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely auditors located in China. The delisting of the ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment;

● The PRC government's significant oversight and discretion over our business operation could result in a material adverse change in our operations and the value of our ADSs;

● Changes in China's economic, political or social conditions or government policies could have a material adverse effect on our business and operations;

● Failure to respond to changes in the regulatory environment in China could adversely affect us; and

● The approval of and filing with the CSRC or other PRC government authorities may be required if we were to conduct offshore offerings in the future, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing.

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***Risks Related to the ADSs***

In addition to the risks described above, we are subject to general risks relating to our ADSs and Class A ordinary shares, including, but not limited to, the following:

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

● Our dual-class share structure with different voting rights will limit your ability to influence corporate matters (and in certain situations, give certain holders of Class B ordinary shares control over the outcome of matters put to a vote of shareholders) and could discourage others from pursuing any change of control transactions that holders of our Class A ordinary shares and ADSs may view as beneficial.

**Risks Related to Our Business and Industry**

***Xiaomi is our strategic partner and our most important customer. A significant portion of our revenue derive from sales to Xiaomi. Changes in our relationship with Xiaomi could have a material adverse effect on our operating results.***

Xiaomi is our strategic partner and our most important customer. A significant portion of our revenue derive from sales to Xiaomi. Specifically, we recorded RMB1,336.6 million, RMB1,292.9 million and RMB1,752.2 million (US$240.1 million) in net revenues from sales to Xiaomi in the years ended December 31, 2022, 2023 and 2024, respectively, which represented 74.7%, 78.9% and 82.7% of our total net revenues during such periods, respectively. In addition, many of our Viomi-branded products are also sold through Xiaomi's e-commerce platform, www.xiaomiyoupin.com, or Youpin, one of our online sales channels.

We sell a wide range of products to Xiaomi, including Xiaomi-branded water purification systems, water purifier filters, water heaters, range hoods and gas stoves, as well as other complementary products such as kettles, among others. We may discuss with Xiaomi to expand the product categories on which we collaborate, which may lead to increased revenues from Xiaomi. However, there is no assurance that these discussions and expansion of cooperation will materialize.

Our cooperation with Xiaomi is provided in a series of contracts, all of which are subject to early termination by Xiaomi under specific circumstances. When any of such circumstances arise, Xiaomi may early terminate cooperation with us. We will initiate good faith negotiations with Xiaomi to renew the agreements whenever they are near the end of the term. However, we cannot assure you that we will be able to renew all such agreements, or on the same or more favorable terms.

In addition, we can recover our production costs when we deliver certain categories of products to Xiaomi, and are entitled to share in the gross profit when Xiaomi sells them to end-customers. However, various reasons may lead to Xiaomi's failure to sell these products, many of which are not within our control, including those related to Xiaomi but unrelated to the products we produced and risks that we could not preempt or prevent with commercially reasonable efforts.

Furthermore, Xiaomi sells a broad spectrum of products, including our Xiaomi-branded and our Viomi-branded products, as well as products unrelated to us through its various sales channels. We cannot assure you that our products can always receive the same level of attention and promotion efforts from Xiaomi that they have received thus far. If Xiaomi dedicates fewer resources to promoting and selling our products or introduces products that compete with ours, our net revenues may decrease as well. Negative publicity related to Xiaomi, including products offered by Xiaomi and unrelated to us, the celebrities Xiaomi are associated with, or even the labor policies or environmental issues of any of Xiaomi's suppliers or manufacturers, may also have a material adverse effect on the sales of our products and public recognition of our brand. Furthermore, Xiaomi is also a shareholder of our company. When exercising its rights as our shareholder, Xiaomi may consider not only the interests of our company and our other shareholders but also its own interests, the interests of its own shareholders and the interests of its other affiliates. Our interests and those of our other shareholders may at times conflict with the interests of Xiaomi and its shareholders and other affiliates. Such conflicts may result in losing business opportunities for us, including opportunities to enter into lines of business that may overlap with those pursued by Xiaomi or companies within its ecosystem.

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***We operate in highly competitive markets, and the scale and resources of some of our competitors may allow them to compete more effectively than we can, which could result in a loss of our market share and a decrease in our net revenues and profitability.***

Embracing the mission of "**AI for Better Water**," we strive to utilize AI technology to provide better drinking water solutions for households. As an industry-leading technology company in home water solutions in China, we have developed a distinctive "**Equipment + Consumables**" business model. We face intense competition from other smart home water solutions providers, internet companies, and traditional home water solution companies. We also face regional competition from local brands in the various geographies where our products are sold. We compete in various aspects, including brand recognition, value for money, user experience, breadth of product and service offerings, product functionality and quality, sales and distribution, supply chain management, customer loyalty, and talents, among others. Intensified competition may result in pricing pressures and reduced profitability and may impede our ability to achieve sustainable growth in our revenues or cause us to lose market share. Our competitors may also engage in aggressive and negative marketing or public relations strategies which may harm our reputation and increase our marketing expenses. Any of these results could substantially harm our results of operations.

Some of our existing and potential competitors enjoy substantial competitive advantages, including: longer operating history, the capability to leverage their sales efforts and marketing expenditures across a broader portfolio of products, more established relationships with a larger number of suppliers, contract manufacturers and channel partners, access to larger and broader user bases, greater brand recognition, greater financial, research and development, marketing, distribution and other resources, more resources to make investments and acquisitions, larger intellectual property portfolios, and the ability to bundle competitive offerings with other products and services. We cannot assure you that we will compete with them successfully.

***We may not be able to effectively manage our growth and the increased complexity of our business, which could negatively impact our brand and financial performance.***

We strive to expand our product portfolio, strengthen our brand recognition, expand our sales channels, enhance our aftersales services capabilities, better manage our supply chain, upgrade our information systems and technologies, and devote other resources to our business expansions, among others. In addition, we have expanded our business overseas primarily through international franchises and agents. We expect that managing our business will become more complicated as we develop a wider product, service, sales channel and customer mix, sometimes in areas where we may have less experience. In addition, as we expand our product and service offerings, further diversify our sales channels and extend our global footprint, we will need to collaborate with a larger number of partners, maintain and expand mutually beneficial relationships with our existing and new partners, adapt our business management to the local corporate cultures and customs, and provide training, management and motivation for our employee base or network of cooperating partners, especially in case of our overseas business.

We cannot assure you that we will be able to effectively manage our growth, that our current personnel, infrastructure, systems, procedures and controls or any measures to enhance them will be adequate and successful to support our expanding operations or that our strategies and new business initiatives will be executed successfully. If we are not able to manage our growth or execute our strategies effectively, our strategies may not be successful and our business and prospects may be materially and adversely affected. In addition, our business operations and growth may be affected by many factors beyond our control. For example, any failure by our contractual manufacturers or international franchisers to comply with ethical, social, product, labor and environmental laws, regulations or standards, any of their engagement in politically or socially controversial conduct, any of their misconduct in product manufacturing or sales or after-sale services, or any negative publicity about them, may negatively affect the public image of and demands for our products, which could adversely affect our business and results of operations.

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***Our future success depends on our ability to promote our brand and protect our reputation. Our failure to establish and promote our brand and any damage to our reputation will hinder our growth.***

We utilize a number of marketing initiatives to promote our brand. We also actively participate in a variety of online and offline marketing events, such as the "618," "Double Eleven" and "Double Twelve" shopping festivals. Additionally, we advertise across various channels, such as event sponsor, live streaming, KOL promotions and social media. We believe our strategy to enhance our brand recognition is crucial to our future success. We have invested, and will need to continue to dedicate, significant time, efforts and resources to advertising and market promotion initiatives. Our selling and marketing expenses were and RMB211.2 million (US$28.9 million) for the year ended December 31, 2024, representing 10.0% of our net revenues. We may need to devote an even greater portion of our resources to continue to strengthen our brand recognition and build our user base, which may impact our profitability. We cannot guarantee that our marketing efforts will ultimately be successful, as it is affected by numerous factors, including the effectiveness of our marketing campaigns, our ability to provide consistent, high-quality products and services, consumers' satisfaction with our products, as well as supports and services we provide, among others.

In addition, any negative publicity related to our brand, products, contract manufacturers, suppliers, distribution partners, strategic partners, such as Xiaomi, third-party ecosystem partners, or celebrities we are associated with could have an adverse impact on our brand, which may negatively affect our business and results of operations.

***If we fail to successfully develop and commercialize new products, services and technologies that are well received by consumers in a timely manner, our operating results may be materially and adversely affected.***

Our ability to compete successfully and grow our business depends in large part on our ability to continue to introduce new and innovative products, services and technologies that are well received by consumers and in a timely manner, and in turn, grow our household user base.

Our ability to roll out new and innovative products and services depends on a number of factors, including significant investments in research and development, quality control of our products and services and effective management of our supply chain. The execution of such initiatives can be complex and costly. Consequently, we could experience delays in completing the development and introduction of new products, services and technologies in the future. We may need to devote an even greater portion of our resources to the research and development of new or enhanced products, services and technologies, which may adversely affect our profitability. In addition, our research and development efforts may not yield the benefits we expect to achieve in a timely manner, or at all. To the extent we are unable to execute our strategy of continually introducing new and innovative products, diversifying our product portfolio and satisfying consumers' changing preferences, we may not be able to grow our household user base and our competitive position and results of operations may be adversely affected.

***Our expansion into new product categories and scenarios and substantial increases in product lines may expose us to new challenges and more risks.***

We strive to continue to expand and diversify our product offerings to cover additional scenarios in the home environment. Expanding into new product categories and scenarios and substantially increasing our product lines involve new risks and challenges. Our potential lack of familiarity with new products and scenarios and the lack of relevant customer data relating to these products may make it more difficult for us to anticipate user demand and preferences. We may misjudge market demand, resulting in inventory buildup and possible inventory write-downs. We may not be able to effectively control our costs and expenses in rolling out these new product categories and scenarios. We may have certain quality issues and experience higher return rates on new products, receive more customer complaints and face costly product liability claims, such as injury allegedly or actually caused by our products, which would harm our brand and reputation as well as our financial performance.

Furthermore, we may need to price our new products more aggressively to penetrate new markets, and gain market share or remain competitive. It may be difficult for us to achieve profitability in the new product categories and our profit margin, if any, may be lower than we anticipate, which would adversely affect our overall profitability and results of operations.

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***We operate in the emerging and evolving home water solutions market in China, which may develop more slowly or differently than we expect. If the home water solutions market does not grow as we expect, or if we cannot expand our products and services to meet consumer demands, our results of operations may be materially and adversely affected.***

The home water solutions market in China has experienced rapid growth in recent years. However, the growth rate may decrease due to uncertainties with respect to China's economy, disposable income growth, acceptance of home water solutions products, and pace of development of technologies and other factors, including the growth of the broader home appliances market. Furthermore, the home water solutions market is constantly evolving, and it is uncertain whether our products and services will achieve and sustain high levels of demand and market acceptance. Our ability to expand the sales of our home water solutions products to a broader consumer base depends on several factors, including Chinese consumers' receptiveness towards and adoption of smart home water solutions, the market awareness of our brand, the timely introduction and market acceptance of our products and services, the network effects of our offerings, our ability to attract, retain and effectively train sales and marketing personnel, the effectiveness of our marketing programs, our ability to develop effective relationships with distribution partners and expand our network of offline stores, the cost and functionality of our products and services, and the success of our competitors. If we are unsuccessful in developing and marketing our home water solutions products to consumers, the market for our products and services may not continue to develop or may develop more slowly than we expect, which would adversely affect our profitability and growth prospects.

***If our user engagement ceases to grow or declines, our business and operating results may be materially and adversely affected.***

User engagement is important to our business model. Our value-added businesses ecosystem and the virtuous cycle that we anticipate to create depend heavily on the level of user engagement with the products and services provided by us.

Many factors may prevent users from continually engaging and habitually using our products, including:

● technical glitches may occur, which may prevent our products and services from operating in a smooth and reliable manner, and hence adversely affect user experience;

● we may be unable to identify and meet evolving user demands and preferences;

● we may not successfully develop functionalities that could further enhance user engagement and generate recurring revenues, or the new or updated products and services we introduce may not be favorably received by users;

● we may not be able to continue to successfully drive organic growth of users through word-of-mouth referrals, which may cause the growth of our user base to slow down or stall or require us to increase our promotion and advertising spending or devote additional resources to acquire users;

● we may be unable to prevent or combat inappropriate use of our products and services, which may lead to negative public perception of us and damage our brand or reputation;

● our competitors may launch or develop similar or disruptive products and services with better user experience, which may result in a loss of existing users or declines in new user growth;

● we may fail to address user concerns related to privacy and communication, data safety or security, and as a result, users may be deferred from using our products and services in scenarios that we hope to capture; and we may be compelled to modify our products and services to address requirements imposed by legislation, regulations, government policies or requests from government authorities in manners that may compromise user experience or make our products less affordable.

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***Our business is subject to complex and evolving Chinese and international laws and regulations, including those regarding data privacy and cybersecurity, many of which are subject to change and uncertain interpretation. Any changes in these laws could cause changes to our business practices and increased cost of operations, and any security breaches and our actual or perceived failure to comply with such laws could result in claims, penalties, damages to our reputation and brand, declines in user growth or engagement or otherwise harm our business.***

We collect basic user information that is necessary to provide the corresponding services, such as phone number and address. Therefore, to comply with the laws and regulations, including the cybersecurity requirements of CAC and other authorities, and to ensure systematic cybersecurity, data and privacy protection, we periodically update our privacy policies, security policies and technologies, including encryption technology, firewall policies, virtual private cloud and host-based intrusion detection systems. As of the date of this annual report, we have not been involved in any formal investigations on cybersecurity review made by the CAC. Nonetheless, we still face inherent risks in managing and safeguarding personal data, with our website, Viomi mobile app, e-commerce platform and information systems being potential targets for various cyber threats, such as viruses, malware or phishing attacks. Given the development of techniques used to sabotage or obtain unauthorized access to systems and the fact that these techniques generally are not recognized until they are launched against a target, we may not be able to anticipate or implement effective preventative measures against these evolving threats. Furthermore, the growing sophistication and diversity of our products and services, along with the increasing expertise of hackers and advancements in cryptography, may lead to compromises or breaches of our website, app, platforms or information systems.

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 or improper use by our employees; and

● 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, storage, transfer, disclosure and security of personal information, which are subject to change and new interpretations, including any changes in regulatory requirements and interpretation as well as requests from regulatory and government authorities relating to such data.

Regulatory authorities in China have enhanced regulatory requirements related to data security, personal information protection and cybersecurity, many of which are subject to change and uncertain interpretation. These laws continue to develop, and the PRC government may adopt further rules, restrictions and clarifications in the future. See "*Item 4. Information on the Company—B. Business Overview—Regulations—Regulations on Information Security and Privacy Protection*." We expect that compliance with data security, personal information protection and cybersecurity will receive greater attention and focus from regulators, both domestically and globally, as well as continued or greater public scrutiny and attention going forward. This trend would increase our compliance costs, result in our adjustments to business practices, and subject us to heightened risks and compliance challenges associated with these matters. We may be required to adopt stricter measures for protecting and managing the data and information we possess, and we may be required to complete cybersecurity review or take other specific actions. However, we face uncertainties as to whether we can complete these additional procedures in a timely manner, or at all. These uncertainties may subject us to government enforcement actions and investigations, fines, penalties, suspension of our non-compliant operations, or removal of our app from the application stores, which could materially and adversely affect our business and results of operations. In addition, pursuant to our business cooperation agreement with Xiaomi, we may obtain certain user data from Xiaomi in relation to the respective Xiaomi-branded products. Any leak or abuse of user data by Xiaomi may cause our users to lose trust in us and could expose us to legal claims. If our security measures are compromised because of third-party actions, employee errors, malfeasance, any violation of laws and regulations by our business partners pertaining to personal information protection and data security, or any failure in full compliance with the agreements with us, it could result in the theft or misuse of user data. If we are unable to manage these risks, or if we are accused of failing to comply with such laws and regulations timely, or at all, we could become subject to government enforcement actions, investigations, disputes and litigation, negative publicity, penalties, such as fines, suspension of business, websites, or applications, and revocation of required licenses, or even criminal liabilities, and our reputation and results of operations could be materially and adversely affected.

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Further, as we spread our footprints in overseas markets, we may also be subject to laws and regulations of other countries regarding cybersecurity, information security, privacy and data protection. For example, there are a number of legislative proposals in the European Union, the United States and other jurisdictions that could impose new obligations affecting our business. Additionally, a growing number of legislative and regulatory bodies have implemented consumer notification requirements in the event of unauthorized data access. These breach notification laws are evolving and may vary across jurisdictions, posing potential challenges, especially with our international expansion plans.

We are susceptible to supply shortages and interruptions, long lead times, and price fluctuations for raw materials and components, any of which could disrupt our supply chain and have a material adverse impact on our results of operations.

Our product portfolio includes various product categories and product lines. Mass production of our products requires timely and adequate supply of various types of raw materials and components. A substantial majority of the components and raw materials used to produce our products are sourced from third-party suppliers, and some of these components and raw materials are sourced from a limited number of suppliers or a single supplier. Therefore, we are subject to risks of shortages or discontinuation in supply, long lead times, cost increases and quality control issues with our suppliers. In addition, some of our suppliers may have more established relationships with our competitors, and as a result of these relationships, such suppliers may choose to limit or terminate their relationships with us or prioritize our competitors' orders in the case of supply shortages.

In the event of a component or raw material shortage or supply interruption from suppliers, we will need to identify alternative sources of supply, which can be time-consuming, difficult to locate, and costly. We may not be able to source these components or raw materials on terms that are acceptable to us, or at all, which may undermine our ability to meet our production requirements or to fill customer orders in a timely manner. This could cause delays in shipment of our products, harm our relationships with our customers, network partners and other business partners, and adversely affect our results of operations.

Moreover, the market prices for certain raw materials have been volatile. For example, we may experience significant increases in the market prices for certain important raw materials. If we experience price hike for raw materials, we may not be able to recover these costs through product price increase without comprising customer experience, which would have a negative effect on our financial results.

***We rely on certain contract manufacturers to produce some of our products. If we encounter issues with them, our business and results of operations could be affected.***

We rely on certain contract manufacturers to produce some of our products. We may experience operational difficulties with our contract manufacturers, including reductions in the availability of production capacity, failure to comply with product specifications, insufficient quality control, failure to meet production deadlines, increases in manufacturing costs and longer lead time. Our contract manufacturers may experience disruptions in their manufacturing operations due to equipment breakdowns, labor strikes or shortages, natural disasters, component or material shortages, cost increases, violation of environmental, health or safety laws and regulations, health epidemics, or other problems. In addition, we may not be able to renew contracts with our contract manufacturers for our existing products or identify contract manufacturers who are capable of producing new products we target to launch in the future.

Any failure of such partners to perform with regards to quantity, quality or timely supply of products may have a material negative impact on our business and results of operations. In addition, if such failure affects our supplies to Xiaomi or other major customers, our relationship with Xiaomi or other such customers may be adversely affected.

Furthermore, although our agreements with our contract manufacturers contain provisions imposing confidentiality obligations on them, and we have adopted security protocols to ensure knowhow and technologies for manufacturing our products could not be easily leaked or plagiarized, we cannot guarantee the effectiveness of these efforts and, any leakage or plagiary of our knowhow and technologies could be detrimental to our business prospects and results of operations.

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***Our business may be adversely impacted by product defects or other quality issues.***

Product defects or other quality issues can occur throughout the product development, design and manufacturing processes or as a result of our reliance on third parties for components, raw materials, and manufacturing. Any product defects or any other failure of our products or substandard product quality could harm our reputation and result in adverse publicity, lost revenues, delivery delays, product recalls, relationships with our network partners and other business partners, product liability claims, administrative penalties, harm to our brand and reputation, and significant warranty and other expenses, and could have a material adverse impact on our business, financial condition, operating results and prospects. While we maintain a reserve for product warranty costs based on certain estimates and our knowledge of current events and actions, our actual warranty costs may exceed our reserve, resulting in current period expenses and a need to increase our reserve for warranty costs.

Moreover, since our products combine hardware and software, any glitches in the software may intervene and disrupt our efforts to integrate our products in consumers' lifestyles. We rely on the connectivity and network effects of our products and services to attract consumers to expand their collection of our products, which we believe will reinforce a positive smart home experience. Any failure or defects that a consumer experiences in one product, however, may prevent this connectivity or network effect from being realized. As a result, we may be prevented from providing solutions to our customers and our business prospectus, results of operations and financial condition could be adversely affected.

***We rely on a limited number of third-party e-commerce platforms to sell our products online. If our cooperation with such platforms terminates, deteriorates or becomes more costly, our business and results of operations may be materially and adversely affected.***

Currently, we rely on third-party e-commerce platforms such as JD.com, Pinduoduo, Tmall, and Youpin, among others, for online sales and order fulfillment of our products and derive a material portion of our online sales revenue therefrom. If our cooperation with such third-party e-commerce platforms terminates, deteriorates or becomes more costly, or we fail to incentivize such platforms to drive traffic to our online stores or promote the sale of our products, our business and results of operations may be materially and adversely affected. We cannot guarantee that we will be able to find alternative channels on terms and conditions commercially acceptable to us in a timely manner, or at all, especially given their leading position and significant influence in China's e-commerce industry. In addition, any internal operation or corporate restructuring and adjustments, negative publicities and operating conditions about such third-party e-commerce platforms, any public perception or claims that non-authentic, counterfeit or defective goods are sold on such platforms, be it with merit or proven or not, most of which are beyond our control, may deter visits to the platforms and result in less user traffics to our flagship stores, which may negatively impact our business and results of operations.

***We face risks associated with our network partners and their personnel for our network of Viomi offline stores.***

We rely on third-party network partners to operate our network of Viomi offline stores. We rely on these network partners to directly interact with and serve end customers, but the interest of a network partner may not be entirely aligned with ours. We set standards of practice of our network partners and provide incentives and periodic evaluation. However, our control over the network partners may not be as effective as if we directly owned and operated these offline stores.

Our network partners carry out a significant amount of direct interactions with end users of our products, and their performance directly affects our brand image. However, we do not directly supervise their interactions or services provided. Although we have established and distributed service standards across our network and provide extensive ongoing training to our third-party network partners, we may not be able to successfully monitor, maintain and improve the services they provide. We may experience service disruptions, customer complaints and reduced sales, and our reputation may be materially and adversely affected if end users of our products are unsatisfied with our network partners' performance.

Our offline stores may not be successful due to factors beyond our control, such as underperformance of the stores or adverse market conditions. Our network partners may also not have the necessary experience or resources to successfully operate the stores over time. We may also have disputes with our network partners. Suspension or termination of a network partner's services in a particular area may cause interruption to or failure in our services in the corresponding area. We may not be able to promptly replace our network partners or find alternative ways to provide services in a timely, reliable and cost-effective manner, or at all. Any service disruptions associated with our network partners could result in our customer satisfaction, reputation, operations and financial performance being materially and adversely affected.

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***If we are unable to adapt to technological changes and implement technological enhancements to our products and services, our ability to remain competitive could be adversely affected.***

The home water solutions market, together with the broader consumer products and home appliances market, is known for its fast-paced technological advancements, frequent launches of new products and changing industry standards, including the rollout of AI and 5G technologies and related ecosystems. We have implemented an "**AI for Better Water**" mission and further strengthened AI application and technology innovation, and have launched a number of innovative and exciting products to strengthen our extensive product portfolio, such as the Kunlun AI water purifiers. Although we are acting proactively to keep pace with the trends of AI and 5G as well as other technological developments in the industry, product development often requires significant lead-time and upfront investment. Our ability to attract new consumers and increase revenues from existing consumers will depend significantly on our ability to accurately anticipate changes in industry standards and to continue to appropriately fund development efforts to enhance our existing products and services or introduce new products and services in a timely manner to keep pace with technological developments. For example, voice-control and intelligent display are important features of our products, and the technologies supporting them have been rapidly developing. If any of our competitors implement new technologies before us, those competitors may be able to provide products that are more effective or with more user-friendly features than ours, possibly at lower prices, which could adversely impact our sales and impact our market share. In addition, any delay or failure in our introduction of new or enhanced products and services could harm our business, results of operations and financial condition.

***We cannot guarantee that we will be able to successfully manage product manufacturing in-house or implement our strategic value chain investments effectively.***

We have established Guangdong Lizi Technology Co., Ltd., or Guangdong Lizi, as a "Water Purifier Gigafactory" focusing on the research, design, production and supply of smart water purifiers, water purifier filters. In addition, we have acquired land use right to a parcel of land of approximately 36,000 square meters in Shunde, Guangdong Province, for the development of Viomi Technology Park, a comprehensive high-tech industrial campus. The construction was completed in the second half of 2023 and Guangdong Lizi, the Water Purifier Gigafactory, has moved into the campus. Currently, the campus includes our multi-functional headquarters, including an exhibition center, research and development center, smart manufacturing center mainly the Water Purifier Gigafactory, and centralized hub for sales and customer service functions. Going forward, the Water Purifier Gigafactory is prioritize the upgrading of water purification industrial chain capabilities. Accordingly, we face risks inherent to maintaining product development and manufacturing facilities or associated with expansion of production capacity and such other risks common in the product development and manufacturing industry. If we are unable to effectively manage the risks we face and produce high-quality products cost-efficiently to meet the market demand and implement effective cost and expense control, our business, financial condition and results of operations may be materially and negatively affected and we may not be able to recoup the investments we have made.

Our personnel expenses and other costs may increase as a result of the additional manpower retained for our manufacturing lines and the additional cost in terms of quality control. In addition, we may fail to attract and retain sufficient skilled manufacturing and mechanic workers. Furthermore, our facilities may experience disruptions due to equipment breakdowns, labor strikes or shortages, natural disasters, health epidemics, component or material shortages, cost increases or other similar issues.

We may from time to time enter into contracts with some customers that provide certain favorable terms to such customers to expand our sales channels and increase our market penetration, which may, in certain situations, adversely affect our results of operations or profitability. For example, our contracts with leading e-commerce platforms provides, among others, return or discount clearance of certain slow-moving products and potential payment of various consideration to these platforms including payment for gross margin guarantee on certain products, monthly compensation for promotion and marketing activities, and advertising fees. For more details, please see "*Item 5. Operating and Financial Review and Prospects—E. Critical Accounting Estimates—Critical Accounting Policies, Judgments and Estimates—Sales returns and sales incentives*."

Meanwhile, in-house manufacturing subjects us to various PRC environmental laws and regulations that are evolving and subject to further implementation and interpretation, potentially leading to higher compliance costs for us. We are also required to maintain all environmental permits, filings and registrations related to our business, including pollution discharge certificate, fire protection certificate, and the environmental protection examination and approval, which are subject to periodic renewal. Although we have obtained and completed all such permits, approval and registrations for our facilities as of the date of this annual report, we cannot assure you that we will be able to obtain their respective renewal in a timely manner, or at all. If we fail to comply in full respect with environmental laws and regulations, we may face fines, orders to suspend our manufacturing and civil or criminal litigations.

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***We are exposed to potential liabilities arising from the products we sell, and costs related to defective products could have a material adverse impact on us.***

Disputes over warranties of our products can arise in the ordinary course of our business. In extreme situations, we may be exposed to various liabilities relating to potential personal injuries as a result of misuse or quality defects of the products we sell. We may experience material product liability losses, and we may be unable to defend these claims at a contained level of cost or at all. Although we have product liability insurance, we cannot assure you that our insurance coverage will be sufficient or that we will be able to obtain sufficient coverage at an acceptable cost in the future. A successful claim brought against us in excess of our available insurance coverage may have a material adverse effect on our business, results of operations and financial condition. Although we historically had insignificant volumes of product replacements or product returns, the cost of product replacements or product returns in the future may be substantial, particularly given our increasing product categories and models, and we could incur substantial costs to implement modifications to fix defects in our products.

***Our consumers may experience service failures or interruptions due to defects in the software, infrastructure, components or processes that compromise our products and services, or due to errors in product installation, any of which could harm our business.***

Our products and services may contain undetected defects in the software, infrastructure, components or processes. Sophisticated software and applications, such as those offered by us, often contain "bugs" that can unexpectedly interfere with the software and applications' intended operations. Our internet services may from time to time experience outages, service slowdowns or errors. Defects may also occur in components or processes used in our products or for our services. There can be no assurance that we will be able to detect and fix all defects in the hardware, software and services we offer. Failure to do so could result in decreases in sales of our products and services, lost revenues, significant warranty and other expenses, decreases in customer confidence and loyalty, lost market share to our competitors, and harm to our reputation.

***Our delivery, return and exchange policies may adversely affect our results of operations.***

We have adopted shipping policies that do not necessarily pass the full cost of shipping onto our customers. We also have adopted customer-friendly return and exchange policies that make it convenient and easy for customers to change their minds within seven days after completing direct online purchases from us. We may also be required by law to adopt new or amend existing return and exchange policies from time to time. These policies improve users' shopping experience and promote customer loyalty, which in turn help us acquire and retain users. However, these policies also subject us to additional costs and expenses which we may not recoup through increased revenues. If our delivery, return and exchange policies are misused by a significant number of customers, our costs may increase significantly and our results of operations may be materially and adversely affected. If we revise these policies to reduce our costs and expenses, our users may be dissatisfied, which may result in loss of existing users or failure to acquire new users at a desirable pace, which may materially and adversely affect our results of operations.

***Our operating results could be materially harmed if we are unable to accurately forecast consumer demand for our products or manage our inventory.***

To ensure adequate supply for our products, we must forecast consumer demand for our products, including Xiaomi's demand. Our ability to accurately forecast demand for our products could be affected by many factors, including changes in consumer perception of our products or our competitors', sales promotions by us or our competitors, our sales channel inventory levels, and unanticipated changes in general market and economic conditions, among others.

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We manage our inventory by constantly monitoring and tracking our current inventory levels, while keeping a portion of reserve stock, based on our forecast customer demand. If we fail to accurately forecast customer demand, we may experience excess inventory levels or a shortage of products available for sale. For example, our inventory level could increase on a seasonal basis as we prepare for large online sales promotion events, and it would be difficult for us to forecast the sales that we may achieve in those events. Inventory levels in excess of customer demand may result in inventory write-downs or write-offs and the sale of excess inventory at discounted prices, which may cause our gross margin to suffer and could impair the strength of our brand. On the other hand, in the case we experience shortage of products, we may be unable to meet the demand for our products, and our business and operating results could be adversely affected. We have experienced inventory shortage of popular products in the past. Such arrangement may lead to loss of consumer confidence and further uncertainty with respect to our inventory level.

As market competition for products similar to ours intensifies, we expect that it will become more difficult to forecast demand. In addition, as we continue to introduce new product and services and expand our products portfolio, we may face increasing challenges managing the production plan and appropriate inventory levels for our product portfolio.

***Our efforts to manage, expand and diversify our customer base and sales channels may not be successful.***

Our key sales channels consist of a network of online e-commerce platforms, Viomi offline stores, third-party offline channels and overseas distribution channels, through which we predominantly sell Viomi-branded products, as well as Xiaomi, to which we predominantly sell Xiaomi-branded products. Historically, Xiaomi has been our largest and most important customer. A significant portion of our revenue derive from sales to Xiaomi. Specifically, sales to Xiaomi accounted for 74.7%, 78.9% and 82.7% of our net revenues in 2022, 2023 and 2024, respectively.

Although we have devoted significant resources to maintaining, expanding and diversifying our customer base and sales channels, we cannot assure you that such efforts would succeed. Our current agreements with Xiaomi and third-party sales channels generally do not prohibit them from working with our competitors or from selling competing products. Our competitors may be more effective in providing incentives to our third-party online sales to favor our competitors' products and promote their sales. Pursuing, establishing and maintaining relationships with our online sales partners requires significant time and resources. We cannot assure you that we will be able to renew those agreements upon their expiry on commercially acceptable terms, or at all. Any such occurrences may negatively impact our business, results of operations and growth prospect.

In addition, we have been optimizing offline stores and cooperating with more and additional new network partners. With the increased scale of operations, we will be required to invest additional resources in managing our network partners, and hence we may not be able to expand as fast or as successfully as we expect. In addition, our sales network management systems may not be effective.

***We rely on third-party service providers for logistics and aftersales services. If these service providers fail to provide reliable services, our business and reputation may be adversely affected.***

We rely on third-party couriers and logistics providers for order fulfillment and delivery services, including shipping products to Xiaomi, our other customers as well as end-consumers. We also outsource a majority of our installation and after-sale services for our products to third-party service providers.

While these arrangements allow us to focus on our main business, they reduce our direct control over the logistics and aftersales services provided to our customers. Logistics in our primary locations or transit to final destinations may be disrupted for a variety of reasons, including events that are beyond our control or the control of these service providers, such as inclement weather, natural and man-made disasters, health epidemics, information technology system failures, transportation disruptions, labor unrest, commercial disputes, military actions or economic, business, labor, environmental, public health, or political issues. If any of our service providers' operations or services are disrupted or terminated, we may not be able to find alternative service providers with quality and on commercial terms to our satisfaction in a timely and reliable manner, or at all. Additionally, if our products are not delivered in proper condition or in a timely manner or if errors occur in product installation or product maintenance processes, our products and services may be compromised, customer experience may be impacted adversely and, as a result, our business and reputation could suffer. Further, if our logistics and after-sale service providers raise their fee rate, we may incur additional costs and may not be able to pass such costs to our customers.

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***An economic downturn may adversely affect consumer discretionary spending and demand for our products and services.***

Our products and services may be considered discretionary items for consumers. Factors affecting the level of consumer spending for such discretionary items include general economic conditions and other factors, such as consumer confidence in future economic conditions, consumer sentiment, the availability and cost of consumer credit, levels of unemployment, and tax rates. Unfavorable economic conditions may lead consumers to delay or reduce purchases of our products and services and consumer demand for our products and services may not grow as we expect. Our sensitivity to economic cycles and any related fluctuation in consumer demand for our products and services may have an adverse effect on our operating results and financial condition.

***Any significant cybersecurity incident or disruption of our information technology systems or those of third-party partners could materially damage our user relationships and subject us to significant reputational, financial, legal and operational consequences.***

We depend on our information technology systems, as well as those of third parties, to develop new products and services, operate our platform, host and manage our services, store data, process transactions, respond to user inquiries, and manage inventory and our supply chain. Any material disruption or slowdown of our systems or those of third parties whom we depend upon, including a disruption or slowdown caused by our failure to successfully manage significant increases in user volume, could cause outages or delays in our services, which could harm our brand and adversely affect our operating results.

We rely on cloud servers maintained by Huawei, Tencent Cloud, Alibaba, Xiaomi, Amazon and Volcengine to store our data. Problems with our cloud service providers or the telecommunications network providers with whom they contract could adversely affect the experience of our users. Our cloud service providers could decide to cease providing us with services without adequate prior notice. Any change in service levels at our cloud servers or any errors, defects, disruptions, or other performance problems with our platform could harm our brand and may damage the data of our users. If changes in technology cause our information systems, or those of third parties whom we depend upon, to become obsolete, or if our or their information systems are inadequate to handle our growth, we could lose users and our business and operating results could be adversely affected.

***Due to the ever-changing cyber threat landscape, our products may be subject to potential vulnerabilities, and our services may be subject to certain risks, including hacking or other unauthorized access to control or view systems and obtain private information.***

Companies that collect and retain sensitive and confidential information are under increasing attack by cyber-criminals around the world. While we implement security measures within our products, services, operations and systems, those measures may not prevent cybersecurity breaches, the access, capture or alteration of information by criminals, the exposure or exploitation of potential security vulnerabilities, distributed denial of service attacks, the installation of malware or ransomware, acts of vandalism, computer viruses, misplaced data or data loss that could disrupt the function of our products or services, and be detrimental to our reputation, business, financial condition, and results of operations.

Third parties, including distribution network partners, ecosystem partners and our other business partners, could also be a source of security risk to us in the event of a failure of their own products, components, networks, security systems, and infrastructure. In addition, we cannot be certain that advances in criminal capabilities, new discoveries in the field of cryptography, or other developments will not compromise or breach the technology protecting the networks that access our products and services. A significant actual or perceived (whether or not valid) theft, loss, fraudulent use or misuse of customer, employee, or other data, whether by us, our business partners, or other third parties, or as a result of employee error or negligence or otherwise, non-compliance with applicable industry standards or our contractual or other legal obligations regarding such data, or a violation of our privacy and information security policies with respect to such data, could result in costs, fines, litigation, or regulatory actions against us. Such an event could additionally result in unfavorable publicity and therefore materially and adversely affect the market's perception of the security and reliability of our services and our credibility and reputation with our customers, which may lead to customer dissatisfaction and could result in lost sales and increased customer revenues attrition.

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***Our intellectual property and proprietary rights may not adequately protect our products, and our business may suffer if third parties infringe our intellectual property and proprietary rights.***

We may not have sufficient intellectual property rights in all countries and regions where unauthorized third-party copying or use of our proprietary technology may occur and the scope of our intellectual property might be more limited in certain countries and regions. Our existing and future patents may not be sufficient to protect our products, services, technologies or designs and/or may not prevent others from developing competing products, services, technologies or designs. We cannot predict the validity and enforceability of our patents and other intellectual property with certainty. Litigation may be necessary to enforce our intellectual property rights. Initiating infringement proceedings against third parties can be expensive and time-consuming, and divert management's attention from other business concerns. We may not prevail in litigation to enforce our intellectual property against unauthorized use.

According to our business cooperation agreement with Xiaomi, Xiaomi and we have joint ownership over most of the technology properties (other than industrial designs) and related intellectual properties generated from the process of design, development, manufacturing and sales of Xiaomi customized products and certain of our Viomi-branded products we supply to Xiaomi. Xiaomi may use these intellectual properties and user data to develop and manufacture competing products on its own and although the business cooperation agreement forbids the parties to license any third party to use the jointly owned intellectual properties without prior consent of the other party, we cannot ensure the compliance of Xiaomi with such agreement.

Under a license agreement effective from June 24, 2018, we have obtained an exclusive and royalty-free right to use 11 patents owned by our founder and chief executive officer Mr. Xiaoping Chen. If, for any reason, we are no longer able to use such patents or are charged significant fees for the use, our business and results of operations could be adversely affected.

***We may encounter claims alleging our infringement of third-party intellectual properties from time to time.***

Our commercial success depends in part on our ability to operate without infringing, misappropriating or otherwise violating the trademarks, patents, copyrights, trade secrets and other proprietary rights of others. We have adopted and implemented internal procedures and licensing practices to prevent unauthorized use of such intellectual properties or the infringement by us of other rights of third parties. However, we cannot be certain that these measures can be effective in completely preventing all possible infringement, misappropriation and other violations of third-party's intellectual property rights or other rights during the course of our business. As we face increasing competition and as litigation becomes a more common way to resolve disputes in China, we face a higher risk of being the subject of intellectual property infringement claims.

We cannot rule out the possibility that our operations or our business may infringe upon or otherwise violate patents, copyrights or other intellectual property rights held by third parties. In particular, we may enter into license agreements with third party proprietary right holders for our use of their intellectual properties in our operations. However, we cannot rule out the possibility that some uses of such licensed rights might exceed the authorized scope or permitted license time period specified in such license agreements. There could also be existing intellectual property of which we are not aware that our operations and business may inadvertently infringe upon. We license and use software and other technologies from third parties in our ordinary course of business. These third-party software or technology licenses may not continue to be available to us on acceptable terms or at all, and may expose us to potential infringement liability. Any such liability, or our inability to use any of these third-party software or technologies on acceptable terms or at all, could harm our reputation, result in increased operating costs, and/or disruptions to our business that may materially and adversely affect our operating and financial results.

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We may from time to time in the future be subject to legal proceedings and claims relating to the intellectual property rights of others. Also, although we have not been subject to claims or lawsuits outside China, we cannot assure you that we will not become subject to intellectual property laws in other jurisdictions, such as the United States. If a claim of infringement brought against us in China, the United States or another jurisdiction is successful, we may be required to pay substantial penalties or other damages and fines, enter into license agreements which may not be available on commercially reasonable terms or at all or be subject to injunctions or court orders. Even if allegations or claims lack merit, defending against them could be both costly and time consuming and could significantly divert the efforts and resources of our management and other personnel. Competitors and other third parties may claim as well that our officers or employees or our contractual manufacturers have infringed, misappropriated or otherwise violated their patent, confidential information, trade secrets or technology in the course of their employment with us or in their course of manufacturing products for us, as the case may be. Although we take steps to prevent the unauthorized use or disclosure of such third-party information, intellectual property or technology by our officers, employees or contract manufacturers, we cannot guarantee that our internal intellectual property policy, any other policies or contractual provisions that we have implemented or may implement will be effective. If a claim of infringement was upheld by courts, we may suffer reputational harm and may be required to pay substantial damages, subject to injunction or court orders or be required to suspend sales of our products or to remit to the plaintiff the revenues we derive from the sales, any of which could adversely affect our business, financial condition and results of operations.

We rely on technology that we license from third parties, including AI, that is integrated with our internally developed algorithms, software, or products.

We rely on technology that we license from third parties. For example, for our voice recognition technologies, we have incorporated speech synthesis engine and Q&A components provided by AISpeech and iFLYTEK. We cannot be certain that our licensors are not infringing the intellectual property rights of third parties or that our licensors have sufficient rights to the licensed intellectual property in all jurisdictions in which we may sell our products, neither can we guarantee that these licensors were, are or will be in full compliance with laws and regulations in relevant jurisdictions. All of these occurrences are beyond our control, and could result in our inability to continue to use the technologies and our incurrences of potential liabilities for our cooperation with such licensors. We believe that certain of our technology service suppliers are included in the Entity List under the Export Administration Regulations (EAR) administered by The Bureau of Industry and Security (BIS) of the U.S. Department of Commerce. As a result, exports or reexports from the U.S. and in-country transfers in the U.S. to such suppliers will face additional license requirements, and the availability of most license exceptions is limited. Currently, the inclusion of such suppliers into the Entity List has not had a material adverse effect on our use of their services or resulted in liabilities to us. However, we cannot rule out the possibility that additional restrictions of different nature could be imposed on such suppliers or other licensors or business partners of ours, especially in light of the changes in international trade policies and heightened political tensions between the U.S. and China. See also "*—Risks Related to Doing Business in China—Changes in international trade policies and rising political tensions, particularly between the U.S. and China, may adversely impact our business and operating results*." In addition, we cannot assure you that our cooperation with such suppliers would not negatively impact our branding and marketing activities in the U.S. or other countries or regions. If we are unable to continue to license those technologies on commercially reasonable terms, we will face delays in releases of new products or functions or we will be required to delete this functionality from our products until equivalent, non-infringing technology can be licensed or developed and integrated into our current products. This effort could take significant time (during which we would be unable to continue to offer our affected products or services) and expenses and may ultimately not be successful. If we are unable to timely locate substitute technologies on commercially reasonable terms or at all in the event that our ability to continue to license technologies from any existing licensor is hindered, or if our branding or sales activities in the U.S. or other countries or regions or access to capital are negatively impacted or we are imposed with any restrictions or liabilities due to our suppliers' being included in any of the entity list maintained by the U.S. or governmental actions taken by any other jurisdiction in which our products are sold, our business, results of operation, financial conditions and prospect may be negatively impacted.

***Our use of open source software could negatively affect our ability to sell our products and subject us to possible litigation.***

A portion of the technologies we use incorporates open source software, and we may incorporate open source software in the future. Such open source software is generally licensed by its authors or other third parties under open source licenses. These licenses may subject us to certain unfavorable conditions, including requirements that we offer our products and services that incorporate the open source software for no cost, that we make publicly available source code for modifications or derivative works we create based upon, incorporating, or using the open source software, or that we license such modifications or derivative works under the terms of the particular open source license.

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Additionally, if a third-party software provider has incorporated open source software into software that we license from such provider, we could be required to disclose or provide at no cost any of our source code that incorporates or is a modification of such licensed software. If an author or any third party that distributes open source software that we use or license were to allege that we had not complied with the conditions of the applicable license, we may need to incur significant legal expenses defending against such allegations and could be subject to significant damages and enjoined from the sale of our products and services that contained the open source software. Any of the foregoing could disrupt the distribution and sale of our products and services and harm our business.

***We may need additional capital, and financing may not be available on terms acceptable to us, or at all.***

We believe that our current cash and cash equivalents and anticipated cash flow from operations will be sufficient to meet our anticipated cash needs for the next 12 months. We may, however, require additional cash resources due to changed business conditions or other future developments, including any changes in our pricing policy, marketing initiatives or investments we may decide to pursue. If these resources are insufficient to satisfy our cash requirements, we may seek to obtain a credit facility or sell additional equity or debt securities. The sale of additional equity securities could result in 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.

***We may engage in acquisition and investment activities, which could require significant management attention, disrupt our business, dilute shareholder value, and adversely affect our operating results.***

As part of our business strategy, we may acquire or make investments in other companies, products, or technologies along our product value chain to complement our business, enhance the features and functionality of our products, and accelerate the expansion of our platform and network of strategic partners. We may not be able to find suitable acquisition or investment candidates and we may not be able to complete acquisition and investment on favorable terms, if at all. If we do complete acquisition and investment in the future, we may not ultimately strengthen our competitive position or achieve our goals; and any acquisition and investment we complete could be viewed negatively by users or investors. In addition, if we fail to successfully integrate such acquisitions, or the technologies associated with such acquisitions, into our company, the revenues and operating results of the combined company could be adversely affected. Acquisitions and investments are inherently risky and may not be successful, and they may disrupt our ongoing operations, divert management from their primary responsibilities, subject us to greater-than-expected liabilities and our expenses, and adversely impact our business, financial condition, operating results, and cash flows.

***Our results of operations may be subject to seasonality.***

Our operating results may vary significantly from period to period due to many factors, including seasonal factors that may have an effect on the demand for our products. We generally expect to experience higher sales in the second and fourth quarters, primarily attributable to the major shopping festivals such as "618," "Double Eleven" and "Double Twelve," which are popular among Chinese consumers. Given the impact of this seasonality, our interim results of operation and financial position at the end of a particular period may not necessarily be representative of the results we expect at year end or in other period of a year. Our operating results could also suffer if we do not achieve revenues consistent with our expectations for this seasonal demand because many of our expenses are based on anticipated levels of annual revenues.

***If labor costs in China increase substantially, our business and costs of operations may be adversely affected.***

The Chinese economy had experienced labor cost increases in the wave of inflation in previous years. According to the National Bureau of Statistics of China, the year-over-year percent changes in the consumer price index for December 2022, 2023 and 2024 were an increase of 1.8%, a decrease of 0.3% and an increase of 0.1%, respectively. Given that majority of our contract manufacturers are currently located in China, rising labor costs in China will increase our personnel expenses. If we are unable to control our labor costs or pass on these increased labor costs, our financial condition and results of operations may be adversely affected. There can be no assurance that we will not be negatively affected in the future by the reoccurrence of inflation in China. As we procure most of our raw materials from China, the potential reoccurrence of inflation may adversely affects our costs of raw materials. We may not be able to pass on rising costs as a result of higher labor costs and increasing raw material prices to end consumers in the form of higher retail sale prices.

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***Certain of our directors may have conflicts of interest.***

One of our directors, Mr. De Liu, is also a director of Xiaomi. This association may give rise to potential conflicts of interest, especially with regard to our business cooperation with Xiaomi. Directors of our company are required by law to act honestly and in good faith with a view to the best of our interests and to disclose any interest that they may have in any of our projects or opportunities. In addition, we have adopted a code of ethics and an audit committee charter. Our code of ethics provides that an interested director needs to refrain from participating in any discussion among senior officers of our company relating to an interested business and may not be involved in any proposed transaction with such interested business. Furthermore, our audit committee charter provides that most related party transactions must be pre-approved by the audit committee, a majority of which consist of independent directors. Our audit committee charter, however, exempts the pre-approval requirement for related party transactions that are immaterial to us or not unusual by nature. In the event of such transactions with Xiaomi, Mr. Liu will still be entitled to vote in our board meeting, and we cannot assure you that Mr. Liu's decision will not be impacted by any potential conflict of interest arising from his relationship with Xiaomi. Additionally, after the completion of the 2024 reorganization transaction, Mr. Xiaoping Chen, our founder, chairman of our board of directors, and chief executive officer, also controls and operates the divested IoT@Home business. Although the divested IoT&Home business does not compete with us directly, operating such business may divert a significant amount of Mr. Xiaoping Chen's attention, which could have an advere impact on our results of operations.

***In connection with the audit of our consolidated financial statements included in this annual report, we identified material weaknesses in our internal control over financial reporting. If we fail to develop and maintain an effective system of internal control over financial reporting, we may be unable to accurately report our financial results or prevent fraud.***

In connection with the audit of our consolidated financial statements included in this annual report, we identified the following material weaknesses in our internal control over financial reporting as well as other control deficiencies. As defined in the standards established by the U.S. Public Company Accounting Oversight Board, or the PCAOB, a "material weakness" is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

The material weaknesses identified related to (i) our lack of sufficient resources regarding financial reporting and accounting personnel with understanding of U.S. GAAP, in particular, to address complex U.S. GAAP technical accounting issues, related disclosures in accordance with U.S. GAAP and financial reporting requirements set forth by the SEC, and (ii) the lack of comprehensive U.S. GAAP accounting policies and financial reporting procedures.

We have taken measures and plan to continue to take measures to remediate the material weaknesses. See "*Item 15. Controls and Procedures—Changes in Internal Control*." However, the implementation of these measures may not fully address the material weaknesses in our internal control over financial reporting, and we cannot conclude that they have been fully remediated. Our failure to correct the material weaknesses or our failure to discover and address any other control deficiencies could result in inaccuracies in our consolidated financial statements and impair our ability to comply with applicable financial reporting requirements and related regulatory filings on a timely basis. Moreover, ineffective internal control over financial reporting could significantly hinder our ability to prevent fraud.

We are subject to the Sarbanes-Oxley Act of 2002. Section 404 of the Sarbanes-Oxley Act requires that we include a report from management on the effectiveness of our internal control over financial reporting in our annual report on Form 20-F beginning with our annual report for the fiscal year ended December 31, 2019. Based on its evaluation, our management concludes that our internal control over financial reporting as of December 31, 2024 was not effective. See "*Item 15. Controls and Procedures—Management's Report on Internal Control over Financial Reporting*." For future fiscal years, our management may conclude that our internal control over financial reporting was not effective either. 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 requirements differently from us. We may be unable to timely complete our evaluation testing and any required remediation.

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

***We have granted, and may continue to grant, options and other types of awards under our share incentive plans, which may result in increased share-based compensation expense and have dilutive impact to you.***

Our shareholders and board of directors have adopted two share incentive plans. Pursuant to these two plans, a total of 44,894,295 ordinary shares underlying all awards may be issued. As of December 31, 2024, there were 24,440,836 ordinary shares issuable upon exercise of outstanding share options under these two plans at a weighted average price of US$0.51 per share. Competition for highly skilled personnel is often intense, and we may incur significant costs or be not successful in attracting, integrating, or retaining qualified personnel to fulfil our current or future needs. 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 compensation to employees in the future. As a result, our expenses associated with share-based compensation may increase, which may have an adverse effect on our results of operations. In addition, the granting, vesting and exercise of the awards under these share incentive plans will have dilutive effect on your shareholding in our company.

***Our future success depends, in part, on our ability to continue to attract, motivate and retain highly skilled personnel. In particular, the growth of our business and ecosystem may require us to hire experienced personnel with a wide range of skills.***

We have, from time to time, experienced, and we expect to continue to experience, difficulty in hiring and retaining highly skilled employees with appropriate qualifications. The loss of any key personnel, especially our founder, chairman, and chief executive officer Mr. Xiaoping Chen, could be disruptive to our operations and research and development activities, reduce our employee retention and revenues, and impair our ability to compete. In addition, if any of our senior management or key personnel joins a competitor or forms a competing company, we may lose know-how, trade secrets, business partners and key personnel. Furthermore, perspective candidates and existing employees often consider the value of the equity awards they receive in connection with their employment. Thus, our ability to attract or retain highly skilled employees may be adversely affected by declines in the perceived value of our equity or equity awards. Furthermore, there is no assurance that the number of shares reserved for issuance under our share incentive plans will be sufficient to grant equity awards adequate to recruit new employees and to compensate existing employees.

***We have limited insurance coverage, which could expose us to significant costs and business disruption.***

Although we maintain property insurance, product liability insurance and public liability insurance, we cannot assure you that our insurance coverage is sufficient. In addition, we do not have business disruption insurance or insurance policies covering damages to our IT infrastructure or information technology systems. Any disruptions to our IT infrastructures or systems or other business disruption event could result in substantial cost to us and diversion of our resources.

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***A severe or prolonged downturn in the Chinese or global economy could materially and adversely affect our business and results of operations.***

Our business could be adversely affected by health epidemics,natural disasters or other acts of god. Fire, floods, typhoons, earthquakes, power loss, telecommunications failures, break-ins, war, military conflicts, riots, terrorist attacks or similar events that negatively impact the Chinese economy could also severely and adversely affect our business and operating performance. COVID-19 had a severe and negative impact on the Chinese and the global economy from 2020 through 2022, and the global macroeconomic environment still faces numerous challenges. In light of ongoing inflationary pressure in many countries, the Federal Reserve and other central banks outside of China have raised interest rates, and a series of banks underwent failures in 2023. The Russia-Ukraine conflict, the Hamas-Israel conflict and the attacks on shipping in the Red Sea have heightened geopolitical tensions across the world. The impact of the Russia-Ukraine conflict on Ukraine food exports has contributed to increases in food prices and thus to inflation more generally. There have also been concerns about the relationship between China and other countries which may potentially have economic effects. In particular, there is significant uncertainty about the future relationship between the United States and China with respect to a wide range of issues including trade policies, treaties, government regulations and tariffs. Economic conditions in China are sensitive to global economic conditions, as well as changes in domestic economic and political policies and the expected or perceived overall economic growth rate in China. Any severe or prolonged slowdown in the global or Chinese economy may materially and adversely affect our business, results of operations and financial condition.

***Increasing focus with respect to environmental, social and governance matters may impose additional costs on us or expose us to additional risks. Failure to adapt to or comply with the evolving expectations and standards on environmental, social and governance matters from investors and the government may adversely affect our business, financial condition and results of operation.***

Governments of China and other regions and public advocacy groups have been increasingly focused on environment, social and governance, or ESG, issues in recent years, making our business more sensitive to ESG issues and changes in governmental policies and laws and regulations associated with environment protection and other ESG-related matters. 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, increased focus from investors and the PRC government on 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. Any ESG concern or issue could increase our regulatory compliance costs. If we do not adapt to or comply with the evolving expectations and standards on ESG matters from investors and the PRC government or are perceived to have not responded appropriately to the growing concern for ESG issues, regardless of whether there is a legal requirement to do so, we may suffer from reputational damage and the business, financial condition, and the price of our ADSs could be materially and adversely effected.

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**Risks Related to Our Corporate Structure**

***If the PRC government finds that the agreements that establish the structure for operating some of our business operations in China do not comply with PRC regulations relating to the relevant industries or securities offering, 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 interest in those operations, or be materially and adversely affected on our ability to raise or utilize funds from future oversea offerings.***

Due to PRC restrictions or prohibitions on foreign ownership of internet and other related business in China, we operate these businesses in China through our VIEs and their subsidiaries, in which we have no ownership interest. According to the Special Administrative Measures (Negative List) for Foreign Investment Access, our provision of internet information services falls within the restricted category and the equity ratio of foreign investment in the enterprises operating the business under the restricted category is subject to the cap of 50%. In addition, although our provision of e-commerce services falls within the permitted category, foreign investments in this business are still restricted by other requirements under related regulations in China. Our WFOEs have each entered into a series of contractual arrangements with one of our VIEs, and their respective shareholders, which enable us to (i) exercise effective control over our VIEs, (ii) receive substantially all of the economic benefits of our VIEs, and (iii) have an exclusive option to purchase all or part of the equity interests and assets in our VIEs when and to the extent permitted by PRC laws. As a result of these contractual arrangements, we have control over and are the primary beneficiary of our VIEs and hence consolidate their financial results into our consolidated financial statements under U.S. GAAP. Our VIEs currently include Beijing Yunmi Technology Co., Ltd., or Beijing Viomi, and Guangzhou Interconnect Technology Co., Ltd., or Guangzhou Interconnect, and, prior to the completion of the 2024 reorganization transaction, our VIEs include Beijing Viomi and Foshan Yunmi Electric Appliances Technology Co., Ltd., or Foshan Viomi. Prior to the completion of the 2024 reorganization transaction, we operate our internet information and e-commerce services business primarily through our former VIE, Foshan Viomi. In the 2024 reorganization transaction, Foshan Viomi agreed to transfer the websites, mobile apps, mini programs operated by it and all the relates materials and rights (including but not limited to domain names, databases, codes, software, operational data, materials, documents, information) to Guangzhou Interconnect. We and Foshan Viomi are currently in the process of such transfer, and after the completion of the transfer, Guangzhou Interconnect will replace Foshan Viomi in operating internet information and e-commerce services business. Investors in our ADSs are not purchasing equity interest in our VIEs in China but instead are purchasing equity interest in a holding company incorporated in the Cayman Islands. See "*Item 4. Information on the Company—C. Organizational Structure*" for further details.

Investors in our ADSs thus are not purchasing equity interest in our VIEs in China but instead are purchasing equity interest in a Cayman Islands holding company. Our holding company in the Cayman Islands, our VIEs and their subsidiaries, and investments in our company face uncertainty about potential future actions by the PRC government that could affect the enforceability of the contractual arrangements with our VIEs and, consequently, the business, financial condition, and results of operations of our VIEs and their subsidiaries and our company as a group. In addition, our ADSs may decline in value or become worthless if we are unable to assert our contractual control rights over the assets of our VIEs, which contributed 90.2%, 88.9% and 45.0% of our revenues in 2022, 2023 and 2024, respectively.

In the opinion of our PRC legal counsel, Han Kun Law Offices, (i) the ownership structure of our VIEs in China and our WFOEs, are not in violation of applicable PRC laws and regulations currently in effect; and (ii) subject to the disclosure in this annual report, the contractual arrangements between our WFOEs, our VIEs and their shareholders governed by PRC laws are valid, binding and enforceable, and will not result in any violation of applicable PRC laws. However, our PRC legal counsel has also advised us that there are substantial uncertainties regarding the interpretation and application of current and future PRC laws, regulations and rules. Accordingly, the PRC regulatory authorities may take a view that is contrary to the opinion of our PRC legal counsel. It is uncertain whether any new PRC laws or regulations relating to variable interest entity structures will be adopted or if adopted, what they would provide. If we or our VIEs are found to be in violation of any existing or future PRC laws or regulations, or fail to obtain or maintain any of the required permits or approvals, the PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures, including:

● levying fines or confiscating our income or the income of our WFOEs or our VIEs, placing restrictions on our right to collect revenues, or imposing other requirements with which we or our VIEs may not be able to comply;

● revoking or suspending the business licenses or operating licenses of our WFOEs or our VIEs, or to re-apply for the necessary licenses, or to relocate our business, staff and assets;

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● discontinuing or placing restrictions or onerous conditions on our operations through any transactions between our WFOEs and our VIEs;

● requiring us to restructure our ownership structure or operations, including the nullification or termination of the contractual arrangements with our VIEs and deregistering the equity pledges of our VIEs, which in turn would affect our ability to consolidate, derive economic interests from, or exert effective control over our VIEs;

● restricting or prohibiting our use of the proceeds of our initial public offering to finance our business and operations in China; and taking other regulatory or enforcement actions that could be harmful to our business.

The imposition of any of these penalties would result in a material and adverse effect on our ability to conduct our business. In addition, any of the assets under the name of the shareholders of our VIEs, including their shares in our VIEs, may be put under court custody in connection with litigation, arbitration or other judicial or dispute resolution proceedings against such shareholder. We cannot ensure that such shares will be disposed of in accordance with the contractual arrangements between our WFOEs, our VIEs and its shareholders. Furthermore, it is unclear what impact the PRC government actions would have on us and on our ability to consolidate the financial results of our VIEs in our consolidated financial statements, if the PRC government authorities were to find our legal structure and contractual arrangements to be in violation of PRC laws and regulations. If the imposition of any of these government actions causes us to lose our right to direct the activities of our VIEs or our right to receive substantially all the economic benefits and residual returns from our VIEs and we are not able to restructure our ownership structure and operations in a satisfactory manner, we would no longer be able to consolidate the financial results of our VIEs in our consolidated financial statements. Either of these occurrences, or any other significant penalties that might be imposed on us in this event, would have a material adverse effect on our financial condition and results of operations and could cause the value of our ADSs to decline or become worthless.

In addition, on February 17, 2023, the CSRC released the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies and five supporting guidelines (collectively, the "Trial Measures for Overseas Listing"), which became effective on March 31, 2023. See "*Item 4. Information on the Company—B. Business Overview—Regulations—Regulations on M&A rules and overseas listings*" for details. If we fail to complete the filing with the CSRC in a timely manner or at all, for any future offerings, listing or any other capital raising activities, which are subject to the filings under the Trial Measures for Overseas Listing, due to the contractual arrangements between our WFOEs, our VIEs and its shareholders, our ability to raise or utilize funds could be materially and adversely affected, and we may even need to unwind our contractual arrangements with our VIEs and its shareholders or restructure our business operations to rectify the failure to complete the filings. However, given that the Trial Measures for Overseas Listing are relatively new, their interpretation, application, and enforcement and how they will affect our operations and our future financing are still uncertain.

***We rely on contractual arrangements with our VIEs and their respective shareholders, which may not be as effective as direct ownership in providing operational control.***

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

If we had direct ownership of our VIEs, we would be able to exercise our rights as a shareholder to effect changes in the board of directors of our VIEs, which in turn could implement changes, subject to any applicable fiduciary obligations, at the management and operational level. However, under the current contractual arrangements, we rely on the performance by our VIEs and their shareholders of their obligations under the contracts to exercise control over our VIEs. However, the shareholders of our consolidated VIEs may not act in the best interests of our company or may not perform their obligations under these contracts. Such risks exist throughout the period in which we intend to operate certain portions of our business through the contractual arrangements with our VIEs. If any disputes relating to these contracts remains unresolved, we will have to enforce our rights under these contracts through the operations of PRC laws and arbitration, litigation and other legal proceedings and therefore will be subject to uncertainties as to the outcome of any such legal proceedings. See "*—Any failure by our VIEs or their shareholders to perform their obligations under our contractual arrangements with them would have a material and adverse effect on our business, financial condition and results of operations*." Therefore, our contractual arrangements with our VIEs and their shareholders may not be as effective in ensuring our control over the relevant portion of our business operations as direct ownership would be.

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***Any failure by our VIEs or their shareholders to perform their obligations under our contractual arrangements with them would have an adverse effect on our business, financial condition and results of operations.***

We refer to the shareholders of our VIEs as their nominee shareholders because although they remain the holders of equity interests on record in our VIEs, pursuant to the terms of the relevant shareholder voting proxy agreements, each such shareholder has irrevocably authorized any person designated by our WFOE to exercise the rights as a shareholder of the VIEs. However, if our VIEs or their shareholders fail to perform their respective obligations under the contractual arrangements, we may have to incur substantial costs and expend additional resources to enforce such arrangements. We may also have to rely on legal remedies under PRC laws, including seeking specific performance or injunctive relief, and contractual remedies, which we cannot assure you will be sufficient or effective under PRC laws. For example, if the shareholders of our VIEs were to refuse to transfer their equity interest in our VIEs to us or our designee if 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.

All of the agreements under our contractual arrangements are governed by PRC laws and stipulate the resolution of disputes through arbitration in China. The arbitration provisions relate to the claims arising out of the contractual relationship established by the VIE agreements, rather than claims under the United States federal securities laws, and do not prevent shareholders of our company from pursuing claims under the United States federal securities laws. Accordingly, these contracts would be interpreted in accordance with PRC laws and any disputes arising from these contracts would be resolved in accordance with PRC legal procedures. We cannot guarantee that we could successfully enforce these contractual arrangements in a timely manner, or at all. See "*—Risks Related to Doing Business in China—Failure to respond to changes in the regulatory environment in China could adversely affect us*."

Meanwhile, there are very few precedents and little formal guidance as to how contractual arrangements in the context of a VIE should be interpreted or enforced under PRC laws. There remain significant uncertainties regarding the ultimate outcome of such arbitration should legal action become necessary. In addition, under PRC laws, rulings by arbitrators are final, which means parties cannot appeal the arbitration results in courts, and if the losing parties fail to carry out the arbitration awards within a prescribed time limit, the prevailing parties may only enforce the arbitration awards in PRC courts through arbitration award recognition proceedings, which would require additional expenses and delay. In the event we are unable to enforce these contractual arrangements, or if we suffer significant delays or other obstacles in the process of enforcing these contractual arrangements, we may not be able to exert effective control over our VIEs, and our ability to conduct our business may be negatively affected.

***Contractual arrangements in relation to our VIEs may be subject to scrutiny by the PRC tax authorities and they may determine that we or our VIEs owe additional taxes, which could negatively affect our financial condition and the value of your investment.***

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

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

Shareholders of our VIEs may have potential conflicts of interest with us. For instance, Mr. Xiaoping Chen, our founder, chairman of our board of directors, and chief executive officer, holds 60% of equity interests in Beijing Viomi, one of our VIEs, with the remaining 40% equity interests of which is held by affiliates or employees of certain of our principal shareholders, Red Better Limited and Shunwei Talent Limited. Foshan Viomi, 99.78% equity interests of which is held by Mr. Chen and the remaining 0.22% equity interests of which is held by a limited partnership controlled and managed by Mr. Chen, holds 100% of equity interests in the other VIE, Guangzhou Interconnect. Conflicts of interests may arise between their roles in our company or in our principal shareholders and their positions as nominal shareholders of our VIEs. These shareholders of our VIEs may breach, or cause our VIEs to breach, or refuse to renew, the existing contractual arrangements we have with them and our VIEs, which would have a material and adverse effect on our ability to effectively control our VIEs and receive economic benefits from them. For example, the shareholders may be able to cause our agreements with our VIEs to be performed in a manner adverse to us by, among other things, failing to remit payments due under the contractual arrangements to us on a timely basis. We cannot assure you that when conflicts of interest arise the shareholder will act in the best interests of our company or such conflicts will be resolved in our favor.

Currently, we do not have any arrangements to address potential conflicts of interest between these shareholders and our company, except that we could exercise our purchase option under the exclusive option agreements with these shareholders to request them to transfer all of their equity interests in the VIE to a PRC entity or individual designated by us, to the extent permitted by PRC laws. Two nominee shareholders of our VIEs, namely Mr. Xiaoping Chen and Mr. De Liu, are also our directors. We rely on them to abide by the laws of the Cayman Islands, which provide that directors owe a fiduciary duty to the company that requires them to act in good faith and in what they believe to be the best interests of the company and not to use their position for personal gains. If we cannot resolve any conflict of interest or dispute between us and the shareholders of our 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.

The shareholders of our VIEs may be involved in personal disputes with third parties or other incidents that may have an adverse effect on their respective equity interests in our VIEs and the validity or enforceability of our contractual arrangements with our VIEs and their shareholders. For example, in the event that any of the shareholders of our VIEs divorces his or her spouse, the spouse may claim that the equity interest of our VIEs held by such shareholder is part of their community property and should be divided between such shareholder and his or her spouse. If such claim is supported by the court, the relevant equity interest may be obtained by the shareholder's spouse or any third party who is not subject to obligations under our contractual arrangements, which could result in a loss of our effective control over the VIEs. Similarly, if any of the equity interests of our VIEs is inherited by a third party on whom the current contractual arrangements are not binding, we could lose our control over the VIEs or have to maintain such control by incurring unpredictable costs, which could cause significant disruption to our business and operations and harm our financial condition and results of operations.

Although under our current contractual arrangements, the spouse of Mr. Chen has executed spousal consent letters, under which she agrees that she will not take any actions or raise any claims to interfere with the performance by her spouse of the obligations under these contractual arrangements, including claiming community property ownership on the equity interest, and renounce any and all right and interest related to the equity interest that she may be entitled to under applicable laws. We cannot assure you that these undertakings and arrangements will be complied with or effectively enforced. In the event that any of them is breached or becomes unenforceable and leads to legal proceedings, it could disrupt our business, distract our management's attention and subject us to substantial uncertainties as to the outcome of any such legal proceedings.

***We may rely on dividends paid by our PRC subsidiaries to fund any cash and financing requirements we may have. Any limitation on the ability of our PRC subsidiaries to pay dividends to us could have a material adverse effect on our ability to conduct our business and to pay dividends to holders of the ADSs and our ordinary shares.***

We are a holding company, and we may rely on dividends to be paid by our wholly-owned PRC subsidiaries for our cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to the holders of the ADSs and our ordinary shares and service any debt we may incur. If our wholly owned PRC subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other distributions to us.

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Under PRC laws and regulations, wholly foreign-owned enterprises in the PRC, such as our WFOEs, may pay dividends only out of its accumulated profits as determined in accordance with PRC accounting standards and regulations. In addition, a wholly foreign-owned enterprise is required to set aside at least 10% of its after-tax profits each year, after making up previous years' accumulated losses, if any, to fund certain statutory reserve funds, until the aggregate amount of such a fund reaches 50% of its registered capital. In addition, it may allocate a portion of its after-tax profits based on PRC accounting standards to discretionary reserve funds at its discretion. These reserve funds are not distributable as cash dividends. Any limitation on the ability of our wholly-owned PRC subsidiaries to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.

***We may lose the ability to use and enjoy assets held by our VIEs that may be material to the operation of certain portion of our business if the VIEs go bankrupt or becomes subject to a dissolution or liquidation proceeding.***

Our VIEs and their subsidiaries hold part of our assets, some of which may be material to the operation of our business. If our VIEs go bankrupt and all or part of their assets become subject to liens or rights of third-party creditors, we may be unable to continue some or all of our business activities, which could materially and adversely affect our business, financial condition and results of operations. Under the contractual arrangements, our VIEs may not, in any manner, sell, transfer, mortgage or dispose of any of their material assets outside the ordinary course of operation or equity interests in the business operation without our prior consent. If our VIEs undergo voluntary or involuntary liquidation proceedings, 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.

***If the chops of our PRC subsidiaries and our VIEs are not kept safely, are stolen or are used by unauthorized persons or for unauthorized purposes, the corporate governance of these entities could be severely and adversely compromised.***

In China, a company chop or seal serves as the legal representation of the company towards third parties even when unaccompanied by a signature. Each legally registered company in China is required to maintain a company chop, which must be registered with the local Public Security Bureau. In addition to this mandatory company chop, companies may have several other chops which can be used for specific purposes. The chops of our PRC subsidiaries and VIEs are generally held securely by personnel designated or approved by us in accordance with our internal control procedures. To the extent those chops are not kept safely, are stolen or are used by unauthorized persons or for unauthorized purposes, the corporate governance of these entities could be severely and adversely compromised and those corporate entities may be bound to abide by the terms of any documents so chopped, even if they were chopped by an individual who lacked the requisite power and authority to do so. In addition, if the chops are misused by unauthorized persons, 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.

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**Risks Related to Doing Business in China**

***The PCAOB had historically been unable to inspect our auditor in relation to their audit work performed for our financial statements and the inability of the PCAOB to conduct inspections over our auditor in the past has deprived our investors with the benefits of such inspections.***

Our auditor, the independent registered public accounting firm that issues the audit report included elsewhere in this annual report, as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. The auditor is located in mainland China, a jurisdiction where the PCAOB was historically unable to conduct inspections and investigations completely before 2022. As a result, we and investors in the ADSs are deprived of the benefits of such PCAOB inspections. The inability of the PCAOB to conduct inspections of auditors in China in the past had made it more difficult to evaluate the effectiveness of our independent registered public accounting firm's audit procedures or quality control procedures as compared to auditors outside of China that are subject to the PCAOB inspections. On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms. However, if the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong, and we use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the Securities and Exchange Commission, we and investors in our ADSs would be deprived of the benefits of such PCAOB inspections again, which could cause investors and potential investors in the ADSs to lose confidence in our audit procedures and reported financial information and the quality of our financial statements.

***Our ADSs may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely auditors located in China. The delisting of the ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment.***

Pursuant to the HFCAA, if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspections for the PCAOB for two consecutive years, the SEC shall prohibit our shares or ADSs from being traded on a national securities exchange or in the over-the-counter trading market in the United States.

On December 16, 2021, the PCAOB issued a report to notify the SEC of its determination that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong and our auditor is subject to that determination. In May 2022, the SEC conclusively listed us as a Commission-Identified Issuer under the HFCAA following the filing of our annual report on Form 20-F for the fiscal year ended December 31, 2021. As of the date of this annual report, the PCAOB has not issued any new determination regarding its ability to inspect or investigate registered public accounting firms headquartered in mainland China and Hong Kong. For this reason, we do not expect to be identified as a Commission-Identified Issuer under the HFCAA after we file this annual report on Form 20-F.

Each year, the PCAOB will determine whether it can inspect and investigate completely audit firms in mainland China and Hong Kong, among other jurisdictions. If the PCAOB determines in the future that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kong and we use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statements filed with the Securities and Exchange Commission, we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-F for the relevant fiscal year. In accordance with the HFCAA, our securities would be prohibited from being traded on a national securities exchange or in the over-the-counter trading market in the United States if we are identified as a Commission-Identified Issuer for two consecutive years in the future. If our shares and ADSs are prohibited from trading in the United States, there is no certainty that we will be able to list on a non-U.S. exchange or that a market for our shares will develop outside of the United States. A prohibition of being able to trade in the United States would substantially impair your ability to sell or purchase our ADSs when you wish to do so, and the risk and uncertainty associated with delisting would have a negative impact on the price of our ADSs. Also, such a prohibition would significantly affect our ability to raise capital on terms acceptable to us, or at all, which would have a material adverse impact on our business, financial condition, and prospects.

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***The PRC government's significant oversight and discretion over our business operation could result in a material adverse change in our operations and the value of our ADSs.***

We conduct our business primarily in China. The PRC government has significant oversight over the conduct of our business, and may regulate or influence our operations. We cannot rule out the possibility that it will in the future release regulations or policies that directly or indirectly affect our industry or require us to seek additional permission to continue our operations, which could result in a material adverse change in our operation and/or the value of our ADSs. Also, the PRC government has recently indicated an intent to exert more oversight over overseas offerings that are conducted by China-based issuers. Therefore, investors of our company and our business face potential uncertainty from actions taken by the PRC government affecting our business.

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

Substantially all our operations are located in China. The PRC government has significant authority to regulate in the China operations of an offshore holding company, such as us. Accordingly, our business, financial condition, results of operations and prospects may be influenced to a significant degree by political, economic and social conditions in China generally. The Chinese economy differs from the economies of most developed countries in many respects, including the level of government involvement, level of development, growth rate, control of foreign exchange and allocation of resources. In addition, the PRC government continues to play a significant role in regulating industry development by imposing industrial policies. The PRC government also has significant authority to regulate a China-based company, such as us, to conduct its business. Therefore, investors of our company and our business face regulatory challenges from China. The PRC government also exercises significant control over China's economic growth through allocating resources, controlling payment of foreign currency-denominated obligations, setting monetary policy, and providing preferential treatment to particular industries or companies.

Any adverse changes in economic conditions in China, in government policies or in the laws and regulations in China could have a material adverse effect on the overall economic growth. Such developments could adversely affect our business and operating results, lead to reduction in demand for our products and services and adversely affect our competitive position. 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 Chinese economy, but may have a negative effect on us. For example, our financial condition and results of operations may be adversely affected by government policies that encourage increased competition in our industry, or additional control over capital investments or changes in tax regulations. In addition, in the past the PRC government has implemented certain measures, including interest rate adjustment, to control the pace of economic growth. These measures may cause decreased economic activity in China, which may adversely affect our business and operating results.

***Failure to respond to changes in the regulatory environment in China could adversely affect us.***

We conduct our business primarily through our PRC subsidiaries and consolidated VIEs in China. Our operations in China are governed by PRC laws and regulations. Our PRC subsidiaries and consolidated VIEs are subject to laws and regulations applicable to foreign investment in China. The PRC legal system is based on written statutes, and court decisions have limited precedential value. The PRC legal system is evolving rapidly and PRC laws, regulations, and rules may change from time to time. The interpretations of many laws, regulations and rules are subject to further implementation and clarification. For example, the PRC Foreign Investment Law, which took effect on January 1, 2020, embodies a PRC regulatory trend to rationalize its foreign investment regulatory regime in line with prevailing international practice and the legislative efforts to unify the corporate legal requirements for both foreign and domestic investments. However, substantial uncertainties exist with respect to the interpretation and implementation of the PRC Foreign Investment Law, its implementation rules and ancillary regulations, which may materially impact the viability of our current corporate structure, corporate governance and business operations. We cannot assure you that we will remain fully compliant with all new regulatory requirements or any future implementation rules on a timely basis, or at all. Any failure of us to fully comply with new regulatory requirements may significantly limit or completely hinder our ability to offer or continue to offer the ADSs, cause significant disruption to our business operations, and severely damage our reputation, which would materially and adversely affect our financial condition and results of operations and cause the ADSs to significantly decline in value or become worthless.

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From time to time, we may have to resort to court and administrative proceedings to enforce our legal rights. However, it may be difficult to predict the outcome of a judicial or administrative proceeding and the level of legal protection we may enjoy. Furthermore, the PRC legal system is based, in part, on government policies and internal rules, which are continually evolving. As a result, we may not always be aware of any potential violation of these policies and rules until sometime after the violation. Such unpredictability towards our contractual, property (including intellectual property), and procedural rights could adversely affect our business and impede our ability to continue our operations.

***We may be adversely affected by the complexity, uncertainties and changes in PRC regulation of internet-related businesses and companies, and any lack of requisite approvals, licenses or permits applicable to our business may have a material adverse effect on our business and results of operations.***

The PRC government extensively regulates the internet industry, including foreign ownership of, and the licensing and permit requirements pertaining to, companies in the internet industry. These internet-related laws and regulations are constantly evolving, and their interpretation and enforcement may be subject to changes from time to time. As a result, in certain circumstances it may be difficult to determine what actions or omissions may be deemed to be in violation of applicable laws and regulations.

Prior to the completion of the 2024 reorganization transaction, our former VIE, Foshan Viomi, holds an operating permit for e-commerce services and an operating permit for internet information services. After the completion of the 2024 reorganization transaction, Guangzhou Interconnect has obtained an operating permit for e-commerce services and an operating permit for internet information services. In addition, the licenses, permits or registrations we may hold in the future are subject to periodic renewal. If we fail to maintain or renew one or more of our licenses and certificates when their term expires, or obtain such renewals on a timely manner, our operations could be disrupted. In addition, under the PRC laws and regulations, our VIEs as license holders are required to update certain licenses if any change to their respective name, registered capital or legal representative during the validity period of such license. If we fail to properly renew and maintain all such requisite licenses on time, we may face penalties and in extreme circumstances, order to suspend or terminate our website and online business.

Furthermore, future interpretation and application of existing PRC laws, regulations and policies and possible new laws, regulations or policies relating to the internet industry may create uncertainties regarding the legality of existing and future foreign investments in, and the businesses and activities of, internet businesses in China, including our business. We cannot assure you that we have obtained all the permits or licenses required for conducting our business in China or will be able to maintain our existing licenses or obtain new ones. Neither can we rule out the possibility that the licenses, permits, registrations or filings we hold may be deemed insufficient by PRC governments, which may restrain our ability to expand our business scope and may subject us to fines or other regulatory actions. Additionally, as we develop and expand our business scope, we may need to obtain additional permits and licenses and we cannot assure that we will be able to obtain such permits on time or at all. If the PRC government considers that we were operating without the proper approvals, licenses or permits or promulgates new laws and regulations that require additional approvals or licenses or imposes additional restrictions on the operation of any part of our business, it has the power, among other things, to levy fines, confiscate our income, revoke our business licenses, and require us to discontinue our relevant business or impose restrictions on the affected portion of our business. Any of these actions by the PRC government may have a material adverse effect on our business and results of operations.

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

We are an exempted company incorporated under the laws of the Cayman Islands, we conduct substantially all of our operations in China and substantially all of our assets are located in China. In addition, most of our senior executive officers reside within China for a significant portion of the time and are PRC nationals. As a result, it may be difficult for you to effect service of process upon us or those persons inside mainland China. It may also be difficult for you to enforce U.S. courts judgments obtained in U.S. courts based on the civil liability provisions of the U.S. federal securities laws against us and our officers and directors, substantial of whom currently reside outside of the United States and whose assets are located outside the United States. In addition, there is uncertainty as to whether the courts of the Cayman Islands would (a) recognize or enforce judgments of the United States courts against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States, or (b) entertain original actions brought in the Cayman Islands to impose liabilities against us or our directors or officers that are predicated upon the civil liability provisions of federal securities laws of the United States or the securities laws of any state in the United States so far as the liabilities imposed by those provisions are penal in nature. Although there is no statutory recognition in the Cayman Islands of judgments obtained in the federal or state courts of the United States (and the Cayman Islands are not a party to any treaties for the reciprocal enforcement or recognition of such judgments), a judgement obtained in such jurisdiction will be recognized and enforced in the courts of the Cayman Islands at common law, without any re-examination of the merits of the underlying disputes, by an action commenced on the foreign judgment debt in the Grand Court of the Cayman Islands, provided such judgment (1) is given by a foreign court of competent jurisdiction, (2) imposes on the judgment debtor a liability to pay a liquidated sum for which the judgment has been given, (3) is final and conclusive, (4) is not in respect of taxes, a fine or a penalty, and (5) is not impeachable on the grounds of fraud and was not obtained in a manner and is not of a kind the enforcement of which is contrary to natural justice or the public policy of the Cayman Islands. However, the Cayman Islands courts are unlikely to enforce a judgment obtained from the United States courts under the civil liability provisions of the securities laws if such judgment is determined by the courts of the Cayman Islands to give rise to obligations to make payments that are penal or punitive in nature. A Cayman Islands court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.

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 between China and the country where the judgment is made or on principles of reciprocity between jurisdictions. China does not have any treaties or other forms of reciprocity with the United States that provide for the reciprocal recognition and enforcement of foreign judgments. In addition, according to the PRC Civil Procedure Law, the PRC courts will not enforce a foreign judgment against us or our directors and officers if they decide that the judgment violates the basic principles of PRC laws or national sovereignty, security or public interest. As a result, it is uncertain whether and on what basis a PRC court would enforce a judgment rendered by a court in the United States.

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

Shareholder claims or regulatory investigation that are common in the United States, including securities law class actions and fraud claims, generally are difficult to pursue as a matter of law or practicality in China. For example, in China, there are significant legal and other obstacles to providing information needed for regulatory investigations or litigation initiated outside China. Although the authorities in China may establish a regulatory cooperation mechanism with the securities regulatory authorities of another country or region to implement cross-border supervision and administration, such cooperation with the securities regulatory authorities in the Unities States may not be efficient in the absence of mutual and practical cooperation mechanism. Furthermore, according to Article 177 of the PRC Securities Law, 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 and no entities or individuals may provide documents or materials in connection with its securities activities to the overseas without proper authorization. In addition, on February 24, 2023, the CSRC, the PRC Ministry of Finance, National Administration of State Secrets Protection and National Archives Administration of China jointly issued the Provisions on Strengthening Confidentiality and Archives Management of Overseas Securities Issuance and Listing by Domestic Enterprises, which became effective on March 31, 2023. The provisions require, among others, that PRC domestic enterprises seeking to offer and list securities in overseas markets, either directly or indirectly, shall establish the confidentiality and archives system, and shall complete approval and filing procedures with competent authorities, if such PRC domestic enterprises or their overseas listing entities provide or publicly disclose documents or materials involving state secrets and work secrets of PRC government agencies to relevant securities companies, securities service institutions, overseas regulatory agencies and other entities and individuals. It further stipulates that providing or publicly disclosing documents and materials which may adversely affect national security or public interests, and accounting files or copies of important preservation value to the state and society shall be subject to corresponding procedures in accordance with the laws and regulations. While detailed interpretation of or implementation rules under the provisions and Article 177 of the PRC Securities Law have yet to be 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. See also "*—Risks Related to the ADSs—You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law*."

***Changes in international trade policies and rising political tensions, particularly between the U.S. and China, may adversely impact our business and operating results.***

There have been changes in international trade policies and rising political tensions, particularly between the U.S. and China, but also as a result of the conflict in Ukraine and sanctions on Russia. The U.S. government has made statements and taken certain actions that may lead to potential changes to U.S. and international trade policies towards many countries, including China. For example, export controls, economic and trade sanctions have been threatened and/or imposed by the U.S. government on a number of Chinese technology companies. The United States has also threatened to impose further export controls, sanctions, trade embargoes, and other heightened regulatory requirements on China and Chinese companies for alleged activities both inside and outside of China. Against this backdrop, China has implemented, and may further implement, measures in response to the changing trade policies, treaties, tariffs and sanctions and restrictions against Chinese companies initiated by the U.S. government. For example, the Ministry of Commerce of China published Rules on Counteracting Unjustified Extra-Territorial Application of Foreign Legislation and Other Measures in January 2021 to counter restrictions imposed by foreign countries on Chinese citizens and companies.

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We are monitoring policies in the United States that are aimed at restriction U.S. persons from investing in certain Chinese companies and/or imposing sanctions on Chinese entities. The United States and various foreign governments have imposed controls, license requirements and restrictions on the import or export of technologies and products (or voiced the intention to do so). For instance, in October 2022, the Bureau of Industry and Security (BIS) of the U.S. Department of Commerce issued rules aimed at restricting China's ability to obtain advanced computing chips, develop and maintain supercomputers and manufacture advanced semiconductors. On August 9, 2023, the Biden administration released an executive order directing the U.S. Department of the Treasury to create an outbound FDI review program that will require reporting on or (in more narrow circumstances) will prohibit investments by U.S. persons involving "covered national security technologies and products." On June 21, 2024, the U.S. Department of the Treasury issued a notice of proposed rulemaking on outbound U.S. investment involving China that generally follows the advanced notice of proposed rulemaking. On October 28, 2024, the U.S. Department of the Treasury issued a final rule imposing restrictions on U.S. outbound investment in Chinese companies active in developing certain national security technologies. The final rule took effect on January 2, 2025. The final rule targets investments involving persons and entities associated with "countries of concern," currently limited to China, and it imposes investment prohibition and notification requirements on a wide range of investments in companies engaged in activities relating to three sectors: (i) semiconductors and microelectronics, (ii) quantum information technologies, and (iii) artificial intelligence systems, with persons from countries of concern engaged in these technologies defined as "covered foreign persons." Investments by U.S. persons subject to the final rule, which are defined as "covered transactions," include acquisition of equity or a contingent equity interest, provision of certain debt financing, conversion of contingent equity interest into equity interest, involvement in greenfield or brownfield investment, entrance into a joint venture, and acquisition of a limited partner interest in non-U.S. pooled investment fund. The final rule excludes some investments from the scope of "covered transactions," including those in publicly traded securities listed on a national stock exchange. The final rule is aimed at exerting greater U.S. government oversight over U.S. direct and indirect investments involving China, and may introduce new hurdles and uncertainties for cross-border collaborations, investments, and funding opportunities of China-based companies. We do not believe we would be defined as "covered foreign person" under the final rule, because we do not engage in a "covered activity" (as defined in the final rule) or otherwise meet the definition of "covered foreign person" provided in the final rule. However, there is no assurance that the U.S. Department of the Treasury will take the same view as ours. If we were to be deemed a "covered foreign person," and if U.S. persons engaged in a "covered transaction" that involves the acquisition of our equity interests, such U.S. persons may be prohibited to do so or may need to make a notification, as applicable pursuant to the final rule. In addition, our ability to raise capital or contingent equity capital from U.S. investors may be limited due to the final rule and other similar laws, regulations and policies, given that relevant laws, regulations, and policies continue to evolve and we cannot rule out the possibility of being deemed a covered foreign person in the future due to different views taken by the U.S. Department of Treasury, potential amendments to the final rule or the introduction of similar regulations. If our ability to raise such capital is significantly and negatively affected, it could be detrimental to our business, financial condition and prospects.

Rising trade and political tensions could reduce levels of trade, investments, technological exchanges and other economic activities between China and other countries, which would have an adverse effect on global economic conditions, the stability of global financial markets, and international trade policies. We begin to expand our business internationally. Any unfavorable government policies on international trade or any restriction on Chinese companies may affect consumer demand for our products and service, impact our competitive position, or prevent us from being able to conduct business in certain countries. In addition, our results of operations could be adversely affected if any such tensions or unfavorable government trade policies harm the Chinese economy or the global economy in general.

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

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

We believe that we are not a PRC resident enterprise for PRC tax purposes. See "*Item 4. Information on the Company—B. Business Overview—Regulations—Regulations on Tax—PRC enterprise income tax*." 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 are a PRC resident enterprise for enterprise income tax purposes, we may be required to withhold a 10% withholding tax, unless a reduced rate is available under an applicable tax treaty, from dividends we pay to our shareholders that are nonresident enterprises, including the holders of our ADSs. In addition, non-resident enterprise shareholders (including our ADS holders) may be subject to PRC tax on gains realized on the sale or other disposition of ADSs or ordinary shares, if such income is treated as sourced from within the PRC. Furthermore, if we are deemed a PRC resident enterprise, dividends payable to our non-PRC individual shareholders (including our ADS holders) and any gain realized on the transfer of ADSs or ordinary shares by such shareholders may be subject to PRC tax at a rate of 20% unless a reduced rate is available under an applicable tax treaty. 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 the event that we are treated as a PRC resident enterprise. Any such tax may reduce the returns on your investment in the ADSs or ordinary shares.

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

On February 3, 2015, the State Administration of Taxation issued a Public Notice Regarding Certain Corporate Income Tax Matters on Indirect Transfer of Properties by Non-Tax Resident Enterprises. Pursuant to this notice, where a non-resident enterprise transfers taxable assets indirectly by disposing of the equity interests of an overseas holding company, which is an Indirect Transfer, the non-resident enterprise, being the transferor, or the transferee, or the PRC entity that directly owns the taxable assets, may report such Indirect Transfer to the tax authority. Using a "substance over form" principle, the PRC tax authority may disregard the existence of the overseas holding company if it lacks a reasonable commercial purpose and was established for the purpose of reducing, avoiding or deferring PRC tax. As a result, gains derived from such Indirect Transfer may be subject to PRC enterprise income tax, and the transferee or other person who is obligated to pay for the transfer is obligated to withhold the applicable taxes, currently at a rate of 10% for the transfer of equity interests in a PRC resident enterprise. Both the transferor and the transferee may be subject to penalties under PRC tax laws if the transferee fails to withhold the taxes and the transferor fails to pay the taxes. However, according to the aforesaid safe harbor rule, the PRC tax would not be applicable to the transfer by any non-resident enterprise of ADSs of the Company acquired and sold on public securities markets.

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On October 17, 2017, the State Administration of Taxation issued a Public Notice of the State Administration of Taxation on Issues Concerning the Withholding of Non-resident Enterprise Income Tax at Source, which clarifies the tax withholding methods in respect of income of non-resident enterprises In addition, this notice abolished certain provisions stipulated in the Public Notice Regarding Certain Corporate Income Tax Matters on Indirect Transfer of Properties by Non-Tax Resident Enterprises. Where the non-resident enterprise fails to declare the tax payable pursuant to Article 39 of the PRC Enterprise Income Tax Law, the tax authority may order it to pay the tax due within required time limits, and the non-resident enterprise shall declare and pay the tax payable within such time limits specified by the tax authority; however, if the non-resident enterprise voluntarily declares and pays the tax payable before the tax authority orders it to do so within required time limits, it shall be deemed that such enterprise has paid the tax in time.

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

***If our preferential tax treatments are revoked, become unavailable or if the calculation of our tax liability is successfully challenged by the PRC tax authorities, we may be required to pay tax, interest and penalties in excess of our tax provisions, and our results of operations could be materially and adversely affected.***

The PRC government has provided various tax incentives to our certain subsidiaries. These incentives include reduced enterprise income tax rates. For example, under the PRC Enterprise Income Tax Law and its implementation rules, the statutory enterprise income tax rate is 25%. However, enterprises which obtained a new software enterprise certification were entitled to an exemption of enterprise income tax for the first two years and a 50% reduction of enterprise income tax for the subsequent three years, commencing from the first profit-making year. In addition, the income tax of an enterprise that has been determined to be a high and new technology enterprise can be reduced to a preferential rate of 15%. Guangdong Lizi has obtained High and New Technology Enterprise status since December 1, 2020, and is thus eligible to enjoy a preferential tax rate of 15% for the periods presented and within the validity period of its High and New Technology Enterprise status, to the extent it has taxable income under the PRC Enterprise Income Tax Law. Any increase in the enterprise income tax rate applicable to our PRC subsidiaries or VIEs in China, or any discontinuation or retroactive or future reduction of any of the preferential tax treatments currently enjoyed by our PRC subsidiaries or VIEs in China, could adversely affect our business, financial condition and results of operations. In addition, in the ordinary course of our business, we are subject to complex income tax and other tax regulations and significant judgment is required in the determination of a provision for income taxes. Although we believe our tax provisions are reasonable, if the PRC tax authorities successfully challenge our position and we are required to pay tax, interest and penalties in excess of our tax provisions, our financial condition and results of operations would be materially and adversely affected.

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

The Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, adopted by six PRC regulatory agencies in 2006 and amended by Ministry of Commerce in 2009, and other regulations and rules concerning mergers and acquisitions, such as the Anti-Monopoly Law last amended on June 24, 2022 and becoming effective on August 1, 2022, the Rules of the State Council on Declaration Threshold for Concentration of Undertakings last amended on December 29, 2023 and becoming effective on January 22, 2024 and the Provisions on the Review of Concentrations of Undertakings issued on March 10, 2023 and becoming effective on April 15, 2023, established additional procedures and requirements that could make merger and acquisition activities by foreign investors more time-consuming and complex. These regulations require, among other things, that the Ministry of Commerce be notified in advance of any change-of-control transaction in which a foreign investor acquires control of a PRC domestic enterprise or a foreign company with substantial PRC operations, if certain thresholds under the Rules of the State Council on Declaration Threshold for Concentration of Undertakings were triggered. See "*Item 4. Information on the Company—B. Business Overview—Regulations—Regulations on M&A rules and overseas listings*." Moreover, the PRC Anti-Monopoly Law requires that transactions which are deemed concentrations and involve parties with specified turnover thresholds must be cleared by the Ministry of Commerce before they can be completed. In addition, the Provisions of Ministry of Commerce on Implementation of Security Review System for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors effective in September 2011 and the Measures for the Security Review of Foreign Investment effective in January 2021 require acquisitions by foreign investors of PRC companies engaged in military related or certain other industries that are crucial to national security be subject to security review before consummation of any such acquisition. We may pursue potential strategic acquisitions that are complementary to our business and operations. Complying with the requirements of these laws and regulations to complete such transactions could be time-consuming, and any required approval processes, including obtaining approval or clearance from the Ministry of Commerce, may delay or inhibit our ability to complete such transactions, which could affect our ability to expand our business or maintain our market share.

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

In July 2014, 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**. SAFE Circular 37 requires PRC residents (including PRC individuals and PRC corporate entities as well as foreign individuals that are deemed as PRC residents for foreign exchange administration purposes) to register with the SAFE or its local branches in connection with their direct or indirect offshore investment activities. SAFE Circular 37 is applicable to our shareholders who are PRC residents and may be applicable to any offshore acquisitions that we make in the future.

Under SAFE Circular 37, PRC residents who make, or have prior to the implementation of SAFE Circular 37 made, direct or indirect investments in offshore special purpose vehicles, or SPVs, are required to register such investments with the SAFE or its local branches. In addition, any PRC resident who is a direct or indirect shareholder of an SPV, is required to update its filed registration with the local branch of the SAFE with respect to that SPV, to reflect any material change. Moreover, any subsidiary of such SPV in China is required to urge the PRC resident shareholders to update their registration with the local branch of the SAFE. If any PRC shareholder of such SPV fails to make the required registration or to update the previously filed registration, the subsidiary of such SPV in China may be prohibited from distributing its profits or the proceeds from any capital reduction, share transfer or liquidation to the SPV, and the SPV may also be prohibited from making additional capital contributions into its subsidiary in China. On February 13, 2015, the SAFE promulgated a Notice on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment effective on June 1, 2015, which mandates that applications for foreign exchange registration of inbound foreign direct investments and outbound overseas direct investments, including those required under SAFE Circular 37, are required to be filed with qualified banks instead of the SAFE. The qualified banks will directly examine the applications and accept registrations under the supervision of the SAFE.

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We have requested PRC residents who we know hold direct or indirect interest in our company to make the necessary applications, filings and registrations as required under SAFE Circular 37. However, we may not be informed of the identities of all the PRC residents holding direct or indirect interest in our company, and we cannot provide any assurance that all these PRC residents have complied or will comply with SAFE Circular No. 37 or the subsequent implementation rules to complete the applicable registrations. The failure or inability of our PRC resident shareholders to comply with the registration procedures set forth in these regulations may subject us to fines and legal sanctions, restrict our cross-border investment activities, limit the ability of our wholly foreign-owned subsidiary in China to distribute to us dividends and the proceeds from any reduction in capital, share transfer or liquidation, and we may also be prohibited from injecting additional capital into the subsidiary. Moreover, failure to comply with the various foreign exchange registration requirements described above could result in liability under PRC laws for circumventing applicable foreign exchange restrictions. As a result, our business operations and our ability to distribute profits to you could be materially and adversely affected.

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

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

In February 2012, the SAFE promulgated the Notices on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Publicly Listed Company. Pursuant to these rules, PRC citizens and non-PRC citizens who have resided in China for a continuous period of not less than one year are required to register with the SAFE through a domestic qualified agent, which could be the PRC subsidiary of such overseas-listed company, and complete certain other procedures if they participate in any stock incentive plan of an overseas publicly listed company, unless certain exceptions are available. In addition, an overseas-entrusted institution must be retained to handle matters in connection with the exercise or sale of stock options and the purchase or sale of shares and interests. We and our executive officers and other employees who are PRC citizens or non-PRC citizens living in the PRC for a continuous period of not less than one year and have been granted options are subject to these regulations. Failure to complete the SAFE registrations may result in fines of up to RMB300,000 for entities, or up to RMB50,000 for individuals, and legal sanctions, and may also limit our ability to contribute additional capital into our PRC subsidiaries and limit our PRC subsidiaries' ability to distribute dividends to us. We also face regulatory uncertainties that could restrict our ability to adopt additional incentive plans for our directors, executive officers and employees under PRC laws. See "*Item 4. Information on the Company—B. Business Overview—Regulations—Regulations on employee share incentive plan of overseas publicly listed company*."

***Failure to make adequate contributions to various government-sponsored employee benefits plans as required by PRC regulations may subject us to penalties.***

Companies operating in China are required to participate in various government-sponsored employee benefit plans, including certain social insurance, housing funds and other welfare-oriented payment obligations, and contribute to the plans in amounts equal to certain percentages of salaries, including bonuses and allowances, of employees up to a maximum amount specified by the local government from time to time at locations where our employees are based. The requirements of employee benefit plans have not been implemented consistently by the local governments in China given the different levels of economic development in different locations. We have paid the social insurance and housing fund contributions for all of our employees, though the amount of such social insurance or housing fund contributions we paid for certain employees was lower than the requirements of the PRC regulations. If local authorities determine that we failed to make adequate contributions to any employee benefits as required by the PRC regulations, we may face late fees or fines in relation to the underpaid employee benefits. In addition, our provision for these liabilities may not be adequate, particularly in light of the recent tightening regulations. As a result, our financial condition and results of operations may be materially and adversely affected.

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***We face certain risks relating to the real properties that we lease.***

We lease real properties from third parties primarily for our office use in China, and none of our lease agreements for these properties has been registered with the PRC governmental authorities as required by PRC laws. Although the failure to do so does not in itself invalidate the leases, we may be ordered by the PRC government authorities to rectify such noncompliance and, if such noncompliance were not rectified within a given period of time, we may be subject to fines imposed by PRC government authorities ranging from RMB1,000 and RMB10,000 for each lease agreement that has not been registered with the PRC governmental authorities.

The ownership certificate or other similar proof of one of our leased properties has not been provided to us by the lessor. Therefore, we cannot assure you that such lessor is entitled to lease the relevant real properties to us. If the lessor is not entitled to lease the real properties to us and the owner of such real properties decline to ratify the lease agreements between us and the respective lessor, we may not be able to enforce our rights to lease such properties under the lease agreement against the owner. As of December 31, 2024, we are not aware of any claim or challenge brought by any third parties concerning our use of leased properties. If our lease agreements are claimed as null and void by third parties who are the real owners of such leased real properties, we could be required to vacate the properties, in which event we could only initiate claims against the lessors under relevant lease agreements for losses resulting from indemnities for their breach of the relevant leasing agreements. We cannot assure you that suitable alternative locations are readily available on commercially reasonable terms, or at all, and if we are unable to relocate our officers in a timely manner, our operations may be interrupted.

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

We are an offshore holding company conducting our operations in China through our PRC subsidiaries and VIEs. We may make loans to our PRC subsidiaries and VIEs subject to the approval from or registration with governmental authorities and limitation on amount, or we may make additional capital contributions to our wholly foreign-owned subsidiary in China. Any loans to our wholly foreign-owned subsidiary in China, which are treated as foreign-invested enterprises under PRC laws, are subject to foreign exchange loan registrations. In addition, a foreign-invested enterprise shall use its capital pursuant to the principle of authenticity and self-use within its business scope. According to the PRC regulations on foreign-invested enterprises in China, capital contributions to our PRC subsidiaries are subject to the requirement of making necessary filings or reports in the Foreign Investment Comprehensive Management Information System, and registration with a local bank authorized by SAFE. Any medium or long-term loan to be provided by us to our consolidated affiliated entities must be filed with the National Development and Reform Commission and recorded by SAFE or its local branches through the online filing system of SAFE pursuant to applicable PRC regulations.

The Circular on Reforming the Administration Measures on Conversion of Foreign Exchange Registered Capital of Foreign-invested Enterprises, which was issued by the SAFE and was most recently amended on March 23, 2023, allows for the use of RMB converted from the foreign currency-denominated capital for equity investments in the PRC, provided that such usage shall fall into the scope of business of the foreign-invested enterprise, which will be regarded as the reinvestment of foreign-invested enterprise. In addition, the Circular Regarding Further Promotion of the Facilitation of Cross-Border Trade and Investment, which was promulgated by the SAFE and was most recently amended on December 4, 2023, allows foreign-invested enterprises whose business scope does not include investment, or non-investment foreign-invested enterprises, to use their capital funds to make equity investments in China, subject to certain conditions. As of the date of this annual report, its interpretation and implementation in practice remained subject to further explanations and elaborations. As the government authorities have discretion in interpreting the regulation, it is unclear whether SAFE will permit such capital funds to be used for equity investments in the PRC 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, we cannot assure you that we will be able to complete the necessary government registrations or filings or obtain the necessary government approvals on a timely basis, if at all, with respect to future loans by us to our PRC subsidiaries or VIEs or with respect to future capital contributions by us to our PRC subsidiaries. If we fail to complete such registrations or obtain such approvals, our ability to use the proceeds from our securities 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.

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***Fluctuations in exchange rates could have a material adverse effect on our results of operations and the value of your investment.***

The conversion of Renminbi into foreign currencies, including U.S. dollars, is based on rates set by the People's Bank of China. The Renminbi has fluctuated against the U.S. dollar, at times significantly and unpredictably. The value of Renminbi against the U.S. dollar and other currencies is affected by changes in China's political and economic conditions and by China's foreign exchange policies, among other things. We cannot assure you that 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 Renminbi and the U.S. dollar in the future.

Any significant appreciation or depreciation of Renminbi may materially and adversely affect our revenues, earnings and financial position, and the value of, and any dividends payable on, our ADSs in U.S. dollars. For example, to the extent that we need to convert U.S. dollars we receive from our securities 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 from the conversion. Conversely, if we decide to convert our Renminbi into U.S. dollars for the purpose of making payments for dividends on our 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 available to us.

Very limited hedging options are available in China to reduce our exposure to exchange rate fluctuations. To date, we have not entered into any hedging transactions in an effort to reduce our exposure to foreign currency exchange risk. While we may decide to enter into hedging transactions in the future, the availability and effectiveness of these hedges may be limited and we may not be able to adequately hedge our exposure or at all. In addition, our currency exchange losses may be magnified by PRC exchange control regulations that restrict our ability to convert Renminbi into foreign currency. As a result, fluctuations in exchange rates may have a material adverse effect on your investment.

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

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

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***The approval of and filing with the CSRC or other PRC government authorities may be required if we were to conduct offshore offerings in the future, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing.***

The Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, which were adopted by six PRC regulatory agencies in 2006 and amended by Ministry of Commerce in 2009, require an overseas special purpose vehicle formed for listing purposes through acquisitions of PRC domestic companies and controlled by PRC persons or entities to obtain the approval from the CSRC prior to the listing and trading of such special purpose vehicle's securities on an overseas stock exchange. The interpretation and application of the regulations are subject to further clarification, and our offshore offerings may ultimately require approval of the CSRC. If the CSRC approval is required, it is uncertain whether we can or how long it will take us to obtain the approval and, even if we obtain such CSRC approval, the approval could be rescinded. Any failure to obtain or delay in obtaining the CSRC approval for any of our offshore offerings, or a rescission of such approval if obtained by us, would subject us to sanctions imposed by the CSRC or other PRC regulatory authorities, which could include fines and penalties on our operations in China, restrictions or limitations on our ability to pay dividends outside of China, and other forms of sanctions that may materially and adversely affect our business, financial condition, and results of operations.

On February 17, 2023, the CSRC promulgated the Trial Measures for Overseas Listing effective on March 31, 2023. According to the Trial Measures for Overseas Listing, PRC domestic companies that seek to offer and list securities in overseas markets, either in direct or indirect means, are required to fulfill the filing procedure with and report relevant information to the CSRC. See "*Item 4. Information on the Company—B. Business Overview—Regulations—Regulations on M&A rules and overseas listings*" for details. In the event that a PRC domestic company fails to fulfill the filing procedure or conceals any material fact or falsifies any major content in its filing documents, this domestic company may be subject to administrative penalties, such as orders to rectify, warnings, fines, and its controlling shareholders, actual controlling beneficial owners, the person directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines. The CSRC also held a press conference and clarified that even though PRC domestic companies already listed overseas on or prior to March 31, 2023, the effective date of the Trial Measures for Overseas Listing, shall be deemed as existing issuers and are not required to complete the filling procedures immediately, they shall still be required to file with the CSRC when subsequent matters such as refinancing are involved. Therefore, we are deemed as existing issuers according to the measures, and are required to file with the CRRC for our refinancing activities as required by the measures.

In addition, pursuant to the Provisions on Strengthening Confidentiality and Archives Management of Overseas Securities Issuance and Listing by Domestic Enterprises, which was released on February 24, 2023 and became effective on March 31, 2023, PRC domestic enterprises seeking to offer and list securities in overseas markets, either directly or indirectly, shall establish and improve the system of confidentiality and archives work, and shall complete approval and filing procedures with competent authorities, if such PRC domestic enterprises or their overseas listing entities provide or publicly disclose documents or materials involving state secrets and work secrets of state organs to relevant securities companies, securities service institutions, overseas regulatory agencies and other entities and individuals. See "*Item 4. Information on the Company—B. Business Overview—Regulations—Regulations on M&A rules and overseas listings*" for details. The Trial Measures for Overseas Listing and the Provisions on Strengthening the Confidentiality and Archives Administration Concerning the Overseas Securities Offering and Listing of by Domestic Enterprises are subject to further implementation and interpretation, and there remains uncertainties as to how these provisions will affect our listing status and future financing. If we fail to complete the filing with or approval of the CSRC or other PRC government authorities in a timely manner or at all, for any future offering or any other activities which are subject to the filing or approval requirements under the aforesaid provisions, our ability to raise or utilize funds and our financial conditions, business operation, and business prospect may be adversely and materially affected.

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In addition, we cannot assure you that any new rules or regulations promulgated in the future will not impose additional requirements on us. If it is determined in the future that approval from or filing with the CSRC or other regulatory authorities or other procedures, including the cybersecurity review under the Cybersecurity Review Measures, are required if we were to conduct offshore offerings, it is uncertain whether we can or how long it will take us to obtain such approval or complete such filing procedures. If we were to conduct offshore offerings and fail to obtain such approval or filing procedures, or such approval or filing, if obtained by us, were to be rescinded, we would be subject to sanctions by the CSRC or other PRC regulatory authorities. These regulatory authorities may impose fines and penalties on our operations in China, limit our ability to pay dividends outside of China, limit our operating privileges in China, delay or restrict the repatriation of the proceeds from our offshore offerings into China or take other actions that could materially and adversely affect our business, financial condition, results of operations, and prospects, as well as the trading price of our listed securities. The CSRC or other PRC regulatory authorities also may take actions requiring us, or making it advisable for us, to halt our offshore offerings before settlement and delivery of the shares offered. In addition, if the CSRC or other regulatory authorities later promulgate new rules or explanations requiring that we obtain their approvals or accomplish the required filing or other regulatory procedures for our prior offshore offerings, we may be unable to obtain a waiver of such approval requirements, if and when procedures are established to obtain such a waiver. Any uncertainties or negative publicity regarding such approval requirement could materially and adversely affect our business, prospects, financial condition, reputation, and the trading price of our listed securities.

**Risks Related to the ADSs**

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

The trading price of our ADSs is likely to be volatile and could fluctuate widely due to factors beyond our control. This may happen because of broad market and industry factors, including overall market volatility and the performance and fluctuation of the market prices of other companies with business operations located mainly in China that have listed their securities in the United States. In addition to market and industry factors, the price and trading volume for our ADSs may be highly volatile for factors specific to our own operations, including the following:

● variations in our net revenues, earnings and cash flow;

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

● announcements of new products and services and expansions by us or our competitors;

● changes in financial estimates by securities analysts;

● failure on our part to realize monetization opportunities as expected;

● changes in revenues generated from our significant business partners;

● additions or departures of key personnel;

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

● detrimental negative publicity about us, our management, our competitors or our industry;

● regulatory developments affecting us or our industry; and

● potential litigation or regulatory investigations.

Any of these factors may result in large and sudden changes in the trading volume and price of the ADSs.

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In the past, shareholders of public companies have often brought securities class action suits against those companies following periods of instability in the market price of their 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 and require us to incur significant expenses to defend the suit, which could harm our results of operations. 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.

***Our dual-class share structure with different voting rights will limit your ability to influence corporate matters (and in certain situations, give certain holders of Class B ordinary shares control over the outcome of matters put to a vote of shareholders) and could discourage others from pursuing any change of control transactions that holders of our Class A ordinary shares and ADSs may view as beneficial.***

We have a dual-class share structure such that our ordinary shares consist of Class A ordinary shares and Class B ordinary shares. One of our key strengths is our visionary and professional management team led by the founder and chief executive officer Mr. Xiaoping Chen and supported by our strategic partner Xiaomi. The dual-class share structure ensures that the vision of the management team and the proven strategies can be consistently implemented. Furthermore, the dual-class structure enables us to better focus on long-term strategies by serving as effective defense against corporate actions which might not be in our long-term interest. Each Class A ordinary share shall entitle the holder thereof to one vote on all matters subject to vote at general meetings of the Company, and each Class B ordinary share shall entitle the holder thereof to ten votes on all matters subject to vote at general meetings of the Company based on our dual-class share structure. Each Class B ordinary share is convertible into one Class A ordinary share at any time at the option of the holder thereof, while Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. Upon any sale, transfer, assignment or disposition of any Class B ordinary share by Mr. Xiaoping Chen or Viomi Limited to any person who is not Mr. Xiaoping Chen or his affiliate(s), or upon a change of ultimate beneficial ownership of any Class B ordinary share to any person who is not Mr. Xiaoping Chen or his affiliate(s), such Class B ordinary share shall be automatically and immediately converted into one Class A ordinary share. Upon any sale, transfer, assignment or disposition of any Class B ordinary share by a shareholder other than Mr. Xiaoping Chen or his affiliate(s) to any person, such Class B ordinary share shall be automatically and immediately converted into one Class A ordinary share. Conversion of Class B ordinary shares to Class A ordinary shares will increase the voting power of holders of Class A ordinary shares and ADSs, while at the same time increasing the relative voting power of individual Class B ordinary shareholders who retain their shares.

As a result of the dual-class share structure and the concentration of ownership, Mr. Xiaoping Chen, certain of our employees and Xiaomi beneficially own all of our issued Class B ordinary shares, and they have considerable influence (and in certain situations, complete control) over matters such as decisions regarding mergers, consolidations and the sale of all or substantially all of our assets, election of directors and other significant corporate actions. Such holders may take actions that are not in the best interest of us or our other shareholders. Due to the disproportionate voting powers associated with our two classes of ordinary shares, the holders of our Class B ordinary shares and our founder, Mr. Xiaoping Chen, beneficially own 91.0% and 61.0%, respectively, of the aggregate voting power of our company as of July 31, 2025. Assuming that the Class B shareholders hold Class B ordinary shares only, the Class B shareholders only need to keep 9.1% of the outstanding shares to continue to control the outcome of matters submitted to shareholders for approval through ordinary resolutions. The concentration of ownership may discourage, delay or prevent a change in control of our company, which could have the effect of depriving our other shareholders of the opportunity to receive a premium for their shares as part of a sale of our company and may reduce the price of our ADSs. This concentrated control will limit your ability to influence corporate matters and could discourage others from pursuing any potential merger, takeover or other change of control transactions that holders of Class A ordinary shares and ADSs may view as beneficial.

***If securities or industry analysts cease to publish research or reports about our business, or if they adversely change their recommendations regarding the ADSs, the market price for the ADSs and trading volume could decline.***

The trading market for the ADSs will be influenced by research or reports that industry or securities analysts publish about our business. If one or more analysts who cover us downgrade the ADSs, the market price for the ADSs would likely decline. If one or more of these analysts cease to cover us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which, in turn, could cause the market price or trading volume for the ADSs to decline.

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

Sales of substantial amounts of our ADSs in the public market, or the perception that these sales could occur, could adversely affect the market price of our ADSs and could materially impair our ability to raise capital through equity offerings in the future. We cannot predict what effect, if any, market sales of securities held by our significant shareholders or any other shareholder or the availability of these securities for future sale will have on the market price of our ADSs.

***Our memorandum and articles of association contain anti-takeover provisions that could have a material adverse effect on the rights of holders of our ordinary shares and ADSs.***

Our memorandum and articles of association 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 premium over prevailing market prices by discouraging third parties from seeking to obtain control of our company in a tender offer or similar transaction. Our proposed dual-class voting structure gives disproportionate voting power to the holders of our Class A and Class B ordinary shares. 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 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 our ADSs may fall and the voting and other rights of the holders of our ordinary shares and ADSs may be materially and adversely affected.

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

Holders of ADSs do not have the same rights as our registered shareholders. As a holder of our ADSs, you will not have any direct right to attend general meetings of our shareholders or to cast any votes at such meetings. You will only be able to exercise the voting rights which are carried by the underlying Class A ordinary shares represented by your ADSs indirectly by giving voting instructions to the depositary in accordance with the provisions of the deposit agreement. Upon receipt of your voting instructions, the depositary will try, as far as is practicable, to vote the underlying Class A ordinary shares represented by your ADSs in accordance with your instructions. If we ask for your instructions, then upon receipt of your voting instructions, the depositary will try to vote the underlying Class A ordinary shares in accordance with these instructions. If we do not instruct the depositary to ask for your instructions, the depositary may still vote in accordance with instructions you give, but it is not required to do so. You will not be able to directly exercise your right to vote with respect to the underlying Class A ordinary shares represented by your ADSs unless you withdraw such shares, and become the registered holder of such shares prior to the record date for the general meeting. When a general meeting is convened, you may not receive sufficient advance notice of the meeting to withdraw the underlying Class A ordinary shares represented by your ADSs and become the registered holder of such shares to allow you to attend the general meeting and to vote directly with respect to any specific matter or resolution to be considered and voted upon at the general meeting. In addition, under our memorandum and articles of association, for the purposes of determining those shareholders who are entitled to attend and vote at any general meeting, our directors may close our register of members and/or fix in advance a record date for such meeting, and such closure of our register of members or the setting of such a record date may prevent you from withdrawing the underlying Class A ordinary shares represented by your ADSs and becoming the registered holder of such shares prior to the record date, so that you would not be able to attend the general meeting or to vote directly. If we ask for your instructions, the depositary will notify you of the upcoming vote and will arrange to deliver our voting materials to you. We have agreed to give the depositary at least 30 days' prior notice of shareholder meetings. Nevertheless, we cannot assure you that you will receive the voting materials in time to ensure that you can instruct the depositary to vote the underlying Class A ordinary shares represented by your ADSs. In addition, the depositary and its agents are not responsible for failing to carry out voting instructions or for their manner of carrying out your voting instructions. This means that you may not be able to exercise your right to direct how the underlying Class A ordinary shares represented by your ADSs are voted and you may have no legal remedy if the underlying Class A ordinary shares represented by 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.

***Because we may not pay regular dividends in the foreseeable future, you must rely on price appreciation of the ADSs for return on your investment.***

We currently intend to retain our available funds and any future earnings to fund the development of our business. We do not have any present plan to pay regular cash dividends on our ordinary shares in the foreseeable future. Therefore, you should not rely on an investment in our ADSs as a source for any future dividend income.

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Pursuant to our memorandum and articles of association, our board of directors has complete discretion as to whether to distribute dividends, subject to certain requirements of Cayman Islands law. In addition, our shareholders may by ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by our board of directors. Under Cayman Islands law, a Cayman Islands company may pay a dividend either out of profits or share premium account, provided that in no circumstances may a dividend be paid if this would result in the company being unable to pay its debts as it falls due in the ordinary course of business. In addition, our shareholders may declare dividends by ordinary resolution, but no dividend declared shall exceed the amount recommended by our directors. Even if our board of directors decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on, 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 our ADSs will likely depend entirely upon any future price appreciation of our ADSs. There is no guarantee that our ADSs will appreciate in value or even maintain the price at which you purchased the ADSs. You may not realize a return on your investment in our ADSs and you may even lose your entire investment in our ADSs.

***You may not receive dividends or other distributions on our ordinary shares and you may not receive any value for them, if it is illegal or impractical to make them available to you.***

The depositary of the ADSs has agreed to pay to you the cash dividends or other distributions it or the custodian receives on ordinary shares or other deposited securities underlying the ADSs, after deducting its fees and expenses. You will receive these distributions in proportion to the number of ordinary shares your ADSs represent. However, the depositary is not responsible if it decides that it is unlawful or impractical to make a distribution available to any holders of ADSs. For example, it would be unlawful to make a distribution to a holder of ADSs if it consists of securities that require registration under the Securities Act of 1933 but that are not properly registered or distributed under an applicable exemption from registration. The depositary may also determine that it is not feasible to distribute certain property through the mail. Additionally, the value of certain distributions may be less than the cost of mailing them. In these cases, the depositary may determine not to distribute such property. We have no obligation to register under U.S. securities laws any ADSs, ordinary shares, rights or other securities received through such distributions. We also have no obligation to take any other action to permit the distribution of ADSs, ordinary shares, rights or anything else to holders of ADSs. This means that you may not receive distributions we make on our ordinary shares or any value for them if it is illegal or impractical for us to make them available to you. These restrictions may cause a material decline in the value of the ADSs.

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

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

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

Your ADSs are transferable on the books of the depositary. However, the depositary may close its books at any time or from time to time when it deems it expedient in connection with the performance of its duties. The depositary may close its books from time to time for a number of reasons, including in connection with corporate events such as a rights offering, during which time the depositary needs to maintain an exact number of ADS holders on its books for a specified period. The depositary may also close its books in emergencies, and on weekends and public holidays. The depositary may refuse to deliver, transfer or register transfers of our ADSs generally when our share register or the books of the depositary are closed, or at any time if we or the depositary thinks it is advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason.

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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, as amended from time to time, the Companies Act of the Cayman Islands 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 owed to us by our directors 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 owed to us by 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 United States. In particular, the Cayman Islands has a less developed body of securities laws than the United States. Some U.S. states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands. In addition, with respect to Cayman Islands companies, plaintiffs may face special obstacles, including but not limited to those relating to jurisdiction and standing, in attempting to assert derivative claims in state or federal courts of the United States.

Shareholders of Cayman Islands exempted companies like us have no general rights under Cayman Islands law to inspect or obtain register of members or corporate records (other than the memorandum and articles of association, the register of mortgages and charges and special resolutions passed by our shareholders) of these companies. Under Cayman Islands law, the names of our current directors can be obtained from a search conducted at the Registrar of Companies in the Cayman Islands. Our directors have discretion under our memorandum and articles of association 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 our shareholders to obtain the information needed to establish any facts necessary for them to motion 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 our board of directors or controlling shareholders than they would as public shareholders of a company incorporated in the United States.

***Your rights to pursue claims against the depositary as a holder of ADSs are limited by the terms of the deposit agreement.***

The deposit agreement governing the ADSs representing our Class A ordinary shares provides that, subject to the depositary's right to require a claim to be submitted to arbitration, the federal or state courts in the City of New York have exclusive jurisdiction to hear and determine claims arising under the deposit agreement and in that regard, to the fullest extent permitted by law, ADS holders waive the right to a jury trial of any claim they may have against us or the depositary arising out of or relating to our shares, the ADSs or the deposit agreement, including any claim under the U.S. federal securities laws.

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

If you or any other holders or beneficial owners of ADSs bring a claim against us or the depositary in connection with matters arising under the deposit agreement or the ADSs, including claims under U.S. 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.

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Nevertheless, if this jury trial waiver provision is not enforced, to the extent a court action proceeds, it would proceed under the terms of the deposit agreement with a jury trial. No condition, stipulation or provision of the deposit agreement or ADSs serves as a waiver by any holder or beneficial owner of ADSs or by us or the depositary of compliance with any substantive provision of the U.S. federal securities laws and the rules and regulations promulgated thereunder.

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

We are a Cayman Islands exempted company and substantially all of our assets are located outside of the United States. Substantially almost all of our current operations are conducted in China. In addition, all of our current directors and officers are nationals and residents of countries other than the United States. Substantially all of the assets of these persons are located outside the United States. As a result, it may be difficult or impossible for you to bring an action against us or against these individuals in the United States in the event that you believe that your rights have been infringed under the U.S. federal securities laws or otherwise. Even if you are successful in bringing an action of this kind, such judgements against our assets or the assets of our directors and officers are further subject to recognition and enforcement proceedings under the laws of the Cayman Islands and the laws of China.

***As an exempted 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.***

As a Cayman Islands company listed on the Nasdaq Stock Market, we are subject to the Nasdaq corporate governance listing standards. However, Nasdaq rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the Cayman Islands, which is our home country, may differ significantly from the Nasdaq corporate governance listing standards. Currently, we rely on home country practice with respect to certain aspects of our corporate governance. See "*Item 16G. Corporate Governance*." As a result, our shareholders may be afforded less protection than they would otherwise enjoy under the Nasdaq governance listing standards applicable to U.S. domestic issuers.

***We may be a passive foreign investment company for U.S. federal income tax purposes, which could result in adverse U.S. federal income tax consequences to U.S. Holders of our ADSs or ordinary shares.***

Depending on the value of our assets, which is determined based, in part, on the market value of our ADSs, and the nature of our assets and income over time, we could be a passive foreign investment company, or PFIC, for U.S. federal income tax purposes. A non-U.S. corporation, such as our company, will be a PFIC for U.S. federal income tax purposes for any taxable year if either (i) at least 75% of its gross income for such year consists of certain types of "passive" income; or (ii) at least 50% of the value of its assets (generally determined on the basis of a quarterly average) during such year is attributable to assets that produce passive income or are held for the production of passive income, or the Asset Test. For purposes of determining our PFIC status, we will be treated as owning a proportionate share of the assets and earning a proportionate share of the income of any other corporation in which we own, directly, indirectly, or constructively, at least 25% (by value) of its stock. Although the law in this regard is not entirely clear, we treat our consolidated VIEs as being owned by us for U.S. federal income tax purposes because we control their management decisions and are entitled to substantially all of the economic benefits associated with them, and, as a result, we consolidate their results of operations in our consolidated U.S. GAAP financial statements. If it were determined that we are not the owner of the consolidated VIEs for U.S. federal income tax purposes, we may be treated as a PFIC for the current taxable year and any subsequent taxable year. Assuming that we are the owner of our VIEs for U.S. federal income tax purposes, and based on our income and assets and the market value of our ADSs, we believe that we were not a PFIC for the taxable year ended December 31, 2024.

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There can be no assurance, however, regarding our PFIC status for the current taxable year or future taxable years, because our PFIC status is a factual determination made annually that will depend, in part, on the composition of our income and assets. The value of our assets for purposes of the Asset Test, including the value of our goodwill and unbooked intangibles, may be determined in part by reference to the market price of our ADSs from time to time (which may be volatile). Because we will generally take into account our current market capitalization in estimating the value of our goodwill and other unbooked intangibles, our PFIC status for the current taxable year and future taxable years may be affected by our market capitalization. Recent fluctuations in our market capitalization create a material risk that we may be a PFIC for the current taxable year and future taxable years. In addition, the composition of our income and our assets will be affected by how, and how quickly, we spend our liquid assets. Under circumstances where our revenue from activities that produce passive income significantly increases relative to our revenue from activities that produce non-passive income, or where we determine not to deploy significant amounts of cash for active purposes, our risk of becoming a PFIC may substantially increase. Because there are uncertainties in the application of these rules, it is possible that the Internal Revenue Service may challenge our classification of certain income or assets as non-passive, or our valuation of our goodwill and other unbooked intangibles, each of which could cause us to become a PFIC for the current or subsequent taxable years.

If we are a PFIC for any taxable year during which a U.S. Holder (as defined in "*Item 10. Additional Information—E. Taxation—U.S. Federal Income Tax Considerations*") holds our ADSs or ordinary shares, the U.S. Holder may be subject to certain adverse U.S. federal income tax consequences. Additionally, if we are a PFIC for any taxable year during which U.S. Holders hold our ADSs or ordinary shares, we would generally continue to be treated as a PFIC with respect to such U.S. Holders even if we do not satisfy either of the above tests to be a PFIC in a subsequent taxable year. See "*Item 10. Additional Information—E. Taxation—U.S. Federal Income Tax Considerations—Passive Foreign Investment Company Considerations*."

**ITEM 4.** **INFORMATION ON THE COMPANY**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **History and Development of the Company** 

We commenced our operation in May 2014 to develop, design, manufacture and sell IoT products, including smart water purification systems. In July 2018, we established Guangdong Lizi, a subsidiary of Foshan Viomi, as a smart water purification system facility focusing on the research, design, production and supply of smart water purifiers and water purifier filters. Guangdong Lizi began commercial manufacturing operations in January 2019.

In October 2020, we established Zhumeng Hulian Technology (Guangdong) Co. Ltd. as a wholly-owned subsidiary of Codream HK Co., Limited, one of our subsidiaries. In November 2020, Foshan Viomi transferred all of its equity interests of Guangdong Lizi to Zhumeng Hulian Technology (Guangdong) Co. Ltd. Meanwhile, Guangdong Lizi expanded its production of smart water purification system, and expanded its business scope to include research, design, production and supply of smart sweeper robots, as well as supply of some small appliances.

In August 2024, to implement our "**Focus**" strategy for home water solutions, we divested our businesses and assets involving certain IoT@Home portfolio products (excluding range hoods, gas stoves, and water heaters) for a total consideration of RMB65 million in cash. Embrading the mission of "**AI for Better Water**," we strive to utilize AI technology to provide better drinking water solutions for households. As an industry-leading technology company in home water solutions in China, we have developed a distinctive "**Equipment + Consumables**" business model. To achieve this, we effect the 2024 reorganization transition by termination the contractual arrangements between Yunmi Hulian and Foshan Viomi, which has resulted in Foshan Viomi's shareholder, Mr. Xiaoping Chen, fully controlling Foshan Viomi and its subsidiaries including Foshan Xiaoxian Hulian Electric Appliances Technology Co. Ltd., Foshan Qutansuo Electric Technology Co., Ltd., Guangdong AI Touch Technology Co., Ltd., and Zhuawa Technology (Guangdong) Co., Ltd. Additionally, Zhumeng Hulian and Guangzhou Interconnect have enter into a new set of contractual arrangements, as a result of which the Company has controlled Guangzhou Interconnect and consolidated its financial results.

We carry out our business though our subsidiaries and VIEs. We have two WFOEs in China, namely Lequan Technology (Beijing) Co., Ltd., or our WFOE I, and Zhumeng Hulian Technology (Guangdong) Co., Ltd., or our WFOE II, to direct the activities of our VIEs and their subsidiaries. Our WFOE I has a series of contractual arrangements with Beijing Viomi and its shareholders. Our WFOE II has a series of contractual arrangements with Guangzhou Interconnect and its shareholders. Prior to the completion of the 2024 reorganization transaction, our WOFEs include WOFE I and Yunmi Hulian Technology (Guangdong) Co., Ltd., or the former WOFE. and our VIEs include Beijing Viomi and Foshan Viomi. See "*—C. Organizational Structure—Contractual Arrangements with Our VIEs and Their Shareholders*" below. Revenues contributed by our VIEs accounted for 90.2%, 88.9% and 45.0% of our total revenues for the years ended December 31, 2022, 2023 and 2024, respectively.

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Our principal executive offices are located at Wansheng Square, Rm 1302 Tower C, Xingang East Road, Haizhu District, Guangzhou, Guangdong, 510220, People's Republic of China. Our telephone number at this address is +86 20 8930 9496. Our registered office in the Cayman Islands is located at offices of Maples Corporate Services Limited at PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands.

You can find the information that we file with the SEC on www.sec.gov. You can also find information on our website ir.viomi.com. This website is not part of this annual report.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Business Overview** 

Embracing the mission of "**AI for Better Water**," we strive to utilize AI technology to provide better drinking water solutions for households worldwide. As an industry-leading technology company in home water solutions, we have developed a distinctive "**Equipment + Consumables**" business model. By leveraging our expertise in AI technology, intelligent hardware and software development, we simplify filter replacement and enhances water quality monitoring, thereby increasing the filter replacement rate. Our continuous technological innovations extend filter lifespan and lower user costs, promoting the adoption of water purifiers and supporting a healthy lifestyle while effectively addressing the rising global demand for cleaner, fresher and healthier drinking water. We operate a world-leading "**Water Purifier Gigafactory**" with an integrated industrial chain that boasts optimal efficiency and facilitates continuous breakthroughs in water purification. This state-of-the-art facility enables us to achieve economies of scale and accelerate the global popularization of residential water filtration.

Our business comprises of two main parts, our Viomi business, which includes our Viomi-branded products, and Non-Viomi business, which involves our strategic partnership with Xiaomi. Sales through our own and third-party channels, which constitute the vast majority of our Viomi-branded products business, accounted for 25.3%, 21.1% and 17.3% of our net revenues in 2022, 2023 and 2024, respectively. Xiaomi is our strategic partner, shareholder and customer. Our strategic partnership with Xiaomi provides us with access to Xiaomi's ecosystem users, sales platforms and data resources and related support. Sales to Xiaomi, predominantly comprising Xiaomi-branded products, accounted for 74.7%, 78.9% and 82.7% of our net revenues in 2022, 2023 and 2024, respectively. Our strong research and development capabilities, supply chain resources and innovative products and services are able to enrich Xiaomi's suite of offerings, resulting in a mutually beneficial relationship between Xiaomi and us.

As an industry-leading technology company for home water solutions, Viomi has consistently driven technological breakthroughs over the past decade. These innovations include:

- Tankless large-flux water purifier: provides fresh drinking water 24/7, with a water flux up to 2000G, expanding the usage scenario of water purification from drinking to cooking, washing vegetables, and more.

- Advancements in ERO electrodialysis and mineralization filter technologies: Allow Viomi to offer a range of water solutions, from pure water to natural mineral water, promoting a new trend of healthy living.

- Integrated functions: Viomi has evolved from single-function filtration to integrated functions such as instant heating, cooling, and ice-making, meeting diverse global drinking needs.

We offers a wide range of products covering various home scenarios, from kitchen to living room and whole-house, comprehensively addressing the increasing global demand for cleaner, fresher and healthier drinking water. With our unwavering commitment to bring smarter products and solutions to consumers, we ranked the 439th in the 21st edition of "2024 China's Top 500 Brands" list released by World Brand Lab on June 19, 2024, with a brand value of approximately RMB15.3 billion.

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In March 2024, for our home water system products, we introduced the Viomi Kunlun Mineral AI Water Purifier, integrating advanced AI technology to optimize the purification process. Featuring an innovative AI-powered mineralizing filter technology, it ensures the sustained release of beneficial minerals. This produces purified water with a mineral composition closely resembling natural mineral water, providing our users with fresh, mineral-rich water at home. In North America, we introduced the Vortex series of under-the-sink RO water purifiers, designed for users who value convenience and efficiency. Its self-installation feature has been well-received, with over 80% of users reporting a smooth installation process averaging only 20 minutes. The Vortex's tankless design and DIY filter replacement can greatly save space and time for users. A three-to-one wastewater ratio and four-year long-lasting filter lifespan enhance filtration efficiency, reduce water waste, and lower maintenance costs, delivering a superior user experience.

In May 2025, we launched Kunlun 4 Pro Alkaline Mineral Water purifier, this next-generation water purifier harnesses AI technology to replicate the natural mineral water formation process, aiming to elevate household drinking water from the era of "pure water" to the new era of "pure mineral water," and offering a solution for families seeking mineral-rich drinking water at home.

**Our platform**

Our unique platform consists of innovative home water systems, consumables, and kitchen appliances and others.

Prior to our 2024 reorganization transaction, we grouped our products into four business lines, including IoT@Home portfolio products, home water solutions, consumables and small appliances and others. After the divestment of our "divested IoT@Home business in 2024, we re-grouped our products to better reflect our "**Focus**" strategy for home water solutions.

Currently, our products are grouped under the following three business lines: "home water systems," which mainly are composed of our smart water purification products, water heaters, smart water kettles, and electric kettles, among others "consumables," which consist of our consumable products that mainly include a range of water filters for our smart water purifiers, and "kitchen appliances and others," which refer to range hoods, gas stoves, and other small appliances, as well as product installation services and rental services.

Specifically, water heaters, smart water kettles which were previously grouped under IoT@Home portfolio products, have been re-grouped to home water systems. Electric kettles, which were previously grouped under small appliances and others, have been also re-grouped to home water systems. Range hoods, gas stoves, and other small appliances, which were previously grouped under IoT@Home portfolio products, have been re-grouped to kitchen applicants and others.

The table below sets forth the revenue contribution of our key business lines after the product recategorization:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** |
|  | **2022** | **2022** | **2023** | **2023** | **2024** | **2024** | **2024** |
|  | **RMB** | **%**  | **RMB** | **%**  | **RMB** | **US$** | **%**  |
|  | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** | **(in thousands, except for percentages)** |
| **Net revenues:** |  |  |  |  |  |  |  |
| Home water systems | 1162725 | 64.9 | 1077858 | 65.8 | 1498368 | 205276 | 70.7 |
| Consumables | 353936 | 19.8 | 324738 | 19.8 | 277704 | 38045 | 13.1 |
| Kitchen appliances and others<sup>(1)</sup> | 273584 | 15.3 | 236140 | 14.4 | 342910 | 46978 | 16.2 |
| **Total** | **1790245** | **100.0** | **1638736** | **100.0** | **2118982** | **290299** | **100.0** |

---

Note:

&nbsp;&nbsp;&nbsp;&nbsp;(1) Including range hoods, gas stoves and other small appliances, as well as product installation services and rental services. For more details, see note 15 to our consolidated financial statements at the end of this annual report.

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***Home water systems***

Our home water system products also include water heaters, smart water kettles, and electric kettles, among others.

***Consumables***

The consumables mainly include water filters for our smart water purifiers. We offer water filters that are complementary, and often essential, to our home water systems. These products generate additional, recurring revenue streams throughout the life cycle of our home water systems. Consumers can purchase these products through our sales channels or the e-commerce platforms integrated to our home water systems.

***Kitchen appliances and others***

Another component of our platform is our kitchen appliances and others.

We offer a variety of other kitchen appliances to supplement our home water systems. These kitchen appliances include range hoods, gas stoves, and other small appliances.

We provide product installation services to end-customers and lease properties to related parties.

**Sales Channels**

Our key sales channel network consists of (i) online e-commerce platforms, (ii) third-party offline channels, through which we predominantly sell Viomi-branded products, and (iii) Xiaomi, through which we predominantly sell Xiaomi-branded products.

***Online***

Our products are sold across a number of leading e-commerce channels in China, including JD.com, Tmall, Youpin and Pinduoduo, among others. We believe that cooperation with these leading e-commerce platforms enables us to leverage their established customer base and brand recognition, and helps us reach a wide group of customers across a variety of markets. We also sell products via our proprietary Viomi mobile app and WeChat program.

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Since 2022, we have deepened our cooperation with JD Logistics to access a broader range of services including planning, logistics, warehousing and installation, which we believe improves efficiency throughout our cycle, from solution design and delivery to installation, as well as provide our customers with more enjoyable after-sale service experience. In 2023, we closely cooperated with JD.com to ensure a smooth and differentiated consumer experience by introducing our new water purifiers on its platform. In February 2025, we further strengthened our cooperation with JD, reaching a joint marketing agreement for the Kunlun series products to promote healthy drinking water.

We are also developing our overseas business via online channels. Our North America new product series made a strong international debut on the Kickstarter crowdfunding platform on November 5, 2024, surpassing its funding goal on the first day with 168 backers contributing over 1,200% of the target. Our Amazon store was officially launched on December 16, 2024.

***Offline***

Our offline sales channels comprise of our Viomi offline stores and online-to-offline (O2O) outlets of major e-commerce retailers. These O2O outlets complement our online channels, expanding our market access and increasing our brand awareness.

*Third-party offline channels*

To further diversify and strengthen our overall channel penetration and presence, we have increased our overall points of sales, particularly through cooperation with O2O outlets of major e-commerce retailers such as JD nationwide, which are expected to increase our end-points of sales and overall consumer awareness of our brand, products and concept.

We are also developing our overseas business by upgrading channels, diversifying our operation model and expanding product categories. We participated for the first time in CES 2025 in Las Vegas in January 2025. Our intelligent home water solutions garnered widespread recognition from industry experts and attendees, reinforcing our reputation as a smart home water solutions innovator.

***Xiaomi***

Under our cooperation agreement with Xiaomi, we are responsible for the design, research, development, production and delivery of various Xiaomi-branded products to Xiaomi. Xiaomi is then responsible for commercial distribution and sales of these respective products. We also sell some Viomi-branded products to Xiaomi.

**Research and Development**

We are committed to developing new and innovative products and services through research and development. As a long-term strategy, we are committed to provide industry-leading water solutions. Recently, we moved Guangdong Lizi's smart water purification system facility to the Viomi Technology Park, to seamlessly integrate both upstream and downstream segments of water purification product manufacturing. As of December 31, 2024, our total research and development staff consisted of approximately 162 employees across multiple R&D centers and product groups teams, representing 31.1% of our total number of employees. Many of our team members are global and cross-industry experts in technical product hardware development, software and AI, including experts with previous experience working at Microsoft, LG, Samsung and AO Smith. We incurred RMB210.0 million, RMB148.9 million and RMB142.9 million (US$19.6 million) in research and development expenses in 2022, 2023 and 2024, respectively.

Our R&D achievements have also been recognized by industry and professional institutions. In April 2022, our AI range hoods' visual detection module technology won the Excellence Award at the 23<sup>rd</sup> China Patent Awards. Also, in the same month, we took the silver at the 8<sup>th</sup> Guangdong Patent Awards with one of our water purifiers and its integrated waterway module technology. Further, the Viomi brand was added to the key trademark protection list in Guangdong province. We were officially listed as Guangdong PhD Work Station by the government and have obtained the selection qualification to establish the Guangdong Postdoctoral Work Station. In July 2023, through its outstanding R&D efforts and innovative capabilities in the water purification industry, Guangdong Lizi Technology Co. Ltd., one of our subsidiaries, was honored with a national-level specialized and innovative "**Little Giant**" enterprise, which is one of the highest-level and most authoritative evaluation ratings for domestic enterprises in China. In December 2023, we ranked the second in the Technology Progress Awards by the Guangdong Artificial Intelligence Industry Association.

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**Software, AI and Data Analytics Systems**

We rely on our advanced software, innovative AI technology and powerful data analytics capability to develop, operate, and continually enhance our products.

***Advanced software***

We have developed advanced software to enable interconnectivity of our products and to support and expand their functionalities. Our software is equipped with public application programming interface through which other parties' software and products can be connected to and integrated with ours.

Some of our products that are equipped with interactive screens that run the Android operating system, which can operate software applications with advanced and diverse functions and serve as the platform on which our products connect. The rest of our products have embedded systems that operate both locally and on the cloud. Our Viomi mobile app allows customers to quickly and efficiently discover, review, select and purchase our products. In addition, the Viomi app serves as the control app for certain of our products, and enables our users to manage, monitor and interact with such products. Using our cloud-based software system, our products receive automatic updates, often on an overnight basis, to incorporate new functionalities and grow smarter over time based on our data analysis.

***AI***

We intend to leverage ongoing advancements in AI by incorporating them into our products and services. Our AI technology team develops and refines our proprietary, AI-based algorithms, and leverages third-party AI components to build a more effective system. AI technology is widely implemented through our services, for example in voice and gesture control, as well as in water quality analysis.

***Data analytics***

Through users' interaction with many of our products, advanced sensors embedded in our products can capture, accumulate and upload user and household usage data, only with the consent of users and will be used within the authorized scope. Our users' behavior and sequential data is stored strictly in compliance with stringent data privacy standards and data security requirements.

Our big data analysis team has developed our own data analytics platform. We use this platform to extract intelligence from large amounts of data. Analyzing this data enhances our understanding of user behavior, and we are thus able to further develop our home water solutions and other products to better serve our customers. By providing better solutions, we believe we will attract more users over time. More users on our platform can then generate more data for our software analytics, enhance our software and algorithms, and lead to a better user experience, which in turn can attract more users to our platform, a powerful virtuous cycle.

We consider the protection of the personal privacy of each of our users to be of paramount importance. We collect only anonymous data and only with users' consent, and all sensitive data is encrypted. We use such data only for the improvement of our products and services. Furthermore, our employees' access to our internal information management system is limited to verified IP address and we restrict the scope of such access based on the duty of the employee. Our data is stored securely in Huawei, Tencent, Alibaba, Xiaomi, Amazon and Volcengine Cloud services.

**Intellectual Property**

Intellectual property rights are fundamental to our business, and we devote significant time and resources to their development and protection. We rely on a combination of patent, copyright, trademark and trade secret laws, as well as confidentiality agreements, to establish and protect our proprietary rights. We generally do not rely on third-party licenses of intellectual property for use in our business.

As of December 31, 2024, we had 1,906 patents registered with the State Intellectual Property Office of China.

Globally, as of December 31, 2024, we had 9 pending patent applications in the United States.

As of December 31, 2024, we had registered 70 trademarks in China.

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**Relationship with Xiaomi**

Xiaomi is our strategic partner, shareholder and customer. Our strategic partnership with Xiaomi provides us access to Xiaomi's ecosystem users, sales platforms and data resources and related support. Meanwhile, our strong manufacturing, research and development capabilities, supply chain resources and innovative products and services are able to enrich Xiaomi's suite of offerings, resulting in a mutually beneficial relationship between Xiaomi and us.

Our cooperation with and sales to Xiaomi extends to a diversified range of products, which, as of the end of 2024, included Xiaomi-branded water purification systems, water purifier filters, range-hoods and gas stoves, water heaters as well as other small products such as kettles, small kitchen products and water quality meters.

Under our cooperation agreement with Xiaomi, we are responsible for the design, research, development, production and delivery of various Xiaomi-branded products to Xiaomi. Xiaomi is then responsible for commercial distributions and sales. For certain products under our cooperation with Xiaomi, the selling price is a fixed amount as agreed by both parties. For other products, we first recover our manufacturing and logistics cost when we deliver to Xiaomi, and are additionally entitled to share a portion of the gross profit when Xiaomi is successful in selling such products to end consumers.

We also sell Viomi-branded products through Xiaomi's e-commerce platform, Youpin, directly to consumers. We are charged with service fees proportionate to the sales amount of our products excluding refunds, or as otherwise agreed for certain products.

Please see the description under "*Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transaction—Our Relationship with Xiaomi—Business cooperation agreement*." For a summary of the material terms of major agreements with Xiaomi. Please also see "*Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—Xiaomi is our strategic partner and our most important customer. Changes in our relationship with Xiaomi could have a material adverse effect on our operating results*." For discussion of our risks associated with the cooperation with Xiaomi.

**Sales and Marketing**

***Marketing***

Our marketing is focused on building our brand recognition, increasing market awareness of our home water solutions and driving customer demand, as well as collaborating with our third-party partners across our sales channels. Examples of our marketing initiatives include:

*Branding and advertisements*

We leverage social-media, including live-streaming platforms to engage with users of our products, whereby we enhance user-experience while promoting our brand. For example, we have invited key opinion leaders, or **KOLs**, celebrities, and even our management and employees to be live-streaming hosts. Considering the target market of our brand and products, support from KOLs through social-media and live-streaming has been quite an effective marketing initiative, not only as a promotional tool, but also to increase customer and user stickiness and engagement. On October 11, 2023, we announced Ms. Xiwei Tian, a well-known actress in China, as the global brand spokesperson for Viomi. As a new-generation actress, Ms. Tian represents the voice of younger consumers who pursue high-tech and healthy lifestyles.

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***Events marketing***

We organize and participate in various official online and offline events to promote our brand and the idea of a healthy lifestyle. We actively participate in shopping festivals across e-commerce platforms such as "618", "Double Eleven" and "Double Twelve," which are highly popular among Chinese consumers. In March 2024, we hosted the Viomi Spring Water Purifier New Product Launch Event and unveiled the Viomi Kunlun Mineral AI Water Purifier. In May 2025, we unveiled Kunlun 4 Pro Alkaline Mineral Water purifier at a special offline product event.

***Customer service***

User experience is a key focus for our business. We strive to provide personalized support for our users, including support from customer service representatives through real-time online chat, our toll-free customer service phone number, or visiting our Viomi offline stores. To improve our overall customer service capability, we keep upgrading our service network across China and have implemented a customer satisfaction system, which integrates the call center, service task and customer relation management.

***After-sales service***

The goal of our after-sale service is to create the best user experience for our customers. Our customers may return all products purchased from our official Viomi online store and other online platforms within seven days from receipt. Our customers may also have their products replaced for specific types of defects or quality issues as required under the laws and regulations. In addition, we partner with local aftersales service providers to provide on-site services such as product installation and repairs to our customers.

**Manufacturing and Fulfillment**

***Procurement and manufacturing***

We produce our products both through outsourcing manufacturing and through in-house manufacturing. Currently, excluding water purification products and filters, the rest of our product manufacturing, is outsourced to a number of contract manufacturers, who produce our products using design specifications and standards that we have established. We also help our contract manufacturers to design the equipment and tooling used in the production and help train their workers. We evaluate on an ongoing basis our current contract manufacturers and component suppliers, including whether or not to utilize new or alternative contract manufacturers or component suppliers.

Our in-house facility, Guangdong Lizi, commenced commercial operations in the first half of 2019 and were integrated into our Viomi platform. Guangdong Lizi is a smart water purification system facility focusing on the research, design, production and supply of smart water purifiers and water purifier filters Going forward, we expect that an increase in the proportion of our smart water purifier, water purifier filter demands that can be supplied directly through this facility.

We acquired land use right to a parcel of land of approximately 36,000 square meters from the local government in Shunde, Guangdong Province in June 2020, for the development of Viomi Technology Park, a comprehensive high-tech industrial campus. We have completed the construction of the building in the second half of 2023 and relocated our in-house facility, Guangdong Lizi, the Water Purifier Gigafactory, of the group into the park. The Viomi Technology Park currently include our multi-functional headquarters, namely a product experience center, a research and development center, a Water Purifier Gigafactory, and a centralized hub for sales and customer service functions. Going forward, the Water Purifier Gigafactory is expected to focus on and accommodate additional facilities for our home water system products, especially water purification products, serving as a focal point of our expanded supply chain capabilities, while attracting more upstream and downstream corporate and business opportunities. We are committed to strengthening our supply chain resources to provide the necessary foundation for supporting our manufacturing and R&D capabilities.

We believe that outsourcing certain manufacturing of our products while retaining others at our own facility allows us to scale up more rapidly while also providing additional operational flexibility and at the same time ensures our control over our supply chain and technological expansion.

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We procure certain key raw materials and components from domestic and some overseas suppliers, and then consign them to our contract manufacturers. Our suppliers generally also provide direct order fulfillment services with logistics that include delivery of parts and assembly to either our own facility for inspection or our contract manufacturers directly.

***Inventory management***

Our inventory primarily consists of finished products and raw materials. We manage our inventory with measures appropriate to the use and nature of the inventory. Our manufacturing plans are designed and implemented to accommodate our sales and maintain reasonable inventory levels. We receive aggregated and geographically-enabled inventory data feeds from our centralized distribution network, which facilitates product shipment from warehouses that are closer to the delivery destination. Through close coordination with our customers and contract manufacturers and frequent purchases of components from suppliers, we are able to carry relatively efficient levels of raw materials and in-process inventories, minimizing inventory risk.

***Product quality assurance***

We developed the quality assurance management software that monitors the manufacturing and quality assurance process used across our own manufacturing facility as well as our contract manufacturers. We have designed and implemented a quality management system that provides the framework for continuing improvement of our products and processes. For our new product lines, we conduct thorough examinations of product samples and each of their components at the product verification testing stage to make sure they satisfy our technical requirements. For our existing product lines, we also have a quality assurance team that establishes, communicates and monitors quality standards by product category. In addition, we have quality assurance personnel seconded to the facilities of our contract manufacturers to ensure that they fully adhere to our quality standards in the production process.

We have constant access to each manufacturing facility of our contract manufacturers, and our quality control team continually monitors the quality of incoming components, materials and finished products, as well as the manufacturing processes at our contract manufacturers' facilities. We also require our partners to maintain quality control over their logistics, production and quality inspection procedures based on ISO9001 quality standards.

**IT Infrastructure**

Our network infrastructure is designed to satisfy the requirements of our operations, to support the growth of our business and to ensure the reliability of our operations as well as the security of information on our platform. We continually develop our platform to offer users an effortless and seamless experience across our products and services, while at the same time enhancing the reliability and scalability of our platform.

We cooperate with Xiaomi, Huawei, Alibaba, Tencent, Amazon and Volcengine Cloud services for services such as computing services, storage, server, bandwidth and video call. We have a working data redundancy model with comprehensive backups of both cloud services. This redundancy supports the reliability of our network and the stable operation of our business.

**Competition**

We compete with other companies in all aspects of our business, particularly companies that are in the home water solution market. The home water solution market has a large number of participants, including traditional appliances companies, consumer electronics companies and AI and consumer internet companies that are moving into the hardware space. The industry in which we compete is evolving rapidly and is becoming increasingly competitive. For additional information, see "*Item 3. Key Information—D. Risk Factors—Risks Related to our Business and Industry—We operate in highly competitive markets, and the scale and resources of some of our competitors may allow them to compete more effectively than we can, which could result in a loss of our market share and a decrease in our net revenues and profitability*."

We believe the success of our growth strategy depends on many factors, including brand recognition, value, user experience, breadth of product and service offerings, product functionality and quality, sales and distribution, and supply chain management.

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**Insurance**

We maintain various insurance policies to safeguard against risks and unexpected events. We have purchased product liability insurance for Viomi branded products, sold in the domestic market as well as those exported to the overseas market. We maintain public liability insurance for any personal injury or property loss of any third party occurred in the operating facilities of the Company in China, including those of Foshan Viomi and its subsidiaries in China. We have also procured insurance policies to insure against the risk of potential inabilities to collect our accounts receivables.

In line with common practice of the market, we do not maintain any business interruption insurance, which is not typical in our industry or mandatory under Chinese laws. We do not maintain key-man life insurance or insurance policies covering non-physical damages to our IT infrastructure or information technology systems. We also do not maintain insurance policies against risks relating to the Contractual Arrangements.

**Regulations**

Substantially all of our business is located in PRC, and laws and regulations in PRC are most relevant to our business. This section sets forth a summary of the most significant rules and regulations that affect our business activities in China.

***Regulations on value-added telecommunication services***

The Telecommunications Regulations of the PRC, promulgated by the State Council in 2000 and last amended in February 2016, provide a regulatory framework for telecommunications services providers in PRC. These regulations require telecommunications services providers to obtain operating licenses prior to the commencement of their operations. The telecommunications services are categorized into basic telecommunications services and value-added telecommunications services. According to the Catalog of Telecommunications Business, attached to the Telecommunications Regulations and last amended by the Ministry of Industry and Information Technology in June 2019, each of internet information services and transaction processing services provided via fixed network, mobile network and Internet fall within value-added telecommunications services.

The Administrative Measures on Internet Information Services, promulgated by the State Council in 2000 and amended in January 2011, set out guidelines on the provision of internet information services. These measures classified internet information services into commercial internet information services and non-commercial internet information services, and a commercial operator of internet information services or transaction processing services must obtain a corresponding operating permit for value-added telecommunications services (VATS License) from the appropriate telecommunications administration authorities. The Administrative Measures for Telecommunications Businesses Operating Licensing, which was promulgated by the Ministry of Industry and Information Technology in July 2017 and became effective on September 1, 2017, provide that a commercial operator of value-added telecommunications services must first obtain a VATS License from the Ministry of Industry and Information Technology or its provincial level counterparts. The VATS License is classified as the Cross-regional Value-added Telecommunications Operating License and the Value-added Telecommunications Operating License within a province, autonomous region and municipality directly under the central government. In addition, in the first quarter of every year while the operator is holding the license, it must report information such as business performance of the telecommunications business in the previous year, the actual progress in network buildup, business development, turnover of staff, institutional restructuring and service quality to the issuing authorities.

Pursuant to the Provisions on the Administration of Foreign-Invested Telecom Enterprises, promulgated by the State Council in 2001 and last amended in 2022, foreign investors are prohibited from holding more than 50% of the equity interests of a telecom enterprise operating value-added telecom services unless otherwise provided by the laws and regulations. In addition, the establishment of a foreign-invested telecom enterprise operating value-added telecom services needs to seek approval from the Ministry of Industry and Information Technology.

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To comply with these regulations, we have adopted a "VIE" structure. Prior to the completion of the 2024 reorganization transaction, our former VIE, Foshan Viomi, holds an operating permit for e-commerce services and an operating permit for internet information services, which allow Foshan Viomi to provide e-commerce services and internet information services. In the 2024 reorganization transaction, Foshan Viomi agreed to transfer the websites, mobile apps, mini programs operated by it and all the relates materials and rights (including but not limited to domain names, databases, codes, software, operational data, materials, documents, information) to Guangzhou Interconnect. We and Foshan Viomi are currently in the process of such transfer. Guangzhou Interconnect has obtained an operating permit for e-commerce services and an operating permit for internet information services. After the completion of the transfer and obtaining all the operating permits, Guangzhou Interconnect will replace Foshan Viomi in operating internet information and e-commerce services business.

***Regulations on catalogue relating to foreign investment***

Investment activities in the PRC by foreign investors are subject to the Catalogue Industries for Encouraging Foreign Investment and the Catalogue of special management measures, or the **Negative List**, both of which were promulgated and are amended from time to time by the Ministry of Commerce and the National Development and Reform Commission. The latest version of the Catalogue Industries for Encouraging Foreign Investment, which was amended and issued on October 26, 2022 and became effective on January 1, 2023, indicates the encouraged industries for foreign investments. The latest version of the Negative List, which was amended and issued on September 6, 2024 and became effective on November 1, 2024, divides the industries listed therein into two categories: restricted industries and prohibited industries. Any industry not listed in any of the latest version of the Catalogue Industries for Encouraging Foreign Investment or the latest version of the Negative List is classified as a permitted industry for foreign investment. Establishment of wholly foreign-owned enterprises is generally allowed in industries outside of the Negative List. For the restricted industries within the Negative List, some are limited to equity or contractual joint ventures, while in some cases Chinese partners are required to hold the majority interests in such joint ventures. In addition, restricted category projects are subject to government approvals and certain special requirements. Foreign investors are not allowed to invest in industries in the prohibited category. Industries not listed in the Negative List are generally open to foreign investment unless specifically restricted by other PRC regulations.

The PRC Foreign Investment Law was promulgated on March 15, 2019 by the National People's Congress and has come into force since January 1, 2020, which stipulates that the state implements a management system of pre-entry national treatment plus Negative List for the administration of foreign investment. According to the PRC Foreign Investment Law, foreign investors and their investments are entitled to pre-entry national treatment and are subject to the negative list management system. The pre-entry national treatment refers to the treatment given to foreign investors and their investments at the market access stage that is no less favorable than that given to domestic investors and their investments. The PRC Foreign Investment Law also provides that industries not included in the Negative List shall be managed under the principle that domestic investment and foreign investment shall be treated equally. On December 26, 2019, the State Council promulgated the Implementation Regulations on the PRC Foreign Investment Law effective on January 1, 2020, which further require that foreign-invested enterprises and domestic enterprises shall be treated equally with respect to policy making and implementation.

On December 30, 2019, the Ministry of Commerce and the State Administration for Market Regulation jointly issued the Measures for Foreign Investment Information Reporting effective on January 1, 2020. Since then, for foreign investors engaging in investment activities, either directly or indirectly, in the PRC, the foreign investors or foreign-invested enterprises shall submit investment information through the Enterprise Registration System and the National Enterprise Credit Information Publicity System, both operated by the State Administration for Market Regulation. Foreign investors or foreign-invested enterprises shall disclose their investment information by submitting reports for their establishments, modifications and cancellations and their annual reports in accordance with the Measures for Foreign Investment Information Reporting. If a foreign-invested enterprise investing in the PRC has finished submitting its reports for its establishment, modifications and cancellation and its annual reports, the submitted information will be shared by the competent market regulation department to the competent commercial department, and therefore the foreign-invested enterprise is not required to submit the reports separately.

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***Regulations on M&A rules and overseas listings***

Foreign investors shall comply with the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors promulgated by six PRC regulatory agencies in 2006 and amended by Ministry of Commerce in 2009, when they purchase equity interests of a domestic company or subscribe the increased capital of a domestic company, changing the nature of the domestic company into a foreign-invested enterprise; when they establish a foreign-invested enterprise in the PRC, purchase the assets of a domestic company and operate the assets; or when they purchase the asset of a domestic company, establish a foreign-invested enterprise by injecting such assets and operate the assets. The Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors include provisions that mandate offshore special purpose vehicles established for overseas listing through acquisitions of PRC domestic companies and controlled by PRC companies or individuals to seek approval from the CSRC before publicly listing their securities on an overseas stock exchange.

On July 6, 2021, the General Office of the State Council, together with another regulatory authority, jointly promulgated the Opinions on Strictly Scrutinizing Illegal Securities Activities in Accordance with the Law, which emphasize the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based companies. These opinions propose to take effective measures, such as promoting the construction of relevant regulatory systems to deal with the risks and incidents faced by China-based overseas-listed companies, and provide that the special provisions of the State Council on overseas offering and listing by those companies limited by shares will be revised and therefore the duties of domestic industry competent authorities and regulatory authorities will be clarified.

According to the Trial Measures for Overseas Listing, (1) domestic companies that seek to offer or list securities in overseas markets, either in direct or indirect means, should fulfill the filing procedure with and report relevant information to the CSRC; if a domestic company fails to complete the filing procedure or conceals any material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative penalties, such as order to rectify, warnings, fines, and its controlling shareholders, actual controlling beneficial owners, the person directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines; (2) if the issuer meets both of the following criteria, the overseas offering and listing shall be determined as an indirect overseas offering and listing by a domestic company: (i) 50% or more of any of the issuer's operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent fiscal year is accounted for by domestic companies; (ii) the main parts of the issuer's operation activities are conducted in mainland China, or the principal operation premises are located in mainland China, or the majority of senior management staff in charge of its business operations and management are PRC citizens or have habitual residences located in mainland China; and (3) an overseas offering and listing of securities of a domestic company is prohibited under any of the following circumstances: (i) such securities offering and listing is explicitly prohibited by provisions in laws, administrative regulations and state rules; (ii) the intended securities offering and listing may endanger national security as reviewed and determined by competent authorities under the State Council in accordance with law; (iii) the domestic company(ies) intending to make the securities offering and listing, or its controlling shareholder(s) and the actual controlling beneficial owner, have committed relevant crimes such as corruption, bribery, embezzlement, misappropriation of property or undermining the order of the socialist market economy during the latest three years; (iv) the domestic company(ies) intending to make the securities offering and listing is currently under investigations for suspicion of criminal offenses or major violations of laws and regulations, and no conclusion has yet been made thereof; or (v) there are material ownership disputes over equity held by the PRC domestic company's controlling shareholder(s) or by other shareholder(s) that are controlled by the controlling shareholder(s) and/or actual controlling beneficial owner. Furthermore, the Trial Measures for Overseas Listing also provide that (1) where a domestic company seeks to indirectly offer and list securities in overseas markets, the issuer shall designate a major domestic operating entity, which shall, as the domestic responsible entity, fulfill the filing procedures with the CSRC; (2) an initial public offering and listing shall be filed with the CSRC within three business days after the relevant application is submitted overseas; (3) subsequent securities offerings of an issuer in the same overseas market where it has previously offered and listed securities shall be filed with the CSRC within three business days after the offering is completed; (4) subsequent securities offerings and listings of an issuer in overseas markets other than where it has offered and listed shall be filed pursuant to provisions as stipulated for initial public offerings and listings.

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On February 17, 2023, the CSRC held a press conference for the release of the Trial Measures for Overseas Listing and issued the Notice on Administration for the Filing of Overseas Offering and Listing by Domestic Companies, which, among others, clarify that (1) domestic companies that have already been listed overseas on or prior to the effective date of the Trial Measures for Overseas Listing (i.e., March 31, 2023) shall be deemed as existing issuers and are not required to complete the filling procedures immediately, and they shall be required to file with the CSRC when subsequent matters such as refinancing are involved; (2) on or prior to the effective date of the Trial Measures for Overseas Listing, domestic companies that have already submitted valid applications for overseas offering and listing but have not obtained approval from overseas regulatory authorities or stock exchanges may reasonably arrange the timing for submitting their filing applications with the CSRC, and shall complete the filing before the completion of their overseas offering and listing; (3) a six-month transition period will be granted to domestic companies which, prior to the effective date of the Trial Measures for Overseas Listing, have already obtained the approval from overseas regulatory authorities or stock exchanges (such as the completion of registration in the market of the United States or the completion of hearing in the market of Hong Kong), but have not completed the indirect overseas listing; if domestic companies fail to complete the overseas listing within such six-month transition period, they shall file with the CSRC according to the requirements; and (4) the CSRC will solicit opinions from the regulatory authorities and complete the filing of the overseas listing of companies with contractual arrangements which duly meet the compliance requirements, and support the development and growth of these companies by enabling them to utilize two markets and two kinds of resources.

On February 24, 2023, the CSRC released the Provisions on Strengthening Confidentiality and Archives Management of Overseas Securities Issuance and Listing by Domestic Enterprises effective on March 31, 2023. The provisions require, among others, that PRC domestic enterprises seeking to offer and list securities in overseas markets, either directly or indirectly, shall establish and improve the system of confidentiality and archives work, and shall complete approval and filing procedures with competent authorities, if such PRC domestic enterprises or their overseas listing entities provide or publicly disclose documents or materials involving state secrets and work secrets of state organs to relevant securities companies, securities service institutions, overseas regulatory agencies and other entities and individuals. It further stipulates that (1) providing or publicly disclosing documents and materials which may adversely affect national security or public interests, and accounting records or photocopies thereof to relevant securities companies, securities service institutions, overseas regulatory agencies and other entities and individuals shall be subject to corresponding procedures in accordance with the laws and regulations; and (2) any working papers formed in the territory of the PRC by securities companies and securities service agencies that provide domestic enterprises with securities services relating to overseas securities issuance and listing shall be stored in the territory of the PRC, the outbound transfer of which shall be subject to corresponding procedures in accordance with the laws and regulations.

***Regulations on product quality and consumer protection***

The PRC Product Quality Law applies to all production and sale activities in China. Pursuant to this law, products offered for sale must satisfy the relevant quality and safety standards. Enterprises may not produce or sell counterfeit products in any manner. Any producer or seller engaging in the production or sale of products that do not adhere to national standards or trade standards aimed at ensuring human health and personal or property safety shall be ordered to cease the production or sale of the products. Additionally, the illegally produced or sold products shall be confiscated and a fine equivalent to, but not more than three times, the value of the products illegally produced or sold (including those already sold and those not yet sold) shall be imposed concurrently. If there are illegal proceeds, such proceeds shall be confiscated concurrently. Furthermore, the business license shall be revoked in the severe circumstances. If the case constitutes a crime, criminal liability shall be investigated. Where a defective product causes physical injury to a person or damage to another person's property, the victim may claim compensation from the manufacturer or from the seller of the product. If the seller pays compensation and it is the manufacturer that should bear the liability, the seller has a right of recourse against the manufacturer. Similarly, if the manufacturer pays compensation and it is the seller that should bear the liability, the manufacturer has a right of recourse against the seller.

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The PRC Consumer Protection Law, which was amended in October 2013 and became effective in March 2014, sets out the obligations of business operators and the rights and interests of the consumers. Pursuant to this law, business operators must guarantee that the commodities they sell satisfy the requirements for personal or property safety, provide consumers with authentic information about the commodities and guarantee the quality, function, usage and term of validity of the commodities. Where business operators use internet, television, telephone, mail or other means to sell their commodities, consumers have the right to return such commodities, except the following commodities within seven days from the date when the consumers receive the commodities without giving any reason:

● commodities customized by the consumers;

● fresh perishable commodities;

● digitized commodities such as audio-video products and computer software downloaded online or opened by the consumers; and delivered newspapers and periodicals.

Where business operators use internet, television, telephone, mail or other means to provide goods or services, or provide securities, insurance, banking or other financial services, they shall provide consumers with information in regard to themselves and the goods or services provided such as business address, contact information, quantity and quality, price or fees, term and method of performance, safety precautions, risk warnings, after-sale services, and civil liabilities. Consumers whose legitimate rights and interests are infringed while purchasing goods or receiving services via an online trading platform shall have the right to claim compensation from the vendor of the goods or the provider of the services. Failure to comply with the PRC Consumer Protection Law may subject business operators to civil liabilities such as refunding purchase prices, exchanging commodities, repairing, remanufacturing, ceasing damages, compensation, and restoring reputation, and even subject the business operators or the responsible individuals to criminal penalties if business operators commit crimes by infringing the legitimate rights and interests of consumers. If the goods or services a business operator provides have caused personal injuries to consumers or other victims, the business operator shall compensate for the medical expenses, nursing expenses, transportation expenses and other reasonable fees for treatment and rehabilitation as well as the reduced income for loss of working time.

Under the PRC Civil Code, which became effective on January 1, 2021, producers shall bear tortious liability for damage caused to others by their defective products. If damages to other persons are caused by defective products due to the fault of a third party, such as the parties providing transportation or warehousing, the producers and the sellers of the products have the right to recover their respective losses from such third parties. If defective products are identified after they have been put into circulation, the producers or the sellers shall take remedial measures such as issuance of a warning, recall of products, etc. in a timely manner. The producers or the sellers shall be liable under tort if they fail to take remedial measures in a timely manner or have not made efforts to take remedial measures, thus causing damages. If the products are produced or sold with known defects, causing deaths or severe adverse health issues, the infringed party has the right to claim punitive damages in addition to compensatory damages.

We are subject to the above laws and regulations as an online retailer of products and believe that we are currently in compliance with these regulations in all material aspects.

***Regulations on intellectual property rights***

The PRC has adopted comprehensive legislation governing intellectual property rights, including patents, trademarks, copyrights and domain names.

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*Patents*

Pursuant to the PRC Patent Law, most recently amended on October 17, 2020, and its implementation rules, most recently amended on December 11, 2023 and becoming effective on January 20, 2024, patents in China fall into three categories: invention, utility model and design. An invention patent is granted to a new technical solution proposed in respect of a product or method or an improvement of a product or method. A utility model is granted to a new technical solution that is practicable for application and proposed in respect of the shape, structure or a combination of both of a product. A design patent is granted to the new design of a certain product in shape, pattern or a combination of both, and in color, shape and pattern combinations aesthetically suitable for industrial application. Under the PRC Patent Law, the term of patent protection starts from the date of application. Patents relating to invention are effective for twenty years, utility models are effective for ten years, and designs are effective for fifteen years from the date of application. The PRC Patent Law adopts the principle of "first-to-file" system, which provides that where more than one person files a patent application for the same invention, a patent will be granted to the person who files the application first.

Existing patents can become narrowed, invalid or unenforceable due to a variety of grounds, including lack of novelty, creativity, and deficiencies in patent application. In China, a patent must have novelty, creativity and practical applicability. Under the PRC Patent Law, novelty means that the invention or the utility model does not fall under the existing technology, and no other person has filed with the patent authority an application that describes an identical invention or utility model and is recorded in patent application documents or patent documents published after the filing date. Creativity means that, compared with existing technology, an invention has prominent substantial features and represents notable progress, and a utility model has substantial features and represents any progress. Practical applicability means an invention or utility model can be manufactured or used and may produce positive results. Patents in China are filed with the State Intellectual Property Office of China. Where, pursuant to the receipt of an application for a patent of an invention, the patent administrative department under the State Council, upon preliminary examination, finds the application conforms to the requirements of the PRC Patent Law, it shall publish the application promptly within 18 full months from the filing date. Upon the request of the applicant, the patent administrative department under the State Council may publish the application earlier.

Article 19 of the PRC Patent Law provides that, for an invention or utility model completed in China, any applicant (not just Chinese companies and individuals), before filing a patent application outside of China, must first submit it to the State Intellectual Property Office of China for a confidential examination. Failure to comply with this requirement will result in the denial of any Chinese patent for the relevant invention. This added requirement of confidential examination by the agency has raised concerns by foreign companies who conduct research and development activities in China or outsource research and development activities to service providers in China.

*Patent enforcement*

Unauthorized use of patents without consent from owners of patents, forgery of the patents belonging to other persons or engagement in other patent infringement acts will subject the infringers to infringement liability. Serious offences such as forgery of patents may be subject to criminal penalties.

When a dispute arises out of infringement of the patent owner's patent right, Chinese law requires that the parties first attempt to settle the dispute through mutual consultation. However, if the dispute cannot be settled through mutual consultation, the patent owner, or an interested party who believes the patent is being infringed, may either file a civil legal suit or file an administrative complaint with the patent administration authority. In the event the patent administrative department, when handling the matter, believes there is an infringement, it may order the infringing party to cease the infringement with immediate effect. If the infringing party is not satisfied with the ruling, it may, within 15 days from the date of receiving the notification of the order, initiate legal proceedings in the people's court in accordance with the PRC Administrative Procedure Law. If the infringing party neither takes legal action at the expiration of the time limit nor ceases the infringement, the patent administrative department may request the people's court for a compulsory execution of the aforementioned order. A Chinese court may issue a preliminary injunction upon the patent owner's or an interested party's request before instituting any legal proceedings or during the proceedings. Damages for infringement are calculated as the loss suffered by the patent holder arising from the infringement or calculated as the benefit gained by the infringer from the infringement. If it is difficult to ascertain damages in this manner, damages may be determined by using a reasonable multiple of the license fee under a contractual license. Statutory damages may be awarded in the circumstances where the damages cannot be determined by the above-mentioned calculation standards. The damage calculation methods shall be applied in the aforementioned order. Generally, the patent owner has the burden of proving that the patent is being infringed. However, if the owner of an invention patent for manufacturing process of a new product alleges infringement of its patent, the alleged infringer has the burden of proof.

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As of December 31, 2024, we had 1,906 patents granted and 596 patents applications pending in China, 9 patents pending outside China.

*Trademark law*

The PRC Trademark Law and its implementation rules protect registered trademarks. The PRC Trademark Office of State Administration for Market Regulation is responsible for the registration and administration of trademarks throughout the PRC. The PRC Trademark Law has adopted a "first-to-file" principle with respect to trademark registration.

In addition, pursuant to the PRC Trademark Law, counterfeit or unauthorized production of the label of another person's registered trademark, or sale of any label that is counterfeited or produced without authorization will be deemed as an infringement to the exclusive right to use a registered trademark. The infringing party will be ordered to stop the infringement immediately, a fine may be imposed and the counterfeit goods will be confiscated. The infringing party may also be held liable for the right holder's damages, which will be calculated as the losses suffered by the right holder as a result of the infringement, and if the loss suffered by the right holder arising from the infringement cannot be determined, will be calculated as the gains obtained by the infringing party. If it is difficult to ascertain damages in this manner, damages may be determined by using a reasonable multiple of the license fee under a contractual license. The compensation amount shall include reasonable expenses incurred by the right holder for stopping the infringement. If the losses, gains or license fee are difficult to determine, the court may render a judgment awarding damage of no more than RMB5 million.

As of December 31, 2024, we had registered 70 trademarks in China.

*Software copyright law*

The PRC Copyright Law (2020 Revision) provides that Chinese citizens, legal persons, or other organizations shall, whether published or not, enjoy copyright in their works, which include, among others, works of literature, art, natural science, social science, engineering technology and computer software. The purpose of the PRC Copyright Law aims to encourage the creation and dissemination of works that are beneficial for the construction of socialist spiritual civilization and material civilization and promote the development and prosperity of Chinese culture.

In order to further implement the Computer Software Protection Regulations promulgated by the State Council in 2001 and amended subsequently, the State Copyright Bureau issued the Computer Software Copyright Registration Procedures in 2002, which apply to software copyright registration, license contract registration and transfer contract registration.

As of December 31, 2024, we had registered 21 pieces of software copyright in China.

*Regulations on domain name*

Internet domain name registration and related matters are primarily regulated by Implementing Rules of National Top Level Domain Name Registration issued by China Internet Network Information Center, the domain name registrar of mainland China, effective on June 18, 2019, the Administrative Measures for Internet Domain Names, issued by the Ministry of Industry and Information Technology in August 2017 and becoming effective on November 1, 2017, and the Measures on National Top Level Domain Name Disputes Resolution issued by China Internet Network Information Center effective on June 18, 2019. Domain name registrations are handled through domain name service agencies established under the regulations, and the applicants become domain name holders upon successful registration.

As of December 31, 2024, we had registered 15 domain names.

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***Regulations on manufacture and sale of home appliances***

Pursuant to the Regulations of the PRC Concerning Accreditation and Recognition, promulgated by the State Council, in 2003 and most recently amended in July 2023, products specified by the applicable government authorities shall not be delivered, sold, imported or used in other business activities until they are certified (or referred to as the Compulsory Product Certification) and labeled with China Compulsory Certification mark. For products that are subject to Compulsory Product Certification, the state implements unified product catalogue, unified compulsory requirements, standards and compliance assessment procedures in technical specification, unified certification marks and unified charging standards. Pursuant to the latest Compulsory Product Certification Product Catalogue promulgated by the State Administration for Market Regulation in August 2023, household and similar electrical appliances, including the water heater, range hood and water purifier, are required to obtain the Compulsory Product Certification in order to be delivered, sold, imported or used.

In addition, according to the Surveillance and Administrative Measures of Drinking Water Hygiene jointly promulgated by the Ministry of Health (currently, the National Health Commission) of the PRC, and the Ministry of Construction(currently, the Ministry of Housing and Urban-Rural Development) in 1997, and most recently amended by the Ministry of Housing and Urban-Rural Development and the National Health Commission in April 2016, any entities or individuals engaging in the production of the products relating to hygiene and safety of drinking water shall apply to health administration authorities for hygiene licenses.

According to the Classification Catalogue for Products Related to Drinking Water, promulgated by the Ministry of Health (currently, the National Health Commission) and effective on September 20, 2007, and most recently amended on September 22, 2011, entities or individuals are required to obtain hygiene license from hygiene administration authorities before producing or importing any products relating to drinking water.

In July 2011, the Ministry of Health (currently, the National Health Commission) promulgated the Notice on Adjustment of Hygiene Administrative License for Domestic Reverse Osmosis Water Purifier and Domestic Nano Filter Water Purifier, which delegates health administrative departments at the provincial level the authority to regulate domestic reverse osmosis water purifiers and domestic nano filter water purifiers. Hereafter, the Ministry of Health and the NHFPC promulgated Regulations on Administrative License for Hygienic Safety Products involving Drinking Water at the Provincial Level, delegating the authority of examination and approval of products related to hygiene and safety of drinking water, except for those made of new materials, technology and chemicals, to the hygiene and health department at the provincial level.

Energy Label Management Rules, jointly promulgated by the National Development and Reform Commission, and the General Administration of Qualification Supervision, Inspection and Quarantine, in 2004 and most recently amended in February 2016, provide that the products listed in the Product Catalogue for Energy Efficiency Labeling in the People's Republic of China shall be marked with the energy-efficient labels. Manufacturers and importers of energy-using products included in such catalogue shall file a record of energy efficient labels and the relevant information with the General Administration of Qualification Supervision, Inspection and Quarantine and the China National Institute of Standardization authorized by the National Development and Reform Commission.

To comply with these laws and regulations, we have obtained the certificates, licenses and labels necessary for our current products. Further, we have verified the qualifications of our manufacturing contractors for the production of the relevant products before their engagement by requiring them to provide effective licenses.

***Regulations on mobile internet***

Pursuant to the Provisions on the Administration of Mobile Internet Applications Information Services promulgated by the CAC in June 2016 and lastly amended on June 14, 2022, application providers shall obtain the relevant qualifications prescribed by laws and regulations, strictly implement their information content administrator responsibilities and carry out the duties including to authenticate the real identity information of users, establish and complete information content inspection and management mechanisms, fulfill the data security protection obligations and regulate personal information processing activities. Application distribution platform shall, within 30 days of the business going online and starting operations, conduct filing procedures with the local cybersecurity and information department. Furthermore, application providers and registered users shall sign service agreements to determinate both sides' rights and obligations.

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Furthermore, on December 16, 2016, the Ministry of Industry and Information Technology issued the Interim Measures on the Administration of Pre-Installation and Distribution of Applications for Mobile Smart Terminals effective on July 1, 2017. These measures require internet information service providers to ensure that a mobile application, as well as its ancillary resource files, configuration files and user data can be uninstalled by a user on a convenient basis, unless it is a basic function software, which refers to a software that supports the normal functioning of hardware and operating system of a mobile smart device.

Prior to the completion of the 2024 reorganization transaction and as of the date hereof, Foshan Viomi, as the operator of Viomi mobile app, is subject to the above laws and regulations as an application information services provider. After the completion of the transfer of the mobile app from Viomi to Guangzhou Interconnect pursuant to the transaction documents of the 2024 reorganization transaction, Guangzhou Interconnect will become the operator of the mobile app and be subject to the above laws and regulations. We believe that Foshan Viomi is currently in compliance with these regulations in all material aspects, and that we will continue to be in compliance with these regulations in all material aspects after the aforesaid transfer.

***Regulations on Information Security and Privacy Protection***

PRC government authorities have enacted legislation on internet use to protect personal information from any unauthorized disclosure. The PRC laws do not prohibit the internet information service providers, or the ICP Operators, from collecting and using personal information from their users with the users' consent. However, the Administrative Measures on Internet Information Services promulgated by the State Council on January 8, 2011 prohibit an ICP Operator from insulting or slandering a third party or infringing the lawful rights and interests of a third party. The regulations further authorize the telecommunications authorities to order ICP Operators to rectify unauthorized disclosure. ICP Operators are subject to legal liability if the unauthorized disclosure results in damages or losses to users. On December 29, 2011, the Ministry of Industry and Information Technology promulgated the Several Provisions on Regulating the Market Order of Internet Information Services effective on March 15, 2012. These provisions stipulate that ICP Operators may not, without a user's consent, collect the user's information that can be used alone or in combination with other information to identify the user and may not provide any such information to third parties without the user's prior consent. ICP Operators may only collect users' personal information that is necessary to provide their services and must expressly inform the users of the method, content and purpose of the collection and use of such personal information. In addition, an ICP Operator may only use users' personal information for the stated purposes under the ICP Operator's scope of service. ICP Operators are also required to ensure the proper security of users' personal information, and take immediate remedial measures if users' personal information is suspected to have been inappropriately disclosed. If the consequences of any such disclosure are expected to be serious, ICP Operators must immediately report the incident to the telecommunications regulatory authority and cooperate with the authorities in their investigations.

On December 28, 2012, the Standing Committee of the National People's Congress issued the Decision on Strengthening the Protection of Online Information. Most requirements under this decision relevant to ICP Operators are consistent with the requirements already established under the Ministry of Industry and Information Technology provisions discussed above, but are often stricter and broader. Under this decision, ICP Operators are required to take such technical and other measures necessary to safeguard information against inappropriate disclosure. To further implement this decision and relevant rules, the Ministry of Industry and Information Technology issued the Regulation of Protection of Telecommunication and Internet User Information on July 16, 2013, which became effective on September 1, 2013.

In August 2015, the Standing Committee of the National People's Congress promulgated the Ninth Amendment to the Criminal Law, which became effective in November 2015. The Ninth Amendment to the Criminal Law amends the standards of crime of infringing citizens' personal information and reinforced the criminal culpability of unlawful collection, transaction, and provision of personal information. It further provides that any ICP provider that fails to fulfill the obligations related to internet information security administration as required by applicable laws and refuses to rectify upon orders will be subject to criminal liability.

On May 28, 2020, the National People's Congress approved the Civil Code of the PRC, which came into effect on January 1, 2021. Pursuant to the Civil Code, the collection, storage, use, process, transmission, provision and disclosure of personal information should follow the principles of legitimacy, properness and necessity.

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The Cybersecurity Law of the PRC, which was promulgated on November 7, 2016 by the Standing Committee of the National People's Congress and came into effect on June 1, 2017, provides that network operators shall meet their cyber security obligations and shall take technical measures and other necessary measures to protect the safety and stability of their networks. Under the Cybersecurity Law, network operators are subject to various security protection-related obligations, including: (i) network operators shall comply with certain obligations regarding maintenance of the security of internet systems; (ii) network operators shall verify users' identities before signing agreements or providing certain services such as information publishing or real-time communication services; (iii) when collecting or using personal information, network operators shall clearly indicate the purposes, methods and scope of the information collection, the use of information collection, and obtain the consent of those from whom the information is collected; (iv) network operators shall strictly preserve the privacy of user information they collect, and establish and maintain systems to protect user privacy; (v) network operators shall strengthen management of information published by users, and when they discover information prohibited by laws and regulations from publication or dissemination, they shall immediately stop dissemination of that information, including taking measures such as deleting the information, preventing the information from spreading, saving relevant records, and reporting to the governmental agencies. In addition, the Cybersecurity Law requires that critical information infrastructures operators generally shall store, within the territory of the PRC, the personal information and important data collected and produced during their operations in the PRC and their purchase of network products and services that affect or may affect national securities shall be subject to national cybersecurity review.

On November 28, 2019, the Secretary Bureau of the CAC, the General Office of the Ministry of Industry and Information Technology, the General Office of the Ministry of Public Security and the General Office of the State Administration of Market Regulation issued the Notice on the Measures for the Determination of the Collection and Use of Personal Information by Apps in Violation of Laws and Regulations. The notice requires that there shall be a privacy policy in the app, and the privacy policy shall contain the rules for collecting and using personal information. The notice also requires that the app shall prompt their users to read the privacy policy through obvious methods such as pop-up windows when an app is put into operation for the first time. According to the notice, the type of personal information collected by the app should be limited to the extent necessary to meet the operation of the corresponding business function. If personal information collected through app for a new business function is beyond the scope of a user's previous consent, refusing to provide the original business function by the app upon the user's disagreement with the new scope of personal information collection shall be considered as in violation of the necessity principle, except in the case where the new business function replaces the previous business function. Pursuant to the Notice on Promulgation of the Rules on the Scope of Necessary Personal Information for Common Types of Mobile Internet Applications, which was promulgated jointly by the CAC, the Ministry of Industry and Information Technology, the Ministry of Public Security and the State Administration of Market Regulation on March 12, 2021 and became effective on May 1, 2021, "necessary personal information" refers to personal information necessary for ensuring the normal operation of an application's basic functional services. Specifically, it refers to the personal information of the consumers, excluding the personal information of the suppliers. Any mobile internet application shall not refuse users to use its basic functional services on the ground that users disagree to provide unnecessary personal information.

On June 10, 2021, the Standing Committee of the National People's Congress promulgated the PRC Data Security Law, which became effect in September 2021. The PRC Data Security Law provides for data security and privacy obligations on entities and individuals carrying out data activities and introduces a data classification and hierarchical protection system based on the importance of data in economic and social development, as well as the degree of harm it will cause to national security, public interests, or legitimate rights and interests of individuals or organizations when such data is tampered with, destroyed, leaked, or illegally acquired or used. The appropriate level of protection measures is required to be taken for each respective category of data. For example, a processor of important data shall designate the personnel and the management body responsible for data security, carry out risk assessments for its data processing activities and file the risk assessment reports with the competent authorities. In addition, the PRC Data Security Law provides a national security review procedure for those data activities which affect or may affect national security and imposes export restrictions on certain data and information.

On July 30, 2021, the State Council promulgated the Regulations on Protection of Critical Information Infrastructure, which became effective on September 1, 2021. Pursuant to the Regulations on Protection of Critical Information Infrastructure, critical information infrastructure shall mean any important network facilities or information systems of the important industry or field such as public communication and information service, energy, transportation, water conservation, finance, public services, e-government affairs and national defense science, which may endanger national security, people's livelihood and public interest in case of damage, function loss or data leakage. In addition, the administration departments of each critical industry and sector shall be responsible to formulate eligibility criteria and determine the critical information infrastructure operator in the respective industry or sector. The operators shall be informed about the final determination as to whether they are categorized as critical information infrastructure operators.

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On August 20, 2021, the Standing Committee of the National People's Congress promulgated the Personal Information Protection Law, which came into effect on November 1, 2021. The Personal Information Protection Law integrates the scattered rules with respect to personal information rights and privacy protection. Pursuant to the Personal Information Protection Law, personal information refers to information related to identified or identifiable natural persons which is recorded by electronic or other means (excluding the anonymized information). The Personal Information Protection Law provides the circumstances under which a personal information processor could process personal information, including but not limited to, where the consent of the individual concerned is obtained and where it is necessary for the conclusion or performance of a contract to which the individual is a contractual party. It also stipulates certain specific rules with respect to the obligations of a personal information processor, such as to inform the purpose and method of processing to the individuals, and the obligation of the third party who has access to the personal information by way of co-processing or delegation etc. Processors processing personal information exceeding the threshold to be set by the authorities and critical information infrastructure operators are required to store, within the territory of the PRC, the personal information collected and produced within the PRC. Specifically, personal information processors using personal information for automated decision-making shall ensure the transparency of decision-making and the fairness and impartiality of the results, and shall not impose unreasonable differential treatment on individuals in terms of pricing and other transaction conditions. The governmental authorities shall organize assessment on mobile apps' personal information protection and publicize the outcome. The mobile apps that are identified as not in compliance with personal information protection requirements under such law may be required to suspend or terminate the services and the operators may also be subject to penalties including confiscation of illegal revenues and fines. Furthermore, the Personal Information Protection Law also provides for the rights of natural persons whose personal information is processed, and heightens the protection of the personal information of minors under 14 and sensitive personal information.

December 28, 2021, the CAC and multiple government authorities jointly released the Cybersecurity Review Measures effective on February 15, 2022. The Cybersecurity Review Measures stipulate that, critical information infrastructure operators that procure internet products and services and network platform operators that carry out data processing activities are subject to a cybersecurity review if their activities affect or may affect national security, and that network platform operators with personal information of over one million users shall apply with the Cybersecurity Review Office for a cybersecurity review before going to list abroad. As of the date of this annual report, we have not been informed that we are a "critical information infrastructure operator" by any government authority. However, the exact scope of "critical information infrastructure operators" under the current regulatory regime remains unclear, and the PRC government authorities may have discretion in the interpretation and enforcement of the applicable laws. Therefore, it is uncertain whether we would be deemed to be a "critical information infrastructure operator" under PRC laws. If we are deemed a "critical information infrastructure operator" under the PRC cybersecurity laws and regulations, we may be subject to obligations in addition to those with which we are currently obligated to comply. The Cybersecurity Review Measures are subject to further clarification on whether relevant requirements will be applicable to companies that are already listed in the United States, such as our company. We cannot predict the impact of the Cybersecurity Review Measures at this stage, and we will closely monitor and assess any developments in the rulemaking process.

On December 31, 2021, the CAC, the Ministry of Industry and Information Technology, the Ministry of Public Security, and the State Administration of Market Regulation jointly promulgated the Administrative Provisions on Internet Information Service Algorithm Recommendation effective on March 1, 2022. The Administrative Provisions on Internet Information Service Algorithm Recommendation implements classification and hierarchical management for algorithm recommendation service providers based on various criteria, stipulates that algorithm recommendation service providers shall inform users of their provision of algorithm recommendation services in a conspicuous manner, and publicize the basic principles, purpose intentions, and main operating mechanisms of algorithm recommendation services in an appropriate manner, and that algorithm recommendation service providers selling goods or providing services to consumers shall protect consumers' rights of fair trade, and are prohibited from carrying out illegal conducts such as unreasonable differential treatment on transaction conditions based on consumers' preferences, purchasing habits, and such other characteristics.

On June 27, 2022, the CAC promulgated the Administrative Provisions on the Account Information of Internet Users, which became effective on August 1, 2022, setting out guidelines on the provision the account information of internet users. Internet-based information service providers shall perform their responsibilities as the administrative subjects of the account information of internet users, have in place professionals and technical capacity appropriate to the scale of services, and establish, improve and strictly implement the authentication of real identity information, verification of account information, security of information content, ecological governance, emergency responses, protection of personal information and other management systems.

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On July 7, 2022, the CAC promulgated the Outbound Data Transfer Security Assessment Measures, which became effective on September 1, 2022. On March 22, 2024, the CAC released the Provisions on Facilitating and Regulating Cross-border Data Transfer. These rules specify the circumstances in which data processors must apply for outbound data transfer security assessment with the CAC. Pursuant to these rules, a data processor is required to apply for a CAC security assessment when: (i) a critical information infrastructure operator is transferring personal information or important data abroad, (ii) a data processor other than a critical information infrastructure operator transferring important data abroad, or is transferring abroad personal information (excluding sensitive personal information) of over one million individuals or sensitive personal information of over 10,000 individuals on a cumulative basis starting from January 1 of the current year; or (iii) other circumstances where the security assessment of data cross-border transfer is required as prescribed by the CAC. In addition, if a data processor other than a critical information infrastructure operator transfers abroad personal information (excluding sensitive personal information) of more than 100,000 but less than one million individuals, or the sensitive personal information of less than 10,000 individuals on a cumulative basis starting from January 1 of the current year, it must conclude a standard contract with the overseas recipient or undergo the authentication on the protection of personal information pursuant to the laws and regulations. The Provisions on Facilitating and Regulating Cross-border Data Transfer also set out exemptions from the security assessment, the conclusion of the standard contract, and the authentication for protection of personal information. These exemptions apply when the outbound transfer of personal information by a data processor falls within any of the following circumstances: (i) where it is truly necessary to transfer personal information abroad for the purpose of executing and performing a contract to which the individual is a concerned party, such as cross-border shopping, cross-border consignment, cross-border remittance, cross-border payment, cross-border account opening, air ticket and hotel reservation, visa application, and examination services; (ii) where it is truly necessary to provide employees' personal information abroad for the purpose of cross-border human resources management under lawfully established labor rules and regulations and pursuant to a lawfully executed collective contract; (iii) where it is truly necessary to transfer any personal information abroad in an emergency for the purpose of protecting the health, life, and property safety of a natural person; or (iv) where a data processor other than a critical information infrastructure operator transfers abroad the personal information (excluding sensitive personal information) of less than 100,000 individuals on a cumulative basis starting from January 1 of the current year. However, since the Outbound Data Transfer Security Assessment Measures and the Provisions on Facilitating and Regulating Cross-border Data Transfer were newly promulgated, these rules will be subject to further implementation and interpretation. The identification of "outbound data transfer" and "important data" is subject to further clarification. These bring more uncertainties with respect to the application and enforcement of the measures, and we may be subject to such outbound data security assessment with the CAC.

On September 24, 2024, the State Council issued the Regulations on the Network Data Security, which became effective on January 1, 2025. The Regulations on the Network Data Security is not only the first at the administrative regulation level specifically for network data security, but it also serves as a comprehensive implementing regulation for the compliance requirements set out by the Cybersecurity Law, Data Security Law, and Personal Information Protection Law. The Regulations on the Network Data Security introduces several key obligations, including requiring network data handlers to specify the purpose and method of personal information processing, as well as the types of personal information involved, before any personal information is handled. It also clarifies definitions for important data, outlines the obligations of those handling important data, establishes broader contractual requirements for data sharing between data handlers, and introduces a new exemption for regulatory obligations regarding cross-border data transfers. It remains to be seen how this regulation will be interpreted and implemented, and to what extent it will affect our operations.

To comply with these laws and regulations, we have adopted security policies and measures to protect our cyber system and user information. In addition, we have required our users to consent to our collecting and using their personal information, and established information security systems to protect users' privacy.

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***Regulations on employment***

The PRC Labor Law, which became effective in 1995 and was most recently amended on December 29, 2018, and the PRC Employment Contract Law, which became effective on January 1, 2008 and was most recently amended on December 28, 2012 provide requirements concerning employment contracts between an employer and its employees, namely, employers must execute written labor contracts with full-time employees and regulate employee/employer rights and obligations. If an employer fails to enter into a written employment contract with an employee within one year from the date on which the employment relationship is established, the employer must rectify the situation by entering into a written employment contract with the employee and pay the employee twice the employee's salary for the period from the day following the lapse of one month from the date of establishment of the employment relationship to the day prior to the execution of the written employment contract. The PRC Labor Contract Law and its implementation rules also require compensation to be paid upon certain terminations, which significantly affects the cost of reducing workforce for employers. In addition, if an employer intends to enforce a non-compete provision in an employment contract or non-competition agreement with an employee, it has to compensate the employee on a monthly basis during the term of the restriction period after the termination or expiry of the labor contract. Employers in most cases are also required to provide severance payment to their employees after their employment relationships are terminated.

Enterprises in China are required by PRC laws and regulations to participate in certain employee benefit plans, including social insurance funds, namely, a pension plan, a medical insurance plan, an unemployment insurance plan, a work-related injury insurance plan and a maternity insurance plan, and a housing provident fund, and contribute to the plans or funds in amounts equal to certain percentages of salaries, including bonuses and allowances, of the employees as specified by the local government from time to time at locations where they operate their businesses or where they are located. According to the PRC Social Insurance Law, which became effective on July 1, 2011 and was most recently amended on December 29, 2018, an employer that fails to make social insurance contributions may be ordered to pay the required contributions within a stipulated deadline and be subject to a late fee. If the employer still fails to rectify the failure to make social insurance contributions within the stipulated deadline, it may be subject to a fine ranging from one to three times the amount overdue. In addition, social insurance contributions payable by an employee shall be paid on his or her behalf by the employer through transfer from wage deduction, and the employer shall notify each employee of details of social insurance contributions to his or her account on a monthly basis. According to the Regulations on Management of Housing Fund, which became effective on April 3, 1999 and was most recently amended on March 24, 2019, when employing new staff or workers, the units shall undertake housing fund payment and deposit registration at the housing fund management center within 30 days from the date of the employment, and the housing fund to be paid and deposited by an individual staff member or worker shall be withheld from his salary by the unit for which he serves. An enterprise that fails to make housing fund contributions may be ordered to rectify the noncompliance and pay the required contributions within a stipulated deadline; otherwise, an application may be made to a local court for compulsory enforcement.

***Regulations on tax***

*PRC enterprise income tax*

Pursuant to the PRC Enterprise Income Tax Law, which became effective on January 1, 2008 and was most recently amended on December 29, 2018, and the Implementing Regulations of the Law of the People's Republic of China on Enterprise income Tax, which became effective on January 1, 2008 and was partly amended on April 23, 2019, enterprises and other organizations receiving income are the taxpayers of enterprise income tax and shall pay enterprise income tax in accordance with the provisions of such laws and regulations. The PRC Enterprise Income Tax Law imposes a uniform enterprise income tax rate of 25% on all PRC resident enterprises, including foreign-invested enterprises, unless they qualify for certain exceptions. The enterprise income tax is calculated based on the PRC resident enterprise's global income as determined under PRC tax laws and accounting standards. If a non-resident enterprise sets up an organization or establishment in the PRC, it will be subject to enterprise income tax for the income derived from such organization or establishment in the PRC and for the income derived from outside the PRC but with an actual connection with such organization or establishment in the PRC.

According to the PRC Enterprise Income Tax Law, the enterprise income tax rate of a high and new technology enterprise is 15%. The Administrative Rules for the Certification of High and New Technology Enterprises, which became effective on January 1, 2008 and was amended on January 29, 2016, specify the criteria and procedures for the certification of High and New Technology Enterprises and stipulate that the certificate of a high and new technology enterprise is valid for three years.

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Pursuant to the Announcement of the State Administration of Taxation on Issuing the Administrative Measures for Special Tax Adjustment and Investigation and Mutual Consultation Procedures effective on May 1, 2017, the tax authorities shall adopt means such as examination of declarations of related party transactions, management of contemporaneous documentation and monitoring of profit level, to implement monitoring and administration of special tax adjustment for enterprises; an enterprise may adjust and pay taxes at its own discretion when it receives a special tax adjustment risk warning or identifies its own special tax adjustment risks; and the tax authorities may also carry out special tax investigation and adjustment in accordance with the provisions in regard to enterprises that adjust and pay taxes at their own discretion.

*PRC value added tax*

Pursuant to the Provisional Regulations on Value-Added Tax of the PRC, promulgated by the State Council on December 13, 1993, and most recently amended on November 19, 2017, and its implementation regulations, any entities and individuals that sell goods or labor services for processing, repair or replacement, sell services, intangible assets, or immovables, or import goods are taxpayers of value-added tax and are required to pay value-added tax. Unless provided otherwise, the value-added tax rate is 6% for general taxpayers selling services and intangible assets. On March 20, 2019, the Ministry of Finance, the State Administration of Taxation and the General Administration of Customs promulgated the Announcement on Policies to Deepen Value-Added Tax Reform, which provides that the applicable value-added tax rate for taxable sales or imports by a general taxpayer of value-added tax shall be 13% and 9%, commencing on April 1, 2019.

According to the Circular of the State Administration of Taxation on Printing and Distributing the Administrative Measures for Tax Refund (Exemption) for Exported Goods (for Trial Implementation) effective on May 1, 2005 and the Announcement of the State Administration of Taxation on the Revision to Certain Taxation Regulatory Documents effective on June 15, 2018, unless otherwise provided by law, for the goods as exported via an export agency, the exporter may, after the export declaration and the conclusion of financial settlement for sales, file a report to competent Local Taxation Bureau for the approval of refund or exemption of VAT or consumption tax on the strength or the relevant certificates.

*PRC dividend withholding tax*

Pursuant to an Arrangement Between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation on Income, and other applicable PRC laws, if a Hong Kong resident enterprise is determined by the competent PRC tax authority to have satisfied the conditions and requirements under such Double Tax Avoidance Arrangement and other applicable laws, the 10% withholding tax on the dividends the Hong Kong resident enterprise receives from a PRC resident enterprise may be reduced to 5%. However, based on the Circular on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties issued in 2009 by the State Administration of Taxation, if the PRC tax authorities determine, in their discretion, that a company benefits from such reduced income tax rate due to a structure or arrangement that is primarily tax-driven, such PRC tax authorities may adjust the preferential tax treatment; and based on the Announcement on Certain Issues with Respect to the "**Beneficial Owner**" in Tax Treaties, which was issued on February 3, 2018 and became effective on April 1, 2018, the business activities conducted by the applicant do not constitute substantive business activities is one of the factors which are not conductive to the determination of an applicant's status as a "beneficial owner", and thus are not entitled to the above-mentioned reduced income tax rate of 5% under the Double Tax Avoidance Arrangement.

***Regulations on foreign exchange***

The principal regulations governing foreign currency exchange in China are the Foreign Exchange Administration Regulations, most recently amended on August 5, 2008. Under the Foreign Exchange Administration Regulations, payments of current account items, such as profit distributions and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval from the SAFE, by complying with certain procedural requirements. However, approval from or registration with appropriate government authorities is required where RMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of foreign currency-denominated loans.

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On March 30, 2015, the SAFE issued the Circular on Reforming the Administration Measures on Conversion of Foreign Exchange Registered Capital of Foreign-invested Enterprises, which took effective on June 1, 2015 and was amended on December 30, 2019 and March 23, 2023. Although this circular allows for the use of RMB converted from the foreign currency-denominated capital for equity investments in China, the restrictions continue to apply as to foreign-invested enterprises' use of the converted RMB for purposes beyond the business scope, for entrusted loans (unless permitted by the business scope) or for inter-company RMB loans. The SAFE promulgated the Circular of the State Administration of Foreign Exchange on Reforming and Standardizing the Foreign Exchange Settlement Management Policy of Capital Account effective on June 9, 2016, which reiterates some of the rules set forth in the Circular on Reforming the Administration Measures on Conversion of Foreign Exchange Registered Capital of Foreign-invested Enterprises, 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-affiliated enterprises. Violations of circulars above could result in administrative penalties.

On November 19, 2012, the SAFE promulgated the Circular of Further Improving and Adjusting Foreign Exchange Administration Policies on Foreign Direct Investment, which substantially amends and simplifies the current foreign exchange procedure. Pursuant to this circular, the opening of various special purpose foreign exchange accounts (e.g., pre-establishment expenses accounts, foreign exchange capital accounts and guarantee accounts), the reinvestment of lawful incomes derived by foreign investors in China (e.g., profit, proceeds of equity transfer, capital reduction, liquidation and early repatriation of investment) and purchase and remittance of foreign exchange as a result of capital reduction, liquidation, early repatriation or share transfer in a foreign-invested enterprise no longer require the SAFE approval, and multiple capital accounts for the same entity may be opened in different provinces, which was not possible before. In addition, the SAFE promulgated the Circular on Printing and Distributing the Provisions on Foreign Exchange Administration over Domestic Direct Investment by Foreign Investors and the Supporting Documents in May 2013, which specifies that the administration by the SAFE or its local branches over direct investment by foreign investors in the PRC shall be conducted by way of registration, and banks shall process foreign exchange business relating to the direct investment in China based on the registration information provided by the SAFE and its branches.

On February 13, 2015, the SAFE promulgated the Circular on Further Simplifying and Improving the Policies Concerning Foreign Exchange Control on Direct Investment, which took effect on June 1, 2015 and was amended on December 30, 2019. The circular delegates the authority to enforce the foreign exchange registration in connection with the inbound and outbound direct investment under the SAFE rules to certain banks and therefore further simplifies the foreign exchange registration procedures for inbound and outbound direct investment.

***Regulations on foreign exchange registration of offshore investment by PRC residents***

On July 4, 2014, the SAFE issued 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, and its implementation guidelines. Pursuant to SAFE Circular 37 and its implementation guidelines, PRC residents (including PRC institutions and individuals) must register with local branches of the SAFE in connection with their direct or indirect offshore investment in an overseas special purpose vehicle, or SPV, directly established or indirectly controlled by PRC residents for the purposes of offshore investment and financing with their legally owned assets or interests in domestic enterprises, or their legally owned offshore assets or interests. Such PRC residents are also required to amend their registrations with the SAFE when there is a change to the basic information of the SPV, such as changes of a PRC resident individual shareholder, the name or operating period of the SPV, or when there is a significant change to the SPV, such as changes of the PRC individual resident's increase or decrease of its capital contribution in the SPV, or any share transfer or exchange, merger or division of the SPV. Failure to comply with the registration procedures set forth in the Circular 37 may result in restrictions being imposed on the foreign exchange activities of the relevant onshore company, including the payment of dividends and other distributions to its offshore parent or affiliate, the capital inflow from the offshore entities and settlement of foreign exchange capital, and may also subject relevant onshore company or PRC residents to penalties under PRC foreign exchange administration regulations.

Mr. Xiaoping Chen has completed his initial registrations with the local branch of the SAFE and all the PRC resident shareholders shall register or amend their existing registrations with the local branch of the SAFE in connection with the equity interest of our company held by them directly or indirectly through the trust arrangements adopted in 2020. See "*Item 6. Directors, Senior Management and Employees—E. Share Ownership*." for a summary of the trust arrangements.

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***Regulations on employee share incentive plan of overseas publicly listed company***

On February 15, 2012, the SAFE issued the Notices on Issues concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plans of Overseas Publicly Listed Companies, pursuant to which, PRC residents who are granted shares or stock options by companies listed on overseas stock exchanges according to the stock incentive plans are required to register with the SAFE or its local branches, and PRC residents participating in the stock incentive plans of overseas listed companies shall retain a qualified PRC agent, which could be a PRC subsidiary of such overseas publicly listed company or another qualified institution selected by such PRC subsidiary, to conduct the SAFE registration and other procedures with respect to the stock incentive plans on behalf of these participants. Such participants must also retain an overseas entrusted institution to handle matters in connection with their exercise of stock options, purchase and sale of corresponding stocks or interests, and fund transfer. In addition, the PRC agents are required to amend the SAFE registration with respect to the stock incentive plan if there is any material change to the stock incentive plan, the PRC agents or the overseas entrusted institution, or other material changes. The PRC agents shall, on behalf of the PRC residents who have the right to exercise the employee share options, apply to the SAFE or its local branches for an annual quota for the payment of foreign currencies in connection with the PRC residents' exercise of the employee share options. The foreign exchange proceeds received by the PRC residents from the sale of shares under the stock incentive plans granted and dividends distributed by the overseas listed companies must be remitted into the bank accounts in the PRC opened by the PRC agents before distribution to such PRC residents. In addition, the PRC agents shall file each quarter the form for record-filing of information of the Domestic Individuals Participating in the Stock Incentive Plans of Overseas Listed Companies with the SAFE or its local branches.

Our PRC citizen employees who have been granted share options or restricted shares, or PRC grantees, are subject to the Notices on Issues concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plans of Overseas Publicly Listed Companies. If we or our PRC grantees fail to comply with these notices and the Individual Foreign Exchange Rule, we and/or our PRC grantees may be subject to fines and other legal sanctions. We may also face regulatory uncertainties that could restrict our ability to adopt additional share incentive plans for our directors and employees under PRC laws. In addition, the State Administration for Taxation has issued certain circulars concerning employee share awards. Under these circulars, our employees working in the PRC who exercise share options or hold the vested restricted shares will be subject to PRC individual income tax. Our PRC subsidiaries and VIEs have obligations to file documents related to employee share options or restricted shares with the tax authorities and to withhold individual income taxes of those employees who exercise their share options or hold the vested restricted shares. If our employees fail to pay or we fail to withhold their income taxes according to the laws and regulations, we may face sanctions imposed by the tax authorities or other PRC government authorities.

***Regulations on dividend distributions***

The principal regulations governing the distribution of dividends paid by wholly foreign-owned enterprises include:

● The PRC Company Law (1993), as amended in 1999, 2004, 2005, 2013 and 2018, with the most recent amendment adopted in 2023 and becoming effective on July 1, 2024;

● The PRC Foreign Investment Law (2020); and

● The Implementation Regulations on the PRC Foreign Investment Law (2020).

Under these laws and regulations, foreign-invested enterprises in China may pay dividends only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, a wholly foreign-owned enterprise in China is required to set aside at least 10.0% of its after-tax profit based on PRC accounting standards each year to its general reserves until the accumulative amount of such reserves reach 50.0% of its registered capital. These reserves are not distributable as cash dividends. A PRC company is not permitted to distribute any profits until any losses from prior fiscal years have been offset. Profits retained from prior fiscal years may be distributed together with distributable profits from the current fiscal year.

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&nbsp;&nbsp;&nbsp;&nbsp;**C.** **Organizational Structure** 

The following diagram illustrates our corporate structure, including our significant subsidiaries and VIEs as of the date of this annual report:

![Graphic](viot-20241231x20f010.jpg)

Notes:

&nbsp;&nbsp;&nbsp;&nbsp;(1) Mr. Chen holds 60% equity interests in Beijing Viomi. Two employees of our shareholders, Red Better Limited and Shunwei Talent Limited, equally hold the remaining 40% of the equity interests in Beijing Viomi.

&nbsp;&nbsp;&nbsp;&nbsp;(2) Foshan Viomi holds 100% of equity interests in Guangdong Interconnect Electric Appliances Technology Co. Ltd.

**Contractual Arrangements with Our VIEs and Their Shareholders**

A series of contractual agreements have been entered into by and among our WFOEs, our VIEs and their respective shareholders, including (i) shareholder voting proxy agreements, which provide us with effective control over our VIEs in China, (ii) exclusive consultation and service agreements, which allow us to receive economic benefits from our VIEs in China, (iii) exclusive option agreements, which provide us with the option to purchase the equity interests in, and assets of, our VIEs, and (iv) equity pledge agreements, under which the shareholders of our VIEs have pledged 100% equity interests in our VIEs to our WFOEs to secure shareholders' obligations under the exclusive option agreements, the shareholder voting proxy agreements and the equity pledge agreements. Terms contained in each set of contractual arrangements with our VIEs and their respective shareholders are substantially similar.

Our WOFEs currently include WOFE I and WOFE II. Prior to the completion of the 2024 reorganization transaction, our WOFEs include WOFE I and the former WOFE. Our VIEs currently include Beijing Viomi and Guangzhou Interconnect. Prior to the completion of the 2024 reorganization transaction, our VIEs include Beijing Viomi and Foshan Viomi.

Specifically, after the completion of our 2024 reorganization transaction, we have terminated the contractual arrangements between the former WOFE, and Foshan Viomi, which has resulted in Foshan Viomi's shareholder, Mr. Xiaoping Chen, fully controlling Foshan Viomi and its subsidiaries including Foshan Xiaoxian Hulian Electric Appliances Technology Co. Ltd., Foshan Qutansuo Electric Technology Co., Ltd., Guangdong AI Touch Technology Co., Ltd., and Zhuawa Technology (Guangdong) Co., Ltd. Additionally, WOFE II and Guangzhou Interconnect have enter into a new set of contractual arrangements, as a result of which the Company has controlled Guangzhou Interconnect and consolidated its financial results.

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***Agreements that provide us with effective control over our VIEs***

***Shareholder Voting Proxy Agreements.*** Our WFOE I, Foshan Viomi and Mr. Xiaoping Chen, who was then the sole shareholder of Foshan Viomi, entered into a Shareholder Voting Proxy Agreement on September 5, 2018, or the **Original Shareholder Voting Proxy Agreement**. On April 28, 2020, WFOE I, Foshan Viomi and Mr. Xiaoping Chen entered into a Termination Agreement, which terminated the Original Shareholder Voting Proxy Agreement. On the same date, the former WFOE, Foshan Viomi and shareholders of Foshan Viomi entered into a Shareholder Voting Proxy Agreement with provisions substantially the same as the Original Shareholder Voting Proxy Agreement. On July 19, 2024, the former WFOE, Foshan Viomi and shareholders of Foshan Viomi entered into a Termination Agreement, which terminated the Shareholder Voting Proxy Agreement.

On July 21, 2015, our WFOE I, Beijing Viomi and each of the shareholders of Beijing Viomi entered into a Shareholder Voting Proxy Agreement. Pursuant to the Shareholder Voting Proxy Agreement, each shareholder of Beijing Viomi has irrevocably authorized any person designated by our WFOE I to act as his attorney-in-fact to exercise all of his rights as a shareholder of Beijing Viomi, including, but not limited to, the right to convene and attend shareholders' meetings, vote on any resolution that requires a shareholder vote, such as the appointment and election of directors, and other senior management personnel who shall be appointed or removed by the shareholders as well as the sale or transfer of all or part of the equity interests owned by such shareholder. Such shareholder voting proxy agreements will remain effective, unless otherwise terminated in advance pursuant to agreement in writing from all parties.

On July 20, 2024, our WFOE II, Guangzhou Interconnect and the sole shareholder of Guangzhou Interconnect entered into a Shareholder Voting Proxy Agreement which contains terms substantially similar to the Shareholder Voting Proxy Agreement executed by the shareholders of Beijing Viomi described above.

***Equity Pledge Agreements***. Our WFOE I, Foshan Viomi and Mr. Xiaoping Chen entered into an Equity Pledge Agreement on September 5, 2018, or the **Original Equity Pledge Agreement**. On April 28, 2020, WFOE I, Foshan Viomi and Mr. Xiaoping Chen entered into a Termination Agreement, which terminated the Original Equity Pledge Agreement. On the same date, the former WFOE, Foshan Viomi and shareholders of Foshan Viomi entered into an Equity Pledge Agreement with provisions substantially the same as the Original Shareholder Voting Proxy Agreement. On July 19, 2024, the former WFOE, Foshan Viomi and shareholders of Foshan Viomi entered into a Termination Agreement, which terminated the Equity Pledge Agreement.

On July 21, 2015, our WFOE I, Beijing Viomi and each of the shareholders of Beijing Viomi entered into an Equity Pledge Agreement. Pursuant to the Equity Pledge Agreement, the shareholders of Beijing Viomi have pledged 100% equity interests in Beijing Viomi to our WFOE I to guarantee the performance by the shareholders of their obligations under the Exclusive Option Agreement, the Shareholder Voting Proxy Agreement and the Equity Pledge Agreement, as well as the performance by Beijing Viomi of its obligations under the Exclusive Option Agreement, the Shareholder Voting Proxy Agreement, the Exclusive Consultation and Service Agreement and the Equity Pledge Agreement. In the event of a breach by Beijing Viomi or any shareholder of contractual obligations under the Equity Pledge Agreement, our WFOE I, as pledgee, will have the right to dispose of the pledged equity interests in Beijing Viomi and will have priority in receiving the proceeds from such disposal. The shareholders of Beijing Viomi also undertake that, without the prior written consent of our WFOE I, the shareholders will not dispose of, create or allow any encumbrance on the pledged equity interests. Beijing Viomi undertakes that, without the prior written consent of our WFOE I, they will not assist or allow any encumbrance to be created on the pledged equity interests.

Our WFOE II, Guangzhou Interconnect and the sole shareholder of Guangzhou Interconnect entered into an Equity Pledge Agreement on July 20, 2024 and a Supplemental Agreement on July 26, 2024, which contain terms substantially similar to the Equity Pledge Agreement executed by the shareholders of Beijing Viomi described above.

We have completed the registration of the equity pledge with the competent office of the State Administration for Market Regulation in accordance with the PRC Civil Code.

[**Table of Contents**](#TOC)

**Agreements that allow us to receive economic benefits from our VIEs**

***Exclusive Consultation and Service Agreements.*** Our WFOE I and Foshan Viomi entered into an Exclusive Consultation Service Agreement on July 21, 2015, or the Original Exclusive Consultation and Service Agreement. On April 28, 2020, WFOE I and Foshan Viomi entered into a Termination Agreement, which terminated the Original Exclusive Consultation and Service Agreement. On the same day, the former WFOE and Foshan Viomi entered into an Exclusive Consultation and Service Agreement with provisions substantially the same as the Original Exclusive Consultation and Service Agreement. On July 19, 2024, the former WFOE, Foshan Viomi and shareholders of Foshan Viomi entered into a Termination Agreement, which terminated the Exclusive Consultation and Service Agreement.

On July 21, 2015, our WFOE I, Beijing Viomi and each of the shareholders of Beijing Viomi entered into an Exclusive Consultation and Service Agreement. Pursuant to the Exclusive Consultation and Service Agreement, our WFOE I has the right to provide Beijing Viomi with the software technology development, technology consulting and technical services required by Beijing Viomi's business. Without our WFOE I's prior written consent, Beijing Viomi may not accept any same or similar services subject to this agreement from any third party. Beijing Viomi agrees to pay our WFOE I an annual service fee at an amount that is equal to 100% of its annual net income or the amount which is adjusted in accordance with our WFOE I's sole discretion for the relevant year as well as the mutually agreed amount for certain other technical services, both of which should be paid within three months after the end of the relevant calendar year. Our WFOE I has the exclusive ownership of all the intellectual property rights created as a result of the performance of the Exclusive Consultation and Service Agreement, to the extent permitted by applicable PRC laws. To guarantee Beijing Viomi's performance of its obligations thereunder, the shareholder has pledged his equity interests in Beijing Viomi to our WFOE I pursuant to the Equity Pledge Agreement. The Exclusive Consultation and Service Agreement will remain effective for an indefinite term, unless otherwise terminated pursuant to mutual agreement in writing or applicable PRC laws.

On July 20, 2024, our WFOE II, Guangzhou Interconnect and the sole shareholder of Guangzhou Interconnect entered into an Exclusive Consultation and Service Agreement which contains terms substantially similar to the Exclusive Consultation and Service Agreement executed by the shareholders of Beijing Viomi described above.

***Agreements that provide us with the option to purchase the equity interests in and assets of our VIEs***

***Exclusive Option Agreements.*** Our WFOE I, Foshan Viomi and Mr. Xiaoping Chen entered into an Exclusive Option Agreement on September 5, 2018, or the **Original Exclusive Option Agreement**. On April 28, 2020, WFOE I, Foshan Viomi and Mr. Xiaoping Chen entered into a Termination Agreement, which terminated the Original Exclusive Option Agreement. On the same day, the former WFOE, Foshan Viomi and shareholders of Foshan Viomi entered into an Exclusive Option Agreement with provisions substantially the same as the Original Shareholder Voting Proxy Agreement. On July 19, 2024, the former WFOE, Foshan Viomi and shareholders of Foshan Viomi entered into a Termination Agreement, which terminated the Exclusive Option Agreement.

On July 21, 2015, our WFOE I, Beijing Viomi and each of the shareholders of Beijing Viomi entered into an Exclusive Option Agreement. Pursuant to the Exclusive Option Agreement, the shareholders of Beijing Viomi have irrevocably granted our WFOE I an exclusive option to purchase all or part of such shareholders' equity interests in Beijing Viomi, and Beijing Viomi has irrevocably granted our WFOE I an exclusive option to purchase all or part of its assets. Our WFOE I or its designated person may exercise such options to purchase equity at their respective paid-in registered capital in Beijing Viomi, or the lowest price permitted under applicable PRC laws, whichever lower. Our WFOE I or its designated person may exercise such options to purchase assets at the lowest price permitted under applicable PRC laws. The shareholders of Beijing Viomi undertake that, without our WFOE I's prior written consent, the shareholders will not, among other things, (i) transfer or otherwise dispose of their equity interests in Beijing Viomi, (ii) create any pledge or encumbrance on their equity interests in Beijing Viomi, (iii) change Beijing Viomi's registered capital, (iv) merge Beijing Viomi with any other entity, (v) dispose of Beijing Viomi's material assets (except in the ordinary course of business), or (vi) amend Beijing Viomi's articles of association. In addition, Beijing Viomi undertakes that, without our WFOE I's prior written consent, it will not, among other things, create any pledge or encumbrance on any of its assets, or transfer or otherwise dispose of its material assets (except in the ordinary course of business). The Exclusive Option Agreement will remain effective until the entire equity interests in and all the assets of Beijing Viomi have been transferred to our WFOE I or its designated person.

Our WFOE II, Guangzhou Interconnect and the sole shareholder of Guangzhou Interconnect entered into an Exclusive Option Agreement on July 20, 2024 and a Supplemental Agreement on July 26, 2024, which contain terms substantially similar to the Exclusive Option Agreement executed by the shareholders of Beijing Viomi described above.

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In the opinion of Han Kun Law Offices, our PRC legal counsel:

● the ownership structures of our VIEs in China and our WFOEs, are not in violation of applicable PRC laws and regulations currently in effect; and

● the contractual arrangements between our company, our WFOEs, our VIEs and their respective shareholders governed by PRC laws are valid, binding and enforceable, and will not result in any violation of applicable PRC laws.

However, our PRC legal counsel has also advised us that there are substantial uncertainties regarding the interpretation and application of current and future PRC laws, regulations and rules. Accordingly, the PRC regulatory authorities may take a view that is contrary to the opinion of our PRC legal counsel. It is uncertain whether any new PRC laws or regulations relating to variable interest entity structures will be adopted or if adopted, what they would provide. If we or our VIE are found to be in violation of any existing or future PRC laws or regulations, or fail to obtain or maintain any of the required permits or approvals, the PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures.

See "Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—If the PRC government finds that the agreements that establish the structure for operating some of our business operations in China do not comply with PRC regulations relating to the relevant industries or securities offering, 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 interest in those operations, or be materially and adversely affected on our ability to raise or utilize funds from future oversea offerings" and "Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—Failure to respond to changes in the regulatory environment in China could adversely affect us."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.** **Property, Plant and Equipment** 

Our headquarters are located in Guangzhou, China, where we rent the office building with an aggregate floor area of approximately 1,065 square meters. Our research and development facilities and our management and operations facilities are located at our headquarters. Our R&D and office space located in Viomi Technology Park in Foshan, Guangdong Province, has an aggregate floor area of approximately 40,538 square meters. Our manufacturing facility located in Viomi Technology Park, Foshan, has an aggregate floor area of approximately 22,467 square meters.

We have acquired land use right to a parcel of land of approximately 36,000 square meters from the local government in Shunde, Guangdong Province, for the development of Viomi Technology Park, a comprehensive high-tech industrial campus. The Viomi Technology Park is planned to host our future headquarters and IoT development and manufacturing sites. We started the construction in May 2021 by entering into an overall project consignment contract with a main contractor. The construction of the building has been completed by the second half of 2023.

As of December 31, 2024, we leased and occupied approximately 1,065 square meters of office space in Guangzhou, approximately 359 square meters of office space in Beijing. These leases vary in duration from one to five years.

**ITEM 4A.** **UNRESOLVED STAFF COMMENTS**

None.

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| | |
|:---|:---|
| **ITEM 5.** | **OPERATING AND FINANCIAL REVIEW AND PROSPECTS** |

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You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and the related notes included elsewhere in this annual report on Form 20-F. This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under "*Item 3. Key Information—D. Risk Factors*" or in other parts of this annual report on Form 20-F.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Operating Results** 

**Key Factors Affecting Our Results of Operations** 

Key factors affecting our results of operations include the following:

***Consumption trend and adoption of AI-enabled smart home water solutions in China***

Our business and operating results are affected by general factors influencing China's broader consumer products and home appliances industries, including overall macroeconomic and consumer disposable income conditions, overall consumption trends, and in particular public knowledge, acceptance and adoption of new and innovative technology such as AI technology.

In recent years, China has experienced varied economic performance, which has influenced consumer behavior and expectations for living standards. While there have been periods of economic growth, recent trends suggest a more complex economic environment, with the middle class potentially facing more economic pressures than in previous years. Chinese consumers, particularly those from the emerging middle class, who are a key demographic for our products, have shown a preference for higher-quality and innovative products. However, the extent of this preference can vary, influenced by broader economic conditions and individual financial stability. Interest in products integrating AI technology remains, reflecting a desire for advanced, modern living solutions.

While these macroeconomic and industry trends have historically supported demand for our products, their influence can be both positive and negative, reflecting the dynamic nature of the market and economic conditions. As such, while these trends have potential to drive demand, they also pose risks that could affect consumer behavior and, consequently, our business operations. Awareness of these dual potentials is essential in understanding the current and future landscape in which we operate.

***Brand recognition and user base***

Our products and services, together with targeted marketing and promotional efforts, as well as our strategic partnership with Xiaomi, have contributed to positive word-of-mouth and media coverage. These factors have supported our brand recognition and helped to expand our user base.

As we continue to invest in and develop our brand, we anticipate that our recognition in the market may increase, potentially leading to greater demand for our products and an expansion of our user base. This could open up further monetization opportunities and positively impact our business growth. However, the realization of these outcomes is subject to market conditions and consumer preferences, which could also pose challenges to our anticipated growth.

***New product launches***

The introduction and sales of new products, both under Viomi and Xiaomi brands, have been key elements in our strategy for our business. Over the past several years, we have launched a variety of new products and plan to continue introducing more items that incorporate advanced technologies such AI. In 2023, we released a series of upgraded home water system products that featured enhanced AI integration and technological innovations, including the 1200G Super 2 AI water purifier with bamboo charcoal filters, the 2000G Space AI Water Purifier with a long-lasting main RO filter, and the Super 2 Max AI water purifier that features ultra-microbubble technology. Additionally, in March 2024, during our Spring New Home Water Solution Product Launch Events, we unveiled several products including the Kunlun AI mineral water purifier, which utilizes high-quality mineral resources and advanced technology for intelligent system adjustments. In North America, we introduced the Vortex series of under-the-sink RO water purifiers.

Our strategy includes fostering growth through repeat customer purchases, and the monetization of our consumable products and value-added services. However, the success of these strategies is contingent upon market reception, consumer preferences, and the competitive landscape, which may, in turn, affect our business performance and results of operations.

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***Investment in R&D, marketing and brand promotion***

Our success is significantly dependent on our ability to continually bring to market products and services that are popular among consumers, particularly relative to those offered by our competitors. Accordingly, we dedicate significant resources towards research and development. For the years ended December 31, 2022, 2023 and 2024, research and development expenses were RMB210.0 million, RMB148.9 million and RMB142.9 million (US$19.6 million), accounting for 11.7%, 9.1% and 6.7% of our net revenues, respectively. We have been devoting research and development resources in the areas of AI and other emerging technologies. Going forward, we will further invest in our research and development efforts as we continue to introduce new and innovative products to comprehensively address the increasing global demand for cleaner, fresher and healthier drinking water.

Similarly, attracting new users and growing the number of our users by continuing to strengthen our brand awareness as well as educating consumers about smart water purification products as a reliable, hassle-free and affordable essential for a healthy lifestyle. For the years ended December 31, 2022, 2023 and 2024, our selling and marketing expenses were RMB282.3 million, RMB214.6 million and RMB211.2 million (US$28.9 million), accounting for 15.8%, 13.1% and 10.0% of our net revenues, respectively. Going forward, we intend to continue investing in our marketing, advertising and brand promotion efforts.

***Relationship with Xiaomi***

Xiaomi is our strategic partner, shareholder, customer and related party. Our strategic partnership with Xiaomi provides us access to Xiaomi's ecosystem users, sales platforms and data resources and related support. Sales to Xiaomi, predominantly comprising Xiaomi-branded products, accounted for 74.7%, 78.9% and 82.7% of our net revenues in 2022, 2023 and 2024, respectively. Our strong research and development capabilities, supply chain resources and innovative products and services are able to enrich Xiaomi's suite of offerings, resulting in a mutually beneficial relationship between Xiaomi and us.

We expect the absolute amount of our revenues generated from our sales to Xiaomi to retain stable or increase going forward, since maintaining a mutually beneficial relationship with Xiaomi, including potential additional product collaborations, will continue to be important to our operations and future growth.

***Seasonality***

We generally expect to experience seasonally higher sales in the second and fourth quarters, primarily attributable to the major shopping festivals and promotional activities across major e-commerce platforms in China, such as "618", "Double Eleven" and "Double Twelve". Given the impact of this seasonality, timely and effective forecasting and product supply and introductions for the peak seasons are critical to our operations.

**Key Components of Our Results of Operations**

***Net revenues***

Prior to our 2024 reorganization transaction, we grouped our products into four business lines, including IoT@Home portfolio products, home water solutions, consumables and small appliances and others. After the divestment of our "divested IoT@Home business in 2024, we re-grouped our products to better reflect our "**Focus**" strategy for home water solutions.

Currently, our products are grouped under the following three business lines: "home water systems," which mainly are composed of our smart water purification products, water heaters, smart water kettles, and electric kettles, among others "consumables," which consist of our consumable products that mainly include a range of water filters for our smart water purifiers, and "kitchen appliances and others," which refer to range hoods, gas stoves and other small appliances, as well as product installation services and rental services.

Specifically, water heaters, smart water kettles which were previously grouped under IoT@Home portfolio products, have been re-grouped to home water systems. Electric kettles, which were previously grouped under small appliances and others, have been also re-grouped to home water systems. Range hoods, gas stoves, and other small appliances sold to Xiaomi, which were previously grouped under IoT@Home portfolio products, have been re-grouped to kitchen appliances and others.

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The following table sets forth the breakdown of our net revenues by business lines both in absolute amounts and as a proportion of the net revenue for the periods indicated.

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** |
|  | **2022** | **2022** | **2023** | **2023** | **2024** | **2024** | **2024** |
|  | **RMB** | **%**  | **RMB** | **%**  | **RMB** | **US$** | **%**  |
| Net revenues: |  |  |  |  |  |  |  |
| Home water systems | 1162725 | 64.9 | 1077858 | 65.8 | 1498368 | 205276 | 70.7 |
| Consumables | 353936 | 19.8 | 324738 | 19.8 | 277704 | 38045 | 13.1 |
| Kitchen appliances and others<sup>(1)</sup> | 273584 | 15.3 | 236140 | 14.4 | 342910 | 46978 | 16.2 |
| **Total** | **1790245** | **100.0** | **1638736** | **100.0** | **2118982** | **290299** | **100.0** |

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Note:

(1)Including range hoods, gas stoves and other small appliances, as well as product installation services and rental services. For more details, see note 15 to our consolidated financial statements at the end of this annual report.

***Home water systems***

The core of our home water systems is smart water purification systems, which were the first product category we launched in this business line, and sales of these products have contributed a material portion of our historical revenues.

In August 2024, to implement our "**Focus**" strategy for home water systems, we divested our businesses and assets involving certain IoT@Home portfolio products. Our home water system products also include water heaters, smart water kettles, and electric kettles, among others.

***Consumables***

The consumables mainly include water filters for our smart water purifiers. We offer water filters that are complementary, and often essential, to our home water systems. These products generate additional, recurring revenue streams throughout the life cycle of our home water systems. Consumers can purchase these products through our sales channels or the e-commerce platforms integrated to our home water systems. Consumers can purchase such products either through our sales channels or through the e-commerce platform embedded within various of our products. The growth of our consumable products business will depend on the size of our user base.

***Kitchen appliances and others***

Revenues from kitchen appliances and others include revenues from the sales of kitchen products include range hoods, gas stoves, and other small appliances, as well as revenue from rendering of services. Historically, revenues from this category have predominantly comprised of product sales.

***Brands***

Our business comprises of two key pillars: our Viomi business, predominantly comprising our Viomi-branded products, and our Xiaomi business, comprising our strategic partnership with Xiaomi. Sales to third-party channels as well as Viomi Store, our proprietary e-commerce platform, which constitute the vast majority of our Viomi-branded products business, accounted for 25.3%, 21.1% and 17.3% of our net revenues in 2022, 2023 and 2024, respectively.

Xiaomi is our strategic partner, shareholder and customer. Our strategic partnership with Xiaomi provides us access to Xiaomi's ecosystem users, sales platforms and data resources and related support. Sales to Xiaomi, predominantly comprising Xiaomi-branded products, historically accounted for 74.7%, 78.9% and 82.7% of our net revenues in 2022, 2023 and 2024, respectively. We sell Xiaomi-branded products directly to Xiaomi, who then on-sells these products to its customers and end-consumers.

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***Cost of revenues***

Our cost of revenues primarily consists of material costs, estimated warranty costs, manufacturing and fulfillment costs, salaries and benefits for staff engaged in production activities and related expenses that are directly attributable to the production of products. We procure a variety of raw materials and components from third-party suppliers, and outsource certain manufacturing and order fulfillment activities to third parties. Our product costs fluctuate with the costs of raw materials and underlying product components as well as the prices we are able to negotiate with our contract manufacturers and raw material and component suppliers. Our cost of revenues was RMB1,195.7 million, RMB1,116.7 million and RMB1,570.3 million (US$215.1 million) for the years ended December 31, 2022, 2023 and 2024, respectively.

**Gross profit and gross profit margin**

Our gross profit margin is affected by changes in our product and business mix as well as our cost of revenues. Please see "*—Key Factors Affecting our Results of Operations—Product and business mix*" for more details. The table below sets forth our gross profit in absolute amount and gross profit margins of products and services for the periods indicated.

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** |
|  | **2022** | **2022** | **2023** | **2023** | **2024** | **2024** | **2024** |
|  | **RMB** | **%**  | **RMB** | **%**  | **RMB** | **US$** | **%**  |
| Gross profit and gross profit margin | 594503 | 33.2 | 522016 | 31.9 | 548706 | 75173 | 25.9 |

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**Operating expenses**

Our operating expenses can be classified into three categories: general and administrative, research and development, and selling and marketing. The following table sets forth the components of our operating expenses, both in absolute amount and as a proportion of our net revenues, for the periods presented. 

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** |
|  | **2022** | **2022** | **2023** | **2023** | **2024** | **2024** | **2024** |
|  | **RMB** | **%**  | **RMB** | **%**  | **RMB** | **US$** | **%**  |
| **Operating expenses:**  |  |  |  |  |  |  |  |
| General and administrative | 60510 | 3.4 | 57346 | 3.5 | 70807 | 9701 | 3.3 |
| Research and development | 209957 | 11.7 | 148879 | 9.1 | 142884 | 19575 | 6.7 |
| Selling and marketing | 282285 | 15.8 | 214610 | 13.1 | 211173 | 28931 | 10.0 |
| **Total** | **552752** | **30.9** | **420835** | **25.7** | **424864** | **58207** | **20.0** |

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*General and administrative*. General and administrative expenses consist primarily of salaries and welfare for general and administrative personnel and share-based compensation for management and administrative personnel. Within the total general and administrative expenses incurred in the year ended December 31, 2022, 2023 and 2024, RMB4.4 million, RMB1.6 million and RMB4.6 million (US$0.6 million) were share-based compensation expenses, respectively.

*Research and development*. Our research and development expenses primarily consist of salaries and benefits as well as share-based compensation for research and development personnel, materials, general expenses and depreciation expenses associated with research and development activities. 

*Selling and marketing*. Our selling and marketing expenses primarily consist of advertising and market promotion expenses, shipping expenses, and salaries and welfare for sales and marketing personnel. We bear mainly the advertising and marketing expenses for our Viomi-branded products. We have heightened expense control to improve our operational performance, as reflected in the decrease in our selling and marketing expenses in absolute amount and as a percentage of our net revenues.

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***Other income***

Other income primarily consists of government grants received from local government authorities to encourage our technology development and innovation. These amounts are paid in the discretion of the governmental authorities, and there is no assurance that we will receive such grants in future periods.

**Taxation** 

***Cayman Islands***

We are an exempted company incorporated in the Cayman Islands. The Cayman Islands currently levies no taxes on corporations based upon profits, income, gains or appreciation.

***Hong Kong***

Our subsidiary incorporated in Hong Kong is subject to Hong Kong profit tax at a rate of 8.25% on assessable profits up to 2,000,000 Hong Kong dollars and 16.5% on any part of assessable profits over that amount. No Hong Kong profit tax has been levied as we did not have an assessable profit that was earned in or derived from the Hong Kong subsidiary during the periods presented. Hong Kong does not impose a withholding tax on dividends.

***China***

Generally, our PRC subsidiaries, variable interest entities and their subsidiaries, which are considered PRC resident enterprises under PRC tax law, are subject to enterprise income tax on their worldwide taxable income as determined under PRC tax laws and accounting standards at a rate of 25%. However, according to the PRC Enterprise Income Tax Law, the income tax of an enterprise that has been determined to be a high and new technology enterprise can be reduced to a preferential rate of 15%. Guangdong Lizi has obtained High and New Technology Enterprise Certificate and is thus eligible to enjoy a preferential tax rate of 15%, to the extent it has taxable income under the PRC Enterprise Income Tax Law.

Dividends paid by our wholly foreign-owned subsidiary in China to our intermediary holding company in Hong Kong will be subject to a withholding tax rate of 10%, unless the relevant Hong Kong entity satisfies all the requirements under the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income with respect to Taxes on Income and Capital and receives approval from the tax authority. If our Hong Kong subsidiary satisfies all the requirements under the tax arrangement and receives approval from the tax authority, then the dividends paid to the Hong Kong subsidiary would be subject to withholding tax at the standard rate of 5%. See "*Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure—We may rely on dividends paid by our PRC subsidiaries to fund any cash and financing requirements we may have. Any limitation on the ability of our PRC subsidiaries to pay dividends to us could have a material adverse effect on our ability to conduct our business and to pay dividends to holders of the ADSs and our ordinary shares*."

If our holding company in the Cayman Islands or any of our subsidiaries outside of China were deemed to be a "resident enterprise" under the PRC Enterprise Income Tax Law, it would be subject to enterprise income tax on its worldwide income at a rate of 25%. See "*Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders or ADS holders*."

**Results of Operations**

The following table sets forth a summary of our consolidated income for the periods presented, both in absolute amount and as a proportion of our net revenues for the periods presented. This information should be read together with our consolidated financial statements and related notes included elsewhere in this annual report.

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As a result of the completion of the 2024 reorganization transaction, from September 2024, we have ceased to consolidate the divested entities, assets and businesses as well as their corresponding financial results. The historical financial results of our diverted IoT@Home business are reflected in our audited consolidated financial statements as discontinued operations. Unless otherwise stated, the financial information and non-GAAP financial measures disclosed in this annual report refer to our continuing operations.

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** |
|  | **2022** | **2022** | **2023** | **2023** | **2024** | **2024** | **2024** |
|  | **RMB** | **%**  | **RMB** | **%**  | **RMB** | **US$** | **%**  |
| **Net revenues**<sup>(1)</sup> | **1790245** | **100.0** | **1638736** | **100.0** | **2118982** | **290299** | **100.0** |
| Cost of revenues | (1195742) | (66.8) | (1116720) | (68.1) | (1570276) | (215126) | (74.1) |
| Gross profit | 594503 | 33.2 | 522016 | 31.9 | 548706 | 75173 | 25.9 |
| **Operating expenses**<sup>(2)</sup>: |  |  |  |  |  |  |  |
| Research and development expenses<sup>(2)</sup> | (209957) | (11.7) | (148879) | (9.1) | (142884) | (19575) | (6.7) |
| Selling and marketing expenses<sup>(2)</sup> | (282285) | (15.8) | (214610) | (13.1) | (211173) | (28931) | (10.0) |
| General and administrative expenses<sup>(2)</sup> | (60510) | (3.4) | (57346) | (3.5) | (70807) | (9701) | (3.3) |
| **Total operating expenses** | **(552752)** | **(30.9)** | **(420835)** | **(25.7)** | **(424864)** | **(58207)** | **(20.1)** |
| Other income, net | 12906 | 0.7 | 8887 | 0.5 | 32492 | 4451 | 1.5 |
| Income from operations | 54657 | 3.1 | 110068 | 6.7 | 156334 | 21417 | 7.4 |
| Interest income and short-term investment income, net | 10506 | 0.6 | 16831 | 1.0 | 5264 | 721 | 0.2 |
| **Income before income tax expenses** | **67651** | **3.8** | **130063** | **7.9** | **161598** | **22138** | **7.6** |
| Income tax credits (expenses) | 447 | 0.0 | (13588) | (0.8) | (16913) | (2317) | (0.8) |
| **Net income from continuing operations** | 68098 | 3.8 | 116475 | 7.1 | 144685 | 19821 | 6.8 |
| **Net loss from discontinued operations** | (350728) | (19.6) | (205808) | (12.6) | (82341) | (11281) | (3.9) |
| **Net Income (loss)** | (282630) | (15.8) | (89333) | (5.5) | 62344 | 8540 | 2.9 |

---

Notes:

&nbsp;&nbsp;&nbsp;&nbsp;(1) Includes RMB1,336.6 million, RMB1,292.9 million and RMB1,819.1 million (US$249.2 million) from sales to related parties for the years ended December 31, 2022, 2023 and 2024, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;(2) Share-based compensation expenses were allocated as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** |
|  | **2022** | **2023** | **2024** | **2024** |
|  | **RMB** | **RMB** | **RMB** | **US$** |
| General and administrative expenses | 4415 | 1551 | 4579 | 627 |
| Research and development expenses | 14645 | 121 | 8151 | 1117 |
| Selling and marketing expenses | 500 | (1566) | 3720 | 510 |
| **Total** | 19560 | 106 | **16450** | **2254** |

---

**Year Ended December 31, 2024 Compared to Year Ended December 31, 2023**

***Net revenues***

Our net revenues increased by 29.3% from RMB1,638.7 million in 2023 to RMB2,119.0 million (US$290.3 million) in 2024, primarily attributable to the growth in the home water systems.

*Home water systems*. Revenues from home water systems increased by 39.0% from RMB1,077.9 million in 2023 to RMB1,498.4 million (US$205.3 million) in 2024, primarily due to the increased demand of the home water system products.

*Consumables*. Revenues from consumables decreased by 14.5% from RMB324.7 million in 2023 to RMB277.7 million (US$38.0 million) in 2024, primarily due to the decreased sales of water purifier filters sold to Xiaomi, partially offset by an increase in demand for the Viomi-branded filters.

*Kitchen appliances and others*. Revenues from kitchen appliances and others increased by 45.2% from RMB236.1 million in 2023 to RMB342.9 million (US$47.0 million) in 2024, primarily due to increased sales of kitchen appliances to Xiaomi.

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***Cost of revenues***

Our cost of revenues increased by 40.6% from RMB1,116.7 million in 2023 to RMB1,570.3 million (US$215.1 million) in 2024, primarily due to a change in product mix during the transition period, resulting from the increased revenue contribution of low gross margin products.

***Gross profit***

As a result of the foregoing, our gross profit increased by 5.1% from RMB522.0 million in 2023 to RMB548.7 million (US$75.2 million) in 2024.

Our gross margin was 25.9% in 2024, as compared to 31.9% in 2023.

***Operating Expenses***

Our operating expenses increased by 1.0% from RMB420.8 million in 2023 to RMB424.9 million (US$58.2 million) in 2024.

*General and administrative*. General and administrative expenses increased by 23.5% from RMB57.3 million in 2023 to RMB70.8 million (US$9.7 million) in 2024, primarily due to higher management personnel expenses, partially offset by a decrease in estimated allowance for accounts and notes receivables.

*Research and development*. Research and development expenses decreased by 4.0% from RMB148.9 million in 2023 to RMB142.9 million (US$19.6 million) in 2024, primarily due to decreased depreciation and amortization expenses and personnel expenses.

*Selling and marketing*. Selling and marketing expenses decreased slightly by 1.6% from RMB214.6 million in 2023 to RMB211.2 million (US$28.9 million) in 2024. This decrease was primarily due to decrease in logistic expenses, partially offset by the increase in advertising expenses.

***Income tax expenses***

We had income tax expenses of RMB16.9 million (US$2.3 million) in 2024, compared to RMB13.6 million in 2023.

***Net income from continuing operations***

As a result of the foregoing, we recorded a net income from continuing operations attributable to ordinary shareholders of the Company of RMB144.4 million (US$19.8 million) in 2024, compared to RMB116.8 million for 2023.

***Net loss related to discontinued operations***

We recorded net loss related to discontinued operations attributable to ordinary shareholders of the Company of RMB201.4 million in 2023. In 2024, we recorded net loss related to discontinued operations attributable to ordinary shareholders of the Company of RMB81.0 million (US$11.1 million), representing the net loss from discontinued operations for the period from January 1 through August 31, 2024.

***Net income (loss)***

We recorded a net income attributable to ordinary shareholders of the Company of RMB63.4 million (US$8.7 million) in 2024, compared to the net loss attributable to ordinary shareholders of the Company of RMB84.7 million for 2023. Excluding the impact of share-based compensation expenses, our net income attributable to ordinary shareholders of the Company was RMB79.9 million (US$10.9 million) in 2024, compared to the net loss of RMB84.6 million for 2023.

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**Year Ended December 31, 2023 Compared to Year Ended December 31, 2022**

***Net revenues***

Our net revenues decreased by 8.5% from RMB1,790.2 million in 2022 to RMB1,638.7 million in 2023, primarily due to a decrease in revenues from the home water systems.

*Home water systems*. Revenues from home water systems decreased by 7.3% from RMB1,162.7 million in 2022 to RMB1,077.9 million in 2023, primarily due to the lower volume of water purifiers sold to Xiaomi Corporation.

*Consumables*. Revenues from consumables decreased by 8.2% from RMB353.9 million in 2022 to RMB324.7 million in 2023, primarily due to decreased demands for purifier filter products.

*Kitchen appliances and others*. Revenues from kitchen appliances and others decreased by 13.7% from RMB273.6 million in 2022 to RMB236.1 million in 2023, primarily due to the ongoing product portfolio adjustment within this category.

***Cost of revenues***

Our cost of revenues decreased by 6.6% from RMB1,195.7 million in 2022 to RMB1,116.7 million in 2023, which is in line with the overall decreased revenue scale.

***Gross profit***

As a result of the foregoing, our gross profit decreased by 12.2% from RMB594.5 million in 2022 to RMB522.0 million in 2023.

Our gross margin remained stable at 33.2% in 2022 and 31.9% in 2023.

***Operating Expenses***

Our operating expenses decreased by 23.9% from RMB552.8 million in 2022 to RMB420.8 million in 2023.

*General and administrative*. General and administrative expenses decreased by 5.2% from RMB60.5 million in 2022 to RMB57.3 million in 2023, primarily due to higher base of credit loss allowance made against a third party customer in 2022 as well as decreased management staff costs.

*Research and development*. Research and development expenses decreased by 29.1% from RMB210.0 million in 2022 to RMB148.9 million in 2023, primarily due to a decrease in salaries expenses and share based compensation among this category.

*Selling and marketing*. Selling and marketing expenses decreased by 24.0% from RMB282.3 million in 2022 to RMB214.6 million in 2023. This decrease was primarily due to a decrease in online platform service fees, logistic expenses, and sales-related personnel costs.

***Income tax expenses/(credits)***

We had income tax expenses of RMB13.6 million in 2023, compared to income tax credits of RMB0.4 million in 2022.

***Net income from continuing operations***

As a result of the foregoing, we recorded a net income from continuing operations attributable to ordinary shareholders of the Company increased by 71.0% from RMB68.3 million in 2022, to RMB116.7 million in 2023, primarily attributable to the streamlining of the organizational structure and overall improved operational efficiency.

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***Net loss related to discontinued operations***

Our net loss related to discontinued operations attributable to ordinary shareholders of the Company decreased by 41.4% from RMB343.8 million in 2022 to RMB201.4 million in 2023, primarily due to the Company's efforts to streamline the loss-making businesses and improve operational efficiency.

***Net loss***

We recorded a net loss attributable to ordinary shareholders of the Company of RMB84.7 million in 2023, compared to the net loss of RMB275.5 million for 2022. Excluding the impact of share-based compensation expenses, our net loss attributable to ordinary shareholders of the Company was RMB84.6 million in 2023, compared to the net loss of RMB256.0 million for 2022.

&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Liquidity and Capital Resources** 

***Cash flows and working capital***

To date, we have financed our operations primarily through cash generated by operating activities and historical equity financing activities. As of December 31, 2022, 2023 and 2024, we had cash and cash equivalents and restricted cash of RMB428.2 million, RMB225.3 million and RMB1,167.5 million (US$159.9 million), respectively. Our cash and cash equivalents primarily consist of cash on hand, demand deposits and highly liquid investments placed with banks. We believe that our cash and cash equivalents and restricted cash and our anticipated cash flows from operations will be sufficient to meet our current and anticipated needs for general corporate purposes for at least the next 12 months.

Although we consolidate the results of our VIEs, we only have access to cash balances or future earnings of our VIEs through our contractual arrangements with them. See "*Item 4. Information on the Company—C. Organizational Structure*." For restrictions and limitations on liquidity and capital resources as a result of our corporate structure, see "*—Holding Company Structure*."

Substantially all of our net revenues have been, and we expect they are likely to continue to be, in the form of Renminbi. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments, and trade- and service-related foreign exchange transactions can be made in foreign currencies without prior approval of SAFE as long as certain routine procedural requirements are fulfilled. Therefore, our PRC subsidiaries are allowed to pay dividends in foreign currencies to us without prior approval of the SAFE by following certain routine procedural requirements. However, current PRC regulations permit our PRC subsidiaries to pay dividends to us only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. Each of our PRC subsidiary is required to set aside at least 10% of its after-tax profits after making up previous years' accumulated losses each year, if any, to fund certain statutory reserve funds until the total amount set aside reaches 50% of its registered capital. In addition, it may allocate a portion of its after-tax profits based on PRC accounting standards to discretionary reserve funds at its discretion. These reserves are not distributable as cash dividends. Historically, our PRC subsidiaries have not paid dividends to us, and they have no present plan to pay any dividends to us in the foreseeable future, since they intend to retain all of their available funds and any future earnings to operate and expand our business. Furthermore, capital account transactions, which include foreign direct investment and loans, must be approved by and/or registered with the SAFE, its local branches and certain local banks.

The restricted net assets of our PRC subsidiaries and VIEs amounted to RMB100.8 million, RMB95.7 million and RMB97.9 million (US$13.4 million) as of December 31, 2022, 2023 and 2024, respectively. The unrestricted portion, or amounts otherwise available for transfer in the form of dividends, loans or advances amounted to RMB149.2 million, RMB177.3 million and RMB813.7 million (US$111.5 million) as of December 31, 2022, 2023 and 2024, respectively.

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As a Cayman Islands exempted company and offshore holding company, we are permitted under PRC laws and regulations to provide funding to our wholly foreign-owned subsidiaries in China through loans, subject to the approval of government authorities and limits on the amount, or we may make additional capital contributions to our wholly foreign-owned subsidiary in China. In addition, our wholly foreign-owned subsidiaries in China may provide Renminbi funding to their respective subsidiaries through capital contributions and entrusted loans, and to our consolidated variable interest entities only through entrusted loans. See "*Item 3. Key Information—D. Risk Factors—Risks Related 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 delay or prevent us from using the proceeds of our securities offering to make loans or additional capital contributions to our PRC subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business*."

The following table sets forth a summary of our cash flows for the periods presented:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** | **For the Year Ended December 31,** |
|  | **2022** | **2023** | **2024** | **2024** |
|  | **RMB** | **RMB** | **RMB** | **US$** |
| **Selected Consolidated Cash Flow Data:** |  |  |  |  |
| Net cash provided by/(used in) continuing operating activities | 134697 | 41319 | 580995 | 79596 |
| Net cash (used in)/provided by continuing investing activities | (154934) | (290949) | (301812) | (41348) |
| Net cash provided/(used in) by continuing financing activities | 113563 | 15657 | (4658) | (638) |
| Net increase/(decrease) in cash and cash equivalents and restricted cash in continuing operations | 93326 | (233973) | 274525 | 37610 |
| Net increase/(decrease) in cash and cash equivalents and restricted cash in discontinued operations | 50615 | 47476 | 241951 | 33147 |
| Cash and cash equivalents and restricted cash at the beginning of the year | 622786 | 813209 | 636355 | 87180 |
| Effect of exchange rate changes on cash and cash equivalents | 46482 | 9643 | 14649 | 2007 |
| Cash and cash equivalents and restricted cash at the end of the year | 813209 | 636355 | 1167480 | 159944 |
| Less: Cash and cash equivalents and restricted cash of held for sales at the end of the year | (385000) | (411028) |  |  |
| Cash and cash equivalents and restricted cash of continuing operations at the end of the year | 428209 | 225327 | 1167480 | 159944 |

---

***Operating activities***

Net cash provided by continuing operating activities was RMB581.0 million (US$79.6 million) in 2024. The difference between net cash provided by operating activities and our net income of RMB144.7 million (US$19.8 million) was primarily due to RMB410.0 million provided by working capital and the adjustment of RMB29.0 million in depreciation and amortization.

Net cash provided by operating activities was RMB41.3 million in 2023. The difference between net cash used in operating activities and our net income of RMB116.5 million was primarily due to RMB126.7 million used for working capital, partially offset by the adjustment of RMB36.9 million in depreciation and amortization, RMB1.2 million in allowance for credit losses, and RMB9.4 million in inventory write-down.

Net cash used in operating activities was RMB134.7 million in 2022. The difference between net cash used in operating activities and our net income of RMB68.1 million was primarily due to RMB4.1 million used for working capital, and the adjustment of RMB40.1 million in depreciation and amortization, RMB4.0 million in deferred income taxes, and RMB19.6 million in share-based compensation.

***Investing activities***

We used RMB301.8 million (US$41.3 million) in investing activities in 2024, mainly due to the cashout due to the discontinued operations.

We used RMB290.9 million in investing activities in 2023, mainly as a result of RMB176.7 million used for the placement of short-term deposits, RMB103.4 million used for the purchase of equipment, RMB39.7 million used for the purchase of short-term investments, partially offset by RMB29.0 million received from the maturity of short-term investments.

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Net cash provided by investing activities was RMB154.9 million in 2022, mainly as a result of RMB150.4 million used for the purchase of equipment.

***Financing activities***

Net cash used in financing activities was RMB4.7 million (US$0.6 million) in 2024, mainly as a result of the repayment for share repurchases.

Net cash provided by financing activities was RMB15.7 million in 2023, mainly as a result of RMB49.1 million proceed from borrowing, partially offset by RMB6.4 million used in repurchase of ordinary shares.

Net cash provided by financing activities was RMB113.6 million in 2022, mainly as a result of RMB118.7 million proceed from borrowing, partially offset by RMB8.0 million used in repurchases of ordinary shares.

***Working capital turnover***

*Inventories*

Our inventory consists of finished products and raw materials. As of December 31, 2022, 2023 and 2024, our inventory was RMB180.5 million, RMB157.3 million and RMB112.3 million (US$15.4 million), respectively. Our inventory turnover days was 62 days, 55 days and 31 days for the years ended December 31, 2022, 2023 and 2024, respectively. Inventory turnover days for a given period are equal to average of the balances of inventories, net of provisions for inventories write-downs, at the beginning and the end of the period divided by cost of revenues during the period and multiplied by the number of days during the period.

*Accounts and notes receivable*

Our accounts and notes receivable represent primarily accounts receivable from Xiaomi as well as accounts and notes receivable from third parties. As of December 31, 2022, 2023 and 2024, our accounts and notes receivable, net of allowance for credit losses, were RMB49.8 million, RMB41.2 million and RMB615.3 million (US$84.3 million), respectively. Our total accounts and notes receivable as of December 31, 2024 included RMB591.2 million (US$81.0 million) from Xiaomi and RMB24.1 million (US$3.3 million) from third parties. Our accounts and notes receivable turnover days were 12 days, 10 days and 57 days for the years ended December 31, 2022, 2023 and 2024, respectively. Accounts and notes receivable turnover days for a given period are equal to average of the balances of accounts and notes receivable, net of allowance for credit losses, at the beginning and the end of the period divided by net revenues during the period and multiplied by the number of days during the period.

*Accounts and notes payable*

Our accounts and notes payable represent primarily accounts and notes payable to contract manufacturers. As of December 31, 2022, 2023 and 2024, our accounts and notes payable were RMB466.2 million, RMB317.5 million and RMB772.2 million (US$105.8 million), respectively. Our accounts and notes payable turnover days were 151 days, 128 days and 127 days for the years ended December 31, 2022, 2023 and 2024, respectively. Accounts and notes payable turnover days for a given period are equal to average of the balances of accounts and notes payable, at the beginning and the end of the period divided by cost of revenues during the period and multiplied by the number of days during the period.

***Material cash requirements***

Our material cash requirements as of December 31, 2024 and any subsequent interim period primarily include our capital expenditures, contractual obligations and capital commitments.

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Cash flow in connection with capital expenditures amounted to RMB154.9 million, RMB84.3 million and RMB8.9 million (US$1.2 million) in the years ended December 31, 2022, 2023 and 2024, respectively. These capital expenditures are incurred primarily in connection with the purchase of property, plant and equipment, intangible assets, the construction of Viomi Technology Park and other long-term assets. Our capital expenditures may increase in the future as our product offerings continue to expand and diversify and as we continue to invest in the Viomi Technology Park. We currently plan to fund these expenditures with our current cash and cash equivalents, restricted cash, short-term investments and cash flow generated from our operating activities.

Our contractual obligations mainly represent operating lease obligations, which consist of the commitments under the lease agreements for our office premises and several factories. The following table sets forth our contractual obligations as of December 31, 2024.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Payment Due by Period** | **Payment Due by Period** | **Payment Due by Period** | **Payment Due by Period** | **Payment Due by Period** |
|  | <br>**Total** | **Less than**<br>**1 Year** | <br>**1-3 Years** | <br>**3-5 Years** | **More than** <br>**5 Years** |
|  | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** | **(RMB in thousands)** |
| Operating lease obligation<sup>(1)</sup> | 4068 | 1860 | 2208 |  |  |

---

Note:

&nbsp;&nbsp;&nbsp;&nbsp;(1) Operating lease obligation consist of the commitments under the lease agreements for our office premises and several factories.

As of December 31, 2024, we had RMB40.8 million outstanding capital commitments, which are mainly related to the construction of Viomi Technology Park.

We intend to fund our existing and future material cash requirements with our existing cash and cash equivalents, restricted cash, short-term investments and other financing alternatives. We will continue to make cash commitments, including capital expenditures, to support the growth of our business.

We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. In addition, we have not entered into any derivative contracts that are indexed to our shares and classified as shareholder's equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or product development services with us.

**Holding Company Structure** 

Viomi Technology Co., Ltd is a holding company with no material operations of its own. We conduct our operations primarily through our subsidiaries, our VIEs and their subsidiaries in China. As a result, Viomi Technology Co., Ltd's ability to pay dividends depends upon dividends paid by our PRC and Hong Kong subsidiaries, our VIEs and their subsidiaries in China. If our existing subsidiaries or controlled entities or any newly formed ones incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us. In addition, our wholly foreign-owned subsidiary in China is permitted to pay dividends to us only out of its retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Under PRC laws, each of our subsidiary, our VIEs and their subsidiaries in China is required to set aside at least 10% of its after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. In addition, each of our wholly foreign-owned subsidiary in China, our variable interest entities and their subsidiaries may allocate a portion of its after-tax profits based on PRC accounting standards to a discretionary surplus fund at its discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends. Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by the SAFE. Our PRC subsidiaries have not paid dividends to us, and they have no present plan to pay any dividends to us in the foreseeable future, since they intend to retain all of their available funds and any future earnings to operate and expand our business.

**Recent Accounting Pronouncements**

See "*Recently issued accounting pronouncements not yet adopted*" included in note 2 to our consolidated financial statements at the end of this annual report.

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&nbsp;&nbsp;&nbsp;&nbsp;**C.** **Research and Development, Patents and Licenses, Etc.** 

See "Item 4. Information on the Company—B. Business Overview—Research and Development" and "—Intellectual Property."

&nbsp;&nbsp;&nbsp;&nbsp;**D.** **Trend Information** 

Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the period since January 1, 2025 that are reasonably likely to have a material adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.

&nbsp;&nbsp;&nbsp;&nbsp;**E.** **Critical Accounting Estimates** 

**Critical Accounting Policies, Judgments and Estimates**

An accounting policy is considered critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time such estimate is made, and if different accounting estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the consolidated financial statements.

We prepare our consolidated financial statements in conformity with U.S. GAAP, which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, related disclosures of contingent assets and liabilities at the balance sheet date, and the reported revenue and expenses during the reported period in the consolidated financial statements and accompanying notes. We continually evaluate these estimates and assumptions based on the most recently available information, our own historical experience and various other assumptions that we believe to be reasonable under the circumstances. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from our expectations as a result of changes in our estimates. Some of our accounting policies require a higher degree of judgment than others in their application and require us to make significant accounting estimates.

The following descriptions of critical accounting policies, judgments and related critical estimates should be read in conjunction with our consolidated financial statements and accompanying notes and other disclosures included in this annual report. When reviewing our consolidated financial statements, you should consider (i) our selection of critical accounting policies, (ii) the judgments and other uncertainties affecting the application of such policies and (iii) the sensitivity of reported results to changes in conditions and assumptions.

***Revenue recognition***

In May 2014, the FASB issued ASU No. 2014-09, "**Revenue from Contracts with Customers (Topic 606)**" and subsequently, the FASB issued several amendments which amend certain aspects of the guidance in ASC 2014-09 (ASU No. 2014-09 and the related amendments are collectively referred to as "**ASC 606**"). According to ASC 606, revenue is recognized when control of the promised good or service is transferred to the customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. We will enter into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized net of allowances for returns, and any taxes collected from customers, which are subsequently remitted to governmental authorities. We adopted ASC 606 for all periods presented.

Our revenue is primarily derived from (i) home water systems, which are composed of smart water purification products, water heaters, smart water kettles, and electric kettles, among others., (ii) consumables complementary to our IoT products, which include a range of water filters for our smart water purifiers, and (iii) kitchen appliances and others refer to range hoods, gas stoves and other small appliances, as well as product installation services and rental services.

*Sales to Xiaomi*

From 2022 to 2024, we generated a substantial portion of our revenues from sales of products to Xiaomi.

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Under the cooperation agreement entered into between Xiaomi and us, we are responsible for design, research, development, production and delivery of designated products using the brand name of "**Xiaomi**," or Xiaomi-branded products, and Xiaomi is responsible for commercial distributions and sales. We also sell some Viomi-branded products to Xiaomi.

Revenue is recognized upon acceptance by this customer, which is considered at the time the control of the products is transferred to Xiaomi. Revenue does not meet the criteria to be recognized over time since (i) even if the products use "Xiaomi" brand, it does not require significant rework to make them suitable to be sold to other customers, (ii) under the cooperation agreement, we do not have the right of payment for the work performed to date.

For a majority of types of products sold to this customer, the selling price is a fixed amount as agreed by both parties. For other types of products sold to this customer, the sales arrangement includes two installment payments. The first installment is priced to recover the costs incurred by us in developing, producing and shipping the products to this customer and is payable to us upon acceptance by the customer after delivery. We are also entitled to receive a potential second installment payment calculated as certain portion of the future gross profits from commercial sales made by this customer. Accordingly, we determine the sales price as the fixed first installment payment plus the variable second installment payment to the extent that it is probable that revenue reversal will not occur when settling with the customer subsequently. We estimate the variable consideration using the expected value method. In assessing the variable second installment payment, we take into consideration the historical experience with the customer, selling price of the same or similar products as at the report date as well as the recent market trend. For the years ended December 31, 2022, 2023, and 2024, net revenues earned from second installment payment arrangement represented 3.5%, 3.4% and 10.5% of total revenue from Xiaomi, respectively.

***Sales to third-party customers, including: sales to leading e-commerce platforms and offline third-party stores; and sales to customers directly through the online platforms operated by Xiaomi, third parties and us***

*- Sales to leading e-commerce platforms and offline stores*

Pursuant to the contracts between leading e-commerce platforms/offline stores, or the E-Commerce Platforms and Stores, and us, the E-Commerce Platforms and Stores have legal title and physical possession of the products upon acceptance and they would bear the inventory risk of loss due to physical damage before the products are transferred and accepted by end customers. The E-Commerce Platforms and Stores are responsible for delivering the products to end customers and can direct the use of the products and obtain the remaining benefits from the products by reselling the products. The E-Commerce Platforms and Stores have flexibility in determining the retail sales price within relatively broad price range set by us. Based on these indicators, we determined the E-Commerce Platforms and Stores (as opposed to the end customers) as its customers according to ASC 606-10-55-39. We recognize revenue equal to the sales price to the E-Commerce Platforms and Stores when control of the inventory is transferred.

*- Sales to customers directly through the online platforms operated by Xiaomi, third parties and us*

Under the cooperation agreements entered between online platforms and us, the platforms' responsibilities are limited to offering an online marketplace, while we are primarily obligated in a sales transaction and takes inventory risk and has latitude in determining prices. The platforms charged us commission fees at pre-determined amounts or a fixed rate based on the sales amounts. Commission fees are recognized as selling expenses. We determine the end customers (as opposed to the platforms) as its customers and recognize revenue equal to the sales price to the end customers when control of the inventory is transferred.

We provide installation service to end customers for designated Viomi-branded products without separate charge. The end customers have the right, not the obligation, to ask us to provide installation service. The installation service is considered being distinct and accounted for as a separate performance obligation as the products and installation services are not inputs into a combined item the end customer has contracted to receive. In addition, we do not provide any significant integration, modification, or customization services. It can fulfill its obligation to transfer each of the products or services separately. End customers do not always exercise their rights to ask for installation services as the installation may not be complicated and could be done by end customers themselves. Therefore, we expect to be entitled to a breakage amount in the contract liabilities related to installation services. We estimate the breakage portion based on historical customers' requests and recognize estimated breakage as revenue in proportion to the pattern of rights exercised by end customers. The assessment of estimated breakage would be updated on a semi-annually basis. Changes in estimated breakage should be accounted for by adjusting contract liabilities to reflect the remaining rights expected to be exercised.

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Judgment is required to determine standalone selling price for each distinct performance obligation and we then allocate the arrangement consideration to the separate accounting of each distinct performance obligation based on its relevant standalone selling price. The standalone selling price of the products is determined based on adjusted market assessment approach by estimating the price the customer is willing to pay for the product without installation service. For the standalone selling price of the installation services, we semi-annually determine it by using a cost plus margin approach by referring to actual installation costs charged by the third-party vendors, plus an estimated profit margin of 5% based on consideration of both company specific and relevant market factors.

We recognize revenue for the sales to third-party customers in accordance with the applicable revenue recognition method for each of the distinct performance obligation identified. Sales of products is recognized upon acceptance by customers after delivery. Installation services revenues are recognized when the services are rendered.

***Sales returns and sales incentives***

*- Sales to leading e-commerce platforms*

Our sales to leading e-commerce platforms started in 2018. As stipulated in the contracts, slow-moving goods are those unsold products after they are controlled by the e-commerce platforms for more than 30 days or 45 days or 60 days, depending on the different categories of products. We shall coordinate with the e-commerce platforms to sell the slowing-moving products to end customers through promotions within 30 or 60 days, otherwise, the e-commerce platforms can (i) return such slow-moving products, or (ii) sell on discount as determined by the e-commerce platforms. We shall bear all losses caused by such discounted sales. Based on our history of cooperation with the e-commerce platforms and the pattern that the e-commerce platforms dealt with slow-moving goods, we estimate that slow-moving goods will be returned to us instead of being sold through discounted sales by the e-commerce platforms. Under ASC 606, a right of return is not a separate performance obligation, but it affects the estimated transaction price for transferred goods. Revenue is only recognized for those products that are not expected to be returned. The estimate of expected returns should be determined in the same way as other variable consideration. Based on historical information and other relevant evidence, including the expected sales and inventory level of the e-commerce platforms, we assess if it is probable there will be no significant reversal of cumulative revenue, and recognize those sales as revenue. We would update our estimate of expected returns at each period end. The expected return asset is presented and assessed for impairment separately from the refund liability. We will assess the expected return asset for impairment, and adjust the value of the asset if it becomes impaired.

Further, we might provide various consideration to the e-commerce platforms, such as gross margin guarantee, advertising and promotion fees, in the form of cash, or directly reducing amounts owed to us by the e-commerce platforms. We evaluate each type of incentives or fees to be paid in accordance with ASC 606. Considering that we either do not receive any service from the e-commerce platforms or cannot elect to engage another vendor to provide similar advertising services on a standalone basis, we reduce the transaction price for the sale of products by the amount of various consideration payable to the e-commerce platforms.

*- 7 days unconditional sales return*

Under the PRC Consumer Protection Law, end customers have an unconditional right to return the products purchased through online platforms within 7 days. We base our estimates of sales return on historical results. For the years ended December 31, 2022, 2023, and 2024, the amount of sales return was insignificant. We may provide sales incentives in the forms of discounts to end customers through online platforms for a group of products. Revenue, recognized on a net basis after such sales incentives, are allocated based on the relative standalone selling prices for respective products.

*- Warranty*

We offer product warranty pursuant to standard product quality required by the PRC Consumer Protection Law. The warranty period is calculated starting from the date when products are sold to the end customers. We have the obligation, at the customer's sole discretion, to either repair or replace the defective product. The customers cannot separately purchase the warranty and the warranty doesn't provide the customer with additional service other than assurance that the product will function as expected. Therefore, these warranties are accounted for in accordance with ASC 460 Guarantees. At the time revenue is recognized, an estimate of warranty expenses is recorded. The reserves established are regularly monitored based upon historical experience and any actual claims charged against the reserve. Warranty reserves are recorded as cost of revenues.

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***Net realizable value ("NRV") of inventories***

Inventories are stated at the lower of cost or NRV. Inventory costs are calculated on the actual cost basis including expenses that are directly or indirectly incurred in the purchase, and production of manufactured product. Expenses include the cost of materials, consignment manufacturing cost and other direct costs. Cost is determined using the weighted average method. We assess the valuation of inventory and periodically writes down the value for inventories when their costs are lower than the NRV. The NRV is determined based on the estimated net selling prices less the estimated costs to completion and other costs necessary to make the sale. Determination of estimated net selling prices of finished goods, estimated costs to completion and other costs necessary to make the sale required significant management judgements, taking into consideration historical actual information and expected future market trends. Write-downs are recorded in cost of revenues in the consolidated statements of comprehensive income (loss).

***Current expected credit losses for accounts and notes receivable***

Our accounts and notes receivable from related parties and third parties are within the scope of ASC Topic 326. We have identified the relevant risk characteristics of our customers and the related accounts and notes receivable based on their credit rating. Receivables with similar risk characteristics have been grouped into pools. For each pool, we consider the historical credit loss experience, current economic conditions, supportable forecasts of future economic conditions, and any recoveries in assessing the lifetime expected credit losses. Other key factors that influence the expected credit loss analysis include payment terms offered in the normal course of business to customers and industry-specific factors that could impact our receivables. Additionally, macroeconomic factors are also considered. This is assessed at each quarter based on our specific facts and circumstances.

***Long-lived assets impairment assessment***

We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. When these events occur, we measure impairment by comparing the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, we would recognize an impairment loss, which is the excess of carrying amount over the fair value of the assets, using the expected future discounted cash flows.

***Valuation allowance for deferred tax assets***

A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered more likely than not that some portion of, or all of the deferred tax assets will not be realized. In making such determination, we consider factors including future taxable income exclusive of reversing temporary differences and tax loss carry forwards. If events occur in the future that allow us to realize more of our deferred income tax than the presently recorded amounts, an adjustment to the valuation allowances will result in a decrease in tax expense when those events occur.

**ITEM 6.** **DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Directors and Senior Management** 

The following table sets forth information regarding our directors and executive officers as of the date of this annual report.

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| | | |
|:---|:---|:---|
| **Directors and Executive Officers** | **Age** | **Position/Title** |
| Xiaoping Chen | 50 | Founder, Chairman of the Board of Directors and Chief Executive Officer |
| De Liu | 52 | Director |
| Jinling Zhang | 54 | Independent Director |
| Weijiang Wu | 48 | Independent Director |
| Jun Li | 47 | Independent Director |

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*Mr. Xiaoping Chen* is our founder, and has served as the chairman of our board of directors and chief executive officer since our inception. Mr. Chen founded our company in May 2014. Prior to that, he served multiple positions in Midea Group Co., Ltd from 1999 to 2014, including vice president of development department, and he was in charge of its research & development center from 2013 to 2014. Mr. Chen received his MBA degree from Sun Yat-sen University, and his dual bachelor's degrees in engineering and finance from Huazhong University of Science & Technology in 1998.

*Mr. De Liu* has served as our director since June 2018. Mr. Liu is an Executive Director, a Co- Founder and Senior Vice President of Xiaomi (HKEX: 1810), and he is also the Xiaomi's Minister of Group Leadership Management Department. Mr. Liu is a leading figure in industrial design in China and has received numerous industrial design awards together with his team. Mr. Liu also holds various positions, including the vice-chairman of China Industrial Design Association and a member of National Manufacturing Strategy Advisory Committee. Mr. Liu has received many honors in the business world as well. To name a few, he was awarded "Zhongguancun Top Talent" in 2015 and "Beijing Top Innovative and Entrepreneurial Leading Talent" in 2016. Mr. Liu received his bachelor's degree in industrial design and master's degree in mechanical design and theory from Beijing Institute of Technology in 1996 and 2001, respectively, and his master's degree in industrial design from the Art Center College of Design in 2010.

*Ms. Jinling Zhang* has served as our independent director since September 2018. Ms. Zhang has served as the managing partner and chief financial officer of Baidu Venture since November 2020 and the chief financial officer of Baidu Capital since 2018. Prior to her current role at Baidu Capital, Ms. Zhang served as the vice president of Baidu Group in 2017, the vice president of finance and investment of Xiaomi from 2013 to 2016, as the financial controller of Cisco Networks Asia Pacific in Japan and Greater China from 2010 to 2013, and as the financial and operational controller of global operations in Seagate Technology from 2006 to 2010. Ms. Zhang received her bachelor's degree in accounting from Capital University of Economics and Business in 1994, and her MBA from William E. Simon Business School of the University of Rochester in 2001. Ms. Zhang is a Chinese Certified Public Accountant, a Chinese Certified Tax Adviser and an American Certified Public Accountant.

*Mr. Weijiang Wu* has served as our independent director since September 2018. Mr. Wu has been the vice president of Zhejiang Youpon Integrated Ceiling Co., Ltd., a Shenzhen Stock Exchange listed company, since March 2010, and served several senior roles in charge of marketing and strategies from 2005 to 2009. Prior to his roles in Zhejiang Youpon Tegrated Ceiling Co., Ltd., Mr. Wu served as assistant to marketing manager in Guangdong Opple Lighting Co., Ltd. From 2003 to 2004, and the chief of the franchising department in Guangdong Vatti Group from 2001 to 2002. Mr. Wu received his bachelor's degree in engineering from Huazhong University of Science & Technology in 1998.

*Mr. Jun Li* has served as our independent director since September 2019. Mr. Li is a professor, Ph. D. supervisor, and the Dean of College of Engineering in South China Agricultural University. Prior to joining South China Agricultural University in July 2007, Mr. Jun Li served as the sales and services manager in Wuyang-Honda Motors (Guangzhou) Co., Ltd from July 1998 to August 2002. Mr. Jun Li received his master's degree in mechatronic engineering in 2004 and his doctor's degree in vehicle engineering in 2007, both from South China University of Technology.

**Employment Agreements and Indemnification Agreements**

We have entered into employment agreements with each of our executive officers. Under these agreements, each of our executive officers is employed for a specified time period. We may terminate employment for cause, at any time, for certain acts of the executive officer, such as conviction or plea of guilty to a felony or any crime involving moral turpitude, dishonest acts to our detriment, misconduct or continued failure to perform agreed duties, or willful misconduct or gross negligence in performing the duties. We may also terminate an executive officer's employment without cause upon 60-day advance written notice. In such case of termination by us, we will provide severance payments to the executive officer as may be agreed between us and the executive officer. The executive officer may resign at any time with a 60-day advance written notice.

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Each executive officer has agreed to hold, both during and after the termination or expiry of his or her employment agreement, in strict confidence and not to use, except as required in the performance of his or her duties in connection with the employment or pursuant to applicable law, any of our confidential information or trade secrets, any confidential information or trade secrets of our clients or prospective clients, or the confidential or proprietary information of any third party received by us and for which we have confidential obligations. The executive officers have also agreed to disclose in confidence to us all inventions, designs and trade secrets which they conceive, develop or reduce to practice during the executive officer's employment with us and to assign all right, title and interest in them to us, and assist us in obtaining and enforcing patents, copyrights and other legal rights for these inventions, designs and trade secrets.

In addition, each executive officer has agreed to be bound by non-competition and non-solicitation restrictions during the term of his or her employment and typically for one years following the termination of employment. Specifically, each executive officer has agreed not to (i) approach our suppliers, clients, customers or contacts or other persons or entities introduced to the executive officer in his or her capacity as a representative of us for the purpose of doing similar business with such persons or entities that will harm our business relationships with these persons or entities; (ii) assume employment with or provide services to any of our competitors, or engage, whether as principal, partner, licensor or otherwise, any of our competitors, without our express consent; (iii) seek directly or indirectly, to solicit the services of any of our employees who is known to be employed or engaged by us; or (iv) otherwise interfere with our business or accounts.

We have also entered into indemnification agreements with each of our directors and executive officers. Under these agreements, we agree to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of our company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Compensation of Directors and Executive Officers** 

In 2024, we paid an aggregate of approximately RMB5.1 million (US$0.7 million) in cash to our executive officers, and RMB1.1 million (US$0.1 million) to our independent directors. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our directors and executive officers. Our PRC subsidiaries and VIEs are required by law to make contributions equal to certain percentages of each employee's salary for his or her pension insurance, medical insurance, unemployment insurance and other statutory benefits and a housing provident fund.

**2015 Share Incentive Plan**

In September 2015, our shareholders and board of directors adopted the 2015 Share Incentive Plan, or the **2015 Plan**, to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants and promote the success of our business. Our board of directors amended the 2015 Plan in October 2023 to extend the effective term from 10 years to 20 years, among other changes, subject to certain exceptions with respect to incentive stock options. The maximum aggregate number of ordinary shares that may be issued pursuant to all awards under the 2015 Plan is 12,727,272 shares. As of December 31, 2024, awards to purchase 2,650,276 ordinary shares have been granted and are outstanding under the 2015 Plan, excluding awards that were exercised, forfeited or cancelled after the relevant grant dates.

The following paragraphs summarize the terms of the 2015 Plan.

***Types of Awards***. The 2015 Plan permits the awards of options and restricted shares.

***Plan Administration***. The plan may be administered by our board of directors or one or more committees designated by our board of directors or another committee within its delegated authority. The plan administrator will determine the participants who are to receive awards, the type or types of awards to be granted, the number of awards to be granted, and the terms and conditions of each award grant. The plan administrator can amend outstanding awards and interpret the terms of the 2015 Plan and any award agreement.

***Award Agreement***. Awards granted under the 2015 Plan are evidenced by an award agreement that sets forth the terms and conditions for each grant. The award agreements evidencing the awards shall contain the terms established by the plan administrator for that award, as well as any other terms, provisions, or restrictions that the plan administrator may impose on the award or any ordinary shares subject to the award of option.

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***Exercise of Awards***. The exercise price of an award will be determined by the plan administrator, which will be specified in applicable award agreement. Each option shall expire not more than 20 years after its date of grant, subject to certain exceptions with respective to incentive stock options. Each restricted share shall vest or be repurchased by the Company not more than 20 years after the date of its grant, subject to earlier termination.

***Eligibility***. We may grant awards to officers, employees, members of the board of directors, consultants or advisors of us or any of our affiliates, subject to certain restrictions.

***Vesting Schedule***. In general, the plan administrator determines the vesting schedule, which is set forth in the relevant award agreement.

***Transfer Restrictions***. Awards may not be transferred in any manner by the recipient, except as otherwise provided in the 2015 Plan, such as by will or the laws of descent and distribution.

***Termination.*** The plan has a term of twenty years, provided that our board of directors may terminate the plan in whole or in part at any time.

**2018 Share Incentive Plan**

In June 2018, our shareholders and board of directors adopted the 2018 Share Incentive Plan, or the **2018 Plan**, to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants and promote the success of our business. Our board of directors amended the 2018 Plan in October 2023 to extend the effective term from 10 years to 20 years, among other changes, subject certain exceptions with respect to incentive stock options. The maximum aggregate number of shares which may be issued pursuant to all awards is 17,672,728, plus an annual increase on the first day of each of the fiscal years of the Company during the term of this Plan commencing with the first fiscal year beginning January 1, 2019, by (i) an amount equal to 1% of the total number of the then outstanding shares or (ii) such fewer number of Shares as may be determined by the Board. As of December 31, 2024, the maximum of shares that may be issued under the 2018 Share Incentive Plan was 30,128,782. As of December 31, 2024, awards to purchase 21,790,560 ordinary shares have been granted and are outstanding under the 2018 Plan, excluding awards that were forfeited or cancelled after the relevant grant dates.

The following paragraphs summarize the terms of the 2018 Plan.

***Types of Awards.*** The 2018 Plan permits the awards of options, restricted shares and restricted share units.

***Plan Administration.*** The 2018 Plan may be administered by our board of directors or a committee designated by our board of directors or another committee, within its delegated authority. The plan administrator will determine the participants who are to receive awards, the type or types of awards to be granted, the number of awards to be granted, and the terms and conditions of each award grant. The plan administrator can amend outstanding awards and interpret the terms of the 2018 Plan and any award agreement under the 2018 Plan.

***Award Agreement.*** Awards granted under the 2018 Plan are evidenced by an award agreement that sets forth the terms, conditions and limitations for each grant. The award agreements evidencing awards shall contain the terms established by the administrator for that award, as well as any other terms, provisions, or restrictions that the administrator may impose on the award or any ordinary shares subject to the award of option.

***Exercise of Options.*** The exercise price per share subject to an option will be determined by the plan administrator, which will be specified in applicable award agreement. The term of any option shall not exceed twenty years, subject to certain exceptions.

***Eligibility.*** We may grant awards to our employees, consultants, and directors of us or any of our subsidiaries as defined in the 2018 Plan, as determined by the plan administrator.

***Vesting Schedule.*** In general, the plan administrator determines the vesting schedule, which is set forth in the relevant award agreement.

***Transfer Restrictions.*** Awards may not be transferred in any manner by the recipient, except as otherwise provided in the 2018 Plan, such as by will or the laws of descent and distribution.

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***Termination and Amendment of the 2018 Plan.*** The 2018 Plan has a term of twenty years, provided that our board of directors may terminate or amend the plan at any time. However, no such action may adversely affect in any material way any awards previously granted without prior written consent of the recipient, subject to certain exceptions.

The following table summarizes, as of December 31, 2024, the awards granted under the 2015 Plan or the 2018 Plan to our directors and executive officers, excluding awards that were forfeited or cancelled after the relevant grant dates.

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| | | | | |
|:---|:---|:---|:---|:---|
| |  | | | |
| <br>**Name** |  | <br>**Exercise Price** <br>**(US$/Share)** | <br>**Date of Grant** | <br>**Date of**<br>**Expiration** |
| Chen Xiaoping | \* | 1.1 | May 6, 2020 | April 1, 2030 |

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\* Less than 1% of our total outstanding shares.

As of December 31, 2024, other employees as a group held outstanding options to purchase 22,440,836 ordinary shares of our company, at a weighted average exercise price of US$0.50 per share.

**Shares awarded to Mr. Xiaoping Chen**

In August 2018, we issued 4,000,000 class A ordinary shares at par value to Mr. Xiaoping Chen's wholly owned entity Viomi Limited to award his contribution to our company's rapid development. Such shares were immediately vested. The issuance of such shares is accounted for as a share-based compensation to Mr. Xiaoping Chen. The share-based compensation expenses related to this one-off share award was RMB90.2 million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.** **Board Practices** 

Our board of directors consists of five directors. A director is not required to hold any shares in our company by way of qualification. A director may vote with respect to any contract, proposed contract, transaction or proposed transaction in which he is interested provided (a) such director has declared the nature of his interest at meeting of the board at which such contract or transaction or proposed contract or transaction shall come before the meeting for consideration, either specifically or by way of a general notice, (b) such director has not been disqualified by the chairman of the relevant board meeting, and (c) if such contract or arrangement is a transaction with a related party, such transaction has been approved by the audit committee in accordance with the Nasdaq rules. The directors may from time to time at their discretion exercise all the powers of the company to raise or borrow money, mortgage or charge its undertaking, property and assets (present and future) and uncalled capital or any part thereof, to issue debentures, debenture stock, bonds or other securities, whether outright or as collateral security for any debt, liability or obligation of the Company or of any third party. None of our non-executive directors has a service contract with us that provides for benefits upon termination of service.

**Committees of the Board of Directors**

We have established three committees under the board of directors: an audit committee, a compensation committee and a nominating and corporate governance committee. We have adopted a charter for each of the three committees. Each committee's members and functions are described below.

*Audit Committee*. Our audit committee consists of Ms. Jinling Zhang and Mr. Jun Li. Ms. Jinling Zhang is the chairman of our audit committee. We have determined that Ms. Jinling Zhang and Mr. Jun Li satisfy the "independence" requirements of Rule 560(c)(2) of the Listing Rules of the Nasdaq and Rule 10A-3 under the Exchange Act. We have determined that Ms. Jinling Zhang qualifies as an "audit committee financial expert." The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our company. The audit committee is responsible for, among other things:

● appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors;

● reviewing with the independent auditors any audit problems or difficulties and management's response;

● discussing the annual audited financial statements with management and the independent auditors;

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● reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures;

● reviewing and approving all proposed related party transactions;

● meeting separately and periodically with management and the independent auditors; and monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.

*Compensation Committee*. Our compensation committee consists of Mr. Xiaoping Chen, Ms. Jinling Zhang and Mr. Weijiang Wu. Ms. Jinling Zhang is the chairman of our compensation committee. We have determined that Ms. Jinling Zhang and Mr. Weijiang Wu satisfy the "independence" requirements of Rule 5605(c)(2) of the Listing Rules of the Nasdaq. The compensation committee assists the board in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers. Our chief executive officer may not be present at any committee meeting during which his compensation is deliberated. The compensation committee is responsible for, among other things:

● reviewing and approving, or recommending to the board for its approval, the compensation for our chief executive officer and other executive officers;

● reviewing and recommending to the board for determination with respect to the compensation of our non-employee directors;

● reviewing periodically and approving any incentive compensation or equity plans, programs or similar arrangements; and selecting compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person's independence from management.

*Nominating and Corporate Governance Committee*. Our nominating and corporate governance committee consists of Mr. Xiaoping Chen, Ms. Jinling Zhang and Mr. Weijiang Wu. Mr. Xiaoping Chen is the chairman of our nominating and corporate governance committee. Ms. Jinling Zhang and Mr. Weijiang Wu satisfy the "independence" requirements of Rule 5605(c)(2) of the Listing Rules of the Nasdaq. The nominating and corporate governance committee assists the board of directors in selecting individuals qualified to become our directors and in determining the composition of the board and its committees. The nominating and corporate governance committee is responsible for, among other things:

● selecting and recommending to the board nominees for election by the shareholders or appointment by the board;

● reviewing annually with the board the current composition of the board with regards to characteristics such as independence, knowledge, skills, experience and diversity;

● making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board; and advising the board periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken.

**Duties of Directors**

Under Cayman Islands law, our directors owe fiduciary duties to our company, including a duty of loyalty, a duty to act honestly, and a duty to act in what they consider in good faith to be in our best interests. Our directors must also exercise their powers only for a proper purpose. Our directors also owe to our company a duty to exercise skills they actually possess and such care and diligence that a reasonably prudent person would exercise in comparable circumstances. It was previously considered that a director need not exhibit in the performance of his duties a greater degree of skill than may reasonably be expected from a person of his knowledge and experience. However, English and Commonwealth courts have moved towards an objective standard with regard to the required skill and care and these authorities are likely to be followed in the Cayman Islands. In fulfilling their duty of care to us, our directors must ensure compliance with our memorandum and articles of association, as amended and restated from time to time. Our company has the right to seek damages if a duty owed by our directors is breached. In certain limited exceptional circumstances, a shareholder may have the right to seek damages in our name if a duty owed by our directors is breached.

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Our board of directors has all the powers necessary for managing, and for directing and supervising, our business affairs. The functions and powers of our board of directors include, among others:

● convening shareholders' annual and extraordinary general meetings and reporting its work to shareholders at such meetings;

● declaring dividends and distributions;

● appointing officers and determining the term of office of the officers;

● exercising the borrowing powers of our company and mortgaging the property of our company; and approving the transfer of shares in our company, including the registration of such shares in our share register.

**Terms of Directors and Officers**

Our officers are appointed by and serve at the discretion of the board of directors. Our directors are not subject to a term of office and hold office until such time as they are removed from office by ordinary resolution of the shareholders or by the board. A director will be removed from office automatically if, among other things, the director (i) becomes bankrupt or makes any arrangement or composition with his creditors; (ii) dies, or is found by our company to be or becomes of unsound mind; (iii) resigns his office by notice in writing to the company, (iv) without special leave of absence from our board, is absent from three consecutive board meetings and our board of directors resolve that his office be vacated; or (v) is removed from office pursuant to any other provision of our memorandum and articles of association.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.** **Employees** 

We had 916 employees as of December 31, 2022, 750 employees as of December 31, 2023 and 521 employees as of December 31, 2024.

The following table sets forth the numbers of our employees categorized by function as of December 31, 2024:

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| | |
|:---|:---|
| <br>**Function:** | **As of** <br>**December 31,**<br>**2024** |
| Research and development | 162 |
| Manufacturing | 234 |
| Sales and marketing | 71 |
| General administration | 54 |
| Total | 521 |

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We invest significant resources in the recruitment and training of our employees in support of our fast-growing business operations. We have a variety of training programs.

As required by laws and regulations in China, we participate in various employee social security plans that are organized by municipal and provincial governments, including housing, pension, medical insurance, childbirth insurance, work-related injury insurance, employment injury insurance, maternity insurance and unemployment insurance. We are required under PRC laws to make contributions to employee benefit 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 enter into standard confidentiality and employment agreements with our key employees. The agreements with our key personnel typically include standard non-compete covenants that prohibit the employee from competing with us, directly or indirectly, during his or her employment and for two years after the termination of his or her employment, provided that we pay compensation equal to a certain proportion of his or her pre-departure salary on a monthly basis during the restriction period.

We believe that we maintain a good working relationship with our employees, and we have not experienced any material labor disputes.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**E.** **Share Ownership** 

Except as specifically noted, the following table sets forth information with respect to the beneficial ownership of our shares as of July 31, 2025 by:

● each of our directors and executive officers; and

● each of our principal shareholders who beneficially own 5% or more of our total outstanding shares on an as-converted basis.

The calculations in the table below are based on 203,890,415 ordinary shares outstanding, consisting of 101,125,867 Class A ordinary shares (excluding 13,297,959 Class A ordinary shares that were issued to our depositary bank and reserved for future grants under our share incentive plans and 12,626,052 Class A ordinary shares that were repurchased by us) and 102,764,548 Class B ordinary shares outstanding as of July 31, 2025.

Beneficial ownership is determined in accordance with the rules and regulations of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership and voting power of that person, we have included shares that the person has the right to acquire within 60 days, including through the exercise of any option, warrant or other right or the conversion of any other security. These shares, however, are not included in the computation of the percentage ownership of any other person.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Ordinary Shares Beneficially Owned** | **Ordinary Shares Beneficially Owned** | **Ordinary Shares Beneficially Owned** | **Ordinary Shares Beneficially Owned** |
|  | **Class A**<br>**Ordinary**<br>&nbsp;&nbsp;&nbsp;&nbsp;**Shares** | **Class B**<br>**Ordinary**<br>&nbsp;&nbsp;&nbsp;&nbsp;**Shares** | **% of total**<br>**ordinary**<br>&nbsp;&nbsp;&nbsp;&nbsp;**shares** | **% of** <br>**aggregate**<br>**voting power**<sup>\*\*</sup> |
| **Directors and Executive Officers\*:** |  |  |  |  |
| Xiaoping Chen<sup>(1)</sup> | 3659850 | 68536364 | 35.4 | 61.0 |
| De Liu |  |  |  |  |
| Jinling Zhang |  |  |  |  |
| Weijiang Wu |  |  |  |  |
| Jun Li |  |  |  |  |
| All Directors and Executive Officers as a Group | 3659850 | 68536364 | 35.4 | 61.0 |
| **Principal Shareholders:** |  |  |  |  |
| Viomi Limited<sup>(2)</sup> | 2200000 | 67636364 | 34.3 | 60.1 |
| Shunwei Talent Limited<sup>(3)</sup> | 28350246 |  | 13.9 | 2.5 |
| Red Better Limited<sup>(4)</sup> | 330000 | 33818182 | 16.7 | 30.0 |

---

Notes:

\* Unless otherwise stated, the business address of our directors and executive officers is Wansheng Square, Rm 1302 Tower C, Xingang East Road, Haizhu District, Guangzhou, Guangdong, 510220, People's Republic of China. Mr. De Liu's business address is Xiaomi Campus, No. 33 Xierqi Middle Road, Haidian District, Beijing, 100085, People's Republic of China. Ms. Jinling Zhang's business address is 601, North Building, Tower C, Raycom InfoTech Park, No. 2 Kexueyuan South Road, Haidian District, Beijing, 100080, People's Republic of China. Mr. Weijiang Wu's business address is No. 388 Baibu Avenue, Baibu Town, Haiyan County, Jiaxing, Zhejiang, 314312, People's Republic of China. Mr. Jun Li's business address is No. 483 Wushan Road, Tianhe District, Guangzhou, Guangdong, 510642, People's Republic of China.

\*\* For each person or group included in this column, percentage of total voting power represents voting power based on both Class A and Class B ordinary shares beneficially owned by such person or group with respect to all outstanding shares of our Class A and Class B ordinary shares as a single class. Each holder of Class A ordinary shares is entitled to one vote per share. Each holder of our Class B ordinary shares is entitled to ten votes per share. Our Class B ordinary shares are convertible at any time by the holder into Class A ordinary shares on a one-for-one basis.

&nbsp;&nbsp;&nbsp;&nbsp;(1) Represents (i) 1,000,000 Class A ordinary shares in the form of ADSs beneficially owned by Xiaoping Chen; (ii) 2,200,000 Class A ordinary shares and 67,636,364 Class B ordinary shares beneficially owned by Viomi Limited; (iii) 397,611 Class A ordinary shares in the form of ADS beneficially owned by VioCloud Limited, and (iv) 900,000 Class B ordinary shares and 62,239 Class A ordinary shares in the form of ADS beneficially owned by certain employees. Viomi Limited is wholly owned by a trust established for the benefit of Mr. Xiaoping Chen and his family. VioCloud Limited is wholly owned by Foshan Viomi. Mr. Xiaoping Chen directly holds 99.78% equity interests in Foshan Viomi and holds another 0.22% equity interests in it through a limited partnership controlled and managed by Mr. Xiaoping Chen. The abovementioned certain employees granted an irrevocable voting proxy for all their ordinary shares to Mr. Xiaoping Chen.

&nbsp;&nbsp;&nbsp;&nbsp;(2) Represents 67,636,364 Class B ordinary shares and 2,200,000 Class A ordinary shares held by Viomi Limited, a British Virgin Islands company. Viomi Limited is wholly owned by a trust established for the benefit of Mr. Xiaoping Chen and his family. The registered address of Viomi Limited is NovaSage Incorporation (BVI) Limited of NovaSage Chambers, P.O. Box 4389, Road Town, Tortola, British Virgin Islands.

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&nbsp;&nbsp;&nbsp;&nbsp;(3) Represents 28,350,246 Class A ordinary shares in the form of ADSs held by Shunwei Talent Limited. Information regarding beneficial ownership is reported as of June 30, 2025, based on the information contained in the Schedule 13G/A filed by Shunwei Talent Limited with SEC on August 13, 2025. The registered address of Shunwei Talent Limited is Vistra Corporate Services Center, Wickhams Cay II, Road Town, Tortola, VG 1110, British Virgin Islands. Shunwei Talent Limited is wholly owned by Shunwei China Internet Fund II, L.P. The general partner of Shunwei China Internet Fund II, L.P. is Shunwei Capital Partners II GP, L.P., and the general partner of Shunwei Capital Partners II GP, L.P. is Shunwei Capital Partners II GP Limited, which is controlled by Mr. Koh Tuck Lye.

&nbsp;&nbsp;&nbsp;&nbsp;(4) Represents 33,818,182 Class B ordinary shares and 330,000 Class A ordinary shares in the form of ADSs held by Red Better Limited, a British Virgin Islands liability limited company. Information regarding beneficial ownership is reported as of December 31, 2018, based on the information contained in the Schedule 13G filed by Red Better Limited with SEC on February 1, 2019. The address of Red Better Limited is Jayla Place, Wickhams Cay 1, Road Town, Tortola, British Virgin Islands. Red Better Limited is wholly owned by Fast Pace Limited, a British Virgin Islands company wholly owned by Xiaomi Corporation.

To our knowledge, as of July 31, 2025, we had 124,849,878 Class A ordinary shares that were held by one record holder residing in the United States, that being Deutsche Bank Trust Company Americas, the depositary of our ADS program. As of July 31, 2025, none of our Class B ordinary shares are held by U.S. record holders. The number of beneficial owners of our ADSs in the United States is likely to be much larger than the number of record holders of our ordinary shares in the United States.

We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**F.** **Disclosure of a Registrant's Action to Recover Erroneously Awarded Compensation** 

Not applicable.

**ITEM 7.** **MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Major Shareholders** 

Please refer to "*Item 6. Directors, Senior Management and Employees—E. Share Ownership*."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Related Party Transactions** 

**Contractual Arrangements with Our VIEs and Their Respective Shareholders**

See "Item 4. Information on the Company—C. Organizational Structure."

**Shareholders Agreement and Investor Rights Agreement**

***Shareholders agreement and registration rights***

We entered into a shareholders agreement on July 21, 2015 with our shareholders, which consist of holders of ordinary shares and preferred shares. The shareholders agreement provides for certain special rights, including right of first refusal, co-sale rights, preemptive rights and contains provisions governing the board of directors and other corporate governance matters. Those corporate governance provisions, as well as special rights, except the registration rights, automatically terminated upon the completion of our initial public offering, and the registration rights terminated on September 27, 2023.

**Employment Agreements and Indemnification Agreements**

See "Item 6. Directors, Senior Management and Employees—A. Directors and Senior Management—Employment Agreements and Indemnification Agreements."

**Share Incentive Plans**

See "Item 6. Directors, Senior Management and Employees—B. Compensation of Directors and Executive Officers—2015 Share Incentive Plan" and "Item 6. Directors, Senior Management and Employees—B. Compensation of Directors and Executive Officers—2018 Share Incentive Plan."

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**Private Placements**

In August 2018, we issued 4,000,000 class A ordinary shares to Mr. Xiaoping Chen's wholly-owned entity Viomi Limited to award his contribution to our company's rapid development.

**Our Relationship with Xiaomi** 

Xiaomi is our strategic partner, shareholder and customer. Our strategic partnership with Xiaomi provides us access to Xiaomi's ecosystem users, sales platforms and data resources and related support. Meanwhile, our strong research and development capabilities, supply chain resources and innovative products and services are able to enrich Xiaomi's suite of offerings, resulting in a mutually beneficial relationship between Xiaomi and us. Our cooperation with and sales to Xiaomi extends to a diversified range of products, which currently include Xiaomi-branded water purification systems, water purifier filters, range-hoods and gas stoves, dishwashers, sweeper robots, blenders as well as other complementary products such as kettles and water quality meters. Since the third quarter of 2021, we have started to largely scaled back the supply of Xiaomi-branded sweeper robots, while maintaining cooperation in other categories we have reached.

Under our cooperation agreement with Xiaomi, we are responsible for the design, research, development, production and delivery of various Xiaomi-branded products to Xiaomi. Xiaomi is then responsible for commercial distributions and sales. For certain products under our cooperation with Xiaomi, the selling price is a fixed amount as agreed by both parties. For other products, we first recover our manufacturers and logistics cost when we deliver to Xiaomi, and are additionally entitled to share a portion of the gross profit when Xiaomi is successful in selling such products to end consumers. A business cooperation agreement provides the terms and conditions of the latter pattern.

We also sell products through Xiaomi's online e-commerce channel, Youpin, and are charged of commissions pursuant to a commission sales agreement.

In 2024, revenues generated from sales to Xiaomi, predominantly comprising Xiaomi-branded products, was RMB1,752.2 million (US$240.1 million), accounting for 82.7% of our net revenues.

***Business cooperation agreement***

The currently effective business cooperation agreement with Xiaomi that was renewed in May 2023 governs the design, production and sales to Xiaomi in relation to certain specified product categories, including some SKUs of Xiaomi-branded water purification systems, water purifier filters, as well as other complementary products such as kettles and water quality meters. This contract will remain in effect until March 21, 2025. This agreement can be terminated prior to the expiration date by Xiaomi, among other reasons, if (i) we breach the material obligation underlying this agreement and purchase order, (ii) except as prohibited by applicable bankruptcy laws, we declare bankruptcy, or if we are unable to repay due loans, or perform contracts, or if our assets are transferred to or taken by other creditors, (iii) the products fail to meet Xiaomi's requirements, and Xiaomi determines that there is no value to remedy or the products still fail the requirement after three times' remedies, (iv) we delay the delivery of the products without reasonable causes and Xiaomi's prior written consent, or (v) we fail to store the data to the Xiaomi Ecosystem Cloud or other server designated by Xiaomi, cause disputes of violating users' personal information, or disclose user data to any third party without Xiaomi's consent.

Under the business cooperation agreement, (i) these products are exclusively designed for and can only be sold to Xiaomi, (ii) Xiaomi shall purchase these products at a price that covers all of our costs of raw materials, outsourcing manufacture, models and logistics, in connection with the manufacture and delivery of these products, and (iii) Xiaomi and we shall share gross profits, derived from sales of these products, the retail prices of which were set by Xiaomi and us together.

Regarding the intellectual property, Xiaomi by itself owns all industrial designs generated from the process of design, development, manufacturing and sales of the products we sell to Xiaomi. Xiaomi and we have joint ownership over all other technology properties and related intellectual properties generated from the process of design, development, manufacturing and sales of these products.

Regarding user data, we shall share with Xiaomi user data collected in relation to the respective Xiaomi-branded products. We can share or license user data to third parties only after we obtain Xiaomi's prior written consent. After the user data of Xiaomi-branded products reaches certain threshold, Xiaomi will also need to obtain our consent before making it available for use by any third party.

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***Youpin commission sales agreement***

We have entered into a commission sales agreement with Xiaomi for the sale of our own branded products on Youpin. This agreement may be terminated by Xiaomi with 30 days' written notice.

Under the commission sales agreement, we shall pay a service fee, calculated as certain portion of the sales price excluding customers' refunds or as otherwise agreed by the parties with respect to specific product lines, as well as a deposit to Xiaomi. The retail prices of our products on Youpin's platform shall be no higher than the sales price from any other e-commerce merchants or our official offline sales channel, including in the event of sales or promotion.

***Transaction with Xiaomi***

In 2024, we recorded RMB1,752.2 million (US$240.1 million) in revenues from Xiaomi primarily for the sales of Xiaomi-branded products. As of December 31, 2024, the amount due from Xiaomi was RMB586.8 million (US$80.4 million).

In 2023, we recorded RMB1,292.9 million in revenues from Xiaomi primarily for the sales of Xiaomi-branded products. As of December 31, 2023, the amount due from Xiaomi was RMB4.4 million.

In 2022, we recorded RMB1,336.6 million in revenues from Xiaomi primarily for the sales of Xiaomi-branded products. As of December 31, 2022, the amount due from Xiaomi was RMB4.8 million.

We purchased RMB23.7 million, RMB26.3 million and RMB13.5 million (US$1.9 million) of products and services from Xiaomi in 2022, 2023 and 2024, respectively. We recognized RMB16.0 million, RMB7.8 million and RMB13.5 million (US$1.8 million) in commission fees and other expenses to Xiaomi in 2022, 2023 and 2024, respectively, which was incurred by selling our own Viomi-branded products on Youpin.

**C.Interests of Experts and Counsel**

Not applicable.

**ITEM 8.** **FINANCIAL INFORMATION**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Consolidated Statements and Other Financial Information** 

We have appended consolidated financial statements filed as part of this annual report.

**Legal Proceedings**

We are currently not a party to any material legal or administrative proceedings. We may from time to time be subject to various legal or administrative claims and proceedings arising in the ordinary course of business. For instance, please refer to "*Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—We may encounter claims alleging our infringement of third-party intellectual properties from time to time*" for information of certain such litigation. Litigation or any other legal or administrative proceeding, regardless of the outcome, is likely to result in substantial cost and diversion of our resources, including our management's time and attention.

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**Dividend Policy**

Our board of directors has discretion on whether to distribute dividends, subject to certain requirements of Cayman Islands law. In addition, our shareholders may by ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by our board of directors. In either case, all dividends are subject to certain restrictions under Cayman Islands law, namely that our company may only pay dividends out of profits or share premium, and provided always 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. Even if we decide to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant.

On July 14, 2025, our board of directors declared a special cash dividend of US$0.0293 per ordinary share (or US$0.088 per ADS) on our outstanding ordinary shares. Going forward, we intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business. We do not have any present plan to pay regular cash dividends on our ordinary shares in the foreseeable future.

We are a holding company incorporated in the Cayman Islands. We may rely on dividends from our subsidiaries in China for our cash requirements, including any payment of dividends to our shareholders. PRC regulations may restrict the ability of our PRC subsidiaries to pay dividends to us. See "*Item 4. Information on the Company—B. Business Overview—Regulations—Regulations on dividend distributions*."

If we pay any dividends on our Class A ordinary shares, we will pay those dividends which are payable in respect of the Class A ordinary shares underlying our ADSs to the depositary, as the registered holder of such Class A ordinary shares, and the depositary then will pay such amounts to our ADS holders in proportion to Class A ordinary shares underlying the ADSs held by such ADS holders, subject to the terms of the deposit agreement, including the fees and expenses payable thereunder. Cash dividends on our Class A ordinary shares, if any, will be paid in U.S. dollars.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Significant Changes** 

Except as disclosed elsewhere in this annual report, we have not experienced any significant changes since the date of our audited consolidated financial statements included in this annual report.

**ITEM 9.** **THE OFFER AND LISTING**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Offering and Listing Details** 

Our ADSs, each representing three Class A ordinary shares of ours, have been listed on the Nasdaq Stock Market since September 25, 2018 under the symbol "VIOT."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Plan of Distribution** 

Not applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.** **Markets** 

Our ADSs, each representing three Class A ordinary shares of ours, have been listed on the Nasdaq Stock Market since September 25, 2018 under the symbol "VIOT."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.** **Selling Shareholders** 

Not applicable.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**E.** **Dilution** 

Not applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**F.** **Expenses of the Issue** 

Not applicable.

**ITEM 10.** **ADDITIONAL INFORMATION**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Share Capital** 

Not applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Memorandum and Articles of Association** 

The following are summaries of material provisions of our memorandum and articles of association and of the Companies Act of the Cayman Islands insofar as they relate to the material terms of our ordinary shares.

*Objects of Our Company.* Under our memorandum and articles of association, the objects of our company are unrestricted and we have the full power and authority to carry out any object not prohibited by the Cayman Islands law.

*Ordinary Shares.* Our ordinary shares are divided into Class A ordinary shares and Class B ordinary shares. Holders of our Class A ordinary shares and Class B ordinary shares will have the same rights except for voting and conversion rights. Our ordinary shares are issued in registered form and are issued when registered in our register of shareholders. We may not issue shares to bearer. Our shareholders who are nonresidents of the Cayman Islands may freely hold and vote their shares.

*Conversion.* 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 sale, transfer, assignment or disposition of any Class B ordinary share by Mr. Xiaoping Chen or Viomi Limited to any person who is not Mr. Chen Xiaoping or his affiliate(s), or upon a change of ultimate beneficial ownership of any Class B ordinary share to any person who is not Mr. Xiaoping Chen or his affiliate(s), such Class B ordinary share shall be automatically and immediately converted into one Class A ordinary share. Upon any sale, transfer, assignment or disposition of any Class B ordinary share by a shareholder other than Mr. Xiaoping Chen or his affiliate(s) to any person, such Class B ordinary share shall be automatically and immediately converted into one Class A ordinary share.

*Dividends.* The holders of our ordinary shares are entitled to such dividends as may be declared by our board of directors. In addition, our shareholders may declare dividends by ordinary resolution, but no dividend shall exceed the amount recommended by our directors. Our memorandum and articles of association provide that dividends may be declared and paid out of our profits, realized or unrealized, or from any reserve set aside from funds legally available for distribution. Under the laws of the Cayman Islands, our company may pay a dividend out of either profit or 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.

*Voting Rights.* In respect of all matters subject to a shareholders' vote, each holder of Class A ordinary shares is entitled to one vote per share and each holder of Class B ordinary shares is entitled to ten votes per share on all matters subject to vote at our general meetings. Our Class A ordinary shares and Class B ordinary shares vote together as a single class on all matters submitted to a vote of our shareholders, except as may otherwise be required by law. Voting at any shareholders' meeting is by show of hands unless a poll is demanded (before or on the declaration of the result on a show of hands). A poll may be demanded by the chairman of such meeting or any shareholder present in person or by proxy.

*General Meetings of Shareholders.* As a Cayman Islands exempted company, we are not obliged by the Companies Act of the Cayman Islands to call shareholders' annual general meetings. Our memorandum and articles of association provide that we may (but are not obliged to) in each year hold a general meeting as our annual general meeting in which case we shall specify the meeting as such in the notices calling it, and the annual general meeting shall be held at such time and place as may be determined by our directors.

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Shareholders' general meetings may be convened by the chairman of our board of directors or a majority of our board of directors (acting by a resolution of the board of directors). Advance notice of at least seven calendar days is required for the convening of our annual general shareholders' meeting (if any) and any other general meeting of our shareholders. A quorum required for any general meeting of shareholders consists of one or more shareholders present in person or by proxy, representing not less than one-third of all votes attaching to all of our shares in issue and entitled to vote.

The Companies Act of the Cayman Islands 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. However, these rights may be provided in a company's articles of association. Our memorandum and articles of association provide that upon the requisition of shareholders representing in aggregate not less than one-third of the votes attaching to the 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 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.

*Transfer of Ordinary shares.* Subject to the restrictions set out in our memorandum and articles of association as set out below, any of our shareholders may transfer all or any of his or her ordinary shares by an instrument of transfer in the usual or common form or any other form approved by our board of directors.

Our board of directors may, in its absolute discretion, decline to register any transfer of any ordinary share which is not fully paid up or on which we have a lien. Our board of directors may also decline to register any transfer of any ordinary share unless:

● the instrument of transfer is lodged with us, accompanied by the certificate for the ordinary shares to which it relates and such other evidence as our board of directors may reasonably require to show the right of the transferor to make the transfer;

● the instrument of transfer is in respect of only one class of ordinary shares;

● the instrument of transfer is properly stamped, if required;

● in the case of a transfer to joint holders, the number of joint holders to whom the ordinary share is to be transferred does not exceed four; and a fee of such maximum sum as Nasdaq may determine to be payable or such lesser sum as our directors may from time to time require is paid to us in respect thereof.

If our directors refuse to register a transfer they shall, within three months after the date on which the instrument of transfer was lodged, send to each of the transferor and the transferee notice of such refusal.

The registration of transfers may, after compliance with any notice required of Nasdaq, be suspended and the register closed at such times and for such periods as our board of directors may from time to time determine, provided, however, that the registration of transfers shall not be suspended nor the register closed for more than 30 days in any year as our board may determine.

*Liquidation.* On the winding up of our company, if the assets available for distribution amongst our shareholders shall be more than sufficient to repay the whole of the share capital at the commencement of the winding up, the surplus shall be distributed amongst our shareholders in proportion to the par value of the shares held by them at the commencement of the winding up, subject to a deduction from those shares in respect of which there are monies due, of all monies payable to our company for unpaid calls or otherwise. If our assets available for distribution are insufficient to repay all of the paid-up capital, the assets will be distributed so that the losses are borne by our shareholders in proportion to the par value of the shares held by them.

*Calls on Shares and Forfeiture of Shares.* Our board of directors may from time to time make calls upon shareholders for any amounts unpaid on their shares in a notice served to such shareholders at least 14 calendar days prior to the specified time of payment. The shares that have been called upon and remain unpaid are subject to forfeiture.

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*Redemption, Repurchase and Surrender of Shares.* We may issue shares on terms that such shares are subject to redemption, at our option or at the option of the holders of these shares, on such terms and in such manner as may be determined, before the issue of such shares, by our board of directors or by shareholders by special resolutions. Our Company may also repurchase any of our shares on such terms and in such manner as have been approved by our board of directors or by an ordinary resolution of our shareholders. Under the Companies Act of the Cayman Islands, the redemption or repurchase of any share may be paid out of our Company's profits or out of the proceeds of a new issue of shares made for the purpose of such redemption or repurchase, or out of capital (including share premium account and capital redemption reserve) if our company can, immediately following such payment, pay its debts as they fall due in the ordinary course of business. In addition, under the Companies Act of the Cayman Islands, no such share may be redeemed or repurchased (a) unless it is fully paid up, (b) if such redemption or repurchase would result in there being no shares issued and outstanding or (c) if the company has commenced liquidation. In addition, our company may accept the surrender of any fully paid share for no consideration.

*Variation of Rights of Shares.* If at any time our share capital is divided into different classes of shares, the rights attached to any such class of shares (unless otherwise provided by the terms of issue of the shares of that class), may be materially adversely varied with the consent in writing of the holders of two-thirds of the issued shares of that class or with the sanction of a special resolution passed at a separate meeting of the holders of the shares of the class. The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the shares of that class, be deemed to be materially adversely varied by the creation or issue of further shares ranking pari passu with or subsequent to such existing class of shares or the redemption or purchase of any shares of any class by our company. In addition, the rights of the holders of shares shall not be deemed to be materially adversely varied by the creation or issue of shares with preferred or other rights including, without limitation, the creation of shares with enhanced or weighted voting rights.

*Issuance of Additional Shares*. Our memorandum and articles of association authorizes our board of directors to issue additional ordinary shares from time to time as our board of directors shall determine, to the extent of available authorized but unissued shares.

Our memorandum and articles of association also authorizes our board of directors to establish from time to time one or more series of preference shares and to determine, with respect to any series of preference shares, the terms and rights of that series, including:

● the designation of the series;

● the number of shares of the series;

● the dividend rights, dividend rates, conversion rights, voting rights; and the rights and terms of redemption and liquidation preferences.

Our board of directors may issue preference shares without action by our shareholders to the extent authorized but unissued. Issuance of these shares may dilute the voting power of holders of ordinary shares.

*Inspection of Books and Records*. Holders of our ordinary shares will have no general right under Cayman Islands law to inspect or obtain copies of our register of members or our corporate records (save for the memorandum and articles of association, our register of mortgages and charges and special resolutions passed by our shareholders). Under Cayman Islands law, the names of our current directors can be obtained from a search conducted at the Registrar of Companies. However, we will provide our shareholders with annual audited financial statements.

*Anti-Takeover Provisions*. Some provisions of our memorandum and articles of association may discourage, delay or prevent a change of control of our company or management that shareholders may consider favorable, including provisions that:

● authorize our board of directors to issue preference shares in one or more series and to designate the price, rights, preferences, privileges and restrictions of such preference shares without any further vote or action by our shareholders; and

● limit the ability of shareholders to requisition and convene general meetings of shareholders.

However, under Cayman Islands law, our directors may only exercise the rights and powers granted to them under our memorandum and articles of association for a proper purpose and for what they believe in good faith to be in the best interests of our company.

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*Exempted Company.* We are an exempted company with limited liability under the Companies Act of the Cayman Islands. The Companies Act of the Cayman Islands distinguishes between ordinary resident companies and exempted companies. Any company that is registered in the Cayman Islands but conducts business mainly outside of the Cayman Islands may apply to be registered as an exempted company. The requirements for an exempted company are essentially the same as for an ordinary company except that an exempted company:

● does not have to file an annual return of its shareholders with the Registrar of Companies;

● is not required to open its register of members for inspection;

● does not have to hold an annual general meeting;

● may issue shares with no par value;

● may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 30 years in the first instance);

● may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;

● may register as a limited duration company; and may register as a segregated portfolio company.

"**Limited liability**" means that the liability of each shareholder is limited to the amount unpaid by the shareholder on the shares of the company (except in exceptional circumstances, such as involving fraud, the establishment of an agency relationship or an illegal or improper purpose or other circumstances in which a court may be prepared to pierce or lift the corporate veil).

*Board Practices*. A director may vote with respect to any contract, proposed contract or arrangement in which he is materially interested provided (a) such director, if his interest in such contract or arrangement is material, has declared the nature of his interest at the earliest meeting of the board at which it is practicable for him to do so, either specifically or by way of a general notice, (b) such director has not been disqualified by the chairman of the relevant board meeting, and (c) if such contract or arrangement is a transaction with a related party, such transaction has been approved by the audit committee in accordance with the Nasdaq rules. The directors may exercise all the powers of the company to borrow money, mortgage its undertaking, property and uncalled capital, and issue debentures or other securities whenever money is borrowed or as security for any obligation of the company or of any third party. None of our non-executive directors has a service contract with us that provides for benefits upon termination of service.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.** **Material Contracts** 

We have not entered into any material contracts other than in the ordinary course of business and other than those described in "*Item 4. INFORMATION ON THE COMPANY*", "*Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions*," in this "*Item 10. Additional Information—C. Material Contracts*" or elsewhere in this annual report on Form 20-F.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.** **Exchange Controls** 

See "Item 4. Information on the Company—B. Business Overview—Regulations—Regulations on Foreign Exchange."

**E.Taxation**

*The following summary of the material Cayman Islands, PRC and U.S. federal income tax considerations of an investment in our ADSs or ordinary shares is based upon laws and relevant interpretations thereof in effect as of the date of this annual report, all of which are subject to change. This summary does not deal with all possible tax considerations relating to an investment in our ADSs or ordinary shares, such as the tax considerations under U.S. state and local tax laws or under the tax laws of jurisdictions other than the Cayman Islands, the People's Republic of China and the United States.*

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**Cayman Islands Taxation**

The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to the holders of our ADSs or ordinary shares levied by the government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or, after execution, brought within the jurisdiction of the Cayman Islands. The Cayman Islands is not party to any double tax treaties that are applicable to any payments made to or by our company. There are no exchange control regulations or currency restrictions in the Cayman Islands.

Payments of dividends and capital in respect of our ordinary shares will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital to any holder of our ordinary shares, nor will gains derived from the disposal of our ordinary shares or ADSs be subject to Cayman Islands income or corporate tax.

**People's Republic of China Taxation**

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

We believe that Viomi Technology Co., Ltd is not a PRC resident enterprise for PRC tax purposes. Viomi Technology Co., Ltd is not controlled by a PRC enterprise or PRC enterprise group and we do not believe that Viomi Technology Co., Ltd meets all of the conditions above. Viomi Technology Co., Ltd is a company incorporated outside the PRC. As a holding company, its key assets are its ownership interests in its subsidiaries, and its key assets are located, and its records (including the resolutions of its board of directors and the resolutions of its shareholders) are maintained, outside the PRC. For the same reasons, we believe our other entities outside of China are not PRC resident enterprises either. 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." There can be no assurance that the PRC government will ultimately take a view that is consistent with us.

If the PRC tax authorities determine that Viomi Technology Co., Ltd is a PRC resident enterprise for enterprise income tax purposes, we may be required to withhold a 10% withholding tax from dividends we pay to our shareholders that are non-resident enterprises, including the holders of our ADSs. In addition, non-resident enterprise shareholders (including our ADS holders) may be subject to a 10% PRC tax on gains realized on the sale or other disposition of ADSs or ordinary shares, if such income is treated as sourced from within the PRC. It is unclear whether our non-PRC individual shareholders (including our ADS holders) would be subject to any PRC tax on dividends or gains obtained by such non-PRC individual shareholders in the event we are determined to be a PRC resident enterprise. If any PRC tax were to apply to such dividends or gains, it would generally apply at a rate of 20% unless a reduced rate is available under an applicable tax treaty. It is also unclear whether non-PRC shareholders of Viomi Technology Co., Ltd would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that Viomi Technology Co., Ltd is treated as a PRC resident enterprise.

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Provided that our Cayman Islands holding company, Viomi Technology Co., Ltd, is not deemed to be a PRC resident enterprise, holders of our ADSs and ordinary shares who are not PRC residents will not be subject to PRC income tax on dividends distributed by us or gains realized from the sale or other disposition of our shares or ADSs. However, under Public Notice Regarding Certain Corporate Income Tax Matters on Indirect Transfer of Properties by Non-Tax Resident Enterprises, or SAT Public Notice 7, and Public Notice of the State Administration of Taxation on Issues Concerning the Withholding of Non-resident Enterprise Income Tax at Source, or SAT Public Notice 37, where a non-resident enterprise conducts an "indirect transfer" by transferring taxable assets, including, in particular, equity interests in a PRC resident enterprise, indirectly by disposing of the equity interests of an overseas holding company, the non-resident enterprise, being the transferor, or the transferee or the PRC entity which directly owned such taxable assets may report to the tax authority such indirect transfer. Using a "substance over form" principle, the PRC tax authority may disregard the existence of the overseas holding company if it lacks a reasonable commercial purpose and was established for the purpose of reducing, avoiding or deferring PRC tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise income tax, and the transferee or other person who is obligated to pay for the transfer is obligated to withhold the applicable taxes, currently at a rate of 10% for the transfer of equity interests in a PRC resident enterprise. We and our non-PRC resident investors may be at risk of being required to file a return and being taxed under these notices, and we may be required to expend valuable resources to comply with these notices, or to establish that we should not be taxed under these circulars. See "*Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—We face uncertainty with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies*."

**U.S. Federal Income Tax Considerations**

The following is a summary of U.S. federal income tax considerations generally applicable to the ownership and disposition of our ADSs or ordinary shares. Unless otherwise noted, this summary addresses only U.S. Holders (as defined below) that hold our ADSs or ordinary shares as "capital assets" for U.S. federal income tax purposes (generally, property held for investment). This summary is based on the U.S. Internal Revenue Code of 1986, as amended, U.S. Treasury regulations promulgated thereunder, judicial decisions, administrative pronouncements, the income tax treaty between the United States and China and other relevant authorities, all as in effect as of the date hereof and all of which are subject to change and differing interpretations, possibly with retroactive effect.

This summary does not address U.S. federal estate, gift or other non-income tax considerations, the alternative minimum tax, the Medicare tax on certain net investment income, or any state, local or non-U.S. tax considerations, relating to the ownership or disposition of our ADSs or ordinary shares, nor does it address all aspects of U.S. federal income taxation that may be relevant to a particular U.S. Holder in light of that U.S. Holder's particular circumstances or that may be relevant to certain types of U.S. Holders subject to special treatment under U.S. federal income tax law, such as:

● banks and other financial institutions;

● insurance companies;

● pension plans;

● cooperatives;

● regulated investment companies;

● real estate investment trusts;

● broker-dealers;

● traders that elect to use a mark-to-market method of accounting;

● certain former U.S. citizens or long-term residents;

● tax-exempt entities (including private foundations);

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● persons that acquire their ADSs or ordinary shares pursuant to any employee share option or otherwise as compensation;

● persons that will hold their ADSs or ordinary shares as part of a straddle, hedge, conversion, constructive sale or other integrated transaction for U.S. federal income tax purposes;

● persons that have a functional currency other than the U.S. dollar; or persons that actually or constructively own 10% or more of our stock (by vote or value).

Prospective investors should consult their tax advisors with respect to the U.S. federal, state, local, non-U.S. income and other tax considerations relevant to the ownership and disposition of our ADSs or ordinary shares in light of their particular circumstances.

***General***

For purposes of this discussion, a "**U.S. Holder**" is a beneficial owner of our ADSs or ordinary shares that is, for U.S. federal income tax purposes:

● a citizen or individual resident of the United States;

● a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created, or organized in or under the law of the United States, any state thereof or the District of Columbia;

● an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or

● a trust (i) that is subject to the primary supervision of a court within the United States and the control of one or more United States persons for all substantial decisions or (ii) that has validly elected to be treated as a United States person under the applicable U.S. Treasury regulations.

If a partnership (or other entity or arrangement treated as a partnership for U.S. federal income tax purposes) is a beneficial owner of our ADSs or ordinary shares, the U.S. federal income tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership. Partnerships holding our ADSs or ordinary shares and their partners should consult their tax advisors regarding an investment in our ADSs or ordinary shares.

The discussion below assumes that the representations contained in the deposit agreement are true and that the obligations in the deposit agreement and any related agreement have been and will be complied with in accordance with their terms. If a U.S. Holder holds ADSs, such holder should be treated as the holder of the underlying common shares represented by those ADSs for U.S. federal income tax purposes.

***Passive Foreign Investment Company Considerations***

A non-U.S. corporation, such as our company, will be a passive foreign investment company, or PFIC, for U.S. federal income tax purposes for any taxable year, if either (i) 75% or more of its gross income for such year consists of certain types of "passive" income or (ii) 50% or more of the value of its assets (determined on the basis of a quarterly average) during such year is attributable to assets that produce or are held for the production of passive income, or the Asset Test. Passive income generally includes dividends, interest, rents, royalties, annuities, net gains from the sale or exchange of property producing such income and net foreign currency gains. Passive assets are those that give rise to passive income and include assets held for investment, as well as cash, assets readily convertible into cash, and (subject to certain exceptions) working capital. Our company's goodwill and other unbooked intangibles are taken into account and may be classified as active or passive depending on the income such assets generate or are held to generate. We will be treated as owning a proportionate share of the assets and earning a proportionate share of the income of any other corporation in which we own, directly, indirectly or constructively, at least 25% (by value) of its stock.

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Although the law in this regard is not entirely clear, we treat each of our consolidated VIEs as being owned by us for U.S. federal income tax purposes because we control their management decisions and are entitled to substantially all of the economic benefits associated with them, and, as a result, we consolidate their results of operations in our consolidated U.S. GAAP financial statements. If it were determined, however, that we are not the owner of the consolidated VIEs for U.S. federal income tax purposes, we may be a PFIC for the current taxable year and any subsequent taxable year.

Assuming that we are the owner of the VIEs for U.S. federal income tax purposes, and based on an analysis of our income and assets and the market value of our ADSs, we believe that we were not a PFIC for the taxable year ended December 31, 2024. There can be no assurance regarding our PFIC status for the current taxable year or future taxable years, however, because our PFIC status is a factual determination made annually that will depend, in part, upon the composition of our income and assets. The value of our assets for purposes of the Asset Test, including the value of our goodwill and unbooked intangibles, may be determined in part by reference to the market price of our ADSs from time to time (which may be volatile). Because we will generally take into account our current market capitalization in estimating the value of our goodwill and other unbooked intangibles, our PFIC status for the current taxable year and future taxable years may be affected by our market capitalization. Recent fluctuations in our market capitalization create a material risk that we may be a PFIC for the current taxable year and future taxable years. In addition, the composition of our income and assets will be affected by how, and how quickly, we spend our liquid assets. Under circumstances in which our revenue from activities that produce passive income significantly increases relative to our revenue from activities that produce non-passive income, or in which we determine not to deploy significant amounts of cash for active purposes, our risk of becoming a PFIC may substantially increase.

Because there are uncertainties in the application of the relevant rules, it is possible that the Internal Revenue Service may challenge our classification of certain income or assets as non-passive, or our valuation of our goodwill and other unbooked intangibles, each of which could cause us to become a PFIC for the current or subsequent taxable years. If we are a PFIC for any taxable year during which a U.S. Holder holds our ADSs or ordinary shares, the PFIC rules discussed below under "*—Passive Foreign Investment Company Rules*" will generally apply to such U.S. Holder for such taxable year, and unless the U.S. Holder makes certain elections, will apply in future taxable years even if we cease to be a PFIC.

The discussion below under "*—Distributions*" and "*—Sale or Other Disposition of ADSs or Ordinary Shares*" assumes that we are not and will not be a PFIC for U.S. federal income tax purposes.

***Distributions***

The gross amounts of any distributions received by a U.S. Holder on our ADSs or ordinary shares (including any amounts withheld in respect of PRC withholding taxes) will generally be subject to tax as dividends to the extent paid out of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles, and will generally be includible in the gross income of a U.S. Holder as dividend income on the day actually or constructively received by the U.S. Holder (in the case of ordinary shares) or by the depositary (in the case of ADSs). Such dividends will not be eligible for the dividends received deduction generally allowed to U.S. corporations under the Code. Distributions in excess of our current and accumulated earnings and profits will be treated as a non-taxable return of capital to the extent of the U.S. Holder's adjusted tax basis in our ADSs and ordinary shares and thereafter generally as capital gain. Because we do not intend to determine our earnings and profits in accordance with U.S. federal income tax principles, the full amount of any distribution we pay will generally be treated as a dividend for U.S. federal income tax purposes.

Individuals and other non-corporate U.S. Holders may be subject to tax on any such dividends at the lower capital gains tax rate applicable to "qualified dividend income," provided that certain conditions are satisfied, including that (1) the ADSs and/or ordinary shares are readily tradable on an established securities market in the United States, or, in the event that we are deemed to be a PRC resident enterprise under the PRC tax law, we are eligible for the benefits of the income tax treaty between the United States and China, (2) we are neither a PFIC nor treated as such with respect to a U.S. Holder (as discussed below) for the taxable year in which the dividend is paid and the preceding taxable year, and (3) certain holding period requirements are met. Our ADSs, but not our ordinary shares, are listed on the Nasdaq Stock Market, so we anticipate that our ADSs should qualify as readily tradable on an established securities market in the United States, although there can be no assurances in this regard.

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For U.S. foreign tax credit purposes, dividends received on our ADSs or ordinary shares will generally be treated as income from foreign sources and will generally constitute passive category income. As described in "*—People's Republic of China Taxation*," if we are deemed to be a PRC resident enterprise for PRC tax purposes, a U.S. Holder may be subject to PRC withholding taxes on such dividends. Subject to certain conditions and limitations, a U.S. Holder may be eligible to claim a foreign tax credit not in excess of any applicable treaty rate in respect of any foreign withholding taxes. Alternatively, a U.S. Holder may elect to deduct such taxes in computing its taxable income for U.S. federal income tax purposes, subject to certain conditions and limitations. A U.S. Holder's election to deduct foreign taxes instead of claiming foreign tax credits applies to all creditable foreign income taxes paid or accrued in the relevant taxable year. The rules regarding foreign tax credits and the deductibility of foreign taxes are complex. All U.S. Holders, whether or not they are eligible to income tax treaty between the United States and China, should consult their tax advisors regarding the availability of foreign tax credits and the deductibility of foreign taxes in light of their particular circumstances.

***Sale or Other Disposition of ADSs or Ordinary Shares***

A U.S. Holder will generally recognize gain or loss on the sale or other disposition of ADSs or ordinary shares in an amount equal to the difference between the amount realized upon the disposition and the U.S. Holder's adjusted tax basis in such ADSs or ordinary shares. Any such gain or loss will generally be long-term capital gain or loss if the U.S. Holder's holding period in the ADSs or ordinary shares exceeds one year at the time of disposition. Long-term capital gains of individuals and certain other non-corporate U.S. Holders are generally eligible for a reduced rate of taxation. The deductibility of capital losses may be subject to limitations.

Any gain or loss recognized by a U.S. Holder on the sale or other disposition of ADSs or ordinary shares will generally be treated as U.S. source income or loss for U.S. foreign tax credit purposes. If, however, gains from the sale or other disposition of our ADSs or ordinary shares are subject to tax in the PRC as described in "*—People's Republic of China Taxation*," a U.S. Holder may be eligible to treat such gains as PRC-source gains for U.S. foreign tax credit purposes. A U.S. Holder may instead elect to deduct such taxes in computing its taxable income for U.S. federal income tax purposes, but only for a year in which such U.S. holder elects to do so for all foreign taxes paid or accrued during such year. The rules regarding foreign tax credits and the deductibility of foreign taxes are complex. U.S. Holders should consult their tax advisors regarding the availability of a foreign tax credit or a deduction in lieu thereof in light of their particular circumstances, as well as with respect to their eligibility for benefits under the income tax treaty between the United States and China.

***Passive Foreign Investment Company Rules***

If we are a PFIC for any taxable year during which a U.S. Holder holds our ADSs or ordinary shares, and unless the U.S. Holder makes a mark-to-market election (as described below), the U.S. Holder will be subject to special tax rules with respect to any "excess distribution" the U.S. Holder receives on our ADSs or ordinary shares and any gain the U.S. Holder recognizes on the sale or other disposition including, under certain circumstances, a pledge, of our ADSs or ordinary shares.

Distributions received by a U.S. Holder on our ADSs or ordinary shares in a taxable year that are greater than 125% of the average annual distributions the U.S. Holder received in the three preceding taxable years or, if shorter, such U.S. Holder's holding period for the ADSs or ordinary shares will be treated as excess distributions. Under the PFIC rules:

● the excess distribution or gain will be allocated ratably over the U.S. Holder's holding period for the ADSs or ordinary shares;

● the amount allocated to the current taxable year and to any taxable years in the U.S. Holder's holding period prior to the first taxable year in which we are a PFIC (each, a "**pre-PFIC year** "), will be taxable as ordinary income; and

● the amount allocated to each prior taxable year, other than the current taxable year or a pre-PFIC year, will be subject to tax at the highest tax rate in effect applicable to the U.S. Holder for that year, and such amounts will be increased by an additional tax equal to the interest on the resulting tax deemed deferred with respect to each such taxable year.

If we are a PFIC for any taxable year during which a U.S. Holder holds our ADSs or ordinary shares and any of our non-U.S. subsidiaries, our VIEs or any of the non-U.S. subsidiaries of our VIEs are also PFICs, such U.S. Holder will be treated as owning a proportionate amount (by value) of the shares of each such lower-tier PFIC for purposes of the application of these rules.

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Alternatively, a U.S. Holder of "marketable stock" (as defined below) in a PFIC may elect out of the excess distribution regime by making a mark-to-market election with respect to such stock. If a U.S. Holder makes a valid mark-to-market election with respect to our ADSs, the U.S. Holder will include in income each year that we are a PFIC an amount equal to the excess, if any, of the fair market value of the ADSs held at the end of the taxable year over the adjusted tax basis of such ADSs. The U.S. Holder is allowed a deduction for the excess, if any, of the adjusted tax basis of the ADSs over the fair market value of such ADSs held at the end of the taxable year. Any such deductions are allowable only to the extent of any net mark-to-market gains on the ADSs included in the U.S. Holder's income for prior taxable years. Amounts included in the U.S. Holder's income under a mark-to-market election, as well as any gain on the sale of disposition of ADSs, will be treated as ordinary income. Ordinary loss treatment also applies to the deductible portion of any mark-to-market loss on the ADSs, as well as any loss realized on the actual sale or other disposition of the ADSs, to the extent that the amount of such loss does not exceed the net mark-to-market gains previously included in income with respect to such ADSs. The U.S. Holder's adjusted tax basis in the ADSs will be adjusted to reflect any such income or loss amounts. If a U.S. Holder makes a mark-to-market election, then, in any taxable year for which we are a PFIC, tax rules that apply to distributions by corporations that are not PFICs would apply to distributions by us (except that the lower applicable capital gains rate for qualified dividend income would not apply). If a U.S. Holder makes a valid mark-to-market election and we subsequently cease to be a PFIC, the U.S. Holder will not be required to take into account the mark-to-market income or loss described above during any period that we are not a PFIC.

The mark-to-market election is available only for "marketable stock," which is stock that is traded in other than de minimis quantities on at least 15 days during each calendar quarter on a qualified exchange or other market, as defined in the applicable U.S. Treasury regulations. The ADSs, but not our ordinary shares, are listed on the Nasdaq Stock Market, which is a qualified exchange for these purposes, and consequently, assuming that the ADSs are traded in other than de minimis quantities on at least 15 days during each calendar quarter, it is expected that the mark-to-market election would be available to U.S. Holders of ADSs if we are or become a PFIC. However, a mark-to-market election may not be available with respect to our ordinary shares as they are not marketable stock. Accordingly, if we are a PFIC during any taxable year in which a U.S. Holder holds our ordinary shares, such holder will generally be subject to the excess distribution regime discussed above.

In addition, because, as a technical matter, a mark-to-market election cannot be made for any lower-tier PFICs that we may own, a U.S. Holder may continue to be subject to the PFIC rules with respect to such U.S. Holder's indirect interest in any investments held by us that are treated as an equity interest in a PFIC for U.S. federal income tax purposes.

We do not intend to provide the information necessary for U.S. Holders to make qualified electing fund elections which, if available, would result in tax treatment different from the general tax treatment for PFICs described above.

U.S. Holders that own our ADSs or ordinary shares during any taxable year for which we are a PFIC will generally be required to make an annual filing with the Internal Revenue Service regarding their ownership of such shares. U.S. Holders should consult their tax advisors concerning the U.S. federal income tax consequences relevant to the ownership and disposition of our ADSs or ordinary shares if we were, are, or become a PFIC, including the possibility of making a mark-to-market election and the annual PFIC filing requirements, if any.

**THE PRECEDING SUMMARY OF U.S. FEDERAL INCOME TAX CONSIDERATIONS IS INTENDED FOR GENERAL INFORMATION ONLY AND DOES NOT CONSTITUTE TAX ADVICE. U.S. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS AS TO THE U.S. FEDERAL, STATE, LOCAL, AND NON-U.S. TAX CONSIDERATIONS GENERALLY APPLICABLE TO THE OWNERSHIP AND DISPOSITION OF OUR ADSS AND ORDINARY SHARES IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES.**

**F.Dividends and Paying Agents**

Not applicable.

**G.Statement by Experts**

Not applicable.

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**H.Documents on Display**

We are subject to periodic reporting and other informational requirements of the Exchange Act, as applicable to foreign private issuers, and are required to file reports and other information with the SEC. Specifically, we are required to file annually an annual report on Form 20-F within four months after the end of each fiscal year, which is December 31. All information we file with the SEC can be obtained over the internet at the SEC's website at *www.sec.gov.* As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of quarterly reports and proxy statements, and officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act.

We will furnish Deutsche Bank Trust Company Americas, the depositary of our ADSs, with our annual reports, which will include a review of operations and annual audited consolidated financial statements prepared in conformity with U.S. GAAP, and all notices of shareholders' meetings and other reports and communications that are made generally available to our shareholders. The depositary will make such notices, reports and communications available to holders of ADSs and, upon our request, will mail to all record holders of ADSs the information contained in any notice of a shareholders' meeting received by the depositary from us.

**I.Subsidiary Information**

Not applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**J.** **Annual Report to Security Holder** 

Not applicable.

**ITEM 11.** **QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

**Market Risks**

***Foreign exchange risk***

Substantially all of our revenues and expenses are denominated in RMB. We do not believe that we currently have any significant direct foreign exchange risk and have not used any derivative financial instruments to hedge exposure to such risk. Although our exposure to foreign exchange risks should be limited in general, the value of your investment in our ADSs will be affected by the exchange rate between U.S. dollar and Renminbi because the value of our business is effectively denominated in RMB, while our ADSs will be traded in U.S. dollars.

The conversion of Renminbi into other currencies, including U.S. dollars, is based on rates set by the People's Bank of China. The Renminbi has fluctuated against other currencies, at times significantly and unpredictably. The value of Renminbi against other currencies is affected by changes in China's political and economic conditions and by China's foreign exchange policies, among other things. It is difficult to predict how market forces or government policies may impact the exchange rate between Renminbi and other currencies in the future.

To the extent that we need to convert U.S. dollars into Renminbi for our operations, appreciation of the Renminbi against the U.S. dollar would have an adverse effect on the RMB amount we receive from the conversion. Conversely, if we decide to convert Renminbi into U.S. dollars for the purpose of making payments for dividends on our 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 amounts available to us.

***Interest rate risk***

Our exposure to interest rate risk primarily relates to the interest income generated by excess cash, which is mostly held in interest-bearing bank deposits. Interest-earning instruments carry a degree of interest rate risk. We have not been exposed to material risks due to changes in interest rates, and we have not used any derivative financial instruments to manage our interest risk exposure. However, our future interest income may fall short of expectations due to changes in market interest rates.

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**ITEM 12.** **DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES**

**A.Debt Securities**

Not applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Warrants and Rights** 

Not applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**C.** **Other Securities** 

Not applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**D.** **American Depositary Shares** 

**Charges Our ADS Holders May Have to Pay**

Our ADS holders will be required to pay the following service fees to the depositary bank and certain taxes and governmental charges (in addition to any applicable fees, expenses, taxes and other governmental charges payable on the deposited securities represented by any of the ADSs held):

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| | |
|:---|:---|
| **Service** | **Fees** |
| ● To any person to which ADSs are issued or to any person to which a distribution is made in respect of ADS distributions pursuant to stock dividends or other free distributions of stock, bonus distributions, stock splits or other distributions (except where converted to cash)<br>| Up to US$0.05 per ADS issued |
| ● Cancellation of ADSs, including the case of termination of the deposit agreement<br>| Up to US$0.05 per ADS cancelled |
| ● Distribution of cash dividends<br>| Up to US$0.05 per ADS held |
| ● Distribution of cash entitlements (other than cash dividends) and/or cash proceeds from the sale of rights, securities and other entitlements<br>| Up to US$0.05 per ADS held |
| ● Distribution of ADSs pursuant to exercise of rights.<br>| Up to US$0.05 per ADS held |
| ● Distribution of securities other than ADSs or rights to purchase additional ADSs<br>| Up to US$0.05 per ADS held  |
| ● Depositary services<br>| Up to US$0.05 per ADS held on the applicable record date(s) established by the depositary bank |

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Our ADS holders will also be responsible to pay certain fees and expenses incurred by the depositary bank and certain taxes and governmental charges (in addition to any applicable fees, expenses, taxes and other governmental charges payable on the deposited securities represented by any of the ADSs held) such as:

● Fees for the transfer and registration of Class A ordinary shares charged by the registrar and transfer agent for the Class A ordinary shares in the Cayman Islands (i.e., upon deposit and withdrawal of Class A ordinary shares).

● Expenses incurred for converting foreign currency into U.S. dollars.

● Expenses for cable, telex and fax transmissions and for delivery of securities.

● Taxes and duties upon the transfer of securities, including any applicable stamp duties, any stock transfer charges or withholding taxes (i.e., when Class A ordinary shares are deposited or withdrawn from deposit).

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● Fees and expenses incurred in connection with the delivery or servicing of Class A ordinary shares on deposit.

● Fees and expenses incurred in connection with complying with exchange control regulations and other regulatory requirements applicable to Class A ordinary shares, deposited securities, ADSs and American depositary receipts that evidence ADSs.

● Any applicable fees and penalties thereon.

The depositary fees payable upon the issuance and cancellation of ADSs are typically paid to the depositary bank by the brokers (on behalf of their clients) receiving the newly issued ADSs from the depositary bank and by the brokers (on behalf of their clients) delivering the ADSs to the depositary bank for cancellation. The brokers in turn charge these fees to their clients. Depositary fees payable in connection with distributions of cash or securities to ADS holders and the depositary services fee are charged by the depositary bank to the holders of record of ADSs as of the applicable ADS record date.

The depositary fees payable for cash distributions are generally deducted from the cash being distributed or by selling a portion of distributable property to pay the fees. In the case of distributions other than cash (i.e., share dividends, rights), the depositary bank charges the applicable fee to the ADS record date holders concurrent with the distribution. In the case of ADSs registered in the name of the investor (whether certificated or uncertificated in direct registration), the depositary bank sends invoices to the applicable record date ADS holders. In the case of ADSs held in brokerage and custodian accounts (via DTC), the depositary bank generally collects its fees through the systems provided by DTC (whose nominee is the registered holder of the ADSs held in DTC) from the brokers and custodians holding ADSs in their DTC accounts. The brokers and custodians who hold their clients' ADSs in DTC accounts in turn charge their clients' accounts the amount of the fees paid to the depositary banks.

In the event of refusal to pay the depositary fees, the depositary bank may, under the terms of the deposit agreement, refuse the requested service until payment is received or may set off the amount of the depositary fees from any distribution to be made to the ADS holder.

**Fees and Other Payments Made by the Depositary to Us**

The depositary may make payments to us or reimburse us for certain costs and expenses, by making available a portion of the ADS fees collected in respect of the program of American depositary receipts that evidence the ADSs or otherwise, upon such terms and conditions as we and the depositary bank agree from time to time. For the year ended December 31, 2024, we didn't received any reimbursement from the depositary.

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**PART II**

**ITEM 13.** **DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES**

None.

**ITEM 14.** **MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS**

See "*Item 10. Additional Information—B. Memorandum and Articles of Association*" for a description of the rights of securities holders, which remain unchanged.

**ITEM 15.** **CONTROLS AND PROCEDURES**

**Evaluation of Disclosure Controls and Procedures**

Under the supervision and with the participation of our management, including our chief executive officer, who is also our principal financial officer, we carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) as of the end of the period covered by this report, as required by Rule 13a-15(b) under the Exchange Act. Based upon that evaluation, our management, with the participation of our chief executive officer, has concluded that, as of December 31, 2024, our disclosure controls and procedures were not effective in ensuring that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms, and that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our chief executive officer, as appropriate, to allow timely decisions regarding required disclosure.

Management's Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.

Our management evaluated the effectiveness of our internal control over financial reporting as of December 31, 2024 based on the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management has identified the following material weaknesses. Our management thus concluded that our internal control over financial reporting was not effective as of December 31, 2024.

The material weaknesses were identified related to (i) our lack of sufficient resources regarding financial reporting and accounting personnel with understanding of U.S. GAAP, in particular, to address complex U.S. GAAP technical accounting issues, related disclosures in accordance with U.S. GAAP and financial reporting requirements set forth by the SEC, and (ii) lack of comprehensive U.S. GAAP accounting policies and financial reporting procedures. These material weaknesses were first identified during the audit of our company's consolidated financial statements for the years ended December 31, 2016, 2017 and 2018.

To remedy identified material weaknesses in internal control over financial reporting, we are in the process of implementing several measures, including:

● hiring additional competent and qualified accounting and reporting personnel with appropriate knowledge and experience of U.S. GAAP and SEC financial reporting requirements;

● establishing an ongoing program to provide sufficient and additional appropriate training to our accounting staff, especially trainings related to U.S. GAAP and SEC financial reporting requirements;

● establishing an internal control and compliance department and hiring additional compliance staff and perform internal audit and evaluation of internal controls from time to time;

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● enhancing U.S. GAAP accounting manual to provide accounting team with more comprehensive guidelines on the accounting policies under U.S. GAAP, SEC rules and relevant requirements; and

● establishing clear roles and responsibilities for accounting and financial reporting staff to address accounting and financial reporting issues; and enhancing our company's monitoring controls over financial reporting, including additional review our company's head of finance, and other senior financial staff over the application of U.S. GAAP accounting requirements, the selection and evaluation of U.S. GAAP accounting policies, critical accounting judgments and estimates, reporting and disclosures;

We are fully committed to continuing to implement measures to remediate our material weaknesses and other control deficiencies in our internal control over financial reporting. However, the implementation of these measures may not fully address the deficiencies in our internal control over financial reporting. We are not able to estimate with reasonable certainty the costs that we will need to incur in implementing these and other measures designed to improve our internal control over financial reporting. See "*Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—In connection with the audit of our consolidated financial statements included in this annual report, we identified material weaknesses in our internal control over financial reporting. If we fail to develop and maintain an effective system of internal control over financial reporting, we may be unable to accurately report our financial results or prevent fraud*."

**Attestation Report of the Registered Public Accounting Firm**

This annual report on Form 20-F does not include an attestation report of our independent registered public accounting firm on internal control over financial reporting because we qualified as a "non-accelerated filer" as of December 31, 2024.

**Changes in Internal Control**

During the audit of our company's consolidated financial statements as of and for the year ended December 31, 2022, our management identified material weaknesses related to (i) operating deficiency in the control relating to the preparation and checking of the input VAT calculation, and (ii) lack of effective financial statements review so as to detect material misstatements in our company's consolidated financial statements.

In 2023, we implemented a number of remedial measures to address the material weaknesses with respect to input VAT calculation and financial statements review, including (i) the hire of additional competent and qualified tax personnel with appropriate knowledge and work experience of taxation; (ii) the enhancement and improvement of the internal controls in relation to preparation and checking of calculation and supporting schedules for input VAT; and (iii) the enhancement and improvement of the internal controls in relation to financial statements review by improving the precision level of the review.

As of December 31, 2024, based on an assessment performed by our management on the effectiveness of the remediation measures mentioned above, we concluded that the aforementioned material weaknesses related to (i) operating deficiency in the controls relating to the preparation and checking of the input VAT calculation and (ii) lack of effective financial statements review so as to detect material misstatements in our company's consolidated financial statements in our internal control over financial reporting previously identified as of December 31, 2023 were remediated.

Other than as described above, there were no changes in our internal controls over financial reporting that occurred during the period covered by this annual report on Form 20-F that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

**ITEM 16A.** **AUDIT COMMITTEE FINANCIAL EXPERT**

Our board of directors has determined that Ms. Jinling Zhang, a member of our audit committee and independent director (under the standards set forth in Rule 5605(c)(2) of the Listing Rules of the Nasdaq and Rule 10A-3 under the Exchange Act of 1934), is an audit committee financial expert.

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**ITEM 16B.** **CODE OF ETHICS**

Our board of directors adopted a code of business conduct and ethics that applies to our directors, officers and employees in August, 2018. We have posted a copy of our code of business conduct and ethics on our website at ir.viomi.com.

**ITEM 16C.** **PRINCIPAL ACCOUNTANT FEES AND SERVICES**

The following table sets forth the aggregate fees by categories specified below in connection with certain professional services rendered by PricewaterhouseCoopers Zhong Tian LLP, our former independent registered public accounting firm, and WWC, P.C., our current independent registered public accounting firm, for the periods indicated. We did not pay any other fees to our auditors during the periods indicated below.

---

| | | |
|:---|:---|:---|
|  | **For the Year Ended**  | **For the Year Ended**  |
|  | **December 31,** | **December 31,** |
|  | **2023** | **2024** |
|  | **(in thousands of RMB)** | **(in thousands of RMB)** |
| **Audit fees**<sup>(1)</sup> | 5200 | 8207 |
| **Total** | **5200** | **8207** |

---

Note:

&nbsp;&nbsp;&nbsp;&nbsp;(1) "Audit fees" means the aggregate fees billed for professional services rendered by our principal auditors for the audit of our annual financial statements and the review of our comparative interim financial statements.

On July 17, 2025, we dismissed PricewaterhouseCoopers Zhong Tian LLP and engaged WWC, P.C.as our independent registered public accounting firm. See also "Item 16F. Change in Registrant's Certifying Accountant."

The policy of our audit committee is to pre-approve all audit and other service provided by PricewaterhouseCoopers Zhong Tian LLP and WWC, P.C. as described above, other than those for de minimis services which are approved by the Audit Committee prior to the completion of the audit.

**ITEM 16D.** **EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES**

Not applicable.

**ITEM 16E.** **PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS**

On March 26, 2020, our board of directors approved a share repurchase plan whereby we were authorized to repurchase up to US$10 million worth of our company's Class A ordinary shares in the form of ADS. The share repurchase plan was publicly announced on March 26, 2020 and ended on March 25, 2021.

On October 14, 2021, our board of directors approved a share repurchase plan whereby we were authorized to repurchase up to US$10 million worth of our company's Class A ordinary share in the form of ADS over the twelve-month period ended October 13, 2022. The share repurchase plan was publicly announced on October 14, 2021 and ended on October 13, 2022.

On October 25, 2022, our board of directors approved a share repurchase plan whereby we were authorized to repurchase up to US$10 million worth of our company's Class A ordinary share in the form of ADS over the twelve-month period ended October 24, 2023. The share repurchase plan was publicly announced on October 25, 2022.

On October 18, 2023, our board of directors approved an extension of our existing share repurchase plan for another 12 months, with no increase in the authorized amount. The extension of the share repurchase plan was publicly announced on October 23, 2023 and the program will end on October 24, 2024.

On October 23, 2024, our board of directors approved an extension of our existing share repurchase plan for another 12 months, with no increase in the authorized amount. The extension of the share repurchase plan was publicly announced on October 23, 2024 and the program will end on October 24, 2025.

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The following table sets forth a summary of our repurchase of the ADSs under the share repurchase plans described in the paragraph above between January 1, 2023 and July 31, 2025. All shares were repurchased in the open market pursuant to the share repurchase plans.

---

| | | | | |
|:---|:---|:---|:---|:---|
| <br>**Period** | <br>**Total Number**<br>**of ADSs**<br>&nbsp;&nbsp;&nbsp;&nbsp;**Purchased** | <br>**Average Price**<br>**Paid per**<br>**ADS** | **Total Number** <br>**of ADSs** <br>**Purchased as**<br>**Part of the**<br>&nbsp;&nbsp;&nbsp;&nbsp;**Publicly** <br>**Announced Plans** | **Approximate** <br>**Dollar value of** <br>**ADSs that**<br>**May Yet Be** <br>**Purchased Under**<br>**the Plans** |
| January 2023 | 30124 | 1.0680 | 30124 | 9779300 |
| February 2023 | 775 | 1.1000 | 775 | 9778447 |
| March 2023 | 146291 | 1.0449 | 146291 | 9625594 |
| April 2023 | 70283 | 0.9438 | 70283 | 9572712 |
| May 2023 | 118897 | 0.8742 | 118897 | 9450242 |
| June 2023 | 71464 | 0.9306 | 71464 | 9402273 |
| September 2023 | 100 | 0.9330 | 100 | 9402180 |
| December 2023 | 530000 | 0.9109 | 530000 | 8919428 |
| December 2024 | 399514 | 1.5019 | 399514 | 8325388 |

---

**ITEM 16F.** **CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT**

On June 17, 2025, the Company announced the dismissal of PricewaterhouseCoopers Zhong Tian LLP ("PwC") as the Company's independent registered public accounting firm and the engagement of WWC, P.C. ("WWC") as the Company's independent registered public accounting firm for the fiscal year ended December 31, 2024, effective June 17, 2025. WWC was also engaged to re-audit the annual consolidated financial statements of the Company for the fiscal years ended December 31, 2022 and 2023, which had previously been audited by PwC. This re-audit is necessary because such comparable financial information should be restated in the Company's annual report for the fiscal year ended December 31, 2024, as a result of the Company's business reorganization completed in August 2024, which divested certain IoT@Home businesses to strategically focus on home water solution businesses.

The engagement of WWC and the dismissal of PwC have been approved by audit committee of board of directors and the board of directors of the Company.

The reports of PwC on the Company's consolidated financial statements for the fiscal years ended December 31, 2022 and 2023 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principle.

During each of the fiscal years ended December 31, 2022 and 2023 and the subsequent period through June 17, 2025, there have been no disagreements between the Company and PwC on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of PwC, would have caused PwC to make reference to the subject matter of the disagreements in its report on the consolidated financial statements, and there have been no "reportable events" as the term is described in Item 16F(a)(1)(v) of Form 20-F, other than as disclosed below in this Form 6-K. In the same periods, the Company was advised by PwC of the following outstanding material weaknesses in the Company's internal control over financial reporting: (i) the Company's lack of sufficient resources regarding financial reporting and accounting personnel with understanding of U.S. GAAP, in particular, to address complex U.S. GAAP technical accounting issues, related disclosures in accordance with U.S. GAAP and financial reporting requirements set forth by the Securities and Exchange Commission (the "SEC"), and (ii) the lack of comprehensive U.S. GAAP accounting policies and financial reporting procedures, which were disclosed in the Company's annual report on Form 20-F for the fiscal year ended December 31, 2023.

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During the course of audit of the Company's financial statements for the year ended December 31, 2024, PwC informed the Company that it had identified certain issues with respect to the business purpose and substance of certain loans transaction between a subsidiary of the Company and a Hong Hong-incorporated company. In January and February 2024, a subsidiary of the Company extended loans with a total principal amount of HK$16 million to the Hong Kong-incorporated company. The loans have a tenure of three years, bear a fixed annual interest rate of 2.5%, and are not guaranteed. The principal amount of the loans and the accrued interest were due for repayment upon maturity in January and February 2027. In March 2025, the Hong Kong-incorporated company early repaid all the outstanding principal and accrued interest of these loans to the subsidiary of the Company, at the Company's request. PwC further suggested the Company to carry out an investigation into the loans transaction on the business purpose and substance of the loans transaction and advised the Company that it would have been necessary to expand the scope of its audit. The audit committee of the board of directors of the Company has engaged international counsel and forensic accountant to conduct an independent investigation on the business purpose and substance of the loans transaction in May 2025. As of the date of the dismissal of PwC, the independent investigation was still ongoing. As of the date of the dismissal of PwC, PwC did not expand the scope of its audit and PwC had not yet completed the annual audit procedures for the fiscal year ended December 31, 2024.

The matters described above constitute reportable events. The audit committee of the Company's board of directors has discussed all reportable events above with PwC, and the Company has authorized PwC to respond fully to the inquiries made by WWC concerning these reportable events.

The Company had provided PwC with a copy of the foregoing disclosure it is making on this current report on Form 6-K and requested from PwC a letter addressed to the SEC indicating whether it agrees with such disclosure. A copy of PwC's letter dated June 17, 2025 is hereby incorporated by reference as Exhibit 16.1 to this annual report.

During each of the fiscal years ended December 31, 2022 and 2023 and the subsequent interim period through June 17, 2025, neither the Company nor anyone on behalf of the Company has consulted with WWC regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on our consolidated financial statements, and neither a written report nor oral advice was provided to the Company that WWC concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing, or financial reporting issue, or (ii) any matter that was the subject of a disagreement (as defined in Item 16F(a)(1)(iv) of the instructions to Form 20-F and the related instructions therein) or a reportable event (as defined in Item 16F(a)(1)(v) of the instructions to Form 20-F).

On June 26, 2025, audit committee of the Company's board of directors has completed the independent investigation on the business purpose and substance of certain loan transactions between a subsidiary of the Company and a Hong Hong-incorporated company as identified by PwC. The independent investigation concluded that the loan transactions have business substance. Specifically, these loan transactions were entered into to pursue cooperation opportunities with the Hong Kong-incorporated company for the Company's overseas expansions. The independent investigation further concluded that the Hong Kong-incorporated company is not a related party of the Company, that these loan transactions were duly authorized, and that they are properly recorded in the financial books of the Company with sufficient supporting documentation.

**ITEM 16G.** **MINE SAFETY DISCLOSURE**

Not applicable.

**ITEM 16H.** **DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS**

Not applicable.

**ITEM 16I.** **INSIDER TRADING POLICIES**

Our board of directors has established insider trading policies and procedures governing the purchase, sale, and other dispositions of our securities by our directors, officers, employees and other relevant persons to promote compliance with applicable insider trading laws, rules and regulations, and listing standards.

Our Amended and Restated Statement of Policies Governing Non-public Information and the Prevention of Insider Trading is filed as Exhibit 11.2 to this annual report on Form 20-F.

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**ITEM 16J.** **CYBERSECURITY**

**Risk Management and Strategy**

We have implemented comprehensive cybersecurity risk assessment procedures to ensure effectiveness in cybersecurity management, strategy and governance and reporting cybersecurity risks. We have also integrated cybersecurity risk management into our overall enterprise risk management system.

We have developed a comprehensive cybersecurity threat defense system to address both internal and external cyber threats. This comprehensive system spans multiple security domains, including network, host and application layers. It integrates a range of security capabilities, such as threat defense, continuous monitoring, in-depth analysis, rapid response, as well as strategic deception and countermeasures. Our approach to managing cybersecurity risks and safeguarding sensitive data is multi-faceted, involving technological safeguards, procedural protocols, a rigorous program of surveillance on our corporate network, continuous testing of aspects of our security posture internally and with third-party business partners, such as third-party network partners and third-party e-commerce platforms, a solid incident response framework and regular cybersecurity training sessions for our employees. Our IT department is actively engaged in monitoring of the performance of our infrastructure to ensure prompt identification and response to potential issues, including potential cybersecurity threats. Our internal control department also performs regular self-assessments and produces annual assessment reports.

As of the date of this annual report, we have not experienced any material cybersecurity incidents or identified any material cybersecurity threats that have affected or are reasonably likely to materially affect us, our business strategy, results of operations or financial condition.

**Governance**

Our corporate governance and nominating committee of our board of directors is responsible for overseeing our cybersecurity risk management and is informed on risks from cybersecurity threats. Our board of directors/The corporate governance and nominating committee shall review, approve and maintain oversight of the disclosure (i) on Form 6-K for material cybersecurity incidents (if any) and (ii) related to cybersecurity matters in the periodic reports (including annual report on Form 20-F) of our Company.

On the management level, our chief executive officer and cybersecurity officer, or the **Cybersecurity Risk Management Officers**, are responsible for assessing, identifying and managing material risks from cybersecurity threats to our company and monitoring the prevention, detection, mitigation and remediation of material cybersecurity incidents. Our Cybersecurity Risk Management Officers report to our corporate governance and nominating committee (i) on a quarterly basis regarding their assessment, identification and management on material risks from cybersecurity threats happened in the ordinary course of our business operations and (ii) on disclosure concerning cybersecurity matters in our Form 6-K for material cybersecurity incidents (if any) and our annual report on Form 20-F.

If a cybersecurity incident occurs, our Cybersecurity Risk Management Officers will promptly organize relevant personnel for internal assessment and, depending on the situation, seek the opinions of external experts and legal advisors. If it is determined that the incident could potentially be a material cybersecurity event, our Cybersecurity Risk Management Officers will promptly report the incident and relevant assessment results to our corporate governance and nominating committee and our corporate governance and nominating committee will decide on the relevant response measures and whether any disclosure is necessary. If such disclosure is determined to be necessary, our Cybersecurity Risk Management Officers shall promptly prepare disclosure material for review and approval by our corporate governance and nominating committee before it is disseminated to the public.

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**PART III**

**ITEM 17.** **FINANCIAL STATEMENTS**

We have elected to provide financial statements pursuant to Item 18.

**ITEM 18.** **FINANCIAL STATEMENTS**

The consolidated financial statements of Viomi Technology Co., Ltd and its subsidiaries and VIEs are included at the end of this annual report.

**ITEM 19.** **EXHIBITS** 

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| | |
|:---|:---|
| **ExhibitNumber** | **Description of Document** |
| 1.1 | [Second Amended and Restated Memorandum and Articles of Association of the Registrant, effective September 24, 2018 (incorporated herein by reference to Exhibit 3.2 to the Form F-1 filed on August 28, 2018 (File No. 333-227063))](https://www.sec.gov/Archives/edgar/data/1742770/000104746918005832/a2236505zex-3_2.htm)  |
| 2.1 | [Registrant's Specimen American Depositary Receipt (included in Exhibit 4.3) (incorporated herein by reference to Exhibit 4.3 to the Form F-1/A filed on September 11, 2018 (File No. 333-227063))](https://www.sec.gov/Archives/edgar/data/1742770/000104746918006129/a2236581zex-4_3.htm)  |
| 2.2 | [Registrant's Specimen Certificate for Class A Ordinary Shares (incorporated herein by reference to Exhibit 4.2 to the Form F-1/A filed on September 11, 2018 (File No. 333-227063))](https://www.sec.gov/Archives/edgar/data/1742770/000104746918006129/a2236581zex-4_2.htm)  |
| 2.3 | [Deposit Agreement, among the Registrant, the depositary and holder of the American Depositary Receipts dated September 24, 2018 (incorporated herein by reference to Exhibit 4.3 to the Form S-8 filed on March 22, 2019 (File No. 333-230431))](https://www.sec.gov/Archives/edgar/data/1742770/000156459019008887/viot-ex43_6.htm)  |
| 2.4 | [Shareholders Agreement between the Registrant and other parties thereto dated April 29, 2015 (incorporated herein by reference to Exhibit 4.4 to the Form F-1 filed on August 28, 2018 (File No. 333-227063))](https://www.sec.gov/Archives/edgar/data/1742770/000104746918005832/a2236505zex-4_4.htm)  |
| 2.5\* | [Description of Securities](viot-20241231xex2d5.htm)  |
| 4.1 | [2015 Share Incentive Plan (incorporated herein by reference to Exhibit 10.1 to the Form F-1 filed on August 28, 2018 (File No. 333-227063))](https://www.sec.gov/Archives/edgar/data/1742770/000104746918005832/a2236505zex-10_1.htm)  |
| 4.2 | [2018 Share Incentive Plan (incorporated herein by reference to Exhibit 4.2 to the Form 20-F filed on April 23, 2020 (File No. 001-38649))](https://www.sec.gov/Archives/edgar/data/1742770/000156459020018219/viot-ex42_757.htm)  |
| 4.3 | [Amendment No.1 to 2015 Share Incentive Plan (incorporated herein by reference to Exhibit 4.3 to the Form 20-F filed on April 25, 2024 (File No. 001-38649))](https://www.sec.gov/Archives/edgar/data/1742770/000110465924051949/viot-20231231xex4d3.htm) |
| 4.4 | [Amendment No.1 to 2018 Share Incentive Plan (incorporated herein by reference to Exhibit 4.4 to the Form 20-F filed on April 25, 2024 (File No. 001-38649))](https://www.sec.gov/Archives/edgar/data/1742770/000110465924051949/viot-20231231xex4d4.htm) |
| 4.5 | [Form of Indemnification Agreement between the Registrant and its directors and executive officers (incorporated herein by reference to Exhibit 10.3 to the Form F-1 filed on August 28, 2018 (File No. 333-227063))](https://www.sec.gov/Archives/edgar/data/1742770/000104746918005832/a2236505zex-10_3.htm)  |
| 4.6 | [Form of Employment Agreement between the Registrant and its executive officers (incorporated herein by reference to Exhibit 10.4 to the Form F-1 filed on August 28, 2018 (File No. 333-227063))](https://www.sec.gov/Archives/edgar/data/1742770/000104746918005832/a2236505zex-10_4.htm)  |
| 4.7 | [English translation of executed form of shareholder voting proxy agreement among a VIE of the Registrant, its shareholders and the WFOE I of the Registrant as currently in effect, and a schedule of all executed shareholder voting proxy agreements adopting the same form in respect of each of the VIEs of the Registrant (incorporated herein by reference to Exhibit 10.5 to the Form F-1 filed on August 28, 2018 (File No. 333-227063))](https://www.sec.gov/Archives/edgar/data/1742770/000104746918005832/a2236505zex-10_5.htm)  |
| 4.8 | [English translation of executed form of equity pledge agreement among a VIE of the Registrant, its shareholders, and the WFOE I of the Registrant, as currently in effect, and a schedule of all executed equity pledge agreements adopting the same form in respect of each of the VIEs of the Registrant (incorporated herein by reference to Exhibit 10.6 to the Form F-1 filed on August 28, 2018 (File No. 333-227063))](https://www.sec.gov/Archives/edgar/data/1742770/000104746918005832/a2236505zex-10_6.htm)  |
| 4.9 | [English translation of executed form of exclusive consultation and service agreement between a VIE and the WFOE I of the Registrant, as currently in effect, and a schedule of all executed exclusive consultation and service agreements adopting the same form in respect of each of the VIEs of the Registrant (incorporated herein by reference to Exhibit 10.7 to the Form F-1 filed on August 28, 2018 (File No. 333-227063))](https://www.sec.gov/Archives/edgar/data/1742770/000104746918005832/a2236505zex-10_7.htm)  |

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| | |
|:---|:---|
| 4.10 | [English translation of executed form of exclusive option agreement among a VIE of the Registrant, its shareholders, and the WFOE I of the Registrant, as currently in effect, and a schedule of all executed exclusive option agreements adopting the same form in respect of each of the VIEs of the Registrant (incorporated herein by reference to Exhibit 10.8 to the Form F-1 filed on August 28, 2018 (File No. 333-227063))](https://www.sec.gov/Archives/edgar/data/1742770/000104746918005832/a2236505zex-10_8.htm)  |
| 4.11 | [English translation of executed form of spousal consent letter of the spouse of Mr. Xiaoping Chen as an individual shareholder of a VIE of the Registrant, as currently in effect, and a schedule of all executed spousal consent letters adopting the same form in respect of each of the VIEs of the Registrant (incorporated herein by reference to Exhibit 10.9 to the Form F-1 filed on August 28, 2018 (File No. 333-227063))](https://www.sec.gov/Archives/edgar/data/1742770/000104746918005832/a2236505zex-10_9.htm)  |
| 4.12 | [English Translation of Termination Agreement between WFOE I, Xiaoping Chen and Foshan Viomi dated April 28, 2020 (incorporated herein by reference to Exhibit 4.11 to the Form 20-F filed on April 26, 2021 (File No. 001-38649))](https://www.sec.gov/Archives/edgar/data/1742770/000156459021020524/viot-ex411_253.htm)  |
| 4.13 | [English translation of the Spousal Consent Letter of the spouse of Mr. Xiaoping Chen as an individual shareholder of Foshan Viomi on April 28, 2020 (incorporated herein by reference to Exhibit 4.16 to the Form 20-F filed on April 26, 2021 (File No. 001-38649))](https://www.sec.gov/Archives/edgar/data/1742770/000156459021020524/viot-ex416_256.htm)  |
| 4.14\* | [English translation of the Supplemental Agreement among Foshan Viomi, Guangzhou Interconnect and WFOE II dated July 26, 2024](viot-20241231xex4d14.htm) |
| 4.15\* | [English translation of the Equity Pledge Agreement among Foshan Viomi, Guangzhou Interconnect, and WFOE II dated July 20, 2024](viot-20241231xex4d15.htm) |
| 4.16\* | [English translation of the Exclusive Consultation and Service Agreement between Guangzhou Interconnect and WFOE II dated July 20, 2024](viot-20241231xex4d16.htm) |
| 4.17\* | [English translation of the Exclusive Option Agreement among Foshan Viomi, Guangzhou Interconnect and WFOE II dated July 20, 2024](viot-20241231xex4d17.htm) |
| 4.18\* | [English translation of Termination Agreement between the former WFOE, Xiaoping Chen, Foshan Viomi and Juan Zhou dated July 19, 2024](viot-20241231xex4d18.htm) |
| 4.19\* | [English translation of the Shareholder Voting Proxy Agreement among Foshan Viomi, Guangzhou Interconnect and WFOE II dated July 20, 2024](viot-20241231xex4d19.htm) |
| 4.20\* | [English translation of Business Reorganization Agreement among the Registrant, Xiaoping Chen, Viomi HK Technology Co., Limited, Zhuhai Yungui Enterprise Management Consulting Partnership (Limited Partnership), Foshan Viomi, and the former WFOE, WFOE I, WFOE II and certain of their subsidiaries dated July 19, 2024](viot-20241231xex4d20.htm) |
| 4.21\* | [English Translation of Business Cooperation Agreement between Guangdong Lizi and Xiaomi dated October 15, 2024](viot-20241231xex4d21.htm) |
| 8.1\* | [List of Subsidiaries and Consolidated Variable Interest Entities of the Registrant](viot-20241231xex8d1.htm)  |
| 11.1 | [Code of Business Conduct and Ethics of the Registrant (incorporated herein by reference to Exhibit 99.1 to the Form F-1 filed on August 28, 2018 (File No. 333-227063))](https://www.sec.gov/Archives/edgar/data/1742770/000104746918005832/a2236505zex-99_1.htm) |
| 11.2\* | [Amended and Restated Statement of Policies Governing Non-public Information and the Prevention of Insider Trading](viot-20241231xex11d2.htm) |
| 12.1\* | [CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](viot-20241231xex12d1.htm)  |
| 12.2\* | [CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](viot-20241231xex12d2.htm)  |
| 13.1\*\* | [CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](viot-20241231xex13d1.htm)  |
| 13.2\*\* | [CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](viot-20241231xex13d2.htm)  |
| 15.1\* | [Consent of Han Kun Law Offices](viot-20241231xex15d1.htm)  |
| 15.2\* | [Consent of WWC, P.C.](viot-20241231xex15d2.htm) |
| 16.1 | [Letter of PricewaterhouseCoopers Zhong Tian LLP dated June 17, 2025 regarding change in independent registered public accounting firm (incorporated by reference to Exhibit 99.1 to the Form 6-K (File No. 001-38649), filed with the SEC on June 17, 2025)](https://www.sec.gov/Archives/edgar/data/1742770/000110465925060285/tm2518202d1_ex99-1.htm) |
| 97.1 | [Clawback Policy of the Registrant (incorporated herein by reference to Exhibit 97.1 to the Form 20-F filed on April 25, 2024 (File No. 001-38649))](https://www.sec.gov/Archives/edgar/data/1742770/000110465924051949/viot-20231231xex97d1.htm) |

---

[**Table of Contents**](#TOC)

---

| | |
|:---|:---|
| 101.INS\* | Inline XBRL Instance Document – this instance document does not appear on the Interactive Data File because its XBRL tags are not embedded with the Inline XBRL document |
| 101.SCH\* | Inline XBRL Taxonomy Extension Scheme Document |
| 101.CAL\* | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF\* | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB\* | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE\* | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104\* | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

---

\* Filed with this Annual Report on Form 20-F.

\*\* Furnished with this Annual Report on Form 20-F.

[**Table of Contents**](#TOC)

**SIGNATURES**

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

---

| | | |
|:---|:---|:---|
| **Viomi Technology Co., Ltd** | **Viomi Technology Co., Ltd** | **Viomi Technology Co., Ltd** |
| By: | /s/ Xiaoping Chen | /s/ Xiaoping Chen |
|  | Name: | Xiaoping Chen |
|  | Title: | Chairman of the Board of Directors and Chief Executive Officer |

---

Date:September 30, 2025

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS

---

| | |
|:---|:---|
| **Contents** | **Page** |
| [Report of Independent Registered Public Accounting Firm](#REPORTOFINDEPENDENTREGISTEREDPUBLICACCOU) (PCAOB ID 1171) | F-2 |
| **Consolidated Financial Statements:** |  |
| [Consolidated Balance Sheets as of December 31, 2023 and 2024](#CONSOLIDATEDBALANCESHEETS_811774) | F-3 |
| [Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2022, 2023 and 2024](#CONSOLIDATEDSTATEMENTSOFCOMPREHENSIVEINC) | F-4 |
| [Consolidated Statements of Changes in Shareholders' Equity for the Years Ended December 31, 2022, 2023 and 2024](#CONSOLIDATEDSTATEMENTSOFCHANGESINSHAREHO) | F-5 |
| [Consolidated Statements of Cash Flows for the Years Ended December 31, 2022, 2023 and 2024](#CONSOLIDATEDSTATEMENTSOFCASHFLOWS_400062) | F-6 |
| [Notes to the Consolidated Financial Statements](#a1ORGANIZATIONANDPRINCIPALACTIVITIES_834) | F-7 |

---

[**Table of Contents**](#TOC)

![Graphic](viot-20241231x20f019.jpg)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Viomi Technology Co., Ltd and its subsidiaries

**Opinion on the Financial Statements**

We have audited the accompanying consolidated balance sheets of Viomi Technology Co., Ltd and its subsidiaries (the Company) as of December 31, 2023 and 2024, and the related consolidated statements of comprehensive income (loss), changes in shareholders' equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

**Critical Audit Matters**

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

/s/ WWC, P.C.

WWC, P.C.

Certified Public Accountants

PCAOB ID: 1171

San Mateo, California

September 30, 2025

We have served as the company's auditor since 2025.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### CONSOLIDATED BALANCE SHEETS
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

---

| | | | |
|:---|:---|:---|:---|
|  | **As of December 31,**  | **As of December 31,**  | **As of December 31,**  |
|  | **2023** | **2024** | **2024** |
|  | **RMB** | **RMB** | **US$** |
|  |  |  | **(Note2(e))** |
| **Assets** |  |  |  |
| **Current assets** |  |  |  |
| Cash and cash equivalents | 206405 | 1026188 | 140587 |
| Restricted cash | 18922 | 141292 | 19357 |
| Short-term deposits | 177268 | 115014 | 15757 |
| Short-term investments | 18505 | 72500 | 9932 |
| Accounts and notes receivable from third parties (net of allowance of RMB16,627 and RMB9,786 as of December 31, 2023 and December 31, 2024, respectively) | 36836 | 24105 | 3302 |
| Accounts receivable from a related party (net of allowance of RMB4 and RMB1,178 as of December 31, 2023 and December 31, 2024, respectively) | 4365 | 591221 | 80997 |
| Other receivables from related parties (net of allowance of nil and RMB1 as of December 31, 2023 and December 31, 2024, respectively) | 100 | 11234 | 1539 |
| Inventories, net | 157303 | 112325 | 15388 |
| Prepaid expenses and other current assets | 101319 | 71363 | 9777 |
| Assets held for sale - current portion | 1561679 |  |  |
| **Total current assets** | 2282702 | 2165242 | 296636 |
| **Non-current assets** |  |  |  |
| Prepaid expenses and other non-current assets | 10535 | 18053 | 2473 |
| Property, plant and equipment, net | 307226 | 315309 | 43197 |
| Deferred tax assets | 4925 | 9698 | 1329 |
| Intangible assets, net | 10901 | 8524 | 1168 |
| Right-of-use assets, net | 4959 | 3382 | 463 |
| Land use right, net | 59177 | 57904 | 7933 |
| Long-term investment | 3538 | 7588 | 1040 |
| Assets held for sale - non-current portion | 70425 |  |  |
| **Total non-current assets** | 471686 | 420458 | 57603 |
| **Total assets** | 2754388 | 2585700 | 354239 |
| **Liabilities and shareholders' equity** |  |  |  |
| **Current liabilities** |  |  |  |
| Accounts and notes payable (including accounts and notes payable of the consolidated variable interest entities and their subsidiaries ("VIEs") without recourse to the Company of nil and RMB4,320 as of December 31, 2023 and 2024, respectively) | 317454 | 772151 | 105784 |
| Advances from customers | 29833 | 11537 | 1581 |
| Amount due to related parties  | 3444 | 835 | 114 |
| Accrued expenses and other liabilities (including accrued expenses and other liabilities of the consolidated VIEs without recourse to the Company of RMB43,914 and RMB1,046 as of December 31, 2023 and 2024, respectively) | 170814 | 168127 | 23033 |
| Short-term borrowing |  | 50000 | 6850 |
| Income tax payables | 1648 | 9736 | 1334 |
| Lease liabilities due within one year  | 2387 | 2037 | 279 |
| Long-term borrowing-current portion | 28029 | 29300 | 4014 |
| Liabilities held for sale - current portion | 712962 |  |  |
| **Total current liabilities** | 1266571 | 1043723 | 142989 |
| **Non-current liabilities** |  |  |  |
| Accrued expenses and other liabilities – non-current portion  |  | 14492 | 1985 |
| Long-term borrowing | 128701 | 75945 | 10404 |
| Lease liabilities  | 2713 | 1783 | 244 |
| Liabilities held for sale – non-current portion | 12766 |  |  |
| **Total non-current liabilities** | 144180 | 92220 | 12633 |
| **Total liabilities** | 1410751 | 1135943 | 155622 |
| **Commitments and contingencies (Note 23)** |  |  |  |
| **Shareholders' equity** |  |  |  |
| Class A Ordinary Shares (US$0.00001 par value; 4,800,000,000 shares authorized; 101,902,544 and 101,059,544 shares issued and outstanding as of December 31, 2023 and December 31, 2024, respectively) | 6 | 6 | 1 |
| Class B Ordinary Shares (US$0.00001 par value; 150,000,000 shares authorized; 102,764,550 and 102,764,550 shares issued and outstanding as of December 31, 2023 and December 31, 2024, respectively) | 6 | 6 | 1 |
| Treasury stock | (81143) | (85426) | (11703) |
| Additional paid-in capital | 1353634 | 1374451 | 188299 |
| Retained earnings | 89711 | 153125 | 20978 |
| Accumulated other comprehensive (loss) income | (14328) | 2279 | 313 |
| **Total equity attributable to shareholders of the Company** | 1347886 | 1444441 | 197889 |
| Non-controlling interests | (4249) | 5316 | 728 |
| **Total shareholders' equity** | 1343637 | 1449757 | 198617 |
| **Total liabilities and shareholders' equity** | 2754388 | 2585700 | 354239 |

---

The accompanying notes are an integral part of these consolidated financial statements.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,**  | **Year ended December 31,**  | **Year ended December 31,**  | **Year ended December 31,**  |
|  | **2022** | **2023** | **2024** | **2024** |
|  | **RMB** | **RMB** | **RMB** | **US$** |
|  |  |  |  | **(Note2(e))** |
| **Net revenues:** |  |  |  |  |
| Related parties | 1336612 | 1292880 | 1819098 | 249215 |
| Third parties | 453633 | 345856 | 299884 | 41084 |
| **Total net revenues** | 1790245 | 1638736 | 2118982 | 290299 |
| Cost of revenues | (1195742) | (1116720) | (1570276) | (215126) |
| **Gross profit** | 594503 | 522016 | 548706 | 75173 |
| **Operating expenses** |  |  |  |  |
| Research and development expenses | (209957) | (148879) | (142884) | (19575) |
| Selling and marketing expenses | (282285) | (214610) | (211173) | (28931) |
| General and administrative expenses | (60510) | (57346) | (70807) | (9701) |
| **Total operating expenses** | (552752) | (420835) | (424864) | (58207) |
| Other income, net | 12906 | 8887 | 32492 | 4451 |
| **Income from operations** | 54657 | 110068 | 156334 | 21417 |
| Interest income and short-term investment income, net | 10506 | 16831 | 5264 | 721 |
| Other non-operating income | 2488 | 3164 |  |  |
| **Income before income tax credits (expenses)** | 67651 | 130063 | 161598 | 22138 |
| Income tax credits (expenses) | 447 | (13588) | (16913) | (2317) |
| **Net income from continuing operations** | 68098 | 116475 | 144685 | 19821 |
| **Net loss from discontinued operations** | (350728) | (205808) | (82341) | (11281) |
| **Net income (loss)**  | (282630) | (89333) | 62344 | 8540 |
| Less: Net loss attributable to the non-controlling interest shareholders | (7115) | (4659) | (1070) | (147) |
| **Net income (loss) attributable to ordinary shareholders of the Company**  | (275515) | (84674) | 63414 | 8687 |
| **Including:** |  |  |  |  |
| **Net income from continuing operations attributable to ordinary shareholders of the Company**  | 68284 | 116768 | 144364 | 19778 |
| **Net loss from discontinued operations attributable to ordinary shareholders of the Company**  | (343799) | (201442) | (80950) | (11091) |
| Other comprehensive income, net of tax: |  |  |  |  |
| Foreign currency translation adjustment | 48785 | 10007 | 16607 | 2275 |
| **Total comprehensive income (loss) attributable to ordinary shareholders of the Company** | (226730) | (74667) | 80021 | 10962 |
| **Net income (loss) per share attributable to ordinary shareholders of the Company** |  |  |  |  |
| -Basic | (1.32) | (0.41) | 0.31 | 0.04 |
| Continuing Operations | 0.33 | 0.57 | 0.70 | 0.10 |
| Discontinued Operations | (1.65) | (0.98) | (0.39) | (0.06) |
| -Diluted | (1.31) | (0.41) | 0.31 | 0.04 |
| Continuing Operations | 0.32 | 0.56 | 0.70 | 0.10 |
| Discontinued Operations | (1.63) | (0.97) | (0.39) | (0.06) |
| Weighted average number of ordinary shares used in calculating net income (loss) per share |  |  |  |  |
| -Basic |  |  |  |  |
| Continuing Operations | 208341011 | 206387105 | 204787786 | 204787786 |
| Discontinued Operations | 208341011 | 206387105 | 204787786 | 204787786 |
| -Diluted |  |  |  |  |
| Continuing Operations | 210278607 | 207667763 | 206690917 | 206690917 |
| Discontinued Operations | 210278607 | 207667763 | 206690917 | 206690917 |

---

The accompanying notes are an integral part of these consolidated financial statements.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Class A ordinary shares** | **Class A ordinary shares** | **Class B ordinary shares** | **Class B ordinary shares** | | **Treasury stock** | **Treasury stock** | | | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | <br>**Additional**<br>**Paid-in**<br>**Capital** | **Shares** | **Amount** | <br>**Retained**<br>**Earnings** | **Accumulated**<br>**Other**<br>**Comprehensive**<br>**Income (Loss)** | **Total Equity**<br>**Attributable**<br>**to Shareholders**<br>**of the Company** | <br>**Non-**<br>**Controlling**<br>**Interest** | <br>**Total**<br>**Shareholders'**<br>**Equity** |
|  |  | **RMB** |  | **RMB** | **RMB** |  | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** |
| **Balance as of January 1, 2022** | 105516779 | 6 | 103214547 | 6 | 1337281 | 6230139 | (66668) | 449900 | (73120) | 1647405 | 3522 | 1650927 |
| Net loss attributable to the Company and non-controlling interest shareholders |  |  |  |  |  |  |  | (275515) |  | (275515) | (7115) | (282630) |
| Share-based compensation related to 2015 and 2018 Share Incentive Plan |  |  |  |  | 19560 |  |  |  |  | 19560 |  | 19560 |
| Class B ordinary shares converted to Class A ordinary shares | 359997 |  | (359997) |  |  |  |  |  |  |  |  |  |
| Issuance of ordinary shares for exercised share options | 956256 |  |  |  | 556 |  |  |  |  | 556 |  | 556 |
| Repurchase of shares | (2293569) |  |  |  |  | 2293569 | (8035) |  |  | (8035) |  | (8035) |
| Foreign currency translation adjustment |  |  |  |  |  |  |  |  | 48785 | 48785 |  | 48785 |
| **Balance as of December 31, 2022** | 104539463 | 6 | 102854550 | 6 | 1357397 | 8523708 | (74703) | 174385 | (24335) | 1432756 | (3593) | 1429163 |
| **Balance as of January 1, 2023** | 104539463 | 6 | 102854550 | 6 | 1357397 | 8523708 | (74703) | 174385 | (24335) | 1432756 | (3593) | 1429163 |
| Net loss attributable to the Company and non-controlling interest shareholders |  |  |  |  |  |  |  | (84674) |  | (84674) | (4659) | (89333) |
| Share-based compensation related to 2015 and 2018 Share Incentive Plan |  |  |  |  | 106 |  |  |  |  | 106 |  | 106 |
| Foreign currency translation adjustment |  |  |  |  |  |  |  |  | 10007 | 10007 |  | 10007 |
| Class B Ordinary shares converted to Class A Ordinary shares  | 90000 |  | (90000) |  |  |  |  |  |  |  |  |  |
| Issuance of ordinary shares for exercised share options | 176883 |  |  |  | 19 |  |  |  |  | 19 |  | 19 |
| Repurchase of shares | (2903802) |  |  |  |  | 2903802 | (6440) |  |  | (6440) |  | (6440) |
| Capital injection in a subsidiary from a non-controlling interest shareholder |  |  |  |  | (3888) |  |  |  |  | (3888) | 4003 | 115 |
| **Balance as of December 31, 2023** | 101902544 | 6 | 102764550 | 6 | 1353634 | 11427510 | (81143) | 89711 | (14328) | 1347886 | (4249) | 1343637 |
| **Balance as of January 1, 2024** | 101902544 | 6 | 102764550 | 6 | 1353634 | 11427510 | (81143) | 89711 | (14328) | 1347886 | (4249) | 1343637 |
| Net income (loss) attributable to the Company and non-controlling interest shareholders |  |  |  |  |  |  |  | 63414 |  | 63414 | (1070) | 62344 |
| Disposal of discontinued operations |  |  |  |  | 4257 |  |  |  |  | 4257 | 9635 | 13892 |
| Share-based compensation related to 2015 and 2018 Share Incentive Plan |  |  |  |  | 16450 |  |  |  |  | 16450 |  | 16450 |
| Foreign currency translation adjustment |  |  |  |  |  |  |  |  | 16607 | 16607 |  | 16607 |
| Issuance of ordinary shares for exercised share options | 355542 |  |  |  | 110 |  |  |  |  | 110 |  | 110 |
| Repurchase of ordinary shares | (1198542) |  |  |  |  | 1198542 | (4283) |  |  | (4283) |  | (4283) |
| Capital injection in a subsidiary from a non-controlling interest shareholder |  |  |  |  |  |  |  |  |  |  | 1000 | 1000 |
| **Balance as of December 31, 2024** | 101059544 | 6 | 102764550 | 6 | 1374451 | 12626052 | (85426) | 153125 | 2279 | 1444441 | 5316 | 1449757 |

---

The accompanying notes are an integral part of these consolidated financial statements.

[**Table of Contents**](#TOC)

**VIOMI TECHNOLOGY CO., LTD**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,**  | **Year ended December 31,**  | **Year ended December 31,**  | **Year ended December 31,**  |
|  | **2022** | **2023** | **2024** | **2024** |
|  | **RMB** | **RMB** | **RMB** | **US$** |
|  |  |  |  | **(Note2(e))** |
| **Cash flows from operating activities** |  |  |  |  |
| Net income (loss) | (282630) | (89333) | 62344 | 8540 |
| Net loss from discontinued operations | 350728 | 205808 | 82341 | 11281 |
| Adjustment to reconcile net income to net cash provided by (used in) operating activities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 40053 | 36941 | 28978 | 3970 |
| &nbsp;&nbsp;&nbsp;Inventory write-down | (1147) | 9363 | (10079) | (1381) |
| &nbsp;&nbsp;&nbsp;Share-based compensation | 19560 | 106 | 16450 | 2254 |
| &nbsp;&nbsp;&nbsp;Allowance for credit losses | 7972 | 1242 | (4359) | (597) |
| &nbsp;&nbsp;&nbsp;Loss of disposal of property and equipment  | 78 | 1378 | 364 | 50 |
| &nbsp;&nbsp;&nbsp;Deferred income tax expenses (benefits) | (3974) | 2044 | (4773) | (654) |
| &nbsp;&nbsp;&nbsp;Investment income |  | 462 | (50) | (7) |
| &nbsp;&nbsp;&nbsp;Foreign currency exchange gains, net |  |  | (225) | (30) |
| Changes in operating assets and liabilities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Accounts and notes receivable from third parties | 5327 | 11677 | 18264 | 2502 |
| &nbsp;&nbsp;&nbsp;Accounts receivable from a related party |  | (4370) | (588030) | (80560) |
| &nbsp;&nbsp;&nbsp;Inventories | 47289 | 13841 | 55057 | 7543 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | (21484) | (7448) | 22497 | 3082 |
| &nbsp;&nbsp;&nbsp;Other receivables from related parties | 29301 | 5217 | 452950 | 62054 |
| &nbsp;&nbsp;&nbsp;Amounts due to related parties | 2328 | 1089 | (2609) | (357) |
| &nbsp;&nbsp;&nbsp;Accounts and notes payable | (56926) | (148737) | 454697 | 62293 |
| &nbsp;&nbsp;&nbsp;Advances from customers | 26606 | (7102) | (18296) | (2507) |
| &nbsp;&nbsp;&nbsp;Income tax payables | (26145) | 1124 | 8088 | 1108 |
| &nbsp;&nbsp;&nbsp;Accrued expenses and other liabilities | 3517 | 12667 | 8666 | 1187 |
| &nbsp;&nbsp;&nbsp;Lease liabilities | (5756) | (4650) | (1280) | (174) |
| Net cash provided by continuing operating activities | 134697 | 41319 | 580995 | 79596 |
| Net cash provided by (used in) discontinued operating activities | (418866) | (144547) | 135033 | 18499 |
| **Net cash provided by (used in) operating activities** | (284169) | (103228) | 716028 | 98095 |
| **Cash flows from investing activities** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Purchase of equipment | (150382) | (103372) | (28606) | (3918) |
| &nbsp;&nbsp;&nbsp;Purchase of lease hold improvement | (740) | (415) | (928) | (127) |
| &nbsp;&nbsp;&nbsp;Purchase of intangible assets | (4564) | (653) |  |  |
| &nbsp;&nbsp;&nbsp;Purchase of short-term investments | (11155) | (39694) | (87430) | (11978) |
| &nbsp;&nbsp;&nbsp;Maturity of short-term investments | 11895 | 28973 | 34241 | 4691 |
| &nbsp;&nbsp;&nbsp;Disposal of property and equipment | 12 | 898 | 416 | 57 |
| &nbsp;&nbsp;&nbsp;Placement of short-term deposits |  | (176686) | (406828) | (55735) |
| &nbsp;&nbsp;&nbsp;Maturities of short-term deposits |  |  | 470459 | 64453 |
| &nbsp;&nbsp;&nbsp;Cash receipt from disposals of discontinued operations |  |  | 65000 | 8905 |
| &nbsp;&nbsp;&nbsp;Cashout due to the unconsolidated of discontinued operations |  |  | (348136) | (47694) |
| Net cash used in continuing investing activities | (154934) | (290949) | (301812) | (41346) |
| Net cash provided by discontinued investing activities | 469481 | 92023 | 136918 | 18758 |
| **Net cash provided by (used in) investing activities** | 314547 | (198926) | (164894) | (22588) |
| **Cash flows from financing activities** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from exercise of vested share options | 2936 | 19 | 110 | 15 |
| &nbsp;&nbsp;&nbsp;Receipt of borrowing | 118662 | 49091 | 58513 | 8016 |
| &nbsp;&nbsp;&nbsp;Repayment of borrowing |  | (27128) | (59998) | (8220) |
| &nbsp;&nbsp;&nbsp;Capital injection in subsidiaries from an investor or a non-controlling shareholder |  | 115 | 1000 | 137 |
| &nbsp;&nbsp;&nbsp;Repurchase of ordinary shares | (8035) | (6440) | (4283) | (587) |
| Net cash provided by (used in) continuing financing activities | 113563 | 15657 | (4658) | (639) |
| Net cash provided by (used in) discontinued financing activities |  | 100000 | (30000) | (4110) |
| **Net cash provided by (used in) financing activities** | 113563 | 115657 | (34658) | (4749) |
| Effect of exchange rate changes on cash and cash equivalents | 46482 | 9643 | 14649 | 2006 |
| Net increase (decrease) in cash and cash equivalents and restricted cash | 190423 | (176854) | 531125 | 72764 |
| Cash and cash equivalents and restricted cash at the beginning of the year | 622786 | 813209 | 636355 | 87180 |
| **Cash and cash equivalents and restricted cash at the end of the year** | 813209 | 636355 | 1167480 | 159944 |
| Less: cash, cash equivalents and restricted cash held for sales at end of the year | (385000) | (411028) |  |  |
| **Cash, cash equivalents and restricted cash of continuing operations, end of the year** | 428209 | 225327 | 1167480 | 159944 |
| **Including:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents of continuing operations at the end of the year | 401699 | 206405 | 1026188 | 140587 |
| &nbsp;&nbsp;&nbsp;Restricted cash of continuing operations at the end of the year | 26510 | 18922 | 141292 | 19357 |
| **Supplemental disclosures of cash flow information:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Cash paid for income tax, net | (26708) | (187) | (2226) | (305) |
| &nbsp;&nbsp;&nbsp;Cash paid for interest expense | (3362) | (5644) | (5734) | (786) |
| &nbsp;&nbsp;&nbsp;Acquisition of equipment in form of other payable | 8122 | 50158 | 40183 | 5505 |

---

The accompanying notes are an integral part of these consolidated financial statements.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. **ORGANIZATION AND PRINCIPAL ACTIVITIES** 

Viomi Technology Co., Ltd (the "Company") is a holding company incorporated under the Laws of the Cayman Islands in January 2015. The Company, through its consolidated subsidiaries and "VIEs" (collectively referred to as the "Group") is primarily engaged in the operation of developing and selling Home water solution businesses products in the People's Republic of China (the "PRC").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(a)*  ***History and Reorganization*** 

The Group commenced its operations in May 2014 through Foshan Yunmi Electric Appliances Technology Co., Ltd. ("Foshan Viomi"), a PRC company established by Mr. Chen Xiaoping ("Mr. Chen" or the "Founder"), and Tianjin Jinxing Investment Co., Ltd. ("Tianjin Jinxing"), a subsidiary of Xiaomi Corporation ("Xiaomi", also referring to entities controlled by Xiaomi Corporation where appropriate), who is an investor of the Company. Mr. Chen and Tianjin Jinxing invested RMB7,500 and RMB5,000 to establish Foshan Viomi and held 60% and 40% initial equity interests, respectively. Included in the RMB7,500 invested by Mr. Chen, RMB2,500 was invested by certain key management founders and held by Mr. Chen on their behalf (The key management founders, together with Mr. Chen are referred to "the Founders"). The Group has undertaken its reorganization ("Reorganization") as detailed below.

In January 2015, the Company was incorporated in the Cayman Islands, Viomi HK Technology Co., Limited ("Viomi HK") was incorporated in Hong Kong as a wholly owned subsidiary of the Company, Beijing Yunmi Technology Co., Ltd. ("Beijing Viomi") was set up as a domestic company. In May 2015, Lequan Technology Beijing Co., Ltd ("Lequan") was incorporated as a wholly owned subsidiary of Viomi HK in the PRC.

In July 2015, the Company issued 33,818,182 class A ordinary shares to exchange the interest of RMB2,500 in Foshan Viomi held by Mr. Chen on behalf of key management founders, 67,636,364 Class B redeemable convertible ordinary shares (Pre-IPO Class B Ordinary Shares) to exchange the interest of RMB5,000 in Foshan Viomi owned by Mr. Chen, and 67,636,364 Pre-IPO Class B Ordinary Shares to Red Better Limited ("Red Better"), a subsidiary of Xiaomi, and Shunwei Talent Limited ("Shunwei"), to exchange the interest of RMB5,000 held by Tianjin Jinxing. Concurrently, the Company obtained control over Foshan Viomi and Beijing Viomi through Lequan by entering into a series of contractual arrangements with Foshan Viomi, Beijing Viomi and their shareholders as detailed in note 1(c). As a result, Foshan Viomi and Beijing Viomi became the consolidated VIEs of the Group. The Reorganization lacks substance and should be treated as a non-substantive merger with no change in the basis of assets and liabilities of Foshan Viomi.

In addition, the Company issued 18,181,818 Series A Preferred Shares at the issue price of US$1.1 per share to a group of investors for considerations of US$20,000, including conversion of the outstanding bridge loans of US$5,250, which was provided by the same investors during January 2015 to July 2015. The remaining consideration was fully received in cash.

In June 2018, the Board of Directors and the shareholders approved a transfer and surrender of shares plan, pursuant to which, Mr. Chen, who holds 33,818,182 class A ordinary shares on behalf of certain key management founders through Viomi Limited, transferred 16,145,454 class A ordinary shares to key management founders and surrendered the remaining 17,672,728 class A ordinary shares to the Company.

Pursuant to the written resolutions of all the shareholders of the Company on August 23, 2018, the Company effected a share split whereby each of the Company's authorized and outstanding ordinary shares and preferred shares, par value of $0.0001 each, was divided into ten ordinary shares and preferred shares of the same series, par value US$0.00001 each, respectively. All shareholders surrendered 90% of their after-share-split outstanding shares back to the Company for cancellation. After the share split and the surrender of shares for cancellation, the number of the Company's outstanding ordinary and preferred shares remained unchanged.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. **ORGANIZATION AND PRINCIPAL ACTIVITIES (Continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(a)***  ***History and Reorganization (Continued)*** 

In December 2019, the Company established Yunmi Hulian Technology (Guangdong) Co., Ltd. ("Yunmi Hulian") as a wholly owned subsidiary of Viomi HK to act as a holding company for future business and investment opportunities.

In October 2020, Codream HK Co., Limited (Hong Kong) ("Codream HK"), one of the Company's subsidiaries, established Zhumeng Hulian Technology (Guangdong) Co. Ltd. ("Zhumeng Hulian") as a wholly owned subsidiary of the Company.

In November 2020, the Group entered into an agreement with Sunglow Wealth HK Limited ("Sunglow") to sell 1% of equity interests of Guangdong Lizi Technology Co. Ltd. ("Guangdong Lizi") for a consideration of RMB175. Meanwhile, Foshan Viomi transferred all of its equity interests of Guangdong Lizi to Zhumeng Hulian. Sunglow has paid up the consideration in December 2021 but is not entitled to any shareholder's rights of Guangdong Lizi until the fulfilment of certain conditions pursuant to the supplemental agreement in November 2021. The Group therefore did not recognize Sunglow as a non-controlling interest of Guangdong Lizi as of December 31, 2021. The conditions had not been fulfilled by December 31, 2024 and therefore the Group did not recognize Sunglow as a non-controlling interest of Guangdong Lizi as of December 31, 2024.

On July 19, 2024, to implement its "Focus" strategy for Home water solution businesses, the Group entered into definitive agreements with Mr. Chen, and an entity controlled by Mr. Chen, to divest the Group's businesses and assets involving certain Internet-of-things-enabled ("IoT-enabled") smart home portfolio products for a total consideration of RMB65 million in cash (the "Disposal"). The Disposal was approved by a special committee of the board of directors of the Group on the same day.

The sale of the IoT@Home portfolio products (excluding range hoods, gas stoves, and water heaters) to Mr. Chen was effected through termination, at closing, of the existing VIE contractual arrangements between Yunmi Hulian and Foshan Viomi, which resulted in Foshan Viomi's shareholder, Mr. Chen, fully controlling Foshan Viomi and its subsidiaries. As part of a pre-closing reorganization, Zhumeng Hulian and Guangzhou Interconnect Technology Co., Ltd. ("Guangzhou Interconnect") entered into a new set of VIE contractual arrangements, as a result of which the Group is considered the primary beneficiaries of Guangzhou Interconnect and consolidates its financial results of operations, assets and liabilities in the Group's consolidated financial statements. The transaction was closed on August 31, 2024.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. **ORGANIZATION AND PRINCIPAL ACTIVITIES (Continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(a)***  ***History and Reorganization (Continued)*** 

As of December 31, 2024, details of the Company's principal subsidiaries and VIEs were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | <br>**Place of** <br>**incorporation** | <br>**Date of** <br>**incorporation** | **Percentage of**<br>**beneficial**<br>**ownership** | <br>**Principal**<br>**activities** |
| ***Subsidiaries*:** |  |  |  |  |
| Viomi HK | Hong Kong | January 30, 2015 | 100% | Investment holding |
| Lequan | PRC | May 05, 2015 | 100% | Investment holding |
| Codream HK | Hong Kong | August 20, 2019 | 100% | Investment holding |
| Yunmi Hulian | PRC | December 9, 2019 | 100% | Investment holding |
| Zhumeng Hulian  | PRC | October 14, 2020 | 100% | Investment holding |
| Guangdong Lizi  | PRC | July 26, 2018 | 100% | Home appliance development and sales |
| ***VIEs:*** |  |  |  |  |
| Guangzhou Interconnect | PRC | December 7, 2020 | 100% | Internet information services |
| Beijing Viomi | PRC | January 12, 2015 | 100% | No substantial business |

---

(b)*Dual Classes Ordinary Shares and Initial Public Offering*

On September 25, 2018, the Company completed its IPO on the NASDAQ Global Market in the United States of America. In this offering, 11,400,000 American Depositary Shares ("ADSs"), representing 34,200,000 Class A ordinary shares, were issued and sold to the public at a price of US$9.00 per ADS.

Pursuant to the resolution of the shareholders of the Company on August 23, 2018, the Company's authorized share capital became US$50,000 divided into 5,000,000,000 shares comprising of (i) 4,800,000,000 class A ordinary shares of a par value of US$0.00001 each ("Class A Ordinary Shares"), (ii) 150,000,000 class B ordinary shares of a par value of US$0.00001 each ("Class B Ordinary Shares") and (iii) 50,000,000 shares of a par value of US$0.00001 each of such class or classes (however designated) as the board of directors may determine in accordance with post-offering amended and restated memorandum and articles of association. 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 ten (10) 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 to any person or entity other than holders of Class B Ordinary Shares or their affiliates, such Class B Ordinary Shares shall be automatically and immediately converted into the equivalent number of Class A Ordinary Shares.

Immediately prior to the completion of the IPO, 16,145,454 issued Class A Ordinary Shares held by certain key management founders, 33,818,182 issued Pre-IPO Class B Ordinary Shares held by Red Better, and 67,636,364 issued Pre-IPO Class B Ordinary Shares held by Mr. Chen's wholly-owned entity Viomi Limited was automatically converted by way of re-designation and re-classification into Class B Ordinary Shares on a one-for-one basis, and the rest of the outstanding Class A Ordinary Shares, the rest of the outstanding Pre-IPO Class B Ordinary Shares, and all outstanding Series A Preferred Shares was automatically converted by way of re-designation and re-classification into Class A Ordinary Shares on a one-for-one basis.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. **ORGANIZATION AND PRINCIPAL ACTIVITIES (Continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(c)*  ***VIE Arrangements between the VIEs and the Company's PRC subsidiaries*** 

The Company, through Lequan or Zhumeng Hulian, entered into the following contractual arrangements with Beijing Viomi, Guangzhou Interconnect and their shareholders, respectively, that enable Lequan or Zhumeng Hulian through their PRC subsidiaries to (1) have power to direct the activities that most significantly affects the economic performance of the VIEs, through the exercise of the shareholders' rights under the shareholder voting proxy agreement as the shareholders' meetings of the VIEs appoint the board of directors of the VIEs, and (2) receive the economic benefits of the VIEs that could be significant to the VIEs through the exclusive consultation and service agreement. Accordingly, Lequan or Zhumeng Hulian are considered the primary beneficiaries of the VIEs and have consolidated the VIEs' financial results of operations, assets and liabilities in the Company's consolidated financial statements.

In making the conclusion that Lequan or Zhumeng Hulian are the primary beneficiaries of the VIEs, the Company believes Lequan or Zhumeng Hulian's rights under the terms of the option agreement provide them with a substantive kick-out right. As advised by the Company's PRC legal counsel, the Company believes the terms of the option agreement are valid, binding and enforceable under PRC laws and regulations currently in effect. The Company also believes that the consideration which is the minimum amount permitted by the applicable PRC law to exercise the option does not represent a financial barrier or disincentive for Lequan or Zhumeng Hulian to currently exercise their rights under the exclusive option agreement.

A simple majority vote of Lequan or Zhumeng Hulian's board of directors is required to pass a resolution to exercise their rights under the option agreement. Lequan or Zhumeng Hulian's rights under the option agreement give them the power to control the shareholders of Beijing Viomi and Guangzhou Interconnect In addition, Lequan or Zhumeng Hulian's rights under the shareholder voting proxy agreement also reinforce their abilities to direct the activities that most significantly impact the VIEs' economic performance. The Company also believes that this ability to exercise control ensures that the VIEs will continue to execute consultation and service agreements and also ensures that consultation and service agreements will be executed and renewed indefinitely unless a written agreement is signed by all parties to terminate it or a mandatory termination is requested by PRC laws or regulations. Lequan and Zhumeng Hulian have the rights to receive substantially all of the economic benefits from the VIEs.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. **ORGANIZATION AND PRINCIPAL ACTIVITIES (Continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(c)*  ***VIE Arrangements between the VIEs and the Company's PRC subsidiaries (Continued)*** 

***Exclusive consulting and service agreement***

In July 2015, Lequan entered into exclusive consultation and service agreements with Foshan Viomi and Beijing Viomi respectively to enable Lequan to receive substantially all of the economic benefits of the VIEs. In April 2020, Lequan assigned and transferred its rights and obligations of Foshan Viomi under the original agreements to Yunmi Hulian, which succeeded Lequan as a party to such agreement and assumed its rights and obligations thereunder. Under the exclusive consultation and service agreements, Lequan or Yunmi Hulian have the exclusive right to provide or designate any entity affiliated with them to provide VIEs the technical and business support services, including information technology support, hardware management and updates, software development, maintenance and updates and other operating services. The exclusive consultation and service agreement could be indefinitely effective unless a written agreement is signed by all parties to terminate it or a mandatory termination is requested by PRC laws or regulations. The exclusive consultation and service agreement was effective in July 2015 and will remain effective until all equity interests and assets in Foshan Viomi and Beijing Viomi are sold to Lequan or Yunmi Hulian or the party designated by them. Under this arrangement, Lequan or Yunmi Hulian has the sole discretion to receive an annual service fee at an amount up to 100% of the annual net income of Foshan Viomi and Beijing Viomi, respectively. In addition, Lequan or Yunmi Hulian are entitled to receive other technical service fees at the amount mutually agreed upon by them and the respective VIE.

Due to the Disposal as mentioned above, the existing VIE contractual arrangements between Yunmi Hulian and Foshan Viomi was terminated on July 19, 2024. As part of a pre-closing reorganization, Zhumeng Hulian and Guangzhou Interconnect entered into a new exclusive consultation and service agreement. Under the new exclusive consultation and service agreement, Zhumeng Hulian has the exclusive right to provide or designate any entity affiliated with it to provide VIE the technical and business support services, including information technology support, hardware management and updates, software development, maintenance and updates and other operating services. The exclusive consultation and service agreement could be indefinitely effective unless a written agreement is signed by all parties to terminate it or a mandatory termination is requested by PRC laws or regulations. The exclusive consultation and service agreement was effective on July 20, 2024 and will remain effective until all equity interests and assets in Guangzhou Interconnect are sold to Zhumeng Hulian or the party designated by it. Under this arrangement, Zhumeng Hulian has the sole discretion to receive an annual service fee at an amount up to 100% of the annual net income of Guangzhou Interconnect. In addition, Zhumeng Hulian is entitled to receive other technical service fees at the amount mutually agreed upon by them and the respective VIE.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. **ORGANIZATION AND PRINCIPAL ACTIVITIES (Continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(c)*  ***VIE Arrangements between the VIEs and the Company's PRC subsidiaries (Continued)*** 

***Equity pledge agreement***

Pursuant to the equity pledge agreements in July 2015 among Foshan Viomi, Beijing Viomi, all of their shareholders and Lequan, all shareholders of Foshan Viomi and Beijing Viomi agreed to pledge their equity interests in Foshan Viomi or Beijing Viomi to Lequan to secure the performance of the VIEs' obligations under the existing exclusive purchase option agreement, shareholder voting proxy agreement, exclusive consulting and service agreement and also the equity pledge agreement. The Pledge will remain binding until Foshan Viomi, Beijing Viomi and their shareholders discharge all their obligations under the contractual agreements. In April 2020, Lequan assigned and transferred its rights and obligations under the original agreements to Yunmi Hulian.

Due to the Disposal as mentioned above, the existing VIE contractual arrangements between Yunmi Hulian and Foshan Viomi was terminated on July 19, 2024. As part of a pre-closing reorganization, Zhumeng Hulian and Guangzhou Interconnect entered into a new equity pledge agreement on July 20, 2024. Pursuant to the new equity pledge agreement among Zhumeng Hulian, Guangzhou Interconnect and its shareholder, the shareholder of Guangzhou Interconnect agreed to pledge its equity interests in Guangzhou Interconnect to Zhumeng Hulian to secure the performance of the VIE's obligations under the existing exclusive purchase option agreement, shareholder voting proxy agreement, exclusive consulting and service agreement and also the equity pledge agreement. The Pledge will remain binding until Guangzhou Interconnect and its shareholder discharge all their obligations under the contractual agreements.

***Exclusive purchase option agreement.***

Lequan, Foshan Viomi, Beijing Viomi and their shareholders entered into exclusive option agreements in July 2015. In April 2020, Lequan assigned and transferred its rights and obligations under the original agreements to Yunmi Hulian, which succeeded Lequan as a party to such agreement and assumed its rights and obligations thereunder. Pursuant to the exclusive option agreements, the shareholders of Foshan Viomi and Beijing Viomi are obligated to sell their equity interest to Lequan or Yunmi Hulian. Lequan or Yunmi Hulian has the exclusive and irrevocable right to purchase, or cause the shareholders of Foshan Viomi and Beijing Viomi to sell to the party designated by them, in Lequan or Yunmi Hulian's sole discretion, all of the shareholders' equity interests or any assets in Foshan Viomi and Beijing Viomi when and to the extent that applicable PRC law permits Lequan or Yunmi Hulian to own such equity interests and assets in Foshan Viomi and Beijing Viomi. The price to be paid will be the minimum amount of consideration permitted by applicable PRC law at the time when such transaction occurs. All of the shareholders promised and agreed that they will refund the consideration once received to Lequan or Yunmi Hulian or any party designated by them within 10 working days. Also, the shareholders of Foshan Viomi and Beijing Viomi should try their best to help Foshan Viomi and Beijing Viomi develop well and are prohibited from transferring, pledging, intentionally terminating significant contracts or otherwise disposing of any significant assets in Foshan Viomi and Beijing Viomi without Lequan or Yunmi Hulian's prior written consent. The exclusive option agreement will remain effective until all equity interests and assets in Foshan Viomi and Beijing Viomi are sold to Lequan or Yunmi Hulian or the party designated by them.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

**1.** **ORGANIZATION AND PRINCIPAL ACTIVITIES (Continued)**

(c)***VIE Arrangements between the VIEs and the Company's PRC subsidiaries (Continued)***

Due to the Disposal as mentioned above, the existing VIE contractual arrangements between Yunmi Hulian and Foshan Viomi was terminated on July 19, 2024. As part of a pre-closing reorganization, Zhumeng Hulian and Guangzhou Interconnect entered into a new exclusive option agreement on July 20, 2024. Pursuant to the exclusive option agreement, the shareholder of Guangzhou Interconnect is obligated to sell its equity interest to Zhumeng Hulian. Zhumeng Hulian has the exclusive and irrevocable right to purchase, or cause the shareholder of Guangzhou Interconnect to sell to the party designated by it, in Zhumeng Hulian's sole discretion, all of the shareholder's equity interests or any assets in Guangzhou Interconnect when and to the extent that applicable PRC law permits Zhumeng Hulian to own such equity interests and assets in Zhumeng Hulian. The price to be paid will be the minimum amount of consideration permitted by applicable PRC law at the time when such transaction occurs. The shareholder promised and agreed that it will refund the consideration once received to Zhumeng Hulian or any party designated by it within 10 working days. Also, the shareholder of Guangzhou Interconnect should try it best to help Guangzhou Interconnect develop well and are prohibited from transferring, pledging, intentionally terminating significant contracts or otherwise disposing of any significant assets in Guangzhou Interconnect without Zhumeng Hulian's prior written consent. The exclusive option agreement will remain effective until all equity interests and assets in Guangzhou Interconnect are sold to Zhumeng Hulian or the party designated by it.

**Shareholder voting proxy agreement**

In July 2015, all of the shareholders of Foshan Viomi and Beijing Viomi have executed a shareholder voting proxy agreement with Lequan, Foshan Viomi and Beijing Viomi, whereby all of the shareholders irrevocably appoint and constitute the person designated by Lequan as their attorney-in-fact to exercise on their behalf any and all rights that the shareholders have in respect of their equity interests in Foshan Viomi and Beijing Viomi. In April 2020, Lequan assigned and transferred its rights and obligations under the original agreement to Yunmi Hulian, which succeeded Lequan as a party to such agreement and assumed its rights and obligations thereunder. The shareholder voting proxy agreement will be indefinitely effective unless all parties decide to terminate it by written agreement.

Due to the Disposal as mentioned above, the existing VIE contractual arrangements between Yunmi Hulian and Foshan Viomi was terminated on July 19, 2024. As part of a pre-closing reorganization, Zhumeng Hulian executed a new shareholder voting proxy agreement with Guangzhou Interconnect on July 20, 2024, whereby the shareholder irrevocably appoint and constitute the person designated by Zhumeng Hulian as their attorney-in-fact to exercise on its behalf any and all rights that the shareholder has in respect of its equity interests in Guangzhou Interconnect. The shareholder voting proxy agreement will be indefinitely effective unless all parties decide to terminate it by written agreement.

In September 2018, Foshan Viomi reduced its registered capital and changed its shareholders from Mr. Chen and Tianjin Jinxing to Mr. Chen alone. Concurrently, the Company entered into a series of contractual arrangements in substantially the same forms with Foshan Viomi and Mr. Chen.

Management therefore concluded that the Company, through its PRC subsidiaries and the above contractual arrangements, has the power to direct the activities that most significantly impact the VIEs' economic performance, bears the risks of and enjoys the rewards normally associated with ownership of the VIEs, and therefore the Company is the ultimate primary beneficiary of these VIEs. Consequently, the financial results of the VIEs were included in the Group's consolidated financial statements.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. **ORGANIZATION AND PRINCIPAL ACTIVITIES (Continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(c)*  ***VIE Arrangements between the VIEs and the Company's PRC subsidiaries (Continued)*** 

#### Risks in relation to VIE structure
The Company believes that the contractual arrangements among its subsidiaries, their VIEs and their respective shareholders are in compliance with PRC laws and regulations and are legally enforceable. However, uncertainties in the PRC legal system could limit Lequan and Zhumeng Hulian's ability to enforce the contractual arrangements. If the legal structure and contractual arrangements were found to be in violation of PRC laws and regulations, the PRC government could:

● revoke the business and operating licenses of the Company's PRC subsidiaries and VIEs;

● discontinue or restrict the operations of any related-party transactions between the Company's PRC subsidiaries and VIEs;

● limit the Company's business expansion in China by way of entering into contractual arrangements;

● impose fines or other requirements with which the Company's PRC subsidiaries and VIEs may not be able to comply;

● impose additional conditions or requirements with which the Company may not be able to comply;

● take other regulatory or enforcement actions against the Company that could be harmful to the Company's business or

● require the Company or the Company's PRC subsidiaries or VIEs to restructure the relevant ownership structure or operations.

The Company's ability to conduct its business may be negatively affected if the PRC government were to carry out any of the aforementioned actions. As a result, the Company may not be able to consolidate its VIEs in its consolidated financial statements as it may lose the ability to exert effective control over the VIEs and their respective shareholders and it may lose the ability to receive economic benefits from the VIEs. The Company, however, does not believe such actions would result in the liquidation or dissolution of the Company, its PRC subsidiaries or VIEs.

Mr. Chen is the ultimate shareholder of Guangzhou Interconnect and the largest shareholder of Beijing Viomi, and Mr. Chen is also the largest beneficiary owner of the Company. The interests of Mr. Chen as the largest beneficiary owner of the VIEs may differ from the interests of the Company as a whole, since Mr. Chen is only one of the beneficiary shareholders of the Company. The Company cannot assert that when conflicts of interest arise, Mr. Chen will act in the best interests of the Company or that conflicts of interests will be resolved in the Company's favor. Currently, the Company does not have existing arrangements to address potential conflicts of interest Mr. Chen may encounter in his capacity as a beneficial owner and director of the VIEs, on the one hand, and as a beneficial owner and director of the Company, on the other hand. The Company relies on Mr. Chen, as a director and executive officer of the Company, to fulfill his fiduciary duties and abide by laws of the PRC and Cayman Islands and act in the best interest of the Company. If the Company cannot resolve any conflicts of interest or disputes between the Company and Mr. Chen, the Company would have to rely on legal proceedings, which could result in disruption of its business, and there is substantial uncertainty as to the outcome of any such legal proceedings.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. **ORGANIZATION AND PRINCIPAL ACTIVITIES (Continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(c)*  ***VIE Arrangements between the VIEs and the Company's PRC subsidiaries (Continued)*** 

In addition, the other shareholder of Beijing Viomi is also a beneficial owner of the Company and therefore have no current interest in seeking to act contrary to the contractual arrangements. However, to further protect the investors' interest from any risk that the shareholders of the Foshan Viomi and Beijing Viomi may act contrary to the contractual arrangements, the Company, through Lequan, entered into a shareholder voting proxy agreement with all of the shareholders of Foshan Viomi and Beijing Viomi in July 2015. The shareholder voting proxy agreement with the shareholder of Foshan Viomi has been updated in September 2018 as Foshan Viomi reduced its registered capital and changed its shareholders from Mr. Chen and Tianjin Jinxing to Mr. Chen alone. In April 2020, Lequan assigned and transferred its rights and obligations of Foshan Viomi under the original agreements to Yunmi Hulian, which succeeded Lequan as a party to such agreement and assumed its rights and obligations thereunder. Due to the Disposal as mentioned above, the existing VIE contractual arrangements between Yunmi Hulian and Foshan Viomi was terminated on July 19, 2024. As part of a pre-closing reorganization, Zhumeng Hulian executed a new shareholder voting proxy agreement with Guangzhou Interconnect on July 20, 2024. Through the shareholder voting proxy agreement, all shareholders of Guangzhou Interconnect and Beijing Viomi have entrusted the person designated by Lequan or Zhumeng Hulian as its proxy to exercise their rights as the shareholders of Zhumeng Hulian and Beijing Viomi with respect to an aggregate of 100% of the equity interests in Zhumeng Hulian and Beijing Viomi.

In March 2019, the National People's Congress enacted PRC Foreign Investment Law which would be effective starting from January 1, 2020. The Foreign Investment Law does not explicitly classify contractual arrangements as a form of foreign investment, but it contains a catch-all provision under the definition of "foreign investment", which includes investments made by foreign investors through means stipulated in laws or administrative regulations or other methods prescribed by the State Council. Existing laws or administrative regulations remain unclear whether the contractual arrangements with variable interest entities will be deemed to be in violation of the market access requirements for foreign investment under the PRC laws and regulations. However, the possibility that such entities will be deemed as foreign invested enterprise and subject to relevant restrictions in the future shall not be excluded. If variable interest entities fall within the definition of foreign investment entities, the Company's ability to use the contractual arrangements with its VIEs and the Company's ability to conduct business through the VIEs could be severely limited.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. **ORGANIZATION AND PRINCIPAL ACTIVITIES (Continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(c)*  ***VIE Arrangements between the VIEs and the Company's PRC subsidiaries (Continued)*** 

The following table sets forth the assets, liabilities, results of operations and cash flows of the VIEs and its subsidiaries taken as a whole on an aggregated basis, which were included in the Group's consolidated financial statements. For purposes of this presentation, activity within and between the VIEs and their subsidiaries have been eliminated, but transactions with other entities within the Consolidated Group have been included without elimination.

---

| | | |
|:---|:---|:---|
|  | **As of December 31,**  | **As of December 31,**  |
|  | **2023** | **2024** |
|  | **RMB** | **RMB** |
| Cash and cash equivalents | 28 | 7179 |
| Accounts receivable from third parties (net of allowance of nil and RMB19 as of December 31, 2023 and 2024, respectively) |  | 62 |
| Amounts due from Group companies |  | 498455 |
| Inventories | 48794 | 68 |
| Other assets | 42604 | 6438 |
| **Total assets** | 91426 | 512202 |
| Accounts and notes payable |  | 4320 |
| Amounts due to Group companies |  | 168 |
| Accrued expenses and other liabilities | 43914 | 1046 |
| Other liabilities | 14971 | 186 |
| **Total liabilities** | 58885 | 5720 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31,**  | **Year ended December 31,**  | **Year ended December 31,**  |
|  | **2022** | **2023** | **2024** |
|  | **RMB** | **RMB** | **RMB** |
| Revenue from Group companies <sup>(1)</sup> | 33574 | 23344 | 49679 |
| Revenue from a related party and third parties | 1581464 | 1433072 | 903402 |
| Cost from Group companies | (921869) | (790069) | (533402) |
| Cost from a related party and third parties | (317877) | (350185) | (312125) |
| Net income (loss) | (54008) | 29046 | 8160 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)  ***Inter-company revenues between VIEs and other subsidiaries*** 

VIEs sell certain products and provide marketing services to other subsidiaries. For the years ended December 31, 2022, 2023 and 2024, the inter-company sales recognized by VIEs to Primary beneficiaries of VIEs and their subsidiaries for the years ended December 31, 2022, 2023 and 2024 are RMB33,574, RMB23,344 and RMB49,679, respectively.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. **SIGNIFICANT ACCOUNTING POLICIES** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(a)*  ***Basis of presentation*** 

The consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") to reflect the financial position, results of operations and cash flows of the Group. Significant accounting policies followed by the Group in the preparation of the consolidated financial statements are summarized below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(b)*  ***Consolidation*** 

The Group's consolidated financial statements include the financial statements of the Company, its subsidiaries and VIEs for which the Company or its subsidiaries are the primary beneficiaries. All transactions and balances among the Company, its subsidiaries and VIEs have been eliminated upon consolidation.

A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting powers; or has the power to appoint or remove the majority of the members of the board of directors; or to cast a majority of votes at the meeting of directors; or has the power to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders.

A VIE is an entity in which the Company, or its subsidiaries, through contractual agreements, bears the risks of, and enjoys the rewards normally associated with ownership of the entity, and therefore the Company or its subsidiaries are the primary beneficiary of the entity. In determining whether the Company or its subsidiaries are the primary beneficiary, the Company considered whether it has the power to direct activities that are significant to the VIE's economic performance, and also the Company's obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. Lequan, Zhumeng Hulian and ultimately the Company hold all the variable interests of the VIE and has been determined to be the primary beneficiary of the VIE. As a result of the transaction to Mr. Chen on August 31, 2024, the Group no longer consolidates the results of Foshan Yunmi and its subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(c)*  ***Use of estimates*** 

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. Significant accounting estimates reflected in the Group's consolidated financial statements include sales returns, inventory valuation, product warranties, share-based compensation, allowance for credit losses, and the valuation allowance for deferred tax assets and income tax. Actual results could differ from those estimates, and such differences may be material to the consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(d)*  ***Foreign currency translation*** 

The Group uses Renminbi ("RMB") as its reporting currency. The functional currency of the Company and its subsidiaries incorporated in Hong Kong and British Virgin Islands are United States dollar ("US$"), while the functional currency of the Group's entities in the PRC is RMB, which is their respective local currency. In the consolidated financial statements, the financial information of the Company and its subsidiaries in Hong Kong and British Virgin Islands, which use US$ as their functional currency, have been translated into RMB. Assets and liabilities are translated at the exchange rates on the balance sheet date, equity amounts are translated at historical exchange rates, and revenues, expenses, and incomes are translated using the average exchange rate for the period. Translation adjustments arising from these are reported as foreign currency translation adjustments and are shown as a component of other comprehensive income in the statements of comprehensive income (loss).

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. **SIGNIFICANT ACCOUNTING POLICIES (Continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(d)*  ***Foreign currency translation (Continued)*** 

Foreign currency transactions denominated in currencies other than functional currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are remeasured at the applicable rates of exchange in effect at that date. Foreign exchange gains and losses resulting from the settlement of such transactions and from remeasurement at year-end are recognized in foreign currency exchange (losses) gains, net in the consolidated statements of comprehensive income (loss).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(e)*  ***Convenience translation*** 

Translations of balances in the consolidated balance sheets, consolidated statements of comprehensive income (loss) and consolidated statements of cash flows from RMB into US$ as of and for the year ended December 31, 2024 are solely for the convenience of the reader and were calculated at the noon buying rate of US$1.00 = RMB7.2993 on December 31, 2024 as set forth in the H.10 statistical release of the U.S. Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on December 31, 2024, or at any other rate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(f)*  ***Cash and cash equivalents*** 

Cash includes currency on hand and deposits held by financial institutions that can be added to or withdrawn without limitation. Cash equivalents represent short-term and highly liquid investments placed with banks, and all highly liquid investments with original maturities of three months or less, which have both of the following characteristics:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i) Readily convertible to known amounts of cash throughout the maturity period;

ii) So near their maturity that they present insignificant risk of changes in value because of changes in interest rates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(g)***  ***Restricted cash*** 

Cash that is restricted as to withdrawal or for use or pledged as security is reported separately on the face of the consolidated balance sheets. Restricted cash is included in the total cash and cash equivalents and restricted cash in the consolidated statements of cash flows when reconciling the beginning-of-period and end-of-period total amounts shown on the statements of cash flows. The Group's restricted cash mainly represents security deposits held in designated bank accounts for issuance of bank acceptance notes and foreign exchange deposits in the bank of mainland China.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(h)*  ***Short-term deposits*** 

Short-term deposits represent time deposits placed with banks with original maturities of more than three months but less than one year. Interest earned is recorded as interest income in the consolidated statements of comprehensive income (loss).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(i)*  ***Short-term investments*** 

In accordance with ASC 825, for investments in financial instruments with a variable interest rate indexed to the performance of underlying assets, the Group elected the fair value method at the date of initial recognition and carried these investments subsequently at fair value. Changes in fair values are reflected in the consolidated statements of comprehensive income (loss).

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. **SIGNIFICANT ACCOUNTING POLICIES (Continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(j)*  ***Accounts receivable*** 

Accounts receivable are stated at the historical carrying amount net of allowance for credit losses. On January 1, 2020, the Group adopted ASC326, "Financial Instruments—Credit Losses" using modified retrospective transition approach. The Group provides an allowance against accounts receivable to the amount management reasonably believe will be collected. The Group writes off trade receivable when they are deemed uncollectible.

The Group maintains an allowance for credit losses which reflects its best estimate of amounts that potentially will not be collected. Accounts receivable have been grouped based on shared credit risk characteristics and days past due to estimate, taking into consideration various factors including but not limited to historical collection experience and credit-worthiness of the debtors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(k)*  ***Inventories, net*** 

Inventories are stated at the lower of cost or net realizable value ("NRV"). Inventory costs are calculated on the actual cost basis including expenses that are directly or indirectly incurred in the purchase, and production of manufactured product. Expenses include the cost of materials, consignment manufacturing cost and other direct costs. Cost is determined using the weighted average method. The Group assesses the valuation of inventory and periodically writes down the value for inventories when their costs are lower than the NRV. The NRV is determined based on the estimated net selling prices less the estimated costs to completion and other costs necessary to make the sale. Determination of estimated net selling prices of finished goods, estimated costs to completion and other costs necessary to make the sale requires significant management judgements, taking into consideration historical actual information and expected future market trends.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(l)*  ***Long-term deposits*** 

Long-term deposits represent time deposits placed with banks with original maturities of more than one year. Interest earned is recorded as interest income in the consolidated statements of comprehensive income (loss).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(m)*  ***Property, plant, and equipment, net*** 

Property, plant, and equipment are carried at cost less accumulated depreciation and impairment losses, if any. Depreciation is calculated on a straight-line basis over the following estimated useful lives and residual value. Residual rate is determined based on the economic value of the property, plant and equipment at the end of the estimated useful lives as a percentage of the original cost.

---

| | | |
|:---|:---|:---|
|  | **Estimated useful lives** | **Residual rate** |
| Buildings | 20 years | 5% |
| Computers and equipment | 2-10 years | 0%-5 |
| Vehicle | 4-5 years | 5% |

---

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. **SIGNIFICANT ACCOUNTING POLICIES (Continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(m)*  ***Property, plant and equipment, net (Continued)*** 

Expenditures for maintenance and repairs are expensed as incurred. The gain or loss on the disposal of property, plant and equipment is the difference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated statements of comprehensive income (loss).

Construction in progress represents property, plant, and equipment under construction and pending installation and is stated at cost less accumulated impairment losses, if any. Completed assets are transferred to their respective asset classes and depreciation begins when an asset is ready for its intended use. Interest expense on outstanding debt is capitalized during the period of significant capital asset construction. Capitalized interest expense on construction-in-progress is included within property, plant, and equipment and is amortized over the life of the related assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(n)***  ***Impairment of long-lived assets*** 

The Group reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. When these events occur, the Group measures impairment by comparing the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to result from the use of the assets. If the sum of the expected undiscounted cash flows is less than the carrying amount of the assets, the Group would recognize an impairment loss, which is the excess of carrying amount over the recoverable amount of the assets, using the expected future discounted cash flows. No impairments of long-lived assets were recognized as of December 31, 2023 and 2024.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(o)***  ***Long-term investment*** 

For an investee over which the Group has the ability to exercise significant influence, but does not own a majority equity interest or otherwise control, the Group accounted for those using the equity method. Significant influence is generally considered to exist when the Group has an ownership interest in the voting stock of the investee between 20% and 50%. Other factors, such as representation on the investee's board of directors, voting rights and the impact of commercial arrangements, are also considered in determining whether the equity method of accounting is appropriate. Under the equity method of accounting, the Group's share of the investee's results of operations is included in interest income and investment income, net in the consolidated statements of comprehensive income (loss).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(p)*  ***Land use right, net*** 

Land use right is recorded at cost less accumulated amortization and impairment losses, if any. Amortization is calculated on a straight-line basis over the estimated useful lives which are 50 years that represent the terms of land use right certificate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(q)*  ***Intangible assets, net*** 

Intangible assets mainly consist of software and license. Identifiable intangible assets are carried at acquisition cost less accumulated amortization and impairment losses, if any. Finite-lived intangible assets are tested for impairment if impairment indicators arise. Amortization of finite-lived intangible assets is computed using the straight-line method over their estimated useful lives, which are as follows:

---

| | | |
|:---|:---|:---|
|  |  | **Estimated useful lives** |
| Software |  | 1 - 10 years |
| License |  | 3 - 10 years |

---

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. **SIGNIFICANT ACCOUNTING POLICIES (Continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(r)***  ***Leases*** 

*Lessee accounting*

The Group categorizes leases with contractual terms longer than twelve months as either operating or finance. Finance leases are generally those leases that allow lessees to substantially utilize or pay for the entire asset over its estimated life. Assets acquired under finance leases are recorded in property, plant and equipment, net. All other leases are categorized as operating leases. All the leases recognized by the Group were classified as operating leases for the years presented.

Lease liabilities are recognized at the present value of the fixed lease payments using a discount rate based on similarly secured borrowings available to us. Lease assets are recognized based on the initial present value of the fixed lease payments plus any direct costs from executing the leases or lease prepayments reclassified from "Prepayments and other current assets" upon lease commencement. Costs associated with operating lease assets are recognized on a straight-line basis within operating expenses over the term of the lease.

The Group has elected not to present short - term leases on the consolidated balance sheets as these leases have a lease term of 12 months or less at commencement date of the lease and do not include options to purchase or renew that the Group is reasonably certain to exercise. The Group recognizes lease expenses for such short - term lease generally on a straight - line basis over the lease term.

*Lessor accounting*

The Group rents out its premises to its related parties, which is classified as an operating lease in accordance with Topic 842. The revenue from an operating lease is recognized in revenue in the consolidated statements of comprehensive income (loss) on a straight-line basis over the term of the lease.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(s)*  ***Revenue recognition*** 

In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)" ("ASU 2014-09") and subsequently, the FASB issued several amendments which amend certain aspects of the guidance in ASC 2014-09 (ASU No. 2014-09 and the related amendments are collectively referred to as "ASC 606"). According to ASC 606, revenue is recognized when control of the promised good or service is transferred to the customers, in an amount that reflects the consideration the Group expects to be entitled to in exchange for those goods or services. The Group will enter into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities. The Group adopted ASC 606 for all periods presented.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. **SIGNIFICANT ACCOUNTING POLICIES (Continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(s)*  ***Revenue recognition (Continued)*** 

The Group's revenue is primarily derived from (i) Home water systems, which are composed of smart water purification systems, kettles and heaters, (ii) consumable products complementary to the Group's Home water systems, such as water purifier filters, (iii) Kitchen appliances and others. Refer to Note 15 to the consolidated financial statements for disaggregation of the Group's revenue by type of product and service for the years ended December 31, 2022, 2023, and 2024.

1) The Group conducts its business through various contractual arrangements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)&nbsp;&nbsp;&nbsp;&nbsp; Sales to Xiaomi

The Group generated a substantial portion of its revenues from sales of products to Xiaomi.

Under the cooperation agreement entered into between the Group and Xiaomi, the Group is responsible for design, research, development, production, and delivery of designated products using the brand name of "Xiaomi" ("Xiaomi-branded products"). Xiaomi is responsible for commercial distributions and sales.

Revenue is recognized upon acceptance by this customer, which is considered at the time the control of the products is transferred to Xiaomi. Revenue does not meet the criteria to be recognized over time since 1) even if the products use "Xiaomi" brand, it does not require significant rework to make them suitable to be sold to other customers, 2) under the cooperation agreement, the Group does not have the right of payment for the work performed to date.

For a majority of types of products sold to this customer, the selling price is a fixed amount as agreed by both parties. For other types of products sold to this customer, the sales arrangement includes two installment payments. The first installment is priced to recover the costs incurred by the Group in developing, producing, and shipping the products to this customer and is payable to the Group upon acceptance by the customer after delivery. The Group is also entitled to receive a potential second installment payment calculated as certain portion of the future gross profits from commercial sales made by this customer. Accordingly, the Group determines the sales price as the fixed first installment payment plus the variable second installment payment to the extent that it is probable that revenue reversal will not occur when settling with the customer subsequently. The Group estimates the variable consideration using the expected value method. In assessing the variable second installment payment, the Group takes into consideration of the historical experience with the customer, selling price of the same or similar products as at the report date as well as the recent market trend. Water purifiers products were entitled to second instalment payments. For the years ended December 31, 2022, 2023, and 2024, net revenues earned from second installment payment arrangement represented 3.5%, 3.4% and 10.5% of total revenue from Xiaomi, respectively.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. **SIGNIFICANT ACCOUNTING POLICIES (Continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(s)*  ***Revenue recognition (Continued)*** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)&nbsp;&nbsp;&nbsp;&nbsp;Sales to third-party customers, including: sales to leading e-commerce platforms and offline stores; and sales to customers directly through the online platforms operated by Xiaomi, third parties and the Group.

The Group recognizes revenue for the sales to third-party customers in accordance with the applicable revenue recognition method for each of the distinct performance obligation identified. Sales of products is recognized upon acceptance by customers after delivery. Installation services revenues are recognized when the services are rendered.

*- Sales to leading e-commerce platforms and offline experience stores*

Pursuant to the contracts between the Group and the leading e-commerce platforms/offline experience stores ("e-commerce platforms and stores"), the e-commerce platforms and stores have legal title and physical possession of the products upon acceptance and they would bear the risk of loss due to physical damage before the products are transferred and accepted by end customers. The e-commerce platforms and stores are responsible for delivering the products to end customers and can direct the use of the products and obtain the remaining benefits from the products by reselling the products. The e-commerce platforms and stores have flexibility in determining the retail sales price within relatively broad price range set by the Group. Based on these indicators, the Group determined the e-commerce platforms and stores (as opposed to the end customers) as its customers according to ASC 606-10-55-39. The Group recognizes revenue equal to the sales price to the e-commerce platforms and stores when control of the inventory is transferred.

*- Sales to customers directly through the online platforms operated by Xiaomi, third parties and the Group*

Under the cooperation agreements entered between the Group and online platforms, the platforms' responsibilities are limited to offering an online marketplace, while the Group is primarily obligated in a sales transaction and takes inventory risk and has latitude in determining prices. The platforms charged the Group commission fees at pre-determined amounts or a fixed rate based on the sales amounts. Commission fees are recognized as selling expenses. The Group determined the end customers (as opposed to the platforms) as its customers and recognizes revenue equal to the sales price to the end customers when control of the inventory is transferred.

*- Rendering of services*

The Group provides installation service to end customers for designated Viomi-branded products without separate charge. The end customers have the right, not the obligation, to ask the Group to provide installation service. The installation service is considered being distinct and accounted for as a separate performance obligation as the products and installation services are not inputs into a combined item the end customer has contracted to receive. In addition, the Group does not provide any significant integration, modification, or customization services. It can fulfill its obligation to transfer each of the products or services separately. End customers do not always exercise their rights to ask for installation services as the installation may not be complicated and could be done by end customers themselves. Therefore, the Group expects to be entitled to a breakage amount in the contract liabilities related to installation services. The Group estimates the breakage portion based on historical customers' requests and recognizes estimated breakage as revenue in proportion to the pattern of rights exercised by end customers on a semi – annually basis. Changes in estimated breakage should be accounted for by adjusting contract liabilities to reflect the remaining rights expected to be exercised.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. **SIGNIFICANT ACCOUNTING POLICIES (Continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(s)*  ***Revenue recognition (Continued)*** 

Judgment is required to determine standalone selling price for each distinct performance obligation. The Group allocates the arrangement consideration to the separate accounting of each distinct performance obligation based on their relative standalone selling price. The standalone selling price of the products is determined based on adjusted market assessment approach by estimating the price the customer is willing to pay for the product without installation service. For the standalone selling price of the installation services, the Group semi-annually determines it by using a cost plus margin approach by referring to actual installation costs charged by the third-party vendors, plus an estimated profit margin of 5% based on consideration of both company specific and relevant market factors.

2) Sales returns and sales incentives

*- Sales to leading e-commerce platforms*

The Group's sales to leading e-commerce platforms started in 2018. As stipulated in the contracts, slow-moving goods are those unsold products after they are controlled by the e-commerce platforms for more than 30 days or 45 days or 60 days, depending on the different categories of products. The Group shall coordinate with the e-commerce platforms to sell the slowing-moving products to end customers through promotions within 30 or 60 days, otherwise, the e-commerce platforms can (i) return such slow-moving products, or (ii) sell on discount as determined by the e-commerce platforms. The Group shall bear all losses caused by such discounted sales. Based on the Group's history of cooperation with the e-commerce platforms and the pattern that the e-commerce platforms dealt with slow-moving goods, the Group estimates that slow-moving goods will be returned to the Group instead of being sold through discounted sales by the e-commerce platforms. Under ASC 606, a right of return is not a separate performance obligation, but it affects the estimated transaction price for transferred goods. Revenue is only recognized for those products that are not expected to be returned. The estimate of expected returns should be determined in the same way as other variable consideration. Based on historical information and other relevant evidence, including the expected sales and inventory level of the e-commerce platforms, the Group assesses if it is probable there will be no significant reversal of cumulative revenue, and recognizes those sales as revenue. For the years ended December 31, 2022, 2023, and 2024, the expected sales return was RMB340, RMB24 and RMB198, respectively. Accordingly, the Group recognizes an expected return asset of RMB17 and RMB88 and a refund liability of RMB27 and RMB224 as of December 31, 2023 and 2024, respectively. The Group would update its estimate of expected returns at each period end. The expected return asset is presented and assessed for impairment separately from the refund liability. The Group would assess the expected return asset for impairment, and adjust the value of the asset if it becomes impaired. Further, the Group might provide various consideration to the e-commerce platforms, such as gross margin guarantee, advertising and promotion fees, in the form of cash, or directly reducing amounts owed to the Group by the e-commerce platforms. The Group evaluates each type of incentives or fees to be paid in accordance with ASC 606. Considering that the Group either does not receive any service from the e-commerce platforms or cannot elect to engage another vendor to provide similar advertising services on a standalone basis, the Group reduces the transaction price for the sale of products by the amount of various consideration payable to the e-commerce platforms.

*- 7 days unconditional sales return*

Under the consumer protection law, end customers have an unconditional right to return the products purchased through online platforms within 7 days. The Group bases its estimates of sales return on historical results. For the years ended December 31, 2022, 2023, and 2024, the amount of sales return was insignificant. The Group may provide sales incentives in the forms of discounts to end customers through online platforms for a group of products. Revenue, recognized on a net basis after such sales incentives, are allocated based on the relative standalone selling prices for respective products.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. **SIGNIFICANT ACCOUNTING POLICIES (Continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(s)*  ***Revenue recognition (Continued)*** 

3) Warranty

The Group offers product warranty pursuant to standard product quality required by consumer protection law. The warranty period is calculated starting from the date when products are sold to the end customers. The Group has the obligation, at the customer's sole discretion, to either repair or replace the defective product. The customers cannot separately purchase the warranty and the warranty doesn't provide the customer with additional service other than assurance that the product will function as expected. Therefore, these warranties are accounted for in accordance with ASC 460 Guarantees. At the time revenue is recognized, an estimate of warranty expenses is recorded. The reserves established are regularly monitored based upon historical experience and any actual claims charged against the reserve. Warranty reserves are recorded as cost of revenues.

4) Value added taxes

Value added taxes ("VAT") on sales is calculated at 13% after April 1, 2019. The Group reports revenue net of VAT. Subsidiaries and VIEs that are VAT general taxpayers are allowed to offset qualified VAT paid against their output VAT liabilities.

5) Contract balances

Key customers, including Xiaomi and third-party customers, are entitled to a credit term. The expected length of time between the products being transferred to customers and when they pay for those products is short. There is no difference between the amount of promised consideration and the cash selling price of the promised products. Therefore, the Group concludes that the contracts with these key customers generally do not include a significant financing component. The allowance for credit losses reflects the Group's best estimate of probable losses inherent in the accounts receivable balance. The Group determines the allowance based on known troubled accounts, historical experience, and other currently available evidence. The amount of the allowance for credit losses is recognized as expenses.

As of December 31, 2023 and 2024 accounts and notes receivable were RMB57,832 and RMB626,290, respectively. During the year ended December 31, 2023 and 2024, the Group recognized impairments, net of recoveries, for accounts receivable from customers amounted to RMB1,321 and RMB1,306, respectively.

The Group does not have contract assets as of December 31, 2023 and 2024. Contract liabilities consist of deferred revenue related to the Group's provision of installation services, where there is still an obligation to be fulfilled by the Group. The contract liabilities will be recognized as revenue when all of the revenue recognition criteria are met.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. **SIGNIFICANT ACCOUNTING POLICIES (Continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(s)*  ***Revenue recognition (Continued)*** 

As of December 31, 2023 and 2024, deferred revenue were RMB1,763 and RMB1,864, respectively. During the years ended December 31, 2023 and 2024, the Group recognized revenue of installation services amounted to RMB275 and RMB1,763, respectively, that was included in the corresponding contract liability balance at the beginning of the years. The Group expects to recognize approximately RMB1,864 of the unearned amount for the Group's remaining performance obligations related to installation services in 2025. During the years ended December 31, 2023 and 2024, the Group does not have any arrangement where the performance obligations have already been satisfied in the past period, but the corresponding revenue is only recognized in a later period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(t)*  ***Cost of revenues*** 

Cost of revenues consists primarily of material costs, warranty, consignment manufacturing cost, salaries and benefits for staff engaged in production activities and related expenses that are directly attributable to the production of products.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(u)*  ***Research and development expenses*** 

Research and development expenses primarily consist of salaries and benefits as well as share-based compensation for research and development personnel, materials, general expenses and depreciation expenses associated with research and development activities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(v)*  ***Selling and marketing expenses*** 

Selling and marketing expenses consist primarily of (i) advertising and market promotion expenses, (ii) shipping expenses and (iii) salaries and welfare for sales and marketing personnel. The advertising and market promotion expenses amounted to RMB74,381, RMB62,107 and RMB53,234 for the years ended December 31, 2022, 2023, and 2024, respectively. The shipping expenses amounted to RMB88,267, RMB66,870 and RMB50,416 for the years ended December 31, 2022, 2023, and 2024, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(w)*  ***General and administrative expenses*** 

General and administrative expenses consist primarily of (i) share-based compensation for management and administrative personnel, and (ii) salaries and welfare for general and administrative personnel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(x)*  ***Government subsidies*** 

Government subsidies represent tax refund and government grants received from local government authorities to encourage the Group's technology and innovation. The Group records such government subsidies as other income in the consolidated statements of comprehensive income (loss) when it has fulfilled all of its obligation related to the subsidy. The Group recorded RMB13,460, RMB8,641 and RMB36,213 of subsidy income for the years ended December 31, 2022, 2023, and 2024, respectively.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. **SIGNIFICANT ACCOUNTING POLICIES (Continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(y)*  ***Employee benefits*** 

Full time employees of the Group in the PRC participate in a government mandated defined contribution plan, pursuant to which certain pension benefits, medical care, employee housing fund and other welfare benefits are provided to the employees. Chinese labor regulations require that the PRC subsidiaries and VIEs of the Group make contributions to the government for these benefits based on certain percentages of the employees' salaries, up to a maximum amount specified by the local government. The Group has no legal obligation for the benefits beyond the contributions made. The total amounts of such employee benefit expenses, which were expensed as incurred, were approximately RMB11,494, RMB18,857 and RMB14,188 for the years ended December 31, 2022, 2023, and 2024, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(z)*  ***Share-based compensation*** 

Share-based compensation expenses arise from share -based awards, mainly including share options for the purchase of ordinary shares for the periods presented. The Group accounts for share-based awards granted to the employees in accordance with ASC 718 Stock Compensation.

For share options for the purchase of ordinary shares granted to employees determined to be equity classified awards, the related share-based compensation expenses are recognized in the consolidated financial statements based on their grant date fair values which are calculated using the binomial option pricing model. The determination of the fair value is affected by the share price as well as assumptions regarding a number of complex and subjective variables, including the expected share price volatility, actual and projected employee share option exercise behavior, risk-free interest rates and expected dividends. Share-based compensation expenses are recorded net of estimated forfeitures using graded-vesting method during the service period requirement, such that expenses are recorded only for those share-based awards that are expected to ultimately vest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(aa)*  ***Current expected credit losses*** 

The Group's accounts and notes receivable and other receivables from related parties and third parties are within the scope of ASC Topic 326. The Group has identified the relevant risk characteristics of its customers and the related accounts and notes receivable and other receivables based on their credit rating. Receivables with similar risk characteristics have been grouped into pools. For each pool, the Group considers the historical credit loss experience, current economic conditions, supportable forecasts of future economic conditions, and any recoveries in assessing the lifetime expected credit losses. Other key factors that influence the expected credit loss analysis include payment terms offered in the normal course of business to customers and industry-specific factors that could impact the Group's receivables. Additionally, macroeconomic factors are also considered. This is assessed at each period based on the Group's specific facts and circumstances. For the years ended December 31, 2022, 2023, and 2024, the Group recorded expected credit losses of RMB7,972, RMB2,563, and RMB(4,360), respectively in general and administrative expenses. As of December 31, 2023 and 2024, the expected credit loss provision for the accounts and notes receivable and other receivables is RMB16,631 and RMB10,965, respectively. The decrease is primarily attributable to the improved receivables turnover which leads to a reversal of allowance for expected credit loss.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. **SIGNIFICANT ACCOUNTING POLICIES (Continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(aa)*  ***Current expected credit losses (Continued)*** 

The following table summarizes the activity in the allowance for credit losses related to accounts and notes receivable and other receivables from related parties for the years ended December 31, 2023 and 2024:

---

| | | |
|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** |
|  | **2023** | **2024** |
|  | **RMB** | **RMB** |
| Balance at beginning of the year | 15389 | 16631 |
| Current year provision | 2574 | 264 |
| Reversals | (11) | (4624) |
| Write off | (1321) | (1306) |
| Balance at end of the year | 16631 | 10965 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(bb)*  ***Income taxes*** 

Current income taxes are provided on the basis of net income for financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions. Deferred income taxes are accounted for using an asset and liability method. Under this method, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The tax base of an asset or liability is the amount attributed to that asset or liability for tax purpose. The effect on deferred taxes of a change in tax rates is recognized in the statements of comprehensive income (loss) in the period of change. A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered more likely than not that some portion of, or all of the deferred tax assets will not be realized.

#### Uncertain tax positions
The guidance on accounting for uncertainties in income taxes prescribes a more likely than not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Guidance was also provided on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures. Significant judgment is required in evaluating the Group's uncertain tax positions and determining its provision for income taxes. The Group recognizes interests and penalties, if any, under accrued expenses and other current liabilities on its consolidated balance sheets and under other expenses in its statements of comprehensive income (loss). The Group did not recognize any interest and penalties associated with uncertain tax positions for the years ended December 31, 2022, 2023, and 2024. As of December 31, 2023 and 2024, the Group did not have any significant unrecognized uncertain tax positions.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. **SIGNIFICANT ACCOUNTING POLICIES (Continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(cc)*  ***Comprehensive income (loss)*** 

Comprehensive income (loss) consists of two components, net income (loss) and other comprehensive income, net of tax. Other comprehensive income (loss) refers to revenue, expenses, and gains and losses that are recorded as an element of shareholders' equity but are excluded from net income (loss). The Group's other comprehensive income consists of foreign currency translation adjustments from its entities not using the RMB as their functional currency. Comprehensive income (loss) is reported in the consolidated statements of comprehensive income (loss).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(dd)*  ***Statutory reserves*** 

The Company's subsidiaries and VIEs established in the PRC are required to make appropriations to certain non-distributable reserve funds.

In accordance with the laws applicable to the Foreign Investment Enterprises established in the PRC, the Company's subsidiaries registered as wholly-owned foreign enterprise have to make appropriations from their annual after-tax profits (as determined under generally accepted accounting principles in the PRC("PRC GAAP") to reserve funds including general reserve fund, enterprise expansion fund and staff bonus and welfare fund. The appropriation to the general reserve fund must be at least 10% of the annual after-tax profits calculated in accordance with PRC GAAP. Appropriation is not required if the general reserve fund has reached 50% of the registered capital of the company. Appropriations to the enterprise expansion fund and staff bonus and welfare fund are made at the respective company's discretion.

In addition, in accordance with the PRC Company Laws, the Group's VIEs registered as Chinese domestic company must make appropriations from its annual after-tax profits as determined under the PRC GAAP to non-distributable reserve funds including statutory surplus fund and discretionary surplus fund. The appropriation to the statutory surplus fund must be 10% of the annual after-tax profits as determined under PRC GAAP. Appropriation is not required if the statutory surplus fund has reached 50% of the registered capital of the company. Appropriation to the discretionary surplus fund is made at the discretion of the company.

The use of the general reserve fund, enterprise expansion fund, statutory surplus fund and discretionary surplus fund are restricted to offsetting of losses or increasing of the registered capital of the respective company. The staff bonus and welfare fund are a liability in nature and is restricted to fund payments of special bonus to employees and for the collective welfare of all employees. None of these reserves are allowed to be transferred to the Company in terms of cash dividends, loans or advances, nor can they be distributed except under liquidation.

There were no appropriations to statutory reserve funds during the years ended December 2023 and 2024. Statutory reserve funds amounting to RMB12,517 and RMB12,517 were recognized in additional paid-in capital as of December 31, 2023 and 2024, respectively.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. **SIGNIFICANT ACCOUNTING POLICIES (Continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(ee)*  ***Income per share*** 

Basic income per share is computed by dividing net income attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period using the two-class method. Under the two-class method, net income is allocated between ordinary shares and other participating securities based on their participating rights. Net losses are not allocated to other participating securities if based on their contractual terms they are not obligated to share the losses.

Diluted income per share is calculated by dividing net income attributable to ordinary shareholders, as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares consist of ordinary shares issuable upon the exercise of share options using the treasury stock method. Ordinary equivalent shares are not included in the denominator of the diluted income per share calculation when inclusion of such shares would be anti-dilutive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(ff)*  ***Related parties*** 

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or significant influence, such as a family member or relative, shareholder, or a related corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(gg)*  ***Discontinued operations*** 

In accordance with ASU No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, a disposal of a component of an entity or a group of components of an entity is required to be reported as discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results when the components of an entity meets the criteria in paragraph 205-20-45-1E to be classified as held for sale. When all of the criteria to be classified as held for sale are met, including management, having the authority to approve the action, commits to a plan to sell the entity, the major current assets, other assets, current liabilities, and non-current liabilities shall be reported as components of total assets and liabilities separate from those balances of the continuing operations. At the same time, the results of all discontinued operations, less applicable income taxes benefit, shall be reported as a component of net loss separate from the net loss of continuing operations in accordance with ASC 205-20-45. For a component that meets the criteria of discontinued operations, the historical financial results are reflected in the Group's consolidated financial statements as discontinued operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(hh)*  ***Segment reporting*** 

In November 2023, the FASB issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures (Topic 280). This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker ("CODM") and included within each reported measure of a segment's profit or loss. This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment's profit or loss in assessing segment performance and deciding how to allocate resources. The Group adopted this ASU commencing January 1, 2024 which was applied retrospectively to all prior periods presented, and the adoption of the ASU did not have a material impact on the Group's financial statements.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. **SIGNIFICANT ACCOUNTING POLICIES (Continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(hh)*  ***Segment reporting (Continued)*** 

ASC Topic 280, "Segment Reporting," requires use of the "management approach" model for segment reporting. The management approach model is based on the way a company's Chief Operating Decision Maker ("CODM") organizes segments within the Group for making operating decisions assessing performance and allocating resources. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company. The Group's CODM has been identified as the Chairman of the Board of Directors/CEO, who reviews consolidated results including revenue, gross profit and operating profit at a consolidated level only. The Group does not distinguish between products and services for the purpose of making decisions about resources allocation and performance assessment. Therefore, the Group has only one operating segment and one reportable segment. Management determined the Group's operations constitute a single reportable segment. This reflects the fact that the Group's CODM continues to evaluate its financial information and resources, and continues to assess the performance of these resources, on a consolidated basis. All required financial segment information is therefore included in the Group's consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(ii)*  ***Recently issued accounting pronouncements not yet adopted*** 

In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance. This ASU will result in the required additional disclosures being included in the Group's consolidated financial statements, once adopted.

In November 2024, the FASB issued ASU No. 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures. This ASU requires entities to 1. disclose amounts of (a) purchase of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and, (e) depreciation, depletion, and amortization recognized as part of oil-and gas-producing activities, 2. include certain amounts that are already required to be disclosed under current Generally Accepted Accounting Principles in the same disclosures as other disaggregation requirements, 3. disclose a qualitative description of the amounts remaining in relevant expense captions that are not necessarily disaggregated quantitatively, and 4. disclose the total amount of selling expenses, in annual reporting periods, an entity's definition of selling expense. The ASU is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Additionally, in January 2025, the FASB issued ASU No. 2025-01 to clarify the effective date of ASU 2024-03. The standard provides guidance to expand disclosures related to the disaggregation of income statement expenses. The standard requires, in the notes to the financial statements, disclosure of specified information about certain costs and expenses which includes purchases of inventory, employee compensation, depreciation, and intangible asset amortization included in each relevant expense caption. This guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, on a retrospective or prospective basis, with early adoption permitted. The Group plans to adopt this guidance effective January 1, 2027 and the Group is currently evaluating the impact of adopting this ASU on its consolidated financial statements.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.** **SIGNIFICANT ACCOUNTING POLICIES (Continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(ii)***  ***Recently issued accounting pronouncements not yet adopted (Continued)*** 

In May 2025, the FASB issued ASU No. 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Accounting Acquirer in a Business Combination Involving a Variable Interest Entity. This ASU clarifies that when a business that is a VIE is acquired primarily with equity interests, the determination of the accounting acquirer should follow ASC 805 rather than defaulting to the primary beneficiary under ASC 810. The standard is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. Early adoption is permitted. The Group plans to adopt this guidance effective January 1, 2027 and the Group is currently evaluating the impact of adopting this ASU on its consolidated financial statements.

In May 2025, the FASB issued ASU No. 2025-04, Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer. This ASU clarifies how entities account for share-based consideration payable to a customer. The ASU requires customer awards with vesting conditions tied to purchases to be treated as performance conditions, eliminates the forfeiture policy election, and states that the variable consideration constraint under ASC 606 does not apply to these awards. The standard is effective for annual periods beginning after December 15, 2026, with early adoption permitted. The Group plans to adopt this guidance effective January 1, 2027 and the Group is currently evaluating the impact of adopting this ASU on its consolidated financial statements.

In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. This ASU provides a practical expedient for all entities related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under Topic 606. The standard is effective for annual periods beginning after December 15, 2025. Early adoption of ASU 2025-05 is permitted and should be applied prospectively. The Group plans to adopt this guidance effective January 1, 2026 and the Group is currently evaluating the impact of adopting this ASU on its consolidated financial statements.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.** **DISCONTINUED OPERATIONS** 

**Disposal of Foshan Viomi and its subsidiaries**

On July 19, 2024, the Group entered into definitive agreements with Mr. Chen, and an entity controlled by Mr. Chen (Refer to Note 1). Accordingly, the assets and liabilities of Foshan Viomi and its subsidiaries were classified as "Assets held for sale" and "Liabilities held for sale" within current and non-current assets and liabilities, respectively, on the consolidated balance sheets. The results of operations of Foshan Viomi and its subsidiaries have been reclassified to "net loss from discontinued operations" in the consolidated statements of comprehensive income (loss).

The following tables set forth the assets, liabilities, statements of operations and cash flows of discontinued operations which were included in the Group's consolidated financial statements (in thousands):

---

| | | |
|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** |
|  | **2023** | **2024** |
|  | **RMB** | **RMB** |
| **Assets** |  |  |
| Current assets |  |  |
| Cash and cash equivalents | 285310 |  |
| Restricted cash | 125718 |  |
| Short-term deposits | 188570 |  |
| Short-term investments | 51864 |  |
| Accounts and notes receivable from third parties | 189966 |  |
| Accounts receivable from a related party | 319858 |  |
| Other receivables from related parties | 124 |  |
| Inventories, net | 284916 |  |
| Prepaid expenses and other current assets | 85353 |  |
| Long-term deposits-current portion | 30000 |  |
| **Total current assets** | **1561679** |  |
| **Non-current assets** |  |  |
| Property, plant and equipment, net | 35759 |  |
| Deferred tax assets | 6065 |  |
| Prepaid expenses and other non-current assets | 8289 |  |
| Right-of-use assets, net | 12 |  |
| Long-term investment | 20300 |  |
| **Total non-current assets** | **70425** |  |
| **Total assets** | **1632104** |  |
| **Liabilities** |  |  |
| **Current liabilities** |  |  |
| Accounts and notes payable | 348879 |  |
| Advances from customers | 101505 |  |
| Accrued expenses and other liabilities | 131400 |  |
| Amount due to related parties | 15024 |  |
| Short-term borrowing | 100000 |  |
| Income tax payables | 16131 |  |
| Lease liabilities due within one year | 23 |  |
| **Total current liabilities** | **712962** |  |
| Accrued expenses and other liabilities - non-current portion | 12766 |  |
| **Total non-current liabilities** | **12766** |  |
| **Total liabilities** | **725728** |  |

---

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

**3.** **DISCONTINUED OPERATIONS (Continued)**

**Disposal of Foshan Viomi and its subsidiaries (Continued)**

---

| | | | |
|:---|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2022** | **2023** | **2024** |
|  | **RMB** | **RMB** | **RMB** |
| **Net revenues:** |  |  |  |
| A related party | 66742 | 24434 | 5821 |
| Third parties | 1375744 | 830216 | 293050 |
| **Total net revenues** | **1442486** | **854650** | **298871** |
| Cost of revenues | (1299896) | (807146) | (297289) |
| Gross profit | **142590** | **47504** | **1582** |
| Operating expenses: |  |  |  |
| Research and development expenses | (89993) | (74032) | (41245) |
| Selling and marketing expenses | (332602) | (187156) | (54681) |
| General and administrative expenses | (61192) | (24162) | (7667) |
| **Total operating expenses** | **(483787)** | **(285350)** | **(103593)** |
| Other income, net | 9229 | 8623 | 4320 |
| Loss from operations | **(331968)** | **(229223)** | **(97691)** |
| Interest and investment income (loss), net | (138) | 13062 | 3846 |
| Other non-operating loss | (1) | (1500) |  |
| **Loss before income tax (expenses) credits** | **(332107)** | **(217661)** | **(93845)** |
| Income tax (expenses) credits | (18621) | 11853 | 11504 |
| **Net loss from discontinued operations** | **(350728)** | **(205808)** | **(82341)** |
| **Net cash (used in) provided by discontinued operating activities** | **(418866)** | **(144547)** | **135033** |
| **Net cash provided by discontinued investing activities** | **469481** | **92023** | **136918** |
| **Net cash (used in) provided by discontinued financing activities** | **—** | **100000** | **(30000)** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. **CONCENTRATION AND RISKS** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(a)*  ***Foreign exchange risk*** 

The revenues and expenses of the Group's entities in the PRC are generally denominated in RMB and their assets and liabilities are denominated in RMB. The RMB is not freely convertible into foreign currencies. Remittances of foreign currencies into the PRC or remittances of RMB out of the PRC as well as exchange between RMB and foreign currencies require approval by foreign exchange administrative authorities and certain supporting documentation. The State Administration for Foreign Exchange, under the authority of the People's Bank of China, controls the conversion of RMB into other currencies.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. **CONCENTRATION AND RISKS (Continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(b)*  ***Credit risk*** 

Financial instruments that potentially expose the Group to credit risk consist primarily of cash and cash equivalents, restricted cash, short-term investments, short-term deposits, accounts and notes receivable and amounts due from related parties. The Group places its cash and cash equivalents, restricted cash, short-term investments and short-term deposits with financial institutions with high credit ratings and quality. There has been no recent history of default in relation to these financial institutions and credit risk is immaterial.

The Group conducts credit evaluations of third-party customers and related parties, and generally does not require collateral or other security from its third-party customers and related parties. The Group establishes an allowance for credit losses primarily based upon the age of the receivables and factors surrounding the credit risk of specific third-party customers and related parties.

Concentration risk of accounts and notes receivable from third parties are presented as below:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **As of December 31,**  | **As of December 31,**  | **As of December 31,**  | **As of December 31,**  |
|  | **2023** | **2023** | **2024** | **2024** |
|  | **RMB** |  | **RMB** |  |
| Company A | 27371 | 74% | 9653 | 40% |
| Company B |  |  | 4440 | 18% |

---

Concentration risk of accounts receivable from a related party are presented as below:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **As of December 31,**  | **As of December 31,**  | **As of December 31,**  | **As of December 31,**  |
|  | **2023** | **2023** | **2024** | **2024** |
|  | **RMB** |  | **RMB** |  |
| Xiaomi | 4365 | 100% | 591221 | 100% |

---

Concentration risk of other receivables from related parties are presented as below:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **As of December 31,**  | **As of December 31,**  | **As of December 31,**  | **As of December 31,**  |
|  | **2023** | **2023** | **2024** | **2024** |
|  | **RMB** |  | **RMB** |  |
| Xiaomi | 100 | 100% | 100 | 1% |
| Foshan Viomi |  |  | 11134 | 99% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***(c)***  ***Revenue concentration risk*** 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Year ended December 31,**  | **Year ended December 31,**  | **Year ended December 31,**  | **Year ended December 31,**  | **Year ended December 31,**  | **Year ended December 31,**  |
|  | **2022** | **2022** | **2023** | **2023** | **2024** | **2024** |
|  | **RMB** |  | **RMB** |  | **RMB** |  |
| Xiaomi | 1336612 | 75% | 1292880 | 79% | 1752246 | 83% |

---

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. **CASH AND CASH EQUIVALENTS** 

Cash and cash equivalents represent cash on hand and demand deposits placed with banks or other financial institutions. Cash and cash equivalents balance as of December 31, 2023 and 2024 primarily consist of the following currencies:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **As of December 31, 2023** | **As of December 31, 2023** | **As of December 31, 2024** | **As of December 31, 2024** |
|  | <br>**Amount** | **RMB**<br>**equivalent** | <br>**Amount** | **RMB**<br>**equivalent** |
| RMB | 119825 | 119825 | 834573 | 834573 |
| US$ | 12209 | 86471 | 26269 | 188832 |
| Others (i) | 85 | 109 | 935 | 2783 |
| Cash and cash equivalents  |  | 206405 |  | 1026188 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) As of December 2024, the other currencies consist of Hong Kong Dollar and Singapore Dollar.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. **RESTRICTED CASH** 

As of December 31, 2023 and 2024, the Group held restricted cash of RMB18,922 and RMB141,292, respectively, in designated bank accounts, which were composed of the deposit required for issuing bank acceptance bills of RMB18,922 and RMB62,108, respectively, capital deposit of nil and RMB770, and the foreign exchange deposits of nil and RMB78,414, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. **SHORT-TERM INVESTMENTS** 

Short-term investments represent structured deposits with maturities of less than one year. Short-term investments balance as of December 31, 2023 and 2024 is denominated in RMB, amounted to RMB18,505 and RMB72,500, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. **INVENTORIES, NET** 

Inventories, net consisted of the followings:

---

| | | | |
|:---|:---|:---|:---|
|  |  | **As of December 31,**  | **As of December 31,**  |
|  |  | **2023** | **2024** |
|  |  | **RMB** | **RMB** |
| Finished goods |  | 105,542 | 80,853 |
| Raw materials |  | 51,761 | 31,472 |
| Inventories, net |  | 157,303 | 112,325 |

---

The Group recorded inventory written down amounted to RMB13,182 and RMB3,104 as of December 31, 2023 and 2024, respectively.

The following table summarizes the activity in inventory written down for the years ended December 31, 2023 and 2024:

---

| | | |
|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** |
|  | **2023** | **2024** |
|  | **RMB** | **RMB** |
| Balance at beginning of the year | 3820 | 13182 |
| Addition | 11006 | 2898 |
| Reduction | (1644) | (12976) |
| Balance at end of the year | 13182 | 3104 |

---

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. **PREPAID EXPENSES AND OTHER ASSETS** 

---

| | | |
|:---|:---|:---|
|  | **As of December 31,**  | **As of December 31,**  |
|  | **2023** | **2024** |
|  | **RMB** | **RMB** |
| Advances to suppliers | 70364 | 47204 |
| Other receivables | 31502 | 37236 |
| Prepayment for equipment | 9444 | 2367 |
| Lease hold improvement | 527 | 1383 |
| Prepaid expenses |  | 1138 |
| Expected return assets | 17 | 88 |
| Total | 111854 | 89416 |
| Less: non-current portion | (10535) | (18053) |
| Prepaid expenses and other assets-current portion | 101319 | 71363 |

---

**10.**PROPERTY, PLANT, AND EQUIPMENT, NET

Property, plant, and equipment, net consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of December 31,**  | **As of December 31,**  |
|  | **2023** | **2024** |
|  | **RMB** | **RMB** |
| Computers and equipment  | 145817 | 140465 |
| Buildings | 258910 | 258910 |
| Construction in progress |  | 7343 |
| Vehicle | 1201 | 2692 |
| Total | 405928 | 409410 |
| Less: accumulated depreciation | (98702) | (94101) |
| Property, plant, and equipment, net | 307226 | 315309 |

---

The Group had recorded depreciation expense of RMB29,248, RMB24,077 and RMB22,882 for the years ended December 31, 2022, 2023, and 2024, respectively. No impairment was recorded for the years ended December 31, 2022, 2023, and 2024.

In addition, the Group also pledged certain property, plant, and equipment for the Group's long-term borrowings (See Note 12).

**11.**LAND USE RIGHT, NET

In 2020, the Group obtained a land use right in Foshan from the local authorities. Amortization of the land use right is made over the remaining term of the land use right period from the date when the land was made available for use by the Group. The land use right is summarized as follows:

---

| | | |
|:---|:---|:---|
|  | **As of December 31,**  | **As of December 31,**  |
|  | **2023** | **2024** |
|  | **RMB** | **RMB** |
| Land use right | 63618 | 63618 |
| Less: accumulated amortization | (4441) | (5714) |
| Land use right, net | 59177 | 57904 |

---

The Group had recorded amortization expense of RMB1,273, RMB1,272 and RMB1,273 for the years ended December 31, 2022, 2023, and 2024, respectively.

In addition, the Group also pledged its land use right for the Group's long-term borrowings (See Note 12).

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

**11.**LAND USE RIGHT, NET (Continued)

The estimated future amortization expense for land use rights is as follows:

---

| | | |
|:---|:---|:---|
| Years ending December 31, |  | **RMB** |
| 2025 |  | 1,273 |
| 2026 |  | 1,273 |
| 2027 |  | 1,273 |
| 2028 |  | 1,273 |
| 2029 |  | 1,273 |
| Thereafter |  | 51,539 |
|  |  | 57,904 |

---

**12.** **BORROWINGS**

*(1) Short-term borrowings*

Short-term bank loans consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** |
|  | **2023** | **2024** |
|  | **RMB** | **RMB** |
| Industrial and Commercial Bank of China <sup>(1)</sup> |  | 20000 |
| Bank of China <sup>(2)</sup> |  | 30000 |
| Total |  | 50000 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) On March 25, 2024, the Group entered into a loan agreement with Industrial and Commercial Bank to borrow RMB20.0 million as working capital for one year, with a maturity date of March 20, 2025. The loan has a fixed interest rate of 2.85% per annum. The loan was fully repaid upon maturity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) On December 27, 2023, the Group entered into a loan agreement with Bank of China to borrow RMB30.0 million as working capital for one year. The loan was withdrawn on January 2, 2024 and as a maturity date in January 2, 2025. The loan has a fixed interest rate of 2.85% per annum. The loan is pledged by the Company's patent rights. The loan was fully repaid upon maturity.

The Group incurred interest expenses for short-term borrowings of nil and nil and RMB1,263 for the years ended December 31, 2022, 2023, and 2024, respectively. The annual weighted average interest rates were nil and nil and 2.85% for the years ended December 31, 2022, 2023, and 2024, respectively.

*(2) Long-term borrowings*

---

| | | |
|:---|:---|:---|
|  | **As of December 31,** | **As of December 31,** |
|  | **2023** | **2024** |
|  | **RMB** | **RMB** |
| Agricultural Bank of China | 156730 | 105245 |
| Total | 156730 | 105245 |
| Less: long-term borrowing-current portion | (28029) | (29300) |
| Long-term borrowing | 128701 | 75945 |

---

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

**12.** **BORROWINGS (Continued)**

*(2) Long-term borrowings (Continued)*

On March 8, 2021, The Group entered into a line of credit agreement with Agricultural Bank of China, which is used for the development of Viomi Technology Park, a comprehensive high-tech industrial campus, which was completed in the second half of 2023. The line of credit is effective from March 8, 2021 to March 7, 2026 and the credit limit is RMB310,000. The loan is guaranteed by Foshan Viomi, a related party of the Group. As of December 31, 2024, the Group borrowed, in aggregate, a total of RMB192,371 under the line of credit, with interest rate ranging from 3.10% to 3.90% per annum. The Group repaid a total of RMB87,126, and the outstanding balance of long-term borrowings was RMB105,245 as of December 31, 2024. As of December 31, 2024, the Group had unutilized lines of credit of RMB117,629 under the line of credit agreement with Agricultural Bank of China.

The future maturities of long-term borrowings as of December 31, 2024 were as follows:

---

| | |
|:---|:---|
| **12 months ending December 31,** | **RMB** |
| 2025 | 29300 |
| 2026 | 24829 |
| 2027 | 24829 |
| 2028 | 24829 |
| 2029 | 1040 |
| Thereafter | 418 |
| Total long-term borrowings | 105245 |

---

The Group's building properties with net book values of RMB245,587 and land use right with net book values of RMB57,904 were pledged as collateral to secure these loans as of December 31, 2024.

The Group completed the construction in the second half of 2023, and prior to the completion, the Group capitalized the interest expense as cost of the assets, and after the assets was ready for its intended use, the Group expenses off the interest expenses. The Group capitalized interest expense of RMB3,516 and RMB5,031 for the years ended December 31, 2022, 2023, respectively, and the Group recorded interest expenses of RMB623 and RMB4,262 for the years ended December 31, 2023, and 2024, respectively.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. **ACCRUED EXPENSES AND OTHER LIABILITIES** 

---

| | | |
|:---|:---|:---|
|  | **As of December 31,**  | **As of December 31,**  |
|  | **2023** | **2024** |
|  | **RMB** | **RMB** |
| Accrued payroll and welfare | 58451 | 42557 |
| Freight payable | 10580 | 16879 |
| Deposit from suppliers | 15595 | 11619 |
| Installation fee payables | 271 |  |
| Product warranty | 5007 | 40568 |
| Marketing and promotion expenses | 3065 | 4187 |
| Payment for purchase of property | 43322 | 40183 |
| Other tax payable | 696 | 6826 |
| Professional fee payables | 1754 | 7547 |
| Refund liabilities | 27 | 224 |
| Other current liabilities | 32046 | 12029 |
| Total | 170814 | 182619 |
| Less: non-current portion |  | (14492) |
| Accrued expenses and other liabilities-current portion | 170814 | 168127 |

---

Product warranty activities were as follows:

---

| | |
|:---|:---|
|  | **Product Warranty** |
|  | **RMB** |
| Balance at December 31, 2022 | 6559 |
| Provided during the year | 84732 |
| Utilized during the year | (56078) |
| Disposed during the year | (30206) |
| Balance at December 31, 2023 | 5007 |
| Provided during the year | 88889 |
| Utilized during the year | (46914) |
| Disposed during the year | (6414) |
| Balance at December 31, 2024 | 40568 |

---

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. **SEGMENT REPORTING** 

**The Group derives revenue by developing and selling Home water solution businesses products in the PRC. The Group operates as one operating and reportable segment and its sole business activity consists of the design, development, manufacturing and marketing of Home water solution businesses products. The Group provides Home water solution businesses products mainly to its customers in the PRC and manages its business activities on a consolidated basis.**

**The accounting policies of the segment are the same as those described in Note "2. Summary of Significant Accounting Policies". The Company's CODM uses net income to measure segment profit or loss and assesses performance against expectations to make resource allocation decisions. Additionally, the CODM reviews and uses functional expenses included in net income to manage the Group's operations and assess operating profitability. The Group operates as one operating and reportable segment, and as such the significant segment expenses regularly provided to the CODM are those presented on the consolidated statements of comprehensive income (loss). These significant segment expense include cost of revenue, research and development, selling and marketing, and general and administrative expenses. Other segment items that are presented on the consolidated statements of comprehensive income (loss) include other income, net, interest income and short-term investment income, net, and other non-operating income, income tax credits (expenses). The Group's entity-wide disclosures, including the breakout of revenue between products are included in Note "15. Revenue".**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. **REVENUE** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31,**  | **Year ended December 31,**  | **Year ended December 31,**  |
|  | **2022** | **2023** | **2024** |
|  | **RMB** | **RMB** | **RMB** |
| Sales of products |  |  |  |
| - Home water solutions | 1162725 | 1077858 | 1498368 |
| - Consumables | 353936 | 324738 | 277704 |
| - Kitchen appliances and others | 254019 | 214279 | 337177 |
| Total of sales of products | 1770680 | 1616875 | 2113249 |
| Rendering of services | 19565 | 21861 | 5733 |
| Total | 1790245 | 1638736 | 2118982 |

---

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. **INCOME TAX EXPENSES** 

*Cayman Islands*

Under the current tax laws of the Cayman Islands, the Company and its subsidiaries are not subject to tax on income or capital gains. Besides, upon payment of dividends by the Company to its shareholders, no Cayman Islands withholding tax will be imposed.

*Hong Kong*

Under the current Hong Kong Inland Revenue Ordinance, the subsidiaries of the Group in Hong Kong are subject to 8.25% and 16.5% Hong Kong profit tax on its taxable income within HKD$2 million and beyond HKD$2 million, respectively, generated from operations in Hong Kong. Additionally, payments of dividends by the subsidiaries incorporated in Hong Kong to the Company are not subject to any Hong Kong withholding tax.

#### PRC
In accordance with the Enterprise Income Tax Law ("EIT Law"), Foreign Investment Enterprises ("FIEs") and domestic companies are subject to Enterprise Income Tax ("EIT") at a uniform rate of 25%. The subsidiaries and VIEs of the Group in the PRC are subject to a uniform income tax rate of 25% for years presented except for the entities which are qualified to certified High and New Technology Enterprises ("HNTE") that are entitled to a favorable statutory tax rate of 15%. According to a policy promulgated by the State Tax Bureau of the PRC and effective from 2008 onwards, enterprises engaged in research and development activities are entitled to claim an additional tax deduction amounting to 50% of the qualified research and development expenses incurred in determining its tax assessable profits for that year. The additional tax deduction has been increased from 50% of the qualified research and development expenses to 75%, effective from 2018 to 2020, according to a new tax incentives policy promulgated by the State Tax Bureau of the PRC in September 2018. The additional tax deduction has been increased from 75% of the qualified research and development expenses to 100%, effective from 2021, according to a new tax incentives policy promulgated by the State Tax Bureau of the PRC in May 2021("Super Deduction").

*Withholding tax on undistributed dividends*

Under the CIT Law and its implementation rules, the profits of a foreign-invested enterprise arising in 2008 and thereafter that are distributed to its immediate holding company outside the PRC are subject to withholding tax at a rate of 10%. A lower withholding tax rate will be applied if there is a beneficial tax treaty between the PRC and the jurisdiction of the foreign holding company. A holding company in Hong Kong, for example, will be eligible, with approval of the PRC local tax authority, to be subject to a 5% withholding tax rate under the Arrangement Between the PRC and the Hong Kong Special Administrative Region on the Avoidance of Double Taxation and Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital if such holding company is considered to be a non-PRC resident enterprise and holds at least 25% of the equity interests in the PRC foreign-invested enterprise distributing the dividends. However, if the Hong Kong holding company is not considered to be the beneficial owner of such dividends under applicable PRC tax regulations, such dividend will remain subject to withholding tax at a rate of 10%. Aggregate undistributed earnings of the Group entities located in the PRC that are available for distribution to the Company as of December 31, 2023 and 2024 are approximately RMB102,347 and nil, respectively. The Company does not intend to have any of its subsidiaries located in the PRC distribute any undistributed earnings of such subsidiaries in the foreseeable future, but rather expects that such earnings will be reinvested by such subsidiaries for their PRC daily operations. Accordingly, no withholding tax was recorded as of December 31, 2023 and 2024.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. **INCOME TAX EXPENSES (Continued)** 

*Composition of income tax expense*

The current and deferred components of income taxes appearing in the consolidated statements of comprehensive income (loss) are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31,**  | **Year ended December 31,**  | **Year ended December 31,**  |
|  | **2022** | **2023** | **2024** |
|  | **RMB** | **RMB** | **RMB** |
| Current tax expenses | 3527 | 11544 | 21686 |
| Deferred tax (benefit) expenses | (3974) | 2044 | (4773) |
| Income tax (benefit) expenses | (447) | 13588 | 16913 |

---

Reconciliation between the income tax expenses computed by applying the PRC enterprise tax rate to income before income taxes and actual provision were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31,**  | **Year ended December 31,**  | **Year ended December 31,**  |
|  | **2022** | **2023** | **2024** |
|  | **RMB** | **RMB** | **RMB** |
| Income from operations in the PRC | 65920 | 126692 | 177311 |
| Income (loss) from overseas entities | 1731 | 3371 | (15713) |
| Income before income tax | 67651 | 130063 | 161598 |
| Tax expense at PRC enterprise income tax rate of 25% | 16913 | 32515 | 40400 |
| Income tax on tax holiday<sup>(1)</sup> | (8062) | (14952) | (20298) |
| Tax effect of permanent differences<sup>(2)</sup> | (19183) | (12860) | (13572) |
| Change in valuation allowance<sup>(3)</sup> | 8979 | 11494 | 8227 |
| Effect of share-based compensation | 2934 | 16 | 2467 |
| Effect of income tax in jurisdictions other than the PRC | (2028) | (2625) | (311) |
| Income tax expenses (benefit) | (447) | 13588 | 16913 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The income tax on tax holidays represents the effect of preferential income tax rate enjoyed by Guangdong Lizi and Yunmi Hulian. Guangdong Lizi applied for HNTE qualification renewal in 2023. It entitled to enjoy the preferential tax rate of 15% as an HNTE for three years starting from 2023 and should apply for HNTE qualification renewal in 2026. Yunmi Hulian applied for the HNTE qualification and obtained approval in December 2021. It is entitled to enjoy the preferential tax rate of 15% as an HNTE for three years starting from 2022, and its HNTE status ceased at the ended of 2023.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The permanent book-tax differences mainly consisted of R&D super deductions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Valuation allowance is provided against deferred tax assets when the Group determines that it is more likely than not that the deferred tax assets will not be utilized in the future. In making such determination, the Group considered factors including future taxable income exclusive of reversing temporary differences and tax loss carry forwards. Valuation allowance for the years ended December 31, 2022, 2023, and 2024 were provided for net operating loss carry forward of certain group entities which reported loss because it was more likely than not that such deferred tax assets would not be realized based on the Group's estimate of their future taxable income. If events occur in the future that allow the Group to realize more of its deferred income tax than the presently recorded amounts, an adjustment to the valuation allowances will result in a decrease in tax expense when those events occur.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. **INCOME TAX EXPENSES (Continued)** 

*Composition of income tax expense (Continued)*

The per share effect of the tax holidays were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  | **Year ended December 31,**  | **Year ended December 31,**  | **Year ended December 31,**  |
|  |  | **2022** | **2023** | **2024** |
|  |  | **RMB** | **RMB** | **RMB** |
| Net income per share effect – basic |  | 0.04 | 0.07 | 0.10 |
| Net income per share effect – diluted |  | 0.04 | 0.07 | 0.10 |

---

*Deferred tax assets*

The significant components of the Group's deferred tax assets were as follows:

---

| | | |
|:---|:---|:---|
|  | **As of December 31,**  | **As of December 31,**  |
|  | **2023** | **2024** |
|  | **RMB** | **RMB** |
| Accrued expenses and others | 4754 | 9363 |
| Net operating loss carry forwards | 30356 | 39905 |
| Inventories write downs | 1593 | 388 |
| Deferred income | 74 | 74 |
| Total deferred tax assets | 36777 | 49730 |
| Less: valuation allowance | (31852) | (40032) |
| Deferred tax assets, net | 4925 | 9698 |

---

*Movement of valuation allowance*

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31,**  | **Year ended December 31,**  | **Year ended December 31,**  |
|  | **2022** | **2023** | **2024** |
|  | **RMB** | **RMB** | **RMB** |
| Balance at beginning of the year | 11379 | 20358 | 31852 |
| Provided | 8979 | 11494 | 8180 |
| Balance at end of the year | 20358 | 31852 | 40032 |

---

*Uncertain tax positions*

The Group evaluates the level of authority for each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions. As of December 31, 2023 and 2024, the Group did not have any significant unrecognized uncertain tax positions.

According to the PRC Tax Administration and Collection Law, the statute of limitations is generally three years and can be extended to five years under special circumstances.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17. **ORDINARY SHARES** 

The Company's original Memorandum and Articles of Association authorizes the Company to issue 346,545,454 class A ordinary shares with a par value of US$0.0001 per share. As of December 31, 2017, the Company had 25,363,636 class A ordinary shares outstanding. Each ordinary share is entitled to one vote. The holders of ordinary shares are also entitled to receive dividends whenever funds are legally available and when declared by the Board of Directors, subject to prior rights of holders of all other classes of shares outstanding.

In June 2018, the Board of Directors and the shareholders approved a transfer and surrender of shares plan, pursuant to which, Mr. Chen, who holds 33,818,182 class A ordinary shares on behalf of certain key management founders through Viomi Limited, transferred 16,145,454 class A ordinary shares to key management founders and surrendered the remaining 17,672,728 class A ordinary shares to the Company.

On August 23, 2018, the Company issued 4,000,000 class A ordinary shares at par value to Mr. Chen's wholly-owned entity Viomi Limited to award his contribution to the Company's development. Such shares were immediately vested. The issuance of such shares is accounted for as a share-based compensation to Mr. Chen. The issuance date fair value was estimated to be approximately US$3.30 per share.

On the same day, the Company effected a share split whereby each of the Company's then authorized and outstanding ordinary shares and preferred shares, par value of $0.0001 each, was divided into ten ordinary shares and preferred shares of the same series, par value US$0.00001 each, respectively. All shareholders then surrendered 90% of their after-share-split outstanding shares back to the Company for cancellation. After the share split and the surrender of shares for cancellation, the number of the Company's outstanding ordinary and preferred shares remained unchanged. The par value per ordinary share has been retroactively revised as if it had been adjusted proportion to the share split.

Pursuant to the resolution of the shareholders of the Company on August 23, 2018, the Company's authorized share capital became US$50,000 divided into 5,000,000,000 shares comprising of the (i) 4,800,000,000 Class A Ordinary Shares of a par value of US$0.00001 each, (ii) 150,000,000 Class B Ordinary Shares of a par value of US$0.00001 each and (iii) 50,000,000 shares of a par value of US$0.00001 each of such class or classes (however designated) as the board of directors may determine in accordance with post-offering amended and restated memorandum and articles of association. Holders of Class A Ordinary Shares and Class B Ordinary Shares have the same rights, except for voting rights and conversion rights. Each Class A Ordinary Share is entitled to one vote, and each Class B Ordinary Share is entitled to ten (10) 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 to any person or entity other than holders of Class B Ordinary Shares or their affiliates, such Class B Ordinary Shares shall be automatically and immediately converted into the equivalent number of Class A Ordinary Shares.

Immediately prior to the completion of the IPO, 16,145,454 issued Class A Ordinary Shares held by certain key management founders, 33,818,182 issued Pre-IPO Class B Ordinary Shares held by Red Better, and 67,636,364 issued Pre-IPO Class B Ordinary Shares held by Mr. Chen's wholly-owned entity Viomi Limited was automatically converted by way of re-designation and re-classification into Class B Ordinary Shares on a one-for-one basis, and the rest of the outstanding Class A Ordinary Shares, the rest of the outstanding Pre-IPO Class B Ordinary Shares, and all outstanding Series A Preferred Shares was automatically converted by way of re-designation and re-classification into Class A Ordinary Shares on a one-for-one basis.

Upon the completion of the Company's IPO in 2018, 34,200,000 Class A Ordinary Shares were issued and 18,181,818 Series A Preferred Shares have been converted into Class A Ordinary Shares.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17. **ORDINARY SHARES (Continued)** 

During the year ended December 31, 2021, 3,011,064 Class A Ordinary Shares were issued for the exercised share options. In addition, 339,999 Class B Ordinary Shares were converted into Class A Ordinary Shares.

In March 2020, the Company's Board of Directors authorized a share repurchase program under which the Company may repurchase up to US$10,000 worth of its ADSs over the following 12 months. The share repurchase may be made in accordance with applicable laws and regulations through open market transactions, privately negotiated transactions or other legally permissible means as determined by the management.

During the year ended December 31, 2020, the Company had repurchased 1,410,723 ADSs (equal to 4,232,169 Class A ordinary shares) for a consideration of US$8,030 on the open market, at a weighted average price of US$5.69 per ADS. The Company accounts for repurchased ordinary shares under the cost method and includes such treasury stock as a component of the shareholders' equity.

During the year ended December 31, 2021, 3,011,064 Class A Ordinary Shares were issued for the exercised share options. In addition, 339,999 Class B Ordinary Shares were converted into Class A Ordinary Shares. Moreover, 1,997,970 Class A Ordinary Shares were repurchased by the Group.

As of December 31, 2021, the Company had 105,516,779 Class A Ordinary Shares and 103,214,547 Class B Ordinary Shares outstanding, respectively.

During the year ended December 31, 2022, 956,256 Class A Ordinary Shares were issued for the exercised share options. In addition, 359,997 Class B Ordinary Shares were converted into Class A Ordinary Shares. Moreover, 2,293,569 Class A Ordinary Shares were repurchased by the Group.

As of December 31, 2022, the Company had 104,539,463 Class A Ordinary Shares and 102,854,550 Class B Ordinary Shares outstanding, respectively.

During the year ended December 31, 2023, 176,883 Class A Ordinary Shares were issued for the exercised share options. In addition, 90,000 Class B Ordinary Shares were converted into Class A Ordinary Shares. Moreover, 2,903,802 Class A Ordinary Shares were repurchased by the Group.

As of December 31, 2023, the Company had 101,902,544 Class A Ordinary Shares and 102,764,550 Class B Ordinary Shares outstanding.

During the year ended December 31, 2024, 355,542 Class A Ordinary Shares were issued for the exercised share options. In addition, 1,198,542 Class A Ordinary Shares were repurchased by the Group.

As of December 31, 2024, the Company had 101,059,544 Class A Ordinary Shares and 102,764,550 Class B Ordinary Shares outstanding.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18. **SHARE-BASED COMPENSATION** 

Compensation expense recognized for share-based awards was as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31,**  | **Year ended December 31,**  | **Year ended December 31,**  |
|  | **2022** | **2023** | **2024** |
|  | **RMB** | **RMB** | **RMB** |
| Share-based compensation expenses |  |  |  |
| —Share options<sup>(a)</sup> | 19560 | 106 | 16450 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(a)*  ***Share options*** 

On September 17, 2015, the Board of Directors of the Company approved the establishment of 2015 Share Incentive Plan, the purpose of which is to provide an incentive for employees contributing to the Group. The 2015 Share Incentive Plan shall be valid and effective for 10 years from the grant date. The maximum number of shares that may be issued pursuant to all awards (including incentive share options) under 2015 Share Incentive Plan shall be 12,727,272 shares.

In June 2018, the Board of Directors and shareholders of the Company approved the 2018 Share Incentive Plan. As of December 31, 2024, the maximum of shares that may be issued under the 2018 Share Incentive Plan was 30,128,782.

For the year ended December 31, 2019, no share options were granted to employees.

For the year ended December 31, 2020, the Company granted 19,175,500 share options to employees pursuant to the 2018 Share Incentive Plan. With respect to the share options granted, 40% of the options will be vested after 24 months of the grant date and the remaining 60% will be vested in three equal installments over the following 36 months.

For the year ended December 31, 2021, the Company granted 3,840,000 share options to employees pursuant to the 2018 Share Incentive Plan. Among which, with respect to the share options granted, 40% of the options will be vested after 24 months of the vesting commencement date and the remaining 60% will be vested in three equal installments over the following 36 months.

For the year ended December 31, 2022, the Company granted 1,010,000 share options to employees pursuant to the 2018 Share Incentive Plan. Among which, with respect to the share options granted, 40% of the options will be vested after 24 months of the vesting commencement date and the remaining 60% will be vested in three equal installments over the following 36 months.

For the year ended December 31, 2023, the Company didn't grant share options to employees pursuant to the 2018 Share Incentive Plan.

For the year ended December 31, 2024, the Company granted 11,920,000 share options to employees pursuant to the 2018 Share Incentive Plan. Among which, with respect to the share options granted, 40% of the options will be vested after 24 months of the vesting commencement date and the remaining 60% will be vested in three equal installments over the following 36 months.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18. **SHARE-BASED COMPENSATION (Continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(a)*  ***Share options (Continued)*** 

The Group calculated the estimated fair value of the options on the respective grant dates using the binomial option pricing model. Assumptions used to determine the fair value of share options granted during 2023 and 2024 are summarized in the following table:

---

| | |
|:---|:---|
|  | **As of December 31,** |
|  | **2024** |
| Risk-free interest rate<br> NA | 3.90%-4.38 |
| Expected volatility<br> NA | 59.20%-59.21 |
| Expected life of option (years)<br> NA | 20 |
| Expected dividend yield<br> NA |  |
| Fair value per ordinary share<br> NA | 0.13-0.53 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(1)*  ***Risk-free interest rate*** 

Risk-free interest rate was estimated based on the yield to maturity of US Treasury Strip with a maturity period close to the contractual term of the options.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(2)*  ***Expected life of option (years)*** 

Expected life of option (years) represents the expected years from the measurement date to the expiration date of the option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(3)*  ***Volatility*** 

The volatility of the underlying ordinary shares during the life of the options was estimated based on the historical stock price volatility of comparable listed companies over a period comparable to the contractual term of the options.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(4)*  ***Dividend yield*** 

The dividend yield was estimated by the Group based on its expected dividend policy over the contractual term of the options.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18. **SHARE-BASED COMPENSATION (Continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(a)*  ***Share options (Continued)*** 

A summary of the stock option activity under the 2015 Share Incentive Plan and 2018 Share Incentive Plan for the years ended December 31, 2022, 2023, and 2024 is included in the table below.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | <br>**Number of**<br>**options** | <br>**Weighted average**<br>**exercise price (US$)** | **Weighted**<br>**average**<br>**remaining**<br>**contractual**<br>**life (years)** | <br>**Aggregate**<br>**intrinsic**<br>**value (US$)** |
| Outstanding at January 1, 2022 | 22226338 | 0.80 | 7.41 | 26813 |
| Granted | 1010000 | 1.10 |  |  |
| Forfeited | (2537466) | 0.98 |  |  |
| Exercised | (956256) | 0.44 |  |  |
| Outstanding at December 31, 2022 | 19742616 | 0.81 | 6.49 | 22974 |
| Granted |  |  |  |  |
| Forfeited | (5047307) | 0.78 |  |  |
| Exercised | (176883) | 0.03 |  |  |
| Outstanding at December 31, 2023 | 14518426 | 0.83 | 5.58 | 15553 |
| Granted | 11920000 | 0.11 |  |  |
| Forfeited | (1642047) | 0.54 |  |  |
| Exercised | (355543) | 0.04 |  |  |
| Outstanding at December 31, 2024 | 24440836 | 0.51 | 11.43 | 19794 |
| Exercisable as of December 31, 2024 | 11504836 | 0.79 | 4.31 | 13460 |
| Expected to vest as of December 31, 2024 | 11642400 | 0.26 | 17.77 | 5700 |

---

The weighted average grant date fair value of options granted for the years ended December 31, 2023 and 2024 was nil per option and RMB0.8 (US$0.11), respectively.

As of December 31, 2023 and 2024, there was RMB5,454 and RMB36,988 of unrecognized compensation expenses related to the options, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(b)*  ***Restricted shares to an investee*** 

As described in Note 1, the Group established Guangdong Lizi in July 2018 as a subsidiary of the Company. In November 2020, following the Group's restructuring plan on its water purifiers business, the Group entered into an agreement with Sunglow to sell 1% of equity interest of Guangdong Lizi for a consideration of RMB175. Sunglow has paid up the consideration in December 2021 but is not entitled to any shareholder's rights of Guangdong Lizi until the fulfilment of certain conditions pursuant to the supplemental agreement in November 2021.

Under the requirement of ASC 718, the Group should recognize share-based compensation if there is a difference between the fair value of Guangdong Lizi's 1% of equity interest and the consideration paid up by Sunglow on the date of capital injection. The Group calculated the estimated fair value of the options on the respective grant dates using the discounted cash flow model.

As of December 31, 2024, there were RMB10,284 of unrecognized compensation expenses related to restricted shares granted to Sunglow for which the performance conditions had not been met and are expected to be recognized when the performance conditions are achieved under the requirement of ASC718.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19. **NET INCOME PER SHARE** 

Basic net income per share is the amount of net income available to each share of ordinary shares outstanding during the reporting period. Diluted net income per share is the amount of net income available to each share of ordinary shares outstanding during the reporting period adjusted to include the effect of potentially dilutive ordinary shares.

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31,**  | **Year ended December 31,**  | **Year ended December 31,**  |
|  | **2022** | **2023** | **2024** |
|  | **RMB** | **RMB** | **RMB** |
| **Numerator:** |  |  |  |
| **Numerator for basic calculation - Net income attributable to ordinary shareholders of the Company from continuing operations**  | 68284 | 116768 | 144364 |
| **Denominator:** |  |  |  |
| **Denominator for basic calculation - weighted average ordinary shares outstanding** | 208341011 | 206387105 | 204787786 |
| &nbsp;&nbsp;&nbsp;&nbsp;Dilutive effect of share options | 1937596 | 1280658 | 1903131 |
| &nbsp;&nbsp;**Denominator for diluted calculation** | 210278607 | 207667763 | 206690917 |
| &nbsp;&nbsp;**Basic net income per ordinary share from continuing operations** | 0.33 | 0.57 | 0.70 |
| &nbsp;&nbsp;**Diluted net income per ordinary share from continuing operations** | 0.32 | 0.56 | 0.70 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20. **RELATED PARTY TRANSACTIONS** 

---

| | | |
|:---|:---|:---|
| **Name** |  | **Relationship with the Group** |
| Mr. Xiaoping Chen |  | Founder |
| Foshan Viomi and its subsidiaries ("Foshan Viomi")\* |  | Controlled by a principal shareholder of the Company |
| Xiaomi |  | Shareholder of the Group |

---

\* Due to the Disposal as mentioned above (See Note 1), the existing VIE contractual arrangements between Yunmi Hulian and Foshan Viom was terminated on July 19, 2025, which resulted in Foshan Viomi's shareholder, Mr. Chen, fully controlling Foshan Viomi and its subsidiaries. As a result, Foshan Viomi and its subsidiaries became to the Group's related parties since August 31, 2024, and all transactions between the Group and Foshan Viomi during the period from September 1, 2024 to December 31, 2024, and any amount due from/due to Foshan Viomi were disclosed as related party transactions and balances.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20. **RELATED PARTY TRANSACTIONS (Continued)** 

*The Group's relationship with Xiaomi*

Xiaomi is the Group's strategic partner and shareholder.

The Group's sales to Xiaomi are governed by a business cooperation agreement, pursuant to which Xiaomi is responsible for the distribution and sales of such products through their network and sales channels.

The Group also sells products through Xiaomi's online e-commerce channel Xiaomiyoupin.com, and is charged of commissions pursuant to a commission sales agreement.

*Transaction with Xiaomi*

#### Business cooperation agreement
The current business corporation agreement entered into in 2024 with Xiaomi governs all the Group's sales to Xiaomi. It will expire in September 2026.

Under the business cooperation agreement, (i) certain products sold to Xiaomi are exclusively designed for and can only be sold to Xiaomi, (ii) Xiaomi shall purchase these products at a price that covers all of the Group's costs of raw materials, outsourcing manufacture, models, logistics and paid intellectual property licensing fees, in connection with the manufacture and delivery of these products, and (iii) Xiaomi and the Group shall share gross profits, derived from sales of these products, the retail prices of which were set by Xiaomi and the Group together.

#### Youpin commission sales agreement
The Group has entered into a commission sales agreement with Xiaomi for the sale of the Group's own branded products on an E-platform operated by Xiaomi, namely Youpin. The commission sales agreement expired on December 31, 2023. The agreement has been renewed in 2024 and it has become non-fixed-term agreement since then. Furthermore, this agreement may be terminated by Xiaomi with 30 days' written notice.

Under the commission sales agreement, the Group shall pay a service fee, calculated as certain portion of the sales price excluding customers' refunds or as otherwise agreed by the parties with respect to specific product lines, as well as a deposit to Xiaomi. The retail prices of the Group's products on Youpin's platform shall be no higher than the sales price from any other e-commerce merchants or the Group's official offline sales channel, including in the event of sales or promotion. Refer to Note 20 (5) to the consolidated financial statements for the commission expenses charged by Youpin for the years ended December 31, 2022, 2023, and 2024.

*Transaction with Mr. Xiaoping Chen*

On July 19, 2024, to implement its focus strategy for the Home water solution businesses, the Group entered into definitive agreement with Mr. Xiaoping Chen and Zhuhai Yungui Enterprise Management Consulting Limited Partnership, an entity controlled by Mr. Chen ("Zhuhai Yungui") (together with Mr. Xiaoping Chen, "Buyer"), to divest the Company's business involving Internet-of-things-enabled ("IoT-enabled") smart home portfolio products for a total consideration of RMB65 million in cash. The transaction was closed on August 31, 2024.

*Transactions with Foshan Viomi*

The Group sells water purifiers and other products to and purchases raw materials from Foshan Viomi. In addition, The Group leases its office premises to Foshan Viomi, and the Group also engages Foshan Viomi for other services such as transportation services, maintenance services as well as installation services etc.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20. **RELATED PARTY TRANSACTIONS (Continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(1)*  ***Amount due from/to related parties*** 

---

| | | |
|:---|:---|:---|
|  | **As of December 31,**  | **As of December 31,**  |
|  | **2023** | **2024** |
|  | **RMB** | **RMB** |
| **Accounts receivable from a related party:** |  |  |
| Xiaomi<sup>(a)</sup> | 4365 | 591221 |
| **Other receivables from related parties:** |  |  |
| Other receivables from Xiaomi | 100 | 100 |
| Other receivables from Foshan Viomi |  | 11134 |
| Total | 100 | 11234 |
| **Amounts due to related parties:** |  |  |
| Purchase and other payable to Xiaomi<sup>(a)</sup> |  | 835 |
| Selling and marketing expenses payable to Xiaomi<sup>(c)</sup> | 3444 |  |
| Total | 3444 | 835 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(2)*  ***Purchase from related parties*** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31,**  | **Year ended December 31,**  | **Year ended December 31,**  |
|  | **2022** | **2023** | **2024** |
|  | **RMB** | **RMB** | **RMB** |
| Xiaomi<sup>(a)</sup> | 23674 | 26341 | 13546 |
| Foshan Viomi<sup>(d)</sup> |  |  | 17144 |
| Total | 23674 | 26341 | 30690 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(3)*  ***Revenue from related parties*** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31,**  | **Year ended December 31,**  | **Year ended December 31,**  |
|  | **2022** | **2023** | **2024** |
|  | **RMB** | **RMB** | **RMB** |
| Xiaomi<sup>(a)</sup> | 1336612 | 1292880 | 1752246 |
| Foshan Viomi<sup>(d)</sup> |  |  | 66852 |
| Total | 1336612 | 1292880 | 1819098 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(4)*  ***Research and development expenses*** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31,**  | **Year ended December 31,**  | **Year ended December 31,**  |
|  | **2022** | **2023** | **2024** |
|  | **RMB** | **RMB** | **RMB** |
| Xiaomi<sup>(a)</sup> | 2791 | 716 | 273 |

---

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20. **RELATED PARTY TRANSACTIONS (Continued)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(5)*  ***Selling and marketing expenses*** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31,**  | **Year ended December 31,**  | **Year ended December 31,**  |
|  | **2022** | **2023** | **2024** |
|  | **RMB** | **RMB** | **RMB** |
| Commission expenses charged by Xiaomi<sup>(b)</sup> | 13491 | 6961 | 13477 |
| Other expenses charged by Xiaomi<sup>(b)</sup> | 2545 | 797 |  |
| Other expenses charged by Foshan Viomi<sup>(e)</sup> |  |  | 400 |
| Total | 16036 | 7758 | 13877 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(6)*  ***Other income and expenses*** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2022** | **2023** | **2024** |
|  | **RMB** | **RMB** | **RMB** |
| Interest income<sup>(f)</sup> |  |  | 1902 |
| Interest expense<sup>(g)</sup> |  |  | 485 |
| Total |  |  | 2387 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Group both sells water purifiers and other products to and purchase Xiaomi branded products and certain raw materials from Xiaomi. The amount due from Xiaomi represents receivable arising from sales of water purifiers and other products. The balance due to Xiaomi represents payable arising from purchase of Xiaomi branded products and certain raw materials.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Group sells its own brand products on the E-platform of Xiaomi, which charges the Group commission and technical service fees, also Xiaomi provides advertising and promotion service. The amount due from Xiaomi represents sales receivable net of commission, advertising and promotion service.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Group sells its own brand products on the E-platform of Xiaomi, which charges the Group customer service fees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Group purchases certain raw materials from Foshan Viomi and its subsidiary. The Group also sells its own branded products to Foshan Viomi, and provides rental services, and other services to Foshan Viomi and its subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Group's related party provides transportation services, maintenance services as well as installation services for the Group.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) On July 1, 2024, the Company entered into a loan agreement with Foshan Viomi to lend USD 20.0 million for its working capital needs with maturity date on November 20, 2028. The loan has a fixed interest rate of 4.0% per annum. The loan was fully collected from Foshan Viomi as of December 31, 2024.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) On February 14, 2019, Guangdong Lizi entered into a loan agreement with Foshan Viomi to borrow RMB 10.0 million. The loan has a fixed interest rate of 4.8% per annum. The loan was fully repaid by Guangdong Lizi on November 28, 2024.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**21.** **FAIR VALUE MEASUREMENTS** 

Fair value reflects the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the assets or liabilities.

The Group applies a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. This guidance specifies a hierarchy of valuation techniques, which is based on whether the inputs into the valuation technique are observable or unobservable. The hierarchy is as follows:

Level 1—Valuation techniques in which all significant inputs are unadjusted quoted prices from active markets for assets or liabilities that are identical to the assets or liabilities being measured.

Level 2—Valuation techniques in which significant inputs include quoted prices from active markets for assets or liabilities that are similar to the assets or liabilities being measured and/or quoted prices for assets or liabilities that are identical or similar to the assets or liabilities being measured from markets that are not active. Also, model-derived valuations in which all significant inputs and significant value drivers are observable in active markets are Level 2 valuation techniques.

Level 3—Valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are valuation technique inputs that reflect the Group's own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The fair value guidance describes three main approaches to measure the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset.

When available, the Group uses quoted market prices to determine the fair value of an asset or liability. If quoted market prices are not available, the Group will measure fair value using valuation techniques that use, when possible, current market-based or independently sourced market parameters, such as interest rates and currency rates.

The Group did not have any other financial instruments that were required to be measured at fair value on a recurring basis as of December 31, 2023 and 2024 except for short-term investments (Note 7).

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**21.** **FAIR VALUE MEASUREMENTS (Continued)** 

The following table summarizes the Group's assets that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy as of December 31, 2023 and 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Level 1**<sup>(i)</sup> | **Level 2**<sup>(ii)</sup> | **Level 3** | **Total** |
| **As of December 31, 2024** |  |  |  |  |
| Short-term investments | 48187 | 24313 |  | 72500 |
| **As of December 31, 2023** |  |  |  |  |
| Short-term investments |  | 18505 |  | 18505 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) (i) Short-term investments represent mainly company securities, and the Company values these short-term investments based on unadjusted quoted prices from active markets of these securities at the end of each period, and accordingly, the Company classifies the valuation techniques that use these inputs as Level 1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) These short-term investments represent mainly company securities and structured deposits, and the Company values these short-term investments based on quoted prices of similar products provided by banks at the end of each period, and accordingly, the Company classifies the valuation techniques that use these inputs as Level 2.

Apart from the short-term investments, the Company's other financial instruments consist principally of cash and cash equivalents, restricted cash, short-term deposits, accounts and notes receivable, other receivables, amounts due to/from related parties, accounts and notes payable and certain accrued expenses. They are recorded at cost which approximates fair value.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22. **LEASES** 

The Group's operating leases are principally for office space and facilities. At December 31, 2023 and 2024, The Group's operating leases had a weighted average discount rate of 4.75% and 4.75% and a weighted-average remaining term of 3.1 years and 2.3 years, respectively. The components of lease expense were as follow：

---

| | | |
|:---|:---|:---|
|  | **Year ended December 31,**  | **Year ended December 31,**  |
|  | **2023** | **2024** |
|  | **RMB** | **RMB** |
| **Lease cost** |  |  |
| Operating lease expense | 2508 | 2193 |
| Short-term lease expense (i) | 1261 | 1147 |
| Total lease cost | 3769 | 3340 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Includes leases with a term of one year or less.

Supplemental cash flow information for leases was as follows:

---

| | | |
|:---|:---|:---|
|  | **Year ended December 31,**  | **Year ended December 31,**  |
|  | **2023** | **2024** |
|  | **RMB** | **RMB** |
| Operating cash flows relating to operating leases | 2,251 | 1,991 |
| Lease liabilities arising from obtaining right-of-use assets | 1,629 | 2,568 |

---

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22. **LEASES (Continued)** 

As of December 31, 2024, the aggregate future minimum rental payments under non-cancelable agreement were as follows:

---

| | |
|:---|:---|
|  | **RMB** |
| 2025 | 1860 |
| 2026 | 1377 |
| 2027 | 626 |
| 2028 | 205 |
| Total future minimum rental payment | 4068 |
| Less amount representing imputed interest | (248) |
| Present value of future minimum rental payments | 3820 |
| Less current portion, recorded in other current liabilities | 2037 |
| Long-term lease liabilities, recorded in other long-term liabilities | 1783 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23. **COMMITMENTS AND CONTINGENCIES** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(a)*  ***Operating lease commitments*** 

The operating commitments mainly consist of the short-term lease commitments and leases that have not yet commenced but that create significant rights and obligations for the Company, which are not included in operating lease right-of–use assets and lease liabilities. As of December 31, 2024, there were no future minimum commitments under non-cancelable agreements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(b)*  ***Capital and other commitment*** 

Capital expenditures contracted for at the balance sheet dates but not recognized in the consolidated financial statements are as follows:

---

| | | |
|:---|:---|:---|
|  | **As of December 31,**  | **As of December 31,**  |
|  | **2023** | **2024** |
|  | **RMB** | **RMB** |
| Property, plant, and equipment | 37,685 | 40,848 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(c)*  ***Legal proceedings*** 

From time to time, the Group is involved in claims and legal proceedings that arise in the ordinary course of business. Based on currently available information, management does not believe that the ultimate outcome of these unresolved matters, individually and in the aggregate, is likely to have a material adverse effect on the Group's financial position, results of operations or cash flows.

However, litigation is subject to inherent uncertainties and the Group's view of these matters may change in the future. If an unfavorable outcome were to occur, there exists the possibility of a material adverse impact on the Group's financial position and results of operations for the periods in which the unfavorable outcome occurs.

[**Table of Contents**](#TOC)

#### VIOMI TECHNOLOGY CO., LTD

#### NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

#### FOR THE YEARS ENDED DECEMBER 31, 2022, 2023 AND 2024
**(Amounts in thousands, except shares, ADS, per share and per ADS data)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;24. **RESTRICTED NET ASSETS** 

Relevant PRC laws and regulations permit payments of dividends by the Group's entities incorporated in the PRC only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. In addition, the Company's entities in the PRC are required to annually appropriate 10% of their net after-tax income to the statutory general reserve fund prior to payment of any dividends, unless such reserve funds have reached 50% of their respective registered capital. As a result of these and other restrictions under PRC laws and regulations, the Company's entities incorporated in the PRC are restricted in their ability to transfer a portion of their net assets to the Company either in the form of dividends, loans or advances, which restricted portion amounted to RMB95,738 and RMB97,942 as of December 31, 2023 and 2024. Even though the Company currently does not require any such dividends, loans or advances from the PRC entities for working capital and other funding purposes, the Company may in the future require additional cash resources from them due to changes in business conditions, to fund future acquisitions and development, or merely to declare and pay dividends or distributions to its shareholders. Except for the above, there is no other restriction on use of proceeds generated by the Group's subsidiaries and VIEs to satisfy any obligations of the Company.

For the year ended December 31, 2024, the Company performed a test on the restricted net assets of subsidiaries and VIEs in accordance with Securities and Exchange Commission Regulation S-X Rule 4-08 (e) (3), "General Notes to Financial Statements" and concluded that the restricted net assets do not exceed 25% of the consolidated net assets of the Company as of December 31, 2024 and the condensed financial information of the Company are not required to be presented.

Cash transfers from the Company's PRC subsidiaries to their parent companies outside of China are subject to PRC government control of currency conversion. Shortages in the availability of foreign currency may temporarily restrict the ability of the PRC subsidiaries and VIEs and their subsidiaries to remit sufficient foreign currency to pay dividends or other payments to the Company, or otherwise satisfy their foreign currency denominated obligation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**25.** **SUBSEQUENT EVENT** 

On March 25, 2025, the Group entered into a loan agreement with Industrial and Commercial Bank to borrow RMB10.0 million as working capital for one year, with a maturity date of March 26, 2026. These loans have a fixed interest rate of 2.75% per annum.

On January 8, 2025, the Group entered into a loan agreement with Bank of China to borrow RMB30.0 million as working capital for one year. The loan was withdrawn on January 15, 2025 and as a maturity date in January 15, 2026. The loan has a fixed interest rate of 2.85% per annum.

The Group entered into a line of credit agreement with Agricultural Bank of China (See Note 12). As of the date of this report, the Group borrowed additional RMB1,118 under the line of credit, with interest rate of 2.85% per annum. The Group repaid a total of RMB14,818, and the outstanding balance of long-term borrowings was RMB91,545 as of the date of this report.

On July 14, 2025, the Company announced that its board of directors has approved the declaration and distribution of a special dividend (the "Special Dividend") of US$0.0293 per ordinary share (US$0.0880 per American depositary share, or ADS). The aggregate amount of the Special Dividend was approximately US$6 million. The Special Dividend was paid to the holders of the Company's ordinary shares on August 18, 2025, and to the holders of the Company's ADSs on August 21, 2025, of record, as of the close of business on July 31, 2025. The Special Dividend paid to the holders of ADSs was subject to the terms of the deposit agreement.

The Group has evaluated other subsequent events from January 1, 2025 up through the date the Group filed these consolidated financial statements and the Group did not identify any subsequent events with material financial impact on the Group's consolidated financial statements.

## Exhibit 2.5

**Exhibit 2.5**

**Description of rights of each class of securities**

**registered under Section 12 of the Securities Exchange Act of 1934 (the "Exchange Act")**

American Depositary Shares ("ADSs") each representing three Class A ordinary shares of Viomi Technology Co., Ltd., ("we," "us," "our company" or "our") are listed and traded on the Nasdaq Stock Market and, in connection with this listing (but not for trading), the Class A ordinary shares are registered under Section 12(b) of the Exchange Act. This exhibit contains a description of the rights of (i) the holders of Class A ordinary shares and (ii) the holders of ADSs. Underlying Class A ordinary shares represented by the ADSs are held by Deutsche Bank Trust Company Americas, as depositary, and holders of ADSs will not be treated as holders of the Class A ordinary shares.

**Description of Class A Ordinary Shares**

The following is a summary of material provisions of our currently effective second amended and restated memorandum and articles of association (the "Memorandum and Articles of Association"), as well as the Companies Act (As Revised) of the Cayman Islands (the "Companies Act") insofar as they relate to the material terms of our ordinary shares. Notwithstanding this, because it is a summary, it may not contain all the information that you may otherwise deem important. For more complete information, you should read the entire Memorandum and Articles of Association, which has been filed with the SEC as an exhibit to our Registration Statement on Form F-1 (File No. 333-227063).

***Type and Class of Securities (Item 9.A.5 of Form 20-F)***

Each Class A ordinary share has US$0.00001 par value. The number of Class A ordinary shares that have been issued as of the last day of the financial year ended December 31, 2019 is provided on the cover of the annual report for fiscal year 2019 on Form 20-F filed in April 2020 (the "2019 Form 20-F"). Our Class A ordinary shares may be held in either certificated or uncertificated form.

***Preemptive Rights (Item 9.A.3 of Form 20-F)***

Our shareholders do not have preemptive rights.

***Limitations or Qualifications (Item 9.A.6 of Form 20-F)***

We have a dual-class voting structure such that our ordinary shares consist of Class A ordinary shares and Class B ordinary shares. Each Class A ordinary share shall entitle the holder thereof to one vote on all matters subject to the vote at general meetings of our company, and each Class B ordinary share shall entitle the holder thereof to ten votes on all matters subject to vote at general meetings of our company. Due to the super voting powers granted to holders of Class B ordinary shares, the voting power of holders of Class A ordinary shares may be materially limited.

------

***Rights of Other Types of Securities (Item 9.A.7 of Form 20-F)***

Not applicable.

***Rights of Class A Ordinary Shares (Item 10.B.3 of Form 20-F)***

*Classes of Ordinary Shares*

Our ordinary shares are divided into Class A ordinary shares and Class B ordinary shares. Holders of our Class A ordinary shares and Class B ordinary shares will have the same rights except for voting and conversion rights. Our ordinary shares are issued in registered form and are issued when registered in our register of shareholders. We may not issue shares to bearer. Our shareholders who are non-residents of the Cayman Islands may freely hold and vote their shares.

*Conversion*

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 sale, transfer, assignment or disposition of any Class B ordinary share by Mr. Xiaoping Chen or Viomi Limited to any person who is not Mr. Chen Xiaoping or his affiliate(s), or upon a change of ultimate beneficial ownership of any Class B ordinary share to any person who is not Mr. Xiaoping Chen or his affiliate(s), such Class B ordinary share shall be automatically and immediately converted into one Class A ordinary share. Upon any sale, transfer, assignment or disposition of any Class B ordinary share by a shareholder other than Mr. Xiaoping Chen or his affiliate(s) to any person, such Class B ordinary share shall be automatically and immediately converted into one Class A ordinary share.

*Dividends*

The holders of our ordinary shares are entitled to such dividends as may be declared by our board of directors. In addition, our shareholders may declare dividends by ordinary resolution, but no dividend shall exceed the amount recommended by our directors. Our Memorandum and Articles of Association provide that dividends may be declared and paid out of our profits, realized or unrealized, or from any reserve set aside from funds legally available for distribution. Under the laws of the Cayman Islands, our company may pay a dividend out of either profit or 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.

*Voting Rights*

In respect of all matters subject to a shareholders' vote, each holder of Class A ordinary shares is entitled to one vote per share and each holder of Class B ordinary shares is entitled to ten votes per share on all matters subject to vote at our general meetings. Our Class A ordinary shares and Class B ordinary shares vote together as a single class on all matters submitted to a vote of our shareholders, except as may otherwise be required by law. Voting at any shareholders' meeting is by show of hands unless a poll is demanded. A poll may be demanded by the chairman of such meeting or any shareholder present in person or by proxy.

------

*Transfer of Ordinary Shares*

Subject to the restrictions set out in our Memorandum and Articles of Association as set out below, any of our shareholders may transfer all or any of his or her ordinary shares by an instrument of transfer in the usual or common form or any other form approved by our board of directors

Our board of directors may, in its absolute discretion, decline to register any transfer of any ordinary share which is not fully paid up or on which we have a lien. Our board of directors may also decline to register any transfer of any ordinary share unless:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· the instrument of transfer is lodged with us, accompanied by the certificate for the ordinary shares to which it relates and such other evidence as our board of directors may reasonably require to show the right of the transferor to make the transfer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· the instrument of transfer is in respect of only one class of ordinary shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· the instrument of transfer is properly stamped, if required;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· in the case of a transfer to joint holders, the number of joint holders to whom the ordinary share is to be transferred does not exceed four; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· a fee of such maximum sum as Nasdaq Stock Market may determine to be payable or such lesser sum as our directors may from time to time require is paid to us in respect thereof.

If our directors refuse to register a transfer they shall, within three months after the date on which the instrument of transfer was lodged, send to each of the transferor and the transferee notice of such refusal.

The registration of transfers may, after compliance with any notice required of Nasdaq Stock Market, be suspended and the register closed at such times and for such periods as our board of directors may from time to time determine, provided, however, that the registration of transfers shall not be suspended nor the register closed for more than 30 days in any year as our board may determine.

*Liquidation Rights*

On the winding up of our company, if the assets available for distribution amongst our shareholders shall be more than sufficient to repay the whole of the share capital at the commencement of the winding up, the surplus shall be distributed amongst our shareholders in proportion to the par value of the shares held by them at the commencement of the winding up, subject to a deduction from those shares in respect of which there are monies due, of all monies payable to our company for unpaid calls or otherwise. If our assets available for distribution are insufficient to repay all of the paid-up capital, the assets will be distributed so that the losses are borne by our shareholders in proportion to the par value of the shares held by them.

*Calls on Shares and Forfeiture of Shares*

------

Our board of directors may from time to time make calls upon shareholders for any amounts unpaid on their shares in a notice served to such shareholders at least 14 calendar days prior to the specified time of payment. The shares that have been called upon and remain unpaid are subject to forfeiture.

*Redemption, Repurchase and Surrender of Ordinary Shares*

We may issue shares on terms that such shares are subject to redemption, at our option or at the option of the holders of these shares, on such terms and in such manner as may be determined, before the issue of such shares, by our board of directors or by shareholders by special resolutions. Our Company may also repurchase any of our shares on such terms and in such manner as have been approved by our board of directors or by an ordinary resolution of our shareholders. Under the Companies Act, the redemption or repurchase of any share may be paid out of our Company's profits or out of the proceeds of a new issue of shares made for the purpose of such redemption or repurchase, or out of capital (including share premium account and capital redemption reserve) if our company can, immediately following such payment, pay its debts as they fall due in the ordinary course of business. In addition, under the Companies Act, no such share may be redeemed or repurchased (a) unless it is fully paid up, (b) if such redemption or repurchase would result in there being no shares outstanding or (c) if the company has commenced liquidation. In addition, our company may accept the surrender of any fully paid share for no consideration.

***Requirements to Change the Rights of Holders of Class A Ordinary Shares (Item 10.B.4 of Form 20-F)***

*Variations of Rights of Shares*

If at any time, our share capital is divided into different classes of shares, the rights attached to any such class of shares (unless otherwise provided by the terms of issue of the shares of that class), may be materially adversely varied with the consent in writing of the holders of two-thirds of the issued shares of that class or with the sanction of a special resolution passed at a separate meeting of the holders of the shares of the class. The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the shares of that class, be deemed to be materially adversely varied by, inter alia, the creation, allotment or issue of further shares ranking *pari passu* with or subsequent to or the redemption or purchase of any shares of such existing class of shares.

***Limitations on the Rights to Own Class A Ordinary Shares (Item 10.B.6 of Form 20-F)***

There are no limitations under the laws of the Cayman Islands or under the Memorandum and Articles of Association that limit the right of non-resident or foreign owners to hold or vote Class A ordinary shares.

***Provisions Affecting Any Change of Control (Item 10.B.7 of Form 20-F)***

*Anti-Takeover Provisions in the Memorandum and Articles of Association*. Some provisions of our Memorandum and Articles of Association may discourage, delay or prevent a

------

change of control of our company or management that shareholders may consider favorable, including provisions that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· authorize our board of directors to issue preference shares in one or more series and to designate the price, rights, preferences, privileges and restrictions of such preference shares without any further vote or action by our shareholders; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· limit the ability of shareholders to requisition and convene general meetings of shareholders.

However, under Cayman Islands law, our directors may only exercise the rights and powers granted to them under our Memorandum and Articles of Association for a proper purpose and for what they believe in good faith to be in the best interests of our company.

***Ownership Threshold (Item 10.B.8 of Form 20-F)***

There are no provisions under the laws of the Cayman Islands applicable to our company or under the Memorandum and Articles of Association that that require the Company to disclose shareholder ownership above any particular ownership threshold.

***Differences Between the Law of Different Jurisdictions (Item 10.B.9 of Form 20-F)***

The Companies Act is derived, to a large extent, from the older Companies Acts of England but does not follow recent English statutory enactments and accordingly there are significant differences between the Companies Act and the current Companies Act of England. In addition, the Companies Act differs from laws applicable to U.S. corporations and their shareholders. Set forth below is a summary of certain significant differences between the provisions of the Companies Act applicable to us and the laws applicable to companies incorporated in the United States and their shareholders.

*Mergers and Similar Arrangements.* The Companies Act permits mergers and consolidations between Cayman Islands companies and between Cayman Islands companies and non-Cayman Islands companies. For these purposes, (i) "merger" means the merging of two or more constituent companies and the vesting of their undertaking, property and liabilities in one of such companies as the surviving company, and (ii) a "consolidation" means the combination of two or more constituent companies into a consolidated company and the vesting of the undertaking, property and liabilities of such companies to the consolidated company. In order to effect such a merger or consolidation, the directors of each constituent company must approve a written plan of merger or consolidation, which must then be authorized by (a) a special resolution of the shareholders of each constituent company, and (b) such other authorization, if any, as may be specified in such constituent company's articles of association. The written plan of merger or consolidation must be filed with the Registrar of Companies of the Cayman Islands together with a declaration as to the solvency of the consolidated or surviving company, a list of the assets and liabilities of each constituent company and an undertaking that a copy of the certificate of merger or consolidation will be given to the members and creditors of each constituent company and that notification of the merger or consolidation will be published in the Cayman Islands Gazette. Court approval is not required for a merger or consolidation which is effected in compliance with these statutory procedures.

------

A merger between a Cayman parent company and its Cayman subsidiary or subsidiaries does not require authorization by a resolution of shareholders of that Cayman subsidiary if a copy of the plan of merger is given to every member of that Cayman subsidiary to be merged unless that member agrees otherwise. For this purpose a company is a "parent" of a subsidiary if it holds issued shares that together represent at least ninety percent (90%) of the votes at a general meeting of the subsidiary.

The consent of each holder of a fixed or floating security interest over a constituent company is required unless this requirement is waived by a court in the Cayman Islands.

Save in certain limited circumstances, a shareholder of a Cayman constituent company who dissents from the merger or consolidation is entitled to payment of the fair value of his shares (which, if not agreed between the parties, will be determined by the Cayman Islands court) upon dissenting to the merger or consolidation, provided the dissenting shareholder complies strictly with the procedures set out in the Companies Act. The exercise of dissenter rights will preclude the exercise by the dissenting shareholder of any other rights to which he or she might otherwise be entitled by virtue of holding shares, save for the right to seek relief on the grounds that the merger or consolidation is void or unlawful.

Separate from the statutory provisions relating to mergers and consolidations, the Companies Act also contains statutory provisions that facilitate the reconstruction and amalgamation of companies by way of schemes of arrangement, provided that the arrangement is approved by (a) 75% in value of the shareholders or class of shareholders, as the case may be, or (b) a majority in number representing 75% in value of the creditors or each class of creditors, as the case may be, with whom the arrangement is to be made, that are, in each case, present and voting either in person or by proxy at a meeting, or meetings, convened for that purpose. The convening of the meetings and subsequently the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder has the right to express to the court the view that the transaction ought not to be approved, the court can be expected to approve the arrangement if it determines that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· the statutory provisions as to the required majority vote have been met;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· the shareholders have been fairly represented at the meeting in question and the statutory majority are acting bona fide without coercion of the minority to promote interests adverse to those of the class;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· the arrangement is such that may be reasonably approved by an intelligent and honest man of that class acting in respect of his interest; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Act.

The Companies Act also contains a statutory power of compulsory acquisition which may facilitate the "squeeze out" of dissentient minority shareholder upon a tender offer. When a tender offer is made and accepted by holders of 90% of the shares affected within four months, the offeror may, within a two-month period commencing on the expiration of such four month period, require the holders of the remaining shares to transfer such shares to the offeror on the terms of the offer.

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An objection can be made to the Grand Court of the Cayman Islands but this is unlikely to succeed in the case of an offer which has been so approved unless there is evidence of fraud, bad faith or collusion.

If an arrangement and reconstruction by way of scheme of arrangement is thus approved and sanctioned, or if a tender offer is made and accepted, in accordance with the foregoing statutory procedures, a dissenting shareholder would have no rights comparable to appraisal rights, save that objectors to a takeover offer may apply to the Grand Court of the Cayman Islands for various orders that the Grand Court of the Cayman Islands has a broad discretion to make, which would otherwise ordinarily be available to dissenting shareholders of Delaware corporations, providing rights to receive payment in cash for the judicially determined value of the shares.

*Shareholders' Suits.* In principle, we will normally be the proper plaintiff to sue for a wrong done to us as a company, and as a general rule a derivative action may not be brought by a minority shareholder. However, based on English authorities, which would in all likelihood be of persuasive authority in the Cayman Islands, the Cayman Islands court can be expected to follow and apply the common law principles (namely the rule in Foss v. Harbottle and the exceptions thereto) so that a non-controlling shareholder may be permitted to commence a class action against or derivative actions in the name of the company to challenge actions where:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· an act which is ultra vires or illegal and is therefore incapable of ratification by the shareholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· an act which requires a resolution with a qualified (or special) majority (i.e., more than a simple majority) that has not been obtained; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· an act which constitutes a fraud against the minority share the wrongdoer are themselves in control of our company.

*Indemnification of Directors and Executive Officers and Limitation of Liability.* Cayman Islands law does not limit the extent to which a company's memorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime. Our Memorandum and Articles of Association provide that that we shall indemnify our officers and directors against all actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained by such directors or officer, other than by reason of such person's own dishonesty, willful default or fraud, in or about the conduct of our company's business or affairs (including as a result of any mistake of judgment) or in the execution or discharge of his duties, powers, authorities or discretions, including without prejudice to the generality of the foregoing, any costs, expenses, losses or liabilities incurred by such director or officer in defending (whether successfully or otherwise) any civil proceedings concerning our company or its affairs in any court whether in the Cayman Islands or elsewhere. This standard of conduct is generally the same as permitted under the Delaware General Corporation Law for a Delaware corporation.

In addition, we have entered into indemnification agreements with our directors and executive officers that provide such persons with additional indemnification beyond that provided in our Memorandum and Articles of Association.

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Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling us under the foregoing provisions, we have been informed that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

*Directors' Fiduciary Duties.* Under Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to shareholders, all material information reasonably available regarding a significant transaction. The duty of loyalty requires that a director acts in a manner he reasonably believes to be in the best interests of the corporation. He must not use his corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by a director, the director must prove the procedural fairness of the transaction, and that the transaction was of fair value to the corporation.

As a matter of Cayman Islands law, a director of a Cayman Islands company is in the position of a fiduciary with respect to the company and therefore it is considered that he owes the following duties to the company—a duty to act bona fide in the best interests of the company, a duty not to make a profit based on his position as director (unless the company permits him to do so), a duty not to put himself in a position where the interests of the company conflict with his personal interest or his duty to a third party, and a duty to exercise powers for the purpose for which such powers were intended. A director of a Cayman Islands company owes to the company a duty to act with skill and care. It was previously considered that a director need not exhibit in the performance of his duties a greater degree of skill than may reasonably be expected from a person of his knowledge and experience. However, English and Commonwealth courts have moved towards an objective standard with regard to the required skill and care and these authorities are likely to be followed in the Cayman Islands.

*Shareholder Action by Written Consent.* Under the Delaware General Corporation Law, a corporation may eliminate the right of shareholders to act by written consent by amendment to its certificate of incorporation. Cayman Islands law and our Memorandum and Articles of Association provide that our shareholders may approve corporate matters by way of a unanimous written resolution signed by or on behalf of each shareholder who would have been entitled to vote on such matter at a general meeting without a meeting being held.

*Shareholder Proposals.* Under the Delaware General Corporation Law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with the notice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings.

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The Companies Act 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. However, these rights may be provided in a company's articles of association. Our Memorandum and Articles of Association allow our shareholders holding in aggregate not less than one-third of all votes attaching to all the issued and outstanding shares of our company entitled to vote at general meetings to requisition an extraordinary general meeting of our shareholders, in which case our board is obliged to convene an extraordinary general meeting and to put the resolutions so requisitioned to a vote at such meeting. Other than this right to requisition a shareholders' meeting, our Memorandum and Articles of Association do not provide our shareholders with any other right to put proposals before annual general meetings or extraordinary general meetings. As an exempted Cayman Islands company, we are not obliged by law to call shareholders' annual general meetings.

*Cumulative Voting.* Under the Delaware General Corporation Law, cumulative voting for elections of directors is not permitted unless the corporation's certificate of incorporation specifically provides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholder to cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder's voting power with respect to electing such director. There are no prohibitions in relation to cumulative voting under the laws of the Cayman Islands but our Memorandum and Articles of Association do not provide for cumulative voting. As a result, our shareholders are not afforded any less protections or rights on this issue than shareholders of a Delaware corporation.

*Removal of Directors.* Under the Delaware General Corporation Law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Under our Memorandum and Articles of Association, directors may be removed with or without cause, by an ordinary resolution of our shareholders, or be appointed on terms that the director shall automatically retire from office (unless he has sooner vacated office) at the next or a subsequent annual general meeting or upon any specified event or after any specified period in a written agreement between our company and the director, if any; but no such term shall be implied in the absence of express provision. In addition, a director's office shall be vacated if the director (i) becomes bankrupt or makes any arrangement or composition with his creditors; (ii) dies or is found to be or becomes of unsound mind; (iii) resigns his office by notice in writing to the company; (iv) without special leave of absence from our board of directors, is absent from three consecutive meetings of the board and the board resolves that his office be vacated or; (v) is removed from office pursuant to any other provisions of our Memorandum and Articles of Association.

*Transactions with Interested Shareholders.* The Delaware General Corporation Law contains a business combination statute applicable to Delaware corporations whereby, unless the corporation has specifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain business combinations with an "interested shareholder" for three years following the date that such person becomes an interested shareholder. An interested shareholder generally is a person or a group who or which owns or owned 15% or more of the target's outstanding voting share within the past three years. This has the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if, among

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other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the business combination or the transaction which resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware corporation to negotiate the terms of any acquisition transaction with the target's board of directors.

Cayman Islands law has no comparable statute. As a result, we cannot avail ourselves of the types of protections afforded by the Delaware business combination statute. However, although Cayman Islands law does not regulate transactions between a company and its significant shareholders, it does provide that such transactions must be entered into bona fide in the best interests of the company and for a proper corporate purpose and not with the effect of constituting a fraud on the minority shareholders.

*Restructuring*. A company may present a petition to the Grand Court of the Cayman Islands for the appointment of a restructuring officer on the grounds that the company:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) is or is likely to become unable to pay its debts; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) intends to present a compromise or arrangement to its creditors (or classes thereof) either pursuant to the Companies Act, the law of a foreign country or by way of a consensual restructuring.

The Grand Court may, among other things, make an order appointing a restructuring officer upon hearing of such petition, with such powers and to carry out such functions as the court may order. At any time (i) after the presentation of a petition for the appointment of a restructuring officer but before an order for the appointment of a restructuring officer has been made, and (ii) when an order for the appointment of a restructuring officer is made, until such order has been discharged, no suit, action or other proceedings (other than criminal proceedings) shall be proceeded with or commenced against the company, no resolution to wind up the company shall be passed, and no winding up petition may be presented against the company, except with the leave of the court. However, notwithstanding the presentation of a petition for the appointment of a restructuring officer or the appointment of a restructuring officer, a creditor who has security over the whole or part of the assets of the company is entitled to enforce the security without the leave of the court and without reference to the restructuring officer appointed.

*Dissolution; Winding Up*. Under the Delaware General Corporation Law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding 100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of the corporation's outstanding shares. Delaware law allows a Delaware corporation to include in its certificate of incorporation a supermajority voting requirement in connection with dissolutions initiated by the board.

Under Cayman Islands law, a company may be wound up by either an order of the courts of the Cayman Islands or by a special resolution of its members or, if the company is unable to pay its debts as they fall due, by an ordinary resolution of its members. The court has authority to order winding up in a number of specified circumstances including where it is, in the opinion of the court, just and equitable to do so.

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*Variation of Rights of Shares*. Under the Delaware General Corporation Law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of such class, unless the certificate of incorporation provides otherwise. Under Cayman Islands law and our Memorandum and Articles of Association, if our share capital is divided into more than one class of shares, we may materially adversely vary the rights attached to any class with the written consent of the holders of two-thirds of the issued shares of that class or with the sanction of a special resolution passed at a separate meeting of the holders of the shares of that class.

*Amendment of Governing Documents.* Under the Delaware General Corporation Law, a corporation's governing documents may be amended with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Under the Companies Act and our Memorandum and Articles of Association, our Memorandum and Articles of Association may only be amended by a special resolution of our shareholders.

*Rights of Non-Resident or Foreign Shareholders*. There are no limitations imposed by our Memorandum and Articles of Association on the rights of non-resident or foreign shareholders to hold or exercise voting rights on our shares. In addition, there are no provisions in our Memorandum and Articles of Association governing the ownership threshold above which shareholder ownership must be disclosed.

*Exempted Company.* The Companies Act in the Cayman Islands distinguishes between ordinary resident companies and exempted companies. Any company that is registered in the Cayman Islands but conducts business mainly outside of the Cayman Islands may apply to be registered as an exempted company. The requirements for an exempted company are essentially the same as for an ordinary company except for the exemptions and privileges listed below:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· an exempted company does not have to file an annual return of its shareholders with the Registrar of Companies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· an exempted company's register of members is not required to be open for inspection;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· an exempted company does not have to hold an annual general meeting;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· an exempted company may issue no par value shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· an exempted company may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 30 years in the first instance);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· an exempted company may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· an exempted company may register as a limited duration company; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· an exempted company may register as a segregated portfolio company.

"Limited liability" means that the liability of each shareholder is limited to the amount unpaid by the shareholder on that shareholder's shares of the company (except in exceptional circumstances, such as involving fraud, the establishment of an agency relationship or an illegal

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or improper purpose or other circumstances in which a court may be prepared to pierce or lift the corporate veil).

***Changes in Capital (Item 10.B.10 of Form 20-F)***

Our shareholders may from time to time by ordinary resolution:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· increase the share capital by such sum, to be divided into shares of such classes and amount, as the resolution shall prescribe;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· increase its share capital by new shares of such amount as it thinks expedient;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· consolidate and divide all or any of our share capital into shares of a larger amount than its existing shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· subdivide its shares, or any of them, into shares of an amount smaller than that fixed by our Memorandum and Articles of Association, provided that in the subdivision the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in case of the share from which the reduced Share is derived; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· cancel any shares that, at the date of the passing of the resolution, have not been taken or agreed to be taken by any person and diminish the amount of our share capital by the amount of the shares so cancelled.

Our shareholders may by special resolution, subject to confirmation by the Grand Court of the Cayman Islands on an application by our company for an order confirming such reduction, reduce our share capital or any capital redemption reserve in any manner permitted by law.

**Debt Securities (Item 12.A of Form 20-F)**

Not applicable.

**Warrants and Rights (Item 12.B of Form 20-F)**

Not applicable.

**Other Securities (Item 12.C of Form 20-F)**

Not applicable.

**Description of American Depositary Shares (Items 12.D.1 and 12.D.2 of Form 20-F)**

Deutsche Bank Trust Company Americas, as depositary, registers and delivers the ADSs. Each ADS represents ownership of three Class A ordinary shares, deposited with Deutsche Bank AG, Hong Kong Branch, as custodian for the depositary. Each ADS also represents ownership of any other securities, cash or other property which may be held by the depositary. The depositary's corporate trust office at which the ADSs are administered is located at 60 Wall Street, New York,

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NY 10005, USA. The principal executive office of the depositary is located at 60 Wall Street, New York, NY 10005, USA.

The Direct Registration System, or DRS, is a system administered by The Depository Trust Company, or DTC, pursuant to which the depositary may register the ownership of uncertificated ADSs, which ownership shall be evidenced by periodic statements issued by the depositary to the ADS holders entitled thereto.

We will not treat ADS holders as our shareholders and accordingly, you, as an ADS holder, will not have shareholder rights. Cayman Islands law governs shareholder rights. The depositary will be the holder of the class A ordinary shares underlying your ADSs. Holder of our ADSs have ADS holder rights. A deposit agreement among our company, the depositary and the holders of our ADSs sets out ADS holder rights as well as the rights and obligations of the depositary. The laws of the State of New York govern the deposit agreement and the ADSs.

The following is a summary of the material provisions of the deposit agreement. For more complete information, you should read the entire deposit agreement and the form of American Depositary Receipt.

***Holding the ADSs***

*How will you hold your ADSs?*

You may hold ADSs either (1) directly (a) by having an American Depositary Receipt, or ADR, which is a certificate evidencing a specific number of ADSs, registered in your name, or (b) by holding ADSs in DRS, or (2) indirectly through your broker or other financial institution. If you hold ADSs directly, you are an ADS holder. This description assumes you hold your ADSs directly. ADSs will be issued through DRS, unless you specifically request certificated ADRs. If you hold the ADSs indirectly, you must rely on the procedures of your broker or other financial institution to assert the rights of ADS holders described in this section. You should consult with your broker or financial institution to find out what those procedures are.

***Dividends and Other Distributions***

*How will you receive dividends and other distributions on the shares?*

The depositary has agreed to pay to you the cash dividends or other distributions it or the custodian receives on 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 as of the record date (which will be as close as practicable to the record date for our class A ordinary shares) set by the depositary with respect to the ADSs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· *Cash.* The depositary will convert or cause to be converted any cash dividend or other cash distribution we pay on the class A ordinary shares or any net proceeds from the sale of any class A ordinary shares, rights, securities or other entitlements under the terms of the deposit agreement into U.S. dollars if it can do so on a practicable basis, and can transfer the U.S. dollars to the United States and will distribute promptly the amount thus received. If the depositary shall determine in its judgment that such conversions or transfers are not

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practical or lawful or if any government approval or license is needed and cannot be obtained at a reasonable cost within a reasonable period or otherwise sought, the deposit agreement allows the depositary to distribute the foreign currency only to those ADS holders to whom it is possible to do so. It will hold or cause the custodian to hold the foreign currency it cannot convert for the account of the ADS holders who have not been paid and such funds will be held for the respective accounts of the ADS holders. It will not invest the foreign currency and it will not be liable for any interest for the respective accounts of the ADS holders.

Before making a distribution, any taxes or other governmental charges, together with fees and expenses of the depositary, that must be paid, will be deducted. It will distribute only whole U.S. dollars and cents and will round down fractional cents to the nearest whole cent. *If the exchange rates fluctuate during a time when the depositary cannot convert the foreign currency, you may lose some or all of the value of the distribution.*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· *Shares.* For any class A ordinary shares we distribute as a dividend or free distribution, either (1) the depositary will distribute additional ADSs representing such class A ordinary shares or (2) existing ADSs as of the applicable record date will represent rights and interests in the additional class A ordinary shares distributed, to the extent reasonably practicable and permissible under law, in either case, net of applicable fees, charges and expenses incurred by the depositary and taxes and/or other governmental charges. The depositary will only distribute whole ADSs. It will try to sell class A ordinary shares which would require it to deliver a fractional ADS and distribute the net proceeds in the same way as it does with cash. The depositary may sell a portion of the distributed class A ordinary shares sufficient to pay its fees and expenses, and any taxes and governmental charges, in connection with that distribution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· *Elective Distributions in Cash or Shares.* If we offer holders of our class A ordinary shares the option to receive dividends in either cash or shares, the depositary, after consultation with us and having received timely notice as described in the deposit agreement of such elective distribution by us, has discretion to determine to what extent such elective distribution will be made available to you as a holder of the ADSs. We must timely first instruct the depositary to make such elective distribution available to you and furnish it with satisfactory evidence that it is legal to do so. The depositary could decide it is not legal or reasonably practicable to make such elective distribution available to you. In such case, the depositary shall, on the basis of the same determination as is made in respect of the class A ordinary shares for which no election is made, distribute either cash in the same way as it does in a cash distribution, or additional ADSs representing class A ordinary shares in the same way as it does in a share distribution. The depositary is not obligated to make available to you a method to receive the elective dividend in shares rather than in ADSs. There can be no assurance that you will be given the opportunity to receive elective distributions on the same terms and conditions as the holders of class A ordinary shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· *Rights to Purchase Additional Shares.* If we offer holders of our class A ordinary shares any rights to subscribe for additional shares, the depositary shall having received timely notice as described in the deposit agreement of such distribution by us, consult with us, and we must determine whether it is lawful and reasonably practicable to make these rights

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available to you. We must first instruct the depositary to make such rights available to you and furnish the depositary with satisfactory evidence that it is legal to do so. If the depositary decides it is not legal or reasonably practicable to make the rights available but that it is lawful and reasonably practicable to sell the rights, the depositary will endeavor to sell the rights and in a riskless principal capacity or otherwise, at such place and upon such terms (including public or private sale) as it may deem proper distribute the net proceeds in the same way as it does with cash. The depositary will allow rights that are not distributed or sold to lapse. In that case, you will receive no value for them.

If the depositary makes rights available to you, it will establish procedures to distribute such rights and enable you to exercise the rights upon your payment of applicable fees, charges and expenses incurred by the depositary and taxes and/or other governmental charges. The depositary shall not be obliged to make available to you a method to exercise such rights to subscribe for class A ordinary shares (rather than ADSs).

U.S. securities laws may restrict transfers and cancellation of the ADSs represented by shares purchased upon exercise of rights. For example, you may not be able to trade these ADSs freely in the United States. In this case, the depositary may deliver restricted depositary shares that have the same terms as the ADSs described in this section except for changes needed to put the necessary restrictions in place.

There can be no assurance that you will be given the opportunity to exercise rights on the same terms and conditions as the holders of class A ordinary shares or be able to exercise such rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· *Other Distributions.* Subject to receipt of timely notice, as described in the deposit agreement, from us with the request to make any such distribution available to you, and provided the depositary has determined such distribution is lawful and reasonably practicable and feasible and in accordance with the terms of the deposit agreement, the depositary will distribute to you anything else we distribute on deposited securities by any means it may deem practicable, upon your payment of applicable fees, charges and expenses incurred by the depositary and taxes and/or other governmental charges. If any of the conditions above are not met, the depositary will endeavor to sell, or cause to be sold, what we distributed and distribute the net proceeds in the same way as it does with cash; or, if it is unable to sell such property, the depositary may dispose of such property in any way it deems reasonably practicable under the circumstances for nominal or no consideration, such that you may have no rights to or arising from such property.

The depositary is not responsible if it decides that it is unlawful or impractical to make a distribution available to any ADS holders. We have no obligation to register ADSs, shares, rights or other securities under the Securities Act. We also have no obligation to take any other action to permit the distribution of ADSs, shares, rights or anything else to ADS holders. This means that you may not receive the distributions we make on our shares or any value for them if we and/or the depositary determines that it is illegal or not practicable for us or the depositary to make them available to you.

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***Deposit, Withdrawal and Cancellation***

*How are ADS issued?*

The depositary will deliver ADSs if you or your broker deposit class A ordinary shares or evidence of rights to receive class A ordinary shares with the custodian. Upon payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, the depositary will register the appropriate number of ADSs in the names you request and will deliver the ADSs to or upon the order of the person or persons entitled thereto.

*How do ADR holders cancel an American Depositary Share?*

You may turn in your ADSs at the depositary's corporate trust office or by providing appropriate instructions to your broker. Upon payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, the depositary will deliver the class A ordinary shares and any other deposited securities underlying the ADSs to you or a person you designate at the office of the custodian. Or, at your request, risk and expense, the depositary will deliver the deposited securities at its corporate trust office, to the extent permitted by law.

*How do ADS holders interchange between Certificated ADSs and Uncertificated ADSs?*

You may surrender your ADR to the depositary for the purpose of exchanging your ADR for uncertificated ADSs. The depositary will cancel that ADR and will send you a statement confirming that you are the owner of uncertificated ADSs. Alternatively, upon receipt by the depositary of a proper instruction from a holder of uncertificated ADSs requesting the exchange of uncertificated ADSs for certificated ADSs, the depositary will execute and deliver to you an ADR evidencing those ADSs.

***Voting Rights***

*How* do you vote?

You may instruct the depositary to vote the class A ordinary shares or other deposited securities underlying your ADSs at any meeting at which you are entitled to vote pursuant to any applicable law, the provisions of our Memorandum and Articles of Association, and the provisions of or governing the deposited securities. *Otherwise, you could exercise your right to vote directly if you withdraw the class A ordinary shares. However, you may not know about the meeting sufficiently enough in advance to withdraw the class A ordinary shares.*

If we ask for your instructions and upon timely notice from us by regular, ordinary mail delivery, or by electronic transmission, as described in the deposit agreement, the depositary will notify you of the upcoming meeting at which you are entitled to vote pursuant to any applicable law, the provisions of our Memorandum and Articles of Association, and the provisions of or governing the deposited securities, and arrange to deliver our voting materials to you. The materials will include or reproduce (a) such notice of meeting or solicitation of consents or proxies; (b) a statement that the ADS holders at the close of business on the ADS record date will be entitled, subject to any applicable law, the provisions of our Memorandum and Articles

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of Association, and the provisions of or governing the deposited securities, to instruct the depositary as to the exercise of the voting rights, if any, pertaining to the class A ordinary shares or other deposited securities represented by such holder's ADSs; and (c) a brief statement as to the manner in which such instructions may be given or deemed given in accordance with the second to last sentence of this paragraph if no instruction is received, to the depositary to give a discretionary proxy to a person designated by us. Voting instructions may be given only in respect of a number of ADSs representing an integral number of class A ordinary shares or other deposited securities. For instructions to be valid, the depositary must receive them in writing on or before the date specified. The depositary will try, as far as practical, subject to applicable law and the provisions of our Memorandum and Articles of Association, to vote or to have its agents vote the Class A ordinary shares or other deposited securities (in person or by proxy) as you instruct. The depositary will only vote or attempt to vote as you instruct. If we timely requested the depositary to solicit your instructions but no instructions are received by the depositary from an owner with respect to any of the deposited securities represented by the ADSs of that owner on or before the date established by the depositary for such purpose, the depositary shall deem that owner to have instructed the depositary to give a discretionary proxy to a person designated by us with respect to such deposited securities, and the depositary shall give a discretionary proxy to a person designated by us to vote such deposited securities. However, no such instruction shall be deemed given and no such discretionary proxy shall be given with respect to any matter if we inform the depositary we do not wish such proxy given, substantial opposition exists or the matter materially and adversely affects the rights of holders of the ordinary shares.

We cannot assure you that you will receive the voting materials in time to ensure that you can instruct the depositary to vote the Class A ordinary shares underlying your ADSs. In addition, there can be no assurance that ADS holders and beneficial owners generally, or any holder or beneficial owner in particular, will be given the opportunity to vote or cause the custodian to vote on the same terms and conditions as the holders of our class A ordinary shares.

The depositary and its agents are not responsible for failing to carry out voting instructions or for the manner of carrying out voting instructions. *This means that you may not be able to exercise your right to vote and you may have no recourse if the Class A ordinary shares underlying your ADSs are not voted as you requested.*

In order to give you a reasonable opportunity to instruct the depositary as to the exercise of voting rights relating to deposited securities, if we request the depositary to act, we will give the depositary notice of any such meeting and details concerning the matters to be voted at least 30 business days in advance of the meeting date.

***Compliance with Regulations***

*Information Requests*

Each ADS holder and beneficial owner shall (a) provide such information as we or the depositary may request pursuant to law, including, without limitation, relevant Cayman Islands law, any applicable law of the United States of America, our Memorandum and Articles of Association, any resolutions of our board of directors adopted pursuant to our Memorandum and Articles of Association, the requirements of any markets or exchanges upon which the Class A

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ordinary shares, ADSs or ADRs are listed or traded, or to any requirements of any electronic book-entry system by which the ADSs or ADRs may be transferred, regarding the capacity in which they own or owned ADRs, the identity of any other persons then or previously interested in such ADRs and the nature of such interest, and any other applicable matters, and (b) be bound by and subject to applicable provisions of the laws of the Cayman Islands, our Memorandum and Articles of Association, and the requirements of any markets or exchanges upon which the ADSs, ADRs or Class A ordinary shares are listed or traded, or pursuant to any requirements of any electronic book-entry system by which the ADSs, ADRs or class A ordinary shares may be transferred, to the same extent as if such ADS holder or beneficial owner held Class A ordinary shares directly, in each case irrespective of whether or not they are ADS holders or beneficial owners at the time such request is made.

*Disclosure of Interests*

Each ADS holder and beneficial owner shall comply with our requests pursuant to Cayman Islands law, the rules and requirements of the Nasdaq Stock Market and any other stock exchange on which the class A ordinary shares are, or will be, registered, traded or listed or our Memorandum and Articles of Association, which requests are made to provide information, inter alia, as to the capacity in which such ADS holder or beneficial owner owns ADS and regarding the identity of any other person interested in such ADS and the nature of such interest and various other matters, whether or not they are ADS holders or beneficial owners at the time of such requests.

***Payment of Taxes***

You will be responsible for any taxes or other governmental charges payable, or which become payable, on your ADSs or on the deposited securities represented by any of your ADSs. The depositary may refuse to register or transfer your ADSs or allow you to withdraw the deposited securities represented by your ADSs until such taxes or other charges are paid. It may apply payments owed to you or sell deposited securities represented by your ADSs to pay any taxes owed and you will remain liable for any deficiency. If the depositary sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay to you any net proceeds, or send to you any property, remaining after it has paid the taxes. You agree to indemnify us, the depositary, the custodian and each of our and their respective agents, directors, employees and affiliates for, and hold each of them harmless from, any claims with respect to taxes (including applicable interest and penalties thereon) arising from any refund of taxes, reduced rate of withholding at source or other tax benefit obtained for you. Your obligations under this paragraph shall survive any transfer of ADRs, any surrender of ADRs and withdrawal of deposited securities or the termination of the deposit agreement.

***Reclassifications, Recapitalizations and Mergers***

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| | | |
|:---|:---|:---|
| **If we:** |  | **Then:** |
| Change the nominal or par value of our Class A ordinary shares |  | The cash, shares or other securities received by the depositary will become deposited securities. |

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| | |
|:---|:---|
| Reclassify, split up or consolidate any of the deposited securities | Each ADS will automatically represent its equal share of the new deposited securities. |
| Distribute securities on the Class A ordinary shares that are not distributed to you, or Recapitalize, reorganize, merge, liquidate, sell all or substantially all of our assets, or take any similar action | The depositary may distribute some or all of the cash, shares or other securities it received. It may also deliver new ADSs or ask you to surrender your outstanding ADRs in exchange for new ADRs identifying the new deposited securities. |

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***Amendment and Termination***

*How may the deposit agreement be amended?*

We may agree with the depositary to amend the deposit agreement and the form of ADR without your consent for any reason. If an amendment adds or increases fees or charges, except for taxes and other governmental charges or expenses of the depositary for registration fees, facsimile costs, delivery charges or similar items, including expenses incurred in connection with foreign exchange control regulations and other charges specifically payable by ADS holders under the deposit agreement, or materially prejudices a substantial existing right of ADS holders, it will not become effective for outstanding ADSs until 30 days after the depositary notifies ADS holders of the amendment. At the time an amendment becomes effective, you are considered, by continuing to hold your ADSs, to agree to the amendment and to be bound by the ADRs and the deposit agreement as amended. If any new laws are adopted which would require the deposit agreement to be amended in order to comply therewith, we and the depositary may amend the deposit agreement in accordance with such laws and such amendment may become effective before notice thereof is given to ADS holders.

*How may the deposit agreement be terminated?*

The depositary will terminate the deposit agreement if we ask it to do so, in which case the depositary will give notice to you at least 90 days prior to termination. The depositary may also terminate the deposit agreement if the depositary has told us that it would like to resign, or if we have removed the depositary, and in either case we have not appointed a new depositary within 90 days. In either such case, the depositary must notify you at least 30 days before termination.

After termination, the depositary and its agents will do the following under the deposit agreement but nothing else: collect distributions on the deposited securities, sell rights and other property and deliver Class A ordinary shares and other deposited securities upon cancellation of ADSs after payment of any fees, charges, taxes or other governmental charges. Six months or more after the date of termination, the depositary may sell any remaining deposited securities by public or private sale. After that, the depositary will hold the money it received on the sale, as well as any other cash it is holding under the deposit agreement, for the pro rata benefit of the ADS holders that have not surrendered their ADSs. It will not invest the money and has no liability for interest. After such sale, the depositary's only obligations will be to account for the money and other cash. After termination, we shall be discharged from all obligations under the deposit agreement except for our obligations to the depositary thereunder.

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***Books of Depositary***

The depositary will maintain ADS holder records at its depositary office. You may inspect such records at such office during regular business hours but solely for the purpose of communicating with other holders in the interest of business matters relating to the Company, the ADRs and the deposit agreement.

The depositary will maintain facilities in the Borough of Manhattan, The City of New York to record and process the issuance, cancellation, combination, split-up and transfer of ADRs.

These facilities may be closed at any time or from time to time when such action is deemed necessary or advisable by the depositary in connection with the performance of its duties under the deposit agreement or at our reasonable written request.

***Limitations on Obligations and Liability to ADR Holders***

*Limits on our Obligations and the Obligations of the Depositary and the Custodian; Limits on Liability to Holders of ADSs*

The deposit agreement expressly limits our obligations and the obligations of the depositary and the custodian. It also limits our liability and the liability of the depositary. The depositary and the custodian:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· are only obligated to take the actions specifically set forth in the deposit agreement without gross negligence or willful misconduct;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· are not liable if any of us or our respective controlling persons or agents are prevented or forbidden from, or subjected to any civil or criminal penalty or restraint on account of, or delayed in, doing or performing any act or thing required by the terms of the deposit agreement and any ADR, by reason of any provision of any present or future law or regulation of the United States or any state thereof, the Cayman Islands or any other country, or of any other governmental authority or regulatory authority or stock exchange, or on account of the possible criminal or civil penalties or restraint, or by reason of any provision, present or future, of our Memorandum and Articles of Association or any provision of or governing any deposited securities, or by reason of any act of God or war or other circumstances beyond its control (including, without limitation, nationalization, expropriation, currency restrictions, work stoppage, strikes, civil unrest, revolutions, rebellions, explosions and computer failure);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· are not liable by reason of any exercise of, or failure to exercise, any discretion provided for in the deposit agreement or in our Memorandum and Articles of Association or provisions of or governing deposited securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· are not liable for any action or inaction of the depositary, the custodian or us or their or our respective controlling persons or agents in reliance upon the advice of or information from legal counsel, any person presenting Class A ordinary shares for deposit or any other person believed by it in good faith to be competent to give such advice or information;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· are not liable for the inability of any holder of ADSs to benefit from any distribution on deposited securities that is not made available to holders of ADSs under the terms of the deposit agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· are not liable for any special, consequential, indirect or punitive damages for any breach of the terms of the deposit agreement, or otherwise;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· may rely upon any documents we believe in good faith to be genuine and to have been signed or presented by the proper party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· disclaim any liability for any action or inaction or inaction of any of us or our respective controlling persons or agents in reliance upon the advice of or information from legal counsel, accountants, any person presenting Class A ordinary shares for deposit, holders and beneficial owners (or authorized representatives) of ADSs, or any person believed in good faith to be competent to give such advice or information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· disclaim any liability for inability of any holder to benefit from any distribution, offering, right or other benefit made available to holders of deposited securities but not made available to holders of ADS.

The depositary and any of its agents also disclaim any liability (i) for any failure to carry out any instructions to vote, the manner in which any vote is cast or the effect of any vote or failure to determine that any distribution or action may be lawful or reasonably practicable or for allowing any rights to lapse in accordance with the provisions of the deposit agreement, (ii) the failure or timeliness of any notice from us, the content of any information submitted to it by us for distribution to you or for any inaccuracy of any translation thereof, (iii) any investment risk associated with the acquisition of an interest in the deposited securities, the validity or worth of the deposited securities, the credit-worthiness of any third party, (iv) for any tax consequences that may result from ownership of ADSs, Class A ordinary shares or deposited securities, or (v) for any acts or omissions made by a successor depositary whether in connection with a previous act or omission of the depositary or in connection with any matter arising wholly after the removal or resignation of the depositary, provided that in connection with the issue out of which such potential liability arises the depositary performed its obligations without gross negligence or willful misconduct while it acted as depositary.

In addition, the deposit agreement provides that each party to the deposit agreement (including each holder, beneficial owner and holder of interests in the ADRs) irrevocably waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in any lawsuit or proceeding against the depositary or our company related to our shares, the ADSs or the deposit agreement.

***Requirements for Depositary Actions***

Before the depositary will issue, deliver or register a transfer of an ADS, split-up, subdivide or combine ADSs, make a distribution on an ADS, or permit withdrawal of Class A ordinary shares, the depositary may require:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· payment of stock transfer or other taxes or other governmental charges and transfer or registration fees charged by third parties for the transfer of any Class A ordinary shares or other deposited securities and payment of the applicable fees, expenses and charges of the depositary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· satisfactory proof of the identity and genuineness of any signature or any other matters contemplated in the deposit agreement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· compliance with (A) any laws or governmental regulations relating to the execution and delivery of ADRs or ADSs or to the withdrawal or delivery of deposited securities and (B) such reasonable regulations and procedures as the depositary may establish, from time to time, consistent with the deposit agreement and applicable laws, including presentation of transfer documents.

The depositary may refuse to issue and deliver ADSs or register transfers of ADSs generally when the register of the depositary or our transfer books are closed or at any time if the depositary or we determine that it is necessary or advisable to do so.

***Your Rights to Receive the Shares Underlying Your ADSs***

You have the right to cancel your ADSs and withdraw the underlying Class A ordinary shares at any time except:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· when temporary delays arise because: (1) the depositary has closed its transfer books or we have closed our transfer books; (2) the transfer of class A ordinary shares is blocked to permit voting at a shareholders' meeting; or (3) we are paying a dividend on our Class A ordinary shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· when you owe money to pay fees, taxes and similar charges;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· when it is necessary to prohibit withdrawals in order to comply with any laws or governmental regulations that apply to ADSs or to the withdrawal of Class A ordinary shares or other deposited securities, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· other circumstances specifically contemplated by Section I.A.(l) of the General Instructions to Form F-6 (as such General Instructions may be amended from time to time); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· for any other reason if the depositary or we determine, in good faith, that it is necessary or advisable to prohibit withdrawals.

The depositary shall not knowingly accept for deposit under the deposit agreement any Class A ordinary shares or other deposited securities required to be registered under the provisions of the Securities Act, unless a registration statement is in effect as to such Class A ordinary shares.

This right of withdrawal may not be limited by any other provision of the deposit agreement.

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***Direct Registration System***

In the deposit agreement, all parties to the deposit agreement acknowledge that the DRS and Profile Modification System, or Profile, will apply to uncertificated ADSs upon acceptance thereof to DRS by DTC. DRS is the system administered by DTC pursuant to which the depositary may register the ownership of uncertificated ADSs, which ownership shall be evidenced by periodic statements issued by the depositary to the ADS holders entitled thereto. Profile is a required feature of DRS which allows a DTC participant, claiming to act on behalf of an ADS holder, to direct the depositary to register a transfer of those ADSs to DTC or its nominee and to deliver those ADSs to the DTC account of that DTC participant without receipt by the depositary of prior authorization from the ADS holder to register such transfer.

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## Exhibit 4.14

**Exhibit 4.14**

**Supplementary Agreement**

THIS SUPPLEMENTAL AGREEMENT (hereinafter referred to as "this Agreement") is made this <u>26th</u> day of <u>July</u>, 2024, by and between the following parties:

&nbsp;&nbsp;&nbsp;&nbsp;1. **Foshan Yunmi Electric Appliances Technology Co., Ltd.** （ Hereinafter referred to as "Existing Shareholder" or "Grantor". ）

Registered Address: Thirteenth Floor, No. 7, Industrial Avenue, Lunjiao Street, Lichun Village, Shunde District, Foshan City, Guangdong Province, China (residence declaration)

Legal Representative: CHEN Xiaoping

&nbsp;&nbsp;&nbsp;&nbsp;2. **Zhumeng Hulian Technology (Guangdong) Co., Ltd.** （ Hereinafter referred to as "Sole Proprietorship" or "Pledgee". ）

Registered Address: Thirteenth Floor, No. 7, Industrial Avenue, Lunjiao Street, Lichun Village, Shunde District, Foshan City, Guangdong Province, China (residence declaration)

Legal Representative: DUAN Erqiang

&nbsp;&nbsp;&nbsp;&nbsp;3. **Guangzhou Interconnect Electric Appliances Technology Co., Ltd.** (Hereinafter referred to as the "Company")

Registered Address: Room 1502, No. 1226 Xingang East Road, Haizhu District, Guangzhou City (office only)

Legal Representative: CHEN Xiaoping

(For the purposes of this Agreement, each of the foregoing parties shall be referred to individually as a "Party" and collectively as the "Parties".)

Whereas：

&nbsp;&nbsp;&nbsp;&nbsp;1. Existing shareholders are the registered shareholders of the Company, who legally hold all of the Company's equity (hereinafter referred to as "the Company's equity").

the parties hereto have entered into an Exclusive Right to Purchase Agreement (the "Exclusive Right to Purchase Agreement"), an Equity Pledge Agreement (the "Equity Pledge Agreement"), an Exclusive Consulting and Services Agreement (the "Exclusive Consulting and Services Agreement"), and a Stockholder Voting Proxy Agreement (the "Stockholder Voting Proxy Agreement"), all dated as of <u>July 20</u>, 2024. "Exclusive Consulting and Services Agreement") and the Stockholder Voting Proxy Agreement (the 'Stockholder Voting Proxy Agreement'), which together with the Exclusive Purchase Right Agreement, the Equity Pledge Agreement and the Exclusive Consulting and Services Agreement are referred to as the "VIE Agreements".

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;2. As at July 19, 2024, the registered capital of the Company was RMB467,316,000. The parties hereto and other related parties entered into a Business Reorganization Agreement dated July 19, 2024 (the "Business Reorganization Agreement"), pursuant to which the Existing Shareholders shall contribute an additional capital of RMB65,000,000 to the Company as consideration for the transaction under the Business Reorganization Agreement. Pursuant to the Business Reorganization Agreement, the existing shareholders subscribed for the additional RMB65,000,000 registered capital of the Company (the "Capital Increase"), and as of the date of this Agreement, the Company has gone through the corresponding procedures of change of registration by the market supervision and management authorities in respect of the aforesaid Capital Increase, the registered capital of the Company has been changed to RMB532,316,000.

&nbsp;&nbsp;&nbsp;&nbsp;3. Based on the shareholding structure of the Company after the aforesaid Capital Increase, the parties agree to enter into additional agreements as described herein with respect to certain contents under the VIE Agreement.

Accordingly, the parties have agreed by consensus as follows:

&nbsp;&nbsp;&nbsp;&nbsp;1. The parties agree to amend the definition of "registered capital of the Company" under Section 1.1 of the Exclusive Right to Purchase Agreement to read as follows: "means the registered capital of the Company in the amount of RMB532,316,000, and also includes the enlarged registered capital as a result of any form of capital increase during the term of this Agreement." The foregoing definition shall apply to the term "registered capital of the Company" as it appears in the Exclusive Right to Purchase Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;2. The parties agree to amend the agreement in Article 2.1 under the Equity Pledge Agreement to read as follows: "The Pledgor hereby agrees to pledge the Pledged Equity Interests, which it legally owns and has the right to dispose of, to the Pledgor as security for the repayment of the Secured Obligations in accordance with the agreement herein. The Company hereby agrees that the Pledged Equity Interests shall be pledged by the Pledgor to the Pledgor in accordance with this Agreement. Among other things, with respect to the date of this Agreement: the Pledgor pledges to the Pledgor the equity interests held by the Pledgor representing 100% of the registered capital of the Company (equivalent to a capital contribution of RMB532,316,000)."

&nbsp;&nbsp;&nbsp;&nbsp;3. For the avoidance of doubt, the parties agree and confirm that all equity interests in the Company held by the Existing Shareholders after the completion of the Capital Increase (corresponding to the registered capital of the Company in the amount of RMB532,316,000) as described in Clause 3 of this Agreement in view of the Part, shall be subject to all the covenants under the VIE Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;4. With respect to matters that are inconsistent with the agreements in this Agreement and the VIE Agreement, the agreements in this Agreement shall prevail. In respect of the relevant matters not agreed in this Agreement, the agreements in the VIE Agreement shall still prevail.

&nbsp;&nbsp;&nbsp;&nbsp;5. The conclusion, entry into force, performance, modification, interpretation and termination of this Agreement shall be governed by the laws of China. Any dispute arising under and in connection with this Agreement shall be resolved through consultation between the parties, and if the parties are unable to reach an agreement within thirty (30) days after the dispute has arisen, the dispute shall be submitted to the Shenzhen International Arbitration Court for arbitration in accordance with the arbitration rules in force at the time. The place of arbitration shall be Shenzhen, the language to be used in the arbitration shall be Chinese, and the arbitral award shall be final and binding on all parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;6. This Agreement shall enter into force on the date on which it is signed by the parties. Any amendments, modifications and supplements to this Agreement shall be made in writing and shall become effective upon signature by the parties.

&nbsp;&nbsp;&nbsp;&nbsp;7. This Agreement is made in three (3) originals in the Chinese language, one (1) for each party to this Agreement.

【No text following this page】

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**[Supplementary agreement signature page]**

IN WITNESS WHEREOF, this Supplemental Agreement has been executed by the following parties as of the date set forth at the top of this document.

**Guangzhou Interconnect Electric Appliances Technology Co., Ltd. (Seal)**

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| | |
|:---|:---|
| Signature： | /s/ Xiaoping Chen |
| Name： | Xiaoping Chen |
| Title： |  |

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**Zhumeng Hulian Technology (Guangdong) Co., Ltd. (Seal)**

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| | |
|:---|:---|
| Signature： | /s/ Erqiang Duan |
| Name： | Erqiang Duan |
| Title： |  |

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**Foshan Yunmi Electric Appliances Technology Co., Ltd. (Seal)**

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| | |
|:---|:---|
| Signature： | /s/ Xiaoping Chen |
| Name： | Xiaoping Chen |
| Title： |  |

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## Exhibit 4.15

**Exhibit 4.15**

**Equity Pledge Agreement**

THIS EQUITY PLEDGE AGREEMENT (this "Agreement") is entered into as of the <u>20th</u> day of <u>July</u>, 2024, by and between:

&nbsp;&nbsp;&nbsp;&nbsp;1. **Foshan Yunmi Electric Appliances Technology Co., Ltd.** (Hereinafter referred to as "Existing Shareholders")

Registered Address: Thirteenth Floor, No. 7, Industrial Avenue, Lunjiao Street, Lichun Village, Shunde District, Foshan City, Guangdong Province, China (residence declaration)

Legal Representative: CHEN Xiaoping

&nbsp;&nbsp;&nbsp;&nbsp;2. **Zhumeng Hulian Technology (Guangdong) Co., Ltd.** (Hereinafter referred to as "sole ownership company")

Registered Address: Thirteenth Floor, No. 7, Industrial Avenue, Lunjiao Street, Lichun Village, Shunde District, Foshan City, Guangdong Province, China (residence declaration)

Legal Representative: DUAN Erqiang

&nbsp;&nbsp;&nbsp;&nbsp;3. **Guangzhou Interconnect Electric Appliances Technology Co., Ltd.** (Hereinafter referred to as the "Company")

Registered Address: Room 1502, No. 1226 Xingang East Road, Haizhu District, Guangzhou City (office only)

Legal Representative: CHEN Xiaoping

(For the purposes of this Agreement, each of the foregoing parties shall be referred to individually as a "Party" and collectively as the "Parties".)

Whereas：

&nbsp;&nbsp;&nbsp;&nbsp;(1) The pledgor is a shareholder of record of the Company and legally holds all of the Company's equity (hereinafter referred to as the "Company's equity").

&nbsp;&nbsp;&nbsp;&nbsp;(2) Pursuant to the provisions of an Exclusive Right to Purchase Agreement (the "Right to Purchase Agreement") entered into by and between the parties hereto on <u>July 20</u>, 2024, the Pledgor or the Company shall transfer all or part of its equity interest in the Company or all or part of the Company's assets to the Pledgor and/or any other entity or individual designated by the Pledgor at the Pledgor's request under the conditions permitted by the laws of the PRC.

&nbsp;&nbsp;&nbsp;&nbsp;(3) Pursuant to the provisions of a Stockholder Voting Proxy Agreement, dated as of <u>July 20</u>, 2024 (the "Voting Proxy Agreement"), entered into by the parties hereto, the Pledgor has irrevocably and fully delegated to the Pledgor the power to exercise on behalf of the Pledgor all of the Pledgor's stockholder voting rights in the Company.

&nbsp;&nbsp;&nbsp;&nbsp;(4) Pursuant to the terms of an Exclusive Consulting and Services Agreement, dated as of <u>July 20</u>, 2024, between the Company and the Pledgor (the "Consulting Services Agreement"), the Company has exclusively retained the Pledgor to

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provide consulting services in connection therewith and has agreed to pay the Pledgor a corresponding service fee for such consulting services.

&nbsp;&nbsp;&nbsp;&nbsp;(5) As security for the performance of the Grantor's Contractual Obligations (as hereinafter defined) and the satisfaction of the Secured Obligations (as hereinafter defined), the Grantor is willing to pledge all of its equity interests in the Company to the Pledgor and to give the Pledgor the right to a first-paid pledge, and the Company has agreed to such equity pledge arrangement.

Accordingly, the parties have agreed by consensus as follows:

**Article I. Definitions**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 Unless the context requires otherwise, the following terms will be construed in this Agreement as follows:

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| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"**Contractual** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**obligations**"： | Indicate all contractual obligations of the Pledgor under the Purchase Right Agreement and the Voting Proxy Agreement; all contractual obligations of the Company under the Purchase Right Agreement, the Voting Proxy Agreement and the Consulting Services Agreement; and all contractual obligations of the Pledgor and the Company under this Agreement. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"**Collateralized** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**debt obligations**"： | means all direct, indirect, and consequential losses and loss of predictable benefits suffered by the Pledgor as a result of any Event of Default (as defined below) by the Pledgor and/or the Company, the amount of which is based on, including, but not limited to, the Pledgor's reasonable business plans and profitability projections; and all costs incurred by the Pledgor in enforcing the performance of the Pledgor and/or the Company in respect of its contractual obligations. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"**Transaction** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Agreements**"： | Refers to purchase option agreements, voting proxy agreements, and consulting service agreements. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"**Event of** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**default**"： | Indicate any breach by the Pledgor of any of its contractual obligations under the Purchase Right Agreement, the Voting Proxy Agreement and/or this Agreement and any breach by the Company of any of its contractual obligations under the Purchase Right Agreement, the Voting Proxy Agreement, the Consulting Services Agreement and/or this Agreement. |

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| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"**Pledge one's** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**equity**"： | means all of the Company's Equity Interests legally owned by the Pledgor at the time of the Effective Date of this Agreement and to be pledged to the Pledgor as security for the performance of the contractual obligations of the Pledgor and the Company in accordance with the provisions of this Agreement, as well as the Increased Capital Contributions and Dividends referred to in Sections 2.6 and 2.7 of this Agreement. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"**PRC law**"： | means the laws, administrative regulations, administrative rules, local regulations, judicial interpretations and other binding normative documents of the People's Republic of China in force at the time. |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2 References in this Agreement to any Chinese laws shall be deemed to (1) include references to amendments, changes, additions and reenactments of such Chinese laws, regardless of whether they take effect before or after the conclusion of this Agreement; and (2) also includes reference to other decisions, notifications and regulations made in accordance with or in force as a result of its provisions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3 Unless otherwise indicated in the context of this Agreement, references in this Agreement to clauses, subclauses, subparagraphs, and paragraphs are references to the corresponding contents of this Agreement.

**Article II. Pledge of Equity**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 The Pledgor hereby agrees to pledge the Pledged Equity Interests which it legally owns and has the right to dispose of to the Pledgor as security for the repayment of the Secured Obligations in accordance with this Agreement. The Company hereby consents to the pledge of the Pledged Equity Interests by the Pledgor to the Pledgor in accordance with this Agreement. Among them, as at the date of this Agreement: the Pledgor has pledged to the Pledgor the equity interests held by the Pledgor representing 100% of the registered capital of the Company (equivalent to a capital contribution of RMB467,316,000).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 Unless otherwise agreed by the parties hereto, the Pledgor undertakes that it will be responsible for the registration of the Equity Pledge Arrangement under this Agreement (the "Equity Pledge") with the Company's business registration authority at an appropriate time after the execution of this Agreement. The Company undertakes that it will use its best endeavors to cooperate with the Pledgor in completing the business registration matters referred to in this Article. The pledge of equity hereunder shall be established upon the registration of the pledge by the Company's business registration office.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 During the validity of this Agreement, the Pledgor shall not be liable for any diminution in value of the Pledged Equity Interests and the Pledgee shall not be entitled to any form of recourse or claim against the Pledgor, unless such diminution is due to the Pledgor's willfulness or gross negligence directly causally related to the result.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4 Subject to the provisions of Article 2.3 above, if there is any possibility of significant decrease in the value of the pledged shares, which is sufficient to jeopardize the rights of the pledgor, the pledgor may at any time act on behalf of the pledgee to auction or sell the pledged shares, and agree with the pledgor that the proceeds from the auction or sale shall be used to settle the secured debts in advance or be withdrawn and deposited with the notary public of the place where the pledgee is located (and any expenses incurred in this regard shall be borne by the pledgor in full). In addition, at the request of the pledgee, the pledgee should provide other property as security for the secured obligation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5 Upon the occurrence of any Event of Default, the Pledgor shall have the right to dispose of the Pledged Equity Interests in the manner set forth in Article IV of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6 With the prior consent of the pledgee, the pledgor may increase the capital of the company. The amount of contribution to the registered capital of the company by the grantor as a result of the capital increase of the company also belongs to the pledged equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.7 With the prior consent of the pledgee, the pledgor may receive dividends or distributions in respect of the pledged equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.8 The Pledgor shall have the right to dispose of any of the Pledged Equity Interests of the Pledgor upon the occurrence of an Event of Default in accordance with the provisions of this Agreement.

**Article III. Release of Pledge**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 After the Pledgor and the Company have fully and completely fulfilled all contractual obligations and settled all secured debts, the Pledgee shall, at the request of the Pledgor, release the Equity Pledge hereunder and cooperate with the Pledgor in the registration of the cancellation of the Equity Pledge, and the Pledgee shall bear the reasonable expenses incurred due to the release of the Equity Pledge.

**Article IV. Disposition of Pledged Equity Interests**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 The parties hereby agree that in the event of any Event of Default, then the Pledgor shall be entitled to exercise all of its rights and powers for remedies for default under the laws of the PRC, the Transaction Agreements and the terms of this Agreement, including (without limitation) auctioning or selling the Pledged Equity Interests for preferential payment, after giving the Pledgor

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a written notice thereof. The Pledgee shall not be liable for any loss resulting from its reasonable exercise of such rights and powers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 The Pledgor shall be entitled to designate in writing its attorney or other agent to exercise any and all of its rights and powers as aforesaid, which shall not be contested by either the Pledgor or the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 In respect of reasonable expenses incurred by the Pledgor in the exercise of any or all of the above rights and powers, the Pledgor shall be entitled to deduct such expenses on a true-up basis from the monies received by the Pledgor in respect of the exercise of its rights and powers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4 Amounts received by the pledgee from the exercise of its rights and powers shall be dealt with in the following order:

First, the payment of all expenses incurred in connection with the disposition of the pledged equity and the exercise by the pledgee of its rights and powers (including the payment of honoraria to its attorneys and agents);

Second, the payment of taxes due on the disposal of the pledged equity; and

Third, repayment of the secured obligation to the pledgee;

If there is any balance after the deduction of the above amount, the pledgor shall return the balance to the pledgor or other persons who are entitled to such amount according to the relevant laws and regulations, or deposit it with the notary public at the location of the pledgor (and any expenses arising therefrom shall be borne entirely by the pledgor).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5 The Pledgor shall have the right to elect to exercise any default remedies to which it is entitled concurrently or sequentially, and the Pledgor shall not be required to exercise any other default remedies prior to exercising its right to auction or realize the Pledged Equity Interests under this Agreement.

**Article V. Fees and expenses**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 All actual expenses incurred in connection with the creation of the Equity Pledge hereunder, including (but not limited to) stamp duty, any other taxes and all legal fees, shall be borne by the parties respectively.

**Article VI. Continuity and non-waiver**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 The Equity Pledge created hereunder is a continuing guarantee, the validity of which shall continue until such time as the Contractual Obligations have been fully performed or the Secured Obligations have been fully discharged. No waiver or forbearance by the Pledgor from any default by the Pledgor or any delay by the Pledgor in exercising any of its rights under the Transaction Agreement and this Agreement shall affect the Pledgor's right under this

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Agreement and the relevant PRC laws and the Transaction Agreement to require the Pledgor to strictly execute the Transaction Agreement and this Agreement at any time thereafter or the Pledgor's rights as a result of the Pledgor's subsequent breach of the Transaction Agreement and/or this Agreement.

**Article VII. Declaration and Warranty of the Pledgor**

The Pledgor represents and warrants to the Pledgor as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 The Grantor is fully competent and has the legal right and capacity to enter into this Agreement and to assume legal obligations under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 All reports, documents and information furnished by the Pledgor to the Pledgor prior to the effective date of this Agreement relating to the Pledgor's and all matters required by this Agreement are true and correct in all material respects at the time of the effective date of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 All reports, documents and information furnished by the Pledgor to the Pledgor after the effective date of this Agreement relating to the Pledgor and to all matters required by this Agreement are true and valid in all material respects at the time of such furnishing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4 At the time this Agreement becomes effective, the Pledgor is the sole legal owner of the Pledged Equity Interests and there are no existing disputes regarding the ownership of the Pledged Equity Interests. The Pledgor shall have the right to dispose of the Pledged Equity Interests and any part thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5 Except for the security interest created in the Pledged Equity Interests as a result of this Agreement and the rights created under the Transaction Agreements, there are no other security interests or third-party interests and any other restrictions on the Pledged Equity Interests.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.6 The Pledged Equity Interests are legally transferable and assignable, and the Pledgor has the full right and power to pledge the Pledged Equity Interests to the Pledgor in accordance with the provisions of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.7 This Agreement, duly executed by the Pledgor, constitutes a legal, valid and binding obligation on the Pledgor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.8 Any consent, permission, waiver, authorization of any third party or approval, license, waiver or exemption of any governmental agency or registration or filing with any governmental agency (if required by law) required to be obtained in connection with the execution and performance of this Agreement and the Equity Pledge hereunder has been obtained or processed and will be in full force and effect during the term of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.9 The execution and performance of this Agreement by the Pledgor is not inconsistent with or in conflict with all applicable laws, any agreement to

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which it is a party or by which its assets are bound, any court judgment, the decision of any arbitration authority, or the decision of any administrative authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.10 The pledge hereunder constitutes a first order security interest in the Pledged Equity Interests.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.11 All taxes and fees payable in connection with the acquisition of the pledged equity have been paid in full by the pledgee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.12 There is no action, proceeding or claim pending or, to the knowledge of the Pledgor, threatened against the Pledgor, or its property, or the Pledged Equity Interests, in any court or arbitral tribunal and there is no action, proceeding or claim pending or, to the knowledge of the Pledgor, threatened against the Pledgor, or its property, or the Pledged Equity Interests, before any governmental agency or administrative authority that would materially or adversely affect the Pledgor's financial condition or its ability to perform its obligations and liabilities under the Pledged Equity Interests hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.13 The Grantor hereby warrants to the Pledgor that the foregoing representations and warranties will be true and correct and will be fully complied with at all times and under all circumstances until the Contractual Obligations have been fully performed or the Secured Obligations have been fully discharged.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.14 The Pledgor, if it receives any dividends, bonuses, dividends and other income from the Company during the term of this Contract, agrees to immediately and unconditionally gift such dividends, bonuses, dividends to the Pledgor or to such entity/person as the Pledgor may designate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.15 In the event that the Company is required to be dissolved or liquidated in accordance with the mandatory provisions of the applicable laws, any benefits distributed by the Pledgor from the Company in accordance with the law after the Company has completed the dissolution or liquidation procedures in accordance with the law shall be granted to the Pledgor or the entity/individual designated by the Pledgor, provided that it does not violate the laws of the PRC.

**Article VIII. Representations and warranties of the Company**

The Company represents and warrants to the pledgee as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1 The Company is a limited liability company duly registered and legally subsisting under the laws of the PRC with independent legal personality; it has full and independent legal status and legal capacity to sign, deliver and perform this Agreement, and can independently act as a party to the litigation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2 All reports, documents and information provided by the Company to the Pledgor prior to the effective date of this Agreement and relating to the Pledged Equity Interests and all matters required by this Agreement are true and correct

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in all material respects as of the effective date of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3 All reports, documents and information furnished by the Company to the Pledgor after the Effective Date of this Agreement relating to the Pledged Equity Interests and all matters required by this Agreement are true and valid in all material respects at the time of such furnishing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.4 This Agreement, duly executed by the Company, constitutes a legal, valid and binding obligation on the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.5 It has full power and authority within the Company to enter into and deliver this Agreement and all other documents to be executed by it in connection with the transactions contemplated by this Agreement, and it has full power and authority to consummate the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.6 There are no actions, proceedings or petitions pending or, to the knowledge of the Company, threatened in any court or arbitral tribunal against the Pledged Equity Interests, the Company or its assets, there are also no actions, proceedings or petitions pending or, to the knowledge of the Company, threatened against the Pledged Equity Interests, the Company or its assets before any governmental agency or administrative authority that would materially or adversely affect the Company's economic condition or the ability of the Pledgor to perform its obligations and liabilities under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.7 The Company hereby agrees to be jointly and severally liable to the Pledgor for the representations and warranties made by the Pledgor under Sections 7.4, 7.5, 7.6, 7.8 and 7.10 of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.8 The Company hereby warrants to the Pledgor that the foregoing representations and warranties will be true and correct and will be fully complied with at all times and under all circumstances until the contractual obligations have been fully performed or the secured obligation has been fully discharged.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.9 In the event that the Company is required to be dissolved or liquidated in accordance with the mandatory provisions of the PRC laws, the assets of the Company shall be sold to the Pledgor or an eligible entity/individual designated by the Pledgor at the lowest price permitted by the PRC laws at that time, subject to compliance with the PRC laws.

**Article IX. Undertaking of the pledgee**

The Grantor hereby promises the Pledgor the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1 The Pledgor shall not create or permit the creation of any new pledge or any other security interest over the Pledged Equity Interests without the prior written consent of the Pledgee, and any pledge or any other security interest created over the whole or any part of the Pledged Equity Interests without the prior written consent of the Pledgee shall be null and void.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2 The pledgee may not transfer the pledged equity without prior written notice to and prior written consent of the pledgee, and all proposed transfers of the pledged equity by the pledgee shall be null and void. The proceeds of the transfer of the pledged shares by the pledgor shall first be used to settle the secured obligation in advance to the pledgor or be deposited with a third party as agreed with the pledgor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3 In the event of any legal action, arbitration or other request which may adversely affect the interests of the Pledgor or the Pledgor under the Transaction Agreement and this Agreement or the Pledged Equity Interests, the Pledgor warrants that it will notify the Pledgor in writing as soon as possible and in a timely manner and, at the Pledgor's reasonable request, will take all necessary measures to ensure the Pledgor's interest in the Pledged Equity Interests pledged.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4 The Pledgor shall not perform or permit any act or action that may adversely affect the Pledgor's interests under the Transaction Agreement and this Agreement or the Pledged Equity Interests. The Pledgor waives the Pledgor's right of first refusal to realize the Pledge Right.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.5 The Pledgor undertakes to take all necessary measures and execute all necessary documents (including, without limitation, the Supplemental Agreements to this Agreement) as reasonably requested by the Pledgor to ensure the Pledgor's pledge interest in the Pledged Equity Interests and the exercise and realization of such rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.6 In the event of any transfer of the Pledged Equity Interests as a result of the exercise of the Pledge Right hereunder, the Pledgor undertakes to take all measures to effect such transfer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.7 The Pledgor shall ensure that the procedures for convening the meeting of the shareholders and the board of directors of the Company for the purpose of signing this Agreement, creating the pledge right and exercising the pledge right, as well as the manner and content of voting at the meeting, do not violate the laws, administrative regulations or the Articles of Association of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.8 The Pledgor shall not be entitled to assign any of its rights and obligations under this Agreement except with the prior consent of the Pledgor.

**Article X. Commitment of the Company**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1 In the event that the consent, permission, waiver, authorization of any third party or the approval, license, waiver or registration or filing with any governmental agency (if required by law) is required for the execution and performance of this Agreement and the Equity Pledge hereunder, the Company will use its best efforts to assist in obtaining and keeping it in full force and effect during the term of this Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2 The Company will not assist or permit the Pledgor to create any new pledge or any other security interest over the Pledged Equity Interests without the prior written consent of the Pledgee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3 The Company will not assist or allow the pledgee to transfer the pledged equity without the prior written consent of the pledgee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.4 In the event of any legal action, arbitration or other request which may adversely affect the interests of the Company, the Pledged Equity Interests or the Pledgee under the Transaction Agreements and this Agreement, the Company warrants that it will notify the Pledgee as soon as practicable and in a timely manner in writing, and at the reasonable request of the Pledgee, will take all necessary measures to secure the Pledgee's interest in the Pledged Equity Interests in the Pledged Equity Interests.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.5 The Company shall not perform or permit any act or action that may adversely affect the Pledgor's interests under the Transaction Agreement and this Agreement or the Pledged Equity Interests.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.6 The Grantor will provide the Pledgor with the Company's financial statements for the preceding calendar quarter, including (but not limited to) a balance sheet, an income statement and a cash flow statement, within the first month of each calendar quarter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.7 The Company undertakes to take all necessary measures and execute all necessary documents (including but not limited to the Supplemental Agreements to this Agreement) as reasonably requested by the Pledgor to ensure the Pledgor's pledge interest in the Pledged Equity Interests and the exercise and realization of such rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.8 In the event of any transfer of the Pledged Equity Interests as a result of the exercise of the Pledge Right hereunder, the Company undertakes to take all steps to effect such transfer.

**Article XI. Changes of circumstances**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1 As a supplement to, and not inconsistent with, the Transaction Agreement and the other provisions of this Agreement, if at any time, as a result of the promulgation or change of any PRC laws, rules or regulations, or as a result of a change in the interpretation or application of such laws, rules or regulations, or as a result of a change in the relevant registration procedures, the Pledgor believes that it becomes unlawful to maintain this Agreement in force and/or to dispose of the Pledged Equity Interests in a manner as provided for herein or in a manner that is inconsistent with such laws, rules or regulations, the Pledgor and the Company shall immediately, upon the written instructions of the Pledgor and upon the reasonable request of the Pledgor, take any action, and/or execute any agreement or other document, that ：

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Keep this agreement in force;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Facilitate the disposition of the Pledged Equity Interests in the manner set forth herein; and/or

**Article XII. Obligation of confidentiality**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.1 Regardless of whether or not this Agreement has been terminated, each party shall maintain in strict confidence all trade secrets, proprietary information, customer information and all other information of a confidential nature (hereinafter collectively referred to as "Confidential Information") relating to the other party that comes to its knowledge in the course of the formation and performance of this Agreement. Except with the prior written consent of the party disclosing the Confidential Information or when disclosure to a third party is required by relevant laws and regulations or the requirements of the place where a party's Affiliate is listed, the party receiving the Confidential Information shall not disclose any of the Confidential Information to any other third party; and the party receiving the Confidential Information shall not use, or indirectly utilize, any of the Confidential Information, except for the purpose of the performance of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.2 The following information is not confidential:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Any information of which there is documentary evidence that the party receiving the information has previously become aware by lawful means;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Information that enters the public domain through no fault of the party receiving it;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Information lawfully obtained by the receiving party from other sources after the receipt of the information; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Either party is obliged to disclose to the relevant governmental authorities, stock exchanges, etc., as required by law or the Listing Rules, or either party is required to disclose the above confidential information to its direct legal advisers and financial advisers as necessary for the normal operation of its business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.3 The party receiving the information may disclose the Confidential Information to its relevant employees, agents or professionals retained by it, provided that the party receiving the information shall ensure that such persons comply with the relevant terms and conditions of this Agreement and shall assume any liability arising from any breach by such persons of the relevant terms and conditions of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.4 Notwithstanding any other provision of this Agreement, the effect of the provisions of this Section shall not be affected by the termination of this Agreement.

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**Article XIII. Entry into force and duration of this Agreement**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.1 This Agreement shall enter into force on the date on which it is duly signed by the parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.2 The term of this Agreement will be until the contractual obligations have been fully performed or the secured obligation has been fully discharged.

**Article XIV. Notification**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.1 Any notices, requests, demands and other communications required by or made pursuant to this Agreement shall be in writing and shall be delivered to the appropriate party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.2 Such notice or other communication shall be deemed to have been served when sent by facsimile or telex; when delivered in person, it shall be deemed to have been served when delivered in person; and when sent by mail, it shall be deemed to have been served five (5) days after posting.

**Article XV. Other matters**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.1 The Pledgor and the Company agree that the Pledgor's rights and/or obligations hereunder may be assigned to any third party upon notice by the Pledgor to the Pledgor and the Company; However, the Pledgor or the Company may not assign its rights, obligations or liabilities under this Agreement to any third party without the prior written consent of the Pledgor. The successors or permitted assigns, if any, of the Pledgor and the Company shall continue to perform the respective obligations of the Pledgor and the Company under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.2 The amount of the Secured Obligations as determined by the Pledgor in its sole discretion in exercising its right to pledge the Pledged Equity Interests in accordance with the provisions of this Agreement shall be conclusive evidence of the Secured Obligations under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.3 This Agreement is made in the Chinese language in three (3) original copies, one (1) for each party to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.4 The conclusion, entry into force, performance, modification, interpretation and termination of this Agreement shall be governed by the laws of China.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.5 Any dispute arising under and in connection with this Agreement shall be resolved by consultation between the parties, and if the parties are unable to reach an agreement within thirty (30) days after the dispute has arisen, any one of the parties may submit the dispute to the Shenzhen International Arbitration Institute for arbitration in accordance with its arbitration rules in force at the time. The place of arbitration shall be Shenzhen and the language of arbitration shall be Chinese. The arbitral award shall be final and binding on the parties hereto.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.6 Any rights, powers and remedies conferred on the parties by any provision of this Agreement shall not be exclusive of any other rights, powers or remedies to which such party may be entitled by virtue of the provisions of the Law and elsewhere hereunder, and the exercise by a party of its rights, powers and remedies shall not be exclusive of the exercise by such party of other rights, powers and remedies to which it is entitled.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.7 No waiver of any of a party's rights, powers and remedies under this Agreement or at law ("such rights") will result from any failure or delay in exercising such rights, and no waiver of any single or partial waiver of such party's rights will preclude such party from exercising such rights in any other manner and from exercising any other rights of such party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.8 The headings of the sections of this Agreement are for indexing purposes only and in no event shall such headings be used in or affect the interpretation of the provisions of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.9 Each provision of this Agreement is severable and independent of each other provision, and if at any time any one or more provisions of this Agreement shall become invalid, illegal or unenforceable, the validity, legality and enforceability of the other provisions of this Agreement shall not be affected thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.10 Any amendment or supplement to this Agreement must be in writing and, except for the assignment by the Pledgor of its rights hereunder pursuant to Section 15.1, shall not be effective until properly executed by the parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.11 This Agreement shall be binding upon the legal successors of the parties.

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**[Equity Pledge Agreement Signature Page]**

IN WITNESS WHEREOF, this Equity Pledge Agreement has been executed by the parties hereto as of the date and place first set forth herein.

**Guangzhou Interconnect Electric Appliances Technology Co., Ltd. (Seal)**

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| | |
|:---|:---|
| Signature： | /s/ Xiaoping Chen |
| Name： | Xiaoping Chen |
| Title： |  |

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**Zhumeng Hulian Technology (Guangdong) Co., Ltd. (Seal)**

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| | |
|:---|:---|
| Signature： | /s/ Erqiang Duan |
| Name： | Erqiang Duan |
| Title： |  |

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**Foshan Yunmi Electric Appliances Technology Co., Ltd. (Seal)**

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| | |
|:---|:---|
| Signature： | /s/ Xiaoping Chen |
| Name： | Xiaoping Chen |
| Title： |  |

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## Exhibit 4.16

**Exhibit 4.16**

**Exclusive Consulting and Service Agreement**

THIS EXCLUSIVE CONSULTING AND SERVICES AGREEMENT is made and entered into this <u>20th</u> day of <u>July</u>, 2024, by and between the parties hereto, in the City of <u>Guangzhou</u>, People's Republic of China (hereinafter referred to as "China"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(1)** **Zhumeng Hulian Technology (Guangdong) Co., Ltd. a wholly foreign-owned enterprise established under the laws of the PRC** 

Registered Address: Thirteenth Floor, No. 7, Industrial Avenue, Lunjiao Street, Lichun Village, Shunde District, Foshan City, Guangdong Province, China (residence declaration)

Legal Representative: DUAN Erqiang

(hereinafter referred to as "Party A"); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) **Guangzhou Interconnect Electric Appliances Technology Co., Ltd. ， a limited liability company established under the laws of the PRC,** 

Registered Address: Room 1502, No. 1226 Xingang East Road, Haizhu District, Guangzhou City (office only)

Legal Representative: CHEN Xiaoping

(hereinafter referred to as "Party B").

(For the purposes of this Agreement, Party A and Party B may be referred to individually as a "Party" and collectively as the "Parties".)

**Whereas：**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Party A's business scope is Internet of Things technology research and development; Internet of Things technology services; Internet of Things equipment manufacturing; Internet of Things equipment sales; Internet of Things application services; software development; software sales; sales of household electrical appliances, installation services for household electrical appliances; research and development of household electrical appliances; manufacturing of household electrical appliances; household electrical appliances spare parts and accessories sales; artificial intelligence industry application integration services; import and export of goods (excluding tobacco and its products) (above) projects do not involve special administrative measures for foreign investment access) (projects subject to approval by law, can only carry out business activities after approval by the relevant departments.) (Items subject to approval according to law can only be carried out after approval by relevant departments)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Party B's scope of business is installation services for household appliances; wholesaling of computer hardware, software and auxiliary equipment; software development; software sales; development of artificial intelligence application software; development of basic software for artificial intelligence; sales of spare parts for household appliances; research and development of household appliances; information consulting services (excluding licensed information

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consulting services); sales of household appliances; manufacturing of household appliances; import and export of goods.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Party B intends to engage Party A to provide software technology development, technical consulting and technical services in relation to Party B's Business (as defined below) in furtherance of its own business; and Party A agrees to accept such engagement.

After friendly negotiations, the parties hereby agree as follows:

**Article I. Definitions**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 Unless the terms or context of this Agreement shall be otherwise construed, in this Agreement, the following terms shall have the meanings set forth below:

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| | |
|:---|:---|
| "**Party B's operations**" | means all businesses operated and developed by Party B now and at any time during the term of this Agreement. |
| "**Services**" | The services provided by Party A to Party B in connection with Party B's business, such services include, but are not limited to:<br>(1)<br>License Party B to use the relevant software required for its business;<br>(2)<br>Provide you with comprehensive solutions in information technology that you need for your business;<br>(3)<br>Daily management, maintenance and updating of hardware equipment and databases;<br>(4)<br>Development, maintenance and updating of related application software;<br>(5)<br>Train specialized technicians for Party B;<br>(6)<br>Assist you in relevant technical and commercial information collection and market research;<br>(7)<br>Introduce customers to you and help establish business and cooperative relationships between them;<br>(8)<br>Provide Party B with suggestions and advice on the establishment and improvement of its corporate structure, management system and departmental settings, and assist Party B in improving its internal management system;<br>(9)<br>As permitted by the laws of the PRC,<br>|

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| | |
|:---|:---|
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;other related technical services and consulting services to be provided by Party B from time to time at its request. |
| "**Service Team**" | means the team of personnel established by us to provide the Services to you under this Agreement, which includes our own employees and third-party professional consultants and other retained by us. |
| "**Service charges**" | means all fees payable by you to us for the Services provided by us in accordance with Article 3 of this Agreement. |
| "**Operating income**" | In respect of any year during the term of this Agreement, means the revenue derived by Party B from the operation of its business in that year as recorded in the column headed "Revenue from Main Business" in Party B's audited balance sheet in accordance with PRC Accounting Standards. |
| "**Annual Business Plan**" | means the business development plan and budget report of Party B for the next calendar year prepared by Party B with the assistance of Party A by November 30 of each year in accordance with this Agreement. |
| "**Equipment**" | means any and all equipment owned or purchased from time to time by the Party and used for the purpose of providing the Services. |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2 Any reference in this Agreement to any law or regulation (hereinafter referred to as "law") shall be deemed to: (1) include references to amendments, changes, additions and reenactments of such laws, whether effective before or after the date of this Agreement; and (2) include references to other decisions, notices and regulations made in accordance with, or in effect as a result of, the provisions of such law or regulation. decisions, notices and regulations made in accordance with or in effect as a result of the provisions thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3 Unless otherwise stated in the context of this Agreement, references in this Agreement to clauses, sub-clauses, terms and paragraphs are to the corresponding contents of this Agreement.

**Article II. Services of Party A**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 In order for you to better conduct your business, you need us to provide services

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to you and we agree to provide such services to you. For this purpose, you appoint us as your exclusive consultant and service provider to provide the Services as defined in this Agreement exclusively for you and we agree to accept such appointment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 We shall provide the Services to you in accordance with the terms of this Agreement and you shall facilitate our services as much as possible.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 We shall provide such equipment and service team as may be reasonably necessary for the provision of the Services and shall purchase and acquire new equipment and add new personnel in accordance with your annual business plan and your reasonable requests in order to meet the needs of us to provide you with good services under this Agreement. However, we may from time to time, at our sole discretion, replace any member of the service team or change the specific service duties of any member of the service team, provided that such replacement or change of service duties will not have a material adverse effect on your day-to-day operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4 Notwithstanding any other provision of this Agreement, we shall be entitled to appoint any third party at our sole discretion to provide any or all of the Services under this Agreement or to perform any of our obligations under this Agreement on our behalf. You hereby agree that we shall be entitled to assign our rights and obligations under this Agreement to any third party.

**Article III. Service Fee**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 In respect of the Services provided by us pursuant to this Agreement, you shall pay us the Service Fee as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1.1 a service fee equal to one hundred percent (100%) of your net revenue for the year; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1.2 as otherwise agreed by the Parties, for specific technical services provided by us from time to time at your request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 Party B shall pay the Service Fee determined in accordance with Clause 3.1 in one lump sum to the bank account number designated by Party A within three months after the end of each calendar year. Party A shall give Party B seven (7) working days' prior written notice if it changes its bank account number.

3.3The parties agree that the payment of the above service fee shall not, in principle, cause difficulties for the operation of either party for the current year, and for the above purpose and within the limit of realizing the above principle, Party A may agree to the late payment of the service fee by Party B, or by mutual consent of the two parties, may adjust in writing the percentage of the service fee and/or the specific amount of service fee payable by Party B to Party A under Clause 3.1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4 The service fee payable by Party B to Party A pursuant to Clause 3.1.2 shall be

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separately determined in writing by the Parties in accordance with the nature of the services and workload.

**Article IV. Party B's obligations**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 The services provided by us under this Agreement are exclusive. During the validity of this Agreement, Party B shall not, without our prior written consent, enter into any written agreement or oral engagement with any other third party to engage such third party to provide it with other services that are the same as or similar to the services provided by us under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 Party B shall provide Party A with the determined annual business plan of Party B for the following year before November 30th of each year, so that Party A can arrange the corresponding service plan and purchase the required software, equipment, personnel and technical service force. If Party B temporarily needs Party A to purchase additional equipment or personnel, it shall consult with Party A fifteen (15) days in advance to reach mutual agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 In order to facilitate the provision of the Services by Party A, Party B shall, at Party A's request, accurately and timely provide Party A with the relevant information it requires.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4 Party B shall pay the Service Fee to Party A on time and in full in accordance with the provisions of Article 3 of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5 Party B shall maintain its good reputation and actively expand its business in order to maximize its revenue.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.6 The Parties hereby acknowledge that, pursuant to the terms and conditions of an Equity Pledge Agreement, dated as of <u>July 20</u>, 2024, by and between all of your shareholders of record at the time of the execution of this Agreement (hereinafter referred to as the "Existing Shareholders") and us.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7 During the term of this Agreement, Party B agrees to cooperate with Party A and Party A's parent company (including directly or indirectly) in conducting audits of connected transactions and other kinds of audits, and to provide Party A, its parent company, or its appointed auditor with relevant information and materials relating to Party B's operation, business, customers, finances, employees, etc., and agrees that Party A's parent company shall disclose such information and to satisfy the requirements of the regulatory requirements of the place where its securities are listed.

**Article V. intellectual property rights**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 As permitted by the applicable laws and regulations of China at that time, the

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 Each party warrants to the other that it will indemnify the other party against any and all economic loss caused by any infringement by one party of the intellectual property rights of another party (including copyrights, trademarks, patents, know-how).

**Article VI. Obligation of confidentiality**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 During the validity of this Agreement, all customer information and other related materials (hereinafter referred to as "Customer Information") relating to Party B's business and the services provided by Party A shall belong to Party A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 Regardless of whether this Agreement has been terminated or not, Party A and Party B shall keep strictly confidential the trade secrets, proprietary information, common customer information and other relevant information of the other party, as well as the non-public information of any other party (hereinafter collectively referred to as the "Confidential Information"), which have come to the knowledge of the other party in the course of the performance of this Agreement. The party receiving the Confidential Information (hereinafter referred to as the "Receiving Party") shall not disclose the Confidential Information or any part thereof to any other third party, except with the prior written consent of the other party or when disclosure to a third party is required by the provisions of the relevant laws and regulations or the rules of the relevant stock exchange; and the Receiving Party shall not use or indirectly utilize the Confidential

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Information, except for the purpose of the fulfillment of this Agreement, nor shall it use the Confidential Information or any part thereof. nor shall the Recipient use or indirectly utilize the Confidential Information or any part thereof except for the purpose of performing this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3 The following information is not confidential:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Any information of which there is written evidence that the recipient has prior knowledge;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Information that is in the public domain or otherwise known to the public through no fault of the recipient;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Information subsequently lawfully obtained by the receiving party from other sources; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Any party is obliged by law or the Listing Rules to disclose to the relevant governmental authorities, stock exchanges, etc., or any party is required to disclose the above confidential information to its direct legal advisers and financial advisers in the ordinary course of its business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4 The Recipient may disclose the Confidential Information to its relevant employees, agents or professionals retained by the Recipient, provided that the Recipient shall ensure that such persons shall also be bound by this Agreement to keep the Confidential Information confidential and to use such Confidential Information only for the purpose of the performance of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5 Upon termination of this Agreement, the recipient of Confidential Information shall return any documents, materials or software containing Confidential Information to the original owner or provider of the Confidential Information or destroy them with the consent of the original owner or provider, including deleting any Confidential Information from any relevant memory device, and shall not continue to use the Confidential Information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.6 The parties agree that these terms will remain in effect regardless of any change, release or termination of this Agreement.

**Article VII. Commitments and undertakings**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 Party A hereby represents and warrants as follows：

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1.1 It is a limited liability company duly registered and legally subsisting under the laws of its place of incorporation, with independent legal personality; it has full and independent legal status and legal capacity to execute, deliver and perform this Agreement, and can independently act as a party to the litigation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1.2 It has full power and authority within the Company to enter into and

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deliver this Agreement and all other documents to be executed by it in connection with the transactions contemplated by this Agreement, and it has full power and authority to consummate the transactions contemplated by this Agreement. This Agreement has been legally and properly executed and delivered by it. This Agreement constitutes a legal and binding obligation upon it and is enforceable against it in accordance with the terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 Party B hereby represents, warrants and undertakes as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2.1 It is a limited liability company duly registered and legally subsisting under the laws of its place of incorporation, with independent legal personality; it has full and independent legal status and legal capacity to execute, deliver and perform this Agreement, and can independently act as a party to the litigation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2.2 It has full power and authority within the Company to enter into and deliver this Agreement and all other documents to be executed by it in connection with the transactions contemplated by this Agreement, and it has full power and authority to consummate the transactions contemplated by this Agreement. This Agreement has been legally and properly executed and delivered by it. This Agreement constitutes a legal and binding obligation upon it and is enforceable against it in accordance with the terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2.3 It has at the time this Agreement comes into effect the complete business license necessary for its operation and has full rights and qualifications to operate the business of Party B that it is currently engaged in within the PRC.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2.4 It shall promptly inform the Party A of its involvement in lawsuits and other unfavorable circumstances, and make its best efforts to prevent the expansion of losses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2.5 Without our written consent, you shall not, in any form, dispose of your material assets or change your existing shareholding structure.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2.6 It will not enter into transactions (other than those arising in the normal or ordinary course of business, or which have been disclosed to us and consented to by us in writing) which may materially affect your assets, liabilities, business operations, shareholding structure, shareholdings in third parties and other legal rights.

**Article VIII. Duration of the agreement**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1 The parties hereby acknowledge that this Agreement has been duly signed by

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both parties and shall remain in force unless the parties agree in writing to terminate this contract by mutual agreement or unless it must be terminated in accordance with the requirements of the relevant applicable Chinese laws and regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2 Both parties to the Agreement shall complete the approval and registration procedures for the extension of the Business Term no later than three months prior to the expiration of the respective Business Term, in order for the validity period of this Agreement to continue.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3 Upon termination of this Agreement, the Parties shall continue to comply with their obligations under Articles 3 and 6 of this Agreement, respectively.

**Article IX. Notification**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1 Any notices, requests, demands and other communications required by or made pursuant to this Agreement shall be in writing and delivered to the appropriate party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2 Such notice or other communication shall be deemed to have been served when sent by facsimile, when delivered in person, or when deposited in the mail, five (5) days after posting.

**Article X. Liability for breach**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1 The parties agree and acknowledge that a material breach of any of the covenants made hereunder or a material failure to perform any of the obligations hereunder by either party (hereinafter referred to as the "Defaulting Party") constitutes a breach of contract hereunder (hereinafter referred to as the "Default"). "), and the Defaulting Party shall have the right to require the Defaulting Party to cure or remedy the breach within a reasonable period of time. If the defaulting party fails to cure or take remedial action within a reasonable period of time or within ten (10) days after the defaulting party has been notified in writing by the defaulting party with a request for correction, then the defaulting party shall have the right to do so at its sole discretion:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1.1 If Party B is the defaulting party, Party A has the right to terminate this Agreement and demand damages from the defaulting party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1.2 If Party A is the defaulting party, Party B has the right to claim damages from the defaulting party, but it does not have any right to terminate or rescind this Agreement under any circumstances unless otherwise provided by law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2 Notwithstanding any other provision of this Agreement, the effect of the provisions of this Article X shall not be affected by the suspension or

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termination of this Agreement.

**Article XI. Force Majeure**

In the event that the performance of this Agreement by one of the parties is directly affected or cannot be performed in accordance with the agreed terms due to earthquake, typhoon, flood, fire, war, change of policy, law and other force majeure events which cannot be foreseen or the consequences of which cannot be prevented or inevitably avoided, the party encountering the force majeure event shall immediately send a notice by facsimile, and shall submit, within 30 days, the details of force majeure and supporting documents on the reasons for the failure to perform or the need to delay the performance of this Agreement. Within thirty (30) days, the Party experiencing the event of force majeure shall submit the details of the force majeure and the reasons for the failure or delay in the performance of this Agreement, which shall be certified by a notary public in the region where the force majeure occurred. The Party affected by an event of force majeure shall take appropriate measures to minimize or eliminate the effects of the event of force majeure and shall endeavor to resume the performance of its obligations that have been delayed or impeded as a result of the event of force majeure. The Parties agree whether the performance of this Agreement should be partially waived or postponed, depending on the extent to which the Force Majeure Event affects the performance of this Agreement. Neither party shall be liable for any economic loss incurred by the parties as a result of the force majeure event.

**Article XII. Other matters**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.1 This Agreement is made in the Chinese language, in two (2) originals, one (1) for each of the parties to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.2 The conclusion, entry into force, performance, modification, interpretation and termination of this Agreement shall be governed by the laws of China.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.3 Any dispute arising under and in connection with this Agreement shall be resolved by mutual agreement between the parties, and if the parties are unable to reach agreement within thirty (30) days after the dispute has arisen, the dispute shall be submitted to the Shenzhen International Arbitration Court for arbitration in accordance with the arbitration rules in effect at the time. The place of arbitration shall be Shenzhen, the language to be used in the arbitration shall be Chinese, and the arbitral award shall be final and binding on both parties to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.4 Any rights, powers and remedies conferred on the parties by any provision of this Agreement shall not be exclusive of any other rights, powers or remedies to which such party may be entitled by virtue of the provisions of the Law and elsewhere hereunder, and the exercise by a party of its rights, powers and remedies shall not be exclusive of the exercise by such party of other rights,

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powers and remedies to which it is entitled.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.5 No waiver of any of a party's rights, powers and remedies under this Agreement or at law ("such rights") will result from a party's failure to exercise, or delay in exercising, any of such rights, powers and remedies, and no waiver of any single or partial waiver of such rights shall preclude such party from otherwise exercising such rights and the exercise of other such rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.6 The headings of the sections of this Agreement are for indexing purposes only and in no event shall such headings be used in or affect the interpretation of the provisions of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.7 This Agreement supersedes any other prior written or oral agreement between the parties relating to the matters set forth herein and constitutes the entire agreement between the parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.8 Each provision of this Agreement is severable and independent of each other provision, and if at any time any one or more provisions of this Agreement shall become invalid, illegal or unenforceable, the validity, legality and enforceability of the other provisions of this Agreement shall not be affected thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.9 Any modification or supplement to this Agreement must be in writing and properly signed by both parties to this Agreement to be effective.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.10 Party B shall not assign any of its rights and/or obligations under this Agreement to any third party without our prior written consent. Party A has the right to assign any of its rights and/or obligations under this Agreement to any third party designated by Party A upon notice to Party B, subject to the laws of the PRC.

12.11This Agreement shall be binding upon the legal successors of the parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.12 The Parties undertake that they will each declare and pay the taxes involved in the transactions under this Agreement in accordance with the law.

**[No text below]**

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[Exclusive Consulting and Services Agreement Signature Page]

IN WITNESS WHEREOF, this Exclusive Consulting and Services Agreement has been executed by the undersigned parties on the date and at the place indicated at the top of this Agreement:

**Guangzhou Interconnect Electric Appliances Technology Co., Ltd. (Seal)**

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| | |
|:---|:---|
| Signature： | /s/ Xiaoping Chen |
| Name： | Xiaoping Chen |
| Title： |  |

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**Zhumeng Hulian Technology (Guangdong) Co., Ltd. (Seal)**

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| | |
|:---|:---|
| Signature： | /s/ Erqiang Duan |
| Name： | Erqiang Duan |
| Title： |  |

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## Exhibit 4.17

**Exhibit 4.17**

**Exclusive Option Agreement**

This Exclusive Option Agreement (hereinafter referred to as the "Agreement") is entered into by the following parties on <u>July 20</u>, 2024:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. **Foshan Yunmi Electric Appliances Technology Co., Ltd.** (Hereinafter referred to as "Existing Shareholders")

Registered Address: Thirteenth Floor, No. 7, Industrial Avenue, Lunjiao Street, Lichun Village, Shunde District, Foshan City, Guangdong Province, China (residence declaration)

Legal Representative: CHEN Xiaoping

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. **Zhumeng Hulian Technology (Guangdong) Co., Ltd.** (Hereinafter referred to as "sole ownership company")

Registered Address: Thirteenth Floor, No. 7, Industrial Avenue, Lunjiao Street, Lichun Village, Shunde District, Foshan City, Guangdong Province, China (residence declaration)

Legal Representative: DUAN Erqiang

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. **Guangzhou Interconnect Electric Appliances Technology Co., Ltd.** (Hereinafter referred to as the "Company")

Registered Address: Room 1502, No. 1226 Xingang East Road, Haizhu District, Guangzhou City (office only)

Legal Representative: CHEN Xiaoping

(For the purposes of this Agreement, each of the foregoing parties shall be referred to individually as a "Party" and collectively as the "Parties".)

Whereas：

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Existing shareholders are registered shareholders of the company and hold all the shares of the company in accordance with the law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The existing shareholders intend to transfer to the sole ownership company all the equity interests held by them in the company without violating the laws of the PRC, and the sole ownership company intends to accept such transfers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The Company intends to transfer the assets held by it to the sole ownership company without violating the laws of the PRC, and the sole ownership company intends to accept such transfer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) In order to effect such equity or asset transfers, the Existing Shareholders and the Company have agreed to exclusively grant an irrevocable equity transfer option and an asset purchase option, respectively, to the Sole Ownership Company. Pursuant to such Conversion Option and Asset Purchase Option, and as permitted by the PRC law, the Existing Shareholders or the Company shall, at the request of the Sole Ownership Company, transfer the Option Equity Interests or the Company's Assets (as hereinafter defined) to the Sole Ownership Company and/or any other entity or person designated by it in accordance with the provisions of this Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) The Existing Shareholders consent to the Company granting the Asset Purchase Option to the Sole Ownership Company pursuant to this Agreement.

Accordingly, the parties have agreed by consensus as follows:

**Article I. Definitions**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 In this Agreement, unless the context requires otherwise, the following terms shall have the following meanings:

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| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"**PRC law**"： | Means the laws, administrative regulations, administrative rules, local regulations, judicial interpretations and other binding normative documents of the People's Republic of China in force at the time. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"**Conversion option**"： | Means an option to require the purchase of an equity interest in the Company granted by an Existing Shareholder to a sole ownership company in accordance with the terms and conditions of this Agreement. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"**Asset purchase option**"： | Means an option granted by the Company to the sole ownership company to require the purchase of any of the Company's assets in accordance with the terms and conditions of this Agreement. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"**Option equity**"： | In respect of the entire shareholding in the Company held by the existing shareholders. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"**Registered capital** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**of the company**"： | As at the date of this Agreement, it means the registered capital of the Company of RMB467,316,000, which also includes the enlarged registered capital as a result of any form of capital increase during the term of this Agreement. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"**Transfer of equity**"： | Means the equity interest in the Company that the sole ownership company has the right to require the existing shareholders to transfer to it, or to an entity or person designated by it, upon the exercise of its Conversion Option, in accordance with the provisions of Section 3 of this Agreement. The amount may be all or part of the option shareholding, and the exact |

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| | |
|:---|:---|
|  | amount shall be determined by the sole ownership company at its discretion in accordance with the provisions of the PRC laws and its own commercial considerations at that time. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**"Transfer of assets"：** | Means the assets of the Company that the sole ownership company, in exercising its Asset Purchase Option, has the right to require the Company to transfer to it, or to an entity or person designated by it, in accordance with the provisions of Section 3 of this Agreement. The amount may be all or part of the company's assets, as determined by the sole ownership company at its discretion in accordance with the provisions of Chinese law and its own commercial considerations at the time. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**"Exercise"：** | Refers to the exercise by a sole ownership company of its conversion option or asset purchase option. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"**Transfer price**"： | Means the entire consideration required to be paid by the sole ownership company or its designated entity or individual to the existing shareholders or the company to acquire the transferred equity or company assets at the time of each exercise. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"**Business license**"**：** | Means any approvals, permits, filings, registrations, etc. that the Company is required to hold in order to legally and efficiently operate all of its business, including but not limited to the Business License for Enterprise Legal Person and such other relevant permits and licenses as may be required by the PRC laws from time to time. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"**Company asset**"： | Means all tangible and intangible assets owned or entitled to be disposed of by the Company during the term of this Agreement, including but not limited to any real property, movable property, and intellectual property rights such as trademarks, copyrights, patents, proprietary technologies, domain names, software usage rights, etc. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"**Major agreement**"： | Means an agreement to which the Company is a party that materially affects the business or assets of the Company, including, but not |

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| | |
|:---|:---|
|  | limited to, the Exclusive Consulting and Services Agreement entered into by the Company and the Sole Ownership Company concurrently with this Agreement, and other agreements of significance with respect to the Company's business. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"**Exercise notice**"： | Shall have the meaning ascribed to it in Section 3.7 of this Agreement. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"**Confidential information**"： | Shall have the meaning ascribed to it in Section 8.1 of this Agreement. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"**Default party**"： | Shall have the meaning ascribed to it in Section 11.1 of this Agreement. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"**Default**"： | Shall have the meaning ascribed to it in Section 11.1 of this Agreement. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"**Rights of the party**"： | Shall have the meaning ascribed to it in Section 12.5 of this Agreement. |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2 Any reference in this Agreement to the laws of China shall be deemed to be:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) include references to amendments, changes, additions and reformulations of such Chinese laws, whether effective before or after the conclusion of this Agreement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Also includes references to other decisions, circulars and regulations made in accordance with or in force as a result of its provisions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3 Unless otherwise indicated in the context of this Agreement, references in this Agreement to clauses, subclauses, subparagraphs, and paragraphs are references to the corresponding contents of this Agreement.

**Article II Grant of Conversion Options and Asset Purchase Options**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 The Existing Stockholders hereby agree that a conversion option is hereby irrevocably and exclusively granted to the Sole Ownership Company, without any additional conditions. Pursuant to such transfer options, the sole ownership company shall have the right to require the existing shareholders to transfer the option shares to the sole ownership company or an entity or person designated by the sole ownership company, as permitted by the laws of the PRC, in accordance with the terms and conditions of this Agreement. The sole ownership company also agreed to accept such conversion options.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 The Company hereby consents to the granting by the Existing Stockholders of such Conversion Options to the Sole Ownership Company in accordance with Section 2.1 above and the other provisions of this Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 The Company hereby agrees that it hereby irrevocably and without any additional conditions exclusively grants to the sole ownership company an Asset Purchase Option, pursuant to which the sole ownership company shall have the right, as permitted by the laws of the PRC, to require the Company to transfer to the sole ownership company, or to an entity or person designated by the sole ownership company, any and all portions of the Company's assets in accordance with the terms and conditions of this Agreement. The sole ownership company also agreed to accept the option to purchase such assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4 The Existing Shareholders hereby consent to the granting by the Company of such Asset Purchase Option to the Sole Ownership Company in accordance with Section 2.3 above and the other provisions of this Agreement.

**Article III. Manner of exercising rights**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 Subject to the terms and conditions of this Agreement and as permitted by the laws of the PRC, the sole ownership company shall have absolute discretion to determine the exact time, manner and frequency of its exercise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 Subject to the terms and conditions of this Agreement and subject to the laws of the PRC at that time, the sole ownership company shall have the right to require at any time that all or a portion of the equity interests in the Company be transferred from the existing shareholders, either by itself or through other entities or individuals designated by it.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3 Subject to the terms and conditions of this Agreement and subject to the laws of the PRC at the time, the sole ownership company shall have the right to require at any time that all or a portion of the assets of the Company be transferred from the Company, either by itself or through other entities or individuals designated by it.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4 In respect of the Conversion Option, at the time of each exercise, the sole ownership company shall have the right to arbitrarily specify the amount of Equity Interests that the Existing Shareholders shall transfer to the sole ownership company and/or such other entity or person as it may designate in such exercise, and the Existing Shareholders shall cede the Transferred Equity Interests to the sole ownership company and/or such other entity or person as it may designate in the amount as required by the sole ownership company. The sole ownership company and/or other entity or person designated by it shall pay the transfer price to the existing shareholders who ceded the Transferred Equity Interests in respect of the Transferred Equity Interests transferred in each exercise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5 In the case of the Asset Purchase Option, at the time of each exercise, the sole ownership company shall have the right to determine the specific company assets that shall be transferred by the company to the sole ownership company and/or such other entity or person as it may designate in such exercise, and the company shall offer the transferred assets to the sole ownership company and/or such other entity or person as it may designate at the request of the sole ownership company. The sole ownership company and/or other entity or person designated by it shall pay the transfer price to the Company for the Transferred Assets transferred in each exercise.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.6 Upon each exercise, the sole ownership company may itself be assigned the transferred equity or transferred assets, or it may designate any third party to be assigned all or part of the transferred equity or transferred assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.7 Each time the sole ownership company decides to exercise the option, it shall send a notice of exercise of the conversion option or an exercise notice of the asset purchase option to the existing shareholders or the company (hereinafter referred to as the "Notice of Exercise", the form of which is set out in Annexes I and II to this Agreement). Upon receipt of the Exercise Notice, the Existing Shareholder or the Company shall immediately transfer the Transferred Equity Interests to the Sole Ownership Company and/or such other entity or person as it may designate in a lump sum in the manner described in Sections 3.4 or 3.5 hereof in accordance with the Exercise Notice.

**Article IV. Transfer price**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 In respect of the conversion option, upon each exercise of the option by the sole ownership company, the entire transfer price payable to the existing shareholders by the sole ownership company or the entity or person designated by it shall be the lower of the amount of the capital contribution of the corresponding transferred equity interest in the registered capital of the target company, or the lowest price permitted under the laws of the PRC at that time. The Existing Shareholder undertakes and agrees that it has been fully indemnified by the sole ownership company and therefore shall return the full amount of the Equity Transfer Price received to the sole ownership company or to the entity or person designated by it within ten (10) business days from the date of receipt of the Equity Transfer Price.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 In respect of the Asset Purchase Option, upon each exercise of the option by the sole ownership company, the sole ownership company or the entity or person designated by it shall pay to the Target Company the minimum price permitted under the laws of the PRC at that time. The Target Company covenants and agrees that it has been fully indemnified by the sole ownership company and therefore shall return the full amount of the Asset Transfer Price received to the sole ownership company or to the entity or person designated by the sole ownership company within ten (10) Business Days after the receipt of the Asset Transfer Price.

**Article V. Representations and warranties**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 The existing shareholders hereby represent and warrant as follows ：

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.1 The Existing Shareholder is a limited liability company duly registered and legally subsisting under the laws of the PRC with independent legal personality; it has full and independent legal status and legal capacity to execute, deliver and perform this Agreement and can independently act as a party to the litigation.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.2 The Company is a limited liability company duly registered and legally subsisting under the laws of the PRC with independent legal personality; it has full and independent legal status and legal capacity to sign, deliver and perform this Agreement and can independently act as a party to the litigation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.3 It has full power and authority to enter into, deliver and perform this Agreement and all other documents to be executed by it in connection with the transactions contemplated by this Agreement, and it has full power and authority to consummate the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.4 This Agreement has been legally and properly executed and delivered by the Existing Stockholders. This Agreement constitutes a legal and binding obligation on them and is enforceable against them in accordance with the terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.6 To the knowledge of the existing shareholders, there are no liens, mortgages, claims and other encumbrances and third-party rights on the Company's assets. Pursuant to this Agreement, the sole ownership company and/or other entities or persons designated by it may, upon exercise of its rights, acquire good and clear title to the assets of the Company free and clear of all liens, encumbrances, claims and other encumbrances or third-party rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.7 Existing shareholders shall not request the Company to declare the distribution or actual payment of any distributable profits, dividends, bonuses or dividends unless mandatorily required by PRC law; If the Existing Shareholders receive any profits, distributions, dividends or dividends from the Company, the Existing Shareholders shall, in compliance with the laws of the PRC, promptly donate the same to the Sole Ownership Company or to a qualified entity or individual designated by the Sole Ownership Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 The Company hereby represents and warrants as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2.1 The Company is a limited liability company duly registered and legally subsisting under the laws of China with independent legal personality. The Company has full and independent legal standing and legal capacity to

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execute, deliver and perform this Agreement and may independently act as a party to the litigation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2.2 The Company has full power and authority within the Company to enter into, deliver and perform this Agreement and all other documents to be executed by it in connection with the transactions contemplated by this Agreement, and it has full power and authority to consummate the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2.3 This Agreement has been legally and properly executed and delivered by the Company. This Agreement constitutes a legal and binding obligation on it.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2.4 There are no liens, mortgages, claims and other encumbrances and third-party rights on the Company's assets. Pursuant to this Agreement, the sole ownership company and/or other entities or persons designated by it may, upon exercise of its rights, acquire good and clear title to the assets of the Company free and clear of all liens, encumbrances, claims and other encumbrances or third-party rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2.5 Unless mandatorily required by PRC law, the Company shall not declare the distribution or actual payment of any distributable profit, bonus, dividend or dividend.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 The sole ownership company represents and warrants as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3.1 A sole ownership company is a duly registered and legally subsisting wholly foreign-owned enterprise with independent legal personality under Chinese law. The sole ownership company has full and independent legal standing and legal capacity to execute, deliver and perform this Agreement and may independently act as a party to the litigation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3.2 The sole ownership company has full power and authority within the Company to enter into, deliver and perform this Agreement and all other documents to be executed by it in connection with the transactions contemplated by this Agreement, and it has full power and authority to consummate the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3.3 This Agreement has been legally and properly executed and delivered by the sole ownership company. This Agreement constitutes a legal and binding obligation on it.

**Article VI. Commitments of existing shareholders**

The existing shareholders hereby undertake the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 During the term of this Agreement, without the prior written consent of the sole proprietor:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1.1 Existing shareholders may not transfer or in any other way dispose of any Option Equity Interests or create any encumbrances or other third party

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rights in any Option Equity Interests;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1.2 It may not increase or decrease the registered capital of the company or merge with any other entity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1.3 He or she shall not dispose of, or cause the management of the Company to dispose of, any material Company assets (other than those occurring in the ordinary course of business);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1.4 It may not terminate or cause the management of the Company to terminate any material agreement entered into by the Company or enter into any other agreement that conflicts with an existing material agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1.5 It shall not appoint or remove any director, supervisor or other officer of any company who shall be appointed or removed by the existing shareholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1.6 It shall not cause the company to declare the distribution or actual payment of any distributable profits, dividends, bonuses or dividends;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1.7 It ensures that the company effectively survives and is not terminated, liquidated or dissolved;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1.8 It shall not amend the articles of association of the company; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1.9 It ensures that the company shall not lend or borrow money, or give guarantees or perform other forms of collateralized acts, or undertake any substantial obligations outside of its normal business activities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 During the term of this Agreement, it must use its best efforts to develop the Company's business and ensure that the Company operates in a lawful and compliant manner, and it will not engage in any act or omission that may damage the Company's assets, goodwill, or affect the validity of the Company's business license.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3 During the term of this Agreement, it shall promptly inform Sole Proprietor of any condition that may have a material adverse effect on the Company's existence, business operations, financial condition, assets or goodwill, and shall promptly take all measures acceptable to Sole Proprietor to preclude such adverse condition or to remedy it effectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4 Once the sole proprietor has given notice of exercise:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4.1 It shall immediately convene a shareholders' meeting and pass a resolution of the shareholders' meeting and take all other necessary actions to consent to the transfer of all of the Transferred Equity Interests or Transferred Assets by the existing shareholders or the Company to the Sole Proprietor and/or other entities or individuals designated by it at the Transfer Price, and to waive any right of first refusal, if any, in its possession;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4.2 it shall immediately enter into an equity transfer agreement with the sole

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proprietor and/or such other entity or person as it may designate, transfer all of the Transferred Equity Interests to the Sole Proprietorship and/or other entities or individuals designated by it at the Transfer Price and, at the request of the Sole Proprietorship and in accordance with the provisions of laws and regulations. Providing the necessary support to the Sole Proprietorship (including the provision and execution of all relevant legal documents, the fulfillment of all governmental approvals and registrations, and the assumption of all related obligations) to enable the Sole Proprietorship and/or other entities or individuals designated by the Sole Proprietorship to acquire the full Transferred Equity Interests, and such Transferred Equity Interests shall be free from any legal defects and free from any encumbrances, third party restrictions or any other restrictions on the Equity Interests.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5 If the total amount of the transfer price received by the existing shareholders in respect of the transferred equity interests held by them is higher than their capital contribution to the Company or if they receive any form of profit distribution, dividends, dividends or bonuses from the Company, the existing shareholders agree to waive the proceeds of the premium portion of the transfer price as well as any profit distribution, dividends, bonuses or bonuses (after deduction of the relevant taxes), to which the Sole Proprietorship Company shall be entitled, provided that the Chinese laws are not violated. The Existing Shareholders shall instruct the relevant Transferee or the Company to pay such portion of the proceeds to the bank account of the Sole Proprietor as may be designated by the Sole Proprietor at that time.

**Article VII. Commitments of the Corporation**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 The Company hereby undertakes as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1.1 In the event that the execution and performance of this Agreement and the grant of the conversion option or the asset purchase option hereunder are subject to the consent, permission, waiver, authorization of any third party or the approval, license, waiver or registration or filing with any governmental agency, if required by law, the Company will use its best efforts to assist in the fulfillment of the foregoing conditions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1.2 The Company will not assist or permit an Existing Shareholder to transfer or in any other way dispose of any Option Equity Interests or create any security interest or other third party rights in any Option Equity Interests without the prior written consent of the Sole Proprietor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1.3 The Company will not transfer or in any other way dispose of any material Company assets (other than those occurring in the ordinary course of business) or create any security interests or other third party rights in any Company assets without the prior written consent of the Sole Proprietor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1.4 The Company shall not do or permit any act or deed that may adversely affect Sole Proprietor's interests under this Agreement, including, without limitation, any acts and deeds subject to Section 6.1

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 Once the sole proprietor gives notice of exercise

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2.1 It shall immediately cause the existing shareholders to convene a shareholders' meeting and pass a resolution of the shareholders' meeting and take all other necessary actions to consent to the transfer of all of the Transferred Assets by the Company to the Sole Proprietor and/or such other entity or person as it may designate at the transfer price;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2.2 It shall immediately sign the Asset Transfer Agreement with the Sole Proprietorship Company and/or other entities or persons designated by it, transfer all the Transferred Assets to the Sole Proprietorship Company and/or other entities or persons designated by it at the Transfer Price, and, in accordance with the requirements of the Sole Proprietorship Company and the provisions of the Laws and the Regulations, procure the Shareholders to provide the Sole Proprietorship Company with the necessary support (including the provision and signing of all the relevant legal documents, the fulfillment of all governmental approvals and (including the provision and signing of all relevant legal documents, fulfillment of all governmental approvals and registrations and assumption of all related obligations) to enable the Sole Proprietorship Company and/or other entities or persons designated by it to acquire all of the Transferred Assets, and such Transferred Assets shall be free from any legal defects and free from any encumbrance, third-party restriction, or any other restriction on the assets of the Company.

**Article VIII. Obligation of confidentiality**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1 Regardless of whether or not this Agreement has been terminated, each party shall maintain in strict confidence all trade secrets, proprietary information, customer information and all other information of a confidential nature (hereinafter collectively referred to as "Confidential Information") relating to the other party that comes to its knowledge in the course of the formation and performance of this Agreement. Except with the prior written consent of the party disclosing the Confidential Information or when disclosure to a third party is required by relevant laws and regulations or the requirements of the place where a party's Affiliate is listed, the party receiving the Confidential Information shall not disclose any of the Confidential Information to any other third party; and the party receiving the Confidential Information shall not use, or indirectly utilize, any of the Confidential Information, except for the purpose of the performance of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2 The following information is not confidential ：

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Any information of which there is written evidence that the party receiving the information has previously become aware by lawful means.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Information in the public domain through no fault of the receiving party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Information lawfully obtained by the receiving party from other sources after the receipt of the information; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Either party is obliged to disclose to the relevant governmental authorities, stock exchanges, etc., as required by law or the Listing Rules, or either party is

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required to disclose the above confidential information to its direct legal advisers and financial advisers as necessary for the normal operation of its business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3 The party receiving the information may disclose the Confidential Information to its relevant employees, agents or professionals retained by it, provided that the party receiving the information shall ensure that such persons comply with the relevant terms and conditions of this Agreement and shall assume any liability arising from any breach by such persons of the relevant terms and conditions of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.4 Notwithstanding any other provision of this Agreement, the effect of the provisions of this Section shall not be affected by the termination of this Agreement.

**Article IX. Duration of the agreement**

This Agreement shall be effective as of the date duly signed by the parties, and this Agreement shall terminate upon the legal transfer of all Option Equity Interests and the assets of the Company into the name of the Sole Proprietor and/or such other entity or person as it may designate, in accordance with the provisions of this Agreement.

**Article X. Notification**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1 Any notices, requests, demands and other communications required by or made pursuant to this Agreement shall be in writing and delivered to the appropriate party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2 Such notice or other communication shall be deemed to have been served when sent by facsimile or telex, when delivered in person, or when deposited in the mail, five (5) days after posting.

**Article XI. Liability for breach of contract**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1 The parties agree and acknowledge that a material breach of any of the covenants made hereunder or a material failure or delay in the performance of any of the obligations hereunder by either party (the "Defaulting Party") constitutes a breach of contract hereunder (the "Default"), and the Defaulting Party shall have the right to require the Defaulting Party to cure or remedy the Default within a reasonable period of time. If the defaulting party fails to cure or remedy the breach within a reasonable period of time or within ten (10) days after the defaulting party has been notified in writing by the defaulting party with a request to cure, then the defaulting party shall have the right to do so at its sole discretion:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1.1 If an existing shareholder or the Company is the defaulting party, the Sole Proprietor shall have the right to terminate this Agreement and demand damages from the defaulting party;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1.2 If Sole Proprietor is the defaulting party, the defaulting party shall have the right to demand damages from the defaulting party, but it shall not have any right to terminate or rescind this Agreement under any circumstances unless otherwise provided by law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.2 Notwithstanding any other provision of this Agreement, the effect of the provisions of this Section shall not be affected by the termination of this Agreement.

**Article XII. Other matters**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.1 This Agreement is made in three (3) originals in the Chinese language, one (1) for each party to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.2 The conclusion, entry into force, performance, modification, interpretation and termination of this Agreement shall be governed by the laws of China.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.3 Any dispute arising under and in connection with this Agreement shall be resolved by consultation between the parties, and if the parties are unable to reach an agreement within thirty (30) days after the dispute has arisen, the dispute shall be submitted to the Shenzhen International Arbitration Court for arbitration in accordance with the arbitration rules in force at the time. The place of arbitration shall be Shenzhen, the language to be used in the arbitration shall be Chinese, and the arbitral award shall be final and binding on all parties to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.4 Any rights, powers and remedies conferred on the parties by any provision of this Agreement shall not be exclusive of any other rights, powers or remedies to which such party may be entitled by virtue of the provisions of the Law and elsewhere hereunder, and the exercise by a party of its rights, powers and remedies shall not be exclusive of the exercise by such party of other rights, powers and remedies to which it is entitled.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.5 No waiver of any of a Party's rights, powers and remedies under this Agreement or at law ("such rights") will result from any failure or delay in exercising such rights, and no waiver of any single or partial waiver of such Party's rights will preclude such Party from otherwise exercising such rights and exercising the rights of other Parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.6 The headings of the sections of this Agreement are for indexing purposes only and in no event shall such headings be used in or affect the interpretation of the provisions of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.7 Each provision of this Agreement is severable and independent of each other provision, and if at any time any one or more provisions of this Agreement shall become invalid, illegal or unenforceable, the validity, legality and enforceability of the other provisions of this Agreement shall not be affected thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.8 This Agreement, when signed, supersedes any other legal document previously

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signed by the parties on the same subject. Any modification or supplement to this Agreement must be in writing and properly signed by the parties hereto in order to be effective.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.9 Neither party may assign any of its rights and/or obligations under this Agreement to any third party without the prior written consent of the other parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.10 This Agreement shall be binding upon the legal assignees or successors of the parties.

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**[Exclusive Right to Purchase Agreement Signature Page]**

IN WITNESS WHEREOF, this Exclusive Right to Purchase Agreement has been executed by the following parties as of the date set forth at the top of this document.

**Guangzhou Interconnect Electric Appliances Technology Co., Ltd. (Seal)**

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| | |
|:---|:---|
| Signature： | /s/ Xiaoping Chen |
| Name： | Xiaoping Chen |
| Title： |  |

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**Zhumeng Hulian Technology (Guangdong) Co., Ltd. (Seal)**

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| | |
|:---|:---|
| Signature： | /s/ Erqiang Duan |
| Name： | Erqiang Duan |
| Title： |  |

---

**Foshan Yunmi Electric Appliances Technology Co., Ltd. (Seal)**

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| | |
|:---|:---|
| Signature： | /s/ Xiaoping Chen |
| Name： | Xiaoping Chen |
| Title： |  |

---

Exclusive Right to Purchase Agreement Signature Page

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## Exhibit 4.18

**Exhibit 4.18**

**Termination Agreement**

THIS TERMINATION AGREEMENT (this "Agreement") is entered into as of the <u>19th</u> day of <u>July</u>, 2024, by and among the following parties：

&nbsp;&nbsp;&nbsp;&nbsp;**1.** **Party A:** 

Yunmi Hulian Technology (Guangdong) Co., Ltd，a limited liability company established and validly existing in accordance with the laws of China;

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **Party B ：** 

Xiaoping Chen, ID: \*\*\*\*\*\*;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Zhuhai Yungui Enterprise Management Consulting Partnership (Limited Partnership), a limited partnership established and validly existing in accordance with the laws of China;

&nbsp;&nbsp;&nbsp;&nbsp;**3.** **Party C ：** 

Foshan Yunmi Electric Technology Co., Ltd, a limited liability company established and validly existing in accordance with the laws of China;

&nbsp;&nbsp;&nbsp;&nbsp;**4.** **Party D ：** 

Juan Zhou, ID: \*\*\*\*\*\*◦

For the purposes of this Agreement, Party A, Party B, Party C and Party D are hereinafter each referred to as a "Party" and collectively as the "Parties".

**Whereas：**

&nbsp;&nbsp;&nbsp;&nbsp;1. On April 28, 2020, Party A entered into an Exclusive Consulting and Services Agreement (the "Exclusive Consulting and Services Agreement") with Party C, Party A entered into the Exclusive Right to Purchase Agreement (the "Exclusive Right to Purchase Agreement"), the Equity Pledge Agreement (the "Equity Pledge Agreement"), the Shareholder Voting Rights Entrustment Agreement (the

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"Entrustment Agreement") with Party B, and Party D signed a Spousal Consent Letter (the 'Consent Letter');

&nbsp;&nbsp;&nbsp;&nbsp;2. On July 19, 2024, Party A, Party B, Party C and other related parties entered into the Business Reorganization Agreement (the "Business Reorganization Agreement") ；

&nbsp;&nbsp;&nbsp;&nbsp;3. The parties agree to terminate the Exclusive Consulting and Services Agreement, the Exclusive Right to Purchase Agreement, the Equity Pledge Agreement, the Entrustment Agreement and the Consent Letter described above in accordance with the terms of the Business Reorganization Agreement and the terms and conditions of this Agreement.

Now, by consensus, the parties have reached the following agreement：

&nbsp;&nbsp;&nbsp;&nbsp;1. The Exclusive Consulting and Services Agreement, the Exclusive Right to Purchase Agreement, the Equity Pledge Agreement, the Entrustment Agreement and the Consent Letter referred to above shall be terminated immediately as of the Settlement Date agreed in the Business Reorganization Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;2. As of the date of termination, the rights and obligations of the parties under the Exclusive Consulting and Services Agreement, the Exclusive Right to Purchase Agreement, the Equity Pledge Agreement, the Entrustment Agreement and the Consent Letter referred to above shall terminate, and the parties shall no longer have any rights, obligations and liabilities based on the aforesaid agreements. The parties confirm that there is no dispute about the above agreements and that they will not make any claims against the other parties on the basis of these documents.

&nbsp;&nbsp;&nbsp;&nbsp;3. Each party hereto shall use its best efforts to maintain the confidentiality of any technical or commercial information of all other parties in all forms ("Confidential Information") acquired by such party in connection with the performance of this Agreement, and the obligation of confidentiality shall survive the termination of this Agreement. For the avoidance of doubt, "confidential information" shall not

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include (i) information that has become generally available to the public at the time of disclosure; (ii) has become generally available to the public after disclosure through no fault of the recipient; (iii) information that the receiving party can demonstrate was in its possession prior to disclosure and was not obtained directly or indirectly from another party; or (iv) either party is under an obligation to disclose to the relevant governmental authorities, stock exchanges, etc., as required by law or the Listing Rules, or either party discloses the above confidential information to its direct legal advisers and financial advisers as necessary for the normal operation of its business.

&nbsp;&nbsp;&nbsp;&nbsp;4. Any dispute arising under and in connection with this Agreement shall be resolved by consultation between the parties, and if the parties are unable to reach an agreement within thirty (30) days after the dispute has arisen, the dispute shall be submitted to the Shenzhen International Arbitration Court for arbitration in accordance with its arbitration rules in force at the time. The place of arbitration shall be Shenzhen, the language to be used in the arbitration shall be Chinese, and the arbitral award shall be final and binding on the parties.

&nbsp;&nbsp;&nbsp;&nbsp;5. The present Agreement shall be executed in four (4) original copies, each of which shall have the same legal effect. This Agreement shall enter into force on the date on which it is signed.

[*Blank below*]

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（This page, without text, is the signature page of the termination agreement）

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| | |
|:---|:---|
| **Party A：** | **Party A：** |
| Yunmi Hulian Technology (Guangdong) Co., Ltd (Seal) | Yunmi Hulian Technology (Guangdong) Co., Ltd (Seal) |
| /s/ Authorized Signatory (represented by company seal) | /s/ Authorized Signatory (represented by company seal) |
| **Party B：** | **Party B：** |
| Xiaoping Chen | Xiaoping Chen |
| Signature： | /s/ Xiaoping Chen |
| Zhuhai Yungui Enterprise Management Consulting Partnership (Limited Partnership) (Seal) | Zhuhai Yungui Enterprise Management Consulting Partnership (Limited Partnership) (Seal) |
| Signature： | /s/ Xiaoping Chen |
| **Party C：** | **Party C：** |
| Foshan Yunmi Electric Technology Co., Ltd (Seal) | Foshan Yunmi Electric Technology Co., Ltd (Seal) |
| Signature： | /s/ Authorized Signatory (represented by company seal) |

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（This page, without text, is the signature page of the termination agreement）

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| | |
|:---|:---|
| **Party D：** | **Party D：** |
| Juan Zhou | Juan Zhou |
| Signature： | /s/ Juan Zhou |

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## Exhibit 4.19

**Exhibit 4.19**

**Shareholder Voting Rights Proxy Agreement**

THIS STOCKHOLDER VOTING RIGHTS PROVISION AGREEMENT (this "Agreement") is entered into as of the <u>20th</u> day of <u>July</u>, 2024, by and among the following parties:

&nbsp;&nbsp;&nbsp;&nbsp;1. **Foshan Yunmi Electric Appliances Technology Co., Ltd.** (Hereinafter referred to as "Existing Shareholders")

Registered Address: Thirteenth Floor, No. 7, Industrial Avenue, Lunjiao Street, Lichun Village, Shunde District, Foshan City, Guangdong Province, China (residence declaration)

Legal Representative: CHEN Xiaoping

&nbsp;&nbsp;&nbsp;&nbsp;2. **Zhumeng Hulian Technology (Guangdong) Co., Ltd.** (Hereinafter referred to as "sole ownership company")

Registered Address: Thirteenth Floor, No. 7, Industrial Avenue, Lunjiao Street, Lichun Village, Shunde District, Foshan City, Guangdong Province, China (residence declaration)

Legal Representative: DUAN Erqiang

&nbsp;&nbsp;&nbsp;&nbsp;3. **Guangzhou Interconnect Electric Appliances Technology Co., Ltd.** (Hereinafter referred to as the "Company")

Registered Address: Room 1502, No. 1226 Xingang East Road, Haizhu District, Guangzhou City (office only)

Legal Representative: CHEN Xiaoping

(For the purposes of this Agreement, each of the foregoing parties shall be referred to individually as a "Party" and collectively as the "Parties".)

Whereas：

&nbsp;&nbsp;&nbsp;&nbsp;1. Existing shareholders are the current registered shareholders of the company, holding 100 percent of the company's equity;

&nbsp;&nbsp;&nbsp;&nbsp;2. Existing shareholders intend to entrust individuals designated by the sole proprietorship company with the exercise of all of their shareholder voting rights in the company, and the sole proprietorship company intends to designate individuals to accept such entrustment.

The parties, after friendly negotiations, hereby unanimously agree as follows:

**Article I. Delegation of voting rights**

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&nbsp;&nbsp;&nbsp;&nbsp;1.1 The Existing Stockholders hereby irrevocably authorize the persons then designated by the Sole Proprietorship (the "Trustees") to exercise on their behalf the following rights (collectively, the "Delegated Rights") to which they are entitled as stockholders of the Corporation pursuant to the Articles of Incorporation of the Corporation then in effect:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) To act as a proxy for the existing shareholders, proposing to convene and attending the Company's shareholders' meetings in accordance with the Company's Articles of Incorporation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Exercise voting rights on behalf of the existing shareholders on all matters requiring discussion and resolution at the shareholders' meeting, including but not limited to the designation and election of directors of the Company, and other senior management personnel to be appointed and removed by the shareholders, and the sale or transfer of all or part of the shareholdings of the existing shareholders in the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) the stockholder' voting rights under other articles of incorporation (including any other stockholder voting rights provided for in such articles as they may be amended).

&nbsp;&nbsp;&nbsp;&nbsp;1.2 The Trustee shall perform its fiduciary duties in accordance with the law with prudence and diligence within the scope of the authorization provided for in this Agreement; the existing shareholders shall acknowledge and bear the responsibility for any legal consequences arising from the exercise of the Trustee's aforesaid delegated rights.

&nbsp;&nbsp;&nbsp;&nbsp;1.3 The Existing Shareholders hereby confirm that the Trustee is not required to consult the Existing Shareholders in advance when exercising the aforementioned proxy rights. However, the Trustee shall promptly inform the Existing Shareholders after each resolution or proposal to convene an extraordinary shareholders' meeting has been made.

**Article II. The right to know**

&nbsp;&nbsp;&nbsp;&nbsp;2.1 For the purpose of exercising the entrusted rights under this Agreement, the Trustee shall have the right to learn about the Company's operations, business, customers, finances, employees, and other relevant information, and to inspect the Company's relevant materials, and the Company shall fully cooperate with the Trustee in this regard.

**Article III. Exercise of entrusted rights**

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&nbsp;&nbsp;&nbsp;&nbsp;3.1 Existing shareholders will provide full assistance to the Trustee in exercising the proxy rights, including timely signing of the resolution of the shareholders' meeting or other relevant legal documents already made by the Trustee when necessary (e.g. to fulfill the requirement of submitting documents for approval, registration or filing by governmental authorities).

&nbsp;&nbsp;&nbsp;&nbsp;3.2 If at any time during the term of this Agreement, the grant or exercise of the proxy rights hereunder is not realized for any reason (other than a default by an existing stockholder or the Company), the parties shall immediately seek an alternative that most closely resembles the unavailable provision and shall execute a supplemental agreement modifying or adjusting the terms of this Agreement, if necessary, in order to ensure that the purposes hereof may continue to be fulfilled.

**Article IV. Exemption and indemnification**

&nbsp;&nbsp;&nbsp;&nbsp;4.1 The parties acknowledge that under no circumstances shall Sole Proprietor be required to assume any liability or make any compensation, financial or otherwise, to the other parties or any third party in connection with the exercise of the delegated rights hereunder by the individual designated by Sole Proprietor.

&nbsp;&nbsp;&nbsp;&nbsp;4.2 The Existing Shareholders and the Company agree to indemnify and hold harmless the Sole Proprietor from and against all losses that the Sole Proprietor has suffered or may suffer as a result of the exercise of the power of attorney by the Appointed Trustee, including but not limited to, any losses arising from any litigation, recovery, arbitration, claims or administrative investigations or penalties by any third party against the Sole Proprietor. However, such losses are not compensable if they are caused by the willfulness or gross negligence of the trustee.

**Article V. Declarations and warranties**

&nbsp;&nbsp;&nbsp;&nbsp;5.1 The existing shareholders hereby represent and warrant as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.1 It has full and independent legal standing and legal capacity and has been duly authorized to execute, deliver and perform this Agreement and can independently act as a party to the litigation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.2 It has full power and authority to enter into and deliver this Agreement and all other documents to be executed by it in connection with the transactions contemplated hereby, and it has full power and authority to consummate the transactions contemplated hereby. This Agreement has been legally and properly executed and delivered by it. This Agreement

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constitutes a legal and binding obligation upon it and is enforceable against it in accordance with the terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;5.2 Sole Proprietorship and Corporation hereby represent and warrant, respectively, as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2.1 It is a limited liability company duly registered and legally subsisting under the laws of its place of incorporation, with independent legal personality; it has full and independent legal status and legal capacity to execute, deliver and perform this Agreement, and can independently act as a party to the litigation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2.2 It has full power and authority within the Company to enter into and deliver this Agreement and all other documents to be executed by it in connection with the transactions contemplated by this Agreement, and it has full power and authority to consummate the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;5.3 The Company further represents and warrants as follows:

**Article VI. Duration of the agreement**

&nbsp;&nbsp;&nbsp;&nbsp;6.1 This Agreement shall enter into force on the date duly signed by the parties; it shall remain in force unless earlier terminated by written agreement of the parties.

**Article VII. Notification**

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&nbsp;&nbsp;&nbsp;&nbsp;7.1 Any notices, requests, demands and other communications required by or made pursuant to this Agreement shall be in writing and shall be delivered to the appropriate party.

&nbsp;&nbsp;&nbsp;&nbsp;7.2 Such notice or other communication shall be deemed to have been served when sent by facsimile or telex; when delivered in person, it shall be deemed to have been served when delivered in person; and when sent by mail, it shall be deemed to have been served five (5) days after posting.

**Article VIII. Obligation of confidentiality**

&nbsp;&nbsp;&nbsp;&nbsp;8.1 Regardless of whether or not this Agreement has been terminated, each party shall maintain in strict confidence all trade secrets, proprietary information, customer information and all other information of a confidential nature (hereinafter collectively referred to as "Confidential Information") relating to the other party that comes to its knowledge in the course of the formation and performance of this Agreement. Except with the prior written consent of the party disclosing the Confidential Information or when disclosure to a third party is required by relevant laws and regulations or the requirements of the place where a party's Affiliate is listed, the party receiving the Confidential Information shall not disclose any of the Confidential Information to any other third party; and the party receiving the Confidential Information shall not use, or indirectly utilize, any of the Confidential Information, except for the purpose of the performance of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;8.2 The following information is not confidential:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Any information of which there is documentary evidence that the party receiving the information has previously become aware by lawful means;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Information that enters the public domain through no fault of the party receiving it;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Information lawfully obtained by the receiving party from other sources after the receipt of the information; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Either party is obliged to disclose to the relevant governmental authorities, stock exchanges, etc., as required by law or the Listing Rules, or either party is required to disclose the above confidential information to its direct legal advisers and financial advisers as necessary for the normal operation of its business.

&nbsp;&nbsp;&nbsp;&nbsp;8.3 The party receiving the information may disclose the Confidential Information to its relevant employees, agents or professionals retained by it, provided that the party receiving the information shall ensure that such persons comply with the relevant terms and conditions of this Agreement and shall assume any liability arising from any breach by such persons of the relevant terms and conditions of this Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;8.4 Notwithstanding any other provision of this Agreement, the effect of the provisions of this Section shall not be affected by the termination of this Agreement.

**Article IX. Liability for breach of contract**

&nbsp;&nbsp;&nbsp;&nbsp;9.1 Each party agrees and acknowledges that a material breach of any of the covenants made hereunder or a material failure or delay in the performance of any of its obligations hereunder by either party (the "Defaulting Party") constitutes a breach of contract ("Default") hereunder.), and either of the other non-defaulting parties (the "Defaulting Party") shall have the right to require the Defaulting Party to cure or remedy the breach within a reasonable period of time. If the defaulting party fails to cure or remedy the breach within a reasonable period of time or within ten (10) days after the other party has notified the defaulting party in writing of the breach and requested that the breach be cured, the

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1.1 If an existing shareholder or the Company is the defaulting party, the Sole Proprietor shall have the right to terminate this Agreement and demand damages from the defaulting party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1.2 If Sole Proprietor is the defaulting party, the defaulting party shall have the right to demand damages from the defaulting party, but it shall not have any right to terminate or rescind this Agreement under any circumstances unless otherwise provided by law.

&nbsp;&nbsp;&nbsp;&nbsp;9.2 Notwithstanding any other provision of this Agreement, the effect of the provisions of this Section shall not be affected by the suspension or termination of this Agreement.

**Article X. Other matters**

&nbsp;&nbsp;&nbsp;&nbsp;10.1 This Agreement is made in three (3) originals in the Chinese language, one (1) for each party to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;10.2 The laws of the People's Republic of China shall apply to the conclusion, entry into force, performance, modification, interpretation and termination of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;10.3 Any dispute arising under and in connection with this Agreement shall be resolved by consultation between the parties, and if the parties are unable to reach an agreement within thirty (30) days after the dispute has arisen, any one of the parties may submit the dispute to the Shenzhen International Arbitration Institute for arbitration in accordance with its arbitration rules in force at the time. The place of arbitration shall be Shenzhen and the language of arbitration shall be Chinese. The arbitral award shall be final and binding on the parties hereto.

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&nbsp;&nbsp;&nbsp;&nbsp;10.4 Any rights, powers and remedies conferred on the parties by any provision of this Agreement shall not be exclusive of any other rights, powers or remedies to which such party may be entitled by virtue of the provisions of the Law and elsewhere hereunder, and the exercise by a party of its rights, powers and remedies shall not be exclusive of the exercise by such party of other rights, powers and remedies to which it is entitled.

&nbsp;&nbsp;&nbsp;&nbsp;10.5 No waiver of any of a party's rights, powers and remedies under this Agreement or at law ("such rights") will result from any failure or delay in exercising such rights, and no waiver of any single or partial waiver of such party's rights will preclude such party from exercising such rights in any other manner and from exercising any other rights of such party.

&nbsp;&nbsp;&nbsp;&nbsp;10.6 The headings of the sections of this Agreement are for indexing purposes only and in no event shall such headings be used in or affect the interpretation of the provisions of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;10.7 Each provision of this Agreement is severable and independent of each other provision, and if at any time any one or more provisions of this Agreement shall become invalid, illegal or unenforceable, the validity, legality and enforceability of the other provisions of this Agreement shall not be affected thereby.

&nbsp;&nbsp;&nbsp;&nbsp;10.8 Any amendment or supplement to this Agreement must be in writing and properly signed by the parties hereto to be effective.

&nbsp;&nbsp;&nbsp;&nbsp;10.9 Neither party may assign any of its rights and/or obligations under this Agreement to any third party without the prior written consent of the other party.

10.10 This Agreement shall be binding upon the legal successors of the parties.

[No text below this page]

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**[Shareholder Voting Proxy Agreement Signature Page]**

IN WITNESS WHEREOF, this Stockholder Voting Proxy Agreement has been executed by the parties hereto as of the date first written.

**Guangzhou Interconnect Electric Appliances Technology Co., Ltd. (Seal)**

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| | |
|:---|:---|
| Signature： | /s/ Xiaoping Chen |
| Name： | Xiaoping Chen |
| Title： |  |

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**Zhumeng Hulian Technology (Guangdong) Co., Ltd. (Seal)**

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| | |
|:---|:---|
| Signature： | /s/ Erqiang Duan |
| Name： | Erqiang Duan |
| Title： |  |

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**Foshan Yunmi Electric Appliances Technology Co., Ltd. (Seal)**

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| | |
|:---|:---|
| Signature： | /s/ Xiaoping Chen |
| Name： | Xiaoping Chen |
| Title： |  |

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## Exhibit 4.20

**Exhibit 4.20**

**Business Reorganization Agreement**

THIS BUSINESS REORGANIZATION AGREEMENT (this "Agreement") is made and entered into by and between the following parties as of the <u>19th</u> day of <u>July</u>, 2024 (the "Date of Execution") in Foshan, the PRC:

&nbsp;&nbsp;&nbsp;&nbsp;1. Chen Xiaoping, Chinese citizen, Chinese identity card number: xxxxxxxxxxxxxxxxxx;

&nbsp;&nbsp;&nbsp;&nbsp;2. Zhuhai Yungui Enterprise Management Consulting Partnership (Limited Partnership), a limited partnership organized and validly existing in Zhuhai under the laws of the PRC ()"**Zhuhai Yungui**" and together with Xiaoping Chen, the "**Purchaser** ");

&nbsp;&nbsp;&nbsp;&nbsp;3. Viomi Technology Co., Ltd, a limited liability company organized and validly existing under the laws of the Cayman Islands （ "**Viomi Cayman** ");

&nbsp;&nbsp;&nbsp;&nbsp;4. Viomi HK Technology Co., Limited ， a company established and validly existing under the laws of Hong Kong with limited liability ()"**Viomi HK**" and together with Viomi Cayman, the "**Vendors** ");

&nbsp;&nbsp;&nbsp;&nbsp;5. Yunmi Hulian Technology (Guangdong) Co., Ltd ， a limited liability company organized and validly existing in Foshan City under the laws of the People's Republic of China ()"**Yunmi Hulian** ");

&nbsp;&nbsp;&nbsp;&nbsp;6. Foshan Xiaoxian Hulian Electric Appliances Technology Co., Ltd. ， a limited liability company organized and validly existing in Foshan City under the laws of the PRC ()"**Foshan Xiaoxian** ");

&nbsp;&nbsp;&nbsp;&nbsp;7. Foshan Qutansuo Electrical Technology Co., Ltd. ， a limited liability company organized and validly existing in Foshan City under the laws of the PRC ()"**Qutansuo** ");

&nbsp;&nbsp;&nbsp;&nbsp;8. Guangdong AI Touch Technology Co., Ltd. ， a limited liability company organized and validly existing in Foshan City under the laws of the PRC ()"**AI Touch** ");

&nbsp;&nbsp;&nbsp;&nbsp;9. Zhuawa Technology (Guangdong) Co., Ltd. ， a limited liability company organized and validly existing in Guangzhou City under the laws of the PRC ()"**Zhuawa** ");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Guangzhou Interconnect Electric Appliances Technology Co., Ltd., a limited liability

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company organized and validly existing in Guangzhou City under the laws of the PRC ("**Guangzhou Interconnect**");

&nbsp;&nbsp;&nbsp;&nbsp;10. Zhumeng Hulian Technology (Guangdong) Co., Ltd. ， a limited liability company organized and validly existing in Foshan City under the laws of the PRC ()"**Zhumeng Hulian** ");

&nbsp;&nbsp;&nbsp;&nbsp;11. Guangdong Lizi Technology Co., Ltd., a limited liability company organized and validly existing in Foshan City under the laws of the PRC ()"**Guangdong Lizi** ");

&nbsp;&nbsp;&nbsp;&nbsp;12. Foshan Quanxian Technology Co., Ltd. ， a limited liability company organized and validly existing in Foshan City under the laws of the PRC ()"**Foshan Quanxian** ");

&nbsp;&nbsp;&nbsp;&nbsp;13. Lequan Technology (Beijing) Co., Ltd. ， a limited liability company organized and validly existing in Beijing City under the laws of the PRC ()"**Lequan** ");

&nbsp;&nbsp;&nbsp;&nbsp;14. Beijing Yunmi Technology Co., Ltd. ， a limited liability company organized and validly existing in Beijing City under the laws of the PRC ()"**Beijing Viomi** ");

&nbsp;&nbsp;&nbsp;&nbsp;15. Foshan Yunmi Electric Appliances Technology Co., Ltd. ， a limited liability company organized and validly existing in Foshan City under the laws of the PRC ()"**Foshan Viomi** ").

Any of the above contracting parties shall be referred to individually as a "**Party**" and collectively as the "**Parties**".

**in view of:**

&nbsp;&nbsp;&nbsp;&nbsp;1. Viomi Cayman is a NASDAQ-listed company (ticker symbol: VIOT) ， Viomi HK is a wholly owned subsidiary of Viomi Cayman ， Yumi Hulian 、 Zhumeng Hulian and Lequan （ collectively "**WFOE**" ） are wholly-owned subsidiaries established in the PRC by Viomi HK or other overseas entities controlled by Viomi Cayman. ， Foshan Viomi is a domestic company controlled by Yummi Hulian through a VIE agreement 。 Guangdong Lizi 、 Foshan Quanxian 、 Beijing Viomi 、 Xiaoxian 、 Qutansuo 、 AI Touch 、 Zhuawa 、 Guangzhou Interconnect are subsidiaries of WFOE directly or indirectly controlled by WFOE through equity or agreements in China. As of the date of this Agreement, the shareholding structure of the Domestic Company is as shown in Attachment I-(I) to this

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Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;2. As of the date of this Agreement, the Purchaser holds in aggregate 100% of the equity interests in Foshan Viomi and has entered into the Existing VIE Agreement (as defined below) with Foshan Viomi and Yummi Hulian in respect of such equity interests; Foshan Viomi holds 100% of the equity interests in Guangzhou Interconnect

&nbsp;&nbsp;&nbsp;&nbsp;3. The current main business of the Group Company mainly consists of two segments, namely water purification business and smart home business, of which the smart home business is mainly operated by the Subject Company (as defined below). Due to the needs of the business development of the Group Company, the parties agree to divest the Target Business (as defined below) from the business system of the Group Company in accordance with the terms and conditions of this Agreement, and the Purchaser shall acquire the equity interest in the Subject Company and the assets, personnel, business and other resources relating to the Target Business through the Transaction, so as to fulfill the purpose of the Purchaser's independent operation of the Target Business.

To this end, the parties have reached this agreement on matters relating to the Transaction after amicable negotiations for mutual compliance and execution by the parties.

**Article 1 Definitional clauses**

&nbsp;&nbsp;&nbsp;&nbsp;1.1 **Defination** For the purposes of this Agreement, unless otherwise specified, the following terms appearing in this Agreement shall have the following meanings ：

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| | |
|:---|:---|
| "**Group company**" | means Viomi Cayman and each of the entities controlled directly or indirectly by it and branches of such entities. |
| "**Target business**" | refers to the smart home business other than hoods, ranges, and water heaters. |
| "**Target company**" | refers to Foshan Viomi, Qutansuo, Xiaoxian, AI Touch and Zhuawa. |
| "**Transaction documents**" | means this Agreement, the VIE Termination Agreement attached hereto as Exhibit II, and all other documents and agreements relating to the Transaction. |

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| | |
|:---|:---|
| "**Existing VIE agreements**" | Refers to the Exclusive Consulting and Services Agreement, the Exclusive Right to Purchase Agreement, the Equity Pledge Agreement, the Shareholders' Voting Rights Entrustment Agreement and the Spousal Consent Letter signed by the spouse of Chen Xiaoping, all of which were entered into by Guangzhou Interconnect and Foshan Viomi and its shareholders on April 28, 2020 |
| "**Related party**" | In relation to a particular person, means: (i) in the case of a natural person, any other person who is directly or indirectly controlled by that person, or a member of that person's family, and (ii) if the person is not a natural person, any person who directly or indirectly controls, or is directly or indirectly controlled by, or is directly or indirectly under common control with, that person. "Control" is defined as the holding of more than 50% of the voting equity/interest in an entity or the right to appoint more than half of the directors or other members of a similar governing body of the entity, or to have actual decision-making power or control over the operations of the entity, whether by agreement or otherwise. |
| "**Parties**" | Every effort should be made to interpret it broadly (and it should include individuals, partnerships (including limited partnerships), corporations, associations, joint stock companies, limited liability companies, trusts, partnerships, unincorporated organizations and governmental bodies). |
| "I**ntellectual property rights**" | Means patents, patent applications, inventions, designs, registered trademarks, trademark applications, unregistered logos, trade names, service marks, brand names, registered designs, unregistered design rights, copyrights, copyrights, data for business use, utility models, know-how, technical drawings, database rights, Internet domain names, computer software programs and systems, source codes, goodwill, business secrets ("business secrets" include, but are not not limited to manufacturing and production processes and know-how, research and development information, technology, drawings, designs, programs, technical data, financial, marketing and business data, pricing and cost information, business and marketing plans, customer and supplier lists and information, and other confidential or proprietary information), confidential information and other industrial or commercial intellectual property rights, whether  |

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| | |
|:---|:---|
|  | or not registered or capable of being registered, and applications for registration or protection for the foregoing and all applications for registration or protection of the foregoing. |
| "**China**" | Means the People's Republic of China (which, for the purposes of this Agreement only, excludes the Hong Kong Special Administrative Region, the Macau Special Administrative Region and Taiwan). |
| "**Chinese law**" | Refers to all Chinese laws currently in force, including laws, regulations, rules, ordinances and provisions, and all normative legal documents formulated by the legislative, executive and judicial organs. |
| "**Workdays**" | Means any day other than Saturdays, Sundays, statutory holidays and other days on which commercial banks in the PRC and Hong Kong are required or authorized to close for business. |

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&nbsp;&nbsp;&nbsp;&nbsp;1.2 **Headings** All headings in this Agreement are for ease of reading only and do not affect the meaning of any provision under the Agreement or the interpretation of that provision.

&nbsp;&nbsp;&nbsp;&nbsp;1.3 **Others** Unless otherwise indicated, the days, months and years referred to in this Agreement are those of the Gregorian calendar.

**Article II. Transaction principles**

The basic transaction method of the Transaction is the termination of the Existing VIE Agreement between Yunmi Hulian and Foshan Viomi and its shareholders, which will enable the Purchaser to beneficially acquire 100% equity interests in Foshan Viomi and indirectly acquire equity interests in Qutansuo, Foshan Xiaoxian, AI Touch and Zhuawa through Foshan Viomi, so as to realize the divestment of the Target Business operated by the Subject Company from the Group Company's business system. Prior to the settlement date of the Transaction, Guangzhou Interconnect, Foshan Viomi and Zhumeng Hulian, a wholly-owned subsidiary of the Seller, entered into a set of new VIE Agreements, which enabled Foshan Viomi to no longer retain control over Interconnect and the Seller to realize the agreed control over Guangzhou Interconnect. The consideration for the Transaction will be paid by the Purchaser through

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Foshan Viomi to Guangzhou Interconnect by way of paid in capital. In addition, as there are certain intersections between the Subject Company and other group companies in terms of business, assets and personnel, etc., in order to ensure the smooth implementation of the Transaction, the Seller has engaged a third-party professional organization to sort out, split and evaluate the assets and business of the Subject Company and other group companies. The parties agree that the group company will transfer all assets, personnel, contracts, debts and liabilities related to the target business but not attributable to the name of the subject company to the subject company. Transfer of assets, personnel, contracts, debts and liabilities related to non-target business held by the subject company to a group company designated by the seller.

**Article III. Adjustment of assets and business within the Group**

&nbsp;&nbsp;&nbsp;&nbsp;3.1 Pursuant to the transaction principles described in Article 2 of this Agreement, the parties agree to restructure and reorganize the assets and businesses of the Group Companies, whereby the Group Companies shall transfer to the Subject Company all the assets and businesses of the Group Companies as at the Valuation Date (December 31, 2023) which are related to the Target Business but are not attributable to the name of the Subject Company. Transfer of all assets and businesses related to non-target business held by the subject company to a group company designated by the seller. Specifically included:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) <u>Transfer of tangible assets</u> 

The Seller shall cause its subsidiary group companies to transfer all fixed assets (including but not limited to machinery and equipment, inventories and other fixed assets) related to the Target Business but not attributable to the name of the Subject Company to the Subject Company; The Subject Company shall transfer all fixed assets (including but not limited to machinery and equipment, inventories and other fixed assets) held by it that are not related to the Target Business to the group company designated by the Seller.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) <u>Transfer of intangible assets</u> 

The Seller shall cause its subsidiary group companies to transfer to the Subject Company the ownership and/or the right to use the intellectual property rights and other intangible assets necessary for the operation of the Target Business but not vested in the name of the

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Subject Company(including but not limited to, the seller shall transfer all registered trademarks, trademark applications and unregistered logos, brand names, trade names, service marks, etc. related to the brand name "Viomi" registered in its name to the group company designated by the seller); The Subject Company shall transfer the ownership and/or the right to use the intellectual property rights and other intangible assets held by it which are not required for the Target Business to the Group Company designated by the Seller. The relevant parties shall use commercially reasonable efforts to complete as soon as possible the procedures for registration of changes in the intellectual property rights to be transferred with the relevant intellectual property administration authorities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) <u>Transfer of Viomi APP</u> 

The Subject Company shall transfer the "Viomi" website (www.viomi.com.cn), " Viomi" APP, public number and small program registered under its name, as well as " Viomi Mall" and all information and interests (including domain names, databases, codes, computer programs and software, operational data, materials, documents, information, etc.) of the Subject Company and its subsidiaries operated by the abovementioned websites, APPs, public numbers and small programs to Guangzhou Interconnect. Subsequently, Guangzhou Interconnect shall be responsible for the subsequent operation of "Viomi" APP and related online business, and handle the "Value-added Telecommunications Business License" (if necessary) required for the operation of online business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) <u>Transfer of personnel</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Seller shall cause its subsidiary group companies to terminate the existing labor agreements with the employees who are actually engaged in the Target Business but whose labor relations are not attributable to the Subject Company （ Including but not limited to labor contracts, confidentiality and intellectual property agreements, non-competition agreements and other documents, hereinafter the same ）， and cause such persons to re-sign a full set of labor agreements with the subject company on the same date as the termination of the existing labor agreements. At the same time, the Subject Company shall terminate the existing labor agreements with its employees engaged in the non-target business and cause such persons to re-sign a full set of labor

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agreements with the group companies designated by the Seller on the same date as the termination of the existing labor agreements. The parties shall use their best efforts to assist in the necessary procedures for the transfer of social security, provident fund and records of such persons.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The remuneration package and related costs (such as social security, provident fund, etc.) of such transferred personnel shall be borne by the personnel's receiving party from the date of signing this Agreement. The parties agree to use their best efforts to cause the transfer of personnel labor relations to be completed as soon as possible and within 60 days of the date of this Agreement. Upon completion of the transfer of labor of the personnel, the parties shall settle the personnel costs, and the former employer of the employees shall be responsible for settling the costs and expenses incurred due to the transfer of the labor relationship of the personnel, as well as the salary costs that have not been settled prior to the date of the signing of this Agreement. For the salary costs of personnel after the date of this Agreement, they shall be borne by the recipient of the personnel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) <u>Assignment of claims and contracts</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Seller shall procure its subsidiary group companies to assign all outstanding debts and claims relating to the Target Business (including but not limited to debts, claims, liabilities, rights, obligations and responsibilities under bank loan contracts, bank notes, business contracts, etc., collectively referred to as the **"Target Business Debts"**) borne by group companies other than the Subject Company to the Subject Company, and the relevant contracts shall be collectively referred to as the "Target Business Contracts". "The relevant contracts are collectively referred to as the "Target Business Contracts") shall be transferred to the Subject Company, which shall then actually fulfill the Target Business Contracts and assume the Target Business Debts and Obligations; The Subject Company shall assign all outstanding debts and claims relating to the Non-Target Business (including but not limited to debts, claims, liabilities, rights, obligations and responsibilities under bank loan contracts, bank notes, business contracts and other contracts, collectively referred to as the "Non-

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Target Business Debts and Claims", and the relevant contracts, collectively referred to as the "Non-Target Business Contracts") to the group company designated by the Seller. The relevant contracts are collectively referred to as the "Non-Target Business Contracts") shall be transferred to the group company designated by the Seller, and the group company designated by the Seller shall subsequently perform the Non-Target Business Contracts and assume the Non-Target Business Debts and Obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The buyer and seller shall cause the relevant assignor to be responsible for all necessary formalities or matters required by law or the relevant agreement, including but not limited to signing supplementary agreements, obtaining the consent of the contractual counterparty or giving notice to the contractual counterparty, in accordance with the agreement of such contracts. Subject to the execution of the said contracts, if the subject concerned is indeed unable to transfer the contractual rights and obligations, he/she shall continue to fulfill the corresponding contractual obligations and assume responsibility in his/her own name, based on the principle of good management, honesty, trustworthiness, diligence and professionalism to the counterparty of the said contracts. However, regardless of whether the transfer process of such contracts is completed or not, from the date of signing of this Agreement until the date of completion of the transfer or performance or termination of all the contracts to be transferred (the aforesaid period shall be referred to as the "Transitional Period"), all revenues and costs arising from the Targeted Business Contracts shall be borne by the Subject Company, and all revenues and costs arising from the Non-Targeted Business Contracts shall be borne by the Group Companies designated by the Seller. All revenues and costs arising from the Target Business Contracts shall be borne by the Subject Company, and all revenues and costs arising from the Non-Target Business Contracts shall be borne by a group company designated by the Seller, and no other party shall have any responsibility or liability in respect of such contracts. The parties agree to settle all the revenues and costs actually incurred during the transition period within 60 days after the transition period, and the revenues and costs actually borne by the subject company under the non-target business contract and the

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revenues and costs actually borne by the other group companies under the target business contract shall be calculated in a comprehensive manner and then set off against each other, and if there is a difference after the set-off, the party that bears the greater amount of revenues shall pay the difference to the other party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) <u>Adjustment of shareholding in Linkage Everything</u> 

Prior to the settlement date of the Transaction, a series of VIE Agreements (collectively, the "New VIE Agreements") such as the Exclusive Consulting and Service Agreement, the Exclusive Right to Purchase Agreement, the Equity Pledge Agreement, the Shareholders' Voting Rights Entrustment Agreement and other agreements shall be entered into by Guangzhou Interconnect with Zhumeng Hulian, and Foshan Viomi, and Guangzhou Interconnect shall realize its control over the Guangzhou Interconnect will realize its control over Guangzhou Interconnect through the New VIE Agreements. Guangzhou Interconnect and Foshan Viomi shall, within thirty (30) business days after the signing of the New VIE Agreement or at such other time as both parties may agree, proceed with the registration of the corresponding pledge in respect of the pledge of equity interests of Guangzhou Interconnect under the New VIE Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;3.2 With respect to the intra-group transfer of assets and businesses referred to in this Article 3, the parties agree that the transferor of each asset and business and the transferee shall enter into a specific transfer agreement or other relevant legal documents (individually or collectively, the "Asset and Business Adjustment Agreements"), with effect from the date of signing of the relevant asset and business realignment agreements, all intra-group asset and business realignments under such asset and business realignment agreements shall be deemed to have been executed, i.e., under the Assets and Operations Adjustment Agreement ： (i) Ownership of all assets and businesses related to the Target Business and all rights and obligations attaching to such assets and businesses are vested in the Target Company ； (ii) Ownership of all assets and businesses related to the non-target business and all rights and obligations attaching to such assets and businesses are vested in the group companies designated by the Seller ； (iii) Subject to Clause 3.1.(4)(b) and Clause 3.1.(5)(b) of this Agreement, as from the date of the Asset and Business Adjustment

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Agreement, the transferor of the relevant assets and businesses shall no longer have any rights over such assets and businesses and shall not have any obligations based on such assets and businesses. From the date of signing of this Agreement, each party shall expeditiously promote the filing/registration procedures for the changes involved in the adjustment of assets and business within the Group as described in this Article 3. However, the completion or non-completion of the procedures for filing/registration of changes involved in the adjustment of assets and businesses within the Group shall not affect the validity of the transfer of such assets and businesses. Neither the transferor nor the receiver of such assets and business shall claim any rights or raise any objections against the other party accordingly.

&nbsp;&nbsp;&nbsp;&nbsp;3.3 The parties agree and confirm that the intra-group assets and business restructuring for the purpose of the Transaction means that all assets, business, personnel, etc. related to the Target Business shall be transferred to the Target Company. All assets, business, personnel, etc. related to the non-target business shall be transferred to the group company designated by the Seller. In the event that there are assets and/or operations (including but not limited to fixed assets, intangible assets, related personnel, business contracts, and all technologies, processes, materials, information, etc.) that are not listed in Article 3 of this Agreement but are related to the Target business, If such assets and/or businesses have been included in the scope of valuation of the Transaction, the Seller shall procure the relevant group companies to transfer them to the Subject Company together at no consideration.

If, after the valuation date, the subject company adds any new assets and/or businesses related to non-target businesses, or if any new assets and/or businesses related to target businesses are added by group companies other than the subject company, including, but not limited to, newly acquired assets, newly signed business contracts, etc. after the valuation date，then the Purchaser and the Seller shall cause the relevant parties to sort out and split up such additional assets and/or business. The transfer of assets and/or businesses related to the Target Business by the relevant Group Company to the Subject Company, and the transfer of assets and/or businesses related to the Non-Target Business by the Subject Company to the Group Company designated by the Seller, and the parties

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agree to negotiate amicably at that time on the manner, terms and price of the transfer of such additional assets and/or businesses.

&nbsp;&nbsp;&nbsp;&nbsp;3.4 The parties agree to use all reasonable endeavors to facilitate the completion of all formalities relating to the intra-group asset and business realignment (including, but not limited to, signing specific agreements on the restructuring of assets and operations, completing procedures for filing/registering changes related to the restructuring of assets and operations, exchanging labor contracts and other procedures related to the transfer of personnel, and completing all other matters related to the restructuring of assets and operations) referred to in this Article 3 as soon as possible from the date of signing of this Agreement. For the purpose of performing the intra-group asset and business realignment under this Agreement, in addition to this Agreement and the Asset and Business Realignment Agreement, the parties and their affiliates may enter into one or more assignment agreements or other agreements based on the terms and conditions of this Agreement, which shall be deemed to be executory documents for the purpose of performance of this Agreement (collectively, the "Executory Documents") (collectively, the "Executory Documents"), and such Executory Documents shall not conflict with the contents of this Agreement. If there is any inconsistency between the contents of such agreements and this Agreement or if there is no corresponding agreement, the contents of this Agreement shall prevail.

**Article IV. The transaction**

&nbsp;&nbsp;&nbsp;&nbsp;4.1 Subject to the terms and conditions of this Agreement, the parties agree that the Transaction shall be conducted as follows ：

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) <u>Termination of the Existing VIE Agreement of Foshan Viomi</u> 

Yummi Hulian and Foshan Viomi and their shareholders shall execute the Termination Agreement in the form and substance as set forth in Attachment II hereto (the "VIE Termination Agreement") on the date hereof. It is agreed that all rights and obligations of each of the relevant parties under the existing VIE Agreement will be terminated on the settlement date and no consideration will be payable. Upon termination of the Existing

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VIE Agreement, Yummi Hulian no longer has any interest in Foshan Viomi. The Purchaser will beneficially own 100% of the equity interest in Foshan Viomi and indirectly own 100% of the equity interest in Foshan Xiaoxian, 100% of the equity interest in Qutansuo, 60% of the equity interest in AI Touch and 60% of the equity interest in Zhuawa through Foshan Viomi (the above transaction in which the Purchaser acquired the equity interest in the Subject Company by way of termination of the existing VIE Agreement of Foshan Viomi shall be referred to as the "Transaction").

The change in the shareholding structure of the domestic companies after the completion of the Transaction is shown in Annexure I-(II) to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) <u>Arrangements for payment of the consideration for the transaction</u> 

The consideration for the Transaction is RMB 65 million, and the manner of payment of the consideration for the Transaction by the Purchaser shall be as follows: on the Settlement Date, the Purchaser shall pay the consideration for the Transaction, RMB 65 million, to Guangzhou Interconnect through Foshan Viomi by way of additional paid-in capital. The Purchaser and the Seller acknowledge that the aforesaid price of RMB 65 million is the full consideration for the Transaction, which has been fully negotiated between the parties and reflects the full price of the equity interest in the Subject Company acquired by the Purchaser through the Transaction. The Purchaser's obligation to pay the price under this Agreement in respect of the Transaction shall be fulfilled upon payment of the said price by the Purchaser and Foshan Yumi to Linkage Wonders in accordance with the provisions of this Article. Zhumeng Hulian and Foshan Viomi shall update (if necessary) the New VIE Agreement under Article 3.1.(6) of this Agreement to reflect the shareholding structure of Foshan Viomi after the Capital Increase from Foshan Viomi to Viomi, ensuring that Zhumeng Hulian controls 100% of the shareholding of Viomi through the VIE Agreement. Within thirty (30) business days after the signing of the Renewed VIE Agreement, Guangzhou Interconnect and Foshan Viomi shall proceed with the registration of the corresponding pledge in respect of the pledge of equity interests of Guangzhou Interconnect under the Renewed VIE Agreement.

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**Article V. Settlement**

&nbsp;&nbsp;&nbsp;&nbsp;5.1 The Transaction shall be settled within ten (10) Business Days after the conditions precedent set forth in Article VII hereunder have been satisfied in full or waived in accordance with this Agreement, or at such other time as may be agreed upon by the Purchaser and the Seller, but no later than August 31, 2024 (the "Settlement Date"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) the VIE Termination Agreement shall become effective on the Settlement Date, and the rights and obligations of each of the relevant parties to the Existing VIE Agreements under the Existing VIE Agreements shall terminate as of the Settlement Date. Each of the relevant parties shall no longer have any rights, obligations and liabilities based on the Existing VIE Agreement. The Purchaser (i.e. Chen Xiaoping and Zhuhai Yungui) beneficially owns 100% of the equity interest in Foshan Viomi from the date of delivery and enjoys all the shareholders' rights and undertakes the corresponding shareholders' obligations in respect of all the equity interest in Foshan Viomi held by the Purchaser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) On the Settlement Date, the Seller shall cause the Target Company to hand over its seals (including official seal, financial seal, invoice seal, contract seal, legal person's seal, etc.), materials related to its bank accounts (including bank seal card, security certificate authority/U-shield, bank seals, name seals related to bank payments, account books), accounts and passwords of WeChat Pay and Alipay, original copies of business licenses, original copies of other qualification certificates, account books, scanned and original copies of contracts, personnel materials such as employee labor contracts, documents related to the target business, technical materials, business data, etc. are inventoried and handed over to the Purchaser or the person designated by the Purchaser. From the date of delivery, the directors, supervisors, managers and other operating executives of the Subject Company shall be independently appointed by the Purchaser, and the Target Business shall be independently operated by the Purchaser and the Subject Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) On the Settlement Date, the Purchaser shall pay the Transaction Consideration in

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accordance with Article 4.1.(2) of this Agreement.

**Article VI. Commitments of the parties**

&nbsp;&nbsp;&nbsp;&nbsp;6.1 Each party undertakes to use its best efforts to cause the transactions and ancillary elements described herein to be consummated in accordance with the terms of this Agreement, including, without limitation, using its best efforts to comply with all governmental approvals, consents, licenses, registrations and filings (such as registration of changes necessary for the transfer of Intellectual Property Rights) required hereunder as soon as practicable after the execution of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;6.2 Within thirty (30) business days from the Settlement Date, the Purchaser and the Seller shall cause the relevant parties to expeditiously complete the corresponding unpledging procedures in respect of the registration of the equity pledge of the equity interests in Foshan Yunmi under the Existing VIE Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;6.3 After the Settlement Date, if the Subject Company and the Group Company intend to carry out any connected transactions due to business operation requirements, the parties agree that they shall negotiate amicably and price the transactions in accordance with the fair market value, including but not limited to the following matters:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Group Company has granted the necessary cooperation authorization to the Subject Company, specifying that the Subject Company has the right to continue to use the relevant resources required for the development of the Target Business, including, but not limited to, brand logos such as "Viomi", and agreeing that the Subject Company shall be stationed in the "Viomi Store" to develop the Target Business; and Target business; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The Group Company leases to the Subject Company the premises in its name which are required for the production, office and business operation of the Subject Company after the Settlement Date.

&nbsp;&nbsp;&nbsp;&nbsp;6.4 After the Settlement Date, if there are any matters not covered by this Agreement, the parties shall negotiate together in an amicable and fair manner and provide for them by

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way of a separate agreement.

**Article VII. Prerequisites**

&nbsp;&nbsp;&nbsp;&nbsp;7.1 **Conditions for delivery by the buyer** 

With respect to Buyer, its performance of its delivery obligations hereunder shall be conditioned upon the satisfaction in full, or waiver in writing by Buyer, of all of the following conditions on or before the Delivery Date:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) the representations and warranties made by Seller in this Agreement are true, accurate and complete in all material respects as of the date hereof and as of the date of Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The Seller has obtained such consents, approvals or authorizations as are necessary to complete the transactions hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) This Agreement, the Asset and Business Adjustment Agreement, the VIE Termination Agreement and the New VIE Agreement have been executed and delivered by the relevant parties (other than the Purchaser).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Seller has performed and complied in all material respects with the agreements, undertakings, and obligations required by this Agreement to be completed by it prior to the Closing Date and has not caused a material default under this Agreement or the other Transaction Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) There is no injunction or similar decree in effect prohibiting or restraining Seller from consummating the transactions hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;7.2 **Conditions for delivery by the seller** 

In the case of Seller, its performance of its delivery obligations hereunder shall be conditioned upon the satisfaction in full, or waiver in writing by Seller, of all of the following conditions on or prior to the Delivery Date:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) the representations and warranties made by the Purchaser herein are true, accurate and complete in all material respects as of the date hereof and as of the date of Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The Buyer has obtained such consents, approvals or authorizations as may be

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necessary to complete the transactions hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) The Seller has obtained the written approval of the special committee established by Viomi Cayman for the transactions under this Agreement (the "Special Committee") and the Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) This Agreement, the Asset and Business Adjustment Agreement, the VIE Termination Agreement and the New VIE Agreement have been executed and delivered by the relevant parties (other than the Seller).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Buyer has performed and complied in all material respects with the agreements, undertakings, and obligations required by this Agreement to be fulfilled by it prior to the Closing Date and has not caused a material default under this Agreement or the other Transaction Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) There is no injunction or similar decree in effect prohibiting or restraining Buyer from consummating the transactions hereunder.

**Article VIII. Representations and warranties**

&nbsp;&nbsp;&nbsp;&nbsp;8.1 **Representations and Warranties of the Seller** 

The Sellers jointly and severally make the following representations and warranties to the Purchaser, which representations and warranties are true, accurate and complete as of the date of this Agreement and as of the date of delivery:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Seller voluntarily and with full right and authority to execute and perform this Agreement and to consummate the transactions contemplated herein. Seller has been legally and validly authorized to take the necessary actions with respect to this Agreement and all transactions described herein. This Agreement constitutes a legal, valid and binding obligation on Seller and is enforceable against it in accordance with the terms of this Agreement. The Seller has obtained all necessary approvals, licenses, consents from the relevant parties (including governmental and regulatory authorities) for the execution of this Agreement to enable the successful performance of this Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The execution and performance of this Agreement is not inconsistent with or in conflict with the laws and regulations to be observed by Seller, administrative orders of governmental authorities, or other contracts or legal documents to which Seller is a party, and none of them will result in a breach of the foregoing or constitute a failure to perform or an inability to perform the same.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) To the best of Seller's knowledge, there are no matters that would have a material adverse effect on the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Foshan Viomi is the beneficial owner of record of Little Fresh Interconnection, Qutansuo, Guang and Java Interconnection, and its equity interest in the abovementioned companies will not be subject to any encumbrances; upon termination of the Existing VIE Agreements, the equity interest in Foshan Yunmi held by the Purchaser will be free of encumbrances.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) the Seller and its designated entities shall have full ownership or effective control of the assets and businesses subject to intra-group restructuring in accordance with Article 3 of this Agreement, and the relevant entities may legally transfer such assets and businesses. Such assets and businesses shall be transferred to the Subject Company free from any defects in rights or security interests attached thereto and free from any objections, disputes, petitions for revocation, requests for declaration of invalidity, lawsuits, arbitrations, administrative proceedings, reviews, penalties, warnings or notices that are ongoing, pending or which the Seller has reason to believe are potential, and which have been filed by governmental agencies or any third party.

&nbsp;&nbsp;&nbsp;&nbsp;8.2 **Representations and warranties of the buyer** 

Buyer jointly and severally represents and warrants to Seller as follows, which representations and warranties are true, accurate and complete as of the date of this Agreement and as of the date of Closing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Purchaser has voluntarily and with full right and authority to execute and perform this Agreement and to consummate the transactions contemplated herein. The Purchaser has been legally and validly authorized to take the necessary actions in

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connection with this Agreement and all of the transactions contemplated herein. This Agreement constitutes a legal, valid and binding obligation on the Buyer and is enforceable against it in accordance with the terms of this Agreement. The Buyer has obtained all necessary approvals, licenses, consents from the relevant parties (including governmental and regulatory authorities) for the execution of this Agreement in order to enable the successful performance of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The signing and performance of this Agreement does not contradict or conflict with the laws and regulations to be observed by the Purchaser, the administrative orders of the governmental departments, or other contracts or legal documents to which the Purchaser is a party, and none of them will result in a breach of the foregoing or constitute a failure to perform or an inability to perform the foregoing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) To the best of Purchaser's knowledge, there are no matters that would have a material adverse effect on the transactions contemplated by this Agreement.

**Article IX. Dissolution and termination**

&nbsp;&nbsp;&nbsp;&nbsp;9.1 This Agreement may be discharged or terminated prior to the Delivery Date upon the occurrence of any of the following events:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The parties hereto unanimously agree in writing to rescind this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) the occurrence of a legally enforceable event of force majeure that makes it objectively impossible for the parties to perform this Agreement or achieve its purpose.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) If either party commits a material breach of any of its representations and warranties or misrepresentations and misrepresentations in this Agreement, or commits a material breach of its undertakings in this Agreement, and such breach is not effectively remedied within fifteen (15) days after receipt of notice of the requirement to cure, resulting in the failure of this Agreement to be performed, or the purpose of this Agreement being fundamentally frustrated, the non-defaulting party may unilaterally terminate this Agreement by giving written notice.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;9.2 If the conditions precedent for delivery as agreed in Article 7 of this Agreement have been fulfilled but the Buyer fails to pay the consideration for the Transaction in accordance with this Agreement, the Seller shall have the right to send a written notice to the Buyer requesting the Buyer to pay the consideration for the Transaction as soon as possible. If Buyer does not complete payment of the consideration for this transaction more than thirty (30) days after written notice from Seller to Buyer, Seller shall have the right to unilaterally terminate this Agreement upon written notice.

&nbsp;&nbsp;&nbsp;&nbsp;9.3 Effect of dissolution or termination:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) This Agreement shall be null and void upon the cancellation or termination of this Agreement pursuant to any of the foregoing Sections 9.1 and 9.2, except that Sections 10, 11, and 12 of this Agreement shall remain in effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Upon the dissolution or termination of this Agreement, the parties hereto shall restore their legal relationship to the status quo as of the date of this Agreement within a reasonable period of time in accordance with the principles of fairness, reasonableness, and good faith and using their best efforts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Upon the termination of this Agreement, unless otherwise agreed herein, all rights and obligations of the parties hereunder shall terminate, and neither party shall have any other claim against the other party hereunder or with respect to the termination of this Agreement, except for the liability of the defaulting party pursuant to the provisions of Article XI of this Agreement.

**Article X. Confidentiality**

&nbsp;&nbsp;&nbsp;&nbsp;10.1 Unless otherwise agreed herein, each party hereto shall use its best efforts to keep confidential any technical or commercial information of all other parties, in all forms, which it obtains as a result of the performance of this Agreement, including any contents of this Agreement and other matters of cooperation and dealings which may exist between the parties ("Confidential Information"). Either party shall restrict access to such information to its employees, consultants, agents, subcontractors, suppliers, etc., only to the extent necessary for the proper performance of its obligations under this Agreement

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and shall maintain the confidentiality of the Confidential Information.

&nbsp;&nbsp;&nbsp;&nbsp;10.2 After the settlement of the Transaction, if either party intends to disclose the Transaction externally in a press conference, industry or professional media, marketing materials or by other means, a unified publicity program for public disclosure (including but not limited to the scope of information that can be disclosed, the content of the press release, etc.) should be negotiated and confirmed by the Purchaser and the Seller in advance. Neither party shall disclose to the public beyond the promotional program confirmed by the buyer and seller without the prior consent of the buyer and seller.

&nbsp;&nbsp;&nbsp;&nbsp;10.3 Confidential information shall not include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Information that has become generally available to the public at the time of disclosure;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) has become generally available to the public after disclosure through no fault of the receiving party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Information that the receiving party can demonstrate was in its possession prior to disclosure and was not obtained directly or indirectly from another party; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) The obligation of either party to disclose to the relevant governmental authorities, stock exchanges, etc. as required by law or the Listing Rules or the disclosure of the above confidential information by either party to its direct legal advisers and financial advisers as necessary for the normal operation of its business.

&nbsp;&nbsp;&nbsp;&nbsp;10.4 Either party hereto shall cause its directors, officers, consultants and employees with respect to Confidential Information, and those of its Affiliates, to comply with the confidentiality obligations under this Article.

**Article XI. Liability and compensation for breach of contract**

&nbsp;&nbsp;&nbsp;&nbsp;11.1 Subject to clause 11.3 of this Agreement, any party in breach of this Agreement (the "breaching party") shall be liable to indemnify the other parties for all losses suffered by them as a result of the breach. In the event of a breach of the provisions of this Agreement by any party hereto, the other party shall be entitled, in addition to its other rights under this Agreement, to actual performance by the breaching party or damages for losses

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suffered by such breaching party as a result of such breach.

&nbsp;&nbsp;&nbsp;&nbsp;11.2 Subject to Section 11.3 of this Agreement, the Defaulting Party shall indemnify, hold harmless and reimburse the Indemnified Parties and their respective successors in title, affiliates and representatives (collectively, the "Indemnified Parties") from and against the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) the breach by the breaching party of any of its representations and warranties made in this Agreement or the misrepresentation or misrepresentation of such representations and warranties; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) a breach or failure by the breaching party to fully perform a promise, agreement, warranty or obligation under this Agreement, except to the extent that it has been waived in writing by the other parties.

The defaulting party shall indemnify or reimburse the indemnified party for any and all losses, debts, liabilities, impairments, costs (including investigation and defense costs and reasonable attorney's and accountant's fees), or other damages of any kind whatsoever (whether or not involving third party claims) suffered by the indemnified party as a result of any of the foregoing, whether directly or indirectly.

&nbsp;&nbsp;&nbsp;&nbsp;11.3 Any claim for indemnification based on Sections 11.1 and 11.2 of this Agreement must be made by the Indemnified Party to the Defaulting Party prior to the Closing Date, except for any breach of, or failure to perform in full, a commitment, agreement, warranty or obligation under this Agreement that is required to be performed after the Closing Date by the Defaulting Party. If the Indemnified Party does not make such indemnification claim prior to the Closing, the Indemnified Party shall be deemed to have waived its right to claim indemnification based on Sections 11.1 and 11.2 of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;11.4 If the Buyer fails to pay the consideration for the Transaction within the payment term agreed in this Agreement, the Seller shall be entitled to charge the Buyer a liquidated damages of one ten thousandth of the consideration for the Transaction for each day of overdue payment, and the Buyer shall pay the aforesaid liquidated damages through the same payment method as agreed in Article 4 of this Agreement.

**Article XII. Applicable law and settlement of disputes**

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;12.1 <u>Applicable Law.</u> The conclusion, validity, interpretation, performance and dispute resolution of this Agreement shall be governed by and construed in accordance with the laws of China.

&nbsp;&nbsp;&nbsp;&nbsp;12.2 <u>Dispute Resolution.</u> Any dispute arising under and in connection with this Agreement shall be resolved by negotiation between the parties, and if the parties are unable to reach an agreement within thirty (30) days after the dispute has arisen, the dispute shall be submitted to the Shenzhen International Arbitration Institute for arbitration in accordance with its arbitration rules in force at the time. The place of arbitration shall be Shenzhen, the language to be used in the arbitration shall be Chinese, and the arbitral award shall be final and binding on the parties.

**Article XIII. Others**

&nbsp;&nbsp;&nbsp;&nbsp;13.1 Each party agrees that any costs incurred by each party in connection with the performance of this Agreement (including but not limited to the costs of engaging intermediaries such as legal advisers, auditors, appraisers and other costs related to the Transaction) shall be borne by each party. Each party shall be responsible for the timely and full filing and payment of all taxes arising out of or in connection with the Transaction that are separately imposed on any party under all applicable laws.

&nbsp;&nbsp;&nbsp;&nbsp;13.2 The appendices and annexes to this Agreement are an integral part of this Agreement and, together with this Agreement and the related documents executed pursuant hereto, constitute the entire agreement with respect to the subject matter hereof, supersedes all oral or written agreements, discussions, minutes, memoranda, understandings or communications (including, but not limited to, facsimiles and e-mails) between the parties prior to the date of this Agreement with respect to the particular matters described herein.

&nbsp;&nbsp;&nbsp;&nbsp;13.3 Any amendment to this Agreement shall be made by written agreement duly executed by the parties, provided that the Seller shall have obtained the written approval of the Special Committee for the execution of such written agreement. If Seller fails to obtain the approval of the Special Committee prior to the execution of such written agreements, Seller's execution of such written agreements shall be null and void.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;13.4 The headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement in any way.

&nbsp;&nbsp;&nbsp;&nbsp;13.5 If any one or more of the provisions of this Agreement or any other legal document to which any one or more of these Agreements relates is held to be invalid, illegal or unenforceable in accordance with any relevant law, the:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The validity, legality and enforceability of the other provisions of this Agreement shall not be affected or impaired and shall be in full force and effect. The validity, legality and enforceability of the agreements covered by this Agreement, other than any provision or agreement that is held to be invalid, illegal or unenforceable, shall not be affected or impaired and shall remain in full force and effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) the parties shall promptly substitute for such invalid, illegal or unenforceable term or agreement a term or agreement that is lawful, valid and enforceable, and such substitute term or agreement shall most closely approximate the intent of such invalid, illegal or unenforceable term or agreement.

&nbsp;&nbsp;&nbsp;&nbsp;13.6 This Agreement shall enter into force upon signature by the parties.

&nbsp;&nbsp;&nbsp;&nbsp;13.7 There are four (4) original copies of this Agreement, each of which shall have the same legal effect.

[Signature page followed]

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(This page, without text, is the signature page of the termination agreement)

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| | |
|:---|:---|
| **Xiaoping Chen** | **Xiaoping Chen** |
| Signature:  | /s/ Xiaoping Chen |
| **Zhuhai Yungui Enterprise Management Consulting Partnership (Limited Partnership) (Seal)** | **Zhuhai Yungui Enterprise Management Consulting Partnership (Limited Partnership) (Seal)** |
| Signature:  | /s/ Xiaoping Chen |
| **Viomi Technology Co., Ltd. (Seal)** | **Viomi Technology Co., Ltd. (Seal)** |
| Signature:  | /s/ Authorized Signatory (represented by company seal) |
| **Viomi HK Technology Co. Ltd. (Seal)** | **Viomi HK Technology Co. Ltd. (Seal)** |
| Signature:  | /s/ Authorized Signatory (represented by company seal) |
| **Yunmi Hulian Technology (Guangdong) Co., Ltd. (Seal)** | **Yunmi Hulian Technology (Guangdong) Co., Ltd. (Seal)** |
| Signature:  | /s/ Authorized Signatory (represented by company seal) |
| **Foshan Yunmi Electric Appliances Technology Co., Ltd. (Seal)** | **Foshan Yunmi Electric Appliances Technology Co., Ltd. (Seal)** |
| Signature:  | /s/ Authorized Signatory (represented by company seal) |

---

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(This page, without text, is the signature page of the termination agreement)

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| | |
|:---|:---|
| **Zhumeng Hulian Technology (Guangdong) Co., Ltd. (Seal)** | **Zhumeng Hulian Technology (Guangdong) Co., Ltd. (Seal)** |
| Signature: | /s/ Authorized Signatory (represented by company seal) |
| **Guangdong Lizi Technology Co., Ltd. (Seal)** | **Guangdong Lizi Technology Co., Ltd. (Seal)** |
| Signature: | /s/ Authorized Signatory (represented by company seal) |
| **Foshan Quanxian Technology Co., Ltd. (Seal)** | **Foshan Quanxian Technology Co., Ltd. (Seal)** |
| Signature: | /s/ Authorized Signatory (represented by company seal) |
| **Lequan Technology (Beijing) Co., Ltd. (Seal)** | **Lequan Technology (Beijing) Co., Ltd. (Seal)** |
| Signature: | /s/ Authorized Signatory (represented by company seal) |
| **Beijing Yunmi Technology Co., Ltd. (Seal)** | **Beijing Yunmi Technology Co., Ltd. (Seal)** |
| Signature: | /s/ Authorized Signatory (represented by company seal) |
| **Foshan Xiaoxian Hulian Electric Appliances Technology Co., Ltd. (Seal)** | **Foshan Xiaoxian Hulian Electric Appliances Technology Co., Ltd. (Seal)** |
| Signature: | /s/ Authorized Signatory (represented by company seal) |

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(This page, without text, is the signature page of the termination agreement)

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| | |
|:---|:---|
| **Qutansuo Electric Technology Co., Ltd. (Seal)** | **Qutansuo Electric Technology Co., Ltd. (Seal)** |
| Signature: | /s/ Authorized Signatory (represented by company seal) |
| **Guangdong AI Touch Technology Co., Ltd. (Seal)** | **Guangdong AI Touch Technology Co., Ltd. (Seal)** |
| Signature: | /s/ Authorized Signatory (represented by company seal) |
| **Zhuawa Technology (Guangdong) Co., Ltd. (Seal)** | **Zhuawa Technology (Guangdong) Co., Ltd. (Seal)** |
| Signature: | /s/ Authorized Signatory (represented by company seal) |
| **Guangzhou Interconnect Technology Co., Ltd. (Seal)** | **Guangzhou Interconnect Technology Co., Ltd. (Seal)** |
| Signature: | /s/ Authorized Signatory (represented by company seal) |

---

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**Appendix I-(I) Shareholding structure of domestic companies before the transaction**

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**Appendix I-(II) Shareholding structure of domestic companies after the transaction**

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**Appendix II**

VIE Termination Agreement

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## Exhibit 4.21

**Exhibit 4.21**

**Business Cooperation Agreement**

Party A: Xiaomi Communications Co., Ltd.

Legal representative: Wang Chuan

Address: No. 019, 9/F, Building 6, Yard 33, Xierqi Middle Road, Haidian District, Beijing

Tel.: [REDACTED]

Fax: [REDACTED]

Party B: Guangdong Lizi Technology Co., Ltd.

Legal representative: Chen Xiaoping

Address: Floor 3, No. 7, Industrial Avenue, Licun Village, Lunjiao Street, Shunde District, Foshan City, Guangdong

Province

Tel.: /

Fax: /

Whereas the cooperation willingness of both parties, this agreement aims at the ways of cooperation of customized Xiaomi products, both parties agree to abide by the following terms jointly through negotiation for the matters related to cooperation of both parties:

**Article 1: Scope of Application**

This agreement applies to all customized products that are provided or have been provided by Party B to Party A (hereinafter referred to as "Customized Xiaomi Products"). The specific products will be subject to Appendix *Approval Agreement of Customized Xiaomi Products* in this agreement signed by both parties before being released.

**Article 2: Ways of Cooperation**

2.1Party A will assign the trademark, ID (industrial design) and package design scheme to be used for Customized Xiaomi Products (refer to Article 3.1 for definitions). Party B is responsible for the overall development, production and supply of Customized Xiaomi Products, and the production and delivery according to Party A's order.

2.2According to the market judgment, Party A will provide Party B with order forecasting, and Party B shall arrange production referring to the order forecasting. The order forecasting will not legally bind Party A. Party B is responsible for producing Customized Xiaomi Products and delivering them to the warehouse assigned by Party A. Party A is responsible for promoting and selling products.

2.3Party A has the right to sell and dispose Customized Xiaomi Products in all channels, including but not limited to domestic, global, online, offline and other channels; Customized Xiaomi Products produced by Party B according to this agreement may be provided to Party A only. Without Party A's advance written approval, Party B shall not provide the Customized Xiaomi Products to any third party other than Party A in any form and any channel, including but not limited to domestic, global, online, offline and other channels. In case Party B violates this term, Party A has the right to terminate the agreement and request Party B to compensate all Party A's losses, and Party A has the right to take any possible measure to avoid further losses.

2.4Party B promises that it will not produce and sell any bogus products of Xiaomi brand by itself or any other third party with its assistance.

2.5[Redacted]

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2.6Based on the joint corporate values and consistent business concepts, both Party A and Party B will enter into a commercial cooperation relation of mutual complementary. Both parties sufficiently acknowledge that a friendly and close business cooperation relation has an important business, consensus and reputation value for both parties. Party B promises that, in case it causes any legal dispute with Party A, such disputes shall be referred to and negotiated between both parties' related management personnels. During negotiation between the management personnels of both parties, Party B shall not file a claim, lawsuit, ban or other legal procedures to Party A and its related company, other companies and suppliers within Xiaomi ecological chain system for products of Xiaomi brand; unless the legal action or claim will not impact the supply and production of products of Xiaomi brand. In case Party B violates this term, Party A has the right to request Party B to pay at least RMB 500,000 as liquidated damages according to specific violation. However, in case both parties fail to reach an agreement within the assigned period ("assigned period" here refers to 90 days for purified water, gas water heater and kitchen appliance products, and 30 days for small home appliances such as electric kettle) from the negotiated date submitted by Party B to the director at Party A's management layer. Party B will not be bound by the above agreements and/ or bear default liabilities.

2.7Party B shall control the production and processing processes of Customized Xiaomi Products strictly. Party B shall sign relevant agreement of supplier's social liabilities with its authorized manufacturer if Party A requires.

2.8Both parties agree to collect, store, use, process, transmit, provide, disclose, delete or dispose otherwise the user data generated in service provision of Customized Xiaomi Products according to Appendix *Terms about User Data of Customized Xiaomi Products* in this agreement.

**Article 3: Definition**

3.1Customized Xiaomi Products: Products produced and sold in the brands of Xiaomi, and products that use Party B's own brands and are determined as Customized Xiaomi Products with the written approval of both parties.

3.2Cost and quotation

3.2.1Party A's cost refers to freight and other expenses (if any) generated from Party A's sales of Customized Xiaomi Products under this agreement.

Freight calculation method: The actual freight will prevail.

Other expenses: Expense from sales of products.

3.2.2Party B's costs include the following contents:

3.2.2.1Raw material cost: Serial number, model and specification, unit, consumption, unit price, supplier/ agent's full name, contact information and other contents of all purchased materials shall be indicated in raw material cost.

3.2.2.2OEM cost: All expense details shall be listed in manufacturer's OEM cost.

3.2.2.3Mold amortization expense: If both parties confirm that the mold expense needs to be apportioned, the expense is limited to the first set of molds of Customized Xiaomi Products. The mold cost invested secondly will be borne by Party B.

The calculation formula of mold amortization expense:

**Mold amortization expense of each product= total mold expenses/ amortization amount\***

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\*Note: The amortization amount is not lower than the sales demand of products in six months, and is not greater than the sale demands of products in one year. The sales demands are subject to Party A's output when product samples are sealed. Specially customized products should be negotiated by both parties.

3.2.2.4Logistics expenses: It refers to the logistics expenses converted or estimated from Party B's manufacturer to the place assigned by Party A (the reference template provided by Party A will prevail); the logistics expense for self-picking up by Party A at Party B's manufacture will not be included in Party B's cost.

3.2.3Expenses that shall not be included in the quotation: Party B's profits and indirect cost (including but not limited to management fee, charge of water and electricity, depreciation cost, after-sales service fee and other indirect costs).

3.2.4All quotations specified in this agreement are tax-inclusive price.

3.2.5In case Party A is disagreed with Party B's costs, it has the right to purchase products in other methods, including but not limited to the following methods:

3.2.5.1Party A will directly purchase products from the supplier, and Party B is responsible for acceptance, quantity counting, management and usage.

3.2.5.2Party A will provide corresponding purchase channel to Party B, and Party B will sign the purchase agreement with manufacturer provided by Party A according to the conditions assigned by Party A.

Party B guarantees that it will use raw materials and auxiliary materials confirmed by Party A or purchased according to 3.2.5.1 or 3.2.5.2 in products provided to Party A in any method mentioned above.

3.2.6Remarks: For the cooperation mode and profit sharing of both parties, both Party A and Party B will calculate direct cost only; Expense for one-time investment (such as research and development, trial production, certification\*, selling and promotion activities) will be excluded from the cost.

\*Note: This place aims to domestic markets only. Whether the certification expenses of overseas market are included into the cost or the methods for sharing the certification expenses of overseas market will be discussed independently according to conditions.

3.2.7Both parties will bear respective expenses for management/ depreciation of water and electricity/ company operation.

3.2.8Based on the compliance of Appendix *Framework Agreement of Customized Product Quality of Xiaomi Ecological Chain* in this agreement, both Party A and Party B will bear respective after-sales expense within the specified quality reject ratio for after-sales maintenance/ after-sales service expenses/ online and offline customer services. (The specific after-sales service agreement will be subject to Appendix *Framework Agreement of Customized Product After-sales Service of Xiaomi Ecological Chain* in this agreement signed by both parties)

3.3Purchase and acceptance

3.3.1BOM import: Party B will provide bill of material ("BOM") according to Party A's format requirements. After successful entry in Party A's system, Party B will provide effective quotation according to Party A's template.

3.3.2Purchase price: The purchase price will be subject to the latest effective purchase order (refer to Article 3.2.2 for Party B's cost).

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3.3.3PO order: It refers to the *Purchase Order* ("PO order") confirmed by both parties through stamping seals within the validity period of this agreement.

3.3.4Delivery cycle: It is started from the date when the commitment is made by Party B for the purchase order issued by Party A in an effective confirmation method, and is ended on the date when the receiver assigned by Party A signs the receipt.

3.3.5Preliminary acceptance: After Party B delivers products in this order to the assigned place, the assigned receiver does not need to unpack the transport package of products and may check quantity, package, binding and other states of products without any inspection equipment.

**Article 4: Order Execution**

4.1After receiving the purchase order issued by Party A, Party B shall sign on the order and stamp seal within 3 days and return the order to Party A; after which, the order will be an effective order of both parties; In case Party B fails to confirm and return the order to Party A within the above period, it will be deemed that Party B does not have any objection for the order information, and the order will be deemed as effective order. Party B shall fully perform all contents in the effective order and shall submit the shipping plan of effective orders that have not been executed to Party A regularly in written form.

4.2Party B shall adopt packing mode that is suitable for product characteristics and delivery time for delivery and transportation. The logistics expenses and responsibilities for Party B's delivery to the place assigned by Party A should be shared by the following methods: The logistics expenses will be included into Party B's cost, and risk and other relevant responsibilities will be borne by Party B. The logistics expenses and responsibilities for Party A's self-picking up at Party B's manufacturer should be shared by the following methods: The logistics expenses will be excluded from Party B's cost, and Party B bears relevant responsibilities caused by Party B such as inappropriate package and shipping.

4.3Party B will deliver products to the delivery place assigned in the effective order, and the receiver assigned by Party A shall accept products preliminarily and sign the receipt to receive order products qualified in the preliminary acceptance. After products are qualified in the preliminary acceptance, Party A has the right to make further acceptance for products. In case products are disqualified in the further acceptance, Party B shall exchange or return at Party A's request.

4.4In case Party B fails to deliver goods in time, Party B shall notify the modified delivery date and quantity to Party A in written form within 15 working days before the delivery date agreed in relevant order. After Party A's written approval is acquired, both parties may determine the specific delivery date and quantity additionally. However, Party A agrees that the modification will not exempt Party B's default liabilities for failure in delivery according to the original time. Party B shall bear compensation liabilities for losses caused to Party A. In case Party B cannot deliver goods according to the delivery quantity and date additionally confirmed by both parties, it shall pay the price amounting to 3 ‰ of the total order amount to Party A per delayed day as liquidated damages. In case the delay is more than ten days, Party A has the right to terminate this order. In case losses are caused to Party A, Party B shall compensate the actual losses caused to Party A, except for conditions caused by force majeure.

**Article 5: Settlement and Payment**

5.1For Customized Xiaomi Products sold through Party A's channel, the gross profits after deducting all Party A's costs and expenses will be executed by Party A and Party B according to the Appendix *Approval Agreement of Customized Xiaomi Products* in this agreement or quotation signed by both parties before the products are released.

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**Gross profit of one product= sales price- Party B's cost- Party A's cost**

\* Refer to Article 3.2 of this agreement for Party A and Party B's costs.

\* Sales price is the average sales price of Customized Xiaomi Products at Party A's place.

**Both parties determine to adopt the method agreed in Article 5.2 or 5.3 for settlement.**

**5.2** **Business dividend mode**

Party B's dividends= Party A's sales volume\* gross profit of one product\* Party B's dividend ratio.

5.2.1Goods payment: It will be settled according to PO order.

5.2.2Dividend amount: Party A will finish the shipment and dividend amount bank statement of the Customized Xiaomi Products in last month at the 10<sup>th</sup> working day in each month, and send them to Party B for confirmation. After confirming as errorless, Party B will issue equivalent special VAT invoice to Party A in the name of corresponding commodities according to the bank statement. After receiving the correct invoice issued by Party B, Party A will make payment to Party B's designated account within 10 working days.

5.2.3The dividend amount will be calculated according to the actual sales volume of products within the settlement time.

**5.3** **Purchase and sales mode**

5.3.1Purchase and sales amount: Party A will finish the warehousing amount and bank statement of the Customized Xiaomi Products in last month at the 5<sup>th</sup> working day in each month, and send them to Party B for confirmation. After confirming as errorless, Party B will issue equivalent special VAT invoice to Party A in the name of corresponding commodities according to the bank statement. After receiving the correct invoice issued by Party B, Party A will make payment to Party B's designated account within 30 working days.

5.3.2The settlement of purchase and sales amount will be subject to the warehousing amount and bank statement.

5.4 Party B's designated account:

Account Name: Guangdong Lizi Technology Co., Ltd.

Bank of Deposit: [REDACTED]

Bank Account: [REDACTED]

**Article 6: Rights and obligations of both parties**

6.1Party B shall ensure that the Customized Xiaomi Products enjoy the treatment of not lower than the production, processing and purchase conditions of Party B's self-brand products.

6.2According to contents contained in Article 3.2 definition of cost, for the Customized Xiaomi Products, Party B shall provide the latest cost list to Party A within 3 working days after the BOM cost list changes. Party A has the right to request Party B to provide details such as cooperation contract signed with OEM manufacturer/ supplier, invoice and receipt of both parties. In case of any adjustment of prices of product raw materials, OEM manufacturer, freight or other expenses, Party B shall indicate the price and execution date before and after the adjustment in details in BOM, and adjust the above prices in the new order correspondingly after acquiring Party A's approval. At the same time, Party B is obligated to guarantee Party A's right to contact supplier directly for audit. As an appendix of this agreement, *Agreement of Equivalent Right to Know and Audit* will be signed when this agreement is signed.

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6.3In case the prices of product raw materials, OEM, freight or other expenses have actually changed, but Party B fails to notify such change to Party A, or fails to indicate in the provided BOM and make corresponding adjustment, Party A has the right to terminate any issued order (to avoid doubt, Party A has the right to cancel the order no matter whether the order is confirmed by Party B) and stop cooperation in case of finding any. Besides, Party A will impose a fine for Party B's fault. The formula for calculating fines is as below:

**Fine limit= purchase unit price before depreciation\* highest depreciation ratio\* accumulative sales volume of the product\* 10; Remarks: The highest depreciation ratio refers to the ratio of single piece of raw material of which the price is depreciated the most in the list of BOM cost.**

6.4Party A shall purchase products from Party B according to the purchase order agreed by both parties. The purchase order will bind both parties. In case either party causes losses to another party due to failure in performance of purchase plan, it ("defaulting party") shall bear compensation liabilities, and the compensation amount is subject to the actual loss of opposite party ("observant party"), excluding any indirect, excepted losses and losses that cannot be forecast by the defaulting party in advance. Despite the above agreement, in case Party A finds out the change in cost after order is effective, it has the right to cancel the order or change order contents.

6.5When replacing spare parts and suppliers of products, Party B needs to notify Party A in advance. The change management is subject to Appendix *Framework Agreement of Customized Product Quality of Xiaomi Ecological Chain* in this agreement.

6.6Party B promises that it is qualified to provide commodities and perform services, and has acquired all permissions, approvals and certifications (in case Party B s responsible for certifying Customized Xiaomi Products) required by Chinese laws and regulations, and laws and regulations of Party A's sales target country for provision and performance of commodities/ services. These permissions, approvals and certifications are comprehensively effective during the term of the agreement.

6.7Party B guarantees that the manufacturing process, product quality, performance indexes and other contents involved in the test of products provided to Party A are consistent with the products certified and tested.

6.8Party A has the right to carry out compliance audit for Customized Xiaomi Products according to company policies combined with the laws and regulations of sales target country. Party B shall provide cooperation according to Party A's compliance audit requirements, timely provide information or materials complying with requirements, and correct Customized Xiaomi Products according to Party A's compliance audit results.

6.9Party B shall guarantee that the packing material information such as specifications, warnings and statements of Customized Xiaomi Products comply with compliance requirements of sales target country. Party A has the right to request Party B to correct packing material information according to laws and regulations of sales target country. The expenses caused thereby will be borne by Party B.

6.10Party B guarantees that product quality and mass comply with Party A's requirements, and shall provide Customized Xiaomi Products according to Appendix *Framework Agreement of Customized Product Quality of Xiaomi Ecological Chain* in this agreement. Party B has acknowledged and agreed to unconditionally accept and abide by relevant policies of after-sales, exchange or return updated by Party A at any time.

6.11When Party A sells Customized Xiaomi Products without gross profit or with negative profit, the losses will be borne by both Party A and Party B according to the profit distribution ratio or the ratio additionally agreed by both parties in written form.

6.12In case Customized Xiaomi Products have potential safety hazards and endanger the personal and property

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safety of terminal users due to Party B, Party B will fully bear all expenses and all legal liabilities generated thereby. The specific details are shown in Appendix *Framework Agreement of Customized Product Quality of Xiaomi Ecological Chain* and Appendix *Framework Agreement of Customized Product After-sales Service of Xiaomi Ecological Chain* in this agreement signed by both Party A and Party B.

6.13Party B shall collect, store, use, process, transmit, provide, disclose, delete or dispose otherwise user data according to the Appendix *Terms About User Data of Customized Xiaomi Products* in this agreement.

6.14In case both parties decide to adopt direct delivery mode for cooperation, Party B or assigned third-party logistics carrier will directly deliver goods to the delivery address or recipient assigned by Party A, and both parties shall sign Appendix *Special Agreements for Directly- delivery Products* and relevant data protection Appendix *Annex of Data Protection* (the appendix name may be adjusted) additionally.

6.15Party B shall purchase product liability insurance complying with Party A's requirements for the Customized Xiaomi Products at Party A's requirements, and Party A will be the joint insured or additional insured. Relevant expenses will be borne by Party B. Copies or scanning copies of relevant insurance certificates shall be submitted to Party A for keeping.

6.16Party B undertakes that Party B may carry out marketing and publicity for Customized Xiaomi Products, and the publicity methods include, but are not limited to: (1) Party B utilizes its own marketing resources and channels to carry out marketing and publicity for Customized Xiaomi Products; (2) Party B carries out joint product publicity and product creation with Party A, and utilizes Party A's marketing resources or Party A's designated marketing resources to carry out product publicity. Regardless of the forms and methods of publicity, in the event that Party A shall pay the publicity supplier any fees on behalf of Party B in advance as negotiated and agreed between both parties, the budget of the product marketing expenses in accordance with the publicity project shall be referred to Party B by Party A for confirmation before confirming such product marketing expenses with the publicity supplier. After both parties confirm the actual product marketing fees incurred, the product marketing fee that Party A has paid on behalf of Party B may be deducted from the purchase payment amount or share of proceeds that Party A should pay to Party B as agreed under this Agreement.

6.17Party B shall not, in the marketing or sales of Party B's own branded products, maliciously denigrate Customized Xiaomi Products, publish unreasonable and malicious comparative advertisements between its own branded products and Customized Xiaomi Products, and conduct other illicit competition activities, thus adversely affecting the sales of Customized Xiaomi Products as well as Xiaomi's brand. If Party B violates this Article 6.17, Party A has the right to demand Party B to pay damages of no less than RMB500,000 according to the specific circumstances of the violation.

6.18If Party B is authorized by Party A to use Party A's brand for new media account registration, the ownership, use, operation and other related rights of such new media account shall belong to Party A. Party A may authorize Party B to operate and manage Party A's new media account on its behalf. For the definition of "Party A's brand", please refer to Article 1(1)(2) of the Appendix *Additional Terms for Brand Protection*. The scope of "new media account" in this article includes Party B's existing accounts registered with Party A's brand and subsequent accounts authorized by Party A to operate Party A's brand.

6.19In the event that Party B operates and manages Party A's new media account on behalf of Party A, Party B shall comply with the following agreements:

6.19.1The operational content of Party A's new media account shall be reported to Party A in advance in accordance with Party A's requirements and confirmed by Party A before release.

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6.19.2Operational content published by Party B:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) shall not include content that is irrelevant to Party A's entities, Party A's business, or Party A's branded products by newsjacking or in any other way;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) shall comply with requirements by applicable laws, regulations, and regulatory policies, and shall not include any military, political, pornographic or violent content;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) shall not violate public order and morals;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) shall not falsely advertise Party A's products;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) shall not release new product information without Party A's prior written confirmation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) shall not use the video slices of Party A's corporate management and Party A's celebrity spokespersons without Party A's prior written confirmation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) shall not violate the intellectual property rights of other person.

6.19.3If Party B fails to report to Party A in accordance with Article 6.19.1 and confirmed by Party A, and if the content released by Party B breaches Article 6.19.2, Party A shall have the right to demand Party B to pay damages of RMB500,000 for each breach by Party B of Article 6.19.2 according to the specific circumstances of the breach.

6.19.4Party A may, according to the business development or basing on Party B's breach of contract, notify Party B in writing to unconditionally withdraw the authorized account which is operated by Party B on behalf of Party A without Party B's consent. Party B shall complete the handover of account operation within 5 business days from the date of receipt of Party A's written notice. Party B's refusal of handover or delayed handover is regarded as breach of agreement, and since the 6th business day, Party A has the right to request Party B to voluntarily compensate Party A with a daily penalty of RMB 10,000 yuan in addition to the penalty agreed in 6.19.3 above, and the total amount of the accumulated penalty will not be subject to any upper limit.

6.19.5Party B shall be responsible for the infringement liability and policy risk liability arise from Party B's operation and management of the new media account on behalf of Party A. If Party B causes any loss to Party A, Party A shall have the right to seek damages from Party B.

6.20If the Customized Xiaomi Products provided by Party B to Party A contain hardware and software (including but not limited to standalone APP, driver, application programs, etc.) developed by Party B to assist in the better usability of the Customized Xiaomi Products, Party B shall be responsible for the development of the hardware and software, the effective maintenance of the normal operation of the software, the improvement of the software's privacy compliance, and Party B shall retain the interface documents, requirement documents, user interface (UI) documents, user experience (UE) documents and other relevant technical documents of the hardware and software. If Party B proposes to Party A to terminate the cooperation or both parties agree to terminate the cooperation by negotiation, Party B may terminate the maintenance of the corresponding hardware or software with Party A's written consent if Party A's related products do not have any active or new users during the 90-day period prior to the termination of the cooperation, as confirmed by both parties. If there are still active or new users of Party A's related products during the 90-day period prior to the termination of cooperation between the two parties, Party B shall prepare subsequent plan for the maintenance and handover of the hardware or software, and Party B may terminate the maintenance of the software with Party A's written consent. If Party B become unable to continue to undertake the maintenance of hardware, software and related after-sales service due to bankruptcy, business adjustment, force majeure or other reasons, Party B needs to notify Party A in writing three months in advance for the appropriate handover of the hardware and software. If Party B violates this Article 6.20, Party A has the right to request Party B to pay damages of no less than RMB one million according to the specific circumstances of violation.

6.21All cloud services used by Party B for Customized Xiaomi Products shall be deployed and run on Party A's servers. If Party B needs to develop or provide services for Customized Xiaomi Products through external functional

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interfaces and SDKs, such interfaces and SDKs shall be assessed and approved by Party A in writing before being used. Without Party A's written approval, Party B shall not use any data or data products obtained from Party A for its own use or transmit, provide or disclose such data or data products to any other third party. If Party B's above development or service work can be outsourced to a third party with Party A's consent, Party B's supplier shall comply with the Party A's security requirements for the use of cloud services and shall not take advantage of Party A's authorization and convenience and the unpredictable loopholes in Party A's system to infiltrate, obtain or transfer data or carry out any act that harms Party A and Party A's data security. If Party B violates this Article 6.21, Party A has the right to require Party B to pay damages of no less than RMB one million according to the specific breach and has the right to claim for the corresponding legal responsibility of Party B.

**Article 7: Open-Source Software**

7.1In principle, Party B shall not include or embed any open-source software, free software, freeware, or any third-party materials that are subject to the license terms of any open-source software, free software, or freeware (collectively, "Open-Source Software") in Customized Xiaomi Products, especially the code that uses infectious open-source licenses, which include but not limited to GPL-type licenses such as LGPL/MPL/GPL/AGPL.

7.2If Party A determines that the use of Open-Source Software is necessary, Party B shall be subject to the following conditions: (1) Party B has provided Party A with a written list of materials in which it expressly identifies that specific elements of the developed products and/or the technical results contain Open-Source Software; and (2) Party B has expressly identified in the written list of materials the applicable third-party licenses for the Open-Source Software and any use restrictions; and (3) Party B has taken technical measures to isolate the code delivered by Party B so that it will not infect Party A's code; and (4) Party A has approved Party B to use the Open-Source Software in writing.

7.3Party B may use the Open-Source Software only if Party B have satisfied Article 7.2 and have represent and warranted that it complies and will continue to comply with the terms and conditions of the licenses applicable to the Open-Source Software included in or embedded in Customized Xiaomi Products. If Party A do not agree to use the Open-Source Software, Party B shall replace the Open-Source Software and warrant that the quality and performance of Customized Xiaomi Products will not be affected in any way.

7.4If Party B fails to perform or does not fully perform the above obligations or fails to meet any of the requirements of the Open-Source Software License, Party B shall be responsible for dealing with and indemnifying Party A and Party A's Affiliates for all costs and losses incurred as a result of such failure, including, but not limited to, litigation fees, arbitration fees, attorney's fees, damages, and settlement payments.

**Article 8: Intellectual Property**

8.1Authorization of Party B's trademark and copyright

8.1.1Party B authorizes Party A and its related party entity, in an irrevocable, free and sub-licensable methods, to use Party B's trademark, identification and enterprise name on Customized Xiaomi Products for the purposes of, including but not limited to, manufacturing, promotion and publicity, selling, offering for sale and export and import. Relevant contents for use of Xiaomi identification will be subject to the Appendix *Additional Terms for Brand Protection* in this agreement.

8.1.2Party B shall ensure the originality of product station (including but not limited to publicity materials, official documents and correspondence, pictures, videos, H5 pages and other contents) materials designed and manufactured. In case the provided materials are from a third party, Party B needs to acquire the legal authorization of relevant third party. Party B agrees to authorize Party A and its related party entity to use the all materials above in the world.

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The specific usage mode and channel are decided by Party A.

8.2Unless otherwise agreed by both parties, if the customized software developed by Party B for Party A needs to be launched on the platforms of business partners, the authorship belongs to Party A and the software will be released in Party A's name. The software copyright shall be applied by Party A. In the event that the foregoing software copyright needs to be applied by Parties B under certain special circumstances, Party B shall apply for such copyright with Party A's prior consent.

8.3Party B shall deliver to Party A all the source code of the service end and plug-in end of the product, and the source code of the device end shall be held by Party B itself (without being delivered to Party A). Nevertheless, with Party B's prior consent, or in the event that Party B fails to provide fault remediation and upgrade services to Party A within the agreed period due to reasons solely attributable to Party B, Party B shall deliver the corresponding source code of the device end to Party A. In addition, if Party B needs to purchase third-party services or code base from a third-party supplier in order to provide the service content under this Agreement, Party B shall authorize and agree that all such third-party services or code base may be used on Customized Xiaomi Products free of charge. Party A has the right to use the source code delivered by Party B by itself (only for the purpose of Customized Xiaomi Products), but Party A shall not provide the source code delivered by Party B to any unaffiliated third parties.

**Article 9: Confidentiality Terms**

Both parties agree that: the confidential information involved in the cooperation between both parties includes but is not limited to any materials provided by both parties to the opposite party according to this agreement, correspondences in cooperation process and other materials or information related to business or technology that are not published. The recipient shall bear confidentiality obligations for the confidential information of disclosing party. The recipient shall not disclose the disclosing party's confidential information acquired in oral, written, visual or other forms to any third party or use such information for the purpose other than the cooperation of both parties; unless the disclosing party has authorized such third party to acquire the disclosed confidential information in written form in advance. The specific agreement of confidentiality is subject to Appendix *Confidentiality Agreement* in this agreement.

**Article 10: Default Liabilities and Contract Termination**

10.1Any behavior violating this agreement and appendixes of this agreement and PO order will be deemed as violation of this agreement. Unless otherwise agreed in this agreement or appendixes, in case either party violates this agreement, it ("defaulting party") shall pay RMB five hundred thousand (RMB 500,000) to the opposite party ("observant party") as liquidated damages. In case the above liquidated damages are insufficient to recover the observant party's losses, the defaulting party shall compensate the insufficient part, including but not limited to the expenses and expenditures generated for observant party's handling of default events, including legal expenses for investigation, arbitration, lawsuit and lawyer. If Party B or its affiliates have any payable amount due to Party A (including but not limited to fees, penalties, liquidated damages, etc.), Party A and Party A's affiliates shall have the right to freeze the corresponding amount from any of Party B's or Party B's affiliate's payable amount to the fullest extent permitted bylaw or to directly set off the amount thereof at its sole discretion.

10.2In case of one or several conditions below due to Party B's violation of this agreement, Party A has the right to adopt or request Party B to take all measures to solve this problem to maintain its brand reputation, including but not limited to taking public relation measures, responding to suits, reaching an accommodation with third party and/or compensating the third party in advance. All expenses generated for solving the dispute or problem (including but not limited to expenses for Party A to engage a lawyer and other third party, expenses for responding a lawsuit and expenses and fines compensated to the third party) shall be borne by Party B. In case Party A compensates such

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expenses in advance, it has the right to claim compensation from Party B:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Products will cause events or disputes that will lead to personal and property losses to consumers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Party B causes intellectual property rights of Customized Xiaomi Products (including but not limited to disputes of infringement of intellectual property rights);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Party B fails to acquire relevant certification, permission or qualification required in laws of China and sales target country, or the products provided do not comply with product compliance requirements of China and sales target country, which causes the conditions including but are not limited to failure in normal sales of products, customer complaints, consumer dispute, administrative punishment, retention and punishment of customs or market regulatory authority, and court injunction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)Controversy, dispute, complaint and other problems are caused by provision of illegal or wrong product after-sales service by Party B or Party B cooperating with authorized distributor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)User data is collected, stored, used, proceeded, transmitted, provided, published, deleted, etc. by Party B through violating laws and regulations about data privacy protection of product sales places or other application laws and regulations about data privacy protection of product sales places.

In case the third party files a claim or lawsuit to Party A or its related company, distributor and agent ("damaged party") due to the above causes, Party B shall cooperate with Party A for defending, to ensure that the interests of damaged party will not be damaged, and Party B shall compensate the damaged party (including but not limited to the expense for the damaged party to engage a lawyer and other third party, expenses for responding a lawsuit and expenses and fines compensated to the third party).

10.3In case of the following conditions, Party A has the right to terminate this agreement and specific order in advance after sending written notice:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Party B seriously violates the obligations in this agreement and specific order;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Except for conditions forbidden by applicable bankruptcy law, Party B is declared as bankrupt, is unable to pay matured debt, losses performance ability due to other causes, or its assets are transferred or received by other creditors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Products delivered by Party B cannot satisfy the agreed acceptance standards or quality requirements, and Party A deems that there is no correction value or the standards still cannot be satisfied after three times of correction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)Party B delays the delivery unconditionally without Party A's advance written approval;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)Party B fails to abide by the Appendix *Terms about User Data of Customized Xiaomi Products* in this agreement, and fails to save data to the Xiaomi Ecosystem Cloud or other server assigned by Xiaomi, causes dispute about infringement of user's personal information protection, and discloses the user data to a third party without Party A's permission.

**Article 11: Export Control**

Both parties promise and guarantee to abide by applicable laws and regulations about export control and economic sanctions (including but not limited to those of China, the U.S., European Union and Japan) strictly. Either party promises that, for any technology, technical data, software code or other information, hardware, equipment or its component ("deliverables") provided to another party, the disclosure or provision to such party will not violate any applicable laws and regulations about export control. Either party guarantees that it will not directly or indirectly disclose or provide any deliverables to the following places within its known scope: (1) Any country or region where the American government executes comprehensive economic sanctions (including Crimea, Cuba, Iran, South Korea and Syria) and other relevant regions sanctioned by America (including Sultan and Venezuela); or (2) Any individuals or entities that are listed in (a) Specially Designated Nationals and Blocked Persons List ("SDN List") of America or other sanction list, or entities that are owned or controlled by entities in the above list; or (b) "List of

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Denied Persons", "Entity List" or any other export control or tied transaction list; or (3) Final military users or final military purpose specified in *Export Control Regulations* of America; (4) Deliverables cannot be used for supporting terrorism, nuclear technology, chemical and biological weapon, guided missile and weapons of mass destruction. In case either party violates this term, the observant party has the right to stop performance of this agreement and relevant contract.

**Article 12: User Data**

Party B shall guarantee to collect, dispose, disclose, save, use and transmit the user data according to applicable data protection laws and regulations. In case Party B violates any applicable data protection laws and regulations, it shall bear all legal liabilities independently. In case of causing losses to Party A, Party B shall make compensation. In case of causing adverse effect to Party A, Party B shall announce and clear relevant conditions through public channels or by cooperating with Party A. Other specific agreements will be subject to the Appendix *Terms about User Data of Customized Xiaomi Products* in this agreement.

**Article 13: Integrity Terms**

Party B undertakes that Party B and Party B's personnel shall not engage in any commercial bribery in business activities related to Party A. Party B shall not engage in any conflict of interests behavior in business activities with Party A without Party A's permission. If Party A reasonably determines that Party B may have violated this Article in its business activities with Party A based on third-party reports and Party B's operation, Party A has the right to conduct audits and investigations on Party B in respect of the relevant business activities and request Party B to bear the responsibility for the violation of the Agreement. Party B shall cooperate with Party A's foregoing audits and investigations. Other specific relevant agreements please see the Business Integrity Agreement as attached to this Agreement.

**Article 14: Force majeure**

14.1In case either party cannot perform obligations under this agreement due to force majeure events, including but not limited to fire, flood, earthquake, typhoon, natural disasters and other unforeseeable or inevitable and uncontrollable conditions, it will not bear any liabilities. The performance time of such party specified in this agreement will be prolonged automatically. The prolonged time shall be equivalent to the time when the party cannot perform this agreement due to force majeure events directly or indirectly. The party influenced by force majeure events shall notify such event to the opposite party through telegraph or telex within the rational time, and submit the proof of relevant force majeure event issued by authorities to the opposite party within 15 days after the events occur.

14.2In case the performance cannot be continued, Party A has the right to terminate this agreement and specific order unilaterally.

**Article 15: Scope of validity**

15.1This agreement is signed by both Party A and Party B in Haidian District, Beijing. The validity period of this agreement is 2 years, which is from September 19, 2024 to September 18, 2026.

15.2Except for conditions agreed in Article 9.3 of this agreement, in case Party B fails to abide by any content in this agreement, Party A has the right to request Party B to stop violation behavior immediately in case of finding; In case Party A finds out that Party B does not stop the violation behavior thereafter, Party A has the right to terminate this agreement immediately.

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15.3Within the validity period of this agreement, either party cannot change and terminate this agreement without the written approval of opposite party. However, either party may execute its unilateral termination right to terminate or suspend this agreement according to this agreement. If both parties have agreed to confirm the change of purchase plan, purchase quantity, after-sale processing and other types of specifications, rules and plans by email, Party A may request Party B to confirm the content of the email within the agreed time. If Party B has any objection to the content of the above email, such objection shall be raised within three business days after receipt of Party A's email notification (unless agreed otherwise) for negotiation between both parties. In the event that Party A and Party B fail to reach an agreement through negotiation on the disputed issues, either party shall have the right to terminate this Agreement. If Party B does not raise any objection within the aforesaid period, it shall be deemed that Party B agrees to follow the above e-mail from Party A.

15.4Both Party A and Party B confirm that, in case the performance of this agreement is unnecessary or impossible due to force majeure, termination of this agreement may be negotiated.

15.5When this agreement expires, the outstanding debts and debts of both parties incurred will not be impacted by termination of this agreement, and both parties shall continuously perform respective obligations.

15.6The warranty, intellectual property rights, confidentiality, default liabilities and other terms that shall be existed as per natures agreed in this agreement and specific order shall be effective if this agreement and specific order are terminated or suspended in advance for any reason.

**Article 16: Dispute resolution**

16.1Any disputes arising from this agreement or matters related to this agreement shall be solved by both parties through negotiation. In case both parties cannot reach an agreement through negotiation, the dispute shall be submitted to China International Economic and Trade Arbitration Commission for arbitration in Beijing in accordance with its arbitration rules currently in force. The arbitral award shall be final and legally binding on both parties. Unless agreed otherwise, the language for the arbitration shall be Chinese.

16.2The losing party shall bear the arbitration fee unless otherwise awarded by the arbitration commission.

16.3In the event of arbitration, neither party shall suspend, refuse or delay the performance of any other part of this Contract which is not affected by arbitration.

**Article 17: Supplementary provisions of the contract**

17.1Agreement changes: All changes of this Agreement (including supplementation and revision) shall only be valid after being effectively signed by both parties.

17.2Appendixes *Approval Agreement of Customized Xiaomi Products, Agreement of Equivalent Right to Know and Audit, Terms about Intellectual Property, Terms about User Data of Customized Xiaomi Products, Framework Agreement of Customized Product Quality of Xiaomi Ecological Chain, Framework Agreement of Customized Product After-sales Service of Xiaomi Ecological Chain, Confidentiality Agreement, Additional Terms for Brand Protection, Framework Agreement of International After-sales Service for Customized Products of Xiaomi Ecological Chain*, *Product Change (PCN) Agreement* and *Business Integrity Agreement* of this agreement as well as PO order signed by both parties shall be indivisible parts of this agreement, which shall have the same legal effects.

17.3A written supplementary agreement may be signed by both parties for matters uncovered in this agreement through negotiation, which shall have the same legal effects as this agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

17.4For any right waiver expressed in this agreement or failure in timely execution of any right granted in this agreement, it will not constitute continuous right waiver or mean the waiver of any right under this agreement.

17.5In case any term or part in this agreement is judged as illegal or non-coercive, relevant contents will be separated from this agreement, and will not influence, damage or relieve the effectiveness of other terms or parts in this agreement. The above terms that are judged as illegal or non-coercive will be replaced by other effective or legal terms or parts in this agreement that have the most similar meaning and content.

17.6Notice: All notices shall be issued in written form. In case Party A sends the written notice to Party B through fax or similar methods, it will be deemed as delivered on the delivery date; in case the mail is adopted, it will be deemed as delivered on the date when the mail is sent to Party B's receiver; in case airmail is adopted, it will be deemed as delivered on the fifth (5<sup>th</sup>) day after the airmail is sent; in case the express is adopted, it will be deemed as delivered after the express is signed by the receiver for confirmation. In case the email or message data is adopted, it will be deemed as delivered on the date when the email or data is sent to Party B's electronic system. In case of any change in Party B's contact person, such change shall be notified to Party A three (3) days in advance.

Contact person of Party B: [REDACTED]

17.7Titles and descriptions of terms contained in this agreement are for reference only. The above titles cannot limit, restrict, expand or describe the scope of this agreement or contents of any terms in any form.

17.8This agreement will be made in duplicate, which will be valid after being stamped with official seal or special seal for contract by both parties. Each party holds one copy with the same legal effects.

(There is no text below and signature page follows)

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---

| | |
|:---|:---|
| **Xiaomi Communications Co., Ltd. (Seal)**  | **Guangdong Lizi Technology Co., Ltd. (Seal)**  |
| Signature of authorized representative: /s/ Authorized Signatory (represented by company seal) | Signature of authorized representative: /s/ Authorized Signatory (represented by company seal) |
| October 15, 2024 | October 15, 2024 |

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Appendix 1: *Terms about Intellectual Property*

Appendix 2: *Agreement of Equivalent Right to Know and Audit*

Appendix 3: *Terms about User Data of Customized Xiaomi Products*

Appendix 4: *Approval Agreement of Customized Xiaomi Products*

Appendix 5: *Additional Terms for Brand Protection*

Appendix 6: *Framework Agreement of Customized Product Quality of Xiaomi Ecological Chain*

Appendix 7: *Framework Agreement of Customized Product After-sales Service of Xiaomi Ecological Chain*

Appendix 8: *Confidentiality Agreement*

Appendix 9: *Framework Agreement of International After-sales Service for Customized Products of Xiaomi Ecological Chain*

Appendix 10: *Product Change (PCN) Agreement*

Appendix 11: *Business Integrity Agreement*

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## Exhibit 8.1

**Exhibit 8.1**

**List of Significant Subsidiaries and Consolidated Variable Interest Entities of Viomi Technology Co., Ltd**

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| | |
|:---|:---|
| **Subsidiaries** | **Place of Incorporation** |
| Codream Ltd. | Cayman Island |
| Codream Co., Ltd. | British Virgin Island |
| Codream HK Co., Limited | Hong Kong |
| Viomi HK Technology Co., Limited | Hong Kong |
| Yunmi Hulian Technology (Guangdong) Co., Ltd. | People's Republic of China |
| Lequan Technology (Beijing) Co., Ltd. | People's Republic of China |
| Zhumeng Hulian Technology (Guangdong) Co. Ltd. | People's Republic of China |
| Guangdong Lizi Technology Co., Ltd. | People's Republic of China |
| **Consolidated Variable Interest Entities** | **Place of Incorporation** |
| Guangzhou Interconnect Electric Appliances Technology Co. Ltd | People's Republic of China |
| Beijing Yunmi Technology Co., Ltd | People's Republic of China |

---

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## Exhibit 11.2

**Exhibit 11.2**

**Viomi Technology Co., Ltd**

**Amended and Restated Statement of PolicIES**

**Governing Material non-public Information and**

**The Prevention of InsideR Trading**

**(Adopted by the Board of Directors of Viomi Technology Co., Ltd and effective**

**on October 18, 2023)**

This Amended and Restated Statement of Policies Governing Material Non-Public Information and the Prevention of Insider Trading (this "**Statement**") applies to all directors, officers, employees and consultants of Viomi Technology Co., Ltd and its subsidiaries and affiliated entities (collectively, the "**Company**").

This Statement consists of three sections: Section I provides an overview; Section II sets forth the Company's policies prohibiting insider trading; and Section III explains insider trading.

**I.** **SUMMARY**

Preventing insider trading is necessary to comply with United States securities laws and to preserve the reputation and integrity of the Company, as well as that of all persons affiliated with it. "Insider trading" occurs when any person purchases or sells any securities while in possession of inside information relating to the securities. As explained in Section III below, "inside information" is information which is considered to be both "material" and "non-public."

The Company considers strict compliance with the policies set forth in this Statement (collectively, the "**Policy**") to be a matter of utmost importance. Violation of the Policy could cause extreme reputational damage and possible legal liability to you and the Company. Knowing or willful violations of the letter or spirit of the Policy will be grounds for immediate dismissal from the Company. Violation of the Policy might expose the violator to severe criminal penalties, as well as civil liability to any person harmed by the violation. The monetary damages flowing from a violation could be multiple times the profit realized by the violator, not to mention the attorney's fees of the persons harmed.

**This Statement applies to all directors, officers, employees and consultants of the Company and extends to all of such persons' activities within and outside their duties at the Company**. Every director, officer, employee and consultant of the Company must review this Statement, and when requested by the Company, must execute and return the Certificate of Compliance attached hereto to the Compliance Officer for the Company (the "**Compliance Officer**") within seven (7) days after receiving the request. Questions regarding this Statement should be directed to the Compliance Officer by e-mail at compliance@viomi.com.cn.

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**II.** **POLICIES PROHIBITING INSIDER TRADING**

For purposes of this Statement, the terms "purchase" and "sell" of securities exclude the acceptance of options or other share-based awards granted by the Company and the exercise of options or vesting of other share-based awards, if applicable, that does not involve the sale of securities. Among other things, the cashless exercise of options does involve the sale of securities and therefore is subject to the policies set forth below. The Policy does not apply to the exercise of a tax withholding right pursuant to which you elect to have the Company withhold ordinary shares or American Depositary Shares ("**ADSs**") subject to an option or other award to satisfy tax withholding requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.***No Trading*** – **No director, officer, employee or consultant of the Company may purchase or sell any ADSs, ordinary shares or other securities of the Company or enter into a binding security trading plan in compliance with Rule 10b5-1 under the U.S. Securities Exchange Act of 1934, as amended (a "Trading Plan") while in possession of material non-public information relating to the Company or its ADSs, ordinary shares or other securities (the "Material Information")**.

In the event that the Material Information possessed by you relates to the ADSs or other securities of the Company, the above policy will require waiting for at least forty-eight (48) hours after public disclosure of the Material Information by the Company, which forty-eight (48) hours shall include in all events at least one full Trading Day on the Nasdaq Stock Market following such public disclosure. The term "**Trading Day**" is defined as a day on which the Nasdaq Stock Market is open for trading. Except for public holidays in the United States, Nasdaq Stock Market's regular trading hours are from 9:30 a.m. to 4:00 p.m., New York City time, Monday through Friday.

**In addition, no director, officer, employee or consultant of the Company may purchase or sell any securities of the Company or enter into a Trading Plan, without the prior clearance by the Compliance Officer, during any period designated as a "limited trading period" by the Company, regardless of whether such director, officer, employee or consultant possesses any Material Information.**

**Furthermore, all transactions in the securities of the Company (including without limitation, acquisitions and dispositions of the ADSs, the sale of ordinary shares issued upon exercise of options or vesting of other share-based awards and the execution of a Trading Plan, but excluding the acceptance of options or other share-based awards granted by the Company and the exercise of options or vesting of other share-based awards that does not involve the sale of securities) by directors, officers and key employees designated by the Company from time to time must be pre-approved by the Compliance Officer.**

Please see Section III below for an explanation of the Material Information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.***Trading Window*** – **Assuming none of the "no trading" restrictions set forth in Section II-A above applies, no director, officer, employee or consultant of the Company may**

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**purchase or sell any securities of the Company or enter into a Trading Plan other than during a Trading Window.**

A "**Trading Window**" is the period in any fiscal quarter or fiscal half year, as applicable, of the Company commencing at the close of business on the second Trading Day following the date of the Company's public disclosure of its financial results for the prior year, semi-year, or quarter, as applicable, and ending on December 31, March 31, June 30 or September 30, as the case may be.

**In other words,**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(1) beginning on January 1 of each year, no director, officer, employee or consultant of the Company may purchase or sell any securities of the Company or enter into a Trading Plan until the close of business on the second Trading Day following the date of the Company's public disclosure of its financial results for the fiscal year ended on December 31 of the prior year, and**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(2) (A) in case that the Company publicly discloses its quarterly financial results, beginning on April 1, July 1 and October 1 of each year, respectively, no director, officer, employee or consultant of the Company may purchase or sell any securities of the Company or enter into a Trading Plan until the close of business on the second Trading Day following the date of the Company's public disclosure of its financial results for the fiscal quarter ended on March 31, June 30 and September 30 of that year, respectively; or (B) in case that the Company publicly discloses its semi-annually financial results, beginning on July 1 of each year, no director, officer, employee or consultant of the Company may purchase or sell any securities of the Company or enter into a Trading Plan until the close of business on the second Trading Day following the date of the Company's public disclosure of its financial results for the fiscal half year ended on June 30 of that year, respectively;**

If the Company's public disclosure of its financial results for the prior period occurs on a Trading Day more than four hours before the Nasdaq Stock Market closes, then such date of disclosure shall be considered the first Trading Day following such public disclosure.

**Please note that trading in any securities of the Company during the Trading Window is not a "safe harbor," and all directors, officers, employees and consultants of the Company should strictly comply with the Policy.**

**When in doubt, do not trade! Check with the Compliance Officer first.**

Notwithstanding the foregoing, sale of securities of the Company pursuant to an existing Trading Plan which was entered into in accordance with the Policy and in compliance with applicable law is not subject to the restrictions on trading in Sections II-A and II-B above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.***No Tipping*** – No director, officer, employee or consultant of the Company may directly or indirectly disclose any Material Information to anyone who trades in securities (so-called "tipping"), regardless of whether the person or entity who receives the information, the "tippee," is related to you and regardless of whether you receive any monetary benefit from the tippee.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.***Confidentiality*** – No director, officer, employee or consultant of the Company may communicate any Material Information to anyone outside the Company under any circumstances unless approved by the Compliance Officer in advance, or to anyone within the Company other than on a need-to-know basis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.***No Comment*** – No director, officer, employee or consultant of the Company may discuss any internal matters or developments of the Company with anyone outside the Company, except as required for the performance of regular corporate duties. Unless you are expressly authorized to the contrary, if you receive any inquiries about the Company or its securities by the financial press, research analysts or others, or any requests for comments or interviews, you are required to decline comment and direct the inquiry or request to the Company's Chief Financial Officer, who is responsible for coordinating and overseeing the release of information of the Company to the investing public, analysts and others in compliance with applicable laws and regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F.***Corrective Action*** – If you become aware that any potential Material Information has been or may have been inadvertently disclosed, you must notify the Compliance Officer immediately so that the Company can determine whether or not corrective action, such as general disclosure to the public, is warranted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G.***Rule 10b5-1 Trading Plans* –** Rule 10b5-1 provides an affirmative defense against insider trading liability under U.S. securities laws. A person subject to this Policy can rely on this defense and trade in the Company's securities, regardless of their awareness of inside information, if the transaction occurs pursuant to a pre-arranged written Trading Plan that was entered into when the person was not in possession of material non-public information and that complies with the requirements of Rule 10b5-1.

Anyone subject to this Policy who wishes to enter into a Trading Plan must submit the Trading Plan to the Compliance Officer for approval at least five business days prior to the planned entry into the Trading Plan. Trading Plans may not be adopted by a person when he or she is in possession of material non-public information about the Company or its securities and must comply with the requirements of Rule 10b5-1 (including specified waiting periods and limitations on multiple overlapping plans and single trade plans).

Once a Trading Plan is adopted, you must not exercise any subsequent influence over the amount of securities to be traded, the price at which they are to be traded or the date(s) of the trade(s). You may amend or replace a Trading Plan only during periods when trading is permitted in accordance with this Policy, and you must submit any proposed amendment or replacement of a Trading Plan to the Compliance Officer for approval prior to adoption. You must provide notice to the Compliance Officer prior to terminating a Trading Plan. You should understand that a modification or termination of a Trading Plan may call into question your good faith in entering into and operating the plan (and therefore may jeopardize the availability of the affirmative defense against insider trading allegations).

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**III.** **EXPLANATION OF INSIDER TRADING**

As noted above, "**insider trading**" refers to the purchase or sale of a security while in possession of "material" "non-public" information relating to the security. "Securities" include not only stocks, bonds, notes and debentures, but also options, warrants and similar instruments. "Purchase" and "sale" are defined broadly under the U.S. federal securities laws. "Purchase" includes not only the actual purchase of a security, but any contract to purchase or otherwise acquire a security. "Sale" includes not only the actual sale of a security, but any contract to sell or otherwise dispose of a security. These definitions extend to a broad range of transactions, including conventional cash-for-stock transactions, the grant and exercise of stock options and acquisitions and exercises of warrants or puts, calls or other options related to a security. It is generally understood that "**insider trading**" includes the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· trading by insiders while in possession of material non-public information;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· trading by persons other than insiders while in possession of material non-public information where the information either was given in breach of an insider's fiduciary duty to keep it confidential or was misappropriated; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· communicating or tipping material non-public information to others, including recommending the purchase or sale of a security while in possession of material non-public information.

As noted above, for purposes of this Statement, the terms "purchase" and "sell" of securities exclude the acceptance of options or other share-based awards granted by the Company and the exercise of options or vesting of other share-based awards that does not involve the sale of securities. Among other things, the cashless exercise of options does involve the sale of securities and therefore is subject to the Policy.

<u>What Facts are Material?</u>

The materiality of a fact depends upon the circumstances. A fact is considered "material" if there is a substantial likelihood that a reasonable investor would consider it important in making a decision to buy, sell or hold a security or where the fact is likely to have a significant effect on the market price of the securities. Information may be material even if it relates to future, speculative or contingent events and even if it is significant only when considered in combination with publicly available information. Material information can be positive or negative and can relate to virtually any aspect of a company's business or to any type of security, debt or equity.

Examples of material information include (but are not limited to) information concerning:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;·dividends;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;·corporate earnings or earnings forecasts, or changes to previously released earnings announcements or guidance;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;·changes in financial condition or asset value;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· negotiations for the mergers or acquisitions or dispositions of significant subsidiaries or assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;·significant new contracts or the loss of a significant contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;·significant new products or services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;·significant marketing plans or changes in such plans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;·capital investment plans or changes in such plans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· material litigation, administrative action or governmental investigations or inquiries about the Company, any of its affiliated companies, or any of its officers or directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;·significant borrowings or financings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;·defaults on borrowings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;·new equity or debt offerings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;·adoption of repurchase plans or amendment of existing repurchase plans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;·significant personnel changes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· a cybersecurity incident or risk that may adversely impact the Company's business, reputation or share value;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;·changes in accounting methods and write-offs; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· any substantial change in industry circumstances or competitive conditions which could significantly affect the Company's earnings or prospects for expansion.

A good general rule of thumb: **when in doubt, do not trade**.

<u>What is Non-public?</u>

Information is "**non-public**" if it is not available to the general public. In order for information to be considered public, it must be widely disseminated in a manner making it generally available to investors through such media as Dow Jones, Reuters Economic Services, The Wall Street Journal, Bloomberg, Associated Press, PR Newswire or United Press International. Circulation of rumors, even if accurate and reported in the media, does not constitute effective public dissemination.

In addition, even after a public announcement, a reasonable period of time must lapse in order for the market to react to the information. Generally, one should allow approximately forty-eight (48) hours following publication as a reasonable waiting period before such information is deemed to be public.

<u>Who is an Insider?</u>

"**Insiders**" include directors, officers, employees and consultants of a company and anyone else who has material non-public information about a company. Insiders have independent

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fiduciary duties to their company and its shareholders not to trade on material non-public information relating to the company's securities. All directors, officers, employees and consultants of the Company are considered insiders with respect to material non-public information about business, activities and securities of the Company. The directors, officers, employees and consultants of the Company may not trade the Company's securities while in possession of material non-public information relating to the Company or tip (or communicate except on a need-to-know basis) such information to others.

It should be noted that trading by household members of a director, officer, employee or consultant can be the responsibility of such director, officer, employee or consultant under certain circumstances and could give rise to legal and Company-imposed sanctions.

<u>Trading by Persons Other than Insiders</u>

Insiders may be liable for communicating or tipping material non-public information to a third party (a "**tippee**"), and insider trading violations are not limited to trading or tipping by insiders. Persons other than insiders also can be liable for insider trading, including tippees who trade on material non-public information tipped to them or individuals who trade on material non-public information which has been misappropriated.

Tippees inherit an insider's duties and are liable for trading on material non-public information tipped to them by an insider. Similarly, just as insiders are liable for the insider trading of their tippees, so are tippees who pass the material non-public information along to others who trade on such information. In other words, a tippee's liability for insider trading is no different from that of an insider. Tippees can obtain material non-public information by receiving overt tips from others or through, among other things, conversations at social, business, or other gatherings.

<u>Penalties for Engaging in Insider Trading</u>

Penalties for trading on or tipping material non-public information can extend significantly beyond any profits made or losses avoided, both for individuals engaging in the unlawful conduct and their employers. The United States Securities and Exchange Commission and the United States Department of Justice have made the civil and criminal prosecution of insider trading violations a top priority. Enforcement remedies available to the government or private plaintiffs under the U.S. federal securities laws include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· administrative sanctions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· sanctions by self-regulatory organizations in the securities industry;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· civil injunctions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· damage awards to private plaintiffs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· disgorgement of profits gained by the violator;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· civil fines for the violator of up to three times the amount of profit gained or loss avoided by the violator;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· civil fines for the employer or other controlling person of a violator (i.e., where the violator is an employee or other controlled person) of up to the greater of approximately US$2,500,000 or three times the amount of profit gained or loss avoided by the violator;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· criminal fines for individual violators of up to US$5,000,000 (US$25,000,000 for an entity); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· jail sentences of up to 20 years.

In addition, insider trading could result in serious sanctions by the Company, including immediate dismissal. Insider trading violations are not limited to violations of the U.S. federal securities laws. Other U.S. federal and state civil or criminal laws, such as the laws prohibiting mail and wire fraud and the Racketeer Influenced and Corrupt Organizations Act (RICO), also may be violated upon the occurrence of insider trading.

<u>Material Non-public Information Regarding Other Companies</u>

This Policy and the guidelines described herein also apply to material non-public information relating to other companies, including the Company's customers, vendors and suppliers ("**Business Partners**"), particularly when that information is obtained in the course of employment with, or other services performed by, or on behalf of, the Company. Civil and criminal penalties, and discipline, including termination of employment for cause, may result from trading on material non-public information regarding the Company's Business Partners. Each individual should treat material non-public information about the Company's Business Partners with the same care required with respect to information related directly to the Company.

<u>Individual Responsibility</u>

Each person subject to this Policy is individually responsible for complying with this Policy and ensuring the compliance of any family members, such as spouses, minor children, adult family members who share the same household, and any other person or entity whose securities trading decisions are influenced or controlled by the person whose transactions are subject to this Policy. Accordingly, you should make your family and household members aware of the need to confer with you before they trade in the Company's securities, and you should treat all such transactions for the purposes of this Policy and applicable securities laws concerning trading while in possession of material non-public information as if the transactions were for your own account.

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**CERTIFICATION OF COMPLIANCE**

TO: Compliance Officer

RE: AMENDED AND RESTATED STATEMENT OF POLICIES OF Viomi Technology Co., Ltd GOVERNING MATERIAL NON-PUBLIC INFORMATION AND THE PREVENTION OF INSIDER TRADING

I have received, reviewed, and understood the policies set forth in the above-referenced Amended and Restated Statement of Policies (such policies, as amended from time to time, the "**Policy**") and hereby undertake, as a condition to my present and continued employment at or association with Viomi Technology Co., Ltd or any of its subsidiaries or affiliated entities, to comply fully with the Policy.

I hereby certify that I have adhered to the Policy during the time period that I have been employed by or associated with Viomi Technology Co., Ltd or any of its subsidiaries or affiliated entities.

I hereby undertake to adhere to the Policy in the future.

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| |
|:---|
| **Signature:** |
| **Name:** |
| **ID Card Number:** |
| **Title:** |
| **Date:** |

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## Exhibit 12.1

**Exhibit 12.1**

**Certification by the Principal Executive Officer**

**Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002**

I, Xiaoping Chen, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this annual report on Form 20-F of Viomi Technology Co., Ltd;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.

---

| | |
|:---|:---|
| Date: | September 30, 2025 |
| By: | /s/ Xiaoping Chen |
| Name: | Xiaoping Chen |
| Title: | Chief Executive Officer |

---

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## Exhibit 12.2

**Exhibit 12.2**

**Certification by the Principal Financial Officer**

**Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002**

I, Xiaoping Chen, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this annual report on Form 20-F of Viomi Technology Co., Ltd;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.

---

| | |
|:---|:---|
| Date: | September 30, 2025 |
| By: | /s/ Xiaoping Chen |
| Name: | Xiaoping Chen |
| Title: | Chief Executive Officer (Principal Financial Officer) |

---

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## Exhibit 13.1

**Exhibit 13.1**

**Certification by the Principal Executive Officer**

**Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**

In connection with the Annual Report of Viomi Technology Co., Ltd (the "Company") on Form 20-F for the year ended December 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Xiaoping Chen, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | |
|:---|:---|
| Date: | September 30, 2025 |
| By: | /s/ Xiaoping Chen |
| Name: | Xiaoping Chen |
| Title: | Chief Executive Officer |

---

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## Exhibit 13.2

**Exhibit 13.2**

**Certification by the Principal Financial Officer**

**Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**

In connection with the Annual Report of Viomi Technology Co., Ltd (the "Company") on Form 20-F for the year ended December 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Xiaoping Chen, Chief Executive Officer (Principal Financial Officer) of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | |
|:---|:---|
| Date: | September 30, 2025 |
| By: | /s/ Xiaoping Chen |
| Name: | Xiaoping Chen |
| Title: | Chief Executive Officer |

---

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## Exhibit 15.1

**Exhibit 15.1**

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| | |
|:---|:---|
| ![Graphic](viot-20241231xex15d1001.jpg) | ![Graphic](viot-20241231xex15d1002.jpg) |

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September 30, 2025

**To: Viomi Technology Co., Ltd** (the "**Company**")

Wansheng Square, Rm 1302 Tower C, Xingang East Road, Haizhu District

Guangzhou, Guangdong, 510220

People's Republic of China

Dear Sir/Madam:

We hereby consent to the reference of our name under the headings "Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure" and "Item 4. Information on the Company—C. Organizational Structure—Contractual Arrangements with Our VIEs and Their Shareholders" in the Company's Annual Report on Form 20-F for the year ended December 31, 2024 (the "**Annual Report**"), which will be filed with the Securities and Exchange Commission (the "**SEC**") in the month of September 2025. We also consent to the filing of this consent letter with the SEC as an exhibit to the Annual Report, and further consent to the incorporation by reference of the summaries of our opinions under these captions into the Company's registration statement on Form S-8 (File No.333-230431) that was filed on March 22, 2019.

In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, or under the Securities Exchange Act of 1934, in each case, as amended, or the regulations promulgated thereunder.

Very truly yours,

---

| |
|:---|
| /s/ Han Kun Law Offices |
| Han Kun Law Offices |

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## Exhibit 15.2

**Exhibit 15.2**

![Graphic](viot-20241231xex15d2001.jpg)

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-230431) of Viomi Technology Co., Ltd of our report dated September 30, 2025 relating to the financial statements, which appears in this Form 20-F.

/s/ WWC, P.C.

WWC, P.C.

Certified Public Accountants

PCAOB ID: 1171

San Mateo, California

September 30, 2025

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