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1、F-1 1 zhiding_f1.htm FORM F-1Table of ContentsUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549 FORM F-1REGISTRATION STATEMENTUNDERTHE SECURITIES ACT OF 1933 ZHIDING YUEMEI TECHNOLOGY CO.,LIMITED(Exact name of Registrant as specified in its charter)British Virgin Islands 7011 Not A

2、pplicable(State or other jurisdiction of (Primary Standard Industrial (I.R.S.Employerincorporation or organization)Classification Code Number)Identification Number)Building 8,Jingdongbei Science and Technology Industrial ParkDaxing District,Beijing,China(Address,including zip code,and telephone numb

3、er,including area code,of Registrantsprincipal executive offices)Altiverse Capital LimitedAsia Leading Chambers,No.986Road Town,Tortola,British Virgin Islands(Name,address,including zip code,and telephone number,including area code,of agent forservice)Copies to:Approximate date of commencement of pr

4、oposed sale to the public:As soon as practicableafter the effective date of this Registration Statement.If any of the securities being registered on this Form are to be offered on a delayed orcontinuous basis pursuant to Rule 415 under the Securities Act of 1933,check the followingbox.o If this Form

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

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

7、ecuritiesAct,check the following box and list the Securities Act registration statement number of theearlier effective registration statement for the same offering.o Indicate by check mark whether the registrant is an emerging growth company as defined inRule 405 of the Securities Act of 1933.Emergi

8、ng growth company x 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 transitionperiod for complying with any new or revised financial accounting standards providedpursuant to

9、Section 7(a)(2)(B)of the Securities Act.x The Registrant hereby amends this registration statement on such date or dates as may benecessary to delay its effective date until the Registrant shall file a further amendment whichspecifically states that this registration statement shall thereafter becom

10、e effective inaccordance with Section 8(a)of the Securities Act,as amended,or until the registrationstatement shall become effective on such date as the Securities and Exchange Commission,acting pursuant to said Section 8(a)may determine.PRELIMINARY PROSPECTUS ORDINARY SHARES.We are offering ordinar

11、y shares.This is the initial public offering of ordinary shares ofZHIDING YUEMEI TECHNOLOGY CO.,LIMITED.The offering price of our ordinaryshares in this offering is expected to be$5.00 per share.Prior to this offering,there has beenno public market for our ordinary shares.We have applied to list our

12、 ordinary shares on the Nasdaq Capital Market under the symbol“ZDYM”.There is no assurance that such application will be approved,and if our applicationis not approved,this offering may not be completed.Investing in our ordinary shares involves a high degree of risk.Before buying anyshares,you shoul

13、d carefully read the discussion of material risks of investing in ourordinary shares in“Risk Factors”.We are an“emerging growth company”as defined under the federal securities laws and,assuch,will be subject to reduced public company reporting requirements.See“ProspectusSummaryImplications of Being

14、an Emerging Growth Company”for additional information.Neither the Securities and Exchange Commission nor any other regulatory body hasapproved or disapproved of these securities or passed upon the accuracy or adequacy ofthis prospectus.Any representation to the contrary is a criminal offense.We are

15、not a Chinese operating company,but rather a holding company incorporated in theBritish Virgin Islands.As a holding company with no material operations of our own,weconduct a substantial majority of our operations through our operating entities established inthe Peoples Republic of China(or the“PRC”

16、).The Ordinary Shares offered in this prospectusare shares of the British Virgin Islands holding company.Holders of our Class A OrdinaryShares do not directly own any equity interests in our Chinese operating subsidiaries,but willinstead own shares of a British Virgin Islands holding company.The Chi

17、nese regulatoryauthorities could disallow our corporate structure,which would likely result in a materialchange in our operations and/or a material change in the value of our Ordinary Shares,including that it could cause the value of our Ordinary Shares to significantly decline orbecome worthless.Un

18、less otherwise stated,as used in this prospectus and in the context ofdescribing our operations and consolidated financial information,“Zhiding,”“we,”“us,”“Company,”or“our,”refers to ZHIDING YUEMEI TECHNOLOGY CO.,LIMITED,aBritish Virgin Islands holding company.For a description of our corporate stru

19、cture,see“Corporate History and Structure.”See also“Risk Factors Risks Relating to Our CorporateStructure.”We face various legal and operational risks and uncertainties relating to our operations inChina.These risks,together with uncertainties in Chinas legal system and the interpretationand enforce

20、ment of Chinese laws,regulations,and policies,could hinder our ability to offer orcontinue to offer our securities,result in a material adverse effect on our business operations,and damage our reputation,which could cause our shares to significantly decline in value orbecome worthless.The Chinese go

21、vernment may intervene or influence the operations of ourPRC subsidiaries at any time and may exert more control over offerings conducted overseasand/or foreign investment in China-based issuers,which could result in a material change inthe operations of our PRC subsidiaries and/or the value of our

22、common stock.Any actions bythe Chinese government to exert more oversight and control over offerings that are conductedoverseas and/or foreign investment in China-based issuers could significantly limit orcompletely hinder our ability to offer or continue to offer securities to investors and cause t

23、hevalue of such securities to significantly decline or be worthless.Recently,the PRCgovernment adopted a series of laws,regulatory measures and issued statements to regulatebusiness operations in China,including cracking down on illegal activities in the securitiesmarket,adopting new measures to ext

24、end the scope of cybersecurity reviews,and expandingthe efforts in anti-monopoly enforcement.The Cyberspace Administration of China(“CAC”)has opened cybersecurity probes into several U.S.-listed technology companies focusing onanti-monopoly regulation,and how companies collect,store,process and tran

25、sfer data,amongother things.If we are subject to such a probe or are required to comply with the stringentrequirements of the new regulations,our ability to conduct our business or list on a U.S.stockexchange may be restricted.As of the date of this prospectus,we and our subsidiaries have notbeen in

26、volved in any investigations on cybersecurity review initiated by any Chineseregulatory authority,nor has any of them received any inquiry,notice or sanction.There arecurrently no relevant laws or regulations in China that prohibit companies whose subsidiariesor entity interests are within China fro

27、m listing on overseas stock exchanges.However,sincethese statements and regulatory actions are newly published,official guidance and relatedimplementation rules have not been issued.It is highly uncertain what the potential impactsuch modified or new policies and regulations will have on our daily b

28、usiness operation,theability to accept foreign investments and our ability to continue trading on a U.S.securitiesmarketplace or stock exchange.i PERSHARE TOTAL Initial public offering price$Underwriting discounts and commissions(1)$Proceeds,before expenses,to us$(1)Does not include accountable and

29、non-accountable expense allowance payable tounderwriters.Please see the section of this prospectus entitled“Underwriting”foradditional information regarding underwriter compensation.We expect our total cash expenses for this offering(including cash expenses payable to ourunderwriters for their out-o

30、f-pocket expenses)to be approximately$,exclusive of theabove commissions.In addition,we will pay additional items of value in connection with thisoffering that are viewed by the Financial Industry Regulatory Authority,or FINRA,asunderwriting compensation.These payments will further reduce proceeds a

31、vailable to usbefore expenses.See“Underwriting.”Neither we nor any of the underwriters have authorized anyone to provide any information orto make any representations other than those contained in this prospectus or in any freewriting prospectuses we have prepared.Neither we nor any of the underwrit

32、ers takeresponsibility for,and can provide no assurance as to the reliability of,any other informationthat others may give you.This prospectus is an offer to sell only the shares offered hereby,butonly under circumstances and in jurisdictions where it is lawful to do so.The informationcontained in t

33、his prospectus is current only as of its date,regardless of the time of delivery ofthis prospectus or of any sale of our common stock.For investors outside the United States:Neither we nor any of the underwriters have doneanything that would permit this offering or possession or distribution of this

34、 prospectus in anyjurisdiction where action for that purpose is required,other than in the United States.Personsoutside the United States who come into possession of this prospectus must inform themselvesabout,and observe any restrictions relating to,the offering of the shares of our common stockand

35、 the distribution of this prospectus outside the United States.Neither the Securities and Exchange Commission nor any state securities commission nor anyother regulatory body has approved or disapproved of these securities or determined if thisprospectus is truthful or complete.Any representation to

36、 the contrary is a criminal offense.ii TABLE OF CONTENTS PagePROSPECTUS SUMMARY1OFFERINGS8RISK FACTORS9SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS34USE OF PROCEEDS35DIVIDEND POLICY36BUSINESS36REGULATIONS38MANAGEMENT45PRINCIPAL SHAREHOLDERS50DESCRIPTION OF SHARE CAPITAL51SHARES ELIGIBLE FOR FUT

37、URE SALE54TAXATION54UNDERWRITING56LEGAL MATTERS58WHERE YOU CAN FIND ADDITIONAL INFORMATION59INDEX TO CONSOLIDATED FINANCIAL STATEMENTSF-1 iii PROSPECTUS SUMMARY The following summary is qualified in its entirety by,and should be read in conjunction with,the more detailed information and financial st

38、atements appearing elsewhere in this prospectus.In addition to this summary,we urge you to read the entire prospectus carefully,especially therisks of investing in our Ordinary Shares discussed under“Risk Factors”before decidingwhether to buy our Ordinary Shares.Overview of Our Company ZHIDING YUEME

39、I TECHNOLOGY CO.,LIMITED,is a hotel chain and hotel SaaScompany registered in the British Virgin Islands.We are a hotel network with a distinctportfolio of lifestyle brands,and we also provide hotel SaaS services to hotels in China.TheCompany is committed to becoming an internationally leading and u

40、niquely innovativeinternet-based hotel group in China.Our Business Model 1.The Company owns multiple hotel brands,such as Feng Ya Song,Johnson,Fanyue,Yolanda,and Wangke.Some of our renowned hotels include:Shanxi Yolanda Hotel:A female-focused theme hotel that provides a range of leisure andwellness

41、services such as hot springs,medical aesthetics,spa,and fitness facilities;GD Zhe Di Hotel:A city-style business hotel that creates a conducive environment for agood nights sleep;and Ningbo Library Hotel:A city-style boutique hotel that combines a hotel with a book bar.2.The Company provides hotel S

42、aaS services to hotels,including:Comprehensive brand standardization system,Intelligent hotel renovation solutions,Online marketing service systems,High-quality member ecological chains,Hotel supplies supply chains,Comprehensive operational guidance,and Multi-channel promotion,and others.The Company

43、 brings new cooperation methods and creates new non-room revenue channelsfor hotels,helping partners quickly implement intelligent hotel products,reducing costs andincreasing efficiency through technological empowerment,and assisting in the developmentof hotel brands.1 Market Opportunities Driven by

44、 Chinas continuous and fast economic growth and strong demand for domestictravelling,Chinas hospitality industry,especially hotel chains,has experienced steady growthin the past few years and witnessed the following key trends.Increasing hotel chain penetration rate.The total number of rooms offered

45、 by hotelchains increased with a CAGR of 14.5%from 2016 to 2021 in China.Meanwhile,thehotel chain penetration rate remains at 34.4%in Chinas hospitality market in 2021,much lower than the average hotel chain penetration rate of 42.7%in the world marketand the penetration rate of 73.0%in the more mat

46、ure U.S.market.The penetration rate ofchained operation in Chinas hospitality industry is anticipated to further increase.Consumption upgrades and consumer preference transformation.In line with continuousconsumption upgrades,hoteliers in China have seen a rising demographic of young,discerning trav

47、elers who demand creative,elevated yet approachable class of hotelsdesigned to surpass customer expectations in personalized ways.This favorable industrytrend has been driving more customers to choose leading hotel brands that are capable ofoffering a diverse range of compelling products and service

48、s across scenario-basedshopping,entertainment,culture,food and other lifestyle spheres.Our Strategies We intend to focus on the following key strategies to solidify our market leadership andachieve sustainable growth:Further expand our hotel network in China,and strengthen our hotel brand portfolio;

49、Bolster our retail offerings to enhance customer engagement and monetization;and Continue to invest in technology and keep improving our hotel SaaS platforms andservices to client hotels.Risk Factors Summary Risks Related to Our Business and Industry Our operating results are subject to conditions t

50、ypically affecting the hospitality industryin China,any of which could reduce our revenues and limit opportunities for growth.If we are unable to compete successfully,our financial condition and results of operationsmay be harmed.We may not be able to manage our expected growth,which could adversely

51、 affect ouroperating results.Our limited operating history makes it difficult to evaluate our future prospects andresults of operations.Our growth depends on our ability to increase revenues generated by our existing andfuture hotels and from our existing and future members.Our success depends on ou

52、r ability to protect our intellectual property.2 The global coronavirus COVID-19 pandemic has caused significant disruptions in ourbusiness,which may continue to materially and adversely affect our results of operationsand financial condition.We may not be able to successfully attract new franchisee

53、s and compete for franchise andmanagement agreements and,as a result,we may not be able to achieve our plannedgrowth.A severe or prolonged downturn in the global or Chinese economy could materially andadversely affect our business and our financial condition.Risks Related to Doing Business in China

54、The Chinese government exerts substantial influence over the manner in which we mustconduct our business activities.We are currently not required to obtain approval fromChinese authorities to list on U.S exchanges,however,if our subsidiaries or the holdingcompany were required to obtain approval in

55、the future and were denied permission fromChinese authorities to list on U.S.exchanges,we will not be able to continue listing onU.S.exchange,which would materially affect the interest of the investors.Changes in Chinas economic,political or social conditions or government policies couldhave a mater

56、ial adverse effect on our business and results of operations.The PRC government may impose restrictions on our ability to transfer cash out of Chinaand to U.S.investors.To the extent cash or assets of our business,or of our PRC or Hong Kong subsidiaries,isin the PRC or Hong Kong,such cash or assets

57、may not be available to fund operations orfor other use outside of the PRC or Hong Kong,due to interventions in or the impositionof restrictions and limitations by the PRC government to the transfer of cash or assets.PRC laws and regulations governing our current business operations are sometimesvag

58、ue and uncertain and any changes in such laws and regulations may impair our abilityto operate profitably.Substantial uncertainties exist with respect to the enactment timetable and final contentof draft China Foreign Investment Law and how it may impact the viability of ourcurrent corporate structu

59、re,corporate governance and business operations.There are uncertainties under the PRC laws relating to the procedures for U.S.regulatorsto investigate and collect evidence from companies located in the PRC.We rely on dividends,loans and other distributions on equity paid by our PRCsubsidiaries to fu

60、nd any cash and financing requirements we may have.Any limitation onthe ability of our PRC subsidiaries to make loans or payments to us could have a materialadverse effect on our ability to conduct our business.PRC regulation of loans to,and direct investments in,PRC entities by offshore holdingcomp

61、anies may delay or prevent us from making loans or additional capital contributionsto our PRC operating subsidiaries and thereby prevent us from funding our business.PRC regulations relating to the establishment of offshore special purpose vehicles byPRC residents may subject our PRC-resident benefi

62、cial owners or our PRC subsidiariesto liability or penalties,limit our ability to make capital contributions into our PRCsubsidiaries,limit our PRC subsidiaries ability to distribute profits to us,or otherwiseadversely affect our financial position.Governmental control of currency conversion may lim

63、it our ability to utilize our netrevenues effectively and affect the value of your investment.3 We must remit the offering proceeds to PRC before they may be used to benefit ourbusiness in the PRC,and this process may take several months.Some of our shareholders are not in compliance with the PRCs r

64、egulations relating tooffshore investment activities by PRC residents,and as a result,the shareholders may besubject to penalties if we are not able to remediate the non-compliance.Failure to make adequate contributions to various employee benefit plans required byPRC regulations may subject us to p

65、enalties.The M&A Rules and certain other PRC regulations establish complex procedures forsome acquisitions of Chinese companies by foreign investors,making it more difficultfor us to pursue growth through acquisitions in China.PRC regulations relating to offshore investment activities by PRC residen

66、ts may limit ourPRC subsidiaries ability to increase their registered capital or distribute profits to us orotherwise expose us or our PRC resident beneficial owners to liability and penaltiesunder PRC law.If we are classified as a PRC resident enterprise for PRC income tax purposes,suchclassificati

67、on could result in unfavorable tax consequences to us and our non-PRCshareholders.We may not be able to obtain certain benefits under relevant tax treaties on dividendspaid by our PRC subsidiaries to us through our Hong Kong subsidiary.Enhanced scrutiny over acquisition transactions by the PRC tax a

68、uthorities may have anegative impact on potential acquisitions we may pursue in the future.If we become directly subject to the scrutiny,criticism and negative publicity involvingU.S.-listed Chinese companies,we may have to expend significant resources toinvestigate and resolve the matter which coul

69、d harm our business operations,share priceand reputation.Our Ordinary Shares may be delisted under the Holding Foreign Companies AccountableAct if the PCAOB is unable to inspect auditors or their affiliates that are located inChina.The delisting of our Ordinary Shares,or the threat of such delisting

70、,maymaterially and adversely affect the value of your investment.Additionally,the inability ofthe PCAOB to conduct inspections deprives our investors of the benefits of suchinspections.The recent joint statement by the SEC and PCAOB,proposed rule changes submitted byNasdaq,and the Holding Foreign Co

71、mpanies Accountable Act all call for additional andmore stringent criteria to be applied to emerging market companies upon assessing thequalification of their auditors,especially the non-U.S.auditors who are not inspected bythe PCAOB.These developments could add uncertainties to our offering.Uncerta

72、inties in the interpretation and enforcement of Chinese laws and regulationscould limit the legal protections available to us.We may be adversely affected by the complexity,uncertainties and changes in PRCregulation of internet-related businesses and companies,and any lack of requisiteapprovals,lice

73、nses or permits applicable to our business may have a material adverseeffect on our business and results of operations.Increases in labor costs in the PRC may adversely affect our business and ourprofitability.4 Risks Related to the Offering and Our Ordinary Shares The initial public offering price

74、of our Ordinary Shares may not be indicative of themarket price of our Ordinary Shares after this offering.In addition,an active,liquid andorderly trading market for our Ordinary Shares may not develop or be maintained,andour share price may be volatile.There may not be an active,liquid trading mark

75、et for our Ordinary Shares.Because we do not expect to pay dividends in the foreseeable future after this offering,you must rely on a price appreciation of the Ordinary Shares for a return on yourinvestment.A sale or perceived sale of a substantial number of our Ordinary Shares may cause theprice of

76、 our Ordinary Shares to decline.There can be no assurance that we will not be a passive foreign investment company(“PFIC”)for United States federal income tax purposes for any taxable year,which couldsubject United States holders of our Ordinary Shares to significant adverse United Statesfederal inc

77、ome tax consequences.For as long as we are an emerging growth company,we will not be required to complywith certain reporting requirements,including those relating to accounting standards anddisclosure about our executive compensation,that apply to other public companies.If we fail to establish and

78、maintain proper internal financial reporting controls,our abilityto produce accurate financial statements or comply with applicable regulations could beimpaired.As a foreign private issuer,we are not subject to certain U.S.securities law disclosurerequirements that apply to a domestic U.S.issuer,whi

79、ch may limit the informationpublicly available to our shareholders.As a foreign private issuer,we are permitted to adopt certain home country practices inrelation to corporate governance matters that differ significantly from the Nasdaq listingstandards.These practices may afford less protection to

80、shareholders than they wouldenjoy if we complied fully with corporate governance listing standards.Certain judgments obtained against us by our shareholders may not be enforceable.Nasdaq may apply additional and more stringent criteria for our initial and continuedlisting because we plan to have a s

81、mall public offering and insiders will hold a largeportion of the companys listed securities.If we cannot satisfy,or continue to satisfy,the initial listing requirements and other rulesof Nasdaq Capital Market,although we exempt from certain corporate governancestandards applicable to US issuers as

82、a Foreign Private Issuer,our securities may not belisted or may be delisted,which could negatively impact the price of our securities andyour ability to sell them.The market price of our ordinary shares may be volatile or may decline regardless of ouroperating performance,and you may not be able to

83、resell your shares at or above thepublic offering price.We have broad discretion in the use of the net proceeds from our public offering and maynot use them effectively.We will incur additional costs as a result of becoming a public company,which couldnegatively impact our net income and liquidity.T

84、he obligation to disclose information publicly may put us at a disadvantage tocompetitors that are private companies.5 Implications of Being an Emerging Growth Company On September 9,2022,the SEC adopted inflation adjustments mandated by the Jumpstart OurBusiness Startups Act of 2012(the“JOBS Act”).

85、As a result,an“emerging growth company”will lose its emerging growth company status on the last day of the fiscal year in which it has$1.235 billion or more in total.As a company with less than$1.235 billion in revenue duringour last fiscal year,we qualify as an“emerging growth company”as defined in

86、 the JOBS Act.“An“emerging growth company”may take advantage of reduced reporting requirements thatare otherwise applicable to larger public companies.In particular,as an emerging growthcompany,we:may present only two years of audited financial statements and only two years of relatedManagements Dis

87、cussion and Analysis of Financial Condition and Results ofOperations;are not required to provide a detailed narrative disclosure discussing our compensationprinciples,objectives and elements and analyzing how those elements fit with ourprinciples and objectives,which is commonly referred to as“compe

88、nsation discussionand analysis”;are not required to obtain an attestation and report from our auditors on ourmanagements assessment of our internal control over financial reporting pursuant to theSarbanes-Oxley Act of 2002;are not required to obtain a non-binding advisory vote from our shareholders

89、onexecutive compensation or golden parachute arrangements(commonly referred to as the“say-on-pay,”“say-on frequency”and“say-on-golden-parachute”votes);are exempt from certain executive compensation disclosure provisions requiring a pay-for-performance graph and CEO pay ratio disclosure;are eligible

90、to claim longer phase-in periods for the adoption of new or revised financialaccounting standards under 107 of the JOBS Act;and will not be required to conduct an evaluation of our internal control over financialreporting until our second annual report on Form 20-F following the effectiveness of our

91、initial public offering.We intend to take advantage of all of these reduced reporting requirements and exemptions,including the longer phase-in periods for the adoption of new or revised financial accountingstandards under 107 of the JOBS Act.Our election to use the phase-in periods may make itdiffi

92、cult to compare our financial statements to those of non-emerging growth companies andother emerging growth companies that have opted out of the phase-in periods under 107 ofthe JOBS Act.Under the JOBS Act,we may take advantage of the above-described reduced reportingrequirements and exemptions unti

93、l we no longer meet the definition of an emerging growthcompany.The JOBS Act provides that we would cease to be an“emerging growth company”at the end of the fiscal year in which the fifth anniversary of our initial sale of common equitypursuant to a registration statement declared effective under th

94、e Securities Act of 1933,asamended(the“Securities Act”)occurred,if we have more than$1.235 billion in annualrevenue,have more than$700 million in market value of our Class A Ordinary Share held bynon-affiliates,or issue more than$1 billion in principal amount of non-convertible debt over athree-year

95、 period.6 Foreign Private Issuer Status We are a foreign private issuer within the meaning of the rules under the Securities ExchangeAct of 1934,as amended(the“Exchange Act”).As such,we are exempt from certainprovisions applicable to United States domestic public companies.For example:we are not req

96、uired to provide as many Exchange Act reports,or as frequently,as adomestic public company;for interim reporting,we are permitted to comply solely with our home countryrequirements,which are less rigorous than the rules that apply to domestic publiccompanies;we are not required to provide the same l

97、evel of disclosure on certain issues,such asexecutive compensation;we are exempt from provisions of Regulation FD aimed at preventing issuers frommaking selective disclosures of material information;we are not required to comply with the sections of the Exchange Act regulating thesolicitation of pro

98、xies,consents,or authorizations in respect of a security registeredunder the Exchange Act;and we are not required to comply with Section 16 of the Exchange Act requiring insiders tofile public reports of their share ownership and trading activities and establishing insiderliability for profits reali

99、zed from any“short-swing”trading transaction.Implications of Being a Controlled Company Controlled companies are exempt from the majority of independent director requirements.Controlled companies are subject to an exemption from Nasdaq standards requiring that theboard of a listed company consist of

100、 a majority of independent directors within one year of thelisting date.Public Companies that qualify as a“Controlled Company”with securities listed on theNasdaq Stock Market(Nasdaq),must comply with the exchanges continued listing standardsto maintain their listings.Nasdaq has adopted qualitative l

101、isting standards.Companies that donot comply with these corporate governance requirements may lose their listing status.Underthe Nasdaq rules,a“controlled company”is a company with more than 50%of its votingpower held by a single person,entity or group.Under Nasdaq rules,a controlled company isexemp

102、t from certain corporate governance requirements including:the requirement that a majority of the board of directors consist of independent directors;the requirement that a listed company have a nominating and governance committee thatis composed entirely of independent directors with a written char

103、ter addressing thecommittees purpose and responsibilities;the requirement that a listed company have a compensation committee that is composedentirely of independent directors with a written charter addressing the committeespurpose and responsibilities;andthe requirement for an annual performance ev

104、aluation of the nominating and governancecommittee and compensation committee.Controlled companies must still comply with the exchanges other corporate governancestandards.These include having an audit committee and the special meetings of independentor non-management directors.Corporate Information

105、 Our principal executive offices are located at Building 8,Jingdongbei Science and TechnologyIndustrial Park,Daxing District,Beijing,China.Our telephone number at this address is+86-400-189-0876.Our registered office in the British Virgin Islands is located at the offices ofVistra Corporate Services

106、 Centre,Wickhams Cay II,Road Town,Tortola,VG1110,BritishVirgin Islands.7 OUR PRE-IPO Prior to the IPO,we will raise an additional capital of USD 50,000,000 in Pre-IPO.The Pre-IPO funds raised will be used for the Companys investment in research and development ofinformation technology,the expansion

107、of more hotels,and the daily operation.OFFERINGS Below is a summary of the terms of the offering:Issuer ZHIDING YUEMEI TECHNOLOGY CO.,LIMITED Securities Being Offered Ordinary Shares,par value US$0.0001 per share Offering Price We expect that the initial public offering price will be US$5.00per Ordi

108、nary Share.Ordinary SharesOutstandingImmediately Before ThisOffering Ordinary Shares Ordinary SharesOutstandingImmediately After ThisOffering Ordinary Shares(or Ordinary Shares if the underwritersexercise their option to purchase additional Ordinary Shares infull).Voting Rights Each Ordinary Share i

109、s entitled to one vote.Use of Proceeds(i)General working capital(ii)Brand promotion and marketing(iii)Specific industry-focused acquisition(iv)Expansion of new offices and servicing scope(v)Recruitment of talented personnel Proposed Nasdaq TradingSymbol and Listing ZDYM Lock-up Our directors,executi

110、ve officers,and shareholder who own 5%or more of the outstanding Ordinary Shares intended agreed withthe underwriters not to offer for sale,issue,sell,contract to sell,pledge or otherwise dispose of any of our Ordinary Shares orsecurities convertible into Ordinary Shares for a period of 6months comm

111、encing on the date of this prospectus.TheCompany is also prohibited from conducting offerings duringthis period and from re-pricing or changing the terms of existingoptions and warrants.See“Underwriting”for additionalinformation.Transfer Agent Risk factors See“Risk Factors”for a discussion of risks

112、you should carefullyconsider before investing in our Ordinary Shares.8 RISK FACTORS An investment in our Ordinary Shares involves a high degree of risk.Before deciding whetherto invest in our Ordinary Shares,you should consider carefully the risks described below,together with all of the other infor

113、mation set forth in this prospectus,including the sectiontitled“Managements Discussion and Analysis of Financial Condition and Results ofOperations”and our consolidated financial statements and related notes.If any of these risksactually occurs,our business,financial condition,results of operations

114、or cash flow could bematerially and adversely affected,which could cause the trading price of our Ordinary Sharesto decline,resulting in a loss of all or part of your investment.The risks described below andin the documents referenced above are not the only ones that we face.Additional risks notpres

115、ently known to us or that we currently deem immaterial may also affect our business.Youshould only consider investing in our Ordinary Shares if you can bear the risk of loss of yourentire investment.Risks Related to Our Business Our operating results are subject to conditions typically affecting the

116、 hospitalityindustry in China,any of which could reduce our revenues and limit opportunities forgrowth.Our operating results are subject to conditions typically affecting the hospitality industry inChina,including,among others:changes in national,regional or local economic conditions;contraction in

117、the global economy or low levels of economic growth;competition from other hotels and vacation rental online marketplace companies;the attractiveness of our hotels to our guests;local market conditions such as an oversupply of,or a reduction in demand for,hotelrooms;adverse weather conditions,natura

118、l disasters or serious contagious diseases,such asCOVID-19;the ability of third-party internet and other travel intermediaries who sell our hotel roomsto guests to attract and retain customers;the availability and cost of capital necessary for us and third-party hotel owners to fundinvestments,capit

119、al expenditures and service debt obligations;delays in or cancellations of planned or future development or refurbishment projects;seasonal and cyclical volatility in the hospitality industry;changes in desirability of geographic regions of the hotels in our business,geographicconcentration of our o

120、perations and customers and shortages of desirable locations fordevelopment;the performance of managerial and other employees of our hotels;andincreases in operating costs and expenses,particularly rents,due to inflation and otherfactors.Changes in any of these conditions could adversely affect our

121、occupancy rates,ADR andRevPAR,or otherwise adversely affect our results of operations and financial condition.If we are unable to compete successfully,our financial condition and results ofoperations may be harmed.The hospitality industry in China is highly competitive.Competition for guests and cus

122、tomersis primarily focused on hotel room rates,quality of accommodations,brand recognition,convenience of location,geographic coverage,quality and range of services,other lifestyleofferings,and guest amenities.We mainly compete with other branded and independent hoteloperating companies,national and

123、 international hotel brands and ownership companies.Inaddition,we may face competition from new entrants in the hospitality industry in China orincreased competition from competitors who are expanding rapidly.Such competitors includevacation rental online marketplace companies.New and existing compe

124、titors may offer morecompetitive rates,greater convenience,superior services or amenities,or superior facilities,possibly attracting guests away from our hotels and resulting in lower occupancy rate for ourhotels.Competitors may also outbid us in the selection of sites for new leased hotel conversio

125、n,negotiate better management terms for potential manachised hotels or offer better terms to ourexisting manachised hotel owners,thereby slowing our anticipated pace of expansion.Furthermore,our typical guests may change their travel,spending and consumption patternsand choose to stay in other types

126、 of hotels.Any of these factors may have an adverse effect onour competitive position,results of operations and financial condition.9 We may not be able to manage our expected growth,which could adversely affect ouroperating results.We have experienced substantial growth in the past.Our expansion ha

127、s placed,and willcontinue to place,substantial demands on our managerial,financial,operational,IT,and otherresources.In order to manage and support our growth,we must continue to improve ourexisting managerial,operational and IT systems,including our financial and managementcontrols,and recruit,trai

128、n and retain qualified hotel management and other personnel.Ourplanned expansion will also require us to maintain consistent and high-qualityaccommodations and services to ensure that our brand does not suffer as a result of anydeviations,whether actual or perceived,in our quality standards.We canno

129、t assure you thatwe will be able to effectively and efficiently manage the growth of our operations or maintainour quality standards.If we are unable to do so,our results of operations and financialcondition may be materially and adversely affected.Our limited operating history makes it difficult to

130、 evaluate our future prospects andresults of operations.We believe that our future success depends on our ability to achieve sustainable and profitablegrowth.We have a limited operating history since we commenced our business operations inChina in 2013.Our limited operating history and significant g

131、rowth make it difficult toevaluate our historical performance or prospects.In addition,fluctuations in results couldmake period to period comparisons difficult.You should consider our future prospects in lightof the risks and challenges encountered by a company with a limited operating history.These

132、risks and challenges include,among others:the uncertainties associated with our ability to continue our growth and maintainprofitability;preserving our competitive position in the upper midscale hotel segment of thehospitality industry in China;offering consistent and high-quality accommodations and

133、 services to retain and attractguests;implementing our strategy and modifying it from time to time to respond effectively tocompetition and changes in customer preferences;our ability to introduce new hotel and other lifestyle offerings to achieve our goal tobecome a leading lifestyle brand;increasi

134、ng awareness of our brands and continuing to develop customer loyalty;andrecruiting,training and retaining qualified managerial and other personnel.If we are unsuccessful in addressing any of these risks or challenges,our business may bematerially and adversely affected.Our growth depends on our abi

135、lity to increase revenues generated by our existing andfuture hotels and from our existing and future members.While sales growth will depend in part on our plans for new hotel openings,deeperpenetration into existing and new geographic markets and increased sales at our existinghotels will also affe

136、ct our sales growth and will continue to be critical factors affecting ourrevenue and profit.Our ability to increase the revenues generated by our hotels depends inpart on our ability to successfully implement our growth strategy and related initiatives.Ourability to penetrate further into the exist

137、ing geographic markets where we already have apresence depends in part on our ability to successfully market ourselves and to maintain andincrease sales to our existing members and attract more members to our membership program.We may not be able to achieve our targeted sales growth at our existing

138、and future hotels,andsales at such hotels could decrease.In addition,we may not be able to achieve our targetedlevel of expansion within existing and new geographic markets.The occurrence of any ofsuch events may have a material adverse effect on our business,financial condition and resultsof operat

139、ions.Our success depends on our ability to protect our intellectual property.Our success depends on our ability to obtain and maintain patent protection for productsdeveloped utilizing our technologies,in the PRC and in other countries,and to enforce thesepatents.There is no assurance that any of ou

140、r existing and future patents will be held valid andenforceable against third-party infringement or that our products will not infringe any third-party patent or intellectual property.We own patents and have filed additional patentapplications with the Patent Administration Department of the PRC;how

141、ever,there is noassurance that our filed patent applications will be granted.10 Any patents relating to our technologies may not be sufficiently broad to protect our products.In addition,our patents may be challenged,potentially invalidated or potentiallycircumvented.Our patents may not afford us pr

142、otection against competitors with similartechnology or permit the commercialization of our products without infringing third-partypatents or other intellectual property rights.We also rely on or intend to rely on our trademarks,trade names and brand names todistinguish our products from the products

143、 of our competitors,and have registered or willapply to register a number of these trademarks.However,third parties may oppose ourtrademark applications or otherwise challenge our use of the trademarks.In the event that ourtrademarks are successfully challenged,we could be forced to rebrand our prod

144、ucts,whichcould result in loss of brand recognition and could require us to devote resources toadvertising and marketing these new brands.Further,our competitors may infringe ourtrademarks,or we may not have adequate resources to enforce our trademarks.In addition,we also have trade secrets,non-pate

145、nted proprietary expertise and continuingtechnological innovation that we shall seek to protect,in part,by entering into confidentialityagreements with licensees,suppliers,employees and consultants.These agreements may bebreached and there may not be adequate remedies in the event of a breach.Disput

146、es may ariseconcerning the ownership of intellectual property or the applicability of confidentialityagreements.Moreover,our trade secrets and proprietary technology may otherwise becomeknown or be independently developed by our competitors.If patents are not issued withrespect to products arising f

147、rom research,we may not be able to maintain the confidentialityof information relating to these products.The global coronavirus COVID-19 pandemic has caused significant disruptions in ourbusiness,which may continue to materially and adversely affect our results of operationsand financial condition.O

148、n March 11,2020,the World Health Organization declared the COVID-19 outbreak a globalpandemic.Many businesses and social activities in China and other countries and regionswere severely disrupted in 2020,including those of our suppliers,customers and employees.This pandemic has also caused market pa

149、nics,which materially and negatively affected theglobal financial markets,such as the plunge of global stocks on major stock exchanges inMarch 2020.Such disruption and slowdown of the worlds economy in 2020 and beyond had,and may continue to have,a material adverse effect on our results of operation

150、s and financialcondition.All of these had resulted in a material adverse effect on our results of operationsand financial condition in the fiscal year 2021.The extent to which the COVID-19 pandemicmay impact our business,operations and financial results will depend on numerous evolvingfactors that t

151、he Company cannot accurately predict at this time,including the uncertainty onthe potential resurgence of the COVID-19 cases in China,the continual spread of the virusglobally,and the instability of local and global government policies and restrictions.We areclosely monitoring the development of the

152、 COVID-19 pandemic and continuously evaluatingany further potential impact on our business,results of operations and financial condition.Ifthe pandemic persists or escalates,we may be subject to further negative impact on ourbusiness operations and financial condition.We may not be able to successfu

153、lly attract new franchisees and compete for franchiseand management agreements and,as a result,we may not be able to achieve our plannedgrowth.Our growth strategy largely depends on our ability to further expand our presence throughentering into franchise and management agreements with our franchise

154、es.We believe that ourability to attract new franchisees and compete for franchise and management agreements withthem depends primarily on our brand recognition and reputation,the results of our overalloperations in general and the success of our current manachised hotels.Other competitivefactors fo

155、r franchise and management agreements include marketing support,membershipprogram,efficiency of our central reservation system(“CRS”)and IT infrastructure,ourability to provide systems and support to assist franchisees to operate their hotels cost-effectively.The terms of any new franchise and manag

156、ement agreements that we obtain also depend onthe terms that our competitors offer for those agreements.In addition,if the availability ofsuitable locations for new properties decreases,or governmental planning or other localregulations change,the supply of suitable properties for additional manachi

157、sed hotels coulddiminish.If the performance of our manachised hotels is less successful than that of ourcompetitors hotels or if we are unable to offer terms as favorable as those offered by ourcompetitors,we may not be able to compete effectively for new franchise and managementagreements and we ma

158、y not be able to attract as many new franchisees as we expect.As aresult,we may not be able to achieve our planned growth and our business and results ofoperations may be materially and adversely affected.11 A severe or prolonged downturn in the global or Chinese economy could materially andadversel

159、y affect our business and our financial condition.Although the Chinese economy expanded well in the last two decades,the rapid growth of theChinese economy has slowed down since 2012,and there is considerable uncertainty over thelong-term effects of the expansionary monetary and fiscal policies adop

160、ted by the PeoplesBank of China and financial authorities of some of the worlds leading economies,includingthe United States and China.There have been concerns over unrest and terrorist threats in theMiddle East,Europe and Africa,which have resulted in volatility in oil and other markets.There have

161、also been concerns on the relationship among China and other Asian countries,which may result in or intensify potential conflicts in relation to territorial disputes.Economicconditions in China are sensitive to global economic conditions,as well as changes indomestic economic and political policies

162、and the expected or perceived overall economicgrowth rate in China.Any severe or prolonged slowdown in the global or Chinese economymay materially and adversely affect our business,results of operations and financial condition.Risks Related to Doing Business in China The Chinese government exerts su

163、bstantial influence over the manner in which we mustconduct our business activities.We are currently not required to obtain approval fromChinese authorities to list on U.S exchanges,however,if our subsidiaries or the holdingcompany were required to obtain approval in the future and were denied permi

164、ssionfrom Chinese authorities to list on U.S.exchanges,we will not be able to continue listingon U.S.exchange,which would materially affect the interest of the investors.Because of our corporate structure as a British Virgin Islands holding company withoperations conducted by our PRC subsidiaries,it

165、 involves unique risks to investors.Furthermore,Chinese regulatory authorities could change the rules and regulations regardingforeign ownership in the industry in which the company operates,which would likely result ina material change in our operations and/or a material change in the value of the

166、securities weare registering for sale,including that it could cause the value of such securities tosignificantly decline or become worthless.The Chinese government has exercised andcontinues to exercise substantial control over virtually every sector of the Chinese economythrough regulation and stat

167、e ownership.Under the current government leadership,thegovernment of the PRC has been pursuing reform policies which have adversely affectedChina-based operating companies whose securities are listed in the United States,withsignificant policies changes being made from time to time without notice.Th

168、ere aresubstantial uncertainties regarding the interpretation and application of PRC laws andregulations,including,but not limited to,the laws and regulations governing our business,orthe enforcement and performance of our contractual arrangements with borrowers in the eventof the imposition of stat

169、utory liens,death,bankruptcy or criminal proceedings.Our ability tooperate in China may be harmed by changes in its laws and regulations,including thoserelating to taxation,environmental regulations,land use rights,property and other matters.The central or local governments of these jurisdictions ma

170、y impose new,stricter regulations orinterpretations of existing regulations that would require additional expenditures and effortson our part to ensure our compliance with such regulations or interpretations.Accordingly,government actions in the future,including any decision not to continue to suppo

171、rt recenteconomic reforms and to return to a more centrally planned economy or regional or localvariations in the implementation of economic policies,could have a significant effect oneconomic conditions in China or particular regions thereof,and could require us to divestourselves of any interest w

172、e then hold in Chinese properties.Given recent statements by the Chinese government indicating an intent to exert moreoversight and control over offerings that are conducted overseas and/or foreign investment inChina-based issuers,any such action could significantly limit or completely hinder our ab

173、ilityto offer or continue to offer securities to investors and cause the value of such securities tosignificantly decline or become worthless.Recently,the General Office of the Central Committee of the Communist Party of China andthe General Office of the State Council jointly issued the Opinions on

174、 Severely CrackingDown on Illegal Securities Activities According to Law,or the Opinions,which was madeavailable to the public on July 6,2021.The Opinions emphasized the need to strengthen theadministration over illegal securities activities,and the need to strengthen the supervision overoverseas li

175、stings by Chinese companies.Effective measures,such as promoting theconstruction of relevant regulatory systems,will be taken to deal with the risks and incidentsof China-concept overseas listed companies.As of the date of this prospectus,we have notreceived any inquiry,notice,warning,or sanctions f

176、rom PRC government authorities inconnection with the Opinions.12 On June 10,2021,the Standing Committee of the National Peoples Congress of China,or theSCNPC,promulgated the PRC Data Security Law,which took effect in September 2021.ThePRC Data Security Law imposes data security and privacy obligatio

177、ns on entities andindividuals carrying out data activities,and introduces a data classification and hierarchicalprotection system based on the importance of data in economic and social development,andthe degree of harm it will cause to national security,public interests,or legitimate rights andinter

178、ests of individuals or organizations when such data is tampered with,destroyed,leaked,illegally acquired or used.The PRC Data Security Law also provides for a national securityreview procedure for data activities that may affect national security and imposes exportrestrictions on certain data an inf

179、ormation.In early July 2021,regulatory authorities in China launched cybersecurity investigations withregard to several China-based companies that are listed in the United States.The Chinesecybersecurity regulator announced on July 2 that it had begun an investigation of Didi GlobalInc.(NYSE:DIDI)an

180、d two days later ordered that the companys app be removed fromsmartphone app stores.On July 5,2021,the Chinese cybersecurity regulator launched thesame investigation on two other Internet platforms,Chinas Full Truck Alliance of Full TruckAlliance Co.Ltd.(NYSE:YMM)and Boss of KANZHUN LIMITED(Nasdaq:B

181、Z).On July24,2021,the General Office of the Communist Party of China Central Committee and theGeneral Office of the State Council jointly released the Guidelines for Further Easing theBurden of Excessive Homework and Off-campus Tutoring for Students at the Stage ofCompulsory Education,pursuant to wh

182、ich foreign investment in such firms via mergers andacquisitions,franchise development,and variable interest entities are banned from this sector.On August 17,2021,the State Council promulgated the Regulations on the Protection of theSecurity of Critical Information Infrastructure,or the Regulations

183、,which took effect onSeptember 1,2021.The Regulations supplement and specify the provisions on the security ofcritical information infrastructure as stated in the Cybersecurity Review Measures.TheRegulations provide,among others,that protection department of certain industry or sectorshall notify th

184、e operator of the critical information infrastructure in time after theidentification of certain critical information infrastructure.On August 20,2021,the SCNPC promulgated the Personal Information Protection Law of thePRC,or the Personal Information Protection Law,which took effect in November 2021

185、.Asthe first systematic and comprehensive law specifically for the protection of personalinformation in the PRC,the Personal Information Protection Law provides,among others,that(i)an individuals consent shall be obtained to use sensitive personal information,such asbiometric characteristics and ind

186、ividual location tracking,(ii)personal information operatorsusing sensitive personal information shall notify individuals of the necessity of such use andimpact on the individuals rights,and(iii)where personal information operators reject anindividuals request to exercise his or her rights,the indiv

187、idual may file a lawsuit with aPeoples Court.As such,the Companys business segments may be subject to various government andregulatory interference in the provinces in which they operate.The Company could be subjectto regulation by various political and regulatory entities,including various local an

188、d municipalagencies and government sub-divisions.The Company may incur increased costs necessary tocomply with existing and newly adopted laws and regulations or penalties for any failure tocomply.Additionally,the governmental and regulatory interference could significantly limit orcompletely hinder

189、 our ability to offer or continue to offer securities to investors and cause thevalue of such securities to significantly decline or be worthless.Furthermore,it is uncertain when and whether the Company will be required to obtainpermission from the PRC government to list on U.S.exchanges in the futu

190、re,and even whensuch permission is obtained,whether it will be denied or rescinded.Although the Company iscurrently not required to obtain permission from any of the PRC federal or local governmentto obtain such permission and has not received any denial to list on the U.S.exchange,ouroperations cou

191、ld be adversely affected,directly or indirectly,by existing or future laws andregulations relating to its business or industry.On December 24,2021,the CSRC,together with other relevant government authorities inChina issued the Provisions of the State Council on the Administration of Overseas Securit

192、iesOffering and Listing by Domestic Companies(Draft for Comments),and the Measures for theFiling of Overseas Securities Offering and Listing by Domestic Companies(Draft forComments)(“Draft Overseas Listing Regulations”).The Draft Overseas Listing Regulationsrequires that a PRC domestic enterprise se

193、eking to issue and list its shares overseas(“Overseas Issuance and Listing”)shall complete the filing procedures of and submit therelevant information to CSRC.The Overseas Issuance and Listing includes direct and indirectissuance and listing.Where an enterprise whose principal business activities ar

194、e conducted inPRC seeks to issue and list its shares in the name of an overseas enterprise(“OverseasIssuer”)on the basis of the equity,assets,income or other similar rights and interests of therelevant PRC domestic enterprise,such activities shall be deemed an indirect overseasissuance and listing(“

195、Indirect Overseas Issuance and Listing”)under the Draft OverseasListing Regulations.Therefore,the proposed listing would be deemed an Indirect OverseasIssuance and Listing under the Draft Overseas Listing Regulations.As such,the Companywould be required to complete the filing procedures of and submi

196、t the relevant information toCSRC after the Draft Overseas Listing Regulations become effective.13 In addition,on December 28,2021,the CAC,the National Development and ReformCommission(“NDRC”),and several other administrations jointly issued the revised Measuresfor Cybersecurity Review,or the Revise

197、d Review Measures,which became effective and hasreplaced the existing Measures for Cybersecurity Review on February 15,2022.According tothe Revised Review Measures,if an“online platform operator”that is in possession ofpersonal data of more than one million users intends to list in a foreign country

198、,it must applyfor a cybersecurity review.Based on a set of Q&A published on the official website of theState Cipher Code Administration in connection with the issuance of the Revised ReviewMeasures,an official of the said administration indicated that an online platform operatorshould apply for a cy

199、bersecurity review prior to the submission of its listing application withnon-PRC securities regulators.Given the recency of the issuance of the Revised ReviewMeasures and their pending effectiveness,there is a general lack of guidance and substantialuncertainties exist with respect to their interpr

200、etation and implementation.For example,it isunclear whether the requirement of cybersecurity review applies to follow-on offerings by an“online platform operator”that is in possession of personal data of more than one millionusers where the offshore holding company of such operator is already listed

201、 overseas.Furthermore,the CAC released the draft of the Regulations on Network Data SecurityManagement in November 2021 for public consultation,which among other things,stipulatesthat a data processor listed overseas must conduct an annual data security review by itself orby engaging a data security

202、 service provider and submit the annual data security review reportfor a given year to the municipal cybersecurity department before January 31 of the followingyear.If the draft Regulations on Network Data Security Management are enacted in thecurrent form,we,as an overseas listed company,will be re

203、quired to carry out an annual datasecurity review and comply with the relevant reporting obligations.As of the date of this prospectus,none of our PRC subsidiaries operations involve storing ofpersonal information of PRC individual clients.However,given the above uncertainties,it isunclear how the R

204、evised Review Measures and the final draft Regulations on Network DataSecurity Management will affect us.We have been closely monitoring the development in theregulatory landscape in China,particularly regarding the requirement of approvals,includingon a retrospective basis,from the CSRC,the CAC or

205、other PRC authorities with respect tothis offering,as well as regarding any annual data security review or other procedures thatmay be imposed on us.If any approval,review or other procedure is in fact required,we arenot able to guarantee that we will obtain such approval or complete such review or

206、otherprocedure timely or at all.For any approval that we may be able to obtain,it couldnevertheless be revoked and the terms of its issuance may impose restrictions on ouroperations and offerings relating to our securities.Changes in Chinas economic,political or social conditions or government polic

207、ies couldhave a material adverse effect on our business and results of operations.Substantially all of our operations are located in China.Accordingly,our business,prospects,financial condition,and results of operations may be influenced significantly by political,economic,and social conditions in C

208、hina generally and by continued economic growth inChina as a whole.The Chinese economy differs from the economies of most developed countries in manyrespects,including the amount of government involvement,level of development,growth rate,control of the foreign exchange,and allocation of resources.Al

209、though the Chinesegovernment has implemented measures emphasizing the utilization of market forces foreconomic reform,the reduction of state ownership of productive assets,and the establishmentof improved corporate governance in business enterprises,a substantial portion of productiveassets in China

210、 is still owned by the government.In addition,the Chinese governmentcontinues to play a significant role in regulating industry development by imposing industrialpolicies.The Chinese government also exercises significant control over Chinas economicgrowth through allocating resources,controlling pay

211、ment of foreign currency-denominatedobligations,setting monetary policy,and providing preferential treatment to particularindustries or companies.While the Chinese economy has experienced significant growth over the past decades,growthhas been uneven,both geographically and among various sectors of

212、the economy.The Chinesegovernment has implemented various measures to encourage economic growth and guide theallocation of resources.Some of these measures may benefit the overall Chinese economy butmay harm us.For example,our financial condition and results of operations may be adverselyaffected by

213、 government control over capital investments or changes in tax regulations.Inaddition,in the past,the Chinese government has implemented certain measures,includinginterest rate increases,to control the pace of economic growth.These measures may causedecreased economic activity in China,and since 201

214、2,Chinas economic growth has sloweddown.Any prolonged slowdown in the Chinese economy may reduce the demand for ourproducts and services and materially and adversely affect our business and results ofoperations.14 We may also decide to finance our PRC subsidiaries using capital contributions.The Min

215、istryof Commerce(“MOC”)or its local counterpart must approve these capital contributions.OnMarch 30,2015,the State Administration of Foreign Exchange,or SAFE,promulgatedCircular of the State Administration of Foreign Exchange on Reforming the ManagementApproach regarding the Settlement of Foreign Ex

216、change Capital of Foreign-investedEnterprises,or Circular 19,which expands a pilot reform of the administration of thesettlement of the foreign exchange capitals of foreign-invested enterprises nationwide.Circular 19 came into force and replaced previous Circular 142 and Circular 36 on June 1,2015.O

217、n June 9,2016,SAFE promulgated the Circular of the State Administration of ForeignExchange on Reforming and Regulating Policies on the Control over Foreign ExchangeSettlement of Capital Accounts,or Circular 16,to further expand and strengthen such reform.Under Circular 19 and Circular 16,foreign-inv

218、ested enterprises in the PRC are allowed to usetheir foreign exchange funds under capital accounts and RMB funds from exchange settlementfor expenditure under current accounts within its business scope or expenditure under capitalaccounts permitted by laws and regulations,except that such funds shal

219、l not be used for(i)expenditure beyond the enterprises business scope or expenditure prohibited by laws andregulations;(ii)investments in securities or other investments than principal-secured productsissued by banks;(iii)granting loans to non-affiliated enterprises,except where it is expresslypermi

220、tted in the business license;and(iv)construction or purchase of real estate for purposesother than self-use(except for real estate enterprises).In addition,SAFE strengthened itsoversight of the flow and use of the RMB capital converted from foreign currency registeredcapital of a foreign-invested co

221、mpany.The use of such RMB capital may not be alteredwithout SAFEs approval,and such RMB capital may not,in any case,be used to repay RMBloans if the proceeds of such loans have not been used.Violations of these circulars couldresult in severe monetary or other penalties.These circulars may significa

222、ntly limit our abilityto use RMB converted from the cash provided by our offshore financing activities to fund theestablishment of new entities in China by our PRC subsidiaries,to invest in or acquire anyother PRC companies through our PRC subsidiaries.In light of the various requirements imposed by

223、 PRC regulations on loans to and directinvestment in PRC entities by offshore holding companies,we cannot assure you that we willbe able to complete the necessary government registrations or obtain the necessarygovernment approvals on a timely basis,if at all,with respect to future loans to our PRCs

224、ubsidiaries or future capital contributions by us to our PRC subsidiaries.If we fail tocomplete such registrations or obtain such approvals,our ability to use the proceeds we expectto receive from our initial public offering to capitalize or otherwise fund our PRC operationsmay be negatively affecte

225、d,which could materially and adversely affect our liquidity and ourability to fund and expand our business.The PRC government may impose restrictions on our ability to transfer cash out ofChina and to U.S.investors.The PRC government imposes controls on the convertibility of Renminbi into foreigncur

226、rencies and,in certain cases,the remittance of currency out of China.To the extent that ourincome is received in Renminbi,shortages in foreign currencies may restrict our ability to paydividends or other payments,or otherwise satisfy our foreign currency denominatedobligations,if any.Under existing

227、PRC foreign exchange regulations,payments of currentaccount items,including profit distributions,interest payments and expenditures from trade-related transactions,can be made in foreign currencies without prior approval from the StateAdministration of Foreign Exchange,or SAFE,as long as certain pro

228、cedural requirements aremet.Approval from appropriate government authorities is required if Renminbi is convertedinto foreign currency and remitted out of China to pay capital expenses such as the repaymentof loans denominated in foreign currencies.The PRC government may,at its discretion,impose res

229、trictions on access to foreign currencies for current account transactions.To address persistent capital outflows and the RMBs depreciation against the U.S.dollar inthe fourth quarter of 2016,the Peoples Bank of China and the SAFE implemented a series ofcapital control measures in the subsequent mon

230、ths,including stricter vetting procedures forChina-based companies to remit foreign currency for overseas acquisitions,dividendpayments and shareholder loan repayments.The PRC government may continue to strengthenits capital controls and our PRC subsidiaries dividends and other distributions may be

231、subjectto tightened scrutiny in the future.The PRC government also imposes controls on theconversion of RMB into foreign currencies and the remittance of currencies out of the PRC.Therefore,we may experience difficulties in completing the administrative proceduresnecessary to obtain and remit foreig

232、n currency for the payment of dividends from our profits,if any.Furthermore,there can be no assurance that the PRC government will not intervene orimpose restrictions on our ability to transfer or distribute cash within our organization or toforeign investors,which could result in an inability or pr

233、ohibition on making transfers ordistributions outside of China or Hong Kong and adversely affect our business as well as yourinvestment.As of the date of this prospectus,we are not aware of other material restrictions andlimitations on our ability to distribute earnings from our businesses,including

234、 oursubsidiaries,to the parent company and U.S.investors or our ability to settle amounts owed,or on foreign exchange or our ability to transfer cash between entities within our group,acrossborders,or to U.S.investors.15 To the extent cash or assets of our business,or of our PRC or Hong Kong subsidi

235、aries,isin the PRC or Hong Kong,such cash or assets may not be available to fund operations orfor other use outside of the PRC or Hong Kong,due to interventions in or the impositionof restrictions and limitations by the PRC government to the transfer of cash or assets.The transfer of funds and asset

236、s among ZDYM,its Hong Kong and PRC subsidiaries issubject to restrictions.The PRC government imposes controls on the conversion of the RMBinto foreign currencies and the remittance of currencies out of the PRC.In addition,the PRCEnterprise Income Tax Law and its implementation rules provide that a w

237、ithholding tax at arate of 10%will be applicable to dividends payable by Chinese companies to non-PRC-resident enterprises,unless reduced under treaties or arrangements between the PRC centralgovernment and the governments of other countries or regions where the non-PRC-residententerprises are tax r

238、esident.As of the date of this prospectus,there are no restrictions or limitations imposed by the HongKong government on the transfer of capital within,into and out of Hong Kong(includingfunds from Hong Kong to the PRC),except for the transfer of funds involving moneylaundering and criminal activiti

239、es.However,there is no guarantee that the Hong Konggovernment will not promulgate new laws or regulations that may impose such restrictions inthe future.As a result of the above,to the extent cash or assets of our business,or of our PRC or HongKong subsidiaries,is in the PRC or Hong Kong,such funds

240、or assets may not be available tofund operations or for other use outside of the PRC or Hong Kong,due to interventions in orthe imposition of restrictions and limitations by the PRC government to the transfer of cash orassets.PRC laws and regulations governing our current business operations are som

241、etimesvague and uncertain and any changes in such laws and regulations may impair ourability to operate profitably.There are substantial uncertainties regarding the interpretation and application of PRC lawsand regulations including,but not limited to,the laws and regulations governing our businessa

242、nd the enforcement and performance of our arrangements with customers in certaincircumstances.The laws and regulations are sometimes vague and may be subject to futurechanges,and their official interpretation and enforcement may involve substantial uncertainty.The effectiveness and interpretation of

243、 newly enacted laws or regulations,includingamendments to existing laws and regulations,may be delayed,and our business may beaffected if we rely on laws and regulations which are subsequently adopted or interpreted in amanner different from our understanding of these laws and regulations.New laws a

244、ndregulations that affect existing and proposed future businesses may also be appliedretroactively.We cannot predict what effect the interpretation of existing or new PRC laws orregulations may have on our business.Substantial uncertainties exist with respect to the enactment timetable and final con

245、tentof draft China Foreign Investment Law and how it may impact the viability of ourcurrent corporate structure,corporate governance and business operations.The MOFCOM published a discussion draft of the proposed Foreign Investment Law inJanuary 2015(the“Draft FIL”).The Draft FIL embodies an expecte

246、d Chinese regulatory trendto rationalize its foreign investment regulatory regime in line with prevailing internationalpractice and the legislative efforts to unify the corporate legal requirements for both foreignand domestic investments.Among other things,the Draft FIL expands the definition of fo

247、reign investment andintroduces the principle of“actual control”in determining whether a company is considered aforeign-invested enterprise(“FIE”).The Draft FIL specifically provides that entitiesestablished in China but“controlled”by foreign investors will be treated as FIEs,whereas anentity set up

248、in a foreign jurisdiction would nonetheless be,upon market entry clearance,treated as a Chinese domestic investor provided that the entity is“controlled”by Chineseentities and/or citizens.Once an entity is determined to be an FIE,it will be subject to theforeign investment restrictions or prohibitio

249、ns set forth in a Negative List to be separatelyissued by the State Council later.Unless the underlying business of the FIE falls within theNegative List,which calls for market entry clearance,prior approval from the governmentauthorities as mandated by the existing foreign investment legal regime w

250、ould no longer berequired for establishment of the FIE.16 On December 27,2021,the NDRC and MOFCOM,jointly issued the Special AdministrativeMeasures for Entry of Foreign Investment(Negative List)(2021 Version),or the NegativeList,which became effective and replaced the previous version on January 1,2

251、022.Pursuantto the Negative List,if a PRC company,which engages in any business where foreigninvestment is prohibited under the Negative List,or prohibited businesses,seeks an overseasoffering or listing,it must obtain the approval from competent governmental authorities.Based on a set of Q&A publis

252、hed on the NDRCs official website,a NDRC official indicatedthat after a PRC company submits its application for overseas listing to the CSRC and wherematters relating to prohibited businesses under the Negative List are implicated,the CSRCwill consult the regulatory authorities having jurisdiction o

253、ver the relevant industries andfields.There are uncertainties under the PRC laws relating to the procedures for U.S.regulators to investigate and collect evidence from companies located in the PRC.According to Article 177 of the newly amended PRC Securities Law which became effectivein March 2020(th

254、e“Article 177”),the securities regulatory authority of the PRC StateCouncil may collaborate with securities regulatory authorities of other countries or regions inorder to monitor and oversee cross border securities activities.Article 177 further providesthat overseas securities regulatory authoriti

255、es are not allowed to carry out investigation andevidence collection directly within the territory of the PRC,and that any Chinese entities andindividuals are not allowed to provide documents or materials related to securities businessactivities to overseas agencies without prior consent of the secu

256、rities regulatory authority ofthe PRC State Council and the competent departments of the PRC State Council.Our principal business operation is conducted in the PRC.In the event that the U.S.regulatorscarry out investigation on us and there is a need to conduct investigation or collect evidencewithin

257、 the territory of the PRC,the U.S.regulators may not be able to carry out suchinvestigation or evidence collection directly in the PRC under the PRC laws.The U.S.regulators may consider cross-border cooperation with securities regulatory authority of thePRC by way of judicial assistance,diplomatic c

258、hannels or regulatory cooperation mechanismestablished with the securities regulatory authority of the PRC.We rely on dividends,loans and other distributions on equity paid by our PRCsubsidiaries to fund any cash and financing requirements we may have.Any limitationon the ability of our PRC subsidia

259、ries to make loans or payments to us could have amaterial adverse effect on our ability to conduct our business.We are a holding company and rely on dividends,loans and other distributions on equity paidby our PRC subsidiaries for our cash and financing requirements,including the fundsnecessary to p

260、ay dividends and other cash distributions to our shareholders and service anydebt or pay any expense we may incur.In the event that our PRC subsidiaries incur debt ontheir own behalf in the future,the instruments governing the debt may restrict their ability topay dividends or make other distributio

261、ns to us.In addition,the PRC tax authorities mayrequire our PRC subsidiaries to adjust their taxable income in a manner that would materiallyand adversely affect their ability to pay dividends and other distributions to us.Under PRC laws and regulations,our PRC subsidiaries,as wholly foreign-owned e

262、nterprisesin China,may pay dividends only out of their respective accumulated after-tax profits asdetermined in accordance with PRC accounting standards and regulations.In addition,awholly foreign-owned enterprise is required to set aside at least 10%of its accumulated after-tax profits each year,if

263、 any,to fund certain statutory reserve funds until the aggregate amountof such funds reaches 50%of its registered capital.At its discretion,a wholly foreign-ownedenterprise may allocate a portion of its after-tax profits based on PRC accounting standards tostaff welfare and bonus funds.These reserve

264、 funds and staff welfare and bonus funds are notdistributable as cash dividends 17 Under existing PRC foreign exchange regulations,payment of current account items,such asprofit distributions and trade and service-related foreign exchange transactions,can be madein foreign currencies without prior a

265、pproval from the State Administration of ForeignExchange,or the SAFE,by complying with certain procedural requirements.Therefore,ourPRC subsidiaries are able to pay dividends in foreign currencies to us without prior approvalfrom SAFE,subject to the condition that the remittance of such dividends ou

266、tside of the PRCcomplies with certain procedures under PRC foreign exchange regulations,such as theoverseas investment registrations by our shareholders or the ultimate shareholders of ourcorporate shareholders who are PRC residents.Approval from,or registration with,appropriate government authoriti

267、es is,however,required where the RMB is to be convertedinto foreign currency and remitted out of China to pay capital expenses such as the repaymentof loans denominated in foreign currencies.The PRC government may also at its discretionrestrict access in the future to foreign currencies for current

268、account transactions.Current PRCregulations permit our PRC subsidiaries to pay dividends to the Company only out of theiraccumulated profits,if any,determined in accordance with Chinese accounting standards andregulations.In response to the persistent capital outflow and the Renminbis depreciationag

269、ainst the U.S.dollar in the fourth quarter of 2016,the Peoples Bank of China and the StateAdministration of Foreign Exchange,or SAFE,have implemented a series of capital controlmeasures,including stricter vetting procedures for China-based companies to remit foreigncurrency for overseas acquisitions

270、,dividend payments,and shareholder loan repayments.ThePRC government may continue to strengthen its capital controls,and our PRC subsidiariesdividends and other distributions may be subjected to tighter scrutiny in the future.Anylimitation on the ability of our PRC subsidiaries to pay dividends or m

271、ake other distributionsto us could materially and adversely limit our ability to grow,make investments oracquisitions that could be beneficial to our business,pay dividends,or otherwise fund andconduct our business.PRC regulation of loans to,and direct investments in,PRC entities by offshore holding

272、companies may delay or prevent us from making loans or additional capitalcontributions to our PRC operating subsidiaries and thereby prevent us from fundingour business.As an offshore holding company with PRC subsidiaries,we may transfer funds to our PRCsubsidiaries by means of loans or capital cont

273、ributions.Any loans to these PRC subsidiaries,which are foreign-invested enterprises,cannot exceed statutory limits based on the differencebetween the amount of our investments and registered capital in such subsidiaries,and shallbe registered with SAFE,or its local counterparts.Furthermore,any capi

274、tal increasecontributions we make to our PRC subsidiaries,which are foreign-invested enterprises,shallbe approved by MOFCOM,or its local counterparts.We may not be able to obtain thesegovernment registrations or approvals on a timely basis,if at all.If we fail to receive suchregistrations or approva

275、ls,our ability to provide loans or capital to increase contributions toour PRC subsidiaries may be negatively affected,which could adversely affect their liquidityand our ability to fund and expand their business.PRC regulations relating to the establishment of offshore special purpose vehicles byPR

276、C residents may subject our PRC-resident beneficial owners or our PRC subsidiariesto liability or penalties,limit our ability to make capital contributions into our PRCsubsidiaries,limit our PRC subsidiaries ability to distribute profits to us,or otherwiseadversely affect our financial position.Unde

277、r several regulations promulgated by SAFE,PRC residents and PRC corporate entitiesare required to register with and obtain approval from local branches of SAFE or designatedqualified foreign exchange banks in mainland China in connection with their direct or indirectoffshore investment activities.In

278、 addition,any PRC resident who is a direct or indirectshareholder of an offshore company is required to update the previously filed registration withthe local branch of SAFE,with respect to any material change involving that offshorecompany,such as an increase or decrease in capital,transfer or swap

279、 of shares,merger ordivision.These regulations apply to all direct and indirect shareholders and beneficial ownersof our company who are PRC residents,or PRC-Resident Shareholders,and may apply to anyoffshore acquisitions that we make in the future.To the best of our knowledge,as of the dateof this

280、prospectus,each of our principal shareholders who is required to make the foreignexchange registration under SAFE Circular 37 had completed such registration.However,wemay not at all times be fully aware or informed of the identities of all the PRC residentsholding direct or indirect interests in ou

281、r company,and we cannot assure you that all of ourshareholders and beneficial owners who are PRC residents will comply with these foreignexchange regulations.If any PRC-Resident Shareholder fails to make the required registration or update a previouslyfiled registration,our PRC subsidiaries may be p

282、rohibited from distributing their profits andproceeds from any reduction in capital,share transfer or liquidation to us,and we may also beprohibited from injecting additional capital into our PRC subsidiaries.Moreover,failure tocomply with the various foreign exchange registration requirements descr

283、ibed above couldresult in liability on the related PRC-Resident shareholder or our PRC subsidiaries under thePRC laws for evasion of applicable foreign exchange restrictions.18 Governmental control of currency conversion may limit our ability to utilize our netrevenues effectively and affect the val

284、ue of your investment.The PRC government imposes controls on the convertibility of the RMB into foreigncurrencies and,in certain cases,the remittance of currency out of China.We receivesubstantially all of our net revenues in RMB.Under our current corporate structure,ourcompany in the British Virgin

285、 Islands may rely on dividend payments from our PRCsubsidiaries to fund any cash and financing requirements we may have.Under existing PRCforeign exchange regulations,payments of current account items,such as profit distributionsand trade and service-related foreign exchange transactions,can be made

286、 in foreign currencieswithout prior approval from SAFE by complying with certain procedural requirements.Therefore,our PRC subsidiaries are able to pay dividends in foreign currencies to us withoutprior approval from SAFE,subject to the condition that the remittance of such dividendsoutside of the P

287、RC complies with certain procedures under PRC foreign exchange regulation,such as the overseas investment registrations by the beneficial owners of our company whoare PRC residents.But approval from or registration with appropriate government authoritiesis required where RMB is converted into foreig

288、n currency and remitted out of China to paycapital expenses such as the repayment of loans denominated in foreign currencies.In light of Chinas flood of capital outflows in 2016 due to the weakening RMB,the PRCgovernment has imposed more restrictive foreign exchange policies and stepped up scrutiny

289、ofmajor outbound capital movements.More restrictions and a substantial vetting process are putin place by SAFE to regulate cross-border transactions falling under the capital account.ThePRC government may also,at its discretion,restrict access in the future to foreign currenciesfor current account t

290、ransactions.In the event that the foreign exchange control systemprevents us from obtaining sufficient foreign currencies to satisfy our foreign currencydemands,we may not be able to pay dividends in foreign currencies to our shareholders.We must remit the offering proceeds to PRC before they may be

291、 used to benefit ourbusiness in the PRC,and this process may take several months.The proceeds of this offering must be sent back to the PRC,and the process for sending suchproceeds back to the PRC may take several months after the closing of this offering.We maybe unable to use these proceeds to gro

292、w our business until we receive such proceeds in thePRC.To remit the offering proceeds to the PRC,we will take the following actions:First,we will open a special foreign exchange account for capital account transactions.Toopen this account,we must submit to State Administration for Foreign Exchange(

293、“SAFE”)certain application forms,identity documents,transaction documents,a form of foreignexchange registration of overseas investments by domestic residents,and foreign exchangeregistration certificate of the invested company.Second,we will remit the offering proceeds into this special foreign exc

294、hange account.Third,we will apply for settlement of the foreign exchange.To do so,we must submit toSAFE certain application forms,identity documents,payment order to a designated person,and a tax certificate.The timing of the process is difficult to estimate because the efficiencies of different SAF

295、Ebranches can vary materially.Ordinarily,the process takes several months to complete but isrequired by law to be accomplished within 180 days of application.Until the abovementionedapprovals,the proceeds of this offering will be maintained in an interest-bearing accountmaintained by us in the Unite

296、d States.Some of our shareholders are not in compliance with the PRCs regulations relating tooffshore investment activities by PRC residents,and as a result,the shareholders may besubject to penalties if we are not able to remediate the non-compliance.In July 2014,the State Administration of Foreign

297、 Exchange promulgated the Circular onIssues Concerning Foreign Exchange Administration over the Overseas Investment andFinancing and Roundtrip Investment by Domestic Residents via Special Purpose Vehicles,or“Circular 37”.According to Circular 37,prior registration with the local SAFE branch isrequir

298、ed for Chinese residents to contribute domestic assets or interests to offshore companies,known as SPVs.Circular 37 further requires amendment to a PRC residents registration inthe event of any significant changes with respect to the SPV,such as an increase or decrease inthe capital contributed by P

299、RC individuals,share transfer or exchange,merger,division,orother material event.Further,foreign investment enterprises established by way of round-tripping shall complete the relevant foreign exchange registration formalities pursuant to theprevailing foreign exchange control provisions for direct

300、investments by foreign investors,anddisclose the relevant information such as actual controlling party of the shareholderstruthfully.19 Currently,some of our shareholders have completed Circular 37 Registration and are incompliance.Some of our beneficial owners,who are PRC residents,have not complet

301、ed theCircular 37 Registration.All our significant shareholders,directors and officers havecompleted Circular 37 Registration.We have asked our shareholders who are Chineseresidents to make the necessary applications and filings as required by Circular 37.Weattempt to comply,and attempt to ensure th

302、at our shareholders who are subject to these rulescomply,with the relevant requirements.We cannot,however,provide any assurances that allof our and future shareholders who are Chinese residents will comply with our request tomake or obtain any applicable registration or comply with other requirement

303、s required byCircular 37 or other related rules.The Chinese resident shareholders failure to comply withCircular 37 registration may result in restrictions being imposed on part of foreign exchangeactivities of the offshore special purpose vehicles,including restrictions on its ability toreceive reg

304、istered capital as well as additional capital from Chinese resident shareholders whofail to complete Circular 37 registration;and repatriation of profits and dividends derivedfrom special purpose vehicles to China,by the Chinese resident shareholders who fail tocomplete Circular 37 registration,are

305、also illegal.In addition,the failure of the Chineseresident shareholders to complete Circular 37 registration may subject each of theshareholders to fines less than RMB50,000.We cannot assure you that each of our Chineseresident shareholders will in the future complete the registration process as re

306、quired byCircular 37.Failure to make adequate contributions to various employee benefit plans required byPRC regulations may subject us to penalties.We are required under PRC laws and regulations to participate in various government-sponsored employee benefit plans,including certain social insurance

307、,housing funds,and otherwelfare-oriented payment obligations,and contribute to the plans in amounts equal to certainpercentages of salaries,including bonuses and allowances,of our employees up to amaximum amount specified by the local government from time to time at locations where weoperate our bus

308、inesses.The requirement of employee benefit plans has not been implementedconsistently by the local governments in China,given the different levels of economicdevelopment in different locations.In the event that the local governments deem ourcontribution to be not sufficient,we may be subject to lat

309、e contribution fees or fines inrelation to any underpaid employee benefits,and our financial condition and results ofoperations may be adversely affected.According to the Interim Regulations on the Collection and Payment of Social InsurancePremiums,the Regulations on Work Injury Insurance,the Regula

310、tions on UnemploymentInsurance and the Trial Measures on Employee Maternity Insurance of Enterprises,enterprisesin the PRC shall provide benefit plans for their employees,which include basic pensioninsurance,unemployment insurance,maternity insurance,work injury insurance and basicmedical insurance.

311、An enterprise must provide social insurance by making social insuranceregistration with local social insurance agencies,and shall pay or withhold relevant socialinsurance premiums for and on behalf of employees.The Law on Social Insurance of thePRC,which was promulgated by the SCNPC on October 28,20

312、10,became effective onJuly 1,2011,and was most recently updated on December 29,2018,has consolidatedpertinent provisions for basic pension insurance,unemployment insurance,maternityinsurance,work injury insurance and basic medical insurance,and has elaborated in detail thelegal obligations and liabi

313、lities of employers who do not comply with laws and regulations onsocial insurance.According to the Regulations on the Administration of Housing Provident Fund,which waspromulgated by the State Counsel and became effective on April 3,1999,and was amendedon March 24,2002 and was partially revised on

314、March 24,2019 by the Decision of the StateCouncil on Revising Some Administrative Regulations(Decree No.710 of the State Council),housing provident fund contributions by an individual employee and housing provident fundcontributions by his or her employer shall belong to the individual employee.Regi

315、stration byPRC companies with the applicable housing provident fund management center iscompulsory,and a special housing provident fund account for each of the employees shall beopened at an entrusted bank.20 The government supervision of social insurance policy has not been implemented consistently

316、by the local governments in China given the different levels of economic development indifferent locations.According to the Social Insurance Law of the Peoples Republic of China,we may be ordered to pay the outstanding social insurance contributions within a prescribeddeadline and liable for a late

317、payment fee equal to 0.05%of the outstanding amount for eachday of delay,in addition to a fine a fine ranging from RMB 10,000 to RMB 50,000.Furthermore,we may be liable for a fine of one to three times the amount of the outstandingcontributions,provided that we still fail to pay the outstanding soci

318、al insurance contributionswithin the prescribed deadline.In addition,according to the Regulations on the Administrationof Housing Provident Fund,we may be ordered by the Housing Accumulation FundManagement Center to deposit the outstanding funds within a time limit.If we fail to depositsuch amounts

319、within the time limit,the Center may petition a peoples court to enforce thepayment.Additionally,the standard for fine imposition has become highly discretional for thelocal government to decide whether to enforce compliance with the employee social fundregulations,if at all.As of the date of the pr

320、ospectus,given that(i)the requirement of socialinsurance and housing fund has not been implemented consistently by the local governmentsin China given the different levels of economic development in different locations;(ii)pursuant to the Emergency Notice on Practicing Principles of the State Counci

321、l ExecutiveMeeting and Stabilizing Work on Collecting Social Insurance Premiums promulgated by theMinistry of Human Resources and Social Security on September 21,2018,local authoritiesare prohibited from recovering unpaid social insurance premiums from enterprises;(iii)as ofthe date of this Prospect

322、us,the Company had not received any notice or order from therelevant government authorities requesting us to pay the social insurance premiums or housingfunds in full;(iv)as of the date of this Prospectus,the Company had not received anycomplaint or report on outstanding social insurance premiums or

323、 housing funds,nor had themhad any labor dispute or lawsuit with their employees on payments of social insurancepremiums or housing provident fund;and(v)the Company had not been subject to anyadministrative penalties,the Company has not made any provisions in connection with theshortfall of its soci

324、al insurance contribution and housing provident funds for the year endedDecember 31,2021.Furthermore,as of the date of the prospectus,we are not aware of anyaction,claim,investigation or penalties being conducted or threatened by any governmentauthorities.However,if we are fined or otherwise penaliz

325、ed by government authorities due toour failure to adequately pay social insurance and housing provident fund contributions forour employees,our financial condition may be negatively impacted.The M&A Rules and certain other PRC regulations establish complex procedures forsome acquisitions of Chinese

326、companies by foreign investors,making it more difficult forus to pursue growth through acquisitions in China.The Regulations on Mergers and Acquisitions of Domestic Companies by Foreign Investors,or the M&A Rules,adopted by six PRC regulatory agencies in August 2006 and amended in2009,and some other

327、 regulations and rules concerning mergers and acquisitions establishedadditional procedures and requirements that could make merger and acquisition activities byforeign investors more time consuming and complex,including requirements in someinstances that the MOC be notified in advance of any change

328、-of-control transaction in which aforeign investor takes control of a PRC domestic enterprise.Moreover,the Anti-MonopolyLaw requires that the MOC shall be notified in advance of any concentration of undertaking ifcertain thresholds are triggered.In addition,the security review rules issued by the MO

329、C thatbecame effective in September 2011 specify that mergers and acquisitions by foreign investorsthat raise“national defense and security”concerns and mergers and acquisitions throughwhich foreign investors may acquire de facto control over domestic enterprises that raise“national security”concern

330、s are subject to strict review by the MOC,and the rules prohibitany activities attempting to bypass a security review,including by structuring the transactionthrough a proxy or contractual control arrangement.In the future,we may grow our businessby acquiring complementary businesses.Complying with

331、the requirements of the above-mentioned regulations and other relevant rules to complete such transactions could be time-consuming,and any required approval processes,including obtaining approval from the MOCor its local counterparts,may delay or inhibit our ability to complete such transactions,whi

332、chcould affect our ability to expand our business or maintain our market share.PRC regulations relating to offshore investment activities by PRC residents may limitour PRC subsidiaries ability to increase their registered capital or distribute profits tous or otherwise expose us or our PRC resident

333、beneficial owners to liability and penaltiesunder PRC law.SAFE promulgated the Circular on Relevant Issues Relating to Domestic ResidentsInvestment and Financing and Roundtrip Investment through Special Purpose Vehicles,orSAFE Circular 37,in July 2014 that requires PRC residents or entities to register with SAFEor its local branch in connection with their establishment or control of an offshore en