INCOME TAX EXPENSES (Tables)
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12 Months Ended |
Dec. 31, 2024 |
INCOME TAX EXPENSES |
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Schedule of current and deferred components of income taxes |
| | | | | | | | | Year ended December 31, | | | 2022 | | 2023 | | 2024 | | | RMB | | RMB | | RMB | Current tax expenses | | 3,527 | | 11,544 | | 21,686 | Deferred tax (benefit) expenses | | (3,974) | | 2,044 | | (4,773) | Income tax (benefit) expenses | | (447) | | 13,588 | | 16,913 |
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Schedule of reconciliation between income tax expenses computed by applying PRC enterprise tax rate before income taxes and actual provision |
| | | | | | | | | Year ended December 31, | | | 2022 | | 2023 | | 2024 | | | RMB | | RMB | | RMB | Income from operations in the PRC | | 65,920 | | 126,692 | | 177,311 | Income (loss) from overseas entities | | 1,731 | | 3,371 | | (15,713) | Income before income tax | | 67,651 | | 130,063 | | 161,598 | Tax expense at PRC enterprise income tax rate of 25% | | 16,913 | | 32,515 | | 40,400 | Income tax on tax holiday(1) | | (8,062) | | (14,952) | | (20,298) | Tax effect of permanent differences(2) | | (19,183) | | (12,860) | | (13,572) | Change in valuation allowance(3) | | 8,979 | | 11,494 | | 8,227 | Effect of share-based compensation | | 2,934 | | 16 | | 2,467 | Effect of income tax in jurisdictions other than the PRC | | (2,028) | | (2,625) | | (311) | Income tax expenses (benefit) | | (447) | | 13,588 | | 16,913 |
| (1) | The income tax on tax holidays represents the effect of preferential income tax rate enjoyed by Guangdong Lizi and Yunmi Hulian. Guangdong Lizi applied for HNTE qualification renewal in 2023. It entitled to enjoy the preferential tax rate of 15% as an HNTE for three years starting from 2023 and should apply for HNTE qualification renewal in 2026. Yunmi Hulian applied for the HNTE qualification and obtained approval in December 2021. It is entitled to enjoy the preferential tax rate of 15% as an HNTE for three years starting from 2022, and its HNTE status ceased at the ended of 2023. |
| (2) | The permanent book-tax differences mainly consisted of R&D super deductions. |
| (3) | Valuation allowance is provided against deferred tax assets when the Group determines that it is more likely than not that the deferred tax assets will not be utilized in the future. In making such determination, the Group considered factors including future taxable income exclusive of reversing temporary differences and tax loss carry forwards. Valuation allowance for the years ended December 31, 2022, 2023, and 2024 were provided for net operating loss carry forward of certain group entities which reported loss because it was more likely than not that such deferred tax assets would not be realized based on the Group’s estimate of their future taxable income. If events occur in the future that allow the Group to realize more of its deferred income tax than the presently recorded amounts, an adjustment to the valuation allowances will result in a decrease in tax expense when those events occur. |
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Schedule of per share effect of tax holidays |
| | | | | | | | | Year ended December 31, | | | 2022 | | 2023 | | 2024 | | | RMB | | RMB | | RMB | Net income per share effect – basic | | 0.04 | | 0.07 | | 0.10 | Net income per share effect – diluted | | 0.04 | | 0.07 | | 0.10 |
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Schedule of significant components of deferred tax assets |
| | | | | | | As of December 31, | | | 2023 | | 2024 | | | RMB | | RMB | Accrued expenses and others | | 4,754 | | 9,363 | Net operating loss carry forwards | | 30,356 | | 39,905 | Inventories write downs | | 1,593 | | 388 | Deferred income | | 74 | | 74 | Total deferred tax assets | | 36,777 | | 49,730 | Less: valuation allowance | | (31,852) | | (40,032) | Deferred tax assets, net | | 4,925 | | 9,698 |
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Schedule of movement of valuation allowance |
| | | | | | | | | Year ended December 31, | | | 2022 | | 2023 | | 2024 | | | RMB | | RMB | | RMB | Balance at beginning of the year | | 11,379 | | 20,358 | | 31,852 | Provided | | 8,979 | | 11,494 | | 8,180 | Balance at end of the year | | 20,358 | | 31,852 | | 40,032 |
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