Taxation (Tables)
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12 Months Ended |
Dec. 31, 2025 |
| Taxation |
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| Schedule of current and deferred portions of income tax expense |
| | | | | | | | | For the year ended December 31, | | | 2023 | | 2024 | | 2025 | | | RMB | | RMB | | RMB | Current income tax expense | | 269 | | 828 | | 4,044 | Deferred income tax expense | | 22 | | 24,740 | | 97,127 | Income tax expense | | 291 | | 25,568 | | 101,171 |
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| Schedule of reconciliation between the income tax expense computed by applying the Enterprise Income Tax ("EIT") rate to income before income taxes and actual provision |
| | | | | | | | For the year ended December 31, 2025 | | | | RMB | | % | | | | | | | | Income tax expenses at PRC statutory income tax rate-25% (i) | | 352,178 | | 25.0 | % | Foreign tax effects | | 3,111 | | 0.2 | % | Nontaxable or nondeductible items: | | (377,892) | | (26.8) | % | -Preferential income tax rate | | (377,941) | | (26.8) | % | -Additional deduction for research and development expenses | | (2,240) | | (0.2) | % | -Share-based payment awards | | 1,004 | | 0.1 | % | -Others | | 1,285 | | 0.1 | % | Changes in valuation allowances | | (6,226) | | (0.4) | % | Withholding income tax | | 130,000 | | 9.2 | % | Income tax expense | | 101,171 | | 7.2 | % |
(i) | The PRC statutory income tax rate is used for the reconciliation as the majority of the Group’s operations are based in the PRC. |
| | | | | | | For the year ended December 31, | | | 2023 | | 2024 | | | RMB | | RMB | Income before income tax | | 205,477 | | 891,414 | | | | | | Tax expense at EIT tax rate of 25% | | 51,369 | | 222,854 | Effect of different tax rates applicable to different subsidiaries of the Group | | (12,845) | | (243,520) | Effect of additional deduction for qualified research and development expenses | | (16,323) | | (6,075) | Effect on deferred tax assets due to change in tax rates(ii) | | — | | 64,030 | Non-deductible expenses | | 5,891 | | 1,539 | Changes in valuation allowance | | (27,801) | | (13,260) | Income tax expense | | 291 | | 25,568 |
(ii) | Yuanbao Kechuang was granted Software Enterprise status in 2024, entitling it to income tax exemption for the year ended December 31, 2024. This status is subject to annual review and approval by the relevant authorities. Consequently, the income tax rates for Yuanbao Kechuang for the years ended December 31, 2023, 2024, and 2025 were 15%, 0%, and 0%, respectively. This change in tax rates resulted in an “effect on deferred tax assets due to change in tax rates” for the year ended December 31, 2024. |
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| Schedule of effect on deferred tax assets and deferred tax liabilities due to change in tax rates |
| | | | | | | December 31, 2024 | | December 31, 2025 | | | RMB | | RMB | Deferred tax assets | | | | | Advertising expenses (iii) | | 2,707 | | 4,337 | Accumulated losses carryforward | | 27,654 | | 32,052 | Operating lease liabilities | | 3,487 | | 899 | Book/tax basis differences in revenue | | 18,377 | | 29,370 | Others | | 4,417 | | 9,279 | Less: valuation allowance | | (44,087) | | (38,169) | Deferred tax assets before offset | | 12,555 | | 37,768 | Offset by deferred tax liabilities | | (5,619) | | (4,431) | Net deferred tax assets | | 6,936 | | 33,337 | | | | | | Deferred tax liabilities | | | | | Accrued interest and fair value change | | 460 | | 2,672 | Operating lease right-of-use assets | | 3,079 | | 1,016 | Book/tax basis differences in revenue | | 33,777 | | 25,968 | Acquired intangible assets | | 14,333 | | 14,476 | Withholding tax | | — | | 130,000 | Deferred tax liabilities before offset | | 51,649 | | 174,132 | Offset by deferred tax assets | | (5,619) | | (4,431) | Net deferred tax liabilities | | 46,030 | | 169,701 |
(iii) | The pre-tax deduction limitation for advertising expense is 15% of revenue every year. The Group can carryforward any unclaimed advertising expense to the future years and there is no limitation for the use in future years. |
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| Schedule of of valuation allowance |
| | | | | | | For the year ended December 31, | | | 2024 | | 2025 | | | RMB | | RMB | Balance at the beginning of the year | | 57,347 | | 44,087 | Additions | | 34,467 | | 8,462 | Reversals | | (47,727) | | (14,380) | Balance at the end of the year | | 44,087 | | 38,169 |
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