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/F-1 1 tm228516-21_f1.htm F-1TABLE OF CONTENTSAs filed with the Securities and Exchange Commission on March 7,2023Registration No.333-SECURITIES AND EXCHANGE COMMISSIONWASHINGTON,D.C.20549 FORM F-1REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ZKH Group Limited(Exact name of Registrant as specified in its charter)Not Applicable(Translation of Registrants name into English)Cayman Islands(State or other jurisdiction of incorporation or organization)5200(Primary Standard Industrial Classification Code Number)Not Applicable(I.R.S.Employer Identification Number)7/F,Tower 4,Libao Plaza,No.36 Shenbin Road Minhang District,Shanghai 201106 Peoples Republic of China 86(21)5080-9696(Address,including zip code,and telephone number,including area code,of Registrants principal executive offices)Cogency Global Inc.112 East 42nd Street,18th Floor New York,NY 10168(800)221-0102(Name,address,including zip code,and telephone number,including area code,of agent for service)Copies to:Haiping Li,Esq.Skadden,Arps,Slate,Meagher&Flom LLP JingAn Kerry Center,Tower II,46/F 1539 Nanjing West Road Shanghai,the Peoples Republic of China 86 21-6193-8200 Brian V.Breheny,Esq.Skadden,Arps,Slate,Meagher&Flom LLP 1440 New York Avenue,N.W.Washington,D.C.20005(202)371-7180 David T.Zhang,Esq.Mengyu Lu,Esq.Steve Lin,Esq.Ethan Yuxin Chen,Esq.Kirkland&Ellis LLP c/o 26th Floor,Gloucester Tower The Landmark 15 Queens Road Central Hong Kong 852 3761-3300 Approximate date of commencement of proposed sale to the public:as soon as practicable after the effective date of this registration statement.If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 underthe Securities Act of 1933,check the following box.If this Form is filed to register additional securities for an offering pursuant to Rule 462(b)under the Securities Act,check the followingbox and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.If this Form is a post-effective amendment filed pursuant to Rule 462(c)under the Securities Act,check the following box and list theSecurities Act registration statement number of the earlier effective registration statement for the same offering.If this Form is a post-effective amendment filed pursuant to Rule 462(d)under the Securities Act,check the following box and list theSecurities Act registration statement number of the earlier effective registration statement for the same offering.Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.Emerging growth company If an emerging growth company that prepares its financial statements in accordance with U.S.GAAP,indicate by check mark if theregistrant has elected not to use the extended transition period for complying with any new or revised financial accounting standardsprovided pursuant to Section 7(a)(2)(B)of the Securities Act.The term“new or revised financial accounting standard”refers to any update issued by the Financial Accounting Standards Board toits Accounting Standards Codification after April 5,2012.The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effectivedate until the Registrant files a further amendment which specifically states that this Registration Statement will thereafterbecome effective in accordance with Section 8(a)of the Securities Act of 1933 or until the Registration Statement becomeeffective on such date as the Securities and Exchange Commission,acting pursuant to said Section 8(a),may determine./TABLE OF CONTENTSPRELIMINARY PROSPECTUS(Subject to Completion)Dated,2023.American Depositary SharesZKH Group LimitedRepresenting Class A Ordinary SharesThis is an initial public offering of American depositary shares,or ADSs,of ZKH Group Limited.ZKH Group Limited isoffering American depositary shares,or ADSs.Each ADS represents of the Class A ordinary shares of ZKHGroup Limited,par value US$0.0000001 per share.Prior to this offering,there has been no public market for the ADSs or the Class A ordinary shares of ZKH Group Limited.We anticipate that the initial public offering price will be between US$and US$per ADS.We intend to apply for the listing of the ADSs on the New York Stock Exchange under the symbol“ZKH.”Following the completion of this offering,our issued and outstanding share capital will consist of Class A ordinary shares andClass B ordinary shares,and we will be a“controlled company”as defined under the NYSE corporate governance listingstandards because Mr.Long Chen,our chairman of board of directors and chief executive officer,holds at least 50%of our totalvoting power.Holders of Class A ordinary shares and Class B ordinary shares have the same rights except for voting andconversion rights.Each Class A ordinary share is entitled to one vote per share,while each Class B ordinary share is entitled to25 votes per share.Holders of Class A and Class B ordinary shares will vote together as one class on all matters that require ashareholders vote.Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof,while each Class A ordinary shares is not convertible into Class B ordinary shares under any circumstance.See“Description ofShare Capital.”Following the completion of this offering,certain executive officers,an employee and an employee shareholdingplatform of our company(collectively,the“Management Shareholders”)will beneficially own all of our issued Class B ordinaryshares.Mr.Long Chen,will beneficially own%of our total ordinary shares on an as-converted basis and%of theaggregate voting power,assuming the underwriters do not exercise their option to purchase additional ADSs.The ManagementShareholders,as a group,will beneficially own%of our total ordinary shares on an as-converted basis and%of theaggregate voting power,assuming the underwriters do not exercise their option to purchase additional ADSs.Each of theshareholding entities of the Management Shareholders other than Mr.Long Chen will execute an irrevocable proxy and power ofattorney,pursuant to which the voting rights of all Class B ordinary shares held by it will be irrevocably and fully delegated toMr.Long Chen.See“Principal Shareholders.”We are an“emerging growth company”under applicable U.S.federal securities laws and are eligible for reduced publiccompany reporting requirements.Investing in the ADSs involves risks.See“Risk Factors”beginning on page 21 for additional information and factors youshould consider before buying the ADSs.ZKH Group Limited is not a Chinese operating company but a Cayman Islands holding company with operations primarilyconducted through our PRC subsidiaries.Under this holding company structure,investors in the ADSs are purchasing equityinterests in the Cayman Islands holding company and obtaining indirect ownership interests in the Chinese operating companies.While we do not operate in an industry that is currently subject to foreign ownership limitations in China,PRC regulatoryauthorities could decide to limit foreign ownership in our industry in the future,in which case there could be a risk that we wouldbe unable to do business in China as we are currently structured.In such event,despite our efforts to restructure to comply withthe then applicable PRC laws and regulations in order to continue our operations in China,we may experience material changesin our business and results of operations,our attempts may prove to be futile due to factors beyond our control,and the value ofthe ADSs you invest in may significantly decline or become worthless.See“Risk FactorsRisks Related to Doing Business inChinaUncertainties exist with respect to how the PRC Foreign Investment Law may impact the viability of our current corporatestructure and operations.”We face various legal and operational risks and uncertainties associated with being based in or having the majority of ouroperations in China and the complex and evolving PRC laws and regulations.For example,we face risks associated withregulatory approvals on offerings conducted overseas by and foreign investment in China-based issuers,anti-monopolyregulatory actions,oversight on cybersecurity,data privacy and personal information.These risks could result in a materialadverse change in our operations and the value of the ADSs of ZKH Group Limited,significantly limit or completely hinder ZKHGroup Limiteds ability to continue to offer securities to investors,or cause the value of such securities to significantly decline orbe of little or no value.For a detailed description of risks related to doing business in China,please refer to risks disclosed under“Risk FactorsRisks Related to Doing Business in China.”On December 16,2021,the PCAOB issued its report notifying the SEC of its determination that it was unable to inspect orinvestigate completely registered public accounting firms headquartered in mainland China or Hong Kong,including our auditor.Under the Holding Foreign Companies Accountable Act,or the HFCAA,if the SEC determines that we have filed audit reportsissued by a registered public accounting firm that has not been subject to inspection by the PCAOB for two consecutive years,the SEC shall prohibit our shares or ADSs from being traded on a national securities exchange or in the over the counter tradingmarket in the U.S.The delisting of our ADSs,or the threat of their being delisted,may materially and adversely affect the value ofyour investment.These risks could result in a material adverse change in our operations and the value of our ADSs,significantlylimit or completely hinder our ability to offer or continue to offer securities to investors,or cause the value of such securities tosignificantly decline or become worthless.On December 15,2022,the PCAOB issued a report that vacated its December 16,2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect orinvestigate completely registered public accounting firms.Each year,the PCAOB will determine whether it can inspect andinvestigate completely audit firms in mainland China and Hong Kong,among other jurisdictions.If the PCAOB determines in thefuture that it no longer has full access to inspect and investigate completely accounting firms in mainland China and Hong Kongand we use an accounting firm headquartered in one of these jurisdictions to issue an audit report on our financial statementsfiled with the SEC,we would be identified as a Commission-Identified Issuer following the filing of the annual report on Form 20-Ffor the relevant fiscal year.There can be no assurance that we would not be identified as a Commission-Identified Issuer for anyfuture fiscal year,and if we were so identified for two consecutive years,we would become subject to the prohibition on tradingunder the HFCAA.For more details,see“Risk FactorsRisks Related to Doing Business in China The PCAOB had historicallybeen unable to inspect our auditor in relation to their audit work”and“Risk FactorsRisks Related to Doing Business in ChinaOur ADSs may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspector investigate completely auditors located in China.The delisting of the ADSs,or the threat of their being delisted,may materiallyand adversely affect the value of your investment.”Unless otherwise indicated or the context otherwise requires,references in this prospectus to“ZKH”are to ZKH GroupLimited,our Cayman Islands holding company;“ZKH Industrial Supply”are to ZKH Industrial Supply(Shanghai)Co.,Ltd.,thewholly foreign owned subsidiary of ZKH Group Limited in China;“we,”“us,”“our company,”and“our”are to ZKH Group Limitedand its subsidiaries,including ZKH Industrial Supply and its subsidiaries;“our PRC subsidiaries”are to ZKH Industrial Supply andits subsidiaries,including but not limited to Shanghai Gongbangbang Industrial Tech Co.,Ltd.,Shanghai Kunhe Supply ChainManagement Co.,Ltd.and Shenzhen Kuntong SmartThe information in this preliminary prospectus is not complete and may be changed.ZKH Group Limited may not sell these securities until the registrationstatement filed with the Securities and Exchange Commission is effective.This preliminary prospectus is not an offer to sell these securities and ZKH GroupLimited is not soliciting offers to buy these securities in any state where the offer or sale is not permitted./(1)TABLE OF CONTENTSWarehousing Technology Co.,Ltd.Unless otherwise specified,in the context of describing our business and operations,we are referring tothe business and operations conducted by our PRC subsidiaries.ZKH Group Limited is a holding company with no material operations of its own.We conduct our operations primarily through ourPRC subsidiaries in China.As a result,ZKH Group Limiteds ability to pay dividends depends upon dividends paid by our PRCsubsidiaries.See also“Managements Discussion and Analysis of Financial Condition and Results of OperationsHolding CompanyStructure.”We have established controls and procedures for cash flows within our organization.Our fund management team is the special taskforce that manages and supervises the transfers of funds among ZKH Industrial Supply and its subsidiaries under the guidance ofCompany Fund Management System,an internal policy adopted by ZKH Industrial Supply.Under this policy,ZKH Industrial Supply isallowed to establish bilateral cash pooling programs between itself,on one hand,and its subsidiaries or branches,on the other hand,tosatisfy cash requirements in the form of entrusted loans.The fund management team closely monitors and manages the cash transfersthrough our organization by preparing monthly reports and annual budget plans.Each transfer of cash between ZKH Group Limited,ourCayman Islands holding company,and a subsidiary or branch is also subject to internal report and approval process by reference to suchpolicy.In addition,cash transfers between ZKH Group Limited,our subsidiaries,or investors shall follow the applicable PRC laws andregulations.See also“Prospectus SummaryCash Flows through Our Organization.”We undertook a corporate restructuring in order to facilitate offshore financing and listing.We refer to this restructuring in thisprospectus as the Restructuring.As part of the Restructuring,the relevant original investors exited from ZKH Industrial Supply by way ofcapital reduction and received refunds for their original investments.Each of such investors paid the same amount of refunds it received asconsideration for its subscription of the shares of ZKH Group Limited.For more details,see“Description of Share CapitalHistory ofSecurities IssuancePreferred Shares.”In addition,ZKH Group Limited has transferred to ZKH Hong Kong Limited an aggregate ofUS$833 million consisting of the proceeds from the issuance of Series F Convertible Notes and the issuance of preferred shares of ZKHGroup Limited in connection with the Restructuring,part of which was subsequently transferred by ZKH Hong Kong Limited to ZKHIndustrial Supply and Shanghai Kunshucai Supply Chain Management Co.,Ltd.for general corporate purposes and the remaining fundwas held by ZKH Hong Kong Limited.For more details about the issuance of Series F Convertible Notes,see“Description of ShareCapital History of Securities IssuancesConvertible Promissory Notes.”Apart therefrom,as of the date of this prospectus,no cash orother assets were transferred between the Cayman Islands holding company and a subsidiary,no subsidiaries paid dividends or madeother distributions to the holding company,and no dividends or distributions were paid or made to U.S.investors.See“ProspectusSummaryCash Flows through Our Organization.”We currently intend to retain most,if not all,of our available funds and any futureearnings to operate and expand our business.See“Dividend Policy.”Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated bySAFE.Our PRC subsidiaries have not paid dividends and will not be able to pay dividends until they generate accumulated profits andmeet the requirements for statutory reserve funds.For more details,see“Prospectus SummaryCash Flows through Our Organization.”For more information on related risks,see“Risk FactorsRisks Related to Doing Business in ChinaWe may rely on dividends and otherdistributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have,and any limitation on theability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business.”For PRC and United States federal income tax considerations in connection with an investment in the ADSs,see“Taxation.”In addition,our PRC subsidiaries and their subsidiaries generate their revenue primarily in Renminbi,and cash transfers from ourPRC subsidiaries to their parent companies outside of China are subject to PRC government control of currency conversion.As a result,any restriction on currency exchange may limit the ability of our PRC subsidiaries to pay dividends to ZKH Group Limited.To the extentcash or assets in the business is in the PRC or a PRC entity,the funds and assets may not be available to fund operations or for other useoutside of mainland China due to interventions in or the imposition of restrictions and limitations on the ability of ZKH or its subsidiaries bythe PRC government to transfer cash or assets.For more details,see“Risk Factors Risks Related to Doing Business in ChinaPRCregulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currencyconversion may delay or prevent us from using the proceeds of this offering to make loans or additional capital contributions to our PRCsubsidiaries in China,which could materially and adversely affect our liquidity and our ability to fund and expand our business.”PRICE US$PER ADSNeither the United States Securities and Exchange Commission nor any other regulatory body has approved ordisapproved of these securities or determined if this prospectus is truthful or complete.Any representation to the contrary is acriminal offense.Per ADS Total Initial public offering price US$US$Underwriting discounts and commissions US$US$Proceeds,before expenses,to ZKH Group Limited US$US$See“Underwriting”for additional information regarding compensation payable by us to the underwriters.ZKH Group Limited has granted the underwriters a 30-day option to purchase up to an additional ADSs at the initial public offeringless the underwriting discounts and commissions.The underwriters expect to deliver the ADSs against payment in U.S.dollars in New York,New York on or about,2023.Goldman Sachs China Renaissance The date of this prospectus is ,2023.(1)/TABLE OF CONTENTS/TABLE OF CONTENTS/TABLE OF CONTENTS/TABLE OF CONTENTS/TABLE OF CONTENTS TABLE OF CONTENTS Prospectus Summary 1 Risk Factors 21 Special Note Regarding Forward-Looking Statements 82 Use of Proceeds 84 Dividend Policy 85 Capitalization 86 Dilution 90 Enforceability of Civil Liabilities 92 Corporate History and Structure 94 Managements Discussion and Analysis of Financial Condition and Results of Operations 96 Industry 120 Business 125 Regulation 152 Management 174 Principal Shareholders 182 Related Party Transactions 185 Description of Share Capital 186 Description of American Depositary Shares 198 Shares Eligible for Future Sale 210 Taxation 212 Underwriting 218 Expenses Related to this Offering 229 Legal Matters 230 Experts 231 Where You Can Find Additional Information 232 Until,2023(the 25th day after the date of this prospectus),all dealers that effecttransactions in these ADSs,whether or not participating in this offering,may be required todeliver a prospectus.This is in addition to the dealer obligation to deliver a prospectus whenacting as an underwriter and with respect to their unsold allotments or subscriptions.You should rely only on the information contained in this prospectus or in any free writing prospectusthat we authorize to be distributed to you.We and the underwriters have not authorized anyone toprovide you with any information other than that contained in this prospectus or in any free writingprospectus prepared by or on behalf of us or to which we have referred you,and neither we,nor theunderwriters take responsibility for any other information others may give you.We are offering to sell,andseeking offers to buy the ADSs,only in jurisdictions where such offers and sales are permitted.Theinformation in this prospectus or any free writing prospectus is accurate only as of its date,regardless ofits time of delivery or the time of any sale of the ADSs.Our business,financial condition,results ofoperations and prospectus may have changed since that date.Neither we nor any of the underwriters has taken any action to permit a public offering of the ADSsoutside the United States or to permit the possession or distribution of this prospectus or any filed freewriting prospectus outside the United States.Persons outside the United States who come intopossession of this prospectus or any filed free writing prospectus must inform themselves about andobserve any restrictions relating to the offering of the ADSs and the distribution of the prospectus or anyfiled free writing prospectus outside the United States.i/TABLE OF CONTENTS Conventions that Apply to this ProspectusUnless otherwise indicated or the context otherwise requires,references in this prospectus to:“ADRs”are to the American depositary receipts that may evidence the ADSs;“ADSs”are to the American depositary shares,each of which represents Class Aordinary shares;“China”or“the PRC”are to the Peoples Republic of China,excluding,for the purposes of thisprospectus only,Hong Kong,Macau and Taiwan;“Class A ordinary shares”are to the Class A ordinary shares of ZKH Group Limited,par valueUS$0.0000001 per share;“Class B ordinary shares”are to the Class B ordinary shares of ZKH Group Limited,par valueUS$0.0000001 per share;“GBB customers”are to customers that we serve on GBB platform,which mainly include microbusinesses such as trading companies,distributors,local hardware stores,and smallbusinesses which are end users;“GMV”are to the total transaction value of orders placed on our platform and shipped tocustomers,excluding taxes,net of the returned amount.We believe that GMV,as a keyoperating metric,provides a measure of the overall volume of transactions that took place onour platform in a given period;“Industry Leading Manufacturing Enterprises in China(“key accounts”)”are to selectedmanufacturing enterprises recognized by reputable institutions or research firms,and large PRCand foreign enterprises by revenues in China based on public disclosure,after eliminatingduplicates.In accordance with above criteria,we identified approximately 1,370 such groupenterprises in China as of December 31,2022,and such list will be reviewed and updated fromtime to time;“MRO”or“maintenance,repair and operations”are to materials used for maintenance,repairand operation purposes and that do not directly constitute final products;“order”are to an order placed on our platform by our customer,regardless of whether anyproduct in such order is ultimately sold or shipped or whether any product in such order isreturned;“our platform”are to ZKH platform,GBB platform,and a variety of digital tools and intelligentservices that we provide.ZKH platform includes ZKH official website at ,mobileapp,Weixin Mini-Program and various interfaces.GBB platform includes GBB official website ,mobile app,and Weixin Mini-Program;“RMB”and“Renminbi”are to the legal currency of China;“shares”or“ordinary shares”are to the Class A and Class B ordinary shares of ZKH GroupLimited,par value US$0.0000001 per share;“US$,”“U.S.dollars,”“$,”and“dollars”are to the legal currency of the United States;“ZKH”are to ZKH Group Limited,our Cayman Islands holding company;“ZKH Industrial Supply”are to ZKH Industrial Supply(Shanghai)Co.,Ltd.,the wholly foreign owned subsidiary of ZKHGroup Limited in China;“we,”“us,”“our company,”and“our”are to ZKH Group Limited and itssubsidiaries,including ZKH Industrial Supply and its subsidiaries;“our PRC subsidiaries”are toZKH Industrial Supply and its subsidiaries,including but not limited to Shanghai GongbangbangIndustrial Tech Co.,Ltd.,Shanghai Kunhe Supply Chain Management Co.,Ltd.and ShenzhenKuntong Smart Warehousing Technology Co.,Ltd.Unless otherwise specified,in the context ofdescribing our business and operations,we are referring to the business and operationsconducted by our PRC subsidiaries;and“ZKH customers”are to customers that we serve on ZKH platform,which mainly includeenterprise customers in a variety of industries.ii/TABLE OF CONTENTS Our reporting currency is Renminbi.This prospectus also contains translations of certain foreigncurrency amounts into U.S.dollars for the convenience of the reader.Unless otherwise stated,alltranslations from Renminbi to U.S.dollars are made at a rate of RMB6.8972 to US$1.00,the exchangerate in effect as of December 30,2022 as set forth in the H.10 statistical release of The Board ofGovernors of the Federal Reserve System.We make no representation that any Renminbi or U.S.dollaramounts referred to in this prospectus could have been or could be converted into U.S.dollars orRenminbi,as the case may be,at any particular rate,or at all.This prospectus contains information derived from various public sources and certain informationfrom a report we commissioned regarding our industry and our market position in China prepared byChina Insights Industry Consultancy Limited,or CIC,an independent research firm.Such informationinvolves a number of assumptions and limitations,and you are cautioned not to give undue weight tothese estimates.We have not independently verified the accuracy or completeness of the data containedin this report.The industry in which we operate is subject to a high degree of uncertainty and risk due tovariety of factors,including those described in the“Risk Factors”section.These and other factors couldcause results to differ materially from those expressed in this report.Due to rounding,numbers presented throughout this prospectus may not add up precisely to thetotals provided and percentages may not precisely reflect the absolute figures.iii/TABLE OF CONTENTS PROSPECTUS SUMMARYThe following summary is qualified in its entirety by,and should be read in conjunction with,the moredetailed information and financial statements appearing elsewhere in this prospectus.In addition to thissummary,we urge you to read the entire prospectus carefully,especially the risks of investing in theADSs discussed under“Risk Factors,”before deciding whether to invest in the ADSs.This prospectuscontains information from an industry report commissioned by us dated March 3,2023 and prepared byChina Insights Industry Consultancy Limited,or CIC,an independent research firm,to provide informationregarding our industry and our market position in China.We refer to this report as the“CIC Report.”Our MissionTransparency and efficiency,for better commerce.Our VisionTo be a world leading industrial supplies company offering superior customer value.Who We AreWe are a leading MRO procurement service platform in China.We provide one-stop MROprocurement and management services for our customers,and offer digital and fulfillment solutions forparticipants along the industry value chain.We spearhead digital transformation of the MRO industry forcost reduction and efficiency improvement.Our leadership is evidenced by our GMV,the number of enterprise customers,the number of SKUs,as well as our comprehensive fulfillment network.We achieved continuous growth in GMV from 2020 to2022 at a CAGR of 37.3%.We served over 58,000 customers in 2022.In addition,our product offeringscovered approximately 17.3 million SKUs and all major MRO product lines as of December 31,2022.MRO procurement services are indispensable in addressing the essential needs in manufacturingenterprises daily operations,yet also challenging because MRO procurement is highly fragmented insupply and demand,involving a vast array of items typically in small volume with recurring purchases.InChina,MRO procurement service market is vast and fast-growing,presenting significant marketopportunities.To directly address the industry pain points and capture the market opportunities,weprovide digitalized,one-stop MRO procurement solutions that allow customers to access a wide selectionof quality products at competitive prices,powered by our strong product selection and recommendationcapabilities,through a transparent and efficient process,and have such products delivered in a timelyand reliable manner with professional fulfillment services.With the digital infrastructure that we have builtfor MRO suppliers and customers,we empower all value chain participants to achieve cost reduction andefficiency improvement.Our market leadership is underpinned by our customer-centric approach,superior productcapabilities,specialized fulfillment network,and robust technology infrastructure.We have developed acoveted and loyal customer base through our relentless focus on customer experience.In 2021,wedirectly served over 35,000 ZKH customers that span a wide variety of industries and segments,as wellas over 16,000 GBB customers.In 2022,we directly served over 40,000 ZKH customers and over 17,000GBB customers.We have witnessed a continuous increase in the average spending from our top 500customers from 2020 to 2022 at a CAGR of 30.5%.Approximately 91%of our top 500 customers interms of GMV in 2020 transacted with us in 2022.1/(1)TABLE OF CONTENTS The diagram below illustrates the composition of our platform.Note:We provide fulfillment services as well as allow suppliers to ship directly to customers.Our Highly Scalable Business ModelBy customer type,we mainly serve enterprise customers on our ZKH platform and micro businesseson our GBB platform.By revenue model,we derive revenue from product sales model and marketplacemodel.Under the product sales model,we purchase products from suppliers and sell them to ourcustomers.Under the marketplace model,suppliers sell products to customers over our platform and payus commissions on their sales.On ZKH platform,we operate both product sales and marketplace model,and on GBB platform,we currently primarily operate product sales model.We offer a broad range of MRO product offerings covering all major MRO product lines on ourplatform,including spare parts,chemicals,manufacturing parts,general consumables,and officesupplies.For a detailed description of our product offerings,see“BusinessProduct Offerings.”ZKH platform for enterprise customers and GBB platform for micro businesses.Our hybridbusiness model,featuring our ZKH platform and GBB platform,is highly scalable and complementary.We first started our operations on ZKH platform for enterprise customers and have developed corecapabilities in product insights,technology and fulfillment over the past years.In December 2018,leveraging the comprehensive infrastructure we have built,we launched GBB platform for microbusinesses which value readily available products at competitive prices and are willing to use cashsettlement.The two platforms come together with substantial synergies:ZKH platform continues to attractenterprise customers and contributes to a majority of our sales;GBB platform allows us to tap into thelarge but fragmented MRO procurement demands from numerous micro businesses and expands ourscale in a cost-effective way with low working capital requirements.Product sales model and marketplace model.We currently generate a majority of our revenuesfrom product sales model,under which we purchase products from suppliers,manage inventories,andsell to our customers.As our product sales grew substantially in size and we have accumulated supplychain management capabilities,we launched marketplace model in June 2019 to further scale ourbusiness,enhance product offerings,and attract more customers and suppliers through powerful networkeffects.We are dedicated to offering customers under the marketplace model the same level of efficientand transparent transaction services as those under the product sales model.Customers undermarketplace model still seamlessly have the access to our fulfillment services and after-sale services.Wehad over 2,400 marketplace suppliers on our platform in 2022 and accumulated approximately 2.2 millionSKUs sold under the marketplace model as of December 31,2022.Our GMV from the marketplacemodel reached RMB302.9 million in 2020,and increased to RMB914.6 million 2/TABLE OF CONTENTS in 2021,and further increased to RMB1,444.2 million in 2022.GMV contribution from marketplace modelhas increased from 6.1%in 2020 to 10.7%in 2021,and further increased to 15.4%in 2022.The diagram below illustrates our business model.Our Market OpportunitiesChina is the country with the largest secondary industry output value in the world,according to theCIC Report,and has a significant demand for MRO products.The market size of the MRO procurementservices in China in terms of sales value grew from RMB2,074.7 billion in 2016 to RMB3,004.1 billion in2022,and is expected to reach RMB3,976.6 billion by 2027,representing a CAGR of 5.8%from 2022,according to the CIC Report.The traditional MRO procurement service industry in China is fragmented and relativelyunderdeveloped,with low levels of digitalization across the value chain.As a result,industry participantshave been rather disconnected,leading to pain points such as lack of transparency,high managementcost,and inefficient transaction process.In addition,the MRO order fulfillment process is complex,andmany products require professional handling.Traditional MRO procurement service providers lack thescale and capabilities to effectively address these market challenges.Therefore,the MRO procurementservice industry has significant demand for an efficient and standardized process empowered by digitalsolutions to deliver a one-stop procurement experience.Our Approach and SolutionsWith profound experiences in the industrial product distribution and manufacturing industry,ourfounder,Mr.Long Chen,had experienced the industry pain points first-hand and identified enormousopportunities in Chinas MRO segment,the transaction infrastructure of which was in great need of acomprehensive digital transformation.We tactically started with large corporations,especially the multi-national corporations(MNCs)inChina which were generally more familiar with one-stop MRO procurement services from their overseasexperience.Since then,we have been expanding our product lines,building out our supply chain andfulfillment capabilities,and firmly establishing our reputation in delivering a superior customer experience.These in turn have enabled us to further expand our customer coverage to small and medium sizedenterprises(SMEs)and micro businesses.During this process,our scope of services expanded fromsales of product to full-suite transaction services across the entire value chain,covering product sourcingand selection,transaction,inventory management,and end-to-end fulfillment.As our product sales modelachieved substantial scale,we also expanded into marketplace model to further scale up our business.3/(1)(2)(3)(4)TABLE OF CONTENTS Today,we offer our customers a full suite of MRO procurement services through building out anindustry infrastructure to maximize the efficiency and transparency of MRO transactions and services.One-stop MRO procurement and management services.Our transaction services cover amassive catalogue of SKUs,including brand-name products at highly competitive prices,ourcurated product lines and private label products that offer great value for money,as well as longtail products to meet the diverse and unplanned MRO needs of our customers.Different fromtraditional MRO procurement service providers which merely focus on product sales and agencyservices,we provide one-stop MRO procurement management services including matchingproduction and procurement plans,product pre-screening,intelligent recommendation,andinventory optimization,helping our customers identify the most suitable products through aconvenient and efficient one-stop procurement experience.Digitalized MRO procurement solutions.We provide a variety of digital procurement interfacesand solutions for our ZKH customers and GBB customers.These enable a fully digitalized andcustomized MRO transaction experience with transparency and efficiency.In addition,weprovide a suite of digital tools for participants across the MRO industry value chain to enhancecustomer and supplier loyalty to our platform.End-to-end servicing.We have built an efficient and digitalized fulfillment network to ensuretimely and reliable fulfillment of our orders.Our nationwide fulfillment network consisted of 30distribution centers,90 transit warehouses and approximately 3,600 EVM smart vendingmachines as of December 31,2022.We maintained a dedicated team of over 260 fulfillmentservice managers as of December 31,2022 to address businesses customized fulfillmentrequests.We have also been deepening and expanding our cooperation with suppliers toachieve efficient inventory management and procurement planning so as to keep purchaseorders fulfilled in a timely and cost-effective manner.Our comprehensive service offerings help us attract more industry participants to our platform andenhance their engagement with us,enabling the sustained growth of our MRO ecosystem.Our PerformanceWe have achieved significant growth and continued improvements in our business in recent years.Notes:In 2022.As of December 31,2022.Approximately 91%of our top 500 customers in terms of GMV in 2020 transacted with us in 2022.Average one-year dollar retention of ZKH customers in 2018,2019,2020,and 2021,in terms of GMV.With our rapid business expansion,we have achieved significant growth.Our net revenues reachedRMB4,686.4 million in 2020,and increased by 63.3%to RMB7,654.6 million in 2021,and furtherincreased by 8.6%from 2021 to RMB8,315.2 million(US$1,205.6 million)in 2022.Our gross profit,calculated by subtracting cost of revenues from net revenues,increased by 52.8%from 4/TABLE OF CONTENTS RMB680.3 million in 2020 to RMB1,039.8 million in 2021 and further increased by 26.7%from 2021 toRMB1,317.7 million(US$191.0 million)in 2022,due to the growing scale and our effort in gross profitimprovement.Our gross margin,representing gross profit as a percentage of net revenues,was 14.5%,13.6%and 15.8%in 2020,2021 and 2022,respectively.Our loss from operations,calculated bysubtracting operating expenses from gross profit,increased by 177.7%from RMB399.8 million in 2020 toRMB1,110.4 million in 2021 and decreased by 38.2%from 2021 to RMB685.7 million(US$99.4 million)in2022,attributable to the increase in gross profit and our efforts in workforce optimization and cost control.Our operating margin,representing loss from operations as a percentage of net revenue,was-8.5%,-14.5%and-8.2%in 2020,2021 and 2022,respectively.We incurred net loss of RMB397.1 million in2020,RMB1,094.1 million in 2021 and RMB731.1 million(US$106.0 million)in 2022,respectively.Excluding the impact of share-based compensation expenses and interest expense due to the issuanceof Series F Convertible Notes,we had an adjusted net loss of RMB305.2 million in 2020,RMB910.8 million in 2021 and RMB626.1 million(US$90.8 million)in 2022,respectively.See“Non-GAAP Financial Measure.”Our adjusted net margin,representing adjusted net loss as a percentage ofnet revenue,was-6.5%,-11.9%and-7.5%in 2020,2021 and 2022,respectively.Our StrengthsWe believe that the following competitive strengths contribute to our success and differentiate usfrom our competitors:Clear industry leadership with high-quality,diverse and loyal customer base;Superior one-stop procurement experience underpinned by strong product capabilities;Purpose-built fulfillment and servicing network for MRO industry;Strong technology capabilities spearheading digital transformation for MRO procurementservice industry;Powerful network effects;andVisionary management team to sustain long-term growth.Our StrategiesWe intend to achieve our mission and further grow our business by pursuing the following strategies:Continue to enhance product offerings to satisfy customers demand for one-stop procurementand cost effectiveness;Deepen customer penetration and constantly optimize customer experience;Strengthen supply chain capabilities to further improve order fulfillment efficiency;Continue to develop and deploy digital technologies to upgrade the infrastructure of the entirevalue chain;Further grow our scale to reinforce economies of scale;andExpand into overseas market.5/TABLE OF CONTENTS Summary of Risk FactorsInvesting in our ADSs involves significant risks.You should carefully consider all of the information inthis prospectus before making an investment in our ADSs.Below please find a summary of the principalrisks we face,organized under relevant headings.With respect to the legal risks associated with beingbased in and having operations in mainland China as discussed in relevant risk factors under“Risk FactorsRisks Related to Doing Business in China,”the laws,regulations and the discretion of mainland Chinagovernmental authorities discussed in this prospectus are expected to apply to mainland China entities andbusinesses,rather than entities or businesses in Hong Kong which operate under a different set of lawsfrom mainland China.These risks are discussed more fully in the section titled“Risk Factors.”Risks Related to Our Business and IndustryOur business,financial condition and results of operations may be materially and adverselyaffected if we are unable to attract and retain customers and maintain satisfactory customerexperience.The expansion into new product categories and services may expose us to new challenges andmore risks.Uncertainties relating to the growth and profitability of the evolving and dynamic MROprocurement service industry could adversely affect our business,prospects and results ofoperations.We cannot guarantee that our current or future strategies will be successfullyimplemented or will generate sustainable profit.If we cannot manage the growth of our business or execute our strategies effectively,our businessand prospects may be materially and adversely affected.If we fail to introduce digital solutions or intelligent services in a manner that responds to theevolving needs of suppliers and customers,our business may be adversely affected.If we fail to improve and enhance the functionality,performance,reliability,design,security andscalability of our platform,our business may be adversely affected.We are exposed to fluctuations in the supply of,or demand for,MRO products inside and outsideof China,along with the conditions underlying such fluctuations,which could adversely affect thetrading volume and price of the MRO products on our platform.Changes in our business and product mix could cause changes in our revenue or gross margin,oraffect our competitive position.Any quality issues of the products offered by us or third-party suppliers through our platform maymaterially and adversely affect our business and results of operations.Our business is subject to complex and evolving Chinese and international laws and regulationsregarding cybersecurity,data security,personal information protection and algorithmicrecommendation.Many of these laws and regulations are subject to change and uncertaininterpretation,and any failure or perceived failure to comply with these laws and regulations couldresult in claims,changes to our business practices,negative publicity,legal proceedings,increased cost of operations,or declines in user growth or engagement,or otherwise harm ourbusiness.For more detailed information,see“Risk FactorsRisks Related to Our Business and Industry.”Risks Related to Doing Business in ChinaUncertainties exist with respect to how the PRC Foreign Investment Law may impact the viabilityof our current corporate structure and operations.Changes in Chinas economic,political or social conditions or government policies could have amaterial adverse effect on our business,financial conditions and results of operations.The PRC government may exert more oversight and control over offerings that are conductedoverseas and/or foreign investment in China-based issuers,which could significantly limit orcompletely hinder our ability to offer or continue to offer securities to investors and cause the valueof such securities to significantly decline or be worthless.For a detailed description of theunderlying risks,see“Risk FactorsRisks Related to Doing Business in ChinaThe approval ofthe China Securities Regulatory Commission or other PRC government authorities may be 6/TABLE OF CONTENTS required in connection with this offering under PRC law,and if required,we cannot predict whetheror for how long we will be able to obtain such approval”on page 55 in this prospectus.The PRC legal system is a civil law system based on written statutes,where prior court decisionshave limited precedential value.The PRC legal system is evolving rapidly,and the interpretationsof many laws,regulations and rules may contain inconsistencies and enforcement of these laws,regulations and rules involves uncertainties.As such,the enforcement of laws in the PRC legalsystem and rules and regulations in China can change quickly with little advance notice.For adetailed description of the underlying risks,see“Risk FactorsRisks Related to Doing Businessin ChinaUncertainties with respect to the PRC legal system could adversely affect us”on page57 in this prospectus.We conduct our business primarily through our PRC subsidiaries.Our operations in China aregoverned by PRC laws and regulations.The PRC government has significant oversight anddiscretion over the conduct of our business,and it may intervene or influence our operations atany time,which could result in a material adverse change in our operation,and our Class Aordinary shares and ADSs may decline in value or become worthless.For a detailed description ofthe underlying risks,see“Risk FactorsRisks Related to Doing Business in ChinaThe PRCgovernments significant oversight and discretion over our business operations could result in amaterial adverse change in our operations and the value of our ADSs”on page 58 in thisprospectus.We may be adversely affected by the complexity,uncertainties and changes in PRC regulation ofinternet-related businesses and companies,and any lack of requisite approvals,licenses orpermits applicable to our business may have a material adverse effect on our business andresults of operations.The PCAOB had historically been unable to inspect our auditor in relation to their audit work.We may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fundany cash and financing requirements we may have,and any limitation on the ability of our PRCsubsidiaries to transfer cash or make payments to us could have a material and adverse effect onour ability to conduct our business.To the extent cash or assets in the business is in the PRC or a PRC entity,the funds and assetsmay not be available to fund operations or for other use outside of mainland China due tointerventions in or the imposition of restrictions and limitations on the ability of ZKH or itssubsidiaries by the PRC government to transfer cash or assets.For a detailed description of theunderlying risks,see“Risk FactorsRisks Related to Doing Business in ChinaPRC regulationof loans to and direct investment in PRC entities by offshore holding companies and governmentalcontrol of currency conversion may delay or prevent us from using the proceeds of this offering tomake loans or additional capital contributions to our PRC subsidiaries in China,which couldmaterially and adversely affect our liquidity and our ability to fund and expand our business.”Our ADSs may be prohibited from trading in the United States under the HFCAA in the future ifthe PCAOB is unable to inspect or investigate completely auditors located in China.The delistingof our ADSs,or the threat of their being delisted,may materially and adversely affect the value ofyour investment.For more detailed information,see“Risk FactorsRisks Related to Doing Business in China.”Risks Related to Our ADSs and This OfferingAn active trading market for our ADSs may not develop and the trading price for our ADSs mayfluctuate significantly.The trading price of our ADSs is likely to be volatile,which could result in substantial losses toinvestors.Our proposed dual-class voting structure will limit your ability to influence corporate matters andcould discourage others from pursuing any change of control transactions that holders of ourClass A ordinary shares and ADSs may view as beneficial.For more detailed information,see“Risk FactorsRisks Related to Our ADSs and This Offering.”7/TABLE OF CONTENTS Permissions Required from the PRC Authorities for Our OperationsWe conduct our business primarily through our PRC subsidiaries in China.Our operations in Chinaare governed by PRC laws and regulations.As of the date of this prospectus,certain leasehold interestsin our leased properties have not been registered with the competent PRC government authorities asrequired by the relevant PRC laws and regulations.For more details,see“Risk Factors Risks Relatedto Our Business and IndustryOur use of some leased properties could be challenged by third parties orgovernmental authorities,which may cause interruptions to our business operations.”Except suchunregistered leasehold interests,as of the date of this prospectus,our PRC subsidiaries have obtainedthe requisite licenses and permits from the PRC government authorities that are required for theirbusiness operations in China,including,among others,the Hazardous Chemical Operation License,theValue-Added Telecommunication License,or the VATS License for online data processing andtransaction processing businesses,the Medical Device Operation Permit,the Registration Certificate ofNon-pharmaceutical Precursor Chemicals,the Transport Business Operations Permit and the FoodOperation License.However,given the uncertainties of interpretation and implementation of relevant lawsand regulations and the enforcement practice by relevant government authorities,we may be required toobtain additional licenses,permits,filings or approvals for the functions and services of our platform in thefuture.For more detailed information,see“Risk FactorsRisks Related to Our Business and IndustryFailure to obtain,renew,or retain licenses,permits or approvals may affect our ability to conduct orexpand our business.”Cash Flows through Our OrganizationZKH Group Limited is a holding company with no material operations of its own.We conduct ouroperations primarily through our PRC subsidiaries in China.As a result,ZKH Group Limiteds ability topay dividends depends upon dividends paid by our PRC subsidiaries.If our existing PRC subsidiaries orany newly formed ones incur debt on their own behalf in the future,the instruments governing their debtmay restrict their ability to pay dividends to ZKH Group Limited.In addition,our wholly foreign-ownedsubsidiaries in China are permitted to pay dividends to ZKH Group Limited only out of its retainedearnings,if any,as determined in accordance with PRC accounting standards and regulations.UnderPRC law,each of our PRC subsidiaries in China is required to set aside at least 10%of its after-taxprofits each year,if any,to fund certain statutory reserve funds until such reserve funds reach 50%oftheir registered capital.In addition,our wholly foreign owned subsidiaries in China may allocate a portionof their after-tax profits based on PRC accounting standards to enterprise expansion funds and staffbonus and welfare funds at their discretion.The statutory reserve funds and the discretionary funds arenot distributable as cash dividends.See also“Managements Discussion and Analysis of FinancialCondition and Results of OperationsHolding Company Structure.”We have established controls and procedures for cash flows within our organization.Our fundmanagement team is the special task force that manages and supervises the transfers of funds amongZKH Industrial Supply and its subsidiaries under the guidance of Company Fund Management System,an internal policy adopted by ZKH Industrial Supply.Under this policy,ZKH Industrial Supply is allowed toestablish bilateral cash pooling programs between itself,on one hand,and its subsidiaries or branches,on the other hand,to satisfy cash requirements in the form of entrusted loans.The fund managementteam closely monitors and manages the cash transfers through our organization by preparing monthlyreports and annual budget plans.Each transfer of cash between ZKH Group Limited,our CaymanIslands holding company,and a subsidiary or branch is also subject to internal report and approvalprocess by reference to such policy.In addition,cash transfers between ZKH Group Limited,oursubsidiaries,or investors shall follow the applicable PRC laws and regulations.As part of the Restructuring,the relevant original investors exited from ZKH Industrial Supply by wayof capital reduction and received refunds for their original investments.Each of such investors paid thesame amount of refunds it received as consideration for its subscription of the shares of ZKH GroupLimited.For more details,see“Description of Share CapitalHistory of Securities Issuance PreferredShares.”In addition,ZKH Group Limited has transferred to ZKH Hong Kong Limited an aggregate ofUS$833 million consisting of the proceeds from the issuance of Series F Convertible Notes and theissuance of preferred shares of ZKH Group Limited in connection with the Restructuring,part 8/(1)(2)(3)TABLE OF CONTENTS of which was subsequently transferred by ZKH Hong Kong Limited to ZKH Industrial Supply andShanghai Kunshucai Supply Chain Management Co.,Ltd.for general corporate purposes and theremaining fund was held by ZKH Hong Kong Limited.For more details about the issuance of Series FConvertible Notes,see“Description of Share CapitalHistory of Securities IssuancesConvertiblePromissory Notes.”Apart therefrom,as of the date of this prospectus,no cash or other assets weretransferred between the Cayman Islands holding company and a subsidiary,no subsidiaries paiddividends or made other distributions to the holding company,and no dividends or distributions were paidor made to U.S.investors.We currently intend to retain most,if not all,of our available funds and anyfuture earnings to operate and expand our business.See“Dividend Policy.”Remittance of dividends by a wholly foreign-owned company out of China is subject to examinationby the banks designated by SAFE.Our PRC subsidiaries have not paid dividends and will not be able topay dividends until they generate accumulated profits and meet the requirements for statutory reservefunds.For more information on related risks,see“Risk FactorsRisks Related to Doing Business inChinaWe may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fundany cash and financing requirements we may have,and any limitation on the ability of our PRCsubsidiaries to make payments to us could have a material and adverse effect on our ability to conductour business.”For PRC and United States federal income tax considerations in connection with aninvestment in the ADSs,see“Taxation.”Under the current laws of the Cayman Islands,we are not subject to tax on income or capital gains.Upon payments of dividends to our shareholders,no Cayman Islands withholding tax will be imposed.For purposes of illustration,the following discussion reflects the hypothetical taxes that might be requiredto be paid in mainland China and Hong Kong,assuming that:(i)we have taxable earnings,and(ii)wedetermine to pay a dividend in the future:Tax calculation Hypothetical pre-tax earnings 100 Tax on earnings at statutory rate of 25%(25 Net earnings available for distribution 75 Withholding tax at standard rate of 10%(7.5 Net distribution to Parent/Shareholders 67.5 Notes:For purposes of this example,the tax calculation has been simplified.The hypothetical book pre-tax earningsamount,not considering timing differences,is assumed to equal taxable income in China.Certain of our subsidiaries qualifies for a 15%preferential income tax rate in China.However,such rate issubject to qualification,is temporary in nature,and may not be available in a future period when distributionsare paid.For purposes of this hypothetical example,the table above reflects a maximum tax scenario underwhich the full statutory rate would be effective.The PRC Enterprise Income Tax Law imposes a withholding income tax of 10%on dividends distributed by aforeign invested enterprise,or FIE,to its immediate holding company outside of China.A lower withholdingincome tax rate of 5%is applied if the FIEs immediate holding company is registered in Hong Kong or otherjurisdictions that have a tax treaty arrangement with China,subject to a qualification review at the time of thedistribution.For purposes of this hypothetical example,the table above assumes a maximum tax scenariounder which the full withholding tax would be applied.In addition,our PRC subsidiaries generate their revenue primarily in Renminbi,and cash transfersfrom our PRC subsidiaries to their parent companies outside of China are subject to PRC governmentcontrol of currency conversion.As a result,any restriction on currency exchange may limit the ability ofour PRC subsidiaries to pay dividends to ZKH Group Limited.To the extent cash or assets in thebusiness is in the PRC or a PRC entity,the funds and assets may not be available to fund operations orfor other use outside of mainland China due to interventions in or the imposition of restrictions andlimitations on the ability of ZKH or its subsidiaries by the PRC government to transfer cash or assets.Formore details,see“Risk FactorsRisks Related to Doing Business in ChinaPRC regulation of loans toand direct investment in PRC entities by offshore holding companies and governmental control ofcurrency conversion may delay or prevent us from using the proceeds of this offering to make loans oradditional capital contributions to our PRC subsidiaries in China,which could materially and adverselyaffect our liquidity and our ability to fund and expand our business.”9(1)%(2)%(3)%/TABLE OF CONTENTS Permissions Required from the PRC Authorities for This OfferingOn December 28,2021,the Cyberspace Administration of China,or the CAC,together with certainother PRC governmental authorities,jointly released the Revised Cybersecurity Review Measures,whichtook effect on February 15,2022.Pursuant to the Revised Cybersecurity Review Measures,(i)operatorsof critical information infrastructure that intend to purchase network products and services and onlineplatform operators that conduct data processing activities,in each case that affect or may affect nationalsecurity,and(ii)operators of network platforms seeking listing abroad that are in possession of more thanone million users personal information must apply for a cybersecurity review.The Revised CybersecurityReview Measures set out certain general factors which would be the focus in assessing the nationalsecurity risk during a cybersecurity review,including without limitation,risks of influence,control ormalicious use of critical information infrastructure,core data,important data or large amounts of personalinformation by foreign governments in relation to listing abroad.On March 29,2022,the China Cybersecurity Review Technology and Certification Center,as theinstitution designated by the CAC to receive application materials for cybersecurity reviews and conductformal examinations of such applications,confirmed to us that we would not be required to apply for acybersecurity review in connection with this offering and our proposed listing on the NYSE,if we do notpossess over one million users personal information prior to the completion of this offering and ourproposed listing.Furthermore,on March 25,2022,the China Securities Regulatory Commission,or the CSRC,informed us that it had communicated with competent regulatory authorities regarding this offering,andthe competent regulatory authorities do not object to this offering.The CSRC further informed us thatbased on its understanding of the relevant provisions in the Revised Cybersecurity Review Measures aswell as its communication with the competent regulatory authority,we are not subject to cybersecurityreview if we are not in possession of over one million users personal information.The CSRC is one ofthe PRC governmental agencies that jointly issued the Revised Cybersecurity Review Measures,whichinstituted the cybersecurity review.The CSRC is a member of the inter-agency task force oncybersecurity review.The CSRC is ascribed the legal power to act as the PRC inter-agency coordinatorin reviewing proposed foreign listings.Therefore,interpretations by the CSRC of the RevisedCybersecurity Review Measures is persuasive authority as to whether cybersecurity review applies to aparticular listing.Given the aforementioned,as well as the fact that(i)we are not in possession of more than onemillion users personal information,and(ii)we process data for the sole purpose of providing MROprocurement and management services,which does not involve data processing activities that affect ormay affect national security,our PRC counsel,Han Kun Law Offices,has advised us that we are notsubject to cybersecurity review by the CAC for this offering.If it is determined that we are required to undergo a cybersecurity review by the CAC or obtainpermissions or approvals from the CAC for this offering for any reasons,including due to changes inapplicable laws,regulations,or interpretations,we will take any and all necessary actions to be compliantwith the then effective rules and regulations.In that case,if we are unable to clear the review,obtainpermission or approval from the CAC,as then applicable,in a timely manner,or at all,we may be subjectto government enforcement actions and investigations,fines,penalties,suspension of our non-compliantoperations,or shutdown of our online platform,among other sanctions,which could materially andadversely affect our business and results of operations,and our Class A ordinary shares and ADSs maydecline in value or become worthless.On December 24,2021,the CSRC released the Provisions of the State Council on theAdministration of Overseas Securities Offering and Listing by Domestic Companies(Draft forComments),or the Draft Administrative Provisions,and the Administrative Measures for the Filing ofOverseas Securities Offering and Listing by Domestic Companies(Draft for Comments),or the DraftFiling Measures,both of which were open for public comments until January 23,2022.On February 17,2023,the CSRC issued the Trial Administrative Measures of Overseas Securities Offering and Listing byDomestic Enterprises,or the Trial Measures,which will become effective on March 31,2023.On thesame date,the CSRC circulated Supporting Guidance Rules No.1 through No.5,Notes on the TrialMeasures,Notice on Administration Arrangements for the Filing of Overseas Listings by DomesticEnterprises and relevant 10/TABLE OF CONTENTS CSRC Answers to Reporter Questions,or collectively,the Guidance Rules and Notice,on CSRCs officialwebsite.The Trial Measures,together with the Guidance Rules and Notice,reiterate the basic principlesof the Draft Administrative Provisions and Draft Filing Measures and impose substantially the samerequirements for the overseas securities offering and listing by domestic enterprises.Under the TrialMeasures and the Guidance Rules and Notice,domestic enterprises conducting overseas securitiesoffering and listing,either directly or indirectly,shall complete filings with the CSRC pursuant to the TrialMeasures requirements within three working days following the submission of application for an initialpublic offering or listing.Starting from March 31,2023,enterprises that have been listed overseas orsatisfy all of the following conditions shall be deemed as“Grandfathered Issuers”and are not required tocomplete the overseas listing filing immediately,but shall complete filings as required if they conductrefinancing or are involved in other circumstances that require filing with the CSRC:(i)the application forindirect overseas offering or listing shall have been approved by the relevant overseas regulatoryauthority or stock exchange prior to March 31,2023(as the SEC does not approve or disapprove of anoffering,this requirement is interpreted to be the SECs declaration of the registration statement to beeffective with respect to this offering),(ii)the enterprise is not required to reapply for the approval of therelevant overseas regulatory authority or stock exchange,and(iii)such overseas securities offering orlisting shall be completed before September 30,2023.Starting from March 31,2023,domesticenterprises that have submitted valid applications for overseas offerings and listing but have not obtainedthe approval from relevant overseas regulatory authority or overseas stock exchange shall completefilings with the CSRC prior to their overseas offering and listings.As advised by our PRC counsel,HanKun Law Offices,if our registration statement on Form F-1 is not declared to be effective by the SEC priorto March 31,2023,we will be required to comply with the filing requirements under the Trial Measures inconnection with this offering.As of the date of this prospectus,our PRC counsel does not expect there tobe any material legal obstacle for us to comply with the filing requirements under the Trial Measures.Regardless of whether this offering will be subject to any filing requirements with the CSRC under theTrial Measures,any future securities offerings and listings outside of mainland China by our company,including but not limited to follow on offerings,secondary listings,and going private transactions,will besubject to the filing requirements with the CSRC under the Trial Measures,and we cannot assure youthat we will be able to comply with such filing requirements in a timely manner,or at all.If it is determined that any approval,filing or other administrative procedure from the CSRC or otherPRC governmental authorities is required for this offering,or any future offering or listing,we cannotassure you that we can obtain the required approval or accomplish the required filings or other regulatoryprocedures in a timely manner,or at all.If we fail to obtain the relevant approval or complete the filingsand other relevant regulatory procedures in a timely manner,we may face sanctions by the CSRC orother PRC regulatory agencies,which may include fines and penalties on our operations in China,limitations on our operating privileges in China,restrictions on or prohibition of the payments orremittance of dividends by our PRC subsidiaries in China,delay of or restriction on the repatriation of theproceeds from this offering into China,or other actions that could have a material and adverse effect onour business,financial condition,results of operations,reputation and prospects,as well as the tradingprice of our ADSs.The CSRC or other PRC regulatory authorities also may take actions requiring us,ormaking it advisable for us,to halt our offerings before settlement and delivery of the shares offered.Consequently,if investors engage in market trading or other activities in anticipation of and prior tosettlement and delivery,they do so at the risk that settlement and delivery may not occur.In addition,ifthe CSRC or other regulatory authorities later promulgate new rules or explanations requiring that weobtain their approvals or accomplish the required filing or other regulatory procedures for this offering,wemay be unable to obtain a waiver of such approval requirements,if and when procedures are establishedto obtain such a waiver.Any uncertainties or negative publicity regarding such approval requirementcould materially and adversely affect our business,prospects,financial condition,reputation,and thetrading price of our ADSs.For detailed information,see“Risk FactorsRisks Related to Our Business and IndustryOurbusiness is subject to complex and evolving Chinese and international laws and regulations regardingcybersecurity,data security,personal information protection and algorithmic recommendation.Many ofthese laws and regulations are subject to change and uncertain interpretation,and any failure orperceived failure to comply with these laws and regulations could result in claims,changes to our 11/TABLE OF CONTENTS business practices,negative publicity,legal proceedings,increased cost of operations,or declines in usergrowth or engagement,or otherwise harm our business.”and“Risk FactorsRisks Related to DoingBusiness in ChinaThe approval of the China Securities Regulatory Commission or other PRCgovernment authorities may be required in connection with this offering under PRC law,and if required,we cannot predict whether or for how long we will be able to obtain such approval.”The Holding Foreign Companies Accountable ActPursuant to the HFCAA,if the SEC determines that we have filed audit reports issued by aregistered public accounting firm that has not been subject to inspections by the PCAOB for twoconsecutive years,the SEC will prohibit our shares or the ADSs from being traded on a nationalsecurities exchange or in the over-the-counter trading market in the United States.On December 16,2021,the PCAOB issued a report to notify the SEC of its determination that the PCAOB was unable toinspect or investigate completely registered public accounting firms headquartered in mainland China andHong Kong,including our auditor.On December 15,2022,the PCAOB issued a report that vacated itsDecember 16,2021 determination and removed mainland China and Hong Kong from the list ofjurisdictions where it is unable to inspect or investigate completely registered public accounting firms.Each year,the PCAOB will determine whether it can inspect and investigate completely audit firms inmainland China and Hong Kong,among other jurisdictions.If the PCAOB determines in the future that itno longer has full access to inspect and investigate completely accounting firms in mainland China andHong Kong and we use an accounting firm headquartered in one of these jurisdictions to issue an auditreport on our financial statements filed with the SEC,we would be identified as a Commission-IdentifiedIssuer following the filing of the annual report for the relevant fiscal year.There can be no assurance thatwe would not be identified as a Commission-Identified Issuer for any future fiscal year,and if we were soidentified for two consecutive years,we would become subject to the prohibition on trading under theHFCAA.See“Risk FactorsRisks Related to Doing Business in ChinaThe PCAOB had historicallybeen unable to inspect our auditor in relation to their audit work”and“Risk FactorsRisks Related toDoing Business in ChinaOur ADSs may be prohibited from trading in the United States under theHFCAA in the future if the PCAOB is unable to inspect or investigate completely auditors located inChina.The delisting of the ADSs,or the threat of their being delisted,may materially and adversely affectthe value of your investment.”Corporate History and StructureIn 2014,we commenced our operations through ZKH Industrial Supply(Shanghai)Co.,Ltd.(formerly known as Shanghai ZKH Trading Co.,Ltd.),or ZKH Industrial Supply.ZKH Industrial Supplyestablished a number of subsidiaries to engage in MRO procurement services.We undertook a corporate restructuring in order to facilitate offshore financing and listing.We refer tothis restructuring in this prospectus as the Restructuring.RestructuringZKH Group Limited was incorporated in the Cayman Islands as our holding company in April 2021.In May 2021,ZKH Group Limited established a wholly owned subsidiary,ZKH Holdings Limited,in theBritish Virgin Islands.Shortly after its incorporation,ZKH Holdings Limited established a wholly ownedsubsidiary in Hong Kong,namely,ZKH Hong Kong Limited,which is our intermediary holding company inHong Kong.Following the completion of the Restructuring in September 2022,ZKH Hong Kong Limitedcurrently owns all of the shares of ZKH Industrial Supply.ZKH Industrial Supply has completed several rounds of equity financing since its inception.See“Description of Share CapitalHistory of Securities Issuances.”As a part of the Restructuring,the thenexisting shareholders of ZKH Industrial Supply immediately prior to the initiation of the Restructuring andtheir respective designated affiliates became ZKH Group Limiteds shareholders in December 2021through a distribution of ZKH Group Limiteds shares in proportion to ZKH Industrial Supplys previousshareholding structure.Also in December 2021,ZKH Industrial Supply entered into a shareholdersagreement and a transitional period agreement with ZKH Group Limiteds shareholders and other parties,pursuant to which each of ZKH Group Limiteds investors shall be deemed as a shareholder of ZKHIndustrial Supply and be entitled to relevant shareholders rights thereunder;such rights 12/TABLE OF CONTENTS terminated upon the exit of all institutional investors from ZKH Industrial Supply in May 2022 and suchtransitional period agreement expired following the completion of the Restructuring in September 2022.We expect to continue operating a majority of our business in China via ZKH Industrial Supply andits subsidiaries.The following diagram illustrates our corporate structure,including our principal subsidiaries,as ofthe date of this prospectus:We do not currently use,and have not used in the past,a variable interest entity structure.Implication of Being an Emerging Growth CompanyAs a company with less than US$1.235 billion in revenue for our last fiscal year,we qualify as an“emerging growth company”pursuant to the Jumpstart Our Business Startups Act of 2012,as amended,or the JOBS Act.An emerging growth company may take advantage of specified reduced reporting andother requirements compared to those that are otherwise applicable generally to public companies.These provisions include exemption from the auditor attestation requirement under Section 404 of theSarbanes-Oxley Act of 2002 in the assessment of the emerging growth companys internal control overfinancial reporting.The JOBS Act also provides that an emerging growth company does not need tocomply with any new or revised financial accounting standards until such date that a private company isotherwise required to comply with such new or revised accounting standards.However,we have electedto“opt out”of this provision and,as a result,we will comply with new or revised accounting standards asrequired when they are adopted for public companies.This decision to opt out of the extended transitionperiod under the JOBS Act is irrevocable.We will remain an emerging growth company until the earliest of(a)the last day of the fiscal yearduring which we have total annual gross revenues of at least US$1.235 billion;(b)the last day of ourfiscal year following the fifth anniversary of the completion of this offering;(c)the date on which we have,during the preceding three-year period,issued more than US$1.0 billion in non-convertible debt;or(d)the date on which we are deemed to be a“large accelerated filer”under the Securities Exchange 13/TABLE OF CONTENTS Act of 1934,as amended,or the Exchange Act,which would occur if the market value of our ADSs thatare held by non-affiliates exceeds US$700 million as of the last business day of our most recentlycompleted second fiscal quarter.Once we cease to be an emerging growth company,we will not beentitled to the exemptions provided in the JOBS Act discussed above.Implication of Being a Foreign Private IssuerWe are a foreign private issuer within the meaning of the rules under the Exchange Act,and as suchwe are exempt from certain provisions of the securities rules and regulations in the United States that areapplicable to U.S.domestic issuers.Moreover,the information we are required to file with or furnish to theSEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S.domestic issuers.In addition,as an exempted company incorporated in the Cayman Islands,we arepermitted to adopt certain home country practices in relation to corporate governance matters that differsignificantly from the NYSE corporate governance listing standards.See“Risk Factors Risks Related tothe ADSs and This OfferingAs a company incorporated in the Cayman Islands,we are permitted toadopt certain home country practices in relation to corporate governance matters that differ significantlyfrom the NYSE corporate governance listing standards;these practices may afford less protection toshareholders than they would enjoy if we complied fully with the NYSE corporate governance listingstandards.”Implication of Being a Controlled CompanyFollowing the completion of this offering,Mr.Long Chen,our chairman of the board of directors andchief executive officer,will beneficially ownClass B ordinary shares,representing%of ourtotal voting power,assuming the underwriters do not exercise their option to purchase additional ADSs;or%of our total voting power,assuming that the option to purchase additional ADSs is exercised bythe underwriters in full.As a result,we will be a“controlled company”as defined under the NYSEcorporate governance listing standards because Mr.Long Chen will hold more than 50%of the votingpower for the election of directors.As a“controlled company,”we are permitted to elect not to comply withcertain corporate governance requirements.If we rely on these exemptions,you will not have the sameprotection afforded to shareholders of companies that are subject to these corporate governancerequirements.Corporate InformationOur principal executive offices are located at 7/F,Tower 4,Libao Plaza,No.36 Shenbin Road,Minhang District,Shanghai,201106,Peoples Republic of China.Our telephone number at this addressis 86(21)5080-9696.Our registered office in the Cayman Islands is located at 4th Floor,Harbour Place,103 South Church Street,PO Box 10240,Grand Cayman,KY1-1002,Cayman Islands.Investors should submit any inquiries to the address and telephone number of our principalexecutive offices.Our main websites are and .The informationcontained on our websites is not a part of this prospectus.Our agent for service of process in the UnitedStates is Cogency Global Inc.,located at 122 East 42nd Street,18th Floor,New York,NY 10168.14/TABLE OF CONTENTS The OfferingOffering priceWe currently estimate that the initial public offering price willbe between US$and US$per ADS.ADSs offered by us ADSs(or ADSs if the underwritersexercise their over-allotment option in full).ADSs outstanding immediately afterthis offering ADSs(or ADSs if the underwritersexercise their over-allotment option in full).Ordinary shares issued andoutstanding immediately after thisoffering Class A ordinary shares and Class Bordinary shares(or Class A ordinary shares if theunderwriters exercise their over-allotment option in full).The ADSsEach ADS represents Class A ordinary shares,parvalue US$0.0000001 per share.The depositary will hold Class A ordinary shares underlyingyour ADSs.You will have rights as provided in the depositagreement among us,the depositary and holders andbeneficial owners of ADSs from time to time.We do not expect to pay any cash dividends on our Class Aordinary shares in the foreseeable future.If,however,wedeclare dividends on our Class A ordinary shares,thedepositary will pay you the cash dividends and otherdistributions it receives on our Class A ordinary shares afterdeducting its fees and expenses in accordance with theterms set forth in the deposit agreement.You may surrender your ADSs to the depositary forcancellation in exchange for Class A ordinary shares.Thedepositary will charge you fees for any cancellation.We may amend or terminate the deposit agreement withoutyour consent.If you continue to hold your ADSs after anamendment to the deposit agreement,you agree to bebound by the deposit agreement as amended.To better understand the terms of the ADSs,you shouldcarefully read the“Description of American DepositaryShares”section of this prospectus.You should also read thedeposit agreement,which is filed as an exhibit to theregistration statement that includes this prospectus.Option to purchase additional ADSsWe have granted to the underwriters an option,exercisablewithin 30 days from the date of this prospectus,to purchaseup to an aggregate ofadditional ADSs.Use of proceedsWe expect that we will receive net proceeds ofapproximately US$million from this offering(orapproximately US$million if the underwritersexercise their over-allotment option in full),assuming aninitial public offering price of US$per ADS,which isthe midpoint of the estimated range of the initial publicoffering price,after 15/TABLE OF CONTENTS deducting underwriting discounts and commissions andestimated offering expenses payable by us.We plan to use the net proceeds of this offering as follows:(i)to further develop our platform to scale up our business;(ii)to strengthen supply chain capabilities and further improvefulfillment efficiency;(iii)for potential strategic investmentand acquisitions although we have not identified any specificinvestment or acquisition opportunities at this time;and(iv)for general corporate purposes.See“Use of Proceeds”for more information.Lock-upWe,our directors and executive officers,and our existingshareholders have agreed with the underwriters,subject tocertain exceptions,not to sell,transfer or otherwise disposeof any ADSs,Class A ordinary shares or similar securities fora period of 180 days after the date of this prospectus.See“Underwriting”for more information.ListingWe intend to apply to have the ADSs listed on the New YorkStock Exchange under the symbol“ZKH.”The ADSs and ourClass A ordinary shares will not be listed on any other stockexchange or traded on any automated quotation system.Payment and settlementThe underwriters expect to deliver the ADSs againstpayment therefor through the facilities of the DepositoryTrust Company on,2023.DepositaryCitibank,N.A.The number of ordinary shares that will be issued and outstanding immediately after this offering:is based on 5,357,261,913 issued and outstanding ordinary shares as of the date of thisprospectus,assuming(i)the automatic re-designation of all of our issued and outstandingpreferred shares into ordinary shares on a one-for-one basis;(ii)the re-designation of4,196,181,913 issued and outstanding ordinary shares(including the ordinary shares convertedfrom(i)as Class A ordinary shares on a one-for-one basis;and(iii)the re-designation of1,161,080,000 issued and outstanding ordinary shares as Class B ordinary shares on a one-for-one basis immediately prior to the completion of this offering;includes Class A ordinary shares in the form of ADSs that we will issue and sell in thisoffering,assuming the underwriters do not exercise their option to purchase additional ADSs;andexcludes ordinary shares issuable upon exercise of our outstanding options,additional ordinaryshares reserved for future issuances under our share incentive plan,and any ordinary sharesthat are treated as treasury stock for accounting purposes.16/TABLE OF CONTENTS SUMMARY CONSOLIDATED FINANCIAL DATAThe following summary consolidated statements of comprehensive loss and summary consolidatedcash flow data for the years ended December 31,2020,2021 and 2022 and summary balance sheetdata as of December 31,2021 and 2022 have been derived from our audited consolidated financialstatements included elsewhere in this prospectus.Our consolidated financial statements are prepared and presented in accordance with accountingprinciples generally accepted in the United States of America,or U.S.GAAP.Our historical results do notnecessarily indicate results expected for any future periods.You should read this Summary ConsolidatedFinancial Data section together with our consolidated financial statements and the related notes and“Managements Discussion and Analysis of Financial Condition and Results of Operations”includedelsewhere in this prospectus.For the Year Ended December 31,2020 2021 2022 RMB RMB RMB US$(in thousands)Summary Consolidated Statements ofComprehensive Loss:Net revenues Net product revenues 4,619,937 7,500,036 8,086,920 1,172,493 Net service revenues 40,812 116,692 179,508 26,026 Other revenues 25,619 37,863 48,808 7,076 Total net revenues 4,686,368 7,654,591 8,315,236 1,205,595 Cost of revenues (4,006,098 (6,614,836 (6,997,566 (1,014,552 Operating expenses Fulfillment (236,882 (444,510 (467,384 (67,764 Sales and marketing (344,767 (689,637 (683,206 (99,056 Research and development (149,593 (256,421 (240,534 (34,874 General and administrative (348,839 (759,627 (612,252 (88,768 Loss from operations (399,811 (1,110,440 (685,706 (99,419 Interest and investment income 6,137 28,277 14,559 2,111 Interest expense (4,057 (10,593 (94,182 (13,655 Others,net 2,497 (1,156 33,737 4,891 Loss before tax (395,234 (1,093,912 (731,592 (106,072 Income tax(expenses)/benefits (1,914 (200 471 68 Net loss (397,148 (1,094,112 (731,121 (106,004 Less:net income attributable to non-controlling interests 245 112 333 48 Less:net income attributable toredeemable non-controlling interests 4,338 28,260 4,227 613 Net loss attributable to ZKH GroupLimited (401,731 (1,122,484 (735,681 (106,665 Accretion on preferred shares toredemption value (184,460 (329,737 (509,281 (73,839 Net loss attributable to ZKH GroupLimiteds ordinary shareholders (586,191 (1,452,221 (1,244,962 (180,504 Net loss per ordinary share attributableto ordinary shareholders Basic and diluted (0.52 (1.20 (0.94 (0.14 Weighted average number of shares Basic and diluted 1,132,337,753 1,213,878,050 1,325,036,140 1,325,036,140 17)(1)(1)(1)(1)/(1)TABLE OF CONTENTS Note:Share-based compensation expenses were allocated as follows:For the Year Ended December 31,2020 2021 2022 RMB RMB RMB US$(in thousands)Fulfillment 5,442 2,154 585 85 Sales and marketing 20,685 8,204 5,935 860 Research and development 19,709 10,134 3,883 563 General and administrative 46,151 162,857 21,496 3,117 Total 91,987 183,349 31,899 4,625 The following table presents our summary consolidated balance sheets data as of December 31,2021 and 2022:As of December 31,2021 2022 RMB RMB US$(in thousands)Summary Consolidated Balance Sheet Data:Cash and cash equivalents 537,998 1,954,246 283,339 Restricted cash 588,922 51,610 7,483 Accounts receivable,net 2,762,003 3,067,064 444,682 Inventories 762,938 655,997 95,111 Total current assets 5,278,401 6,283,255 910,986 Total assets 5,940,257 6,813,720 987,898 Accounts and notes payable 2,446,322 2,566,136 372,055 Accrued expenses and other current liabilities 519,152 539,191 78,175 Total liabilities 3,663,296 3,697,442 536,079 Total mezzanine equity 5,042,933 7,182,773 1,041,406 Total shareholders deficit (2,765,972 (4,066,495 (589,587 Total liabilities,mezzanine equity and shareholders deficit 5,940,257 6,813,720 987,898 18)/TABLE OF CONTENTS The following table presents our summary consolidated cash flow data for the years endedDecember 31,2020,2021 and 2022:For the Year Ended December 31,2020 2021 2022 RMB RMB RMB US$(in thousands)Summary Consolidated Cash Flow Data:Net cash provided by/(used in)operating activities 31,801 (1,382,752 (504,203 (73,102 Net cash used in investing activities (57,905 (94,395 (37,040 (5,370 Net cash provided by financing activities 1,826,445 174,631 1,302,710 188,876 Effect of exchange rate changes on cash,cashequivalents,and restricted cash (7,412 (8,695 117,469 17,031 Increase/(Decrease)in cash,cash equivalents,andrestricted cash 1,792,929 (1,311,211 878,936 127,435 Cash,cash equivalents,and restricted cash at beginning of year 645,202 2,438,131 1,126,920 163,388 Cash,cash equivalents,and restricted cash at end of year 2,438,131 1,126,920 2,005,856 290,823 Non-GAAP Financial MeasureWe review adjusted net loss,a non-GAAP measure,in evaluating our operating results and forfinancial and operational decision-making purposes.We define adjusted net loss for a specific period asnet loss in the same period excluding share-based compensation expenses and interest expense due tothe issuance of Series F Convertible Notes,which have been fully converted into Series F preferredshares without payment of interests.We present this non-GAAP financial measure because it is used by our management to evaluate ouroperating performance and formulate business plans.Accordingly,we believe that adjusted net losshelps identify underlying trends in our business that could otherwise be distorted by the effect of certainexpenses that are included in net loss and certain expenses that are not expected to result in future cashpayments or that are non-recurring in nature.We also believe that the use of the non-GAAP financialmeasure facilitates investors assessment of our operating performance,enhances the overallunderstanding of our past performance and future prospects and allows for greater visibility with respectto key metrics used by our management in its financial and operational decision making.The non-GAAP financial measure should not be considered in isolation from or construed as analternative to its most directly comparable financial measure prepared in accordance with GAAP.Investors are encouraged to review the historical non-GAAP financial measure in reconciliation to itsmost directly comparable GAAP financial measure.As the non-GAAP financial measure has materiallimitations as an analytical metric and may not be calculated in the same manner by all companies,suchmeasure may not be comparable to other similarly titled measure used by other companies.In light of theforegoing limitations,you should not consider the non-GAAP financial measure as a substitute for,orsuperior to,its most directly comparable financial measure prepared in accordance with GAAP.Weencourage investors and others to review our financial information in its entirety and not rely on a singlefinancial measure.19)/TABLE OF CONTENTS The following table presents a reconciliation of the historical non-GAAP financial measure to its mostdirectly comparable GAAP financial measure for each of the years indicated:For the Year Ended December 31,2020 2021 2022 RMB RMB RMB US$(in thousands)Net loss (397,148 (1,094,112 (731,121 (106,004 Add:Share-based compensation expenses 91,987 183,349 31,899 4,625 Interest expense due to the issuance of Series FConvertible Notes 73,081 10,596 Adjusted net loss (305,161 (910,763 (626,141 (90,783 See also“Managements Discussion and Analysis of Financial Condition and Results of Operations Non-GAAP Financial Measure.”20)/TABLE OF CONTENTS RISK FACTORSInvesting in our ADSs involves a high degree of risk.You should carefully consider the following risksand uncertainties and all other information contained in this prospectus before investing in our ADSs.Ourbusiness,financial condition,results of operations or prospects could also be harmed by risks anduncertainties not currently known to us or that we currently do not believe are material.If any of the risksactually occur,our business,financial condition,results of operations and prospects could be adverselyaffected.In that event,the market price of our ADSs could decline,and you could lose part or all of yourinvestment.Risks Related to Our Business and IndustryOur business,financial condition and results of operations may be materially and adverselyaffected if we are unable to attract and retain customers and maintain satisfactory customerexperience.The success of our business depends on our ability to provide superior MRO procurementexperience to expand our customer base,which in turn depends on a variety of factors.These factorsinclude our ability to offer a wide array of high-quality MRO products with great value for money,optimizethe product offering in response to the diverse and evolving demands of our customers,expand andmaintain relationships with our customers,suppliers and service providers,offer timely and reliablefulfillment service,develop digital solutions and intelligent services and recommend suitable ones to ourcustomers and suppliers,all of which will require us to incur substantial costs and expenses.If such costsand expenses fail to effectively translate into a larger customer base,we may not be able to achieve ourbusiness goals and our results of operations may be materially and adversely affected.Our efforts togrow our customer base may not lead to increased revenues in the immediate future.Even if they do,anyincreases in revenues may not offset the cost of revenues and the expenses incurred.If we are notsuccessful in our efforts to retain existing customers,attract new customers,increase customer spending,and ensure the quality of services provided by third-party suppliers under our marketplace model,ourrevenues may decline and our results of operations may be materially and adversely affected.Interruptions to or failures in the delivery services could prevent the timely or successful delivery ofour products.These interruptions or failures may be due to unforeseen events that are beyond ourcontrol or the control of our third-party delivery service providers,such as inclement weather,naturaldisasters or labor unrest.If products sold on our platform are not delivered in a timely or reliable manner,or are delivered in a damaged state which we failed to detect,customers may refuse to accept theseproducts and have less confidence in our products and services,furthermore we may face claims raisedby our customers that we should be held liable for any losses and damages arising therefrom.As aresult,our reputation,business,financial condition,and results of operations might suffer significantly.We depend on our fulfillment service managers to provide the last-mile delivery services and wedepend on our customer service team to provide pre-sale,sale and after-sales services and handlecustomer requests to return or exchange.If our fulfillment service managers and customer service teamfail to provide satisfactory services,our brand and customer loyalty may be adversely affected.Inaddition,any negative publicity or poor feedback regarding our customer service may harm our brandand reputation and in turn cause us to lose customers and market share.As a result,if we are unable to continue to maintain the quality of our customer experience andcustomer service,we may not be able to retain existing customers or attract new customers,which couldhave a material adverse effect on our business,financial condition and results of operations.The expansion into new product categories and services may expose us to new challenges andmore risks.As our customer base and product mix change over time,we must identify new products andservices that respond to the evolving industry trends and customer needs.Our inability to introduce newproducts and services that meet customers evolving demands and preferences,and effectively integratethem into our existing product and service mix could have a negative impact on future sales 21/TABLE OF CONTENTS growth and our competitive position.Specifically,our lack of familiarity with new products and lack ofrelevant customer insights relating to these products may make it more difficult for us to anticipatecustomer demands and preferences or to ensure the quality of products and services.We may misjudgecustomer demands,resulting in inventory buildup and possible inventory write-down,this may also makeit more difficult for us to inspect and control quality and ensure proper handling,storage and delivery.Wemay experience higher return rates on new products,receive more customer complaints about them andface costly product liability claims as a result of selling them,which would harm our brand and reputationas well as our financial performance.We may not have much bargaining power over suppliers in newcategories of products and we may not be able to negotiate favorable terms with suppliers or ensurestable supplies of these new product categories.From time to time,we may need to price aggressively togain market share or remain competitive in new categories.Furthermore,we may need to adjust ourproduct mix from time to time in response to customers evolving procurement demands.It may bedifficult for us to achieve profitability in new product categories and our profit margin,if any,may be lowerthan we anticipate,which would adversely affect our overall profitability and results of operations.Wecannot assure you that we will be able to recoup our investments in introducing these new productcategories.Uncertainties relating to the growth and profitability of the evolving and dynamic MROprocurement service industry could adversely affect our business,prospects and results ofoperations.We cannot guarantee that our current or future strategies will be successfullyimplemented or will generate sustainable profit.The online MRO procurement service industry is still in its early stage of development in China,which may not develop into the stage and scale we expect.We have a limited operating history of onlineMRO procurement services and limited experience in operating under our product sales and marketplacemodels.In addition,we have limited experience in providing digital solutions,intelligent services andwarehousing,logistics and fulfillment services.As our business grows,or in response to fiercecompetition,we may continue to introduce new products and services,adjust our existing product andservice offerings,or adjust our business operations in general to effectively withstand changes ofpurchase price of MRO products to maintain our growth and profitability,which may incur considerablecosts with no obvious improvement in our operations or our financial results.For associated risks,see“We may fail to compete effectively in the MRO procurement service industry.”We may also seek toexpand our current customer base,which may result in additional costs and expenses.Furthermore,ourability to continuously attract funding sources on reasonable terms is critical to our business.Anysignificant change to our business model that does not achieve expected results may have a material andadverse impact on our financial condition and results of operations.As the online MRO procurement services emerged in China only in recent years,the long-termviability and prospects of shifting the MRO procurement process from offline to online in China remainuntested and subject to significant uncertainties.You should consider our business and prospects in lightof the risks and challenges we encounter or may encounter given the rapidly evolving market in which weoperate and our limited operating history.These risks and challenges include our ability to,among otherthings:expand or optimize the product mix,sustain and improve the quality of MRO products andfulfillment solutions on our platform and provide a satisfying customer experience;maintain and enhance our relationship and business collaboration with suppliers,distributors,and warehousing and logistics service providers;attract new customers,retain existing c