| SEGMENT REPORTING |
19. SEGMENT REPORTING Segment information is prepared on the same basis that our CEO, who is our CODM, manages the segments, evaluates financial results, and makes key operating decisions. The CODM evaluates the performance of its operating segments based on net revenues and operating income. Segment information is prepared on the same basis that the Company’s CEO, who is the CODM, manages the segments, evaluates financial results, and makes key operating decisions. The CODM evaluates the performance of its operating segments based on net revenues and operating income. Significant expenses within operating income, as well as within net income, mainly include cost of materials, store rental and other operating costs, delivery expenses, sales and marketing expenses and general and administrative expenses, which are each separately presented on the Company’s Consolidated Statements of Operations. Other segment items within net income mainly include interest and investment income, other income, net, and income tax expense. The Group has one reportable operating segment: PRC segment, which is encompassing our operations in the PRC, stands as the Group’s most mature business and has achieved significant scale. The PRC segment derives its revenue through two primary sources: product sales from physical and online stores, and partnership revenue generated from domestic retail partners. All other operating segments, which comprised the Group’s operations in Singapore and the U.S., do not meet the quantitative thresholds for the determination of reportable segment. 19. SEGMENT REPORTING (CONTINUED) The following tables present selected financial information with respect to the Group’s single reportable segment. All intercompany revenues and expenses are eliminated in computing revenues and operating income. | | | | | | | | | | | For the year ended | | | December 31, | | | 2023 | | 2024 | | 2025 | | | RMB | | RMB | | RMB | | US$ | PRC segment: | | | | | | | | | Total net revenues | | 24,870,496 | | 34,336,827 | | 49,003,619 | | 6,994,222 | Depreciation and amortization expenses | | (600,914) | | (1,177,234) | | (1,535,095) | | (219,102) | Operating income | | 3,078,018 | | 3,501,834 | | 5,253,819 | | 749,870 |
| | | | | | | | | | | For the year ended | | | December 31, | | | 2023 | | 2024 | | 2025 | | | RMB | | RMB | | RMB | | US$ | PRC segment: | | | | | | | | | Revenues from product sales | | 18,644,720 | | 26,591,586 | | 37,413,748 | | 5,340,015 | Freshly brewed drinks | | 16,845,573 | | 24,365,054 | | 34,344,185 | | 4,901,900 | Other products | | 1,241,512 | | 1,683,648 | | 2,311,145 | | 329,867 | Others | | 557,635 | | 542,884 | | 758,418 | | 108,248 | Revenues from partnership stores | | 6,225,776 | | 7,745,241 | | 11,589,871 | | 1,654,207 | PRC segment total net revenues (1) | | 24,870,496 | | 34,336,827 | | 49,003,619 | | 6,994,222 | | | | | | | | | | Reconciliation: | | | | | | | | | All other revenues(2) | | 32,670 | | 137,987 | | 284,476 | | 40,603 | Total net revenues | | 24,903,166 | | 34,474,814 | | 49,288,095 | | 7,034,825 |
| (1) | The reportable segment’s total net revenues reflect the Group’s domestic operations in PRC. |
| (2) | All other revenues represent sales within our self- operated stores in Singapore and the United States and franchisee revenue from overseas exclusive partners. |
19. SEGMENT REPORTING (CONTINUED) | | | | | | | | | | | For the year ended | | | December 31, | | | 2023 | | 2024 | | 2025 | | | RMB | | RMB | | RMB | | US$ | PRC segment operating income | | 3,078,018 | | 3,501,834 | | 5,253,819 | | 749,870 | | | | | | | | | | Reconciliation: | | | | | | | | | Corporate and other unallocated income/(expenses)(1) | | (14,983) | | 115,595 | | (43,768) | | (6,247) | Operating loss from other operations(2) | | (42,612) | | (47,360) | | (137,116) | | (19,570) | Total consolidated operating income | | 3,020,423 | | 3,570,069 | | 5,072,935 | | 724,053 | Interest and other income/(loss), net(3) | | 81,741 | | 156,193 | | 207,240 | | 29,579 | Total consolidated income before income taxes | | 3,102,164 | | 3,726,262 | | 5,280,175 | | 753,632 |
| (1) | Corporate and other unallocated expenses represent corporate overhead expenses that have not been allocated to any segment for reporting purposes including general and administrative expenses, losses and expenses related to Fabricated Transactions and Restructuring, etc. |
| (2) | Amounts reflect the net loss from operations related to our operations outside PRC. |
| (3) | Amounts reflect the difference between the consolidated operating income and the income before income taxes which are not reviewed at the segment level by CODM. This primarily includes interest and investment income, interest and financing expenses, foreign exchange gain/(loss), Other income/(loss) and provision for equity litigants settlement, etc. |
| | | | | | | | | As of December 31, | | | 2024 | | 2025 | | | RMB | | RMB | | US$ | PRC segment: | | | | | | | Total long-lived assets(1) | | 10,887,651 | | 13,550,932 | | 1,934,107 | Total assets | | 21,591,523 | | 29,480,222 | | 4,207,673 |
| (1) | Total long-lived assets primarily consist of the property and equipment and the Group’s operating lease right-of-use asset. |
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