v3.26.1
Fair Value Measurements
 12 Months Ended
Dec. 31, 2025
Fair Value Disclosures [Abstract]  
Fair Value Measurements

18. Fair Value Measurements

 

Assets and Liabilities Measured and Disclosed at Fair Value on a Recurring Basis

 

In accordance with ASC 820, the Group measures term deposits and short-term investments, restricted cash and available-for-sale debt investments at fair value on a recurring basis.

The following table sets forth the financial instruments, measured at fair value on a recurring basis, by level within the fair value hierarchy (in thousands):

 

 

Fair Value Measurements at Reporting Date Using

 

 

 

Carrying
Value
on Balance
Sheets

 

 

Quote Prices
in Active
Market for
Identical Assets
(Level 1)

 

 

Significant
Other
Observable
Inputs
(Level 2)

 

 

Significant
Unobservable
Inputs
(Level 3)

 

 

 

RMB

 

 

RMB

 

 

RMB

 

 

RMB

 

As of December 31, 2024:

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Term deposits and short-term investments

 

 

428,343

 

 

 

—

 

 

 

428,343

 

 

 

—

 

Restricted cash

 

 

9,761

 

 

 

9,761

 

 

 

—

 

 

 

—

 

Available-for-sale debt investments

 

 

313

 

 

 

—

 

 

 

—

 

 

 

313

 

As of December 31, 2025:

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Term deposits and short-term investments

 

 

464,226

 

 

 

—

 

 

 

464,226

 

 

 

—

 

Restricted cash

 

 

16,102

 

 

 

16,102

 

 

 

—

 

 

 

—

 

Available-for-sale debt investments

 

 

306

 

 

 

—

 

 

 

—

 

 

 

306

 

 

18. Fair Value Measurements (Continued)

Assets and Liabilities Measured and Disclosed at Fair Value on a Recurring Basis (Continued)

The following table sets forth the reconciliation of the fair value measurements of available-for-sale debt investments from January 1, 2023 to December 31, 2025 (in thousands):

 

 

Fair Value
Measurements of
Available-for-sale
Debt Investments

 

 

 

RMB

 

Ending balance as of January 1, 2023

 

 

304

 

Currency translation adjustment

 

 

5

 

Ending balance as of December 31, 2023

 

 

309

 

Currency translation adjustment

 

 

4

 

Ending balance as of December 31, 2024

 

 

313

 

Currency translation adjustment

 

 

(7

)

Ending balance as of December 31, 2025

 

 

306

 

 

Term deposit and short-term investments. The Group’s term deposit and short-term investments consist of wealth management products and structured deposits issued by commercial banks and other financial institutions with original maturity of more than three months and up to one year, which contain a variable interest rate. The Group elected the fair value method at the date of initial recognition and carried these investments at fair value. Changes in the fair value are reflected in the consolidated statements of comprehensive income/(loss) as interest income. To estimate fair value, the Group refers to the quoted rate of return provided by banks at the end of each period using the discounted cash flow method. The Group classifies the valuation techniques that use these inputs as Level 2 of fair value measurements.

Restricted cash. The Group’s restricted cash represents deposits that are restricted to withdrawal or usage. The fair values of restricted cash are determined based on the pervasive interest rate in the market. The Group classifies the valuation techniques that use the pervasive interest rates input as Level 1 of fair value measurement.

Available-for-sale debt investments. Available-for-sale debt investments mainly represent the investments of convertible redeemable preferred shares in Particle. In accordance with ASC 820, the Group measures available-for-sale debt investments at fair value on a recurring basis. The fair values of the investments in Particle as of December 31, 2023, 2024 and 2025 were determined based on a valuation technique under the market approach, known as guideline company method, where financial ratios of comparable companies were analyzed to determine the value of Particle, as well as using observable transactions of Particle’s shares. The Group classifies the valuation techniques that use unobservable inputs as Level 3 of fair value measurements.

The key inputs used in valuation of available-for-sale debt investments in Particle as of December 31, 2023, 2024 and 2025 were as follow:

 

 

As of December 31,

 

 

2023

 

2024

 

2025

Lack of marketability discount (“DLOM”)

 

20%

 

20%

 

20%

Volatility

 

50.0%

 

50.0%

 

50.0%

 

18. Fair Value Measurements (Continued)

Assets and Liabilities Measured and Disclosed at Fair Value on a Non-Recurring Basis

The Group’s non-financial long-lived assets, such as equity method investments, intangible assets and fixed assets, would be measured at fair value only if they were determined to be impaired on an other-than-temporary basis. The Group uses a combination of valuation methodologies, including market and income approaches based on the Group’s best estimate to determine the fair value of these non-financial assets. Inputs used in these methodologies primarily included future cash flows, discount rate, expected volatility and the selection of comparable companies operating in similar businesses.

For equity investments without readily determinable fair values accounted for under the measurement alternative, when there are observable price changes in orderly transactions for identical or similar investments of the same issuer, the investments are re-measured to fair value. The non-recurring fair value measurements to the carrying amount of an investment usually requires management to estimate a price adjustment for the different rights and obligations between a similar instrument of the same issuer with an observable price change in an orderly transaction and the investment held by the Company. These non-recurring fair value measurements were measured as of the observable transaction dates. The valuation methodologies involved require management to use the observable transaction price at the transaction date and other unobservable inputs (level 3) such as volatility of comparable companies and probability of exit events as it relates to liquidation and redemption preferences.

Accounts receivable, notes receivable, amounts due from related parties, prepayments and other current assets, accounts payable and amounts due to related parties are financial assets or liabilities with carrying values that approximate fair value due to their short term nature.