0001104659-23-049651 | 20-F | XBRL Viewer

Year ended December 31,

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Document and Entity Information	12 Months Ended
Document and Entity Information	Dec. 31, 2022 shares
Document and Entity Information
Document Type	20-F
Document Registration Statement	false
Document Annual Report	true
Document Period End Date	Dec. 31, 2022
Document Transition Report	false
Document Shell Company Report	false
Entity File Number	001-38649
Entity Registrant Name	Viomi Technology Co., Ltd
Entity Incorporation, State or Country Code	E9
Entity Address, Address Line One	Wansheng Square, Rm 1302 Tower C
Entity Address, Address Line Two	Xingang East Road
Entity Address, Address Line Three	Haizhu District
Entity Address, City or Town	Guangdong
Entity Address, Country	CN
Entity Address, Postal Zip Code	510220
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Shell Company	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Bankruptcy Proceedings, Reporting Current	false
Document Accounting Standard	U.S. GAAP
ICFR Auditor Attestation Flag	false
Auditor Name	PricewaterhouseCoopers Zhong Tian LLP
Auditor Location	Guangzhou, the People’s Republic of China
Auditor Firm ID	1424
Amendment Flag	false
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	FY
Entity Central Index Key	0001742770
Current Fiscal Year End Date	--12-31
Business Contact
Document and Entity Information
Entity Address, Address Line One	Wansheng Square, Rm 1302 Tower C
Entity Address, Address Line Two	Xingang East Road
Entity Address, Address Line Three	Haizhu District
Entity Address, City or Town	Guangdong
Entity Address, Country	CN
Entity Address, Postal Zip Code	510220
Contact Personnel Name	Xiaoping Chen
City Area Code	20
Local Phone Number	8930 9496
Contact Personnel Email Address	chenxp@viomi.com
Ordinary shares
Document and Entity Information
Entity Common Stock, Shares Outstanding	207,394,013
Class A Ordinary Shares
Document and Entity Information
Title of 12(b) Security	Class A ordinary shares, par value US$0.00001 per share
No Trading Symbol Flag	true
Security Exchange Name	NASDAQ
Entity Common Stock, Shares Outstanding	104,539,463
Entity Common Stock, Shares Outstanding Excluding Shares Issued to Depositary Bank and Reserved for Future Grants	19,037,118
Class B Ordinary Shares
Document and Entity Information
Entity Common Stock, Shares Outstanding	102,854,550
ADR [Member]
Document and Entity Information
Title of 12(b) Security	American depositary shares, each representing three Class A ordinary shares
Trading Symbol	VIOT
Security Exchange Name	NASDAQ

CONSOLIDATED BALANCE SHEETS ¥ in Thousands, $ in Thousands	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
Current assets
Cash and cash equivalents	¥ 737,139	$ 106,875	¥ 586,955
Restricted cash	76,070	11,029	35,831
Short-term deposits	171,541	24,871
Short-term investments	197,058	28,571	828,867
Accounts and notes receivable from third parties (net of allowance of RMB34,385 and RMB87,563 as of December 31, 2021 and 2022, respectively)	241,652	35,036	302,336
Accounts receivable from a related party (net of allowance of RMB368 and RMB272 as of December 31, 2021 and 2022, respectively)	360,497	52,267	320,939
Other receivables from related parties (net of allowance of RMB104 and RMB19 as of December 31, 2021 and 2022, respectively)	25,021	3,628	88,367
Inventories	502,291	72,825	576,351
Prepaid expenses and other current assets	183,708	26,636	156,127
Long-term deposits-current portion			50,000
Total current assets	2,494,977	361,738	2,945,773
Non-current assets
Prepaid expenses and other non-current assets	22,856	3,314	27,321
Property, plant and equipment, net	236,432	34,279	145,993
Deferred tax assets	12,660	1,836	35,304
Intangible assets, net	13,671	1,982	12,176
Right-of-use assets, net	14,649	2,124	18,425
Land use rights, net	60,449	8,764	61,722
Long-term deposits-non-current portion	30,000	4,350	30,000
Total non-current assets	390,717	56,649	330,941
Total assets	2,885,694	418,387	3,276,714
Current liabilities
Accounts and notes payable (including accounts and notes payable of the consolidated variable interest entities and their subsidiaries ("VIEs") without recourse to the Company of RMB545,966 and RMB377,839 as of December 31, 2021 and 2022, respectively)	844,058	122,377	1,069,108
Advances from customers (including advances from customers of the consolidated VIEs without recourse to the Company of RMB89,303 and RMB81,434 as of December 31, 2021 and 2022, respectively)	118,369	17,162	99,632
Amounts due to related parties (including amounts due to related parties of the consolidated VIEs without recourse to the Company of RMB5,415 and RMB11,548 as of December 31, 2021 and 2022, respectively)	11,548	1,674	5,415
Accrued expenses and other liabilities (including accrued expenses and other liabilities of the consolidated VIEs without recourse to the Company of RMB284,830 and RMB222,668 as of December 31, 2021 and 2022, respectively)	308,845	44,778	365,718
Income tax payables (including income tax payables of the consolidated VIEs without recourse to the Company of RMB16,231 and RMB16,151 as of December 31, 2021 and 2022, respectively)	16,674	2,418	43,343
Lease liabilities due within one year (including lease liabilities due within one year of the consolidated VIEs without recourse to the Company of RMB6,988 and RMB4,138 as of December 31, 2021 and 2022, respectively)	7,233	1,049	11,312
Long-term borrowing-current portion	20,215	2,931
Total current liabilities	1,326,942	192,389	1,594,528
Non-current liabilities
Accrued expenses and other liabilities (including accrued expenses and other liabilities of the consolidated VIEs without recourse to the Company of RMB7,558 and RMB8,245 as of December 31, 2021 and 2022, respectively)	8,245	1,196	7,558
Long-term borrowing	114,552	16,608	16,105
Lease liabilities (including lease liabilities of the consolidated VIEs without recourse to the Company of RMB4,751 and RMB6,040 as of December 31, 2021 and 2022, respectively)	6,792	985	7,596
Total non-current liabilities	129,589	18,789	31,259
Total liabilities	1,456,531	211,178	1,625,787
Commitments and contingencies (Note 21)
Shareholders' equity
Treasury stock	(74,703)	(10,831)	(66,668)
Additional paid-in capital	1,357,397	196,804	1,337,281
Retained earnings	174,385	25,283	449,900
Accumulated other comprehensive loss	(24,335)	(3,528)	(73,120)
Total equity attributable to shareholders of Viomi Technology Co., Ltd (the "Company")	1,432,756	207,730	1,647,405
Non-controlling interests	(3,593)	(521)	3,522
Total shareholders' equity	1,429,163	207,209	1,650,927
Total liabilities and shareholders' equity	2,885,694	418,387	3,276,714
Class A Ordinary Shares
Shareholders' equity
Ordinary shares, value	6	1	6
Class B Ordinary Shares
Shareholders' equity
Ordinary shares, value	¥ 6	$ 1	¥ 6

CONSOLIDATED BALANCE SHEETS (Parenthetical) ¥ in Thousands, $ in Thousands	Dec. 31, 2022 CNY (¥) shares	Dec. 31, 2021 CNY (¥) shares
Accounts and Notes Receivable, Net, Current	¥ 53,082	¥ 25,446
Accounts and notes payable	844,058	1,069,108
Advances from customers	118,369	99,632
Amounts due to related parties	11,548	5,415
Accrued expenses and other liabilities-current portion	308,845	365,718
Income tax payables	16,674	43,343
Lease liabilities, current	7,233	11,312
Accrued expenses and other liabilities non current	8,245	7,558
Lease liabilities, non current	6,792	7,596
VIEs
Accounts and notes payable	377,839	545,966
Advances from customers	81,434	89,303
Amounts due to related parties	11,548	5,415
Accrued expenses and other liabilities-current portion	223,080	284,830
Income tax payables	16,151	16,231
Lease liabilities, current	4,138	6,988
Accrued expenses and other liabilities non current	8,245	7,558
Lease liabilities, non current	6,040	4,751
Related party
Accounts and Notes Receivable, Net, Current	272	368
Accounts and Other Receivables, Net, Current	19	104
Related party \| VIEs
Accounts and Notes Receivable, Net, Current	272	368
Third party
Accounts and Notes Receivable, Net, Current	87,563	34,385
Third party \| VIEs
Accounts and Notes Receivable, Net, Current	¥ 72,193	¥ 27,009
Class A Ordinary Shares
Common stock, shares authorized \| shares	4,800,000,000	4,800,000,000
Common stock, shares issued \| shares	104,539,463	105,516,779
Common stock, shares outstanding \| shares	104,539,463	105,516,779
Class B Ordinary Shares
Common stock, shares authorized \| shares	150,000,000	150,000,000
Common stock, shares issued \| shares	102,854,550	103,214,547
Common stock, shares outstanding \| shares	102,854,550	103,214,547

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥) ¥ / shares shares	Dec. 31, 2022 USD ($) $ / shares shares	Dec. 31, 2021 CNY (¥) ¥ / shares shares	Dec. 31, 2020 CNY (¥) ¥ / shares shares
Net revenues:
A related party	¥ 1,403,354	$ 203,467	¥ 2,295,569	¥ 2,889,441
Third parties	1,829,377	265,235	3,008,266	2,936,183
Total net revenues	3,232,731	468,702	5,303,835	5,825,624
Cost of revenues	(2,495,638)	(361,834)	(4,105,767)	(4,742,668)
Gross profit	737,093	106,868	1,198,068	1,082,956
Operating expenses:
Research and development expenses	(299,950)	(43,489)	(311,786)	(265,680)
Selling and marketing expenses	(614,887)	(89,150)	(751,011)	(597,176)
General and administrative expenses	(121,702)	(17,645)	(97,730)	(68,914)
Total operating expenses	(1,036,539)	(150,284)	(1,160,527)	(931,770)
Other income, net	22,135	3,209	27,128	32,795
Income (loss) from operations	(277,311)	(40,207)	64,669	183,981
Interest income and short-term investment income, net	10,368	1,503	28,589	31,968
Other non-operating income	2,487	361	1,372	1,818
Income (loss) before income tax expenses	(264,456)	(38,343)	94,630	217,767
Income tax expenses	(18,174)	(2,635)	(5,739)	(43,321)
Net income (loss)	(282,630)	(40,978)	88,891	174,446
Less: Net income (loss) attributable to the non-controlling interest shareholders	(7,115)	(1,032)	286	1,122
Net income (loss) attributable to ordinary shareholders of the Company	(275,515)	(39,946)	88,605	173,324
Net income (loss) attributable to the Company	(275,515)	(39,946)	88,605	173,324
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	48,785	7,073	(13,736)	(40,239)
Total comprehensive income (loss) attributable to the Company	¥ (226,730)	$ (32,873)	¥ 74,869	¥ 133,085
Net income (loss) per share attributable to ordinary shareholders of the Company:
-Basic \| (per share)	¥ (1.32)	$ (0.19)	¥ 0.42	¥ 0.83
-Diluted \| (per share)	¥ (1.32)	$ (0.19)	¥ 0.40	¥ 0.80
Weighted average number of ordinary shares used in calculating net income per share
-Basic	208,341,011	208,341,011	209,551,821	208,812,049
-Diluted	208,341,011	208,341,011	220,735,997	215,623,773

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)
Share-based compensation expenses - Share options	¥ 19,560		¥ 47,405	¥ 72,203
Research and development expenses
Share-based compensation expenses - Share options	14,645	$ 2,123	32,609	49,996
Selling and Marketing Expenses
Share-based compensation expenses - Share options	500	72	5,666	10,904
General and Administrative Expenses
Share-based compensation expenses - Share options	¥ 4,415	$ 640	¥ 9,130	¥ 11,303

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY ¥ in Thousands, $ in Thousands	Common Stock Class A Ordinary Shares Conversion of Class B ordinary shares into Class A ordinary shares shares	Common Stock Class A Ordinary Shares CNY (¥) shares	Common Stock Class B Ordinary Shares Conversion of Class B ordinary shares into Class A ordinary shares shares	Common Stock Class B Ordinary Shares CNY (¥) shares	Treasury Stock CNY (¥) shares	Additional Paid-in Capital 2015 and 2018 Share Incentive Plan CNY (¥)	Additional Paid-in Capital CNY (¥)	Retained Earnings CNY (¥)	Accumulated Other Comprehensive (Loss) Income CNY (¥)	Total Equity Attributable to Shareholders of the Company Cumulative Effect, Period of Adoption, Adjustment CNY (¥)	Total Equity Attributable to Shareholders of the Company 2015 and 2018 Share Incentive Plan CNY (¥)	Total Equity Attributable to Shareholders of the Company CNY (¥)	Non-Controlling Interest CNY (¥)	Class A Ordinary Shares shares	Class B Ordinary Shares shares	2015 and 2018 Share Incentive Plan CNY (¥)	CNY (¥) shares	USD ($) shares
Balances at Dec. 31, 2019		¥ 6		¥ 6			¥ 1,192,332	¥ 195,596	¥ (19,145)	¥ (2,405)		¥ 1,368,795	¥ 5,652				¥ 1,374,447
Balances (in shares) at Dec. 31, 2019 \| shares		98,444,732		110,850,000
Net income (loss) attributable to the Company and a non-controlling interest shareholder								173,324				173,324	1,122				174,446
Share-based compensation related to Share Incentive Plan							72,203					72,203					72,203
Securities have been converted into Ordinary Shares upon the completion of the Initial Public Offering (in shares) \| shares	7,295,454		(7,295,454)											7,295,454
Issuance of ordinary shares for exercised share options							8,989					8,989					¥ 8,989
Issuance of ordinary shares for exercised share options (in shares) \| shares		2,655,669												2,655,669			2,655,669	2,655,669
Repurchase of shares					¥ (54,600)							(54,600)					¥ (54,600)
Repurchase of shares (in shares) \| shares		(4,232,169)			4,232,169									(4,232,169)
Purchase of non-controlling interests							(1,016)					(1,016)	2,302				1,286
Dividend to non-controlling interests													(1,236)				(1,236)
Appropriation to statutory reserves							3,464	(3,464)
Foreign currency translation adjustment									(40,239)			(40,239)					(40,239)
Balances at Dec. 31, 2020		¥ 6		¥ 6			1,278,004	363,051	(59,384)			1,527,083	3,236				1,530,319
Balances (in shares) at Dec. 31, 2020 \| shares		104,163,686		103,554,546										104,163,686	103,554,546
Treasury stock, ending balance at Dec. 31, 2020					¥ (54,600)
Treasury stock, ending balance (in shares) at Dec. 31, 2020 \| shares					4,232,169
Net income (loss) attributable to the Company and a non-controlling interest shareholder								88,605				88,605	286				88,891
Share-based compensation related to Share Incentive Plan						¥ 47,405					¥ 47,405					¥ 47,405
Securities have been converted into Ordinary Shares upon the completion of the Initial Public Offering (in shares) \| shares	339,999		(339,999)											339,999
Issuance of ordinary shares for exercised share options							9,941					9,941					¥ 9,941
Issuance of ordinary shares for exercised share options (in shares) \| shares		3,011,064												3,011,064			3,011,064	3,011,064
Capital injection in a subsidiary from a non-controlling interest shareholder							175					175					¥ 175
Repurchase of shares					¥ (12,068)							(12,068)					(12,068)
Repurchase of shares (in shares) \| shares		(1,997,970)			1,997,970									(1,997,970)
Appropriation to statutory reserves							1,756	(1,756)
Foreign currency translation adjustment									(13,736)			(13,736)					(13,736)
Balances at Dec. 31, 2021		¥ 6		¥ 6			1,337,281	449,900	(73,120)			1,647,405	3,522				1,650,927
Balances (in shares) at Dec. 31, 2021 \| shares		105,516,779		103,214,547										105,516,779	103,214,547
Treasury stock, ending balance at Dec. 31, 2021					¥ (66,668)												(66,668)
Treasury stock, ending balance (in shares) at Dec. 31, 2021 \| shares					6,230,139
Net income (loss) attributable to the Company and a non-controlling interest shareholder								(275,515)				(275,515)	(7,115)				(282,630)	$ (40,978)
Share-based compensation related to Share Incentive Plan						¥ 19,560					¥ 19,560					¥ 19,560
Securities have been converted into Ordinary Shares upon the completion of the Initial Public Offering (in shares) \| shares	359,997		(359,997)											359,997
Issuance of ordinary shares for exercised share options							556					556					¥ 556
Issuance of ordinary shares for exercised share options (in shares) \| shares		956,256												956,256			956,256	956,256
Repurchase of shares					¥ (8,035)							(8,035)					¥ (8,035)
Repurchase of shares (in shares) \| shares		(2,293,569)			2,293,569									(2,293,569)
Foreign currency translation adjustment									48,785			48,785					48,785	$ 7,073
Balances at Dec. 31, 2022		¥ 6		¥ 6			¥ 1,357,397	¥ 174,385	¥ (24,335)			¥ 1,432,756	¥ (3,593)				1,429,163	207,209
Balances (in shares) at Dec. 31, 2022 \| shares		104,539,463		102,854,550										104,539,463	102,854,550
Treasury stock, ending balance at Dec. 31, 2022					¥ (74,703)												¥ (74,703)	$ (10,831)
Treasury stock, ending balance (in shares) at Dec. 31, 2022 \| shares					8,523,708

CONSOLIDATED STATEMENTS OF CASH FLOWS ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)
Cash flows from operating activities
Net income (loss)	¥ (282,630)	$ (40,978)	¥ 88,891	¥ 174,446
Adjustment to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	88,494	12,830	72,148	54,271
Inventory write-down	32,846	4,762	8,103	22,577
Share-based compensation	19,560	2,836	47,405	72,203
Allowance for doubtful accounts	52,997	7,684	25,541	4,484
Deferred income tax (benefits) expenses	22,644	3,283	(21,115)	(1,492)
Investment income	(7,350)	(1,066)	(1,369)	(10,800)
Changes in operating assets and liabilities:
Accounts and notes receivable from third parties	7,505	1,088	99,877	(118,403)
Accounts receivable from a related party	(39,462)	(5,721)	287,690	98,792
Inventories	41,214	5,975	(145,079)	(43,937)
Prepaid expenses and other current assets	(25,710)	(3,728)	(76,193)	(23,543)
Other receivables from related parties	63,432	9,197	(266)	(64,103)
Amounts due to related parties	6,133	889	(118,777)	99,086
Interest received relating to the investment income recognized in previous year	3,243	470	2,785	8,089
Accounts and notes payable	(225,050)	(32,629)	67,737	(41,788)
Advances from customers	18,737	2,717	(12,981)	9,463
Income tax payables	(26,669)	(3,867)	(7,619)	17,440
Accrued expenses and other liabilities	(29,220)	(4,236)	3,202	421
Lease liabilities	(4,883)	(708)	(11,012)	(8,392)
Purchase of a land use right				(63,618)
Net cash provided by (used in) operating activities	(284,169)	(41,202)	308,968	185,196
Cash flows from investing activities
Purchase of equipment	(195,555)	(28,353)	(99,448)	(47,509)
Purchase of lease hold improvement			(3,991)	(569)
Purchase of intangible assets	(4,405)	(639)	(6,733)	(2,365)
Purchase of short-term investments	(347,971)	(50,451)	(1,796,620)	(3,256,151)
Maturity of short-term investments	983,887	142,650	1,663,489	2,874,162
Placement of short-term deposits	(171,541)	(24,871)	(164,761)	(215,630)
Maturities of short-term deposits			162,743	214,979
Placement of long-term deposits			(30,000)
Maturities of long-term deposits	50,000	7,249	10,000
Proceeds from disposal of property and equipment	132	19
Net cash (used in) provided by investing activities	314,547	45,604	(265,321)	(433,083)
Cash flows from financing activities
Proceeds from exercise of vested share options	2,936	426	12,920	6,615
(Repayment) receipt of borrowing	118,662	17,204	16,106	(95,868)
Capital injection in subsidiaries from non-controlling shareholders or investors			175
Purchase of non-controlling interests				(1,286)
Repurchase of ordinary shares	(8,035)	(1,165)	(12,068)	(54,600)
Dividends paid by non-wholly owned subsidiaries to non-controlling interests				(1,236)
Net cash (used in) provided by financing activities	113,563	16,465	17,133	(146,375)
Effect of exchange rate changes on cash and cash equivalents	46,482	6,739	(12,703)	(34,034)
Net (decrease) increase in cash and cash equivalents and restricted cash	190,423	27,606	48,077	(428,296)
Cash and cash equivalents and restricted cash at the beginning of the year	622,786	90,295	574,709	1,003,005
Cash and cash equivalents and restricted cash at the end of the year	813,209	117,901	622,786	574,709
Cash and cash equivalents at the end of the year	737,139	106,875	586,955	504,108
Restricted cash at the end of the year	76,070	11,029	35,831	70,601
Supplemental disclosures of cash flow information:
Cash paid for income tax	(22,802)	(3,306)	(34,446)	(27,373)
Cash paid for interest expense, net of amounts capitalized				(76)
Acquisition of equipment in form of other payable	¥ 16,075	$ 2,331	¥ 60,507	¥ 15,624

ORGANIZATION AND PRINCIPAL ACTIVITIES

12 Months Ended

Dec. 31, 2022

ORGANIZATION AND PRINCIPAL ACTIVITIES

ORGANIZATION AND PRINCIPAL ACTIVITIES

1.ORGANIZATION AND PRINCIPAL ACTIVITIES

Viomi Technology Co., Ltd (the “Company”) is a holding company incorporated under the Laws of the Cayman Islands in January 2015. The Company, through its consolidated subsidiaries and “VIEs” (collectively referred to as the “Group”) is primarily engaged in the operation of developing and selling Internet-of-things-enabled (“IoT-enabled”) smart home products in the People’s Republic of China (the “PRC”).

(a)History and Reorganization

The Group commenced its operations in May 2014 through Foshan Yunmi Electric Appliances Technology Co., Ltd. (“Foshan Viomi”), a PRC company established by Mr. Chen Xiaoping (“Mr. Chen” or the “Founder”), and Tianjin Jinxing Investment Co., Ltd. (“Tianjin Jinxing”), a subsidiary of Xiaomi Corporation (“Xiaomi”, also referring to entities controlled by Xiaomi Corporation where appropriate), who is an investor of the Company. Mr. Chen and Tianjin Jinxing invested RMB7,500 and RMB5,000 to establish Foshan Viomi and held 60% and 40% initial equity interests, respectively. Included in the RMB7,500 invested by Mr. Chen, RMB2,500 was invested by certain key management founders and held by Mr. Chen on their behalf (The key management founders, together with Mr. Chen are referred to “the Founders”). The Group has undertaken its reorganization (“Reorganization”) as detailed below.

In January 2015, the Company was incorporated in the Cayman Islands, Viomi HK Technology Co., Limited (“Viomi HK”) was incorporated in Hong Kong as a wholly owned subsidiary of the Company, Beijing Yunmi Technology Co., Ltd. (“Beijing Viomi”) was set up as a domestic company. In May 2015, Lequan Technology Beijing Co., Ltd (“Lequan”) was incorporated as a wholly owned subsidiary of Viomi HK in the PRC.

In July 2015, the Company issued 33,818,182 class A ordinary shares to exchange the interest of RMB2,500 in Foshan Viomi held by Mr. Chen on behalf of key management founders, 67,636,364 Class B redeemable convertible ordinary shares (Pre-IPO Class B Ordinary Shares) to exchange the interest of RMB5,000 in Foshan Viomi owned by Mr. Chen, and 67,636,364 Pre-IPO Class B Ordinary Shares to Red Better Limited (“Red Better”), a subsidiary of Xiaomi, and Shunwei Talent Limited (“Shunwei”), to exchange the interest of RMB5,000 held by Tianjin Jinxing. Concurrently, the Company obtained control over Foshan Viomi and Beijing Viomi through Lequan by entering into a series of contractual arrangements with Foshan Viomi, Beijing Viomi and their shareholders as detailed in note 1(c). As a result, Foshan Viomi and Beijing Viomi became the consolidated VIEs of the Group. The Reorganization lacks substance and should be treated as a non-substantive merger with no change in the basis of assets and liabilities of Foshan Viomi.

In addition, the Company issued 18,181,818 Series A Preferred Shares at the issue price of US$1.1 per share to a group of investors for considerations of US$20,000, including conversion of the outstanding bridge loans of US$5,250, which was provided by the same investors during January 2015 to July 2015. The remaining consideration was fully received in cash.

In June 2018, the Board of Directors and the shareholders approved a transfer and surrender of shares plan, pursuant to which, Mr. Chen, who holds 33,818,182 class A ordinary shares on behalf of certain key management founders through Viomi Limited, transferred 16,145,454 class A ordinary shares to key management founders and surrendered the remaining 17,672,728 class A ordinary shares to the Company.

Pursuant to the written resolutions of all the shareholders of the Company on August 23, 2018, the Company effected a share split whereby each of the Company’s authorized and outstanding ordinary shares and preferred shares, par value of $0.0001 each, was divided into ten ordinary shares and preferred shares of the same series, par value US$0.00001 each, respectively. All shareholders surrendered 90% of their after-share-split outstanding shares back to the Company for cancellation. After the share split and the surrender of shares for cancellation, the number of the Company’s outstanding ordinary and preferred shares remained unchanged.

1.	ORGANIZATION AND PRINCIPAL ACTIVITIES (Continued)

(a)	History and Reorganization (Continued)

In December 2019, the Company established Yunmi Hulian Technology (Guangdong) Co., Ltd. (“Yunmi Hulian”) as a wholly owned subsidiary of Viomi HK to act as a holding company for future business and investment opportunities.

In October 2020, Codream HK Co., Limited (Hong Kong) (“Codream HK”), one of the Company’s subsidiaries, established Zhumeng Hulian Technology (Guangdong) Co. Ltd. (“Zhumeng Hulian”) as a wholly owned subsidiary of the Company.

In November 2020, the Group entered into an agreement with Sunglow Wealth HK Limited (“Sunglow”) to sell 1% of equity interests of Guangdong Lizi Technology Co. Ltd. (“Guangdong Lizi”) for a consideration of RMB175. Meanwhile, Foshan Viomi transferred all of its equity interests of Guangdong Lizi to Zhumeng Hulian. Sunglow has paid up the consideration in December 2021 but is not entitled to any shareholder’s rights of Guangdong Lizi until the fulfilment of certain conditions pursuant to the supplemental agreement in November 2021. The Group therefore did not recognize Sunglow as a non-controlling interest of Guangdong Lizi as of December 31, 2021.The situation did not change in 2022.

As of December 31, 2022, details of the Company’s principal subsidiaries and VIEs were as follows:


			Percentage of
	Place of	Date of	beneficial		Principal
	incorporation	incorporation	ownership		activities
Subsidiaries:
Viomi HK	Hong Kong	January 30, 2015	100	%	Investment holding
Lequan	PRC	May 15, 2015	100	%	Investment holding
Codream HK	Hong Kong	August 20, 2019	100	%	Investment holding
Yunmi Hulian	PRC	December 9, 2019	100	%	Investment holding
Zhumeng Hulian	PRC	October 14, 2020	100	%	Investment holding
Guangdong Lizi	PRC	July 26, 2018	100	%	Home appliance development and sales
Guangzhou interconnect Technology Co., Ltd.	PRC	December 7, 2020	100	%	Home appliance development and sales
VIEs:
Foshan Viomi	PRC	May 6, 2014	100	%	Home appliance development and sales
Beijing Viomi	PRC	January 12, 2015	100	%	No substantial business
Subsidiaries of Foshan Viomi:
Guangdong AI Touch Technology Co., Ltd. (“AI Touch”)	PRC	January 30, 2019	VIE’s subsidiary		Home appliance development and sales
Foshan Xiaoxian Hulian Electric Appliances Technology Co., Ltd. (“Foshan Xiaoxian”)	PRC	October 12, 2016	VIE’s subsidiary		Home appliance development and sales

(b)Dual Classes Ordinary Shares and Initial Public Offering

On September 25, 2018, the Company completed its IPO on the NASDAQ Global Market in the United States of America. In this offering, 11,400,000 American Depositary Shares (“ADSs”), representing 34,200,000 Class A ordinary shares, were issued and sold to the public at a price of US$9.00 per ADS.

1.	ORGANIZATION AND PRINCIPAL ACTIVITIES (Continued)

(b)Dual Classes Ordinary Shares and Initial Public Offering (Continued)

Pursuant to the resolution of the shareholders of the Company on August 23, 2018, the Company’s authorized share capital became US$50,000 divided into 5,000,000,000 shares comprising of (i) 4,800,000,000 class A ordinary shares of a par value of US$0.00001 each (‘‘Class A Ordinary Shares’’), (ii) 150,000,000 class B ordinary shares of a par value of US$0.00001 each (‘‘Class B Ordinary Shares’’) and (iii) 50,000,000 shares of a par value of US$0.00001 each of such class or classes (however designated) as the board of directors may determine in accordance with post-offering amended and restated memorandum and articles of association. In respect of all matters subject to a shareholder vote, each Class A ordinary share is entitled to one vote, and each Class B Ordinary Share is entitled to ten (10) votes, voting together as one class. Each Class B Ordinary Share is convertible into one Class A Ordinary Share at any time by the holder thereof. Class A Ordinary Shares are not convertible into Class B Ordinary Shares under any circumstances. Upon any transfer of Class B Ordinary Shares by a holder to any person or entity other than holders of Class B Ordinary Shares or their affiliates, such Class B Ordinary Shares shall be automatically and immediately converted into the equivalent number of Class A Ordinary Shares.

Immediately prior to the completion of the IPO, 16,145,454 issued Class A Ordinary Shares held by certain key management founders, 33,818,182 issued Pre-IPO Class B Ordinary Shares held by Red Better, and 67,636,364 issued Pre-IPO Class B Ordinary Shares held by Mr. Chen’s wholly-owned entity Viomi Limited was automatically converted by way of re-designation and re-classification into Class B Ordinary Shares on a one-for-one basis, and the rest of the outstanding Class A Ordinary Shares, the rest of the outstanding Pre-IPO Class B Ordinary Shares, and all outstanding Series A Preferred Shares was automatically converted by way of re-designation and re-classification into Class A Ordinary Shares on a one-for-one basis.

(c)	VIE Arrangements between the VIEs and the Company’s PRC subsidiaries

The Company, through Lequan or Yunmi Hulian, entered into the following contractual arrangements with Beijing Viomi, Foshan Viomi and their shareholders, respectively, that enable Lequan or Yunmi Hulian through their PRC subsidiaries to (1) have power to direct the activities that most significantly affects the economic performance of the VIEs, through the exercise of the shareholders’ rights under the shareholder voting proxy agreement as the shareholders’ meetings of the VIEs appoint the board of directors of the VIEs, and (2) receive the economic benefits of the VIEs that could be significant to the VIEs through the exclusive consultation and service agreement. Accordingly, Lequan or Yunmi Hulian are considered the primary beneficiaries of the VIEs and have consolidated the VIEs’ financial results of operations, assets and liabilities in the Company’s consolidated financial statements.

In making the conclusion that Lequan or Yunmi Hulian are the primary beneficiaries of the VIEs, the Company believes Lequan or Yunmi Hulian’s rights under the terms of the option agreement provide them with a substantive kick-out right. As advised by the Company’s PRC legal counsel, the Company believes the terms of the option agreement are valid, binding and enforceable under PRC laws and regulations currently in effect. The Company also believes that the consideration which is the minimum amount permitted by the applicable PRC law to exercise the option does not represent a financial barrier or disincentive for Lequan or Yunmi Hulian to currently exercise their rights under the exclusive option agreement.

A simple majority vote of Lequan or Yunmi Hulian’s board of directors is required to pass a resolution to exercise their rights under the option agreement. Lequan or Yunmi Hulian’s rights under the option agreement give them the power to control the shareholders of Foshan Viomi and Beijing Viomi. In addition, Lequan or Yunmi Hulian’s rights under the shareholder voting proxy agreement also reinforce their abilities to direct the activities that most significantly impact the VIEs’ economic performance. The Company also believes that this ability to exercise control ensures that the VIEs will continue to execute consultation and service agreements and also ensures that consultation and service agreements will be executed and renewed indefinitely unless a written agreement is signed by all parties to terminate it or a mandatory termination is requested by PRC laws or regulations. Lequan and Yunmi Hulian have the rights to receive substantially all of the economic benefits from the VIEs.

1.	ORGANIZATION AND PRINCIPAL ACTIVITIES (Continued)

(c)	VIE Arrangements between the VIEs and the Company’s PRC subsidiary (Continued)

Exclusive consulting and service agreement. In July 2015, Lequan entered into exclusive consultation and service agreements with Foshan Viomi and Beijing Viomi respectively to enable Lequan to receive substantially all of the economic benefits of the VIEs. In April 2020, Lequan assigned and transferred its rights and obligations of Foshan Viomi under the original agreements to Yunmi Hulian, which succeeded Lequan as a party to such agreement and assumed its rights and obligations thereunder. Under the exclusive consultation and service agreements, Lequan or Yunmi Hulian have the exclusive right to provide or designate any entity affiliated with them to provide VIEs the technical and business support services, including information technology support, hardware management and updates, software development, maintenance and updates and other operating services. The exclusive consultation and service agreement could be indefinitely effective unless a written agreement is signed by all parties to terminate it or a mandatory termination is requested by PRC laws or regulations. The exclusive consultation and service agreement was effective in July 2015 and will remain effective until all equity interests and assets in Foshan Viomi and Beijing Viomi are sold to Lequan or Yunmi Hulian or the party designated by them. Under this arrangement, Lequan or Yunmi Hulian has the sole discretion to receive an annual service fee at an amount up to 100% of the annual net income of Foshan Viomi and Beijing Viomi, respectively. In addition, Lequan or Yunmi Hulian are entitled to receive other technical service fees at the amount mutually agreed upon by them and the respective VIE.

Equity pledge agreement. Pursuant to the equity pledge agreements in July 2015 among Foshan Viomi, Beijing Viomi, all of their shareholders and Lequan, all shareholders of Foshan Viomi and Beijing Viomi agreed to pledge their equity interests in Foshan Viomi or Beijing Viomi to Lequan to secure the performance of the VIEs’ obligations under the existing exclusive purchase option agreement, shareholder voting proxy agreement, exclusive consulting and service agreement and also the equity pledge agreement. The Pledge will remain binding until Foshan Viomi, Beijing Viomi and their shareholders discharge all their obligations under the contractual agreements. In April 2020, Lequan assigned and transferred its rights and obligations under the original agreements to Yunmi Hulian.

Exclusive purchase option agreement. Lequan, Foshan Viomi, Beijing Viomi and their shareholders entered into exclusive option agreements in July 2015. In April 2020, Lequan assigned and transferred its rights and obligations under the original agreements to Yunmi Hulian, which succeeded Lequan as a party to such agreement and assumed its rights and obligations thereunder. Pursuant to the exclusive option agreements, the shareholders of Foshan Viomi and Beijing Viomi are obligated to sell their equity interest to Lequan or Yunmi Hulian. Lequan or Yunmi Hulian has the exclusive and irrevocable right to purchase, or cause the shareholders of Foshan Viomi and Beijing Viomi to sell to the party designated by them, in Lequan or Yunmi Hulian’s sole discretion, all of the shareholders’ equity interests or any assets in Foshan Viomi and Beijing Viomi when and to the extent that applicable PRC law permits Lequan or Yunmi Hulian to own such equity interests and assets in Foshan Viomi and Beijing Viomi. The price to be paid will be the minimum amount of consideration permitted by applicable PRC law at the time when such transaction occurs. All of the shareholders promised and agreed that they will refund the consideration once received to Lequan or Yunmi Hulian or any party designated by them within 10 working days. Also, the shareholders of Foshan Viomi and Beijing Viomi should try their best to help Foshan Viomi and Beijing Viomi develop well and are prohibited from transferring, pledging, intentionally terminating significant contracts or otherwise disposing of any significant assets in Foshan Viomi and Beijing Viomi without Lequan or Yunmi Hulian’s prior written consent. The exclusive option agreement will remain effective until all equity interests and assets in Foshan Viomi and Beijing Viomi are sold to Lequan or Yunmi Hulian or the party designated by them.

1.	ORGANIZATION AND PRINCIPAL ACTIVITIES (Continued)

(c)	VIE Arrangements between the VIEs and the Company’s PRC subsidiary (Continued)

Shareholder voting proxy agreement. In July 2015, all of the shareholders of Foshan Viomi and Beijing Viomi have executed a shareholder voting proxy agreement with Lequan, Foshan Viomi and Beijing Viomi, whereby all of the shareholders irrevocably appoint and constitute the person designated by Lequan as their attorney-in-fact to exercise on their behalf any and all rights that the shareholders have in respect of their equity interests in Foshan Viomi and Beijing Viomi. In April 2020, Lequan assigned and transferred its rights and obligations under the original agreement to Yunmi Hulian, which succeeded Lequan as a party to such agreement and assumed its rights and obligations thereunder. The shareholder voting proxy agreement will be indefinitely effective unless all parties decide to terminate it by written agreement.

In September 2018, Foshan Viomi reduced its registered capital and changed its shareholders from Mr. Chen and Tianjin Jinxing to Mr. Chen alone. Concurrently, the Group entered into a series of contractual arrangements in substantially the same forms with Foshan Viomi and Mr. Chen.

Management therefore concluded that the Company, through its PRC subsidiary and the above contractual arrangements, has the power to direct the activities that most significantly impact the VIEs’ economic performance, bears the risks of and enjoys the rewards normally associated with ownership of the VIEs, and therefore the Company is the ultimate primary beneficiary of these VIEs. Consequently, the financial results of the VIEs were included in the Group’s consolidated financial statements.

Risks in relation to VIE structure

The Company believes that the contractual arrangements among its subsidiaries, their VIEs and their respective shareholders are in compliance with PRC laws and regulations and are legally enforceable. However, uncertainties in the PRC legal system could limit Lequan and Yunmi Hulian’s ability to enforce the contractual arrangements. If the legal structure and contractual arrangements were found to be in violation of PRC laws and regulations, the PRC government could:

●

revoke the business and operating licenses of the Company’s PRC subsidiary and VIEs;

●

discontinue or restrict the operations of any related-party transactions between the Company’s PRC subsidiary and VIEs;

●

limit the Group’s business expansion in China by way of entering into contractual arrangements;

●

impose fines or other requirements with which the Company’s PRC subsidiary and VIEs may not be able to comply;

●

impose additional conditions or requirements with which the Group may not be able to comply;

●

take other regulatory or enforcement actions against the Group that could be harmful to the Group’s business or

●

require the Company or the Company’s PRC subsidiary or VIEs to restructure the relevant ownership structure or operations.

1.	ORGANIZATION AND PRINCIPAL ACTIVITIES (Continued)

(c)	VIE Arrangements between the VIEs and the Company’s PRC subsidiary (Continued)

The Company’s ability to conduct its business may be negatively affected if the PRC government were to carry out any of the aforementioned actions. As a result, the Company may not be able to consolidate its VIEs in its consolidated financial statements as it may lose the ability to exert effective control over the VIEs and their respective shareholders and it may lose the ability to receive economic benefits from the VIEs. The Company, however, does not believe such actions would result in the liquidation or dissolution of the Company, its PRC subsidiary or VIEs.

Mr. Chen is the ultimate shareholder of Foshan Viomi and the largest shareholder of Beijing Viomi, and Mr. Chen is also the largest beneficiary owner of the Company. The interests of Mr. Chen as the largest beneficiary owner of the VIEs may differ from the interests of the Company as a whole, since Mr. Chen is only one of the beneficiary shareholders of the Company. The Company cannot assert that when conflicts of interest arise, Mr. Chen will act in the best interests of the Company or that conflicts of interests will be resolved in the Company’s favor. Currently, the Company does not have existing arrangements to address potential conflicts of interest Mr. Chen may encounter in his capacity as a beneficial owner and director of the VIEs, on the one hand, and as a beneficial owner and director of the Company, on the other hand. The Company relies on Mr. Chen, as a director and executive officer of the Company, to fulfill his fiduciary duties and abide by laws of the PRC and Cayman Islands and act in the best interest of the Company. If the Company cannot resolve any conflicts of interest or disputes between the Company and Mr. Chen, the Company would have to rely on legal proceedings, which could result in disruption of its business, and there is substantial uncertainty as to the outcome of any such legal proceedings.

In addition, the other shareholder of Beijing Viomi is also a beneficial owner of the Company and therefore have no current interest in seeking to act contrary to the contractual arrangements. However, to further protect the investors’ interest from any risk that the shareholders of the Foshan Viomi and Beijing Viomi may act contrary to the contractual arrangements, the Company, through Lequan, entered into a shareholder voting proxy agreement with all of the shareholders of Foshan Viomi and Beijing Viomi in July 2015. The shareholder voting proxy agreement with the shareholder of Foshan Viomi has been updated in September 2018 as Foshan Viomi reduced its registered capital and changed its shareholders from Mr. Chen and Tianjin Jinxing to Mr. Chen alone. In April 2020, Lequan assigned and transferred its rights and obligations of Foshan Viomi under the original agreements to Yunmi Hulian, which succeeded Lequan as a party to such agreement and assumed its rights and obligations thereunder. Through the shareholder voting proxy agreement, all shareholders of Foshan Viomi and Beijing Viomi have entrusted the person designated by Lequan or Yunmi Hulian as its proxy to exercise their rights as the shareholders of Foshan Viomi and Beijing Viomi with respect to an aggregate of 100% of the equity interests in Foshan Viomi and Beijing Viomi.

In March 2019, the National People’s Congress enacted PRC Foreign Investment Law which would be effective starting from January 1, 2020. The Foreign Investment Law does not explicitly classify contractual arrangements as a form of foreign investment, but it contains a catch-all provision under the definition of “foreign investment”, which includes investments made by foreign investors through means stipulated in laws or administrative regulations or other methods prescribed by the State Council. Existing laws or administrative regulations remain unclear whether the contractual arrangements with variable interest entities will be deemed to be in violation of the market access requirements for foreign investment under the PRC laws and regulations. However, the possibility that such entities will be deemed as foreign invested enterprise and subject to relevant restrictions in the future shall not be excluded. If variable interest entities fall within the definition of foreign investment entities, the Group’s ability to use the contractual arrangements with its VIE and the Group’s ability to conduct business through the VIE could be severely limited.

1.	ORGANIZATION AND PRINCIPAL ACTIVITIES (Continued)

(c)	VIE Arrangements between the VIEs and the Company’s PRC subsidiaries (Continued)

The following table sets forth the assets, liabilities, results of operations and cash flows of the VIEs and its subsidiaries taken as a whole on an aggregated basis, which were included in the Group’s consolidated financial statements. For purposes of this presentation, activity within and between the VIEs and their subsidiaries have been eliminated, but transactions with other entities within the Consolidated Group have been included without elimination.


	As of December 31,
	2021	2022
	RMB	RMB
Cash and cash equivalents	353,554	335,476
Short-term investments	820,344	189,275
Accounts receivable from third parties (net of allowance of RMB27,009 and RMB72,193 as of December 31, 2021 and 2022, respectively)	204,769	150,686
Accounts receivable from a related party (net of allowance of RMB368 and RMB272 as of December 31, 2021 and 2022, respectively)	320,939	360,497
Amount due from Group companies	232,203	707,458
Inventories	362,385	281,649
Other assets	383,569	427,598
Total assets	2,677,763	2,452,639
Accounts and notes payable	545,966	377,839
Amount due to Group companies	824,304	1,043,056
Accrued expenses and other liabilities	292,388	231,325
Other liabilities	122,508	119,311
Total liabilities	1,785,166	1,771,531


	Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Revenue from Group companies (1)	25,994	131,379	220,607
Revenue from a related party and third parties	5,790,475	4,859,414	2,805,557

Cost from Group companies	214,289	1,291,468	49,359
Cost from a related party and third parties	4,556,588	2,870,809	2,355,718

Net income/(loss)	152,908	(60,908)	(237,517)

Net cash used in operating activities with Group companies	(162,243)	(794,936)	(958,297)
Net cash provided by operating activities with third parities	218,030	1,248,860	537,068
Net cash (used in)/provided by investing activities with Group companies	(30,404)	(83,325)	7,280
Net cash (used in)/provided by investing activities with third parties	(490,270)	(233,934)	461,320
Net cash provided by/(used in) financing activities with Group companies	154,557	(156,406)	(60,361)
Net cash (used in)/provided by financing activities with third parties	(98,390)	—	—

(1)	Inter-company revenues between VIEs and other subsidiaries

VIEs sell certain products to other subsidiaries. For the years ended 31 December, 2020, 2021 and 2022, the inter-company sales recognized by VIEs to Equity subsidiaries are RMB12.6 million, RMB131.3 million and RMB195.8 million, respectively. And the inter-company sales recognized by VIEs to Primary beneficiaries of VIEs and their subsidiaries for the year ended 31 December, 2020, 2021 and 2022 are RMB13.4 million, RMB0.1 million and RMB24.8 million, respectively.

SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2022

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES

2.	SIGNIFICANT ACCOUNTING POLICIES

(a)	Basis of presentation

The consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) to reflect the financial position, results of operations and cash flows of the Group. Significant accounting policies followed by the Group in the preparation of the consolidated financial statements are summarized below.

(b)	Consolidation

The Group’s consolidated financial statements include the financial statements of the Company, its subsidiaries and VIEs for which the Company or its subsidiary is the primary beneficiaries. All transactions and balances among the Company, its subsidiaries and VIEs have been eliminated upon consolidation.

A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting powers; or has the power to appoint or remove the majority of the members of the board of directors; or to cast a majority of votes at the meeting of directors; or has the power to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders.

A VIE is an entity in which the Company, or its subsidiary, through contractual agreements, bears the risks of, and enjoys the rewards normally associated with ownership of the entity, and therefore the Company or its subsidiary is the primary beneficiary of the entity. In determining whether the Company or its subsidiaries are the primary beneficiary, the Company considered whether it has the power to direct activities that are significant to the VIE’s economic performance, and also the Company’s obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. Lequan and ultimately the Company hold all the variable interests of the VIE and has been determined to be the primary beneficiary of the VIE.

(c)	Use of estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. Significant accounting estimates reflected in the Group’s consolidated financial statements include sales returns, inventory valuation, product warranties, share-based compensation, allowance for doubtful accounts and the valuation allowance for deferred tax assets and income tax. Actual results could differ from those estimates, and such differences may be material to the consolidated financial statements.

(d)	Foreign currency translation

The Group uses Renminbi (“RMB”) as its reporting currency. The functional currency of the Company and its subsidiaries incorporated in Hong Kong and British Virgin Islands are United States dollar (“US$”), while the functional currency of the Group’s entities in the PRC is RMB, which is their respective local currency. In the consolidated financial statements, the financial information of the Company and its subsidiary in Hong Kong and British Virgin Islands, which use US$ as their functional currency, have been translated into RMB. Assets and liabilities are translated at the exchange rates on the balance sheet date, equity amounts are translated at historical exchange rates, and revenues, expenses, and incomes are translated using the average exchange rate for the period. Translation adjustments arising from these are reported as foreign currency translation adjustments and are shown as a component of other comprehensive income in the statement of comprehensive income.

2.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(d)	Foreign currency translation (Continued)

Foreign currency transactions denominated in currencies other than functional currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are remeasured at the applicable rates of exchange in effect at that date. Foreign exchange gains and losses resulting from the settlement of such transactions and from remeasurement at year-end are recognized in foreign currency exchange (losses) gains, net in the consolidated statement of comprehensive income.

(e)	Convenience translation

Translations of balances in the consolidated balance sheets, consolidated statements of comprehensive income and consolidated statements of cash flows from RMB into US$ as of and for the year ended December 31, 2022 are solely for the convenience of the reader and were calculated at the noon buying rate of US$1.00 = RMB6.8972 on December 30, 2022 as set forth in the H.10 statistical release of the U.S. Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on December 30, 2022, or at any other rate.

(f)	Cash and cash equivalents

Cash includes currency on hand and deposits held by financial institutions that can be added to or withdrawn without limitation. Cash equivalents represent short-term and highly liquid investments placed with banks, and all highly liquid investments with original maturities of three months or less, which have both of the following characteristics:

Readily convertible to known amounts of cash throughout the maturity period;

ii)

So near their maturity that they present insignificant risk of changes in value because of changes in interest rates.

(g)	Restricted cash

Cash that is restricted as to withdrawal or for use or pledged as security is reported separately on the face of the consolidated balance sheets. Restricted cash is included in the total cash and cash equivalents and restricted cash in the consolidated statements of cash flows when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The Group’s restricted cash mainly represents security deposits held in designated bank accounts for issuance of bank acceptance notes.

(h)	Short-term deposits

Short-term deposits represent time deposits placed with banks with original maturities of more than three months but less than one year. Interest earned is recorded as interest income in the consolidated statement of comprehensive income during the years presented.

(i)	Short-term investments

In accordance with ASC 825, for investments in financial instruments with a variable interest rate indexed to the performance of underlying assets, the Company elected the fair value method at the date of initial recognition and carried these investments subsequently at fair value. Changes in fair values are reflected in the consolidated statements of comprehensive income.

2.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(j)	Accounts receivable

Accounts receivable are stated at the historical carrying amount net of allowance for doubtful accounts. On January 1, 2020, the Company adopted ASC326, “Financial Instruments—Credit Losses” using modified retrospective transition approach. The Group provides an allowance against accounts receivable to the amount management reasonably believe will be collected. The Group writes off trade receivable when they are deemed uncollectible.

The Company maintains an allowance for doubtful accounts which reflects its best estimate of amounts that potentially will not be collected. Accounts receivable have been grouped based on shared credit risk characteristics and days past due to estimate, taking into consideration various factors including but not limited to historical collection experience and credit-worthiness of the debtors.

(k)	Inventories

Inventories are stated at the lower of cost or net realizable value. Inventory costs are calculated on the actual cost basis including expenses that are directly or indirectly incurred in the purchase, and production of manufactured product. Expenses include the cost of materials, consignment manufacturing cost and other direct costs. Cost is determined using the weighted average method. The Group assesses the valuation of inventory and periodically writes down the value for estimated excess and obsolete inventory based upon the turnover and age of the products. Write downs are recorded in cost of revenues in the consolidated statements of comprehensive income.

(l)	Long-term deposits

Long-term deposits represent time deposits placed with banks with original maturities of more than one year. Interest earned is recorded as interest income in the consolidated statement of comprehensive income during the years presented.

(m)	Property, plant and equipment, net

Property, plant and equipment are carried at cost less accumulated depreciation and impairment, if any. Depreciation is calculated on a straight-line basis over the following estimated useful lives and residual value. Residual rate is determined based on the economic value of the property and equipment at the end of the estimated useful lives as a percentage of the original cost.


	Estimated useful lives	Residual rate
Computers and equipment	2-10 years	0%-5	%
Vehicle	4 years	5	%

Expenditures for maintenance and repairs are expensed as incurred. The gain or loss on the disposal of property and equipment is the difference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated statements of comprehensive income.

Construction in progress represents property, plant and equipment under construction and pending installation and is stated at cost less accumulated impairment losses, if any. Completed assets are transferred to their respective asset classes and depreciation begins when an asset is ready for its intended use. Interest expense on outstanding debt is capitalized during the period of significant capital asset construction. Capitalized interest expense on construction-in-progress is included within property, plant and equipment and is amortized over the life of the related assets.

2.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(n)	Land use rights

Land use rights are recorded at cost less accumulated amortization and impairment, if any. Amortization is calculated on a straight-line basis over the estimated useful lives which are 50 years that represent the terms of land use rights certificate.

(o)	Intangible assets

Intangible assets mainly consist of software and license. Identifiable intangible assets are carried at acquisition cost less accumulated amortization and impairment loss, if any. Finite-lived intangible assets are tested for impairment if impairment indicators arise. Amortization of finite-lived intangible assets is computed using the straight-line method over their estimated useful lives, which are as follows:


		Estimated useful lives
Software		1 - 10 years
License		3 - 10 years

(p)

Leases

The Company categorize leases with contractual terms longer than twelve months as either operating or finance. Finance leases are generally those leases that allow lessees to substantially utilize or pay for the entire asset over its estimated life. Assets acquired under finance leases are recorded in property and equipment, net. All other leases are categorized as operating leases. All the leases recognized by the Company were classified as operating leases for the years presented.

Lease liabilities are recognized at the present value of the fixed lease payments using a discount rate based on similarly secured borrowings available to us. Lease assets are recognized based on the initial present value of the fixed lease payments plus any direct costs from executing the leases or lease prepayments reclassified from “Prepayments and other current assets” upon lease commencement. Costs associated with operating lease assets are recognized on a straight-line basis within operating expenses over the term of the lease.

(q)	Revenue recognition

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”) and subsequently, the FASB issued several amendments which amend certain aspects of the guidance in ASC 2014-09 (ASU No. 2014-09 and the related amendments are collectively referred to as “ASC 606”). According to ASC 606, revenue is recognized when control of the promised good or service is transferred to the customers, in an amount that reflects the consideration the Group expects to be entitled to in exchange for those goods or services. The Group will enter into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities. The Group adopted ASC 606 for all periods presented.

2.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(q)	Revenue recognition (Continued)

The Group’s revenue is primarily derived from (i) IoT @ Home portfolio including sweeper robots, air conditioning systems and other smart devices, (ii) Home water solutions, which are composed of smart water purification systems, (iii) consumable products complementary to the Group’s IoT smart home products, such as water purifier filters, (iv) Small appliances and others refer to the value-added businesses. Refer to Note 13 to the consolidated financial statements for disaggregation of the Group’s revenue by type of product and service for the years ended December 31, 2020, 2021 and 2022.

1)	The Group conducts its business through various contractual arrangements, the following table disaggregates the Group’s revenue by type of contract for the years ended December 31, 2020, 2021 and 2022:


	Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Sales to Xiaomi	2,889,441	2,295,569	1,403,354
—Xiaomi-branded products	2,560,787	2,021,117	1,154,689
—Viomi-branded products	326,114	274,452	248,665
—Rendering of services	2,540	—	—
Sales to third-party customers	2,936,183	3,008,266	1,829,377
	5,825,624	5,303,835	3,232,731

a) Sales to Xiaomi

The Group generated a substantial portion of its revenues from sales of products to Xiaomi.

Under the cooperation agreement entered into between the Group and Xiaomi, the Group is responsible for design, research, development, production and delivery of designated products using the brand name of “Xiaomi” (“Xiaomi-branded products”). Xiaomi is responsible for commercial distributions and sales. The Group also sells some Viomi-branded products to Xiaomi.

Revenue is recognized upon acceptance by this customer, which is considered at the time the control of the products is transferred to Xiaomi. Revenue does not meet the criteria to be recognized over time since 1) even if the products use “Xiaomi” brand, it does not require significant rework to make them suitable to be sold to other customers, 2) under the cooperation agreement, the Group does not have the right of payment for the work performed to date.

For a majority of types of products sold to this customer, the selling price is a fixed amount as agreed by both parties. For other types of products sold to this customer, the sales arrangement includes two installment payments. The first installment is priced to recover the costs incurred by the Group in developing, producing and shipping the products to this customer and is payable to the Group upon acceptance by the customer after delivery. The Group is also entitled to receive a potential second installment payment calculated as certain portion of the future gross profits from commercial sales made by this customer. Accordingly, the Group determines the sales price as the fixed first installment payment plus the variable second installment payment to the extent that it is probable that revenue reversal will not occur when settling with the customer subsequently. The Group estimates the variable consideration using the expected value method. In assessing the variable second installment payment, the Group takes into consideration of the historical experience with the customer, selling price of the same or similar products as at the report date as well as the recent market trend. Water purifiers products were previously entitled to second instalment payments but second instalment payment arrangement has stopped for water purifiers products since the first quarter of 2020. For the years ended December 31, 2020, 2021 and 2022, net revenues earned from second installment payment arrangement represented 3.8%, 2.0% and 2.8% of total revenue from Xiaomi, respectively.

2.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(q)	Revenue recognition (Continued)

In 2019, the Group entered into a cooperation arrangement with Xiaomi related to a certain type of products. Under the arrangement, the Group acts as an agent of Xiaomi to procure suppliers without obtaining the control, risks and rewards of the products during the whole process. The Group recognizes revenue of sales on a net basis for these products. This cooperation arrangement was terminated at the end of 2020.

b) Sales to third-party customers, including: sales to leading e-commerce platforms and offline experience stores; and sales to customers directly through the online platforms operated by Xiaomi, third parties and the Group.

- Sales to leading e-commerce platforms and offline experience stores

Pursuant to the contracts between the Group and the leading e-commerce platforms/offline experience stores (“e-commerce platforms and stores”), the e-commerce platforms and stores have legal title and physical possession of the products upon acceptance and they would bear the risk of loss due to physical damage before the products are transferred and accepted by end customers. The e-commerce platforms and stores are responsible for delivering the products to end customers and can direct the use of the products and obtain the remaining benefits from the products by reselling the products. The e-commerce platforms and stores have flexibility in determining the retail sales price within relatively broad price range set by the Group. Based on these indicators, the Group determined the e-commerce platforms and stores (as opposed to the end customers) as its customers according to ASC 606-10-55-39. The Group recognizes revenue equal to the sales price to the e-commerce platforms and stores when control of the inventory is transferred.

- Sales to customers directly through the online platforms operated by Xiaomi, third parties and the Group

Under the cooperation agreements entered between the Group and online platforms, the platforms’ responsibilities are limited to offering an online marketplace, while the Group is primarily obligated in a sales transaction and takes inventory risk and has latitude in determining prices. The platforms charged the Group commission fees at pre-determined amounts or a fixed rate based on the sales amounts. Commission fees are recognized as selling expenses. The Group determined the end customers (as opposed to the platforms) as its customers and recognizes revenue equal to the sales price to the end customers when control of the inventory is transferred.

The Group provides installation service to end customers for designated Viomi-branded products without separate charge. The end customers have the right, not the obligation, to ask the Group to provide installation service. The installation service is considered being distinct and accounted for as a separate performance obligation as the products and installation services are not inputs into a combined item the end customer has contracted to receive. In addition, the Group does not provide any significant integration, modification, or customization services. It can fulfill its obligation to transfer each of the products or services separately. End customers do not always exercise their rights to ask for installation services as the installation may not be complicated and could be done by end customers themselves. Therefore, the Group expects to be entitled to a breakage amount in the contract liabilities related to installation services. The Group estimates the breakage portion based on historical customers’ requests and recognizes estimated breakage as revenue in proportion to the pattern of rights exercised by end customers. The assessment of estimated breakage would be updated on a quarterly basis. Changes in estimated breakage should be accounted for by adjusting contract liabilities to reflect the remaining rights expected to be exercised.

2.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(q)	Revenue recognition (Continued)

Judgment is required to determine standalone selling price for each distinct performance obligation. The Group allocates the arrangement consideration to the separate accounting of each distinct performance obligation based on their relative standalone selling price. The standalone selling price of the products is determined based on adjusted market assessment approach by estimating the price the customer is willing to pay for the product without installation service. For the standalone selling price of the installation services, the Group determines it by referring to actual costs charged by the third-party vendors, plus an estimated profit margin of 5% based on consideration of both company specific and relevant market factors.

The Group recognizes revenue for the sales to third-party customers in accordance with the applicable revenue recognition method for each of the distinct performance obligation identified. Sales of products is recognized upon acceptance by customers after delivery. Installation services revenues are recognized when the services are rendered.

2)	Sales returns and sales incentives

- Sales to leading e-commerce platforms

The Group’s sales to leading e-commerce platforms started in 2018. As stipulated in the contracts, slow-moving goods are those unsold products after they are controlled by the e-commerce platforms for more than 30 days or 45 days or 60 days, depending on the different categories of products. The Group shall coordinate with the e-commerce platforms to sell the slowing-moving products to end customers through promotions within 30 or 60 days, otherwise, the e-commerce platforms can (i) return such slow-moving products, or (ii) sell on discount as determined by the e-commerce platforms. The Group shall bear all losses caused by such discounted sales. Based on the Group’s history of cooperation with the e-commerce platforms and the pattern that the e-commerce platforms dealt with slow-moving goods, the Group estimates that slow-moving goods will be returned to the Group instead of being sold through discounted sales by the e-commerce platforms. Under ASC 606, a right of return is not a separate performance obligation, but it affects the estimated transaction price for transferred goods. Revenue is only recognized for those products that are not expected to be returned. The estimate of expected returns should be determined in the same way as other variable consideration. Based on historical information and other relevant evidence, including the expected sales and inventory level of the e-commerce platforms, the Group assesses if it is probable there will be no significant reversal of cumulative revenue, and recognizes those sales as revenue. For the years ended December 31, 2020, 2021 and 2022, the expected sales return was RMB6,820, RMB5,593 and RMB2,351. Accordingly the Group recognizes an expected return asset of RMB4,106, RMB3,189 and RMB1,350, and a refund liability of RMB7,707, RMB6,320 and RMB2,656 as of December 31, 2020, 2021 and 2022, respectively. The Group would update its estimate of expected returns at each period end. The expected return asset is presented and assessed for impairment separately from the refund liability. The Group would assess the expected return asset for impairment, and adjust the value of the asset if it becomes impaired. Further, the Group might provide various consideration to the e-commerce platforms, such as gross margin guarantee, advertising and promotion fees, in the form of cash, or directly reducing amounts owed to the Group by the e-commerce platforms. The Group evaluates each type of incentives or fees to be paid in accordance with ASC 606. Considering that the Group either does not receive any service from the e-commerce platforms or cannot elect to engage another vendor to provide similar advertising services on a standalone basis, the Group reduces the transaction price for the sale of products by the amount of various consideration payable to the e-commerce platforms.

- 7 days unconditional sales return

Under the consumer protection law, end customers have an unconditional right to return the products purchased through online platforms within 7 days. The Group bases its estimates of sales return on historical results. For the years ended December 31, 2020, 2021 and 2022, the amount of sales return was insignificant. The Group may provide sales incentives in the forms of discounts to end customers through online platforms in a bundle transaction. Revenue, recognized on a net basis after such sales incentives, are allocated based on the relative standalone selling prices for respective products.

2.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(q)	Revenue recognition (Continued)

Warranty

The Group offers product warranty pursuant to standard product quality required by consumer protection law. The warranty period is calculated starting from the date when products are sold to the end customers. The Group has the obligation, at the customer’s sole discretion, to either repair or replace the defective product. The customers cannot separately purchase the warranty and the warranty doesn’t provide the customer with additional service other than assurance that the product will function as expected. Therefore, these warranties are accounted for in accordance with ASC 460 Guarantees. At the time revenue is recognized, an estimate of warranty expenses is recorded. The reserves established are regularly monitored based upon historical experience and any actual claims charged against the reserve. Warranty reserves are recorded as cost of revenues.

4)	Value added taxes

Value added taxes (“VAT”) on sales is calculated at 17% on revenue from products before April 30, 2018, 16% between May 1, 2018 and March 31, 2019, and 13% after April 1, 2019. The Group reports revenue net of VAT. Subsidiaries and VIEs that are VAT general taxpayers are allowed to offset qualified VAT paid against their output VAT liabilities.

5)	Contract balances

Key customers, including Xiaomi and third-party customers, are entitled to a credit term. The expected length of time between the products being transferred to customers and when they pay for those products is short. There is no difference between the amount of promised consideration and the cash selling price of the promised products. Therefore, the Group concludes that the contracts with these key customers generally do not include a significant financing component. The allowance for doubtful accounts reflects the Group’s best estimate of probable losses inherent in the accounts receivable balance. The Group determines the allowance based on known troubled accounts, historical experience, and other currently available evidence. The amount of the allowance for doubtful accounts is recognized as expenses.

The opening balance of accounts receivable from these key customers as of January 1, 2021 was RMB 1,045,753. As of December 31, 2021 and 2022 accounts and notes receivable were RMB658,028 and RMB689,984, respectively. During the years ended December 31, 2021 and 2022, the Group recognized impairments, net of recoveries, for accounts receivable from customers amounted to RMB 25,446 and RMB53,082 respectively.

Contract liabilities consist of deferred revenue related to the Group’s provision of installation services and membership services, where there is still an obligation to be fulfilled by the Group. The contract liabilities will be recognized as revenue when all of the revenue recognition criteria are met.

The opening balance of deferred revenue as of January 1, 2021 was RMB5,719. As of December 31, 2021 and 2022, deferred revenue were RMB2,111 and RMB2,130, respectively. During the years ended December 31, 2020, 2021 and 2022, the Group recognized revenue of installation services amounted to RMB7,790, RMB5,719 and RMB3,154, respectively, that was included in the corresponding contract liability balance at the beginning of the years. The Group expects to recognize approximately RMB1,966 and RMB164 of the unearned amount for the Group’s remaining performance obligations related to installation services and membership service in 2022, respectively. During the years ended December 31, 2020, 2021 and 2022, the Group does not have any arrangement where the performance obligations have already been satisfied in the past period, but the corresponding revenue is only recognized in a later period.

2.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(r)	Cost of revenues

Cost of revenues consists primarily of material costs, warranty, consignment manufacturing cost, salaries and benefits for staff engaged in production activities and related expenses that are directly attributable to the production of products.

(s)	Research and development expenses

Research and development expenses primarily consist of salaries and benefits as well as share-based compensation for research and development personnel, materials, general expenses and depreciation expenses associated with research and development activities.

(t)	Selling and marketing expenses

Selling and marketing expenses consist primarily of (i) advertising and market promotion expenses, (ii) shipping expenses and (iii) salaries and welfare for sales and marketing personnel. The advertising and market promotion expenses amounted to RMB102,719, RMB173,642 and RMB187,417 for the years ended December 31, 2020, 2021 and 2022. The shipping expenses amounted to RMB247,417, RMB248,609 and RMB200,695 for the years ended December 31, 2020, 2021 and 2022, respectively.

(u)	General and administrative expenses

General and administrative expenses consist primarily of (i) share-based compensation for management and administrative personnel, and (ii) salaries and welfare for general and administrative personnel.

(v)	Government subsidies

Government subsidies represent tax refund and government grants received from local government authorities to encourage the Group’s technology and innovation. The Group records such government subsidies as other income in the consolidated statements of comprehensive income when it has fulfilled all of its obligation related to the subsidy. The Group recorded RMB33,674, RMB30,147 and RMB23,192 of subsidy income for the years ended December 31, 2020, 2021 and 2022, respectively.

(w)	Employee benefits

PRC Contribution Plan

Full time employees of the Group in the PRC participate in a government mandated defined contribution plan, pursuant to which certain pension benefits, medical care, employee housing fund and other welfare benefits are provided to the employees. Chinese labor regulations require that the PRC subsidiary and VIEs of the Group make contributions to the government for these benefits based on certain percentages of the employees’ salaries, up to a maximum amount specified by the local government. The Group has no legal obligation for the benefits beyond the contributions made. The total amounts of such employee benefit expenses, which were expensed as incurred, were approximately RMB 10,571, RMB34,291 and RMB 21,465 for the years ended December 31, 2020, 2021 and 2022, respectively.

2.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(x)	Share-based compensation

Share-based compensation expenses arise from share -based awards, mainly including share options for the purchase of ordinary shares for the periods presented. The Company accounts for share-based awards granted to the employees in accordance with ASC 718 Stock Compensation.

For share options for the purchase of ordinary shares granted to employees determined to be equity classified awards, the related share-based compensation expenses are recognized in the consolidated financial statements based on their grant date fair values which are calculated using the binomial option pricing model. The determination of the fair value is affected by the share price as well as assumptions regarding a number of complex and subjective variables, including the expected share price volatility, actual and projected employee share option exercise behavior, risk-free interest rates and expected dividends. The fair value of the ordinary shares is assessed using the income approach/discounted cash flow method, with a discount for lack of marketability, given that the shares underlying the awards were not publicly traded at the time of grant. Share-based compensation expenses are recorded net of estimated forfeitures using graded-vesting method during the service period requirement, such that expenses are recorded only for those share-based awards that are expected to ultimately vest.

(y)	Income taxes

Current income taxes are provided on the basis of net income for financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions. Deferred income taxes are accounted for using an asset and liability method. Under this method, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The tax base of an asset or liability is the amount attributed to that asset or liability for tax purpose. The effect on deferred taxes of a change in tax rates is recognized in statement of comprehensive income in the period of change. A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered more likely than not that some portion of, or all of the deferred tax assets will not be realized.

Uncertain tax positions

The guidance on accounting for uncertainties in income taxes prescribes a more likely than not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Guidance was also provided on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures. Significant judgment is required in evaluating the Group’s uncertain tax positions and determining its provision for income taxes. The Group recognizes interests and penalties, if any, under accrued expenses and other current liabilities on its balance sheet and under other expenses in its statement of comprehensive income. The Group did not recognize any interest and penalties associated with uncertain tax positions for the years ended December 31, 2020, 2021 and 2022. As of December 31, 2021 and 2022, the Group did not have any significant unrecognized uncertain tax positions.

2.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(z)	Comprehensive income

Comprehensive income consists of two components, net income and other comprehensive income, net of tax. Other comprehensive income refers to revenue, expenses, and gains and losses that are recorded as an element of shareholders’ equity but are excluded from net income. The Group’s other comprehensive income consists of foreign currency translation adjustments from its entities not using the RMB as their functional currency. Comprehensive income is reported in the consolidated statements of comprehensive income.

(aa)	Statutory reserves

The Company’s subsidiaries and VIEs established in the PRC are required to make appropriations to certain non-distributable reserve funds.

In accordance with the laws applicable to the Foreign Investment Enterprises established in the PRC, the Company’s subsidiaries registered as wholly-owned foreign enterprise have to make appropriations from their annual after-tax profits (as determined under generally accepted accounting principles in the PRC(“PRC GAAP”)) to reserve funds including general reserve fund, enterprise expansion fund and staff bonus and welfare fund. The appropriation to the general reserve fund must be at least 10% of the annual after-tax profits calculated in accordance with PRC GAAP. Appropriation is not required if the general reserve fund has reached 50% of the registered capital of the company. Appropriations to the enterprise expansion fund and staff bonus and welfare fund are made at the respective company’s discretion.

In addition, in accordance with the PRC Company Laws, the Group’s VIEs registered as Chinese domestic company must make appropriations from its annual after-tax profits as determined under the PRC GAAP to non-distributable reserve funds including statutory surplus fund and discretionary surplus fund. The appropriation to the statutory surplus fund must be 10% of the annual after-tax profits as determined under PRC GAAP. Appropriation is not required if the statutory surplus fund has reached 50% of the registered capital of the company. Appropriation to the discretionary surplus fund is made at the discretion of the company.

The use of the general reserve fund, enterprise expansion fund, statutory surplus fund and discretionary surplus fund are restricted to offsetting of losses or increasing of the registered capital of the respective company. The staff bonus and welfare fund are a liability in nature and is restricted to fund payments of special bonus to employees and for the collective welfare of all employees. None of these reserves are allowed to be transferred to the Company in terms of cash dividends, loans or advances, nor can they be distributed except under liquidation.

During the years ended December 31, 2020, 2021, appropriations to statutory reserve funds amounted to RMB3,464, RMB1,756, respectively. There were no appropriations to statutory reserve funds during the year ended December 2022. Statutory reserve funds amounting to RMB12,517 and RMB 12,517 were recognized in additional paid-in capital as of December 31, 2021 and 2022, respectively.

2.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(bb)	Income per share

Basic income per share is computed by dividing net income attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period using the two-class method. Under the two-class method, net income is allocated between ordinary shares and other participating securities based on their participating rights. Net losses are not allocated to other participating securities if based on their contractual terms they are not obligated to share the losses.

Diluted income per share is calculated by dividing net income attributable to ordinary shareholders, as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares consist of ordinary shares issuable upon the exercise of share options using the treasury stock method. Ordinary equivalent shares are not included in the denominator of the diluted income per share calculation when inclusion of such shares would be anti-dilutive.

(cc)	Related parties

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or significant influence, such as a family member or relative, shareholder, or a related corporation.

(dd)	Segment reporting

Based on the criteria established by ASC 280 “Segment Reporting”, the Group’s chief operating decision maker has been identified as the Chairman of the Board of Directors/CEO, who reviews consolidated results of the Group when making decisions about allocating resources and assessing performance. The Group has internal reporting of revenue, cost and expenses by nature as a whole. Hence, the Group has only one operating segment. The Company is domiciled in the Cayman Islands while the Group mainly operates its businesses in the PRC and earns a great majority of the revenues from external customers attributed to the PRC.

(ee)	Current expected credit losses

In 2016, the FASB issued ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASC Topic 326”), which amends previously issued guidance regarding the impairment of financial instruments by creating an impairment model that is based on expected losses rather than incurred losses. The Group adopted this ASC Topic 326 and several associated ASUs on January 1, 2020 using a modified retrospective approach with a cumulative effect increase of RMB2,826, recorded in accumulated deficit.

2.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(ee)	Current expected credit losses (Continued)

The Group’s accounts and notes receivable and other receivables from related parties and third parties are within the scope of ASC Topic 326. The Group has identified the relevant risk characteristics of its customers and the related accounts and notes receivable and other receivables based on their credit rating. Receivables with similar risk characteristics have been grouped into pools. For each pool, the Group considers the historical credit loss experience, current economic conditions, supportable forecasts of future economic conditions, and any recoveries in assessing the lifetime expected credit losses. Other key factors that influence the expected credit loss analysis include payment terms offered in the normal course of business to customers and industry-specific factors that could impact the Group’s receivables. Additionally, macroeconomic factors are also considered. This is assessed at each quarter based on the Group’s specific facts and circumstances. For the year ended December 31, 2021 and 2022, the Group recorded expected credit loss of RMB25,541 and RMB52,997, respectively in general and administrative expenses. As of December 31, 2021 and 2022, the expected credit loss provision for the accounts and notes receivable and other receivables is RMB34,857 and RMB87,854 respectively. The increase is primarily due to an increase in the estimated allowance for accounts and notes receivables from a third party customer resulting from the significant deterioration of the collectability of receivables due from this customer in 2022.

The following table summarizes the activity in the allowance for credit losses related to accounts and notes receivable and other receivables from related parties for the year ended December 31, 2021 and 2022:


	Year ended December 31,
	2021	2022
	RMB	RMB
Balance at beginning of the year	9,316	34,857
Current year provision	29,343	61,336
Reversals	(3,802)	(8,339)
Balance at end of the year	34,857	87,854

(ff)	Recently issued accounting pronouncements

In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (ASU 2021-08), which clarifies that an acquirer of a business should recognize and measure contract assets and contract liabilities in a business combination in accordance with Topic 606, Revenue from Contracts with Customers. The new amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The amendments should be applied prospectively to business combinations occurring on or after the effective date of the amendments, with early adoption permitted. The Group is currently evaluating the impact of the new guidance on our consolidated financial statements.

In March 2022, the FASB issued ASU No. 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, which eliminates the troubled debt restructurings (TDRs) accounting model for creditors that have already adopted Topic 326, which is commonly referred to as the current expected credit loss (CECL) model. For entities that have adopted Topic 326, the amendments in this Update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The FASB’s decision to eliminate the TDR accounting model is in response to feedback that the allowance under CECL already incorporates credit losses from loans modified as TDRs and, consequently, the related accounting and disclosures – which preparers often find onerous to apply – no longer provide the same level of benefit to users. The Group is currently evaluating the impact of the new guidance on our consolidated financial statements.

2.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(ff)	Recently issued accounting pronouncements (Continued)

In June 2022, the FASB issued ASU No. 2022-03, Fair Value Measurement (Topic 820) – Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, which stipulates that a contractual restriction on the sale of an equity security should not be considered part of the equity security’s unit of account and, therefore, should not be considered in measuring its fair value. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. The Group is currently evaluating the impact of the new guidance on our consolidated financial statements.

CONCENTRATION AND RISKS

12 Months Ended

Dec. 31, 2022

CONCENTRATION AND RISKS

CONCENTRATION AND RISKS

3.	CONCENTRATION AND RISKS

(a)	Foreign exchange risk

The revenues and expenses of the Group’s entities in the PRC are generally denominated in RMB and their assets and liabilities are denominated in RMB. The RMB is not freely convertible into foreign currencies. Remittances of foreign currencies into the PRC or remittances of RMB out of the PRC as well as exchange between RMB and foreign currencies require approval by foreign exchange administrative authorities and certain supporting documentation. The State Administration for Foreign Exchange, under the authority of the People’s Bank of China, controls the conversion of RMB into other currencies.

(b)	Credit risk

Financial instruments that potentially expose the Group to credit risk consist primarily of cash and cash equivalents, restricted cash, short-term investments, short-term deposits, accounts and notes receivable and amounts due from related parties. The Group places its cash and cash equivalents, restricted cash, short-term investments and short-term deposits with financial institutions with high credit ratings and quality. There has been no recent history of default in relation to these financial institutions and credit risk is immaterial.

The Group conducts credit evaluations of third-party customers and related parties, and generally does not require collateral or other security from its third-party customers and related parties. The Group establishes an allowance for doubtful accounts primarily based upon the age of the receivables and factors surrounding the credit risk of specific third-party customers and related parties.

Concentration risk of accounts and notes receivable from third parties are presented as below:


	As of December 31,
	2021			2022
	RMB			RMB
Company A	161,785	54	%	125,971	52	%
Company B	37,776	12	%	4,259	2	%

Concentration risk of accounts receivable from a related party are presented as below:


	As of December 31,
	2021			2022
	RMB			RMB
Xiaomi	320,939	100	%	360,497	100	%

3.	CONCENTRATION AND RISKS (Continued)

(b)	Credit risk(Continued)

Concentration risk of other receivables from related parties are presented as below:


	As of December 31,
	2021			2022
	RMB			RMB
Xiaomi	88,367	100	%	25,021	100	%

(c)	Revenue concentration risk


	Year ended December 31,
	2020			2021			2022
	RMB			RMB			RMB
Xiaomi	2,889,441	50	%	2,295,569	43	%	1,403,354	43	%

The revenue generated from Xiaomi included sale of both Xiaomi-branded and Viomi-branded products. Revenue from sale of Viomi-branded products amounted to RMB326,114, RMB274,452 and RMB248,665 for the years ended December 31, 2020, 2021 and 2022, respectively.

CASH AND CASH EQUIVALENTS

12 Months Ended

Dec. 31, 2022

CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS

4.	CASH AND CASH EQUIVALENTS

Cash and cash equivalents represent cash on hand and demand deposits placed with banks or other financial institution. Cash and cash equivalents balance as of December 31, 2021 and 2022 primarily consist of the following currencies:


	As of December 31, 2021		As of December 31, 2022
		RMB		RMB
	Amount	equivalent	Amount	equivalent
RMB	238,386	238,386	440,557	440,557
US$	54,671	348,569	42,584	296,582
Total		586,955		737,139

RESTRICTED CASH

12 Months Ended

Dec. 31, 2022

RESTRICTED CASH

RESTRICTED CASH

5.	RESTRICTED CASH

As of December 31, 2021 and 2022, the Group held restricted cash of RMB35,831 and RMB76,070 respectively in designated bank accounts, which were composed of the deposit required for issuing bank acceptance bills and the judicial frozen funds.

SHORT-TERM INVESTMENTS

12 Months Ended

Dec. 31, 2022

SHORT-TERM INVESTMENTS

SHORT-TERM INVESTMENTS

6.	SHORT-TERM INVESTMENTS

Short-term investments represent structured deposits with maturities of less than one year. Short-term investments balance as of December 31, 2021 and 2022 is denominated in RMB, amounted to RMB 828,867 and RMB 197,058 respectively.

INVENTORIES

12 Months Ended

Dec. 31, 2022

INVENTORIES

INVENTORIES

7.	INVENTORIES

Inventories consisted of the followings:


	As of December 31,
	2021	2022
	RMB	RMB
Finished goods	422,627	309,239
Raw materials	153,724	193,052
Inventories	576,351	502,291

For the years ended December 31, 2020, 2021 and 2022, the Group recorded write-down of RMB22,577, RMB8,103 and RMB32,846 for obsolete inventories.

PREPAID EXPENSES AND OTHER ASSETS

12 Months Ended

Dec. 31, 2022

PREPAID EXPENSES AND OTHER ASSETS

PREPAID EXPENSES AND OTHER ASSETS

8.	PREPAID EXPENSES AND OTHER ASSETS


	As of December 31,
	2021	2022
	RMB	RMB
Advances to suppliers	106,666	139,306
Other receivables	48,322	44,697
Prepayment for equipment	18,493	15,976
Lease hold improvement	6,643	5,234
Expected return assets	3,189	1,351
Other current assets	135	—
Total	183,448	206,564
Less: non-current portion	(27,321)	(22,856)
Prepaid expenses and other assets-current portion	156,127	183,708

LONG-TERM DEPOSITS

12 Months Ended

Dec. 31, 2022

LONG-TERM DEPOSITS

LONG-TERM DEPOSITS

9.	LONG-TERM DEPOSITS

Long-term deposits balance as of December 31, 2021 and 2022 is denominated in RMB.

PROPERTY, PLANT AND EQUIPMENT, NET

12 Months Ended

Dec. 31, 2022

PROPERTY, PLANT AND EQUIPMENT, NET

PROPERTY, PLANT AND EQUIPMENT, NET

10.	PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment, net consisted of the following:


	As of December 31,
	2021	2022
	RMB	RMB
Construction in progress	76,440	166,480
Computers and equipment	185,776	266,085
Vehicle	508	759
Total	262,724	433,324
Less: accumulated depreciation	(116,731)	(196,892)
Property, plant and equipment, net	145,993	236,432

The Group had recorded depreciation expense of RMB42,470, RMB55,124 and RMB 80,161 for the years ended December 31, 2020, 2021 and 2022, respectively. No impairment was recorded for the years ended December 31, 2020, 2021 and 2022.

LAND USE RIGHTS, NET

12 Months Ended

Dec. 31, 2022

LAND USE RIGHTS, NET

LAND USE RIGHTS, NET

11.	LAND USE RIGHTS, NET

In 2020, the Group obtained a land use right in Foshan from the local authorities. Amortization of the land use right is made over the remaining term of the land use right period from the date when the land was made available for use by the Group. The land use rights are summarized as follows:


	As of December 31,
	2021	2022
	RMB	RMB
Land use rights	63,618	63,618
Less: Accumulated amortization	(1,896)	(3,169)
Land use right, net	61,722	60,449

The total amortization expense for the year ended December 31, 2021 and 2022 amounted to approximately RMB1,260 and RMB1,273.

ACCRUED EXPENSES AND OTHER LIABILITIES

12 Months Ended

Dec. 31, 2022

ACCRUED EXPENSES AND OTHER LIABILITIES

ACCRUED EXPENSES AND OTHER LIABILITIES

12.	ACCRUED EXPENSES AND OTHER LIABILITIES


	As of December 31,
	2021	2022
	RMB	RMB
Accrued payroll and welfare	95,816	76,468
Freight payable	68,197	29,533
Deposit from suppliers	27,483	36,909
Installation fee payables	18,957	6,609
Product warranty	28,796	28,292
Marketing and promotion expenses	25,709	47,124
Payment for purchase of property	17,647	16,075
Other tax payable	9,954	3,474
Professional fee payables	5,143	4,265
Refund liabilities	6,320	2,656
Other current liabilities	69,254	65,685
Total	373,276	317,090
Less: non-current portion	(7,558)	(8,245)
Accrued expenses and other liabilities-current portion	365,718	308,845

Product warranty activities were as follows:


		Product Warranty
		RMB
Balance at December 31, 2020		22,420
Provided during the year		76,845
Utilized during the year		(70,469)
Balance at December 31, 2021		28,796
Provided during the year		51,161
Utilized during the year		(51,665)
Balance at December 31, 2022		28,292

REVENUE

12 Months Ended

Dec. 31, 2022

REVENUE

REVENUE

13.

REVENUE


	Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Sales of product
- IoT @ Home portfolio	3,671,717	3,400,966	1,619,941
- Home water solutions	883,325	742,912	681,054
- Consumables	382,896	367,021	358,442
- Small appliances and other products	792,965	708,260	494,943
Total of sales of products	5,730,903	5,219,159	3,154,380
Rendering of services	94,721	84,676	78,351
Total	5,825,624	5,303,835	3,232,731

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI https://asc.fasb.org/topic&trid=49130388

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-Name Accounting Standards Codification
-Topic 606
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+ Details

INCOME TAX EXPENSES

12 Months Ended

Dec. 31, 2022

INCOME TAX EXPENSES

INCOME TAX EXPENSES

14.	INCOME TAX EXPENSES

Cayman Islands

Under the current tax laws of the Cayman Islands, the Company and its subsidiaries are not subject to tax on income or capital gains. Besides, upon payment of dividends by the Company to its shareholders, no Cayman Islands withholding tax will be imposed.

Hong Kong

Under the current Hong Kong Inland Revenue Ordinance, the subsidiaries of the Group in Hong Kong are subject to 8.25% and 16.5% Hong Kong profit tax on its taxable income within HKD$2 million and beyond HKD$2 million respectively, generated from operations in Hong Kong. Additionally, payments of dividends by the subsidiary incorporated in Hong Kong to the Company are not subject to any Hong Kong withholding tax.

PRC

In accordance with the Enterprise Income Tax Law (“EIT Law”), Foreign Investment Enterprises (“FIEs”) and domestic companies are subject to Enterprise Income Tax (“EIT”) at a uniform rate of 25%. The subsidiaries and VIEs of the Group in the PRC are subject to a uniform income tax rate of 25% for years presented except for the entities which are qualified to certified High and New Technology Enterprises (“HNTE”) that are entitled to a favorable statutory tax rate of 15%. According to a policy promulgated by the State Tax Bureau of the PRC and effective from 2008 onwards, enterprises engaged in research and development activities are entitled to claim an additional tax deduction amounting to 50% of the qualified research and development expenses incurred in determining its tax assessable profits for that year. The additional tax deduction has been increased from 50% of the qualified research and development expenses to 75%, effective from 2018 to 2020, according to a new tax incentives policy promulgated by the State Tax Bureau of the PRC in September 2018. The additional tax deduction has been increased from 75% of the qualified research and development expenses to 100%, effective from 2021, according to a new tax incentives policy promulgated by the State Tax Bureau of the PRC in May 2021(“Super Deduction”).

Withholding tax on undistributed dividends

Under the CIT Law and its implementation rules, the profits of a foreign-invested enterprise arising in 2008 and thereafter that are distributed to its immediate holding company outside the PRC are subject to withholding tax at a rate of 10%. A lower withholding tax rate will be applied if there is a beneficial tax treaty between the PRC and the jurisdiction of the foreign holding company. A holding company in Hong Kong, for example, will be eligible, with approval of the PRC local tax authority, to be subject to a 5% withholding tax rate under the Arrangement Between the PRC and the Hong Kong Special Administrative Region on the Avoidance of Double Taxation and Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital if such holding company is considered to be a non-PRC resident enterprise and holds at least 25% of the equity interests in the PRC foreign-invested enterprise distributing the dividends. However, if the Hong Kong holding company is not considered to be the beneficial owner of such dividends under applicable PRC tax regulations, such dividend will remain subject to withholding tax at a rate of 10%. Aggregate undistributed earnings of the Group entities located in the PRC that are available for distribution to the Company as of December 31, 2021 and 2022 are approximately RMB956,980 and RMB693,623, respectively. The Company does not intend to have any of its subsidiaries located in the PRC distribute any undistributed earnings of such subsidiaries in the foreseeable future, but rather expects that such earnings will be reinvested by such subsidiaries for their PRC daily operations. Accordingly, no withholding tax was recorded as of December 31, 2021 and 2022.

14.	INCOME TAX EXPENSES (Continued)

Composition of income tax expense

The current and deferred components of income taxes appearing in the consolidated statements of comprehensive income are as follows:


	Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Current tax expenses	44,813	26,854	(4,470)
Deferred tax (benefit) expense	(1,492)	(21,115)	22,644
Income tax expenses	43,321	5,739	18,174

Reconciliation between the income tax expenses computed by applying the PRC enterprise tax rate to income before income taxes and actual provision were as follows:


	Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Income (loss) from operations in the PRC	200,941	89,126	(272,186)
Income from overseas entities	16,826	5,504	7,730
Income (loss) before income tax	217,767	94,630	(264,456)
Tax expense (benefit) at PRC enterprise income tax rate of 25%	54,442	23,658	(66,114)
Income tax on tax holiday⁽¹⁾	(31,074)	(16,872)	6,310
Tax effect of permanent differences⁽²⁾	(16,895)	(28,303)	(30,550)
Change in valuation allowance⁽³⁾	29,780	22,153	107,603
Effect of share-based compensation	10,830	7,111	2,934
Effect of income tax in jurisdictions other than the PRC	(3,762)	(2,008)	(2,009)
Income tax expenses	43,321	5,739	18,174

(1)

The income tax on tax holidays represents the effect of preferential income tax rate enjoyed by Foshan Viomi, Guangdong Lizi and Yunmi Hulian. Foshan Viomi was qualified as an HNTE and enjoyed the beneficial tax rate of 15% for the three years ended December 31, 2020, 2021 and 2022. Foshan Viomi applied for HNTE qualification renewal in 2022, and obtained approval in December 2022. Guangdong Lizi applied for the HNTE qualification and obtained approval in December 2020. It entitled to enjoy the preferential tax rate of 15% as an HNTE for three years starting from 2020 and should apply for HNTE qualification renewal in 2023. Yunmi Hulian applied for the HNTE qualification and obtained approval in December 2021. It is entitled to enjoy the preferential tax rate of 15% as an HNTE for three years starting from 2021 and should apply for HNTE qualification renewal in 2024.

(2)

The permanent book-tax differences mainly consisted of R&D super deductions.

(3)

Valuation allowance is provided against deferred tax assets when the Group determines that it is more likely than not that the deferred tax assets will not be utilized in the future. In making such determination, the Group considered factors including future taxable income exclusive of reversing temporary differences and tax loss carry forwards. Valuation allowance for the years ended December 31, 2020, 2021 and 2022 were provided for net operating loss carry forward of certain group entities which reported loss because it was more likely than not that such deferred tax assets would not be realized based on the Group’s estimate of their future taxable income. If events occur in the future that allow the Group to realize more of its deferred income tax than the presently recorded amounts, an adjustment to the valuation allowances will result in a decrease in tax expense when those events occur.

14.	INCOME TAX EXPENSES (Continued)

Composition of income tax expense (Continued)

The per share effect of the tax holidays are as follows:


	Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Net income per share effect – basic	0.14	0.02	0.06
Net income per share effect – diluted	0.13	0.02	0.06

Deferred tax assets and deferred tax liabilities

The significant components of the Group’s deferred tax assets were as follows:


	As of December 31,
	2021	2022
	RMB	RMB
Accrued expenses and others	18,567	21,935
Net operating loss carry forwards	69,852	151,463
Inventories write downs	985	1,040
Deferred income	161	86
Total deferred tax assets	89,565	174,524
Less: valuation allowance	(54,261)	(161,864)
Deferred tax assets, net	35,304	12,660

Movement of valuation allowance


	Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Balance at beginning of the year	3,146	32,926	54,261
Provided	29,780	21,335	107,603
Balance at end of the year	32,926	54,261	161,864

Uncertain tax positions

The Group evaluates the level of authority for each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions. As of December 31, 2021 and 2022, the Group did not have any significant unrecognized uncertain tax positions.

According to the PRC Tax Administration and Collection Law, the statute of limitations is generally three years and can be extended to five years under special circumstances.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

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+ Details

ORDINARY SHARES

12 Months Ended

Dec. 31, 2022

ORDINARY SHARES

ORDINARY SHARES

15.	ORDINARY SHARES

The Company’s original Memorandum and Articles of Association authorizes the Company to issue 346,545,454 class A ordinary shares with a par value of US$0.0001 per share. As of December 31, 2017, the Company had 25,363,636 class A ordinary shares outstanding. Each ordinary share is entitled to one vote. The holders of ordinary shares are also entitled to receive dividends whenever funds are legally available and when declared by the Board of Directors, subject to prior rights of holders of all other classes of shares outstanding.

On August 23, 2018, the Company issued 4,000,000 class A ordinary shares at par value to Mr. Chen’s wholly-owned entity Viomi Limited to award his contribution to the Company’s development. Such shares were immediately vested. The issuance of such shares is accounted for as a share-based compensation to Mr. Chen. The issuance date fair value was estimated to be approximately US$3.30 per share.

On the same day, the Company effected a share split whereby each of the Company’s then authorized and outstanding ordinary shares and preferred shares, par value of $0.0001 each, was divided into ten ordinary shares and preferred shares of the same series, par value US$0.00001 each, respectively. All shareholders then surrendered 90% of their after-share-split outstanding shares back to the Company for cancellation. After the share split and the surrender of shares for cancellation, the number of the Company’s outstanding ordinary and preferred shares remained unchanged. The par value per ordinary share has been retroactively revised as if it had been adjusted proportion to the share split.

Pursuant to the resolution of the shareholders of the Company on August 23, 2018, the Company’s authorized share capital became US$50,000 divided into 5,000,000,000 shares comprising of the (i) 4,800,000,000 Class A Ordinary Shares of a par value of US$0.00001 each, (ii) 150,000,000 Class B Ordinary Shares of a par value of US$0.00001 each and (iii) 50,000,000 shares of a par value of US$0.00001 each of such class or classes (however designated) as the board of directors may determine in accordance with post-offering amended and restated memorandum and articles of association. Holders of Class A Ordinary Shares and Class B Ordinary Shares have the same rights, except for voting rights and conversion rights. Each Class A Ordinary Share is entitled to one vote, and each Class B Ordinary Share is entitled to ten (10) votes, voting together as one class. Each Class B Ordinary Share is convertible into one Class A Ordinary Share at any time by the holder thereof. Class A Ordinary Shares are not convertible into Class B Ordinary Shares under any circumstances. Upon any transfer of Class B Ordinary Shares by a holder to any person or entity other than holders of Class B Ordinary Shares or their affiliates, such Class B Ordinary Shares shall be automatically and immediately converted into the equivalent number of Class A Ordinary Shares.

Upon the completion of the Company’s IPO in 2018, 34,200,000 Class A Ordinary Shares were issued and 18,181,818 Series A Preferred Shares have been converted into Class A Ordinary Shares.

15.	ORDINARY SHARES (Continued)

During the year ended December 31, 2020, 2,655,669 Class A Ordinary Shares were issued for the exercised share options. In addition, 7,295,454 Class B Ordinary Shares were converted into Class A Ordinary Shares.

In March 2020, the Company’s Board of Directors authorized a share repurchase program under which the Company may repurchase up to US$10,000 worth of its ADSs over the following 12 months. The share repurchase may be made in accordance with applicable laws and regulations through open market transactions, privately negotiated transactions or other legally permissible means as determined by the management.

During the year ended December 31, 2020, the Company had repurchased 1,410,723 ADSs (equal to 4,232,169 Class A ordinary shares) for a consideration of US$8,030 on the open market, at a weighted average price of US$5.69 per ADS. The Company accounts for repurchased ordinary shares under the cost method and includes such treasury stock as a component of the shareholders’ equity.

As of December 31, 2020, the Company had 104,163,686 Class A Ordinary Shares and 103,554,546 Class B Ordinary Shares outstanding, respectively.

During the year ended December 31, 2021, 3,011,064 Class A Ordinary Shares were issued for the exercised share options. In addition, 339,999 Class B Ordinary Shares were converted into Class A Ordinary Shares. Moreover, 1,997,970 Class A Ordinary Shares were repurchased by the Group.

As of December 31, 2021, the Company had 105,516,779 Class A Ordinary Shares and 103,214,547 Class B Ordinary Shares outstanding, respectively.

During the year ended December 31, 2022, 956,256 Class A Ordinary Shares were issued for the exercised share options. In addition, 359,997 Class B Ordinary Shares were converted into Class A Ordinary Shares. Moreover, 2,293,569 Class A Ordinary Shares were repurchased by the Group.

As of December 31, 2022, the Company had 104,539,463 Class A Ordinary Shares and 102,854,550 Class B Ordinary Shares outstanding, respectively.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 14
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 16
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496180-112644

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (i)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(e)(1))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 40
-Section 50
-Paragraph 6
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126731327&loc=SL126733271-114008

+ Details

SHARE-BASED COMPENSATION

12 Months Ended

Dec. 31, 2022

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION

16.	SHARE-BASED COMPENSATION

Compensation expense recognized for share-based awards was as follows:

(a)	Share options

On September 17, 2015, the Board of Directors of the Company approved the establishment of 2015 Share Incentive Plan, the purpose of which is to provide an incentive for employees contributing to the Group. The 2015 Share Incentive Plan shall be valid and effective for 10 years from the grant date. The maximum number of shares that may be issued pursuant to all awards (including incentive share options) under 2015 Share Incentive Plan shall be 12,727,272 shares.

In June 2018, the Board of Directors and shareholders of the Company approved the 2018 Share Incentive Plan. As of December 31, 2022, the maximum of shares that may be issued under the 2018 Share Incentive Plan was 26,008,171.

For the year ended December 31, 2019, no share options were granted to employees.

For the year ended December 31, 2020, the Company granted 19,175,500 share options to employees pursuant to the 2018 Share Incentive Plan. With respect to the share options granted, 40% of the options will be vested after 24 months of the grant date and the remaining 60% will be vested in three equal installments over the following 36 months.

For the year ended December 31, 2021, the Company granted 38,400,000 share options to employees pursuant to the 2018 Share Incentive Plan. Among which, with respect to the share options granted, 40% of the options will be vested after 24 months of the vesting commencement date and the remaining 60% will be vested in three equal installments over the following 36 months.

For the year ended December 31, 2022, the Company granted 1,010,000 share options to employees pursuant to the 2018 Share Incentive Plan. Among which, with respect to the share options granted, 40% of the options will be vested after 24 months of the vesting commencement date and the remaining 60% will be vested in three equal installments over the following 36 months.

16.	SHARE-BASED COMPENSATION (Continued)

(a)	Share options (Continued)

The Group calculated the estimated fair value of the options on the respective grant dates using the binomial option pricing model. Assumptions used to determine the fair value of share options granted during 2021 and 2022 are summarized in the following table:


	Year ended December 31,
	2021		2022
Risk-free interest rate	2.88%~3.19	%	3.98	%
Expected volatility	42.93%~43.41	%	43.60	%
Expected life of option (years)	10		10
Expected dividend yield	—		—
Fair value per ordinary share	US$0.84~US$2.25		US$0.12

(1)

Risk-free interest rate

Risk-free interest rate was estimated based on the yield to maturity of China Government Bond with a maturity period close to the contractual term of the options.

(2)

Expected life of option (years)

Expected life of option (years) represents the expected years to vest the options.

(3)

Volatility

The volatility of the underlying ordinary shares during the life of the options was estimated based on the historical stock price volatility of comparable listed companies over a period comparable to the contractual term of the options.

(4)

Dividend yield

The dividend yield was estimated by the Group based on its expected dividend policy over the contractual term of the options.

(5)

Fair value per ordinary share

In determining the grant date fair value of the Company’s ordinary shares for purposes of recording share-based compensation expenses in connection with Restricted Shares owned by the Founder, Restricted Shares owned by the Founder on behalf of certain key management founders, and share options under the 2015 Share Incentive Plan and 2018 Share Incentive Plan, the Company evaluated the use of three generally accepted valuation approaches: market, cost and income approaches to estimate the enterprise value of the Company and income approach (discounted cash flow, or DCF method) was relied on for value determination with market approach (guideline companies method, or GCM) taken as reference.

DCF method of the income approach involves applying appropriate weighted average cost of capital (“WACC”), to discount the future cash flows forecast, based on the Company’s best estimates as of the valuation date, to present value. The WACC was determined based on a consideration of the factors including risk-free rate, comparative industry risk, equity risk premium, company size and non-systematic risk factors.

16.	SHARE-BASED COMPENSATION (Continued)

(a)	Share options (Continued)

GCM under the market approach was adopted as reference of the equity valuation for the Company. GCM employs trading multiples method of selected public comparable companies including trailing and leading enterprise value/revenue multiples.

In deriving the equity value of each class of shares, the Company applied the option pricing method. The option pricing method treats different classes of shares as call options on the total equity value, with exercise prices based on the liquidation preference or redemption amount of the certain classes of shares. Under this method, the ordinary share has value only if the fund available for distribution to shareholders exceeds the value of liquidation preference or redemption amounts at the time of a liquidity event, assuming the enterprise has funds available to make liquidation preference or redemption. Given the nature of the different classes of shares, the modeling of different classes of capital as call options on company’s enterprise value was analyzed and the values of different classes of shares were derived accordingly.

The Company also applied a discount for lack of marketability (“DLOM”), which was quantified by the black-Scholes option pricing model. Under this option-pricing method, which assumed that the put option is struck at the average price of the stock before the privately held shares can be sold, the cost of the put option was considered as a basis to determine the DLOM.

A summary of the stock option activity under the 2015 Share Incentive Plan and 2018 Share Incentive Plan for the years ended December 31, 2020, 2021 and 2022 is included in the table below.


			Weighted
			average
			remaining	Aggregate
	Number of	Weighted average	contractual	intrinsic
	options	exercise price (US$)	life (years)	value (US$)
Outstanding at January 31, 2020	11,365,268	0.44	7.59	17,737
Granted	19,175,500	0.86
Forfeited	(1,778,500)	0.60
Exercised	(2,655,669)	0.48
Outstanding at December 31, 2020	26,106,599	0.74	8.08	30,299
Granted	3,840,000	1.10
Forfeited	(4,709,197)	0.81
Exercised	(3,011,064)	0.43
Outstanding at December 31, 2021	22,226,338	0.80	7.41	26,813
Granted	1,010,000	1.10
Forfeited	(2,537,466)	0.98
Exercised	(956,256)	0.44
Outstanding at December 31, 2022	19,742,616	0.81	6.49	22,974
Exercisable as of December 31, 2022	10,650,023	0.63	5.54	13,640
Expected to vest as of December 31, 2022	8,212,534	1.01	7.59	8,475

The weighted average grant date fair value of options granted for the years ended December 31, 2021 and 2022 was RMB11.56 (US$1.73) and RMB7.66 (US$1.1) per option, respectively.

As of December 31, 2021 and 2022, there was RMB53,652 and RMB21,025 of unrecognized compensation expenses related to the options, respectively.

16.	SHARE-BASED COMPENSATION (Continued)

(b)	Restricted shares to an investee

As described in note 1, the Group established Guangdong Lizi in July 2018 as a subsidiary of the Company. In November 2020, following the Group’s restructuring plan on its water purifiers business, the Group entered into an agreement with Sunglow to sell 1% of equity interest of Guangdong Lizi for a consideration of RMB175. Sunglow has paid up the consideration in December 2021 but is not entitled to any shareholder’s rights of Guangdong Lizi until the fulfilment of certain conditions pursuant to the supplemental agreement in November 2021.

Under the requirement of ASC 718, the Group should recognize share-based compensation if there is a difference between the fair value of Guangdong Lizi’s 1% of equity interest and the consideration paid up by Sunglow on the date of capital injection. The Group calculated the estimated fair value of the options on the respective grant dates using the discounted cash flow model.

As of December 31, 2022, there were RMB10,284 of unrecognized compensation expenses related to restricted shares granted to Sunglow for which the performance conditions had not been met and are expected to be recognized when the performance conditions are achieved under the requirement of ASC 718.

NET INCOME (LOSS) PER SHARE

12 Months Ended

Dec. 31, 2022

NET INCOME (LOSS) PER SHARE

NET INCOME (LOSS) PER SHARE

17.	NET INCOME (LOSS) PER SHARE

Basic net income (loss) per share is the amount of net income available to each share of ordinary shares outstanding during the reporting period. Diluted net income per share is the amount of net income available to each share of ordinary shares outstanding during the reporting period adjusted to include the effect of potentially dilutive ordinary shares.


	Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Numerator:
Numerator for basic calculation - Net income (loss) attributable to ordinary shareholders of the Company	173,324	88,605	(275,515)

Denominator:
Denominator for basic calculation - weighted average ordinary shares outstanding	208,812,049	209,551,821	208,341,011
Dilutive effect of share options	6,811,724	11,184,176	—
Denominator for diluted calculation	215,623,773	220,735,997	208,341,011

Basic net income (loss) per ordinary share	0.83	0.42	(1.32)
Diluted net income (loss) per ordinary share	0.80	0.40	(1.32)

RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2022

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

18.	RELATED PARTY TRANSACTIONS


Name		Relationship with the Group
Mr. Chen		Founder
Xiaomi		Shareholder of the Group
Foshan Wanwuhulian Trade Co., Ltd. (“Foshan Wanwuhulian”)		Controlled by the Founder

The Group’s relationship with Xiaomi

Xiaomi is the Group’s strategic partner and shareholder.

18.	RELATED PARTY TRANSACTIONS (Continued)

The Group’s sales to Xiaomi are governed by a business cooperation agreement, pursuant to which Xiaomi is responsible for the distribution and sales of such products through their network and sales channels.

The Group also sells products through Xiaomi’s online e-commerce channel Xiaomiyoupin.com, and is charged of commissions pursuant to a commission sales agreement.

Transaction with Xiaomi

Business cooperation agreement

The current business corporation agreement entered into in 2019 with Xiaomi governs all the Group’s sales to Xiaomi. It expired in September 2021 and has been renewed up to September 2023.

Under the business cooperation agreement, (i) certain products sold to Xiaomi are exclusively designed for and can only be sold to Xiaomi, (ii) Xiaomi shall purchase these products at a price that covers all of the Group’s costs of raw materials, outsourcing manufacture, models, logistics and paid intellectual property licensing fees, in connection with the manufacture and delivery of these products, and (iii) Xiaomi and the Group shall share gross profits, derived from sales of these products, the retail prices of which were set by Xiaomi and the Group together.

In 2019, the Group has entered into a service arrangement with Xiaomi for a particular type of product under which the Group acts as the agent of Xiaomi. The Group charges Xiaomi with reference to market price. This service arrangement was terminated at the end of 2020.

Youpin commission sales agreement

The Group has entered into a commission sales agreement with Xiaomi for the sale of the Group’s own branded products on an E-platform operated by Xiaomi, namely Youpin. The commission sales agreement expired on December 31, 2021. The agreement has been renewed in 2022 and it has become non-fixed-term agreement since then. Furthermore, this agreement may be terminated by Xiaomi with 30 days’ written notice.

Under the commission sales agreement, the Group shall pay a service fee, calculated as certain portion of the sales price excluding customers’ refunds or as otherwise agreed by the parties with respect to specific product lines, as well as a deposit to Xiaomi. The retail prices of the Group’s products on Youpin’s platform shall be no higher than the sales price from any other e-commerce merchants or the Group’s official offline sales channel, including in the event of sales or promotion. Refer to Note 18 (5) to the consolidated financial statements for the commission expenses charged by Youpin for the years ended December 31, 2020, 2021 and 2022.

18.	RELATED PARTY TRANSACTIONS (Continued)

(1)

Amount due from/to related parties


	As of December 31,
	2021	2022
	RMB	RMB
Accounts receivable from a related party:
Xiaomi^(a)	320,939	360,497

Other receivables from related parties:
Sales receivable from Xiaomi^(b)	88,331	24,802
Other receivables from Xiaomi	36	219
Total	88,367	25,021

Amounts due to related parties:
Purchase payable to Xiaomi^(a)	3,537	7,245
Research and development expenses payable to Xiaomi	715	221
Selling and marketing expenses payable to Xiaomi^(d)	1,163	4,082
Total	5,415	11,548

(2)

Purchase from related parties


	Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Xiaomi^(a)	50,843	33,767	30,941
Foshan Wanwuhulian^(c)	469,950	—	—
Total	520,793	33,767	30,941

(3)

Revenue from a related party


	Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Xiaomi^(a)	2,889,441	2,295,569	1,403,354

(4)

Research and development expenses


	Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Xiaomi^(a)(e)	1,915	3,484	2,791

18.	RELATED PARTY TRANSACTIONS (Continued)

(5)

Selling and marketing expenses


	Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Commission expenses charged by Xiaomi^(b)	77,163	82,617	32,795
Other expenses charged by Xiaomi^(b)	20,060	24,312	8,789
Total	97,223	106,929	41,584

(a)

The Group both sells water purifiers and other products to and purchase Xiaomi branded products, certain raw materials and research and development services from Xiaomi. The amount due from Xiaomi represents receivable arising from sales of water purifiers and other products. The balance due to Xiaomi represents payable arising from purchase of Xiaomi branded products, certain raw materials, and services.

(b)

The Group sells its own brand products on the E-platform of Xiaomi, which charges the Group commission and technical service fees, also Xiaomi provides advertising and promotion service. The amount due from Xiaomi represents sales receivable net of commission, advertising and promotion service.

(c)

The Group purchases products from Foshan Wanwuhulian for trading during the year ended December 31, 2020. The cooperation with Foshan Wanwuhulian was terminated at the end of 2020.

(d)

The Group sells its own brand products on the E-platform of Xiaomi, which charges the Group customer service fees.

(e)

This amount indicates services provided by Xiaomi and recognized in research and development expenses by the Group.

FAIR VALUE MEASUREMENTS

12 Months Ended

Dec. 31, 2022

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

19.

FAIR VALUE MEASUREMENTS

Fair value reflects the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the assets or liabilities.

The Group applies a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. This guidance specifies a hierarchy of valuation techniques, which is based on whether the inputs into the valuation technique are observable or unobservable. The hierarchy is as follows:

Level 1—Valuation techniques in which all significant inputs are unadjusted quoted prices from active markets for assets or liabilities that are identical to the assets or liabilities being measured.

Level 2—Valuation techniques in which significant inputs include quoted prices from active markets for assets or liabilities that are similar to the assets or liabilities being measured and/or quoted prices for assets or liabilities that are identical or similar to the assets or liabilities being measured from markets that are not active. Also, model-derived valuations in which all significant inputs and significant value drivers are observable in active markets are Level 2 valuation techniques.

Level 3—Valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are valuation technique inputs that reflect the Group’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

19.

FAIR VALUE MEASUREMENTS (Continued)

The fair value guidance describes three main approaches to measure the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset.

When available, the Group uses quoted market prices to determine the fair value of an asset or liability. If quoted market prices are not available, the Group will measure fair value using valuation techniques that use, when possible, current market-based or independently sourced market parameters, such as interest rates and currency rates.

The Group did not have any other financial instruments that were required to be measured at fair value on a recurring basis as of December 31, 2021 and 2022 except for short-term investments (Note 6).

The following table summarizes the Group’s assets that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy as of December 31, 2021 and 2022:


	Level 1	Level 2	Level 3	Total
As of December 31, 2022
Short-term investments (i)	—	197,058	—	197,058
As of December 31, 2021
Short-term investments (i)	—	828,867	—	828,867

(i)

Short-term investments represent structured deposits, and the Company values these short-term investments based on quoted prices of similar products provided by banks at the end of each period, and accordingly, the Company classifies the valuation techniques that use these inputs as Level 2.

Apart from the short-term investments, the Company’s other financial instruments consist principally of cash and cash equivalents, restricted cash, short-term deposits, accounts and notes receivable, other receivables, amounts due to/from related parties, accounts and notes payable and certain accrued expenses. They are recorded at cost which approximates fair value.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

LEASES

12 Months Ended

Dec. 31, 2022

LEASES

LEASES

20.

LEASES

The Group’s operating leases are principally for office space, facilities and self-run offline stores. At December 31, 2022, The Group’s operating leases had a weighted average discount rate of 4.75% and a weighted-average remaining term of 1.6 years.

The components of lease expense were as follows:


	Year ended December 31,
	2021	2022
Lease cost
Operating lease expense	12,065	11,506
Short-term lease expense (i)	2,382	312
Total lease cost	14,447	11,818

(i)Includes leases with a term of one year or less.

20.	LEASES (Continued)

Supplemental cash flow information for leases was as follows:


	Year ended December 31,
	2021	2022
Operating cash flows relating to operating leases	14,765	7,818
Lease liabilities arising from obtaining right-of-use assets	16,835	6,080

As of December 31, 2022, the aggregate future minimum rental payments under non-cancelable agreement were as follows:


		Rental
		RMB
2023		13,103
2024		2,313
2025 and after		1,559
Total future minimum rental payment		16,975
Less amount representing imputed interest		(2,950)
Present value of future minimum rental payments		14,025
Less current portion, recorded in other current liabilities		(7,233)
Long-term lease liabilities, recorded in other long-term liabilities		6,792

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2022

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

21.	COMMITMENTS AND CONTINGENCIES

(a)	Operating lease commitments

The operating commitments presented above mainly consist of the short-term lease commitments and leases that have not yet commenced but that create significant rights and obligations for the Company, which are not included in operating lease right-of–use assets and lease liabilities. As of December 31, 2022, there were no future minimum commitments under non-cancelable agreements.

(b)	Capital and other commitment

Capital expenditures contracted for at the balance sheet dates but not recognized in the consolidated financial statements are as follows:


	As of December 31,
	2021	2022
Property, plant and equipment	116,527	89,029

(c)	Legal proceedings

From time to time, the Group is involved in claims and legal proceedings that arise in the ordinary course of business. Based on currently available information, management does not believe that the ultimate outcome of these unresolved matters, individually and in the aggregate, is likely to have a material adverse effect on the Group’s financial position, results of operations or cash flows.

However, litigation is subject to inherent uncertainties and the Group’s view of these matters may change in the future. If an unfavorable outcome were to occur, there exists the possibility of a material adverse impact on the Group’s financial position and results of operations for the periods in which the unfavorable outcome occurs.

RESTRICTED NET ASSETS

12 Months Ended

Dec. 31, 2022

Restricted Net Assets [Abstract]

RESTRICTED NET ASSETS

22.RESTRICTED NET ASSETS

Relevant PRC laws and regulations permit payments of dividends by the Group’s entities incorporated in the PRC only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. In addition, the Company’s entities in the PRC are required to annually appropriate 10% of their net after-tax income to the statutory general reserve fund prior to payment of any dividends, unless such reserve funds have reached 50% of their respective registered capital. As a result of these and other restrictions under PRC laws and regulations, the Company’s entities incorporated in the PRC are restricted in their ability to transfer a portion of their net assets to the Company either in the form of dividends, loans or advances, which restricted portion as calculated under PRC GAAP amounted to RMB112,603 and RMB115,751 as of December 31, 2021 and 2022. Even though the Company currently does not require any such dividends, loans or advances from the PRC entities for working capital and other funding purposes, the Company may in the future require additional cash resources from them due to changes in business conditions, to fund future acquisitions and development, or merely to declare and pay dividends or distributions to its shareholders. Except for the above, there is no other restriction on use of proceeds generated by the Group’s subsidiaries and VIE to satisfy any obligations of the Company.

For the year ended December 31, 2022, the Company performed a test on the restricted net assets of subsidiaries and VIE in accordance with Securities and Exchange Commission Regulation S-X Rule 4-08 (e) (3), “General Notes to Financial Statements” and concluded that the restricted net assets do not exceed 25% of the consolidated net assets of the Company as of December 31, 2022 and the condensed financial information of the Company are not required to be presented.

Cash transfers from the Company’s PRC subsidiaries to their parent companies outside of China are subject to PRC government control of currency conversion. Shortages in the availability of foreign currency may temporarily restrict the ability of the PRC subsidiaries and VIEs and their subsidiaries to remit sufficient foreign currency to pay dividends or other payments to the Company, or otherwise satisfy their foreign currency denominated obligation.

SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2022

SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

(a)	Basis of presentation

Consolidation

(b)	Consolidation

Use of estimates

(c)	Use of estimates

Foreign currency translation

(d)	Foreign currency translation

2.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(d)	Foreign currency translation (Continued)

Convenience Translation

(e)	Convenience translation

Cash and cash equivalents

(f)	Cash and cash equivalents

Readily convertible to known amounts of cash throughout the maturity period;

ii)

So near their maturity that they present insignificant risk of changes in value because of changes in interest rates.

Restricted cash

(g)	Restricted cash

Short-term deposits

(h)	Short-term deposits

Short-term investments

(i)	Short-term investments

Accounts receivable

2.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(j)	Accounts receivable

Inventories

(k)	Inventories

Long-term deposits

(l)	Long-term deposits

Property, plant and equipment, net

(m)	Property, plant and equipment, net


	Estimated useful lives	Residual rate
Computers and equipment	2-10 years	0%-5	%
Vehicle	4 years	5	%

Land use rights

2.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(n)	Land use rights

Intangible assets

(o)	Intangible assets


		Estimated useful lives
Software		1 - 10 years
License		3 - 10 years

Leases

(p)

Leases

Revenue recognition

(q)	Revenue recognition

2.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(q)	Revenue recognition (Continued)

1)	The Group conducts its business through various contractual arrangements, the following table disaggregates the Group’s revenue by type of contract for the years ended December 31, 2020, 2021 and 2022:


	Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Sales to Xiaomi	2,889,441	2,295,569	1,403,354
—Xiaomi-branded products	2,560,787	2,021,117	1,154,689
—Viomi-branded products	326,114	274,452	248,665
—Rendering of services	2,540	—	—
Sales to third-party customers	2,936,183	3,008,266	1,829,377
	5,825,624	5,303,835	3,232,731

a) Sales to Xiaomi

The Group generated a substantial portion of its revenues from sales of products to Xiaomi.

2.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(q)	Revenue recognition (Continued)

- Sales to leading e-commerce platforms and offline experience stores

- Sales to customers directly through the online platforms operated by Xiaomi, third parties and the Group

2.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(q)	Revenue recognition (Continued)

2)	Sales returns and sales incentives

- Sales to leading e-commerce platforms

- 7 days unconditional sales return

2.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(q)	Revenue recognition (Continued)

Warranty

4)	Value added taxes

5)	Contract balances

Cost of revenues

(r)	Cost of revenues

Research and development expenses

(s)	Research and development expenses

Selling and marketing expenses

(t)	Selling and marketing expenses

General and administrative expenses

(u)	General and administrative expenses

Government subsidies

(v)	Government subsidies

Employee benefits

(w)	Employee benefits

PRC Contribution Plan

Share-based compensation

(x)	Share-based compensation

Income taxes

(y)	Income taxes

Uncertain tax positions

Comprehensive income

(z)	Comprehensive income

Statutory reserves

(aa)	Statutory reserves

The Company’s subsidiaries and VIEs established in the PRC are required to make appropriations to certain non-distributable reserve funds.

Income per share

(bb)	Income per share

Related parties

(cc)	Related parties

Segment reporting

(dd)	Segment reporting

Current expected credit losses

(ee)	Current expected credit losses

2.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(ee)	Current expected credit losses (Continued)


	Year ended December 31,
	2021	2022
	RMB	RMB
Balance at beginning of the year	9,316	34,857
Current year provision	29,343	61,336
Reversals	(3,802)	(8,339)
Balance at end of the year	34,857	87,854

Recently issued accounting pronouncements

(ff)	Recently issued accounting pronouncements

ORGANIZATION AND PRINCIPAL ACTIVITIES (Tables)

12 Months Ended

Dec. 31, 2022

ORGANIZATION AND PRINCIPAL ACTIVITIES

Schedule of principal subsidiaries and VIEs

As of December 31, 2022, details of the Company’s principal subsidiaries and VIEs were as follows:


			Percentage of
	Place of	Date of	beneficial		Principal
	incorporation	incorporation	ownership		activities
Subsidiaries:
Viomi HK	Hong Kong	January 30, 2015	100	%	Investment holding
Lequan	PRC	May 15, 2015	100	%	Investment holding
Codream HK	Hong Kong	August 20, 2019	100	%	Investment holding
Yunmi Hulian	PRC	December 9, 2019	100	%	Investment holding
Zhumeng Hulian	PRC	October 14, 2020	100	%	Investment holding
Guangdong Lizi	PRC	July 26, 2018	100	%	Home appliance development and sales
Guangzhou interconnect Technology Co., Ltd.	PRC	December 7, 2020	100	%	Home appliance development and sales
VIEs:
Foshan Viomi	PRC	May 6, 2014	100	%	Home appliance development and sales
Beijing Viomi	PRC	January 12, 2015	100	%	No substantial business
Subsidiaries of Foshan Viomi:
Guangdong AI Touch Technology Co., Ltd. (“AI Touch”)	PRC	January 30, 2019	VIE’s subsidiary		Home appliance development and sales
Foshan Xiaoxian Hulian Electric Appliances Technology Co., Ltd. (“Foshan Xiaoxian”)	PRC	October 12, 2016	VIE’s subsidiary		Home appliance development and sales

Schedule of financial statement amounts and balances of VIEs


	As of December 31,
	2021	2022
	RMB	RMB
Cash and cash equivalents	353,554	335,476
Short-term investments	820,344	189,275
Accounts receivable from third parties (net of allowance of RMB27,009 and RMB72,193 as of December 31, 2021 and 2022, respectively)	204,769	150,686
Accounts receivable from a related party (net of allowance of RMB368 and RMB272 as of December 31, 2021 and 2022, respectively)	320,939	360,497
Amount due from Group companies	232,203	707,458
Inventories	362,385	281,649
Other assets	383,569	427,598
Total assets	2,677,763	2,452,639
Accounts and notes payable	545,966	377,839
Amount due to Group companies	824,304	1,043,056
Accrued expenses and other liabilities	292,388	231,325
Other liabilities	122,508	119,311
Total liabilities	1,785,166	1,771,531


	Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Revenue from Group companies (1)	25,994	131,379	220,607
Revenue from a related party and third parties	5,790,475	4,859,414	2,805,557

Cost from Group companies	214,289	1,291,468	49,359
Cost from a related party and third parties	4,556,588	2,870,809	2,355,718

Net income/(loss)	152,908	(60,908)	(237,517)

Net cash used in operating activities with Group companies	(162,243)	(794,936)	(958,297)
Net cash provided by operating activities with third parities	218,030	1,248,860	537,068
Net cash (used in)/provided by investing activities with Group companies	(30,404)	(83,325)	7,280
Net cash (used in)/provided by investing activities with third parties	(490,270)	(233,934)	461,320
Net cash provided by/(used in) financing activities with Group companies	154,557	(156,406)	(60,361)
Net cash (used in)/provided by financing activities with third parties	(98,390)	—	—

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

+ References + Details

SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2022

SIGNIFICANT ACCOUNTING POLICIES

Schedule of property plant and equipment estimated useful lives and residual rate


	Estimated useful lives	Residual rate
Computers and equipment	2-10 years	0%-5	%
Vehicle	4 years	5	%

Schedule of amortization of finite-lived intangible assets estimated useful lives


		Estimated useful lives
Software		1 - 10 years
License		3 - 10 years

Schedule of disaggregates the Group's revenue by type of contract


	Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Sales to Xiaomi	2,889,441	2,295,569	1,403,354
—Xiaomi-branded products	2,560,787	2,021,117	1,154,689
—Viomi-branded products	326,114	274,452	248,665
—Rendering of services	2,540	—	—
Sales to third-party customers	2,936,183	3,008,266	1,829,377
	5,825,624	5,303,835	3,232,731

Schedule of activity in allowance for credit losses related to accounts and notes receivable and other receivables from related parties


	Year ended December 31,
	2021	2022
	RMB	RMB
Balance at beginning of the year	9,316	34,857
Current year provision	29,343	61,336
Reversals	(3,802)	(8,339)
Balance at end of the year	34,857	87,854

CONCENTRATION AND RISKS (Tables)

12 Months Ended

Dec. 31, 2022

Credit Risk

Concentration and risks

Summary of concentration of risk


	As of December 31,
	2021			2022
	RMB			RMB
Company A	161,785	54	%	125,971	52	%
Company B	37,776	12	%	4,259	2	%


	As of December 31,
	2021			2022
	RMB			RMB
Xiaomi	320,939	100	%	360,497	100	%


	As of December 31,
	2021			2022
	RMB			RMB
Xiaomi	88,367	100	%	25,021	100	%

Revenue Concentration Risk

Concentration and risks

Summary of concentration of risk


	Year ended December 31,
	2020			2021			2022
	RMB			RMB			RMB
Xiaomi	2,889,441	50	%	2,295,569	43	%	1,403,354	43	%

CASH AND CASH EQUIVALENTS (Tables)

12 Months Ended

Dec. 31, 2022

CASH AND CASH EQUIVALENTS

Summary of cash and cash equivalents


	As of December 31, 2021		As of December 31, 2022
		RMB		RMB
	Amount	equivalent	Amount	equivalent
RMB	238,386	238,386	440,557	440,557
US$	54,671	348,569	42,584	296,582
Total		586,955		737,139

INVENTORIES (Tables)

12 Months Ended

Dec. 31, 2022

INVENTORIES

Schedule of inventories


	As of December 31,
	2021	2022
	RMB	RMB
Finished goods	422,627	309,239
Raw materials	153,724	193,052
Inventories	576,351	502,291

PREPAID EXPENSES AND OTHER ASSETS (Tables)

12 Months Ended

Dec. 31, 2022

PREPAID EXPENSES AND OTHER ASSETS

Schedule of prepaid expenses and other assets


	As of December 31,
	2021	2022
	RMB	RMB
Advances to suppliers	106,666	139,306
Other receivables	48,322	44,697
Prepayment for equipment	18,493	15,976
Lease hold improvement	6,643	5,234
Expected return assets	3,189	1,351
Other current assets	135	—
Total	183,448	206,564
Less: non-current portion	(27,321)	(22,856)
Prepaid expenses and other assets-current portion	156,127	183,708

PROPERTY, PLANT AND EQUIPMENT, NET (Tables)

12 Months Ended

Dec. 31, 2022

PROPERTY, PLANT AND EQUIPMENT, NET

Schedule of property, plant and equipment, net


	As of December 31,
	2021	2022
	RMB	RMB
Construction in progress	76,440	166,480
Computers and equipment	185,776	266,085
Vehicle	508	759
Total	262,724	433,324
Less: accumulated depreciation	(116,731)	(196,892)
Property, plant and equipment, net	145,993	236,432

LAND USE RIGHTS, NET (Tables)

12 Months Ended

Dec. 31, 2022

LAND USE RIGHTS, NET

Summary of land use rights, net


	As of December 31,
	2021	2022
	RMB	RMB
Land use rights	63,618	63,618
Less: Accumulated amortization	(1,896)	(3,169)
Land use right, net	61,722	60,449

ACCRUED EXPENSES AND OTHER LIABILITIES (Tables)

12 Months Ended

Dec. 31, 2022

ACCRUED EXPENSES AND OTHER LIABILITIES

Schedule of accrued expenses and other liabilities


	As of December 31,
	2021	2022
	RMB	RMB
Accrued payroll and welfare	95,816	76,468
Freight payable	68,197	29,533
Deposit from suppliers	27,483	36,909
Installation fee payables	18,957	6,609
Product warranty	28,796	28,292
Marketing and promotion expenses	25,709	47,124
Payment for purchase of property	17,647	16,075
Other tax payable	9,954	3,474
Professional fee payables	5,143	4,265
Refund liabilities	6,320	2,656
Other current liabilities	69,254	65,685
Total	373,276	317,090
Less: non-current portion	(7,558)	(8,245)
Accrued expenses and other liabilities-current portion	365,718	308,845

Schedule of product warranty activities


		Product Warranty
		RMB
Balance at December 31, 2020		22,420
Provided during the year		76,845
Utilized during the year		(70,469)
Balance at December 31, 2021		28,796
Provided during the year		51,161
Utilized during the year		(51,665)
Balance at December 31, 2022		28,292

REVENUE (Tables)

12 Months Ended

Dec. 31, 2022

REVENUE

Schedule of disaggregation of revenue by type of contract


	Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Sales of product
- IoT @ Home portfolio	3,671,717	3,400,966	1,619,941
- Home water solutions	883,325	742,912	681,054
- Consumables	382,896	367,021	358,442
- Small appliances and other products	792,965	708,260	494,943
Total of sales of products	5,730,903	5,219,159	3,154,380
Rendering of services	94,721	84,676	78,351
Total	5,825,624	5,303,835	3,232,731

INCOME TAX EXPENSES (Tables)

12 Months Ended

Dec. 31, 2022

INCOME TAX EXPENSES

Schedule of current and deferred components of income taxes

The current and deferred components of income taxes appearing in the consolidated statements of comprehensive income are as follows:


	Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Current tax expenses	44,813	26,854	(4,470)
Deferred tax (benefit) expense	(1,492)	(21,115)	22,644
Income tax expenses	43,321	5,739	18,174

Schedule of reconciliation between income tax expenses computed by applying PRC enterprise tax rate before income taxes and actual provision

Reconciliation between the income tax expenses computed by applying the PRC enterprise tax rate to income before income taxes and actual provision were as follows:


	Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Income (loss) from operations in the PRC	200,941	89,126	(272,186)
Income from overseas entities	16,826	5,504	7,730
Income (loss) before income tax	217,767	94,630	(264,456)
Tax expense (benefit) at PRC enterprise income tax rate of 25%	54,442	23,658	(66,114)
Income tax on tax holiday⁽¹⁾	(31,074)	(16,872)	6,310
Tax effect of permanent differences⁽²⁾	(16,895)	(28,303)	(30,550)
Change in valuation allowance⁽³⁾	29,780	22,153	107,603
Effect of share-based compensation	10,830	7,111	2,934
Effect of income tax in jurisdictions other than the PRC	(3,762)	(2,008)	(2,009)
Income tax expenses	43,321	5,739	18,174

(1)

(2)

The permanent book-tax differences mainly consisted of R&D super deductions.

(3)

Schedule of per share effect of tax holidays

The per share effect of the tax holidays are as follows:


	Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Net income per share effect – basic	0.14	0.02	0.06
Net income per share effect – diluted	0.13	0.02	0.06

Schedule of significant components of deferred tax assets

The significant components of the Group’s deferred tax assets were as follows:


	As of December 31,
	2021	2022
	RMB	RMB
Accrued expenses and others	18,567	21,935
Net operating loss carry forwards	69,852	151,463
Inventories write downs	985	1,040
Deferred income	161	86
Total deferred tax assets	89,565	174,524
Less: valuation allowance	(54,261)	(161,864)
Deferred tax assets, net	35,304	12,660

Schedule of movement of valuation allowance


	Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Balance at beginning of the year	3,146	32,926	54,261
Provided	29,780	21,335	107,603
Balance at end of the year	32,926	54,261	161,864

SHARE-BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2022

SHARE-BASED COMPENSATION

Summary of compensation expense recognized for share-based awards

Summary of assumptions used to determine the fair value of share options granted


	Year ended December 31,
	2021		2022
Risk-free interest rate	2.88%~3.19	%	3.98	%
Expected volatility	42.93%~43.41	%	43.60	%
Expected life of option (years)	10		10
Expected dividend yield	—		—
Fair value per ordinary share	US$0.84~US$2.25		US$0.12

Summary of stock option activity


			Weighted
			average
			remaining	Aggregate
	Number of	Weighted average	contractual	intrinsic
	options	exercise price (US$)	life (years)	value (US$)
Outstanding at January 31, 2020	11,365,268	0.44	7.59	17,737
Granted	19,175,500	0.86
Forfeited	(1,778,500)	0.60
Exercised	(2,655,669)	0.48
Outstanding at December 31, 2020	26,106,599	0.74	8.08	30,299
Granted	3,840,000	1.10
Forfeited	(4,709,197)	0.81
Exercised	(3,011,064)	0.43
Outstanding at December 31, 2021	22,226,338	0.80	7.41	26,813
Granted	1,010,000	1.10
Forfeited	(2,537,466)	0.98
Exercised	(956,256)	0.44
Outstanding at December 31, 2022	19,742,616	0.81	6.49	22,974
Exercisable as of December 31, 2022	10,650,023	0.63	5.54	13,640
Expected to vest as of December 31, 2022	8,212,534	1.01	7.59	8,475

NET INCOME (LOSS) PER SHARE (Tables)

12 Months Ended

Dec. 31, 2022

NET INCOME (LOSS) PER SHARE

Summary of net income per share, basic and diluted


	Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Numerator:
Numerator for basic calculation - Net income (loss) attributable to ordinary shareholders of the Company	173,324	88,605	(275,515)

Denominator:
Denominator for basic calculation - weighted average ordinary shares outstanding	208,812,049	209,551,821	208,341,011
Dilutive effect of share options	6,811,724	11,184,176	—
Denominator for diluted calculation	215,623,773	220,735,997	208,341,011

Basic net income (loss) per ordinary share	0.83	0.42	(1.32)
Diluted net income (loss) per ordinary share	0.80	0.40	(1.32)

RELATED PARTY TRANSACTIONS (Tables)

12 Months Ended

Dec. 31, 2022

RELATED PARTY TRANSACTIONS


Name		Relationship with the Group
Mr. Chen		Founder
Xiaomi		Shareholder of the Group
Foshan Wanwuhulian Trade Co., Ltd. (“Foshan Wanwuhulian”)		Controlled by the Founder

Summary of related party transactions

(1)

Amount due from/to related parties


	As of December 31,
	2021	2022
	RMB	RMB
Accounts receivable from a related party:
Xiaomi^(a)	320,939	360,497

Other receivables from related parties:
Sales receivable from Xiaomi^(b)	88,331	24,802
Other receivables from Xiaomi	36	219
Total	88,367	25,021

Amounts due to related parties:
Purchase payable to Xiaomi^(a)	3,537	7,245
Research and development expenses payable to Xiaomi	715	221
Selling and marketing expenses payable to Xiaomi^(d)	1,163	4,082
Total	5,415	11,548

(2)

Purchase from related parties


	Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Xiaomi^(a)	50,843	33,767	30,941
Foshan Wanwuhulian^(c)	469,950	—	—
Total	520,793	33,767	30,941

(3)

Revenue from a related party


	Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Xiaomi^(a)	2,889,441	2,295,569	1,403,354

(4)

Research and development expenses


	Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Xiaomi^(a)(e)	1,915	3,484	2,791

(5)

Selling and marketing expenses


	Year ended December 31,
	2020	2021	2022
	RMB	RMB	RMB
Commission expenses charged by Xiaomi^(b)	77,163	82,617	32,795
Other expenses charged by Xiaomi^(b)	20,060	24,312	8,789
Total	97,223	106,929	41,584

(a)

(b)

(c)

The Group purchases products from Foshan Wanwuhulian for trading during the year ended December 31, 2020. The cooperation with Foshan Wanwuhulian was terminated at the end of 2020.

(d)

The Group sells its own brand products on the E-platform of Xiaomi, which charges the Group customer service fees.

(e)

This amount indicates services provided by Xiaomi and recognized in research and development expenses by the Group.

FAIR VALUE MEASUREMENTS (Tables)

12 Months Ended

Dec. 31, 2022

FAIR VALUE MEASUREMENTS

Summary of assets measured at fair value on recurring basis


	Level 1	Level 2	Level 3	Total
As of December 31, 2022
Short-term investments (i)	—	197,058	—	197,058
As of December 31, 2021
Short-term investments (i)	—	828,867	—	828,867

(i)

LEASES (Tables)

12 Months Ended

Dec. 31, 2022

LEASES

Summary of components of lease expense


	Year ended December 31,
	2021	2022
Lease cost
Operating lease expense	12,065	11,506
Short-term lease expense (i)	2,382	312
Total lease cost	14,447	11,818

(i)Includes leases with a term of one year or less.

20.	LEASES (Continued)

Summary of supplemental cash flow information for leases


	Year ended December 31,
	2021	2022
Operating cash flows relating to operating leases	14,765	7,818
Lease liabilities arising from obtaining right-of-use assets	16,835	6,080

Summary of aggregate future minimum rental payments under non-cancelable agreement

As of December 31, 2022, the aggregate future minimum rental payments under non-cancelable agreement were as follows:


		Rental
		RMB
2023		13,103
2024		2,313
2025 and after		1,559
Total future minimum rental payment		16,975
Less amount representing imputed interest		(2,950)
Present value of future minimum rental payments		14,025
Less current portion, recorded in other current liabilities		(7,233)
Long-term lease liabilities, recorded in other long-term liabilities		6,792

COMMITMENTS AND CONTINGENCIES (Tables)

12 Months Ended

Dec. 31, 2022

COMMITMENTS AND CONTINGENCIES

Summary of capital and other commitment


	As of December 31,
	2021	2022
Property, plant and equipment	116,527	89,029

ORGANIZATION AND PRINCIPAL ACTIVITIES - Additional information (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands					1 Months Ended		12 Months Ended
	Sep. 25, 2018 $ / shares shares	Aug. 23, 2018 USD ($) $ / shares shares	Aug. 23, 2018 Vote $ / shares shares	Jul. 31, 2015 USD ($) $ / shares shares	Jul. 31, 2015 CNY (¥) shares	Jul. 31, 2015 USD ($) $ / shares shares	Dec. 31, 2022 $ / shares shares	Dec. 31, 2018 USD ($) shares	Dec. 31, 2021 $ / shares shares	Dec. 31, 2020 $ / shares	Nov. 30, 2020 CNY (¥)	Sep. 24, 2018 shares	Aug. 22, 2018 $ / shares shares	Jun. 30, 2018 shares	May 31, 2014 CNY (¥)
Organization and principal activities
Entity incorporation date							2015-01
Common stock, par value per share \| $ / shares													$ 0.0001
Preferred shares, par value \| $ / shares		$ 0.00001	$ 0.00001										0.0001
Stock split ratio		10
Surrender of outstanding shares after share split		90
Stock, conversion basis							IPO, 16,145,454 issued Class A Ordinary Shares held by certain key management founders, 33,818,182 issued Pre-IPO Class B Ordinary Shares held by Red Better, and 67,636,364 issued Pre-IPO Class B Ordinary Shares held by Mr. Chen’s wholly-owned entity Viomi Limited was automatically converted by way of re-designation and re-classification into Class B Ordinary Shares on a one-for-one basis, and the rest of the outstanding Class A Ordinary Shares, the rest of the outstanding Pre-IPO Class B Ordinary Shares, and all outstanding Series A Preferred Shares was automatically converted by way of re-designation and re-classification into Class A Ordinary Shares on a one-for-one basis.
Foshan Viomi and Beijing Viomi
Organization and principal activities
Percentage of beneficial ownership							100.00%
Class A Ordinary Shares
Organization and principal activities
Shares issued								34,200,000
Ordinary shares, issued		4,000,000	4,000,000				104,539,463		105,516,779					33,818,182
Ordinary shares, transferred														16,145,454
Ordinary shares, surrendered														17,672,728
Common stock, par value per share \| $ / shares							$ 0.00001		$ 0.00001				$ 0.0001
Ordinary shares, shares authorized							4,800,000,000		4,800,000,000				346,545,454
Class B Ordinary Shares
Organization and principal activities
Ordinary shares, issued							102,854,550		103,214,547
Common stock, par value per share \| $ / shares									$ 0.00001	$ 0.00001
Ordinary shares, shares authorized							150,000,000		150,000,000
IPO
Organization and principal activities
Shares issued	34,200,000
Ordinary shares, shares authorized		5,000,000,000	5,000,000,000
Dividends value of shares authorized \| $		$ 50,000
Conversion ratio of class B ordinary share into class A ordinary shares		1
Stock, conversion basis							Each Class B Ordinary Share is convertible into one Class A Ordinary Share at any time by the holder thereof.
IPO \| Class A Ordinary Shares
Organization and principal activities
Common stock, par value per share \| $ / shares		$ 0.00001	$ 0.00001
Ordinary shares, shares authorized		4,800,000,000	4,800,000,000
Ordinary shares, voting rights \| Vote			1
IPO \| Class B Ordinary Shares
Organization and principal activities
Common stock, par value per share \| $ / shares		$ 0.00001	$ 0.00001
Ordinary shares, shares authorized		150,000,000	150,000,000
Ordinary shares, voting rights \| Vote			10
IPO \| ADR [Member]
Organization and principal activities
Shares issued	11,400,000
Shares issued price per share \| $ / shares	$ 9.00
IPO \| Designated Common Stock
Organization and principal activities
Common stock, par value per share \| $ / shares		$ 0.00001	$ 0.00001
Ordinary shares, shares authorized		50,000,000	50,000,000
Foshan Viomi
Organization and principal activities
Change in basis of assets and liabilities \| $								$ 0
Mr. Chen
Organization and principal activities
Equity investments amount \| ¥															¥ 7,500
Initial equity interest percent															60.00%
Mr. Chen \| Mr. Chen
Organization and principal activities
Equity investments amount \| ¥															¥ 7,500
Tianjin Jinxing
Organization and principal activities
Equity investments amount \| ¥															¥ 5,000
Initial equity interest percent															40.00%
Key Management Founders
Organization and principal activities
Equity investments amount \| ¥															¥ 2,500
Key Management Founders \| Class A Ordinary Shares
Organization and principal activities
Ordinary shares, issued												16,145,454
Red Better Limited \| Class B Ordinary Shares
Organization and principal activities
Ordinary shares, issued												33,818,182
Red Better Limited \| Key Management Founders \| Class A Ordinary Shares
Organization and principal activities
Shares issued				33,818,182	33,818,182	33,818,182
Ordinary shares issued in exchange of interest, value \| ¥					¥ 2,500
Red Better Limited \| Mr. Chen \| Class B Redeemable Convertible Ordinary Shares
Organization and principal activities
Shares issued					67,636,364	67,636,364
Ordinary shares issued in exchange of interest, value \| ¥					¥ 5,000
Viomi Limited \| Class A Ordinary Shares
Organization and principal activities
Conversion basis of stock							1
Viomi Limited \| Class B Ordinary Shares
Organization and principal activities
Shares issued				67,636,364
Ordinary shares issued in exchange of interest, value \| ¥					¥ 5,000
Ordinary shares, issued												67,636,364
Conversion basis of stock							1
Viomi Limited \| Mr. Chen \| Class B Redeemable Convertible Ordinary Shares
Organization and principal activities
Shares issued					67,636,364	67,636,364
Investors \| Series A Preferred Shares
Organization and principal activities
Stock issued				18,181,818		18,181,818
Shares issued price per share \| $ / shares				$ 1.1		$ 1.1
Stock issued for consideration including conversion of outstanding bridge loans \| $						$ 20,000
Outstanding bridge loans \| $				$ 5,250		$ 5,250
Sunglow \| Guangdong Lizi
Organization and principal activities
Equity investments amount \| ¥											¥ 175
Initial equity interest percent											1.00%

ORGANIZATION AND PRINCIPAL ACTIVITIES- Schedule of principal subsidiaries and VIEs (Details)	12 Months Ended
	Dec. 31, 2022
Viomi HK \| Subsidiaries
Organization and principal activities
Percentage of beneficial ownership	100.00%
Lequan \| Subsidiaries
Organization and principal activities
Percentage of beneficial ownership	100.00%
Codream HK \| Subsidiaries
Organization and principal activities
Percentage of beneficial ownership	100.00%
Yunmi Hulian \| Subsidiaries
Organization and principal activities
Percentage of beneficial ownership	100.00%
Zhumeng Hulian \| Subsidiaries
Organization and principal activities
Percentage of beneficial ownership	100.00%
Foshan Viomi \| VIEs
Organization and principal activities
Percentage of beneficial ownership	100.00%
Beijing Viomi \| VIEs
Organization and principal activities
Percentage of beneficial ownership	100.00%
Guangzhou interconnect Technology Co., Ltd. \| Subsidiaries
Organization and principal activities
Percentage of beneficial ownership	100.00%
Guangdong Lizi \| Subsidiaries
Organization and principal activities
Percentage of beneficial ownership	100.00%

ORGANIZATION AND PRINCIPAL ACTIVITIES - Assets and liabilities of VIEs and its subsidiaries and group's taken as whole (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)
Variable interest entity
Cash and cash equivalents	¥ 737,139	$ 106,875	¥ 586,955	¥ 504,108
Short-term investments	197,058	28,571	828,867
Accounts receivable from third parties	241,652	35,036	302,336
Accounts and Notes Receivable, Net, Current	53,082		25,446
Accounts receivable from a related party	360,497	52,267	320,939
Inventories	502,291	72,825	576,351
Total assets	2,885,694	418,387	3,276,714
Accounts and notes payable	844,058	122,377	1,069,108
Total liabilities	1,456,531	$ 211,178	1,625,787
Related party
Variable interest entity
Accounts and Notes Receivable, Net, Current	272		368
Third party
Variable interest entity
Accounts and Notes Receivable, Net, Current	87,563		34,385
VIEs
Variable interest entity
Cash and cash equivalents	335,476		353,554
Short-term investments	189,275		820,344
Accounts receivable from third parties	150,686		204,769
Accounts receivable from a related party	360,497		320,939
Inventories	281,649		362,385
Amount due from Group companies	707,458		232,203
Other assets	427,598		383,569
Total assets	2,452,639		2,677,763
Accounts and notes payable	377,839		545,966
Accrued expenses and other liabilities	231,325		292,388
Amount due to Group companies	1,043,056		824,304
Other liabilities	119,311		122,508
Total liabilities	1,771,531		1,785,166
VIEs \| Related party
Variable interest entity
Accounts and Notes Receivable, Net, Current	272		368
VIEs \| Third party
Variable interest entity
Accounts and Notes Receivable, Net, Current	¥ 72,193		¥ 27,009

ORGANIZATION AND PRINCIPAL ACTIVITIES - VIE Arrangements between the VIEs and the Company' s PRC subsidiary (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)
Variable interest entity
Revenue	¥ 3,232,731	$ 468,702	¥ 5,303,835	¥ 5,825,624
Cost	2,495,638	361,834	4,105,767	4,742,668
Net income/(loss)	(275,515)	(39,946)	88,605	173,324
Net cash (used in)/ provided by operating activities	(284,169)	(41,202)	308,968	185,196
Net cash (used in)/provided by investing activities	314,547	45,604	(265,321)	(433,083)
Net cash (used in)/provided by investing activities	113,563	$ 16,465	17,133	(146,375)
VIEs
Variable interest entity
Revenue	220,607		131,379	25,994
Cost	49,359		1,291,468	214,289
Net income/(loss)	(237,517)		(60,908)	152,908
Net cash (used in)/ provided by operating activities	(958,297)		(794,936)	(162,243)
Net cash (used in)/provided by investing activities	7,280		(83,325)	(30,404)
Net cash (used in)/provided by investing activities	(60,361)		(156,406)	154,557
VIEs \| Related Party and Third Parties
Variable interest entity
Revenue	2,805,557		4,859,414	5,790,475
Cost	2,355,718		2,870,809	4,556,588
VIEs \| Third party
Variable interest entity
Net cash (used in)/ provided by operating activities	537,068		1,248,860	218,030
Net cash (used in)/provided by investing activities	¥ 461,320		¥ (233,934)	(490,270)
Net cash (used in)/provided by investing activities				¥ (98,390)

ORGANIZATION AND PRINCIPAL ACTIVITIES- Inter-company revenues between VIEs and other subsidiaries (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)
Variable interest entity
Revenue	¥ 3,232,731	$ 468,702	¥ 5,303,835	¥ 5,825,624
VIEs to Equity Subsidiaries
Variable interest entity
Revenue	195,800		131,300	12,600
VIEs to Primary Beneficiary of VIEs and their Subsidiaries
Variable interest entity
Revenue	¥ 24,800		¥ 100	¥ 13,400

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8906-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Topic 280
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-Section 50
-Paragraph 40
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 5
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130545-203045

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-URI https://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

SIGNIFICANT ACCOUNTING POLICIES - Additional information (Detail) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥) segment installment	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2022 USD ($)	Jan. 01, 2020 CNY (¥)	Mar. 31, 2019	Apr. 30, 2018
Significant accounting policies
Foreign currency exchange buying rate	6.8972			6.8972
Estimated useful lives	50 years
Operating lease, right of use asset	¥ 14,649	¥ 18,425		$ 2,124
Operating lease, liability	¥ 14,025
Number of installment payments from customer \| installment	2
Percentage of estimated profit margin based on consideration of specific and relevant market factors	5.00%
Expected sales return	¥ 2,351	5,593	¥ 6,820
Expected return asset	1,350	3,189	4,106
Refund liability	¥ 2,656	6,320	7,707
Value added tax rate	13.00%			13.00%		16.00%	17.00%
Accounts and notes receivable from key customers	¥ 689,984	658,028	1,045,753
Recognized impairments, net of recoveries, for accounts receivable from customers	53,082	25,446
Deferred revenue	2,130	2,111	5,719
Advertising and market promotion expenses	187,417	173,642	102,719
Shipping expenses	200,695	248,609	247,417
Subsidy income	23,192	30,147	33,674
Uncertain tax positions, interest and penalties recognized		0	0
Statutory reserve funds	¥ 1,756	3,464
Number of operating segment \| segment	1
Retained earnings	¥ 174,385	449,900		$ 25,283
Current year provision	61,336	29,343
Expected credit loss provision for accounts and notes receivable and other receivables	87,854	34,857	9,316
General and Administrative Expenses
Significant accounting policies
Current year provision	52,997	25,541
Additional Paid-in Capital
Significant accounting policies
Accumulated statutory reserve funds	12,517	12,517
P R C Contribution Plan
Significant accounting policies
Employee benefit expenses	21,465	34,291	10,571
Installation Services
Significant accounting policies
Revenue recognized amount	3,154	¥ 5,719	¥ 7,790
Expect to recognize unearned amount for remaining performance obligation in 2022	1,966
Membership Service
Significant accounting policies
Expect to recognize unearned amount for remaining performance obligation in 2022	¥ 164
Xiaomi Inc
Significant accounting policies
Percentage of second installment payment arrangement to total revenue	2.80%	2.00%	3.80%
ASU No. 2016-13 \| Cumulative Effect, Period of Adoption, Adjustment
Significant accounting policies
Retained earnings					¥ 2,826

SIGNIFICANT ACCOUNTING POLICIES - Schedule of property plant and equipment estimated useful lives and residual rate (Detail)	12 Months Ended
	Dec. 31, 2022
Computers and equipment \| Minimum
Property plant and equipment net
Property, plant and equipment, Estimated useful lives	2 years
Property, plant and equipment, Residual rate	0.00%
Computers and equipment \| Maximum
Property plant and equipment net
Property, plant and equipment, Estimated useful lives	10 years
Property, plant and equipment, Residual rate	5.00%
Vehicle
Property plant and equipment net
Property, plant and equipment, Estimated useful lives	4 years
Property, plant and equipment, Residual rate	5.00%

SIGNIFICANT ACCOUNTING POLICIES - Schedule of amortization of finite-lived intangible assets estimated useful lives (Detail)	12 Months Ended
	Dec. 31, 2022
Software \| Minimum
Finite lived intangible assets
Finite-lived intangible assets, Estimated useful lives	1 year
Software \| Maximum
Finite lived intangible assets
Finite-lived intangible assets, Estimated useful lives	10 years
License \| Minimum
Finite lived intangible assets
Finite-lived intangible assets, Estimated useful lives	3 years
License \| Maximum
Finite lived intangible assets
Finite-lived intangible assets, Estimated useful lives	10 years

SIGNIFICANT ACCOUNTING POLICIES - Schedule of disaggregation of revenue by type of contract (Detail) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)
Revenue
Revenue	¥ 3,232,731	$ 468,702	¥ 5,303,835	¥ 5,825,624
Sales to Xiaomi
Revenue
Revenue	1,403,354		2,295,569	2,889,441
Sales to Xiaomi \| Xiaomi-branded products
Revenue
Revenue	1,154,689		2,021,117	2,560,787
Sales to Xiaomi \| Viomi-branded products
Revenue
Revenue	248,665		274,452	326,114
Sales to Xiaomi \| Rendering of services
Revenue
Revenue				2,540
Sales to Third Party Customers
Revenue
Revenue	¥ 1,829,377		¥ 3,008,266	¥ 2,936,183

- Definition

+ References

+ Details

SIGNIFICANT ACCOUNTING POLICIES - Schedule of summarizes the activity in the allowance for credit losses related to accounts and notes receivable and other receivables from related parties (Detail) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
SIGNIFICANT ACCOUNTING POLICIES
Balance at beginning of the year	¥ 34,857	¥ 9,316
Current year provision	61,336	29,343
Reversals	(8,339)	(3,802)
Balance at end of the year	¥ 87,854	¥ 34,857

- Definition

Amount of allowance for credit loss on financing receivable. Excludes allowance for financing receivable covered under loss sharing agreement.

+ References + Details

CONCENTRATION AND RISKS - Schedule of concentration risk of accounts and notes receivable from third parties (Details) - Accounts and Notes Receivable - Credit Risk - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Company A
Concentration and risks
Accounts and notes receivable	¥ 125,971	¥ 161,785
Concentration risk, percentage	52.00%	54.00%
Company B
Concentration and risks
Accounts and notes receivable	¥ 4,259	¥ 37,776
Concentration risk, percentage	2.00%	12.00%

CONCENTRATION AND RISKS - Schedule of concentration risk of accounts receivable from related party (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2022 USD ($)
Concentration and risks
Accounts receivable from a related party	¥ 360,497	¥ 320,939	$ 52,267
Xiaomi Inc \| Accounts Receivable \| Credit Risk
Concentration and risks
Accounts receivable from a related party	¥ 360,497	¥ 320,939
Concentration risk, percentage	100.00%	100.00%

- Definition

The aggregate amount of receivables to be collected from related parties where one party can exercise control or significant influence over another party; including affiliates, owners or officers and their immediate families, pension trusts, and so forth, at the financial statement date. which are usually due within one year (or one business cycle).

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iii)(C))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442552-122756

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Topic 470
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-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(iv))
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
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-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(5))
-URI https://asc.fasb.org/extlink&oid=126975872&loc=SL124442552-122756

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
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-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(iii)(B))
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
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-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=6457730&loc=d3e39549-107864

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(3)(a)(2))
-URI https://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Subparagraph (SX 210.13-01(a)(5))
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Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
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-Name Accounting Standards Codification
-Topic 235
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-Paragraph 1
-Subparagraph (SX 210.4-08(k)(1))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

CONCENTRATION AND RISKS - Schedule of concentration risk of other receivables from related parties (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2022 USD ($)
Concentration and risks
Other receivables	¥ 25,021	¥ 88,367	$ 3,628
Xiaomi Inc \| Other Receivables \| Credit Risk
Concentration and risks
Other receivables	¥ 25,021	¥ 88,367
Concentration risk, percentage	100.00%	100.00%

CONCENTRATION AND RISKS- Summary of revenue concentration risk (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)
Concentration and risks
Revenue	¥ 3,232,731	$ 468,702	¥ 5,303,835	¥ 5,825,624
Xiaomi Inc \| Revenue Benchmark \| Revenue Concentration Risk
Concentration and risks
Revenue	¥ 1,403,354		¥ 2,295,569	¥ 2,889,441
Concentration risk, percentage	43.00%	43.00%	43.00%	50.00%

- Definition

+ References

+ Details

CONCENTRATION AND RISKS - Additional information (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)
Concentration and risks
Revenue	¥ 3,232,731	$ 468,702	¥ 5,303,835	¥ 5,825,624
Contract With Xiaomi \| Viomi-branded products
Concentration and risks
Revenue	¥ 248,665		¥ 274,452	¥ 326,114

- Definition

+ References

+ Details

CASH AND CASH EQUIVALENTS - Summary of cash and cash equivalents (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 CNY (¥)
Cash and cash equivalents
Cash and cash equivalents	¥ 737,139	$ 106,875	¥ 586,955		¥ 504,108
RMB
Cash and cash equivalents
Cash and cash equivalents	440,557	440,557	238,386	$ 238,386
US$
Cash and cash equivalents
Cash and cash equivalents	¥ 296,582	$ 42,584	¥ 348,569	$ 54,671

RESTRICTED CASH - Additional information (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)
RESTRICTED CASH
Restricted cash	¥ 76,070	$ 11,029	¥ 35,831	¥ 70,601

SHORT-TERM INVESTMENTS - Schedule of short-term investments (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
Schedule Of Investments
Short-term investments	¥ 197,058	$ 28,571	¥ 828,867
RMB
Schedule Of Investments
Short-term investments	¥ 197,058		¥ 828,867

INVENTORIES - Schedule of inventories (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
INVENTORIES
Finished goods	¥ 309,239		¥ 422,627
Raw materials	193,052		153,724
Inventories	¥ 502,291	$ 72,825	¥ 576,351

INVENTORIES - Additional information (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)
INVENTORIES
Inventory write-down	¥ 32,846	$ 4,762	¥ 8,103	¥ 22,577

PREPAID EXPENSES AND OTHER ASSETS - Schedule of prepaid expenses and other assets (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
PREPAID EXPENSES AND OTHER ASSETS
Advances to suppliers	¥ 139,306		¥ 106,666
Other receivables	44,697		48,322
Prepayment for equipment	15,976		18,493
Lease hold improvement	5,234		6,643
Expected return assets	1,351		3,189
Other current assets			135
Total	206,564		183,448
Less: non-current portion	(22,856)	$ (3,314)	(27,321)
Prepaid expenses and other assets-current portion	¥ 183,708	$ 26,636	¥ 156,127

PROPERTY, PLANT AND EQUIPMENT, NET - Schedule of property, plant and equipment, net (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
Property plant and equipment net
Property, plant and equipment, gross	¥ 433,324		¥ 262,724
Less: accumulated depreciation	(196,892)		(116,731)
Property, plant and equipment, net	236,432	$ 34,279	145,993
Construction in progress
Property plant and equipment net
Property, plant and equipment, gross	166,480		76,440
Computers and equipment
Property plant and equipment net
Property, plant and equipment, gross	266,085		185,776
Vehicle
Property plant and equipment net
Property, plant and equipment, gross	¥ 759		¥ 508

PROPERTY, PLANT AND EQUIPMENT, NET - Additional information (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
PROPERTY, PLANT AND EQUIPMENT, NET
Depreciation expense	¥ 80,161	¥ 55,124	¥ 42,470
Impairment charge	¥ 0	¥ 0	¥ 0

LAND USE RIGHTS, NET - Summary of land use rights (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
LAND USE RIGHTS, NET
Land use rights	¥ 63,618		¥ 63,618
Less: Accumulated amortization	(3,169)		(1,896)
Land use right, net	¥ 60,449	$ 8,764	¥ 61,722

LAND USE RIGHTS, NET - Additional information (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
LAND USE RIGHTS, NET
Amortization expense	¥ 1,273	¥ 1,260

ACCRUED EXPENSES AND OTHER LIABILITIES - Schedule of accrued expenses and other liabilities (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
ACCRUED EXPENSES AND OTHER LIABILITIES
Accrued payroll and welfare	¥ 76,468		¥ 95,816
Freight payable	29,533		68,197
Deposit from suppliers	36,909		27,483
Installation fee payables	6,609		18,957
Product warranty	28,292		28,796
Marketing and promotion expenses	47,124		25,709
Payment for purchase of property	16,075		17,647
Other tax payable	3,474		9,954
Professional fee payables	4,265		5,143
Refund liabilities	2,656		6,320
Other current liabilities	65,685		69,254
Total	317,090		373,276
Less: non-current portion	(8,245)		(7,558)
Accrued expenses and other liabilities-current portion	¥ 308,845	$ 44,778	¥ 365,718

ACCRUED EXPENSES AND OTHER LIABILITIES - Schedule of product warranty activities (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
ACCRUED EXPENSES AND OTHER LIABILITIES
Beginning balance	¥ 28,796	¥ 22,420
Provided during the year	51,161	76,845
Utilized during the year	(51,665)	(70,469)
Ending balance	¥ 28,292	¥ 28,796

REVENUE - Schedule of net revenues (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)
Revenue
Revenue	¥ 3,232,731	$ 468,702	¥ 5,303,835	¥ 5,825,624
IoT @ Home portfolio
Revenue
Revenue	1,619,941		3,400,966	3,671,717
Home water solutions
Revenue
Revenue	681,054		742,912	883,325
Consumables
Revenue
Revenue	358,442		367,021	382,896
Small appliances and other products
Revenue
Revenue	494,943		708,260	792,965
Total of sales of products
Revenue
Revenue	3,154,380		5,219,159	5,730,903
Rendering of services
Revenue
Revenue	¥ 78,351		¥ 84,676	¥ 94,721

- Definition

+ References

+ Details

INCOME TAX EXPENSES - Additional information (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2018
Hong Kong \| Taxable Income Within HKD$2 million
INCOME TAX EXPENSES
Income tax rate	8.25%
Hong Kong \| Taxable Income Beyond HKD$2 million
INCOME TAX EXPENSES
Income tax rate	16.50%
PRC
INCOME TAX EXPENSES
Percentage of qualified research and development expenses enterprises are entitled to claim as additional tax deduction	100.00%	75.00%	50.00%	50.00%
Withholding tax rate	10.00%
Undistributed earnings available for distribution	¥ 693,623	¥ 956,980
Statute of limitations year	3 years
Statute of limitations extended period	5 years
PRC \| Arrangement Between PRC and Hong Kong Special Administrative Region on Avoidance of Double Taxation and Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital
INCOME TAX EXPENSES
Withholding tax rate	5.00%
Minimum percentage of equity interests in PRC foreign-invested enterprise to be subject to special withholding tax rate	25.00%
Withholding income tax rate on dividends for Hong Kong holding company which is not considered to be beneficial owner	10.00%
PRC \| 2020
INCOME TAX EXPENSES
Percentage of qualified research and development expenses enterprises are entitled to claim as additional tax deduction	75.00%
PRC \| Enterprise Income Tax
INCOME TAX EXPENSES
Income tax rate	25.00%
PRC \| Subsidiaries and VIEs and Predecessor Operations
INCOME TAX EXPENSES
Income tax rate	25.00%	25.00%	25.00%
PRC \| High and New Technology Enterprises
INCOME TAX EXPENSES
Income tax rate	15.00%

INCOME TAX EXPENSES - Current and deferred components of income taxes (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)
INCOME TAX EXPENSES
Current tax expenses	¥ (4,470)		¥ 26,854	¥ 44,813
Deferred tax benefit	22,644	$ 3,283	(21,115)	(1,492)
Income tax expenses	¥ 18,174	$ 2,635	¥ 5,739	¥ 43,321

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

INCOME TAX EXPENSES - Reconciliation between income tax expenses computed by applying PRC enterprise tax rate before income taxes and actual provision (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)
INCOME TAX EXPENSES
Income from operations in the PRC	¥ (272,186)		¥ 89,126	¥ 200,941
Income from overseas entities	7,730		5,504	16,826
Income (loss) before income tax expenses	(264,456)	$ (38,343)	94,630	217,767
Tax expense at PRC enterprise income tax rate of 25%	(66,114)		23,658	54,442
Income tax on tax holiday	6,310		(16,872)	(31,074)
Tax effect of permanent differences	(30,550)		(28,303)	(16,895)
Change in valuation allowance	107,603		22,153	29,780
Effect of share-based compensation	2,934		7,111	10,830
Effect of income tax in jurisdictions other than the PRC	(2,009)		(2,008)	(3,762)
Income tax expenses	¥ 18,174	$ 2,635	¥ 5,739	¥ 43,321

INCOME TAX EXPENSES - Reconciliation between income tax expenses computed by applying PRC enterprise tax rate before income taxes and actual provision (Parenthetical) (Details) - High and New Technology Enterprises	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
INCOME TAX EXPENSES
Beneficial tax rate	15.00%	15.00%	15.00%
Preferential tax rate	15.00%	15.00%

INCOME TAX EXPENSES - Per share effect of tax holidays (Details) - ¥ / shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
INCOME TAX EXPENSES
Net income per share effect - basic	¥ 0.06	¥ 0.02	¥ 0.14
Net income per share effect - diluted	¥ 0.06	¥ 0.02	¥ 0.13

INCOME TAX EXPENSES - Significant components of deferred tax assets (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2022	Dec. 31, 2021
INCOME TAX EXPENSES
Accrued expenses and others	¥ 21,935	¥ 18,567
Net operating loss carry forwards	151,463	69,852
Inventories write downs	1,040	985
Deferred income	86	161
Total deferred tax assets	174,524	89,565
Less: valuation allowance	(161,864)	(54,261)
Deferred tax assets, net	¥ 12,660	¥ 35,304

INCOME TAX EXPENSES - Movement of valuation allowance (Details) - Valuation Allowance of Deferred Tax Assets - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Movement of valuation allowance
Balance at beginning of the year	¥ 54,261	¥ 32,926	¥ 3,146
Provided	107,603	21,335	29,780
Balance at end of the year	¥ 161,864	¥ 54,261	¥ 32,926

ORDINARY SHARES - Additional Information (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands					12 Months Ended
	Sep. 25, 2018 shares	Aug. 23, 2018 USD ($) $ / shares shares	Aug. 23, 2018 Vote $ / shares shares	Jul. 31, 2015 shares	Dec. 31, 2022 CNY (¥) shares	Dec. 31, 2021 CNY (¥) shares	Dec. 31, 2020 CNY (¥) shares	Dec. 31, 2020 USD ($) $ / shares shares	Dec. 31, 2018 shares	Dec. 31, 2022 $ / shares shares	Dec. 31, 2021 $ / shares shares	Mar. 31, 2020 USD ($)	Sep. 24, 2018 shares	Aug. 22, 2018 $ / shares shares	Jun. 30, 2018 shares	Dec. 31, 2017 shares
ORDINARY SHARES
Common stock, par value per share \| $ / shares														$ 0.0001
Preferred shares, par value \| $ / shares		$ 0.00001	$ 0.00001											$ 0.0001
Number of ordinary shares		10
Surrendered percentage of ordinary shares after share split		90.00%
Stock, conversion basis					IPO, 16,145,454 issued Class A Ordinary Shares held by certain key management founders, 33,818,182 issued Pre-IPO Class B Ordinary Shares held by Red Better, and 67,636,364 issued Pre-IPO Class B Ordinary Shares held by Mr. Chen’s wholly-owned entity Viomi Limited was automatically converted by way of re-designation and re-classification into Class B Ordinary Shares on a one-for-one basis, and the rest of the outstanding Class A Ordinary Shares, the rest of the outstanding Pre-IPO Class B Ordinary Shares, and all outstanding Series A Preferred Shares was automatically converted by way of re-designation and re-classification into Class A Ordinary Shares on a one-for-one basis.
Issuance of ordinary shares for exercised share options (in shares)					956,256	3,011,064	2,655,669	2,655,669
Shares repurchases, consideration amount \| ¥					¥ 8,035	¥ 12,068	¥ 54,600
IPO
ORDINARY SHARES
Common stock, shares authorized		5,000,000,000	5,000,000,000
Ordinary shares, voting rights					Each Class A Ordinary Share is entitled to one vote, and each Class B Ordinary Share is entitled to ten (10) votes, voting together as one class
Dividends value of shares authorized \| $		$ 50,000
Stock, conversion basis					Each Class B Ordinary Share is convertible into one Class A Ordinary Share at any time by the holder thereof.
Shares issued	34,200,000
Class A Ordinary Shares
ORDINARY SHARES
Common stock, shares authorized										4,800,000,000	4,800,000,000			346,545,454
Common stock, par value per share \| $ / shares										$ 0.00001	$ 0.00001			$ 0.0001
Ordinary shares, outstanding								104,163,686		104,539,463	105,516,779					25,363,636
Ordinary shares, voting rights					Each ordinary share is entitled to one vote
Common stock, shares issued		4,000,000	4,000,000							104,539,463	105,516,779				33,818,182
Ordinary shares, transferred															16,145,454
Ordinary shares, surrendered															17,672,728
Fair value per share \| $ / shares		$ 3.30	$ 3.30
Shares issued									34,200,000
Shares issued upon conversion					359,997	339,999	7,295,454	7,295,454	18,181,818
Issuance of ordinary shares for exercised share options (in shares)					956,256	3,011,064	2,655,669	2,655,669
Shares repurchased during period					2,293,569	1,997,970	4,232,169	4,232,169
Class A Ordinary Shares \| Key Management Founders
ORDINARY SHARES
Common stock, shares issued													16,145,454
Class A Ordinary Shares \| IPO
ORDINARY SHARES
Common stock, shares authorized		4,800,000,000	4,800,000,000
Common stock, par value per share \| $ / shares		$ 0.00001	$ 0.00001
Ordinary shares, voting rights \| Vote			1
Class B Ordinary Shares
ORDINARY SHARES
Common stock, shares authorized										150,000,000	150,000,000
Common stock, par value per share \| $ / shares								$ 0.00001			$ 0.00001
Ordinary shares, outstanding								103,554,546		102,854,550	103,214,547
Common stock, shares issued										102,854,550	103,214,547
Class B Ordinary Shares \| Red Better Limited
ORDINARY SHARES
Common stock, shares issued													33,818,182
Class B Ordinary Shares \| Viomi Limited
ORDINARY SHARES
Common stock, shares issued													67,636,364
Shares issued				67,636,364
Class B Ordinary Shares \| IPO
ORDINARY SHARES
Common stock, shares authorized		150,000,000	150,000,000
Common stock, par value per share \| $ / shares		$ 0.00001	$ 0.00001
Ordinary shares, voting rights \| Vote			10
Designated Common Stock \| IPO
ORDINARY SHARES
Common stock, shares authorized		50,000,000	50,000,000
Common stock, par value per share \| $ / shares		$ 0.00001	$ 0.00001
ADR [Member] \| IPO
ORDINARY SHARES
Shares issued	11,400,000
American Depositary Shares [Member]
ORDINARY SHARES
Share repurchase program, authorized amount \| $												$ 10,000
Shares repurchased during period							1,410,723	1,410,723
Shares repurchases, consideration amount \| $								$ 8,030
Shares repurchases, weighted average price per share \| $ / shares								$ 5.69

SHARE-BASED COMPENSATION - Compensation expense recognized for share-based awards (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
SHARE-BASED COMPENSATION
Share-based compensation expenses - Share options	¥ 19,560	¥ 47,405	¥ 72,203

SHARE-BASED COMPENSATION - Additional Information (Details) ¥ / shares in Units, ¥ in Thousands		12 Months Ended
	Sep. 17, 2015 shares	Dec. 31, 2022 CNY (¥) $ / shares shares	Dec. 31, 2022 CNY (¥) ¥ / shares shares	Dec. 31, 2021 CNY (¥) $ / shares shares	Dec. 31, 2021 CNY (¥) ¥ / shares shares	Dec. 31, 2020 shares	Dec. 31, 2019 shares	Nov. 30, 2020 CNY (¥)
SHARE-BASED COMPENSATION
Number of share options granted to employees under stock incentive plans		1,010,000	1,010,000	3,840,000	3,840,000	19,175,500	0
Weighted average grant date fair value of options granted \| (per share)		$ 1.1	¥ 7.66	$ 1.73	¥ 11.56
Unrecognized compensation expenses related to options \| ¥		$ 21,025	¥ 21,025	$ 53,652	¥ 53,652
Sunglow
SHARE-BASED COMPENSATION
Unrecognized compensation expenses related to options \| ¥		$ 10,284	¥ 10,284
Sunglow \| Guangdong Lizi
SHARE-BASED COMPENSATION
Equity interests								1.00%
Equity investments amount \| ¥								¥ 175
2015 Share Incentive Plan
SHARE-BASED COMPENSATION
Share incentive plan effective period	10 years
Maximum number of shares issued under share incentive plan	12,727,272
2018 Share Incentive Plan
SHARE-BASED COMPENSATION
Maximum number of shares issued under share incentive plan		26,008,171	26,008,171
Number of share options granted to employees under stock incentive plans		1,010,000	1,010,000	38,400,000	38,400,000	19,175,500
2018 Share Incentive Plan \| Vested after 24 Months
SHARE-BASED COMPENSATION
Share options vested percentage		40.00%	40.00%	40.00%	40.00%	40.00%
2018 Share Incentive Plan \| Vested in Two Equal Installments over Following 24 Months
SHARE-BASED COMPENSATION
Share options vested percentage		60.00%	60.00%	60.00%	60.00%	60.00%

SHARE-BASED COMPENSATION - Schedule of Earnings Per Share, Basic and Diluted (Details) ¥ / shares in Units, $ / shares in Units, ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥) ¥ / shares shares	Dec. 31, 2022 USD ($) $ / shares shares	Dec. 31, 2021 CNY (¥) ¥ / shares shares	Dec. 31, 2020 CNY (¥) ¥ / shares shares
Numerator:
Numerator for basic calculation - Net income attributable to ordinary shareholders of the Company	¥ (275,515)	$ (39,946)	¥ 88,605	¥ 173,324
Denominator:
Denominator for basic calculation - weighted average ordinary shares outstanding	208,341,011	208,341,011	209,551,821	208,812,049
Dilutive effect of share options			11,184,176	6,811,724
Denominator for diluted calculation	208,341,011	208,341,011	220,735,997	215,623,773
Basic net income (loss) per ordinary share \| (per share)	¥ (1.32)	$ (0.19)	¥ 0.42	¥ 0.83
Diluted net income (loss) per ordinary share \| (per share)	¥ (1.32)	$ (0.19)	¥ 0.40	¥ 0.80

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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+ Details

- Definition

Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities; of income (loss) available to common shareholders.

+ References

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+ Details

SHARE-BASED COMPENSATION - Assumptions used to Determine Fair Value of Share Options Granted (Details) - $ / shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
SHARE-BASED COMPENSATION
Risk-free interest rate	3.98%
Risk-free interest rate, minimum		2.88%
Risk-free interest rate, maximum		3.19%
Expected volatility	43.60%
Expected volatility, minimum		42.93%
Expected volatility, maximum		43.41%
Expected life of option (years)	10 years	10 years
Fair value per ordinary share	$ 0.12
Minimum
SHARE-BASED COMPENSATION
Fair value per ordinary share		$ 0.84
Maximum
SHARE-BASED COMPENSATION
Fair value per ordinary share		$ 2.25

SHARE-BASED COMPENSATION - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
SHARE-BASED COMPENSATION
Number of options, Outstanding, Beginning Period	22,226,338	26,106,599	11,365,268
Number of options, Granted	1,010,000	3,840,000	19,175,500	0
Number of options, Forfeited	(2,537,466)	(4,709,197)	(1,778,500)
Number of options, Exercised	(956,256)	(3,011,064)	(2,655,669)
Number of options, Outstanding, Ending Period	19,742,616	22,226,338	26,106,599	11,365,268
Number of options, Exercisable	10,650,023
Number of options, Expected to vest	8,212,534
Weighted average exercise price, Outstanding, Beginning Period	$ 0.80	$ 0.74
Weighted average exercise price, Granted	1.10	1.10	$ 0.86	$ 0.44
Weighted average exercise price, Forfeited	0.98	0.81	0.60
Weighted average exercise price, Exercised	0.44	0.43	0.48
Weighted average exercise price, Outstanding, Ending Period	0.81	$ 0.80	$ 0.74
Weighted average exercise price, Exercisable	0.63
Weighted average exercise price, Expected to vest	$ 1.01
Weighted-average remaining contractual life (years), Outstanding	6 years 5 months 26 days	7 years 4 months 28 days	8 years 29 days	7 years 7 months 2 days
Weighted-average remaining contractual life (years), Exercisable	5 years 6 months 14 days
Weighted-average remaining contractual life (years), Expected to vest	7 years 7 months 2 days
Aggregate intrinsic value, Outstanding	$ 22,974	$ 26,813	$ 30,299	$ 17,737
Aggregate intrinsic value, Exercisable	13,640
Aggregate intrinsic value, Expected to vest	$ 8,475

NET INCOME (LOSS) PER SHARE - Schedule of earnings per share, basic and diluted (Details) ¥ / shares in Units, $ / shares in Units, ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥) ¥ / shares shares	Dec. 31, 2022 USD ($) $ / shares shares	Dec. 31, 2021 CNY (¥) ¥ / shares shares	Dec. 31, 2020 CNY (¥) ¥ / shares shares
Numerator:
Numerator for basic calculation - Net income (loss) attributable to ordinary shareholders of the Company	¥ (275,515)	$ (39,946)	¥ 88,605	¥ 173,324
Denominator:
Denominator for basic calculation - weighted average ordinary shares outstanding	208,341,011	208,341,011	209,551,821	208,812,049
Dilutive effect of share options			11,184,176	6,811,724
Denominator for diluted calculation	208,341,011	208,341,011	220,735,997	215,623,773
Basic net income (loss) per ordinary share \| (per share)	¥ (1.32)	$ (0.19)	¥ 0.42	¥ 0.83
Diluted net income (loss) per ordinary share \| (per share)	¥ (1.32)	$ (0.19)	¥ 0.40	¥ 0.80

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities; of income (loss) available to common shareholders.

+ References

+ Details

RELATED PARTY TRANSACTIONS - Schedule of Related Party Transaction Relationship (Details)	12 Months Ended
	Dec. 31, 2022
Mr. Chen
RELATED PARTY TRANSACTIONS
Relationship with the Group	Founder
Xiaomi
RELATED PARTY TRANSACTIONS
Relationship with the Group	Shareholder of the Group
Foshan Wanwuhulian Trade Co., Limited
RELATED PARTY TRANSACTIONS
Relationship with the Group	Controlled by the Founder

RELATED PARTY TRANSACTIONS - Additional Information (Details) - Xiaomi	12 Months Ended
	Dec. 31, 2022
Business corporation agreement
RELATED PARTY TRANSACTIONS
Related party transaction expiration	2021-09
Related party transaction agreement renewed date	2023-09
Youpin commission sales agreement
RELATED PARTY TRANSACTIONS
Related party transaction, expire date	Dec. 31, 2021
Related party transaction renewed year	2022
Related party transaction agreement termination notice period	30 days

RELATED PARTY TRANSACTIONS - Schedule of related party transactions (Details) ¥ in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)	Dec. 31, 2020 CNY (¥)	Dec. 31, 2022 USD ($)
RELATED PARTY TRANSACTIONS
Other receivables	¥ 25,021		¥ 88,367		$ 3,628
Amounts due to related parties	11,548		5,415		$ 1,674
Purchase from related parties	30,941		33,767	¥ 520,793
Revenue from a related party	1,403,354	$ 203,467	2,295,569	2,889,441
Selling and marketing expenses	41,584		106,929	97,223
Xiaomi
RELATED PARTY TRANSACTIONS
Accounts receivable from a related party	360,497		320,939
Sales receivable	24,802		88,331
Other receivables	219		36
Purchase payable	7,245		3,537
Research and development expenses payable	221		715
Selling and marketing expenses payable	4,082		1,163
Purchase from related parties	30,941		33,767	50,843
Revenue from a related party	1,403,354		2,295,569	2,889,441
Research and development expenses	2,791		3,484	1,915
Commission expenses	32,795		82,617	77,163
Other expenses	¥ 8,789		¥ 24,312	20,060
Foshan Wanwuhulian Trade Co., Limited
RELATED PARTY TRANSACTIONS
Purchase from related parties				¥ 469,950

FAIR VALUE MEASUREMENTS - Summary of assets measured at fair value on recurring basis (Details) - Fair value measurements - Short-term Investments - CNY (¥)
¥ in Thousands

Dec. 31, 2022

Dec. 31, 2021

FAIR VALUE MEASUREMENTS

Assets measured at fair value

^[1]

¥ 197,058

¥ 828,867

Level 2

FAIR VALUE MEASUREMENTS

Assets measured at fair value

^[1]

¥ 197,058

¥ 828,867

[1]	Short-term investments represent structured deposits, and the Company values these short-term investments based on quoted prices of similar products provided by banks at the end of each period, and accordingly, the Company classifies the valuation techniques that use these inputs as Level 2.

LEASES - Additional Information (Details)	Dec. 31, 2022
LEASES
Operating leases, weighted average discount rate	4.75%
Operating leases, weighted-average remaining lease term	1 year 7 months 6 days

LEASES - Components of lease expense (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Lease cost
Operating lease expense	¥ 11,506	¥ 12,065
Short-term lease expense	312	2,382
Total lease cost	¥ 11,818	¥ 14,447

LEASES - Supplemental cash flow information for leases (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
LEASES
Operating cash flows relating to operating leases	¥ 7,818	¥ 14,765
Lease liabilities arising from obtaining right-of-use assets	¥ 6,080	¥ 16,835

LEASES - Aggregate future minimum rental payments under non-cancelable agreement (Details) ¥ in Thousands, $ in Thousands	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 CNY (¥)
LEASES
2023	¥ 13,103
2024	2,313
2025 and after	1,559
Total future minimum rental payment	16,975
Less amount representing imputed interest	(2,950)
Present value of future minimum rental payments	14,025
Less current portion, recorded in other current liabilities	(7,233)	$ (1,049)	¥ (11,312)
Long-term lease liabilities, recorded in other long-term liabilities	¥ 6,792	$ 985	¥ 7,596

COMMITMENTS AND CONTINGENCIES - Operating lease commitments (Details) ¥ in Thousands	Dec. 31, 2022 CNY (¥)
COMMITMENTS AND CONTINGENCIES
Future minimum commitments under non-cancelable agreements	¥ 0

COMMITMENTS AND CONTINGENCIES - Capital and other commitment (Details) - CNY (¥) ¥ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
COMMITMENTS AND CONTINGENCIES
Property, plant and equipment	¥ 89,029	¥ 116,527

RESTRICTED NET ASSETS - Additional Information (Details) - CNY (¥) ¥ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Restricted Net Assets [Abstract]
Amount of restricted net assets for consolidated and unconsolidated subsidiaries	¥ 115,751	¥ 112,603