Fangdd Network : Annual Report for Fiscal Year Ending December 31, 2025 (Form 20-F)

Published: 2026-05-06 08:12:37 ET DUO

Published on 05/06/2026 at 08:12 am EDT

OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion of our financial condition and results of operations is based upon, and should be read in conjunction with, our audited consolidated financial statements and the related notes included in this annual report on Form 20-F. This report contains forward-looking statements. See "Special Note Regarding Forward-Looking Statements." In evaluating our business, you should carefully consider the information provided under the caption "Item 3. Key Information-D. Risk Factors" in this annual report on Form 20-F. We caution you that our businesses and financial performance are subject to substantial risks and uncertainties.

A. Operating Results

Overview

We are a customer-oriented PropTech company in China, focusing on providing real estate transaction digitalization services. We operate a real estate-focused online marketplace for real estate transactions and related services in China. Our marketplace connects real estate sellers, agents, buyers, and other participants as part of a vibrant ecosystem and a self-reinforcing network, enabling marketplace participants to transact real estate assets with efficiency at lowered costs. We provide all participants with one-stop digital real estate transaction services and seamless transaction experience through our reliable and extensive property listings, SaaS solutions, intelligent matching algorithms and other real estate related services. In 2025, we had over 67.4 thousand active agents on our marketplace. By providing real estate sellers with innovative and diversified digital marketing solutions as well as access to our extensive agent network, we help real estate sellers to move their traditional offline business online and improve transaction efficiency, thereby gathering the property resources of real estate transactions on our marketplace. In 2025, there were 310 new property projects on our marketplace.

Our primary sources of revenue are (i) property transaction services and (ii) innovation initiatives and other value-added services. We earn base commission revenue by charging commission fees when real estate buyers and sellers close transactions through the marketplace. Our innovation initiatives and other value-added services include SaaS solutions and other value-added services which are provided based on our deep understanding of marketplace participants' problems and needs, such as asset management services aimed at optimizing returns for asset holders and enhancing the overall operational efficiency of their asset portfolios. For our SaaS solutions, we charge marketplace participants software subscription fees. For other value-added services such as our asset management services, we charge consulting fees, management fees, sharing fees, and commissions.

Our revenue increased by 19% from RMB285.0 million in 2023 to RMB339.1 million in 2024, and further increased by 4.6% to RMB354.8 million (US$50.7 million) in 2025 due to various factors, including modest stimulation in the Chinese real estate market spurred by a series of preferential policies, such as greater access to credit and funding for real estate developers, mortgage interest rate cuts and lower down payments for home buyers, and relaxed restrictions on secondhand housing sales and purchases. In addition, our growth was supported by strategic decisions such as discontinuing business partnerships with high credit risk developers to mitigate losses and focusing on developers with strong credit profiles to sustain our property transaction services. We also actively explored opportunities in asset management services and other real estate transactions. We will continue to focus on optimizing our revenue mix and prioritizing the value-added services and new business initiatives, including our SaaS solutions for various platform participants and asset management services. We recorded a net loss of RMB93.1 million in 2023, a net income of RMB28.3 million in 2024, and a net loss of RMB86.0 million (US$12.3 million) in 2025.

Factors Affecting Our Results of Operations

The PRC real estate industry

Our business and results of operations are affected by our ability to adapt to the fluctuation in the PRC real estate industry. The general factors affecting the industry include:

In the past, we were able to innovate new products and services in time to adapt to market changes. Our ability to adapt our business to market fluctuations will continue to have a significant effect on our results of operation.

Our ability to attract and retain real estate agents

We derive a substantial portion of revenue from property transactions facilitated through our marketplace by agents. Therefore, our revenue is affected by the number of active agents who have established online shops in our marketplace and effectively conduct property transactions. Our ability to expand our agent base mainly depends on our ability to continue to provide comprehensive resources and effective products and services that help agents access business opportunities and complete transactions efficiently.

We attract and retain agents through our strong online service capabilities. For example, we offer innovative technology-based products and services and leverage social media and other internet-based platforms to promote products and services to agents. We had over 61.8 thousand active agents on our marketplace in 2024. We aim to continue to build our incentive and guidance system, provide comprehensive training and support agents' operations in order to empower them to conduct business more effectively and increase their revenue.

Our ability to increase cooperation with real estate sellers

The participation of real estate sellers is of critical importance to our marketplace. We place great emphasis on our relationship with real estate developers and strive to provide efficient and effective property transaction solutions to promote their success. For example, in December 2020, we launched Property Cloud, a SaaS solution for real estate sellers. Property Cloud connects real-estate sellers with agents directly, which largely increases the matching efficiency. Through Property Cloud, real estate sellers may list information including properties details, commission rates and other terms in connection with the sale, all of which will automatically become available to agents using Duoduo Sales. Interested agents may then contact the developer directly through Duoduo Sales.

By leveraging the digitalization capabilities, data analysis capabilities and customer base, our marketplace is capable of providing premium services to real estate sellers, which is in line with the development of the real estate industry in China. This helps our marketplace to broaden the source of property listings, enrich the number and types of properties available on our marketplace, attract more agents and real estate buyers to our marketplace, and further increase the success rate of transactions.

Our ability to improve our real estate transaction digitalization capabilities

We are a PropTech company, and our operational success depends on our real estate transaction digitalization capabilities. We have built a suite of modular software products and solutions powered by technology that simplify traditionally cumbersome processes in real estate transactions and allow agents and agencies to effectively grow their businesses. We connect agents with essential business resources through a smart matching system and provide them with both insights and direct access to business intelligence tools to analyze data, and optimize their businesses operation and management. Through our digital platform, real estate sellers can post their listings, access a wide real estate buyer base, search for the most suitable agents and conduct transactions efficiently on our marketplace. Our ability to continue to attract real estate sellers and buyers, the key component of a vibrant transaction marketplace, is associated with the transaction efficiency achieved in our marketplace through digitalization, which will remain one of our primary business objectives as we continue to grow.

Our ability to innovate product and service offerings

To further attract and better serve marketplace participants, we have developed diverse products and services to meet marketplace participants' business needs and help them conduct transactions in our marketplace more efficiently. As we facilitate more transactions, our marketplace attracts more market participants, who in turn contribute to our resources and ability to further innovate products and services. These innovative services and products enhance the level of engagement and loyalty of our marketplace participants, and improve agents' operational efficiency and rate of returns. We aim to continue to innovate new products and services by leveraging our data analysis and deep understanding of market participants. Our ability to innovate product and service offerings has, and will continue to have, a significant impact on our results of operations.

Our ability to achieve profitability

Our ability to achieve profitability is dependent on whether we can leverage our marketplace model to maintain and improve operational efficiency. We continue to standardize our business and management processes, which allow us to reduce our headcount and achieve high operational efficiency. For example, we have been able to substantially reduce labor costs since 2017 as we established the property database that can be updated and renewed automatically using AI and big data analytic tools. We further helped improve our employees' operational efficiency by offering comprehensive training both online and offline. In response to the continued downturn status of China's real estate market and the heightened credit risks of developers, we have taken risk control measures to strategically reduce the scale of our property transaction services, discontinue business partnerships with high credit risk developers and actively explore opportunities from other real estate transaction digitalization services. As a result of these measures, our closed-loop GMV per employee increased from RMB87.6 million in 2023 to RMB100.8 million in 2024 and further to RMB105.8 million (US$15.1 million) in 2025, and our revenue per employee increased from RMB1.7 million in 2023 to RMB2.6 million in 2024, and remained at RMB2.6 million (US$0.4 million) in 2025.

Revenue

The following table sets forth our total revenue for the years presented:

We generate our revenue from (i) commissions paid by real estate sellers and buyers in connection with property transactions, and (ii) innovation initiatives and other value-added services, such as SaaS solutions for various marketplace participants and asset management services.

Cost of Revenue

The following table sets forth our cost of revenue in absolute amount and as a percentage of our total revenue for the years presented:

Our cost of revenue consists primarily of (i) the commission fees we pay to agents for their services rendered in completing the real estate transactions, (ii) project-based promotion and operational expenses, and (iii) salaries and benefits expenses that are incurred for property transactions.

Operating Expenses

Our operating expenses consist of sales and marketing expenses, product development expenses, and general and administrative expenses. The following table sets forth our operating expenses in absolute amount and as a percentage of our total revenue for the years presented:

Sales and marketing expenses

Our sales and marketing expenses mainly consist of salaries of sales personnel and costs of online and offline advertisements that are placed to raise our brand recognition and attract listings from real estate sellers to our marketplace. We expect our sales and marketing expenses to increase in the long term as we continue to grow our business while fluctuating from quarter to quarter depending on our advertising and marketing plans and seasonality.

Product development expenses

Our product development expenses primarily consist of salaries and benefits expenses, office expenses and depreciation of equipment relating to the development of new products or upgrading of existing products and other expenses for our product activities.

General and administrative expenses

Our general and administrative expenses mainly consist of provision of credit losses, payroll and related staff costs for corporate functions, professional service fees, as well as other general corporate expenses such as rental expenses and depreciation expenses for offices and equipment that are used by the corporate functions.

Taxation

Cayman Islands

The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us levied by the government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or brought within the jurisdiction of the Cayman Islands. In addition, the Cayman Islands does not impose withholding tax on dividend payments.

Hong Kong

Fangdd HK in Hong Kong, our subsidiary incorporated in Hong Kong, is subject to Hong Kong profit tax at a rate of 16.5% on its taxable income generated from operations in Hong Kong. A two-tiered profits tax rates regime has been introduced since year 2018 where the first HK$2 million of assessable profits earned by a company will be taxed at half the current tax rate (8.25%) whilst the remaining profits will continue to be taxed at 16.5%. There is an anti-fragmentation measure where each group will have to nominate only one company in the group to benefit from the progressive rates. Under the Hong Kong tax law, Fangdd Network Holding Limited is exempted from the Hong Kong income tax on its foreign-derived income. Hong Kong does not impose a withholding tax on dividends.

China

Our PRC subsidiaries, VIE and VIE's subsidiaries are subject to the PRC Enterprise Income Tax Law and are taxed at the statutory income tax rate of 25%. In addition, Fangdd Network and its subsidiaries are subject to value added taxes, or VAT, at a rate of 6% on the commissions earned from developers and other real estate sellers as well as revenue from other services we provide to our marketplace participants, less any deductible VAT we have already paid or borne. We are also subject to surcharges on VAT payments in accordance with PRC law.

Dividends paid by our wholly owned subsidiaries in China to our intermediary holding company in Hong Kong will be subject to a withholding tax rate of 10%, unless they qualify for a special exemption. If Fangdd Network Holding Limited, our subsidiary in Hong Kong, satisfies all the requirements under the Arrangement between the Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income and the Notice on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties, then dividends paid by our wholly owned subsidiaries in China will be subject to a withholding tax rate of 5% instead. See "Item 3. Key Information-D. Risk Factors-Risks Related to Doing Business in China-Dividends we receive from our subsidiaries located in the PRC may be subject to PRC withholding tax, which could materially and adversely affect the amount of dividends, if any, we may pay our shareholders."

If our holding company in the Cayman Islands or any of our subsidiaries outside of China were deemed to be a "resident enterprise" under the PRC Enterprise Income Tax Law, it would be subject to enterprise income tax on its worldwide income at a rate of 25%. See "Item 3. Key Information-D. Risk Factors-Risks Related to Doing Business in China-If we are classified as a "resident enterprise" of China under the PRC Enterprise Income Tax Law, we and our non-PRC shareholders could be subject to unfavorable tax consequences, and our business, financial condition and results of operations could be materially and adversely affected."

Inflation

To date, inflation in China has not materially impacted our results of operations. According to the National Bureau of Statistics of China, the year-over-year percent change in the consumer price index was a decrease of 0.3% for December 2023, an increase of 0.1% for December 2024, and an increase of 0.8% for December 2025. Although we have not been materially affected by inflation in the past, we can provide no assurance that we will not be affected by higher inflation rates in China in the future.

Results of Operations

The following table sets forth a summary of our consolidated results of operations for the years presented in absolute amount and as a percentage of our total revenue. This information should be read together with our consolidated financial statements and related notes included elsewhere in this annual report. The operating results in any period are not necessarily indicative of the results that may be expected for any future period.

Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

Revenue

Our revenue in 2025 increased by 4.6% to RMB354.8 million (US$50.7 million) from RMB339.1 million in 2024. The increase was attributable to various factors, including modest stimulation in the Chinese real estate market spurred by a series of preferential policies, such as greater access to credit and funding for real estate developers, mortgage interest rate cuts and lower down payments for home buyers, and relaxed restrictions on secondhand housing sales and purchases. In addition, our growth was supported by strategic decisions such as discontinuing business partnerships with high credit risk developers to mitigate losses and focusing on developers with strong credit profiles to sustain our property transaction services. We also actively explored opportunities in asset management services and other real estate related services.

Cost of revenue

Our cost of revenue in 2025 increased by 5.0% to RMB291.2 million (US$41.6 million) from RMB277.4 million in 2024. As our revenue increased, the commission fees paid to agents for their services in completing real estate transactions also increased proportionally.

Gross profit

Our gross profit in 2025 increased by 3.0% to RMB63.6 million (US$9.1 million) from RMB61.7 million in 2024. Our gross profit margin in 2025 slightly decreased to 17.9% from 18.2% in 2024.

Operating expenses

Our operating expenses in 2025 increased by 5.1% to RMB196.9 million (US$28.2 million) from RMB187.4 million in 2024, which included share-based compensation expenses of RMB18 thousand.

Sales and marketing expenses. Our sales and marketing expenses in 2025 decreased to RMB9.5 million (US$1.4 million) from RMB10.1 million in 2024. The decrease was a normal fluctuation in our advertising and marketing plans.

Product development expenses. Our product development expenses in 2025 increased to RMB25.4 million (US$3.6 million) from RMB24.8 million in 2024. The increase was attributable to the increases in personnel costs as a result of increased headcount in research and development personnel.

General and administrative expenses. Our general and administrative expenses in 2025 increased to RMB162.0 million (US$23.2 million) from RMB152.6 million in 2024. The increase was mainly due to the increase in amortization of artificial intelligence technology we purchased in 2025 in order to enhance our SaaS solutions.

Loss from operations

We had a net loss from operations of RMB133.3 million (US$19.1 million), compared to a net loss from operations of RMB125.7 million RMB in 2024.

Other income/(expenses)

Our total other income decreased to RMB27.0 million (US$3.9 million) in 2025 from RMB146.3 million in 2024. The decrease was primarily due to our record of (i) RMB44.4 million (US$6.4 million) in impairment loss for equity method investment in 2025, compared to an impairment loss for equity method investment of RMB4.0 million in 2024, and (ii) RMB54.6 million (US$7.8 million) in the other income, net in 2025, compared to the other income, net of RMB156.2 million in 2024, which mainly consisted of accounts payable write-off benefit attributable to the prolonged overdue status of the corresponding accounts receivable from real estate developers.

Income tax benefit

Our income tax benefit increased to RMB20.3 million (US$2.9 million) from RMB7.7 million in 2024.

Net income/(loss)

As a result of the foregoing, our net loss in 2025 was RMB86.0 million (US$12.3 million), compared to a net income of RMB28.3 million in 2024.

Year Ended December 31, 2024 Compared to Year Ended December 31, 2023

Revenue

Our revenue in 2024 increased by 19.0% to RMB339.1 million from RMB285.0 million in 2023. The increase was attributable to various factors, including modest stimulation in the Chinese real estate market spurred by a series of preferential policies, such as greater access to credit and funding for real estate developers, mortgage interest rate cuts and lower down payments for home buyers, and relaxed restrictions on secondhand housing sales and purchases. In addition, our growth was supported by strategic decisions such as discontinuing business partnerships with high credit risk developers to mitigate losses and focusing on developers with strong credit profiles to sustain our property transaction services. We also actively explored opportunities in asset management services and other real estate related services.

Cost of revenue

Our cost of revenue in 2024 increased by 13.8% to RMB277.4 million from RMB243.8 million in 2023. As our revenue increased, the commission fees paid to agents for their services in completing real estate transactions also increased proportionally.

Gross profit

Our gross profit in 2024 increased by 49.9% to RMB61.7 million from RMB41.2 million in 2023. Our gross profit margin in 2024 increased to 18.2% from 14.5% in 2023. The increase was mainly because (i) the PRC government has implemented a series of positive policies to promote the stable and healthy development of the real estate market, which result in an increase of revenue, and (ii) we carried out continuous actions on the optimization of the costs to improve the operating efficiency.

Operating expenses

Our operating expenses in 2024, which included share-based compensation expenses of RMB18.0 thousand, decreased by 38.8% to RMB187.4 million from RMB306.4 million in 2023, which included share-based compensation expenses of RMB105.0 thousand.

Sales and marketing expenses. Our sales and marketing expenses in 2024 increased to RMB10.1 million from RMB2.8 million in 2023. The increase was primarily due to our increased personnel costs related to marketing activities associated with our newly launched asset management services and other real estate related services.

Product development expenses. Our product development expenses in 2024 decreased to RMB24.8 million from RMB32.1 million in 2023. The decrease was attributable to reduced personnel-related expenses following our decision to adopt a more conservative approach towards further investments in research and development.

General and administrative expenses. Our general and administrative expenses in 2024 decreased to RMB152.6 million from RMB271.4 million in 2023. The decrease was mainly due to (i) the decrease in provision of impairment of certain assets, such as other receivables of deposits, and (ii) the actions that we have taken to improve operating efficiency due to the expected continuation of the current market condition in the foreseeable future, which were partially offset by the increased professional service fees as a result of the equity financing in 2024.

Loss from operations

We had a net loss from operations of RMB125.7 million, compared to a net loss from operations of RMB265.2 million in 2023.

Other income/(expenses)

Our total other income decreased to RMB146.3 million in 2024 from RMB170.2 million in 2023. The decrease was primarily due to our record of (i) RMB8.4 million in foreign currency exchange loss in 2024, compared to a foreign currency exchange gain of RMB0.3 million in 2023, (ii) RMB1.0 million in impairment loss for long-term equity investment in 2024, compared to an impairment loss for long-term equity investment of RMB3.0 million in 2023, and (iii) RMB156.2 million in the other income, net in 2024, compared to the other income, net of RMB183.5 million in 2023, which mainly consisted of accounts payable write-off benefit attributable to the prolonged overdue status of the corresponding accounts receivable from real estate developers.

Income tax benefit

Our income tax benefit increased to RMB7.7 million from RMB1.9 million in 2023.

Net income/(loss)

As a result of the foregoing, our net income in 2024 was RMB28.3 million, compared to a net loss of RMB93.1 million in 2023.

B. Liquidity and Capital Resources

The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We have historically incurred recurring losses from operations. As of December 31, 2025, we had an accumulated deficit of RMB4,703.3 million (US$672.6 million). For the year ended December 31, 2025, we recorded a net loss of RMB86.0 million (US$12.3 million) and had negative cash flows from operating activities of RMB60.2 million (US$8.6 million). As of December 31, 2025, our cash and cash equivalents were RMB29.3 million (US$4.2 million). Our ability to continue as a going concern is dependent on, among other things, our ability to generate cash flows from operations and our ability to raise sufficient capital through equity or debt financing. We have prepared a future cash flow forecasts and believe that we will have sufficient unrestricted liquidity for at least the next 12 months from the date of this annual report. We have also taken measures to speed up the collection of accounts receivable, such as litigation and stringent developer credit rating management, although the effectiveness of these actions may be limited as developers have already been in severe finance distress. In 2025, we have obtained equity financing and plan to seek additional equity and/or debt financing in the near future; however, the availability and amount of such funding remain uncertain. The ongoing downturn in China's real estate market and heightened credit risks of developers have adversely affected our results of operations and financial condition and may potentially affect our ability to obtain necessary financing for an extended period.

As of December 31, 2025, we had RMB32.7 million (US$4.7 million) in cash and cash equivalents and restricted cash. Our cash and cash equivalents primarily consist of demand deposits placed with banks or other financial institutions, which are unrestricted as to withdrawal or use. As of December 31, 2025, we had RMB3.3 million (US$0.5 million) restricted cash, which consists of bank deposits frozen due to ongoing lawsuits with suppliers and brokerage firms and restricted for other special purposes. As of December 31, 2025, we had RMB114.9 million (US$16.4 million) in short-term investments. Our short-term investments consisted of fund investments and investments in wealth management products which are redeemable by us at any time.

Our total current liabilities were RMB209.4 million (US$29.9 million) as of December 31, 2025, which primarily included RMB72.8 million (US$10.4 million) in accounts payable, RMB99.7 million (US$14.3 million) in accrued expenses and other payables and RMB18.2 million (US$2.6 million) in customers' refundable fees. Most of our current liabilities are accounts payable, which are typically settled upon our collection of accounts receivable. We believe that our current cash and cash equivalents will be sufficient to meet our anticipated working capital requirements and capital expenditures for the next 12 months. We may, however, need additional capital in the future to fund our continued operations. The issuance and sale of additional equity would result in further dilution to our shareholders. The incurrence of indebtedness may result in increased fixed obligations and could result in operating covenants that would restrict our operations. As we will continue to invest in technology to support our business, we may not be able to maintain a surplus or improve our working capital position beyond the next 12 months. In the future, should we require additional liquidity and capital resources to fund our business and operations, we may need to obtain additional financing, including financing from new and/or existing shareholders, financing generated through capital market transactions and borrowing from commercial banks. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all.

Although we consolidate the results of the VIE and its subsidiaries, we only have access to the assets or earnings of the VIE and its subsidiaries through our contractual arrangements with the VIE and its shareholders. See "Item 4. Information on the Company-C. Organizational Structure-Contractual Arrangements with the VIE and its Shareholders." For restrictions and limitations on liquidity and capital resources as a result of our corporate structure, see "Item 5. Operating and Financial Review and Prospects-B. Liquidity and Capital Resources-Holding Company Structure."

A majority of our future revenues are likely to continue to be denominated in Renminbi. Under existing PRC foreign exchange regulations, Renminbi may be converted into foreign exchange for current account items, including profit distributions, interest payments and trade and service-related foreign exchange transactions. Our PRC subsidiaries may convert Renminbi amounts that they generate in their own business activities, including fees associated with the technology development and application services, operation maintenance services and marketing services pursuant to the contracts with the VIE, into foreign exchange and pay them to its non-PRC parent company in the form of dividends. However, current PRC regulations permit our PRC subsidiaries to pay dividends to us only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. Our PRC subsidiaries are required to set aside at least 10% of their after-tax profits after making up previous years' accumulated losses each year, if any, to fund certain reserve funds until the total amount set aside reaches 50% of their registered capital. These reserves are not distributable as cash dividends. Historically, our PRC subsidiaries have not paid dividends to us, and they will not be able to pay dividends until they generate accumulated profits. Furthermore, capital account transactions, which include foreign direct investment and loans, must be approved by and/or registered with SAFE, its local branches and certain local banks.

As a Cayman Islands exempted company and offshore holding company, we are permitted under PRC laws and regulations to provide funding to our PRC subsidiaries only through loans or capital contributions, subject to the approval of government authorities and limits on the amount of capital contributions and loans. This may delay us from using the proceeds from our offshore financings to make loans or capital contribution to our PRC subsidiaries. See "Item 3. Key Information-D. Risk Factors-Risks Related to Doing Business in China-PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from making loans or additional capital contributions to our PRC operating subsidiaries."

Cash Flows

The following table sets forth our cash flows for the years presented:

Operating Activities

Net cash used in operating activities in 2025 was RMB60.2 million (US$8.6 million). The principal items accounting for the difference between our net cash used in operating activities and our net loss of RMB86.0 million (US$12.3 million) were an RMB36.8 million (US$5.3 million) decrease in prepayments and other assets, and certain non-cash expenses such as RMB44.4 million (US$6.4 million) impairment loss for equity method investments, RMB43.7 million (US$6.3 million) provision of credit losses and RMB12.0 million (US$1.7 million) impairment loss for property, plant and equipment, which were partially offset by an RMB70.8 million (US$10.1 million) decrease in accounts payable and certain non-cash other income such as RMB34.9 million (US$5.0 million) accounts payable write-off benefit.

Net cash used in operating activities in 2024 was RMB60.4 million. The principal items accounting for the difference between our net cash used in operating activities and our net income of RMB28.3 million were an RMB34.3 million decrease in amounts due to related parties, an RMB17.4 million decrease in accrued expenses and other payables, an RMB16.4 million decrease in prepayments and other assets, and an RMB15.4 million decrease in customers' refundable fees, and certain non-cash other income such as RMB151.5 million written off of accounts payable, which were partially offset by an RMB54.1 million increase in accounts receivable and certain non-cash expenses such as RMB78.2 million provision of credit losses.

Net cash used in operating activities in 2023 was RMB186.1 million. The principal items accounting for the difference between our net cash used in operating activities and our net loss of RMB93.1 million were an RMB85.2 million decrease in accounts payable, an RMB80.5 million decrease in prepayments and other assets, and an RMB59.2 million decrease in accrued expenses and other payables, and certain non-cash other income such as RMB167.9 million written off of accounts payable, which were partially offset by an RMB97.8 million decrease in accounts receivable and some non-cash expenses, such as RMB201.9 million provision of credit losses and RMB15.3 million in impairment loss for equity method investment.

Investing Activities

Net cash used in investing activities in 2025 was RMB42.9 million (US$6.1 million), mainly comprising RMB88.8 million (US$12.7 million) for cash paid for short-term investments and RMB23.4 million (US$3.3 million) for purchase of property, plant and equipment, which were partially offset by RMB70.7 million (US$10.1 million) in proceeds from disposal of short-term investments.

Net cash used in investing activities in 2024 was RMB146.0 million, mainly comprising RMB334.4 million for cash paid for short-term investments, RMB23.1 million for prepayment for acquisition of property, and RMB18.1 million for investment in equity method investments, which were partially offset by RMB237.6 million in proceeds from disposal of short-term investments.

Net cash provided by investing activities in 2023 was RMB31.4 million, mainly comprising RMB63.8 million for cash paid for short-term investments, which was partially offset by RMB50.0 million in proceeds from disposal of short-term investments and RMB45.6 million in return of capital from equity method investees.

Financing Activities

Net cash provided by financing activities in 2025 was RMB47.9 million (US$6.9 million), primarily comprising RMB44.7 million (US$6.4 million) in proceeds from issuance of convertible promissory note, net of issuance costs.

Net cash provided by financing activities in 2024 was RMB146.6 million, primarily comprising RMB88.6 million in proceeds from issuance of ordinary shares, net of issuance costs, RMB30.8 million in proceeds from issuance and exercise of pre-funded warrants, and RMB25.3 million in proceeds from regular warrants exercised.

Net cash provided by financing activities in 2023 was RMB119.8 million, primarily comprising RMB145.1 million in proceeds from issuance of convertible promissory note, net of issuance costs and RMB46.6 million in proceeds from issuance of ordinary shares, net of issuance costs, which was partially offset by RMB72.5 million in repayment for short-term bank borrowings.

Material Cash Requirements

Our material cash requirements as of December 31, 2025 and any subsequent interim period primarily include our short-term debt obligations, operating lease commitments and capital commitment obligations. The following table sets forth our contractual obligations by specified categories as of December 31, 2025:

Our short-term debt obligations primarily consist of accounts payable and accrued expenses and other payables. As of December 31, 2025, we had RMB72.8 million (US$10.4 million) in accounts payable, most of which were due to real estate agencies and payable as long as we have collected payments of corresponding accounts receivable from developers. As of December 31, 2025, we had RMB99.7 million (US$14.3 million) in accrued expenses and other payables, primarily as a result of amounts due to third parties under collaborative agreements and other taxes and surcharge payable.

Our operating lease commitments represent the commitments made under the lease agreements for our office premises in China. We lease our office facilities under non-cancelable operating leases with various expiration dates. Our leasing expense was RMB5.9 million, RMB2.5 million and RMB2.0 million (US$0.3 million) in 2023, 2024 and 2025, respectively.

As a limited partner of certain limited partnerships disclosed in Note 12 to our consolidated financial statements included elsewhere in this annual report, we are committed to make further capital injection into the limited partnership in accordance with the respective partnership deeds. Such capital commitment obligations do not have a contractual maturity date. The capital commitment obligations amounted to RMB278.0 million, RMB278.0 million and RMB86.3 million (US$12.3 million) as of December 31, 2023, 2024 and 2025, respectively.

We intend to fund our existing and future material cash requirements primarily with anticipated cash flows from operations, our existing cash balance and proceeds from equity and/or debt financing.

Our capital expenditures primarily consist of the purchase of properties, electronic equipment, motor vehicles, office furniture, and other equipment. Our capital expenditures RMB295.7 thousand in 2023, RMB31.2 million in 2024 and RMB23.4 million (US$3.3 million) in 2025. We will continue to make capital expenditures to meet our business needs.

We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any off-balance sheet derivative instruments. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.

Other than as discussed above, we did not have any significant capital and other commitments, long-term obligations or guarantees as of December 31, 2025.

Holding Company Structure

Fangdd Cayman is a holding company with no material operations of its own. We conduct our operations primarily through our PRC subsidiaries, the VIE and its subsidiaries in China. As a result, Fangdd Cayman's ability to pay dividends depends upon dividends paid by our PRC subsidiaries. If our existing PRC subsidiaries or any newly formed ones incur debts on their own behalf in the future, the instruments governing their debts may restrict their ability to pay dividends to us. In addition, our wholly owned subsidiaries in China are permitted to pay dividends to us only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Under PRC laws, each of our PRC subsidiaries, the VIE and its subsidiaries in China is required to set aside at least 10% of its after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. In addition, our wholly owned subsidiaries in China may allocate a portion of their after-tax profits based on PRC accounting standards to enterprise expansion funds and staff bonus and welfare funds at their discretion, and the VIE may allocate a portion of its after-tax profits based on PRC accounting standards to a discretionary surplus fund at its discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends. Remittance of dividends by a wholly owned subsidiary out of China is subject to examination by the banks designated by SAFE. Our PRC subsidiaries have not paid dividends and will not be able to pay dividends until they generate accumulated profits and meet the requirements for statutory reserve funds.

C. Research and Development, Patents and Licenses, etc.

See "Item 4. Information on the Company-B. Business Overview-Technology Systems and Infrastructure" and "-Intellectual Property."

D. Trend Information

Other than as described elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on our revenue, income from continuing operations, profitability, liquidity or capital resources, or that would cause our reported financial information not necessarily to be indicative of future operating results or financial condition.

E. Critical Accounting Estimates

The preparation of the consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, related disclosures of contingent assets and liabilities as of the balance sheet date, and the reported revenues and expenses during the reported period in the consolidated financial statements and accompanying notes. Significant accounting estimates include, but not limited to, allowance for accounts, loans, goodwill impairment, impairment loss for long-term equity investment, impairment loss for equity method investments and share-based compensation. Actual results may differ materially from those estimates, and as such, differences may be material to the consolidated financial statements.

Allowance for Credit Losses of Accounts Receivable

Accounts receivable mainly represent amounts due from the real estate developers for new property business upon the completion of services to them. Accounts receivable are recorded net of allowance for credit losses. We consider many factors in assessing the collectability of its accounts receivable, such as the age of the amounts due, the payment history, credit-worthiness and the financial condition of the debtor. An allowance for credit losses is recorded in the period in which a loss is determined to be probable. In addition, with respect to the accounts receivable due from developers having higher credit risks, we also record a special allowance if there is strong evidence indicating that a certain amount of account receivable is likely to be unrecoverable. Accounts receivable are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Allowance of RMB642.8 million (US$91.9 million) was provided as of December 31, 2025, which included RMB111.4 million (US$15.9 million)) special allowance for the credit losses of the accounts receivable have strong evidence indicating that is likely to be unrecoverable.

Impairment of Goodwill

Goodwill represents the excess of the purchase consideration over the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed from the acquired entity as a result of the Group's acquisitions of interests in its subsidiaries. The Group assesses goodwill for impairment in accordance with ASC 350-20 ("ASC 350-20"), "Intangibles-Goodwill and Other: Goodwill", which requires that goodwill to be tested for impairment at the reporting unit level at least annually and more frequently upon the occurrence of certain events, as defined by ASC 350-20.

On March 31, 2022, our company completed the acquisition of 78% equity interest in Beijing Tuqiang Yunxia Technology Limited ("Tuqiang"), which mainly engages in the provision of internet information services for real estate developers and agencies. Upon the completion of the transactions, our company held 78% equity interest in Tuqiang, and it became a consolidated subsidiary of our company.

Tuqiang mainly engages in the provision of internet information services for real estate developers and agencies. The excess of total consideration over net assets and identifiable intangible assets acquired were recorded as goodwill which amounted to RMB454.0 thousand at the acquisition date. The goodwill arising from this acquisition was attributable to the synergies expected from the combined operations of Tuqiang and our company, the assembled workforce and its knowledge and experience in the managing real estate agencies in China.

In considering property market conditions and the operating performance of Tuqiang, our company ceased all businesses of Tuqiang during 2023 and the goodwill recognized from the acquisition was fully impaired as of December 31, 2023.

There was no such goodwill impairment during the year ended December 31, 2024.

In 2024, the Group invested in Suzhou Tinghaozhu Technology Co., Ltd. ("Suzhou Tinghaozhu") and had ability to exercise significant influence over its financial and operating policies accounting for 30%. In May 2025, the Group further acquired a 35% equity interest in Suzhou Tinghaozhu to achieve control. The excess of total consideration over net assets was recorded as goodwill which amounted to RMB621 thousand at the acquisition date. During the year ended December 31, 2025, an impairment loss of RMB621 thousand (US$88.8 thousand) was made against goodwill arising from the acquiree Suzhou Tinghaozhu according to its implied fair value estimated by the management.

Impairment of Long-term Equity Investment

We invested in Chengdu Haofangtong Technology Corporation Limited ("Haofangtong"), as described in note 11 to the consolidated financial statements. In accordance with the Capital Injection and Share Transfer Agreement entered between our group, Haofangtong and the existing shareholders of Haofangtong dated July 7, 2018, our group agreed to acquire 26% equity interests of Haofangtong by subscribing (1) 4,029,543 newly issued shares (the "New Share Issuing"), which represents 7% equity interests of Haofangtong, with a consideration of RMB56.0 million, and (2) an option to purchase 10,937,339 shares, representing 19% equity interests of Haofangtong after New Share Issuing, from the existing shareholders for RMB32.0 million if Haofangtong and the existing shareholders of Haofangtong fulfill certain conditions under the agreement. Haofangtong's principal activities are the development and sales of enterprise resource planning ("ERP") system for real estate agents.

On September 5, 2018, our group completed the transaction of subscripting 4,029,543 newly issued shares of Haofangtong. Management has determined that the consideration paid of RMB56.0 million represents the cost of (i) 7% equity interests of Haofangtong and (ii) a purchase option in respect of an additional 19% equity interests of Haofangtong from the existing shareholders for RMB32.0 million. The total consideration paid is allocated to the 7% equity interest and the purchase option of an additional 19% equity interest, based on the valuation report prepared by an independent valuation firm.

Our group has determined that it does not have significant influence in Haofangtong and that there is no readily determinable fair value of Haofangtong's shares. The investments in the 7% equity interests and the purchase option on additional equity interests are measured at their respective allocated costs, less impairment, with subsequent adjustments for observable price changes.

The Group continually reviews the equity investments in Haofangtong to determine whether a decline in fair value to below the carrying value is other-than-temporary. The impairment recorded for equity investments in Haofangtong was RMB54.0 million and RMB55.0 million as of December 31, 2024 and 2025, respectively. For the years ended December 31, 2023, 2024 and 2025, the impairment loss of RMB3.0 million, RMB1.0 million and RMB1.0 million (US$0.1 million) was recognized, respectively, according to the estimated fair value determined by the management.

Impairment of Equity Method Investment

In connection with the Sales Commitment Arrangements as described in Notes 1(c) and 2.20 to the consolidated financial statements, we invested in certain limited partnerships (the "Limited Partnerships"). We were the limited partner and had invested less than 50% of interests in the Limited Partnerships as of December 31, 2025. We have determined that given the design of these Limited Partnerships, they are considered to be unconsolidated VIEs and we are not considered to be the primary beneficiary, as we do not have the power to direct the activities of Limited Partnerships that most significantly impact their economic performance. We determined that we have significant influence over these Limited Partnerships and therefore have accounted for our investments under the equity method.

Considering current real estate market conditions and the operating performance of the Limited Partnerships, we recognized other-than-temporary impairment loss of RMB44.4 million (US$6.4 million) to the investment in certain Limited Partnerships in 2025.

Valuation and Recognition of Share-based Compensation Arrangements

Compensation expense is recognized for all grants of share options and restricted share units. Determining the appropriate valuation model and estimating the fair values of share option grants requires the input of subjective assumptions, including risk-free interest rate, expected stock price volatility, dividend yields, expected term, and forfeiture rates. The expected volatility assumption is based partially upon the historical volatility of our ordinary shares, which may or may not be a true indicator of future volatility. The assumptions used in calculating the fair values of share option grants represent management's best estimates, but these estimates involve inherent uncertainties and the application of judgment. As a result, if factors change and different assumptions are used, share-based compensation expense could be significantly different from what we recorded in the current period.

Disclaimer

Fangdd Network Group Ltd. published this content on May 06, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 06, 2026 at 12:11 UTC.