AIFU Inc 6-K, filed Sep 29, 2026
AIFU Inc. (AIFU)
About this 6-K
AIFU Inc filed this 6-K on September 29, 2026.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of September
Commission File Number:
Room 1, Building 10,
Jinzhong Guobin Hui Qinyuan 2nd Road
Lihu Community, Xili Street
Shenzhen, 518055
People’s Republic of China
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
AIFU Inc. (the “Company”) is furnishing this Current Report on Form 6-K to provide (i) unaudited condensed consolidated financial statements for the six months ended June 30, 2026 and related notes, and (ii) Operating and Financial Review for the six months ended June 30, 2026.
Incorporation by Reference
The contents of this Current Report on Form 6-K are hereby incorporated by reference into the Company’s registration statement on Form F-3 (File No. 333-296229) that was initially filed with the SEC on May 26, 2026 and declared effective by the SEC on May 28, 2026.
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EXHIBIT INDEX
| Exhibit Number | Description | |
| 99.1 | Operating and Financial Review for the Six Months Ended June 30, 2026 | |
| 99.2 | Unaudited Condensed Consolidated Financial Statements for the Six Months Ended June 30, 2026 and Related Notes | |
| 101.INS* | XBRL Instance Document | |
| 101.SCH* | XBRL Taxonomy Extension Schema Document | |
| 101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB* | XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104* | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| AIFU Inc. | ||
| By: | /s/ Mingxiu Luan | |
| Name: | Mingxiu Luan | |
| Title: | Chief Executive Officer | |
Date: September 29, 2026
3
Exhibit 99.1
Operating and Financial Review for the six months ended June 30, 2026
The following discussion and analysis of the results of operations of AIFU Inc. (together with our subsidiaries, unless the context indicates otherwise, “we,” “us,” “our,” or the “Company”) should be read in conjunction with our consolidated financial statements and the related notes attached hereto as Exhibit 99.2.
Share Capital Reduction and Reverse Split
On April 29, 2026, our shareholders approved, amongst other matters,
(i) a reduction in the par value of each issued and unissued Class A ordinary share and Class B ordinary share from US$0.4 per share to US$0.0001 per share (the “Capital Reduction”). The Capital Reduction became effective on May 13, 2026; and
(ii) 1-for-20 reverse share split, pursuant to which every twenty (20) issued and unissued ordinary shares of a par value of US$0.0001 each were consolidated into one ordinary share of a par value of US$0.002 each (the “Reverse Split”). On June 16, 2026, the Reverse Split became market effective on NASDAQ.
Unless otherwise indicated, all share counts and per share amounts for all periods presented have been retroactively adjusted to reflect the cumulative effect of the Reverse Split.
Discontinued Operation
In January 2025, we disposed of our entire equity interest in Fanhua Insurance Surveyors & Loss Adjustors Co., Ltd. (“FHISLA”), the operating entity of our claims adjusting business segment, and ceased offering claims adjusting services. As a result, this business has been presented as a discontinued operation for all periods presented, and we now operate with two reportable segment —the insurance agency segment and the health and wellness segment.
Results of Operations
The following information was derived from our unaudited financial results for the six months ended June 30, 2026 and 2025.
Selected Items and Data of Unaudited Interim Consolidated Statements:
| For the Six Months Ended | ||||||||||||
| June 30, | ||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| RMB | RMB | US$ | ||||||||||
| (in thousands, except for share data) | ||||||||||||
| Total net revenues | 297,447 | 226,180 | 33,334 | |||||||||
| Total operating costs and expenses | (305,245 | ) | (193,268 | ) | (28,484 | ) | ||||||
| (Loss) Income from operations | (7,798 | ) | 32,912 | 4,850 | ||||||||
| Net (loss) income from continuing operations | (473,345 | ) | 48,076 | 7,085 | ||||||||
| Net income from discontinued operations, net of tax | 3,230 | — | — | |||||||||
| Net (loss) income attributable to the Company’s shareholders | (465,709 | ) | 48,283 | 7,116 | ||||||||
| Net (loss) income per share attributable to the Company’s shareholders - basic and diluted | (1,696.4 | )* | 8.2 | 1.2 | ||||||||
| * | Retrospectively restated for the 1-for-20 reverse split effected on June 16, 2026. |
Revenues
Our net revenues are derived primarily from the provision of insurance agency services and sales of health and wellness products. Our insurance agency services primarily comprise of distribution of long-term life insurance products and, to a lesser extent, short-term insurance products to individuals, and commercial property insurance products to corporate clients. Sales of health and wellness products primarily represent sales of premium dark tea to corporate clients.
The following table sets forth our total net revenues earned from services and sales, both in absolute amounts and as percentages of total net revenues, for the periods indicated:
| Six Months Ended June 30, | ||||||||||||||||||||
| 2025 | 2026 | |||||||||||||||||||
| RMB | % | RMB | US$ | % | ||||||||||||||||
| (in thousands except percentages) | ||||||||||||||||||||
| Net revenue generated from services | ||||||||||||||||||||
| Life insurance business | 267,881 | 90.1 | 209,373 | 30,858 | 92.6 | |||||||||||||||
| Non-life insurance business | 29,566 | 9.9 | 15,120 | 2,228 | 6.7 | |||||||||||||||
| Total net revenue from services | 297,447 | 100.0 | 224,493 | 33,086 | 99.3 | |||||||||||||||
| Net revenue generated from sales | — | — | 1,687 | 248 | 0.7 | |||||||||||||||
| Total net revenues | 297,447 | 100.0 | 226,180 | 33,334 | 100 | |||||||||||||||
Total net revenues were RMB226.2 million (US$33.3 million) for the six months ended June 30, 2026, representing a decrease of 24.0% from RMB297.4 million for the six months ended June 30, 2025.
Total gross written premiums (“GWP”) of insurance products that we facilitated was RMB7,003.0 million for the six months ended June 30, 2026, representing a decrease of 14.4% from RMB8,177.3 million for the same period of 2025, of which first year premiums (“FYP”) increased by 8.2% year-over-year from RMB520.5 million to RMB563.2 million while renewal premiums decreased by 15.9% year-over-year from RMB7,656.8 million to RMB6,439.8 million.
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| ● | Net revenues generated from the life insurance business were RMB209.4 million (US$30.9 million) for the six months ended June 30, 2026, representing a decrease of 21.8% from RMB267.9 million for the six months ended June 30, 2025. The decrease was primarily attributable to a shift in product mix toward shorter-duration, savings-oriented products, as well as a decline in renewal commissions resulting from reduced new business volume in prior periods, alongside intensified industry competition following the full implementation of the “alignment of reported and actual expenses” policy in the insurance agency/broker channel. Total life insurance GWP decreased by 14.6% year-over-year from RMB8,106.9 million to RMB6,925.0 million, of which life insurance FYP increased by 7.8% year-over-year from RMB447.3 million to RMB485.1 million while renewal premiums decreased by 15.9% year-over-year from RMB7,656.8 million to RMB6,439.8 million. |
Net revenues generated from our life insurance business accounted for 92.6% of our total net revenues in the first half of 2026, as compared to 90.1% in the same period of 2025.
| ● | Net revenues generated from the non-life insurance business were RMB15.1 million (US$2.2 million) for the six months ended June 30, 2026, representing a decrease of 48.9% from RMB29.6 million for the six months ended June 30, 2025. The decrease in non-life insurance revenues was mainly due to a change of product mix. Although premiums from our non-life insurance business, which mainly comprises the distribution of commercial line of property and casualty insurance products, increased by 10.8% from RMB70.4 million for the six months ended June 30, 2025 to RMB78.1 million for the six months ended June 30, 2026, the proportion of products with lower commission rates rose, resulting in lower revenue despite higher premium volume. Net revenues generated from the non-life insurance business accounted for 6.7% of our total net revenues for the six months ended June 30, 2026, as compared to 9.9% in the same period of 2025. |
Net revenue generated from sales of health and wellness products were RMB1.7 million (US$0.2 million) for the six months ended June 30, 2026, following the Company’s expansion into this segment after acquiring a premium inventory of dark tea products on January 9, 2026.
Net revenues from sales of health and wellness products accounted for 0.7% of our total net revenues in the first half of 2026, as compared to nil for the same period of 2025.
Operating Costs and Expenses
Our operating costs and expenses primarily consist of costs incurred in connection with the distribution of insurance products, selling expenses and general and administrative expenses. The following table sets forth the components of our operating costs and expenses, both in absolute amounts and as percentages of our net revenues, for the periods indicated.
| Six Months Ended June 30, | ||||||||||||||||||||
| 2025 | 2026 | |||||||||||||||||||
| RMB | % | RMB | US$ | % | ||||||||||||||||
| (in thousands except percentages) | ||||||||||||||||||||
| Total net revenues | 297,447 | 100 | 226,180 | 33,334 | 100 | |||||||||||||||
| Operating costs | (142,567 | ) | 48 | (98,597 | ) | (14,531 | ) | 44 | ||||||||||||
| Selling expenses | (23,171 | ) | 8 | (24,926 | ) | (3,674 | ) | 11 | ||||||||||||
| General and administrative expenses | (139,507 | ) | 47 | (69,745 | ) | (10,279 | ) | 31 | ||||||||||||
| Total operating costs and expenses | (305,245 | ) | 103 | (193,268 | ) | (28,484 | ) | 86 | ||||||||||||
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We incur costs primarily in connection with the distribution of insurance products, primarily representing commissions costs paid to sales agents or connected channels.
Operating costs were RMB98.6 million (US$14.5 million) for the six months ended June 30, 2026, representing a decrease of 30.8% from RMB142.6 million for the six months ended June 30, 2025. The decrease was in line with the decrease in net revenues.
Our selling expenses primarily consist of i) salaries and employment benefits for employees who work in back office below the provincial management level, ii) office rental, telecommunications and office supply expenses incurred in connection with sales activities and iii) advertising and marketing expenses.
Selling expenses were RMB24.9 million (US$3.7 million) for the six months ended June 30, 2026, representing an increase of 7.6% from RMB23.2 million for the six months ended June 30, 2025. The increase was primarily attributable to a low comparative base, as the corresponding period of 2025 reflected a reversal of previously recognized share-based compensation expenses arising from the forfeiture of share options granted to agents. This increase was partially offset by cost savings from reduced rental expenses.
Our general and administrative expenses primarily consist of salaries and benefits for our administrative staff, research and development expenses in relation to our mobile and online programs, professional fees paid for valuation, market research, legal and auditing services, share-based compensation expenses for managerial and administrative staff, bad debt expenses for credit loss, depreciations and amortizations, office rental expenses, travel and telecommunications expenses, entertainment expenses, and office supply expenses for our administrative staff.
General and administrative expenses were RMB69.7 million (US$10.3 million) for the six months ended June 30, 2026, representing a decrease of 50.0% from RMB139.5 million for the six months ended June 30, 2025. The decrease was mainly attributable to cost savings from personnel optimization and reduced rental expenses of provincial branch offices and a reduction of RMB15.7 million in share-based compensation expenses, which were recognized in the prior-year period but were not incurred in the current period.
(Loss) Income from Operations
As a result of the foregoing factors, income from operation was RMB32.9 million (US$4.9 million) for the six months ended June 30, 2026, as compared with an operating loss of RMB7.8 million for the six months ended June 30, 2025.
Other (Loss) Income
Loss from fair value change was RMB1.1 million (US$0.2 million) for the six months ended June 30, 2026, as compared to loss from fair value change of RMB18.0 million for the six months ended June 30, 2025. The loss for the six months ended June 30, 2026 primarily represented the fair value changes of our equity investment in BGM Group Ltd. while the loss from fair value change for the six months ended June 30, 2025 primarily represented the fair value change of RMB17.5 million of contingent consideration in regards to business combinations completed in the first quarter of 2023.
Provision for credit losses was a net reversal of negative RMB3.2 million (US$0.5 million) for the six months ended June 30, 2026, as compared with a provision of RMB487.6 million for the six months ended June 30, 2025, mainly representing a reversal of credit loss allowance previously recorded in respect of loans to third parties, due to the collection of RMB3.7 million of such loan receivables in the current period. No interest income has been accrued on the loans this period as collection of the related interest is deemed unlikely.
Investment loss was RMB0.8 million (US$0.1 million) for the six months ended June 30, 2026, as compared to investment income of RMB5.0 million for the six months ended June 30, 2025. The decrease reflected i) losses arising from the disposal of held shares; ii) decrease of cash available for short term investment and the periodic fluctuation in yields from short-term investments in financial products as it is recognized when the investment matures or is disposed of.
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Income tax expense
Income tax expense was RMB8.2 million (US$1.2 million) for the six months ended June 30, 2026, representing a decrease of 2.4% from RMB8.4 million for the six months ended June 30, 2025.
Net (loss) income from continuing operations
As a result of the foregoing factors, net income from continuing operations was RMB48.1 million (US$7.1 million) for the six months ended June 30, 2026, as compared to a net loss from continuing operations of RMB473.3 million for the six months ended June 30, 2025.
Net income from discontinued operations
Net income from discontinued operations was nil for the six months ended June 30, 2026, as compared to RMB3.2 million for the six months ended June 30, 2025, mainly representing gain from the disposal of the claims adjusting segment.
Net (loss) income attributable to the Company’s shareholders
Net income attributable to the Company’s shareholders was RMB48.3 million (US$7.1 million) for the six months ended June 30, 2026, as compared to net loss attributable to the Company’s shareholders of RMB465.7 million for the six months ended June 30, 2025.
Basic and diluted net (loss) income per ordinary share attributable to the Company’s shareholders from continuing operations
Basic and diluted net income per ordinary share attributable to the Company’s shareholders from continuing operations were RMB8.2 (US$1.2) and RMB8.2 (US$1.2) for the six months ended June 30, 2026, respectively, as compared to basic and diluted net loss per ordinary share from continuing operations attributable to the Company’s shareholders of RMB1,708.2 and RMB1,708.2 for the six months ended June 30, 2025, respectively.
Liquidity and Capital Resources
Our principal sources of liquidity have been cash generated from our financing activities. As of June 30, 2026, we had RMB33.3 million (US$4.9 million) in cash and cash equivalents, and RMB0.3 million (US$0.05 million) in short-term investments. Our cash and cash equivalents consist of cash on hand and bank deposits and our short-term investments consisting of short-term, highly liquid investments that are readily convertible to known amounts of cash, and have an insignificant risk of changes in value related to changes in interest rates. Our principal uses of cash have been to fund maintenance of digital platforms, working capital requirements, office equipment purchases, office renovation and rental deposits.
We expect to need cash to fund our ongoing business needs, such as recruiting and training a professional sales force, enhancing our IT infrastructure and developing the sales capabilities and channels for our tea products.
We believe that our current cash and cash equivalents and anticipated cash flow from operations will be sufficient to meet our anticipated cash needs, including our cash needs for working capital and capital expenditures, for at least the next 12 months. We may, however, require additional cash due to changing business conditions or other future developments, including any investments or acquisitions we may decide to pursue. If our existing cash is insufficient to meet our requirements, we may seek to sell additional equity securities, debt securities or borrow from lending institutions. Financing may be unavailable in the amounts we need or on terms acceptable to us, if at all. The sale of additional equity securities, including convertible debt securities, would dilute our earnings per share. The incurrence of debt would divert cash for working capital and capital expenditures to service debt obligations and could result in operating and financial covenants that restrict our operations and our ability to pay dividends to our shareholders. If we are unable to obtain additional equity or debt financing as required, our business operations and prospects may suffer.
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The following table sets forth our cash flows for the periods indicated:
| Six Months Ended June 30, | ||||||||||||
| 2025 | 2026 | |||||||||||
| RMB | RMB | US$ | ||||||||||
| (in thousands) | ||||||||||||
| Net cash generated from operating activities | 1,485 | 3,761 | 554 | |||||||||
| Net cash used in investing activities | (104,411 | ) | (226,803 | ) | (33,426 | ) | ||||||
| Net cash (used in) generated from financing activities | (45,627 | ) | 233,424 | 34,402 | ||||||||
| Net (decrease) increase in cash and cash equivalents and restricted cash | (148,553 | ) | 10,382 | 1,530 | ||||||||
| Cash and cash equivalents and restricted cash at the beginning of the period | 245,744 | 50,256 | 7,407 | |||||||||
| Cash and cash equivalents and restricted cash at the end of the period | 96,639 | 52,782 | 7,779 | |||||||||
Operating Activities
Net cash generated in operating activities for the six months ended June 30, 2026 was RMB3.8 million (US$0.6 million). This reflected the net income of RMB48.1 million (US$7.1 million), as adjusted for: (i) depreciation expense of RMB2.6 million (US$0.4 million); (ii) non-cash operating lease expense of RMB7.8 million (US$1.2 million); (iii) reversal of allowance for credit losses on financial assets of RMB4.2 million (US$0.6 million); (iv) deferred taxes of RMB10.1 million (US$1.5 million); and (v) investment loss of RMB0.8 million (US$0.1 million). The significant changes in such non-cash and non-operating items were primarily due to depreciation expense, non-cash operating lease expenses, offset by reversal of credit losses on financial assets and deferred taxes. Operating cash flows were affected by a net negative change of RMB41.5million (US$6.1 million) in our operating assets and liabilities, primarily from the effects of: (i) a decrease of contract assets of RMB67.8 million (US$10.0 million); (ii) a decrease of other current assets of RMB3.7 million (US$0.5 million); (iii) an increase of income taxes payable of RMB8.5 million (US$1.3 million); offset by: (i) an increase of accounts receivable of RMB6.3 million (US$0.9 million); (ii) an increase of other receivables of RMB6.3 million (US$0.9 million); (iii) a decrease of accounts payable of RMB36.5 million (US$5.4 million); (iv) a decrease of accrued commissions of RMB13.3 million (US$2.0 million); (v) a decrease of other payables and accrued expenses of RMB45.8 million (US$6.8 million); (vi) a decrease of accrued payroll of RMB6.2 million (US$0.9 million); and (vii) a decrease of lease liabilities of RMB7.3 million (US$1.1 million).
Net cash generated from operating activities for the six months ended June 30, 2025 was RMB1.5 million. This reflected the net loss of RMB470.1 million, as adjusted for non-cash and non-operating items, primarily including (i) depreciation expense of RMB2.4 million; (ii)non-cash operating lease expense of RMB17.7 million; (iii) allowance for credit losses on financial assets of RMB486.7 million; (iv) share-based compensation expensesof RMB15.8 million; (v) loss on disposal of investment in an associate of RMB4.3 million; (vi) gain on disposal of property, plant and equipment of RMB1.2 million; (vii) investment income of RMB5.0 million; (viii) net gain on disposal of subsidiaries of RMB9.5 million; (ix) deferred taxes of RMB6.5 million; and (x) interest accrued for other receivables of RMB17.5 million. The significant changes in such non-cash and non-operating items were primarily due to allowance for credit losses on financial assets, non-cash operating lease expense, depreciation expense,share-based compensation expenses,loss on disposal of investment in an associate, offset by interest accrued for other receivables, net gain on disposal of subsidiaries, deferred taxes, investment income and gain on disposal of property, plant and equipment. Operating cash flows were negatively affected by a RMB16.0 million net change in our operating assets and liabilities, primarily from the effects of (i) a decrease of accounts receivable of RMB13.0 million; (ii) a decrease of contract assets of RMB132.3 million; (iii) a decrease of other current assets of RMB221.7 million; (iv) an increase of other payables and accrued expenses of RMB38.9 million; and (v) an increase of income taxes payable of RMB15.4 million; offset by (i) an increase of other receivables of RMB113.3 million; (ii) an increase of other non-current assets of RMB187.3 million; (iii) a decrease of accounts payable of RMB26.9 million; (iv) a decrease of accrued commissions of RMB48.1 million; (v) a decrease of accrued payroll of RMB6.2 million; (vi) a decrease of lease liabilities of RMB17.9 million; and (vii) a decrease of tax liabilities of RMB37.3 million.
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Investing Activities
Net cash used in investing activities for the six months ended June 30, 2026 was RMB226.8 million (US$33.4 million), primarily attributable to cash used to purchase short-term investment products of RMB3.6 million (US$0.5 million), payment for business acquisitions, net of cash acquired of RMB150.0 million (US$22.1 million), cash paid out for loan receivables from third parties of RMB121.6 million (US$17.9 million), an increase in amounts due from related parties of RMB1.0 million (US$0.1 million), and purchase of property, plant and equipment of RMB2.0 million (US$0.3 million), offset by proceeds from the disposal of short-term investments of RMB7.7 million (US$1.1 million) that matured, consideration received in respect of subsidiaries disposed of in the prior year of RMB38.2 million (US$5.6 million), cash received for loan receivables from third parties of RMB4.7 million (US$0.7 million), proceeds from disposal of property and equipment of RMB0.4 million (US$0.1 million), a decrease in amounts due from related parties of RMB0.7 million (US$0.1 million).
Net cash used in investing activities for the six months ended June 30, 2025 was RMB104.4 million, primarily attributable to cash used to purchase short-term investment products of RMB56.9 million, increase in amounts due from related parties of RMB10.4 million, purchase of property, plant and equipment of RMB1.1 million and disposal of subsidiaries, net of cash disposed of RMB131.1 million, offset by proceeds from the disposal of short-term investments of RMB93.3 million that matured and proceeds from disposal of property and equipment of RMB1.4 million.
Financing Activities
Net cash generated from financing activities was RMB233.4 million (US$34.4 million) for the six months ended June 30, 2026, attributable to proceeds from ordinary shares issuance of RMB234.7 million (US$34.6 million) partially offset by repayment of bank and other borrowings and other financing outflows of RMB1.3 million (US$0.2 million).
Net cash used in financing activities was RMB45.6 million for the six months ended June 30, 2025, attributable to repayment of bank borrowings of RMB52.9 million, partially offset by proceeds of issuance of ordinary shares of RMB7.3 million.
Foreign Currency Translation
The unaudited financial results for the six months ended June 30, 2026 are stated in RMB. Translations of amounts from RMB into USD are solely for the convenience of the readers outside of China and were calculated at the rate of US$1.00 = RMB 6.7851, representing the noon buying rate in the City of New York for cable transfers of RMB on June 30, 2026, as set forth in H.10 statistical release of the Federal Reserve Bank of New York. The translation is not intended to imply that the RMB amounts could have been, or could be, converted, realized or settled into USD at such rate.
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AIFU’s Insurance Sales and Service Distribution Network:
As of June 30, 2026, AIFU’s distribution network consisted of 288 sales outlets in 24 provinces, compared with 360 sales outlets in 24 provinces as of June 30, 2025. The decrease in the number of sales outlets reflected our focus on growing profitable branches, coupled with the challenging decisions to close those which were not yielding profits.
Forward-looking Statements
This filing contains statements of a forward-looking nature. These statements, including the statements relating to the Company’s future financial and operating results, are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by terminology such as “will,” “expects,” “believes,” “anticipates,” “intends,” “estimates” and similar statements. Among other things, management’s quotations contain forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about AIFU and the industry. Potential risks and uncertainties include, but are not limited to, those relating to its ability to attract and retain productive agents, especially entrepreneurial agents, its ability to maintain existing and develop new business relationships with insurance companies, its ability to execute its growth strategy, its ability to adapt to the evolving regulatory environment in the Chinese insurance industry, its ability to compete effectively against its competitors, quarterly variations in its operating results caused by factors beyond its control including macroeconomic conditions in China. Except as otherwise indicated, all information provided in this press release speaks as of the date hereof, and AIFU undertakes no obligation to update any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although AIFU believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that its expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results. Further information regarding risks and uncertainties faced by AIFU is included in AIFU’s filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F.
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AIFU INC.
Unaudited Condensed Consolidated Balance Sheets
(In thousands, except for shares and per share data)
| As of December 31, 2025 | As of June 30, 2026 | |||||||||||
| RMB | RMB | US$ | ||||||||||
| Audited | Unaudited | Unaudited | ||||||||||
| ASSETS: | ||||||||||||
| Current assets: | ||||||||||||
| Cash and cash equivalents | 31,095 | 33,326 | 4,912 | |||||||||
| Restricted cash | 3,102 | 3,679 | 542 | |||||||||
| Securities available for sale, at fair value | 2,450 | 346 | 51 | |||||||||
| Equity securities, at fair value | 2,746 | — | — | |||||||||
| Accounts receivable, net of allowances of RMB1,858 and RMB906 as of December 31, 2025 and June 30, 2026, respectively | 65,533 | 72,772 | 10,725 | |||||||||
| Contract assets, net of allowances of 164 and RMB160 as of December 31, 2025 and June 30, 2026, respectively | 182,453 | 160,332 | 23,630 | |||||||||
| Other receivables, net | 288,339 | 143,232 | 21,110 | |||||||||
| Inventories | — | 867,560 | 127,863 | |||||||||
| Amounts due from a related party | 13,252 | 13,349 | 1,967 | |||||||||
| Other current assets | 14,809 | 13,967 | 2,058 | |||||||||
| Total current assets | 603,779 | 1,308,563 | 192,858 | |||||||||
| Non-current assets: | ||||||||||||
| Restricted bank deposit – non-current | 16,059 | 15,777 | 2,325 | |||||||||
| Contract assets - non-current, net of allowances of RMB509 and RMB520 as of December 31, 2025 and June 30, 2026, respectively | 565,418 | 519,695 | 76,594 | |||||||||
| Property, plant, and equipment, net | 62,876 | 62,111 | 9,154 | |||||||||
| Deferred tax assets | 8,902 | 12,831 | 1,891 | |||||||||
| Other non-current assets | 237,475 | 41,662 | 6,140 | |||||||||
| Right-of-use assets | 33,589 | 26,183 | 3,859 | |||||||||
| Total non-current assets | 924,319 | 678,259 | 99,963 | |||||||||
| Total assets | 1,528,098 | 1,986,822 | 292,821 | |||||||||
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AIFU INC.
Unaudited Condensed Consolidated Balance Sheets (continued)
(In thousands)
| As of December 31, 2025 | As of June 30, 2026 | |||||||||||
| RMB | RMB | US$ | ||||||||||
| Audited | Unaudited | Unaudited | ||||||||||
| LIABILITIES AND EQUITY: | ||||||||||||
| Current liabilities: | ||||||||||||
| Short-term loans | 56,000 | 55,941 | 8,245 | |||||||||
| Accounts payable | 81,089 | 71,426 | 10,527 | |||||||||
| Accrued commissions | 90,076 | 76,769 | 11,314 | |||||||||
| Insurance premium payables | 6 | 6 | 1 | |||||||||
| Other payables and accrued expenses | 184,722 | 138,837 | 20,462 | |||||||||
| Accrued payroll | 17,940 | 11,803 | 1,740 | |||||||||
| Income taxes payable | 67,020 | 75,509 | 11,129 | |||||||||
| Operating lease liabilities | 15,308 | 12,217 | 1,801 | |||||||||
| Total current liabilities | 512,161 | 442,508 | 65,219 | |||||||||
| Non-current liabilities: | ||||||||||||
| Accrued commissions | 316,419 | 289,604 | 42,681 | |||||||||
| Tax liabilities | 25,701 | 25,701 | 3,788 | |||||||||
| Deferred tax liabilities | 187,218 | 181,055 | 26,683 | |||||||||
| Operating lease liabilities | 15,463 | 11,628 | 1,714 | |||||||||
| Total non-current liabilities | 544,801 | 507,988 | 74,866 | |||||||||
| Total liabilities | 1,056,962 | 950,496 | 140,085 | |||||||||
| Commitments and contingencies | ||||||||||||
| Shareholders’ Equity: | ||||||||||||
| Class A Ordinary shares (US$0.4 par value, 8,000,000,000 shares authorized, 671,764 shares issued and 671,764 shares outstanding as of December 31, 2025; US$0.002 par value, 8,000,000,000 shares authorized, 5,925,748 shares issued and 5,925,748 shares outstanding as of June 30, 2026)* | 38,877 | 78 | 11 | |||||||||
| Class B Ordinary shares (US$0.4 par value, 2,000,000,000 shares authorized, 375,000 shares issued and 375,000 shares as of December 31, 2025; US$0.002 par value, 2,000,000,000 shares authorized, 250,000 shares issued and 250,000 shares outstanding as of June 30, 2026) * | 21,373 | 4 | 1 | |||||||||
| Additional paid-in capital | 401,928 | 1,177,809 | 173,588 | |||||||||
| Statutory reserves | 343,026 | 343,026 | 50,556 | |||||||||
| Accumulated deficit | (235,471 | ) | (70,418 | ) | (10,378 | ) | ||||||
| Accumulated other comprehensive loss | (91,213 | ) | (406,582 | ) | (59,923 | ) | ||||||
| Total AIFU INC. shareholders’ equity | 478,520 | 1,043,917 | 153,855 | |||||||||
| Non-controlling interests | (7,384 | ) | (7,591 | ) | (1,119 | ) | ||||||
| Total shareholders’ equity | 471,136 | 1,036,326 | 152,736 | |||||||||
| Total liabilities and shareholders’ equity | 1,528,098 | 1,986,822 | 292,821 | |||||||||
The number of shares as of December 31, 2025 is retrospectively restated for the 1-for-20 reverse share split effected on June 16, 2026.
10
AIFU INC.
Unaudited
Condensed Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income
(In thousands, except for shares and per share data)
| For the Six Months Ended June 30, | ||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| RMB | RMB | US$ | ||||||||||
| Net revenues: | ||||||||||||
| Revenues generated from Agency services | 297,447 | 224,493 | 33,086 | |||||||||
| Life insurance business | 267,881 | 209,373 | 30,858 | |||||||||
| Non-life insurance business | 29,566 | 15,120 | 2,228 | |||||||||
| Revenues generated from sales of health and wellness products | — | 1,687 | 248 | |||||||||
| Total net revenues | 297,447 | 226,180 | 33,334 | |||||||||
| Operating costs and expenses: | ||||||||||||
| Cost of Agency services | (142,567 | ) | (96,946 | ) | (14,288 | ) | ||||||
| Life insurance business | (126,440 | ) | (87,716 | ) | (12,928 | ) | ||||||
| Non-Life insurance business | (16,127 | ) | (9,230 | ) | (1,360 | ) | ||||||
| Cost of Sales | — | (1,651 | ) | (243 | ) | |||||||
| Total operating costs | (142,567 | ) | (98,597 | ) | (14,531 | ) | ||||||
| Selling expenses | (23,171 | ) | (24,926 | ) | (3,674 | ) | ||||||
| General and administrative expenses | (139,507 | ) | (69,745 | ) | (10,279 | ) | ||||||
| Total operating costs and expenses | (305,245 | ) | (193,268 | ) | (28,484 | ) | ||||||
| (Loss) Income from operations | (7,798 | ) | 32,912 | 4,850 | ||||||||
| Other (loss) income, net: | ||||||||||||
| Losses from fair value change | (17,960 | ) | (1,112 | ) | (164 | ) | ||||||
| Investment income (loss) related to the realized gain (loss) on short term investments | 5,025 | (804 | ) | (118 | ) | |||||||
| Gains from disposal of subsidiaries | 6,313 | — | — | |||||||||
| Interest income | 16,621 | 121 | 18 | |||||||||
| Financial cost | (2,209 | ) | (2,956 | ) | (436 | ) | ||||||
| (Provision for) Reversal of credit losses | (487,583 | ) | 3,199 | 472 | ||||||||
| Others, net | 22,646 | 24,916 | 3,672 | |||||||||
| (Loss) Income from continuing operations before income taxes and share income and impairment of affiliates, net | (464,945 | ) | 56,276 | 8,294 | ||||||||
| Income tax expense | (8,400 | ) | (8,200 | ) | (1,209 | ) | ||||||
| Net (loss) income from continuing operations | (473,345 | ) | 48,076 | 7,085 | ||||||||
| Net income from discontinued operations, net of tax | 3,230 | — | — | |||||||||
| Net (loss) income | (470,115 | ) | 48,076 | 7,085 | ||||||||
| Less: net loss attributable to non-controlling interests | (4,406 | ) | (207 | ) | (31 | ) | ||||||
| Net (loss) income attributable to the Company’s shareholders | (465,709 | ) | 48,283 | 7,116 | ||||||||
| Continuing operations | (468,939 | ) | 48,283 | 7,116 | ||||||||
| Discontinued operations | 3,230 | — | — | |||||||||
| Net (loss) income per share attributable to the Company’s shareholders - basic and diluted*: | (1,696.4 | ) | 8.2 | 1.2 | ||||||||
| Continuing operations | (1,708.2 | ) | 8.2 | 1.2 | ||||||||
| Discontinued operations | 11.8 | — | — | |||||||||
| Shares used in calculating net income per share — basic and Diluted*: | 274,525 | 5,920,686 | 5,920,686 | |||||||||
| Net (loss) income | (470,115 | ) | 48,076 | 7,085 | ||||||||
| Other comprehensive loss, net of tax: | ||||||||||||
| Foreign currency translation adjustments | (471 | ) | (2,996 | ) | (442 | ) | ||||||
| Unrealized net losses on investments | (11,418 | ) | (195,603 | ) | (28,828 | ) | ||||||
| Comprehensive loss | (482,004 | ) | (150,523 | ) | (22,185 | ) | ||||||
| Less: Comprehensive loss attributable to the non-controlling interests | (4,406 | ) | (207 | ) | (31 | ) | ||||||
| Comprehensive loss attributable to the Company’s shareholders | (477,598 | ) | (150,316 | ) | (22,154 | ) | ||||||
| * | Retrospectively restated for the 1-for-20 reverse split effected on June 16, 2026. |
11
AIFU INC.
Unaudited Condensed Consolidated Statements of Cash Flow
(In thousands)
| Six Months Ended June 30, | ||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| RMB | RMB | US$ | ||||||||||
| Note 2(v) | ||||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net (loss) income | (470,115 | ) | 48,076 | 7,085 | ||||||||
| Adjustments to reconcile net (loss) income to net cash generated from operating activities: | ||||||||||||
| Depreciation expense | 2,433 | 2,635 | 388 | |||||||||
| Non-cash operating lease expense | 17,701 | 7,824 | 1,153 | |||||||||
| Loss on termination of operating lease | 331 | — | — | |||||||||
| Allowance for (Reversal of) credit losses on financial assets | 486,734 | (4,153 | ) | (611 | ) | |||||||
| Share-based compensation expenses | 15,823 | — | — | |||||||||
| (Gain) Loss on disposal of property, plant and equipment | (1,196 | ) | 127 | 19 | ||||||||
| Change in fair value of equity investments | — | 24 | 4 | |||||||||
| Investment (income) loss | (5,025 | ) | 805 | 119 | ||||||||
| Net gain on disposal of subsidiaries | (9,543 | ) | — | — | ||||||||
| Loss on disposal of investment in an associate | 4,330 | — | — | |||||||||
| Deferred taxes | (6,476 | ) | (10,086 | ) | (1,486 | ) | ||||||
| Interest accrued for other receivables | (17,503 | ) | — | — | ||||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Accounts receivable | 13,040 | (6,267 | ) | (924 | ) | |||||||
| Contract assets | 132,264 | 67,816 | 9,995 | |||||||||
| Other receivables | (113,270 | ) | (6,288 | ) | (927 | ) | ||||||
| Other current assets | 221,672 | 3,658 | 538 | |||||||||
| Other non-current assets | (187,284 | ) | 225 | 33 | ||||||||
| Accounts payable | (26,915 | ) | (36,479 | ) | (5,377 | ) | ||||||
| Accrued commissions | (48,060 | ) | (13,307 | ) | (1,961 | ) | ||||||
| Insurance premium payables | (278 | ) | — | — | ||||||||
| Other payables and accrued expenses | 38,907 | (45,836 | ) | (6,756 | ) | |||||||
| Accrued payroll | (6,248 | ) | (6,157 | ) | (907 | ) | ||||||
| Income taxes payable | 15,396 | 8,488 | 1,251 | |||||||||
| Lease liabilities | (17,935 | ) | (7,344 | ) | (1,082 | ) | ||||||
| Tax liabilities | (37,298 | ) | — | — | ||||||||
| Net cash generated from operating activities | 1,485 | 3,761 | 554 | |||||||||
12
| Six Months Ended June 30, | ||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| RMB | RMB | US$ | ||||||||||
| Note 2(v) | ||||||||||||
| Cash flows from investing activities: | ||||||||||||
| Purchase of short-term investments | (56,943 | ) | (3,637 | ) | (536 | ) | ||||||
| Proceeds from disposal of short-term investments | 93,318 | 7,682 | 1,132 | |||||||||
| Purchase of property, plant and equipment | (1,071 | ) | (2,032 | ) | (299 | ) | ||||||
| Proceeds from disposal of property, plant and equipment | 1,374 | 36 | 5 | |||||||||
| Cash paid out for loan receivables from third parties | — | (121,539 | ) | (17,913 | ) | |||||||
| Cash received for loan receivables from third parties | — | 4,740 | 699 | |||||||||
| Payment for business acquisitions, net of cash acquired | — | (150,018 | ) | (22,110 | ) | |||||||
| Increase in amounts due from related parties | (10,414 | ) | (961 | ) | (141 | ) | ||||||
| Decrease in amounts due from related parties | — | 686 | 101 | |||||||||
| Disposal of subsidiaries, net of cash disposed | (131,068 | ) | — | — | ||||||||
| Consideration received in respect of subsidiaries disposed of in the prior year | — | 38,240 | 5,636 | |||||||||
| Cash received from disposal of an equity investment | 354 | — | — | |||||||||
| Cash acquired on non-cash acquisitions | 39 | — | — | |||||||||
| Net cash used in investing activities | (104,411 | ) | (226,803 | ) | (33,426 | ) | ||||||
| Cash flows from financing activities: | — | |||||||||||
| Proceeds of issuance of ordinary shares | 7,299 | 234,688 | 34,589 | |||||||||
| Repayment of bank and other borrowings | (52,926 | ) | (59 | ) | (9 | ) | ||||||
| Payments of deferred offering costs | — | (1,205 | ) | (178 | ) | |||||||
| Net cash (used in) generated from financing activities | (45,627 | ) | 233,424 | 34,402 | ||||||||
| Net (decrease) increase in cash and cash equivalents, and restricted cash | (148,553 | ) | 10,382 | 1,530 | ||||||||
| Cash and cash equivalents and restricted cash at beginning of the period | 245,744 | 50,256 | 7,407 | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | (552 | ) | (7,856 | ) | (1,158 | ) | ||||||
| Cash and cash equivalents and restricted cash at the end of the period | 96,639 | 52,782 | 7,779 | |||||||||
| Reconciliation in amounts on the consolidated balance sheets: | ||||||||||||
| Cash and cash equivalents at the end of the period | 77,292 | 33,326 | 4,912 | |||||||||
| Restricted cash at the end of the period | 19,347 | 19,456 | 2,867 | |||||||||
| Total of cash and cash equivalents and restricted cash at the end of the period | 96,639 | 52,782 | 7,779 | |||||||||
| Supplemental disclosure of cash flow information: | ||||||||||||
| Income taxes paid | (10,264 | ) | (9,609 | ) | (1,416 | ) | ||||||
| Interests paid | — | (440 | ) | (65 | ) | |||||||
| Supplemental disclosure of non-cash information: | ||||||||||||
| Right-of-use assets obtained in exchange for lease liabilities | 14,988 | 418 | 62 | |||||||||
| Assets acquired through the issuance of ordinary shares | 715,713 | 105,483 | ||||||||||
13
Exhibit 99.2
AIFU INC.
INDEX TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
F-1
AIFU INC.
Unaudited Consolidated Balance Sheets
(In thousands, except for shares and per share data)
| As of December 31, 2025 |
As of June 30, 2026 |
|||||||||||
| RMB | RMB | US$ | ||||||||||
| Audited | Unaudited | Note 2(v) | ||||||||||
| ASSETS: | ||||||||||||
| Current assets: | ||||||||||||
| Cash and cash equivalents | ||||||||||||
| Restricted cash | ||||||||||||
| Securities available for sale, at fair value | ||||||||||||
| Equity securities, at fair value | ||||||||||||
| Accounts receivable, net of allowances of RMB | ||||||||||||
| Contract assets, net of allowances of RMB | ||||||||||||
| Other receivables, net | ||||||||||||
| Inventories, net | ||||||||||||
| Amounts due from a related party | ||||||||||||
| Other current assets | ||||||||||||
| Total current assets | ||||||||||||
| Non-current assets: | ||||||||||||
| Restricted bank deposit – non-current | ||||||||||||
| Contract assets - non-current, net of allowances of RMB | ||||||||||||
| Property, plant, and equipment, net | ||||||||||||
| Deferred tax assets | ||||||||||||
| Other non-current assets | ||||||||||||
| Right-of-use assets | ||||||||||||
| Total non-current assets | ||||||||||||
| Total assets | ||||||||||||
F-2
AIFU INC.
Unaudited Consolidated Balance Sheets
(In thousands, except for shares and per share data)
| As of December 31, 2025 |
As of June 30, 2026 |
|||||||||||
| RMB | RMB | US$ | ||||||||||
| Audited | Unaudited | Note 2(v) | ||||||||||
| LIABILITIES AND EQUITY: | ||||||||||||
| Current liabilities: | ||||||||||||
| Short-term loans | ||||||||||||
| Accounts payable | ||||||||||||
| Accrued commissions | ||||||||||||
| Insurance premium payables | ||||||||||||
| Other payables and accrued expenses | ||||||||||||
| Accrued payroll | ||||||||||||
| Income taxes payable | ||||||||||||
| Operating lease liabilities | ||||||||||||
| Total current liabilities | ||||||||||||
| Non-current liabilities: | ||||||||||||
| Accrued commissions | ||||||||||||
| Tax liabilities | ||||||||||||
| Deferred tax liabilities | ||||||||||||
| Operating lease liabilities | ||||||||||||
| Total non-current liabilities | ||||||||||||
| Total liabilities | ||||||||||||
| Commitments and contingencies | ||||||||||||
| Shareholders’ Equity: | ||||||||||||
| Class A Ordinary shares (US$ | ||||||||||||
| Class B Ordinary shares (US$ | ||||||||||||
| Additional paid-in capital | ||||||||||||
| Statutory reserves | ||||||||||||
| Accumulated deficit | ( | ) | ( | ) | ( | ) | ||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ( | ) | ||||||
| Total AIFU INC. shareholders’ equity | ||||||||||||
| Non-controlling interests | ( | ) | ( | ) | ( | ) | ||||||
| Total shareholders’ equity | ||||||||||||
| Total liabilities and shareholders’ equity | ||||||||||||
| * |
The accompanying notes are an integral part of the unaudited consolidated financial statements.
F-3
AIFU INC.
Unaudited Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income
(In thousands, except for shares and per share data)
| Six Months Ended June 30, | ||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| RMB | RMB | US$ | ||||||||||
| Note 2(v) | ||||||||||||
| Net revenues: | ||||||||||||
| Revenues generated from Agency services | ||||||||||||
| Life insurance business | ||||||||||||
| Non-life insurance business | ||||||||||||
| Revenues generated from sales of health and wellness products | ||||||||||||
| Total net revenues | ||||||||||||
| Operating costs and expenses: | ||||||||||||
| Cost of Agency services | ( | ) | ( | ) | ( | ) | ||||||
| Life insurance business | ( | ) | ( | ) | ( | ) | ||||||
| Non-Life insurance business | ( | ) | ( | ) | ( | ) | ||||||
| Cost of Sales of health and wellness products | ( | ) | ( | ) | ||||||||
| Total operating costs | ( | ) | ( | ) | ( | ) | ||||||
| Selling expenses | ( | ) | ( | ) | ( | ) | ||||||
| General and administrative expenses | ( | ) | ( | ) | ( | ) | ||||||
| Total operating costs and expenses | ( | ) | ( | ) | ( | ) | ||||||
| (Loss) Income from operations | ( | ) | ||||||||||
| Other (loss) income, net: | ||||||||||||
| Losses from fair value change | ( | ) | ( | ) | ( | ) | ||||||
| Investment income (loss) related to the realized gain (loss) on short term investments | ( | ) | ( | ) | ||||||||
| Gains from disposal of subsidiaries | ||||||||||||
| Interest income, net | ||||||||||||
| Financial cost | ( | ) | ( | ) | ( | ) | ||||||
| (Provision for) Reversal of credit losses | ( | ) | ||||||||||
| Others, net | ||||||||||||
| (Loss) Income from continuing operations before income taxes, share of income and impairment of affiliates, net | ( | ) | ||||||||||
| Income tax expense | ( | ) | ( | ) | ( | ) | ||||||
| Net (loss) income from continuing operations | ( | ) | ||||||||||
| Net income from discontinued operations, net of tax | ||||||||||||
| Net (loss) income | ( | ) | ||||||||||
| Less: net loss attributable to the non-controlling interests | ( | ) | ( | ) | ( | ) | ||||||
| Continuing operations | ( | ) | ( | ) | ( | ) | ||||||
| Discontinued operations | ||||||||||||
| Net (loss) income attributable to the shareholders of the Company | ( | ) | ||||||||||
| Continuing operations | ( | ) | ||||||||||
| Discontinued operations | ||||||||||||
F-4
AIFU INC.
Unaudited Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income
(In thousands, except for shares and per share data)
| Six Months Ended June 30, | ||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| RMB | RMB | USD | ||||||||||
| Note 2(v) | ||||||||||||
| Net (loss) income per share attributable to ordinary shareholders of the Company — Basic and diluted *: | ( | ) | ||||||||||
| Continuing operations | ( | ) | ||||||||||
| Discontinued operations | ||||||||||||
| Shares used in calculating net (loss) income per share — basic and diluted*: | ||||||||||||
| Net (loss) income | ( | ) | ||||||||||
| Other comprehensive loss, net of tax: | ||||||||||||
| Foreign currency translation adjustments | ( | ) | ( | ) | ( | ) | ||||||
| Unrealized net loss on investments | ( | ) | ( | ) | ( | ) | ||||||
| Total comprehensive loss | ( | ) | ( | ) | ( | ) | ||||||
| Less: comprehensive loss attributable to the non-controlling interests | ( | ) | ( | ) | ( | ) | ||||||
| Comprehensive loss attributable to the Company’s shareholders | ( | ) | ( | ) | ( | ) | ||||||
| * |
The accompanying notes are an integral part of the unaudited consolidated financial statements.
F-5
AIFU INC.
Unaudited Consolidated Statements of Changes in Shareholders’ Equity
(In thousands, except for shares and per share data)
| Share Capital | Additional | Treasury stock | Accumulated Other | Non- | ||||||||||||||||||||||||||||||||||||||||||||
| Number of | Number of | Paid-in | Number of | Statutory | Retained | Comprehensive | controlling | |||||||||||||||||||||||||||||||||||||||||
| Share* | Amounts | Share* | Amounts | Capital | Share | Amounts | Reserves | Earnings | Loss | Interests | Total | |||||||||||||||||||||||||||||||||||||
| Class A | RMB’000 | Class B | RMB’000 | RMB’000 | RMB’000 | RMB’000 | RMB’000 | RMB’000 | RMB’000 | RMB’000 | ||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Foreign currency translation | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Exercise of restricted share units | — | ( | ) | — | ||||||||||||||||||||||||||||||||||||||||||||
| Disposal of subsidiaries | — | — | ( | ) | — | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||
| Subscriptions receivable for issuance of new shares | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Fair value changes | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2025 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||
| Share Capital | Additional | Accumulated Other |
Non- | |||||||||||||||||||||||||||||||||||||
| Number of Share* |
Amounts | Number of Share |
Amounts | Paid-in Capital |
Statutory Reserves |
Accumulated deficit |
Comprehensive Loss |
controlling Interests |
Total | |||||||||||||||||||||||||||||||
| Class A | RMB’000 | Class B | RMB’000 | RMB’000 | RMB’000 | RMB’000 | RMB’000 | RMB’000 | RMB’000 | |||||||||||||||||||||||||||||||
| Balance as of December 31, 2025 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | ( | ) | ||||||||||||||||||||||||||||||||||||
| Foreign currency translation | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Par value amendment | — | ( | ) | — | ( | ) | ||||||||||||||||||||||||||||||||||
| Issuance of new shares | — | |||||||||||||||||||||||||||||||||||||||
| Conversion of Class B to Class A ordinary shares | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||
| Subscriptions receivable for issuance of new shares | — | — | ||||||||||||||||||||||||||||||||||||||
| Fair value changes | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2026 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2026 in US$ | — | — | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| * |
The accompanying notes are an integral part of the unaudited consolidated financial statements.
F-6
AIFU INC.
Unaudited Consolidated Statements of Cash Flows
(In thousands)
| Six Months Ended June 30, | ||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| RMB | RMB | US$ | ||||||||||
| Note 2(v) | ||||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net (loss) income | ( | ) | ||||||||||
| Adjustments to reconcile net (loss) income to net cash generated from operating activities: | ||||||||||||
| Depreciation expense | ||||||||||||
| Non-cash operating lease expense | ||||||||||||
| Loss on termination of operating lease | ||||||||||||
| Allowance for (Reversal of) credit losses on financial assets | ( | ) | ( | ) | ||||||||
| Share-based compensation expenses | ||||||||||||
| (Gain) Loss on disposal of property, plant and equipment | ( | ) | ||||||||||
| Change in fair value of equity investments | ||||||||||||
| Investment (income) loss | ( | ) | ||||||||||
| Net gain on disposal of subsidiaries | ( | ) | ||||||||||
| Loss on disposal of investment in an associate | ||||||||||||
| Deferred taxes | ( | ) | ( | ) | ( | ) | ||||||
| Interest accrued for other receivables | ( | ) | ||||||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Accounts receivable | ( | ) | ( | ) | ||||||||
| Contract assets | ||||||||||||
| Other receivables | ( | ) | ( | ) | ( | ) | ||||||
| Other current assets | ||||||||||||
| Other non-current assets | ( | ) | ||||||||||
| Accounts payable | ( | ) | ( | ) | ( | ) | ||||||
| Accrued commissions | ( | ) | ( | ) | ( | ) | ||||||
| Insurance premium payables | ( | ) | ||||||||||
| Other payables and accrued expenses | ( | ) | ( | ) | ||||||||
| Accrued payroll | ( | ) | ( | ) | ( | ) | ||||||
| Income taxes payable | ||||||||||||
| Lease liabilities | ( | ) | ( | ) | ( | ) | ||||||
| Tax liabilities | ( | ) | ||||||||||
| Net cash generated from operating activities | ||||||||||||
F-7
AIFU INC.
Unaudited Consolidated Statements of Cash Flows
(In thousands)
| Six Months Ended June 30, | ||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| RMB | RMB | US$ | ||||||||||
| Note 2(v) | ||||||||||||
| Cash flows from investing activities: | ||||||||||||
| Purchase of short-term investments | ( | ) | ( | ) | ( | ) | ||||||
| Proceeds from disposal of short-term investments | ||||||||||||
| Purchase of property, plant and equipment | ( | ) | ( | ) | ( | ) | ||||||
| Proceeds from disposal of property, plant and equipment | ||||||||||||
| Cash paid out for loan receivables from third parties | ( | ) | ( | ) | ||||||||
| Cash received for loan receivables from third parties | ||||||||||||
| Payment for business acquisitions, net of cash acquired | ( | ) | ( | ) | ||||||||
| Increase in amounts due from related parties | ( | ) | ( | ) | ( | ) | ||||||
| Decrease in amounts due from related parties | ||||||||||||
| Disposal of subsidiaries, net of cash disposed | ( | ) | ||||||||||
| Consideration received in respect of subsidiaries disposed of in the prior year | ||||||||||||
| Cash received from disposal of an equity investment | ||||||||||||
| Cash acquired on non-cash acquisitions | ||||||||||||
| Net cash used in investing activities | ( | ) | ( | ) | ( | ) | ||||||
| Cash flows from financing activities: | — | |||||||||||
| Proceeds of issuance of ordinary shares | ||||||||||||
| Repayment of bank and other borrowings | ( | ) | ( | ) | ( | ) | ||||||
| Payments of deferred offering costs | ( | ) | ( | ) | ||||||||
| Net cash (used in) generated from financing activities | ( | ) | ||||||||||
| Net (decrease) increase in cash and cash equivalents, and restricted cash | ( | ) | ||||||||||
| Cash and cash equivalents and restricted cash at beginning of the period | ||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | ( | ) | ( | ) | ( | ) | ||||||
| Cash and cash equivalents and restricted cash at the end of the period | ||||||||||||
| Reconciliation in amounts on the consolidated balance sheets: | ||||||||||||
| Cash and cash equivalents at the end of the period | ||||||||||||
| Restricted cash at the end of the period | ||||||||||||
| Total of cash and cash equivalents and restricted cash at the end of the period | ||||||||||||
| Supplemental disclosure of cash flow information: | ||||||||||||
| Income taxes paid | ( | ) | ( | ) | ( | ) | ||||||
| Interests paid | ( | ) | ( | ) | ||||||||
| Supplemental disclosure of non-cash information: | ||||||||||||
| Right-of-use assets obtained in exchange for lease liabilities | ||||||||||||
| Assets acquired through the issuance of ordinary shares | ||||||||||||
The accompanying notes are an integral part of the unaudited consolidated financial statements.
F-8
AIFU INC.
Notes to the Unaudited Consolidated Financial Statements
(In thousands, except for shares and per share data)
(1) Organization
| (a) | History of the Company and Reorganization |
AIFU Inc. (the “Company”) (formally known as “AIX Inc.” and “Fanhua Inc.”) was incorporated in the Cayman Islands on
The Company is a leading independent financial services platform in China, operating principally through its wholly-owned PRC subsidiaries, including Fanhua Group Company and its subsidiaries. The Group distributes life, and non-life insurance products on behalf of insurance companies through its network of licensed insurance agents. The Group’s operations expanded to include the distribution and sale of health and wellness products after the acquisition of a premium inventory of dark tea products on January 9, 2026. As of June 30, 2026, the Group identified two reportable segments:(i) the insurance agency segment: (2) health and wellness segment.
As of June 30, 2026, the Company, through Fanhua Group Company, had controlling equity ownership in one insurance sales services company with a national operating license, three regional insurance agencies and two insurance brokerage firms.
Reverse Share Split
On May 21, 2025, the Company effected a
On June 16, 2026, the Company effected a
Unless otherwise indicated, all share, per share amounts and prices herein for all periods presented have been retroactively adjusted to reflect the cumulative effect of these Reverse Share Splits.
The following transactions have materially affected the composition, scope of consolidation, or control of the Company.
In January 2025, the Group disposed of its
On December 27, 2024, as part of the share exchange transaction with BGM Group Ltd. (“BGM”), the Group transferred all of its interests in Fanhua RONs (Beijing) Technology Co., Ltd. (“Fanhua RONS Technologies”) and Shenzhen Xinbao Investment Co., Ltd. (“Xinbao Investment”) and its subsidiaries (the “former VIEs”) to BGM in exchange for Class A ordinary shares of BGM. The historical contractual arrangements among (x) the Group’s wholly-owned PRC subsidiary Fanhua Group Company and Fanlian Investment, (y) the former consolidated VIEs, and (z) the individual nominee shareholders of the consolidated VIEs (the “Contractual Arrangements”) were subsequently terminated. The Group has had no VIE structure since that date.
F-9
AIFU INC.
Notes to the Unaudited Consolidated Financial Statements
(In thousands, except for shares and per share data)
Change of Control
On December 27, 2023, securities exchange agreements (the “Agreements”) were entered into by and among MAASE Inc. (“MAASE”, formerly known as “Highest Performances Holdings Inc.” and “Puyi Inc.”) and certain shareholders of the Company (the “Selling Shareholders”). Pursuant to the Agreements, MAASE issued and allotted to the Selling Shareholders an aggregate of
On January 2, 2025, the Company issued
On December 22, 2025, the Company issued
As of June 30, 2026, Expansion owned approximately
(2) Summary of Significant Accounting Policies
| (a) | Basis of Presentation and Consolidation |
The unaudited consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The unaudited consolidated financial statements include the financial statements of the Company, all of its subsidiaries and those VIEs of which the Company is the primary beneficiary from the dates they were acquired or incorporated. All intercompany balances and transactions have been eliminated in consolidation. A subsidiary is an entity in which (i) the Company directly or indirectly controls more than
Before December 27, 2024, in order to comply with the PRC laws and regulations which prohibit or restrict foreign control of companies involved in provision of internet content and other restricted businesses, the Group operates certain of its businesses which are subject to restrictions in the PRC through PRC domestic companies, whose equity interests are held by certain individuals (“Nominee Shareholders”). The Group obtained control over these PRC domestic companies by entering into a series of contractual arrangements with these PRC domestic companies and their respective Nominee Shareholders. Management concluded that these PRC domestic companies are former consolidated VIEs of the Group, of which the Group is the primary beneficiary. As such, the Group consolidated the financial results of these PRC domestic companies and their subsidiaries in the Group’s consolidated financial statements. See Note 13 for details.
F-10
AIFU INC.
Notes to the Unaudited Consolidated Financial Statements
(In thousands, except for shares and per share data)
| (b) | Use of Estimates |
The preparation of financial statements in conformity with U.S. GAAP requires to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, management reviews these estimates and assumptions using the currently available information. Changes in facts and circumstances may cause the Group to revise its estimates. In accordance with ASC 250, the changes in estimates will be recognized in the same period of changes in facts and circumstances. The Group bases its estimates on past experiences and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Estimates are used when accounting for items and matters including, but not limited to, estimates on variable renewal commissions for long-term life insurance products, allowance for credit losses, valuation and recognition of share-based compensation expenses, the useful lives of property, plant and equipment, impairment of long-lived assets, short term investment and valuation allowance for deferred tax assets. Actual results could differ from those estimates.
| (c) | Cash and Cash Equivalents and Restricted Cash |
Cash and cash equivalents consist of cash on hand and bank deposits, which have original maturities of three months or less, and that are readily convertible to known amounts of cash and have insignificant risk of changes in value related to changes in interest rates.
In its capacity as an insurance agent, the Group collects premiums from the insureds and remits the premiums to the appropriate insurance companies. Accordingly, as reported in the unaudited consolidated balance sheets, “premiums” are receivables from the insureds of RMB
| (d) | Short Term Investments |
All investments with original maturities less than twelve months or investments that are expected to be realized in cash during the next twelve months are classified as short-term investments. The Group accounts for short-term debt investments in accordance with ASC Topic 320, Investments – Debt Securities (“ASC 320”). The Group classifies the short-term investments in debt securities as held-to-maturity or available-for-sale, whose classification determines the respective accounting methods stipulated by ASC 320. Dividend and interest income for all categories of investments in securities are included in earnings. Any realized gains or losses on the sale of the short-term investments are determined on a specific identification method, and such gains and losses are reflected in earnings during the period in which gains or losses are realized.
The Group evaluates each individual available-for-sale debt securities periodically for impairment. For investments where the Group does not intend to sell, the Group evaluates whether a decline in fair value is due to deterioration in credit risk. Credit-related impairment losses, not to exceed the amount that fair value is less than the amortized cost basis, are recognized through an allowance for credit losses on the unaudited consolidated balance sheets with corresponding adjustment in the unaudited consolidated statements of (loss) income and comprehensive (loss) income. Subsequent increases in fair value due to credit improvement are recognized through reversal of the credit loss and corresponding reduction in the allowance for credit loss. Any decline in fair value that is non-credit related is recorded in accumulated other comprehensive loss as a component of shareholder’s equity. As of June 30, 2026, there were investments held by the Group that had been in continuous unrealized loss position.
F-11
AIFU INC.
Notes to the Unaudited Consolidated Financial Statements
(In thousands, except for shares and per share data)
An impairment loss on short term investments of was identified for the six months ended June 30, 2025 and 2026, respectively.
| (e) | Accounts Receivable and Contract Assets, net |
Accounts receivable are recorded at the amount that the Group expects to collect and do not bear interest. Accounts receivables represent fees receivable on agency services primarily from insurance companies. For life insurance products, there is generally a
The Group evaluates the collectability of its accounts receivable and contract assets based on a combination of factors. The Group generally does not require collateral on trade receivables and contract assets as the majority of the Group’s customers are large, well-established insurance companies. The allowance of credit losses for accounts receivable and contract assets is based upon the current expected credit losses (“CECL”) model by pooling accounts receivable and contract assets into various age buckets. The entire contract assets balance is included in the bucket of within 1 year. The expected credit loss rates applied range from
Accounts receivable and contract assets, net is analyzed as follows:
| As of December 31, 2025 | As of June 30, 2026 | |||||||
| RMB | RMB | |||||||
| Accounts receivable | ||||||||
| Contract assets (See Note 2(r)) | ||||||||
| Allowance for expected credit losses | ( | ) | ( | ) | ||||
| Accounts receivable and contract assets, net | ||||||||
The following table summarizes the movement of the Group’s allowance for expected credit losses of accounts receivable and contract assets:
| For six months ended June 30, | ||||||||
| 2025 | 2026 | |||||||
| RMB | RMB | |||||||
| Balance at the beginning of the period | ||||||||
| Current period provision for expected credit losses | ||||||||
| Write-offs | ( | ) | ||||||
| Balance at the end of the period | ||||||||
F-12
AIFU INC.
Notes to the Unaudited Consolidated Financial Statements
(In thousands, except for shares and per share data)
| (f) | Inventories, net |
Inventories are stated at the lower of cost and net realizable value. Costs include the cost of raw materials, freight-in, direct labor and related production overhead. The cost of inventories is calculated using the first-in, first-out (FIFO) method. Any excess of the cost over the net realizable value of each inventory item is recognized as a provision for diminution in the value of inventories. Net realizable value is the estimated selling price in the normal course of business less reasonably predictable costs to completion, disposal, and transportation. Allowances for obsolescence are also assessed based on expiration dates, as applicable, taking into consideration historical and expected future product sales.
| (g) | Property, Plant and Equipment, net |
Property, plant and equipment are stated at cost.
| Estimated useful lives (Years) | Estimated residual value | |||||||
| Building | % | |||||||
| Office equipment, furniture and fixtures | % | |||||||
| Motor vehicles | % | |||||||
| Leasehold improvements | % | |||||||
Direct costs that are related to the construction of property, plant and equipment incurred in connection with bringing the assets to their intended use are capitalized as construction in progress. Construction in progress is transferred to specific property, plant and equipment items and the depreciation of these assets commences when the assets are ready for their intended use. As of December 31, 2025 and June 30, 2026, construction in progress were primarily relating to the office buildings under construction.
The depreciation methods and estimated useful lives are reviewed regularly.
| For the six months ended June 30, | ||||||||
| 2025 | 2026 | |||||||
| RMB | RMB | |||||||
| Selling expenses | ||||||||
| General and administrative expenses | ||||||||
| Depreciation expense | ||||||||
| (h) | Business combinations and non-controlling interests |
The Group evaluates acquisitions of assets to assess whether the transaction should be accounted for as a business combination or an asset acquisition. In determining whether a particular set of activities and assets constitutes a business, the Group assesses whether the acquired set of assets and activities includes, at a minimum, an input and a substantive process, and whether it has the ability to produce outputs. The Group applies a ‘screen test’ that permits a simplified assessment of whether an acquired set of activities and assets is not a business. The test is met if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets.
Transactions in which the acquired is considered a business are accounted for as a business combination as described below. Conversely, transactions not considered as business acquisition are accounted for as acquisition of assets and liabilities. In such transactions, the cost of acquisition is allocated proportionately to the acquired identifiable assets and liabilities, based on their proportionate fair value on the acquisition date. In an asset acquisition, no goodwill is recognized.
F-13
AIFU INC.
Notes to the Unaudited Consolidated Financial Statements
(In thousands, except for shares and per share data)
The Group accounts for its business combinations using the acquisition method of accounting in accordance with ASC 805 “Business Combinations”. The consideration transferred in a business combination is measured as the aggregate of the acquisition-date fair value of the assets transferred, liabilities incurred by the Group to the selling shareholders of the acquiree, and the equity interests issued by the Group. Transaction costs directly attributable to the acquisition are expensed as incurred. Identifiable assets acquired and liabilities assumed are measured separately at their fair value as of the acquisition date, irrespective of the extent of any non-controlling interests. The excess of (i) the consideration transferred, the fair value of any non-controlling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable net assets of the acquiree, is recorded as goodwill.
The consideration for the Group’s business acquisitions may include future payments that are contingent upon the occurrence of a particular event or events. Contingent consideration also takes the form of a right of the Group to the returns of previously transferred assets or issued equity interests from the sellers of the acquired business. Both the rights and obligations for such contingent consideration returns and payments are recorded at fair value on the acquisition date. The Group’s contingent right to receive a return of some equity interests issued (i.e., contingently returnable shares) is recognized as an asset and measured at fair value. The Group’s obligation to pay contingent consideration is recognized and classified as a liability and measured at fair value. The contingent consideration rights and obligations are subsequently evaluated each reporting period with changes in fair value recognized as a gain or loss and recorded within change in the fair value of contingent assets and liabilities in the unaudited consolidated statements of (loss) income and comprehensive (loss) income.
For the Group’s majority-owned subsidiaries and subsidiaries of former VIEs, a non-controlling interest is recognized to reflect the portion of their equity which is not attributable, directly or indirectly, to the Group. Consolidated net income on the unaudited consolidated statements of (loss) income and comprehensive (loss) income includes the net income attributable to non-controlling interests. The cumulative results of operations attributable to non-controlling interests, are recorded as non-controlling interests on the Group’s unaudited consolidated balance sheets.
| (i) | Goodwill and Other Intangible Assets |
Goodwill
Goodwill represents the excess of purchase price over fair value of the identifiable net assets of businesses acquired in a business combination. Goodwill is not amortized and the Group assesses goodwill for impairment in accordance with ASC Subtopic 350-20, Intangibles-Goodwill and Other: Goodwill (“ASC 350-20”), which requires 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. For the six months ended June 30, 2025, the Group operated in one reporting unit. For the six months ended June 30, 2026, the Group operated in two reporting units.
The impairment test is performed as of year-end or if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount by comparing the fair value of a reporting unit with its carrying value. If the fair value of the reporting unit exceeds its carrying amount, goodwill is not impaired and no further testing is required. If the fair value of the reporting unit is less than the carrying value, an impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit.
The impairment review is highly judgmental and involves the use of significant estimates and assumptions. These estimates and assumptions have a significant impact on the amount of any impairment charge recorded. Estimates of fair value are primarily determined by using discounted cash flows. Discounted cash flows method is dependent upon assumptions of future sales trends, market conditions and cash flows of each reporting unit over several years. Actual cash flows in the future may differ significantly from those previously forecasted. Other significant assumptions include growth rates and the discount rate applicable to future cash flows. The Group recorded an impairment loss on goodwill of nil and for the six months ended June 30, 2025 and 2026, respectively.
F-14
AIFU INC.
Notes to the Unaudited Consolidated Financial Statements
(In thousands, except for shares and per share data)
Intangible Assets
Identifiable intangibles assets are required to be determined separately from goodwill based on their fair values. In particular, an intangible asset acquired in a business combination should be recognized as an asset separate from goodwill if it satisfies either the “contractual-legal” or “separability” criterion. Intangible assets with a finite economic life are carried at cost less accumulated amortization. The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets that are not considered to have an indefinite useful life are amortized over their estimated useful lives on a straight-line basis.
The estimated useful lives for the Group’s intangible assets are as follows:
| Estimated useful lives (Years) | ||||
| Software | ||||
| Non-compete agreements | ||||
| Agent resources | ||||
| Brokerage license | ||||
| (j) | Investment in Affiliates |
The Group uses the equity method of accounting for investments in which the Group has the ability to exercise significant influence but does not have the controlling ability.
On April 1, 2024, BWWS Limited (“BWW”), a wholly-owned subsidiary of the Group, disposed of its controlling financial interests in its majority-owned subsidiaries Brave Moon Limited (“BML”) and Avantech Solutions Limited (“Avantech”) to the minority shareholder through entering into a supplement joint venture agreement (the “Joint Venture Agreement”) to share the power with the other shareholder to jointly control the strategic operating, investing, and financing decisions over BML and Avantech. The Group accounted for the investments using the equity method and the fair value of the retained interests as of the date of joint control forms the basis for the initial measurement. The Group therefore recorded an investment loss of RMB
On November 27, 2024, the Group’s wholly owned subsidiary entered into transaction agreements with BGM to exchange its equity shares in Xinbao Investment and Fanhua RONS Technologies. At the completion of the transaction, the Group acquired
On April 30, 2025, the Group transferred
The Group continually reviews its investment in equity investees to determine whether a decline in fair value to an amount below the carrying value is other-than-temporary. The primary factors the Group considers in its determination are the duration and severity of the decline in fair value; the financial condition, operating performance and the prospects of the equity investee; and other company specific information such as the stock price of the investee and its corresponding volatility, if publicly traded, the Group’s intent and ability to hold the investment until recovery, and changes in the macro-economic, competitive and operational environment of the investee. If the decline in fair value is deemed to be other-than-temporary, the carrying value of the equity investee is written down to fair value.
F-15
AIFU INC.
Notes to the Unaudited Consolidated Financial Statements
(In thousands, except for shares and per share data)
| (k) | Long-term Investments |
Other non-current assets mainly represent long-term equity investments accounted for under the measurement alternative method and an investment in debt securities classified as held-to-maturity which is measured at amortized cost.
Equity securities without readily determinable fair value
The Group has long-term investments in equity security of certain privately held companies which the Group exerts no significant influence or a controlling interest. As a result of adoption of “Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”) in January 1, 2019, equity securities without readily determinable fair values that do not qualify for the practical expedient in ASC 820, Fair Value Measurements and Disclosure to estimate fair value using the net asset value per share (or its equivalent) of the investment, are measured and recorded using a measurement alternative that measures the securities at cost less impairment, if any, plus or minus changes resulting from qualifying observable price changes. Significant judgments are required to determine whether observable price changes are orderly transactions and identical or similar to an investment held by the Group.
During each reporting period, the Group makes a qualitative assessment considering impairment indicators to separately evaluate whether each of its equity securities without readily determinable fair value is impaired. Impairment indicators that the Group considers include, but are not limited to a significant deterioration in the earnings performance, credit rating, asset quality, or business prospects of the investee, factors such as negative cash flows from operations and working capital deficiencies that raise significant concerns about the investee’s ability to continue as a going concern, current economic and market conditions and other specific information. If a qualitative assessment indicates that the investment is impaired, the entity has to estimate the investment’s fair value in accordance with the principles of ASC 820. If the fair value is less than the investment’s carrying value, the Group recognizes an impairment loss in earnings equal to the difference between the carrying value and fair value.
The Group recorded an impairment of and during the six months ended June 30, 2025 and 2026, respectively, in the unaudited consolidated statements of (loss) income and comprehensive (loss) income.
Investment in debt securities with embedded features
As of December 31, 2025, the Group held a two-year-term debt security valued at RMB
The Group evaluated the additional earning right as a derivative instrument that is “embedded” to the host contract in accordance with ASC 815. The Group considered the stated and implied substantive features of the contract as well as the economic characteristics and risks of the hybrid instrument and determined that the additional earning right be considered as an embedded derivative separated from the host contract and accounted it for as a derivative instrument. The Group classified the embedded derivative measured at fair value and change in fair value is charged through profit or loss. As of December 31, 2025 and June 30, 2026, the fair value of the embedded derivative was immaterial.
The Group recorded impairment loss on investment in debt securities of and nil during the six months ended June 30, 2025 and 2026, respectively, in the unaudited consolidated statements of (loss) income and comprehensive (loss) income.
| (l) | Impairment of Long-Lived Assets |
Property, plant, and equipment and intangible assets with definite lives are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying value of the asset exceeds the fair value of the asset. The Group recorded impairment on long-lived assets of and for the six months ended June 30, 2025 and 2026.
F-16
AIFU INC.
Notes to the Unaudited Consolidated Financial Statements
(In thousands, except for shares and per share data)
| (m) | Insurance Premium Payables |
Insurance premium payables are insurance premiums collected on behalf of insurance companies but not yet remitted as of the balance sheet dates.
| (n) | Treasury Shares |
Treasury shares represent ordinary shares repurchased by the Group that are no longer outstanding and are held by the Group. The repurchased ordinary shares are recorded whereby the total par value of shares acquired is recorded as treasury stock and the difference between the par value and the amount of cash paid is recorded in additional paid-in capital. If additional paid-in capital is not available or is not sufficient, the remaining amount is to reduce retained earnings. Ordinary shares issued in business combinations through an exchange of equity interests that are subsequently returned to the Group are also accounted for treasury shares. The Group had and treasury shares as of December 31,2025 and June 30, 2026.
| (o) | Income Taxes |
Income taxes are accounted for under the asset and liability method. Deferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements, net operating loss carryforwards and credits by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.
The Group records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) it determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Group recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Group recognizes interest and penalties related to unrecognized tax benefits, if any, on the income tax expense line in the accompanying unaudited consolidated statements of (loss) income and comprehensive (loss) income. Accrued interest or penalties are included on the other tax liabilities line in the consolidated balance sheets.
| (p) | Share-based Compensation |
All forms of share-based payments to employees and nonemployees, including restricted share units, stock options and stock purchase plans, are treated the same as any other form of compensation by recognizing the related cost in the unaudited consolidated statements of (loss) income and comprehensive (loss) income. The Group recognizes compensation cost for an award with only service conditions that has a graded vesting schedule on a straight-line basis over the requisite service period for the entire award, provided that the amount of compensation cost recognized at any date must at least equal to the portion of the grant-date value of the award that is vested at that date. For awards with both service and performance conditions, if each tranche has an independent performance condition for a specified period of service, the Group recognizes the compensation cost of each tranche as a separate award on a straight-line basis; if each tranche has performance conditions that are dependent of activities that occur in the prior service periods, the Group recognizes the compensation cost on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was, in-substance, multiple awards. The Group has made an accounting policy election to account for forfeitures when they occur for an award with only service conditions. For an award with a performance condition, the Group continues to assess at each reporting period whether it is probable that the performance condition will be achieved. No compensation cost is recognized for instruments that employees and nonemployees forfeit because a service condition or a performance condition is not satisfied.
Employee share-based compensation
Compensation cost related to employee stock options or similar equity instruments is measured at the grant date based on the fair value of the award and is recognized over the service period, which is usually the vesting period. If an award requires satisfaction of one or more performance or service conditions (or any combination thereof), compensation cost is recognized if the requisite service is rendered, while no compensation cost is recognized if the requisite service is not rendered.
F-17
AIFU INC.
Notes to the Unaudited Consolidated Financial Statements
(In thousands, except for shares and per share data)
Nonemployee share-based compensation
Consistent with the accounting requirement for employee share-based compensation, nonemployee share-based compensation within the scope of Topic 718 are measured at grant-date fair value of the equity instruments, which the Group is obligated to issue when the service has been rendered and any other conditions necessary to earn the right to benefit from the instruments have been satisfied.
| (q) | Employee Benefit Plans |
As stipulated by the regulations of the PRC, the Group’s subsidiaries in the PRC participate in various defined contribution plans organized by municipal and provincial governments for its employees. The Group is required to make contributions to these plans at a percentage of the salaries, bonuses and certain allowances of the employees. Under these plans, certain pension, medical and other welfare benefits are provided to employees. The Group has no other material obligation for the payment of employee benefits associated with these plans other than the annual contributions described above. The contributions are charged to the unaudited consolidated statements of (loss) income and comprehensive (loss) income as they become payable in accordance with the rules of the above mentioned defined contribution plans.
| (r) | Revenue Recognition |
The Group recognizes revenue when its customer obtains control of promised goods or services in an amount that reflects the consideration which the Group expects to receive in exchange for those goods or services. For revenue recognition, the Group evaluates the arrangements within the scope of Topic 606 and performs the following five steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation.
The Group’s revenue from contracts with insurance companies is derived principally from the provision of agency and claims adjusting services, and insurance companies are defined as the Group’s customers under ASC 606 “Revenue from Contracts with Customers” (“ASC 606”). The Group disaggregates its revenue from different types of service contracts with customers by principal service categories, as the Group believes it best depicts the nature, amount, timing and uncertainty of its revenue and cash flows. See Note 22 for detailed disaggregated revenue information that is disclosed for each reportable segment.
The following is a description of the accounting policy for the principal revenue streams of the Group.
Insurance agency services revenue
The Group derives agency revenue serving as a sales agent to distribute various life insurance and property and casualty (“P&C”) insurance products on behalf of insurance companies by which the Group is entitled to receive an initial commission from the insurance companies based on the premium paid by the policyholders for the related insurance policy sold. For life insurance agency, the Group is also entitled to renewal commissions when the policyholder renews the policy within the renewal term of the original policy as such life insurance products are typically long-term products.
The Group has identified its promise to sell insurance products on behalf of an insurance company as the performance obligation in its contracts with the insurance companies. The Group’s performance obligation to the insurance company is satisfied and revenue is recognized at a point in time when an insurance policy becomes effective. Specifically for life insurance agency business, certain contracts include the promise to provide certain post-sales administrative services to policyholders on behalf of the insurance company, such as responding to the policyholder inquiries, facilitating the renewal process and/or gathering information from the policyholder to assist the insurance companies to update the contact information of the policy holder, the Group has concluded such services are administrative in nature and immaterial, and none of these activities on their own results in a transfer of a goods or services to the insurance company in the context of the contract. Accordingly, no performance obligation exists after a policy becomes effective.
F-18
AIFU INC.
Notes to the Unaudited Consolidated Financial Statements
(In thousands, except for shares and per share data)
Initial placement of an insurance policy
The Group recognizes agency revenue related P&C insurance products (which is short term in nature and related premiums are collected upfront) when an insurance policy becomes effective. The commission to be earned is required to be partially refunded contingently on policy cancellations. Based on its past experience, subsequent commission adjustments in connection with P&C insurance policy cancellations have been de minims to date, and are recognized upon notification from the insurance carriers. Actual commission and fee adjustments in connection with the cancellation of P&C insurance policies were
For life insurance products, there is generally a
In addition, for life insurance agency, the Group may receive a performance bonus from insurance companies as agreed and per contract provisions. Once the Group achieves a certain sales volume based on respective agency agreements, the bonus will become due. Performance bonus represents a form of variable consideration associated with certain sales volume, for which the Group earns commissions. The Group estimates the amount of consideration with a constraint applied that will be received in the coming year such that a significant reversal of revenue is not probable, and includes performance bonus as part of the transaction price. For the six months ended June 30, 2025 and 2026, the Group recognized contingent performance bonus of RMB
Renewals of a life insurance policy
For the long-term life insurance products, in addition to the initial commission earned, the Group is also entitled to subsequent renewal commission and compensation, and renewal performance bonus which represents variable considerations and are contingent on future renewals of initial policies or the Group achieves its performance target.
When making estimates of the amount of variable consideration to which the Group expects to be entitled, the Group uses the expected value method and evaluates many factors, including but not limited to, insurance companies mix, product mix, renewal term of various products, renewal premium rates and commission rates, to determine the method(s) of measurement, relevant inputs and the underlying assumptions. The Group considers constraints as well when determining the amount which should be included in the transaction price.
The Group performs ongoing evaluation of the appropriateness of the constraint applied and will consider the sufficiency of evidence that would suggest that the long-term expectation underlying the assumptions has changed. The Group makes an estimate of variable considerations over the portfolio of contracts based on accumulated historical data and experiences. The estimated renewal commissions are contingent on future renewals of initial policies or achievement of certain performance targets. Given the material uncertainty around the future renewal of the insurance policies, the estimated renewal commissions expected to be collected are recognized as revenue only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty is subsequently resolved. The judgment and assumptions are continuously re-evaluated and adjusted as needed along with the accumulation of historical experiences and data when new information becomes available. Actual renewal commissions in the future may differ significantly from those previously estimated.
F-19
AIFU INC.
Notes to the Unaudited Consolidated Financial Statements
(In thousands, except for shares and per share data)
Revenue from sales of health and wellness products
The Group enters into contracts with customers for the sale of dark tea products. Each contract is assessed at inception and is determined to contains a single performance obligation, which is the promise to transfer the products to customers. This performance obligation is distinct and separately identifiable from any other promises within the contract and is satisfied at a point in time when control of the promised products transfers to the customer, which generally occurs upon delivery and acceptance of the products by the customer, in accordance with ASC 606-10-25-30. Revenue is recognized at that point in time.
The Group’s sales contracts generally provide that if the products do not conform to the contract requirements or have quality defects, the customer is required to return the goods within three business days. This represents a limited right of return. The Group estimates expected returns based on historical return experience and other relevant factors, and recognizes a refund liability and a corresponding return asset, with a corresponding adjustment to cost of sales, in accordance with ASC 606.Historically, product returns have been immaterial. The existence of this limited right of return does not preclude recognition of revenue upon transfer of control, as the right of return is accounted for as variable consideration.
The Group acts as principal in these arrangements pursuant to ASC 606-10-55-36 through 55-40, as the Group (1) is the primary obligor responsible for fulfilling the promise to deliver the products to the customers; (2) bears inventory risk and customer credit risk;(3) has the ability to direct the use of, and obtain substantially all of the remaining benefits from, the products before they are transferred to the customer; and (4) has discretion in establishing the selling price of the products.
Insurance claims adjusting services revenue
For insurance claims adjusting services, performance obligations are considered met and revenue is recognized when the services are rendered and completed, at the time loss adjusting reports are confirmed being received by insurance companies. The Group does not accrue any service fee before the receipt of an insurance company’s acknowledgement of receiving the adjusting reports. Any subsequent adjustments in connection with discounts which have been de minims to date are recognized in revenue upon notification from the insurance companies. In January 2025, the Group divested its entire equity interest in Guangdong Meidiya Investment Co., Ltd. and its subsidiaries, which comprised the Group’s claims-adjusting segment. Since completion of the disposal, the Group has ceased providing claims adjusting services (see Note 4 for details)
Contract balances
The Group’s contract balances include accounts receivable and contract asset. The balances of accounts receivable as of December 31,2025 and June 30, 2026 are all derived from contracts with customers.
The Group recognized revenues and correspondent contract assets derived from estimated renewal commissions for selling long-term life insurance products because it is entitled to payments of the subsequent renewal commissions which are contingent on future renewals of initial policies and/or the achievement of its performance target set forth in relation to future renewals other than the passage of time. Accordingly, the Group presented contract assets separately in the unaudited consolidated balance sheets which include both the amount derived from estimated renewal commissions and the amount of commissions in relation to policies that are still within the hesitation period by the period-end date. The contract assets balance will be reclassified to accounts receivable once the initial policies have been renewed and/or the Group has achieved certain renewal target in subsequent years within the renewal term of the policies, or upon the hesitation period expires.
Practical expedients and exemptions
The Group generally expenses sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within sales and marketing expenses in the unaudited consolidated statements of (loss) income and comprehensive (loss) income, as the amortization period is less than one year and the Group has elected the practical expedient included in ASC 606.
F-20
AIFU INC.
Notes to the Unaudited Consolidated Financial Statements
(In thousands, except for shares and per share data)
The Group has applied the optional exemption provided by ASC 606 to not disclose the value of remaining performance obligations not yet satisfied as of period end for contracts with original expected duration of one year or less.
Value-added tax and surcharges
The Group presents revenue net of tax surcharges and value-added taxes incurred. The tax surcharges amounted to RMB
Total value-added taxes paid by the Group during the six months ended June 30, 2025 and 2026 amounted to RMB
| (s) | Fair Value of Financial Instruments |
Fair value is considered to be 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 asset or liability. The established fair value hierarchy 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. The three levels of inputs may be used to measure fair value include:
| Level 1 | Applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. | ||
| Level 2 | Applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. | ||
| Level 3 | Applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. |
The carrying values of the Group’s financial instruments, including cash and cash equivalents, restricted cash, accounts receivable, insurance premium payables, other receivables, short-term loan, accounts payable and other payables, approximate their fair values due to the short-term nature of these instruments.
The carrying amounts of the long-term receivables and payables approximate their fair value as the interest rates are comparable to the prevailing interest rates in the market.
Measured at fair value on a recurring basis
As of December 31, 2025 and June 30, 2026, information about inputs into the fair value measurements of the Group’s assets and liabilities that are measured at fair value on a recurring basis in periods subsequent to their initial recognition is as follows.
F-21
AIFU INC.
Notes to the Unaudited Consolidated Financial Statements
(In thousands, except for shares and per share data)
| Fair Value Measurements at Reporting Date Using | ||||||||||||||||
| Description | As of December 31, 2025 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
| RMB | RMB | RMB | RMB | |||||||||||||
| Short-term investments - debt security | ||||||||||||||||
| Investments – equity security recorded within other current assets and other non-current assets | ||||||||||||||||
| Fair Value Measurements at Reporting Date Using | ||||||||||||||||
| Description | As of June 30, 2026 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
| RMB | RMB | RMB | RMB | |||||||||||||
| Short-term investments - debt security | ||||||||||||||||
| Investments – equity security recorded within other current assets and other non-current assets | ||||||||||||||||
The majority of debt security consists of investments in bank financial products, trust products and asset management plans that normally pay a prospective fixed rate of return. These investments are recorded at fair values on a recurring basis. The Group measured these investments at fair values and the unrealized gains or losses from the changes in fair values are included in accumulated other comprehensive loss, at the balance sheet date. It is classified as Level 2 of the fair value hierarchy since fair value measurement at the reporting date is benchmarked against fair value of comparable investments. The Group identified credit-related impairment losses of and nil on trust products during the six months ended June 30, 2025 and 2026, reflecting reduced liquidity and lower recovery expectations for the underlying assets.
The Group measures its equity investments with readily determinable fair value at its quoted price in active markets. There were transfers into or out of Level 1 and Level 2 during the six months ended June 30, 2025 and 2026.
Measured at fair value on a non-recurring basis
The Group measures certain assets, including equity securities without readily determinable fair values, equity method investments and intangible assets, at fair value on a nonrecurring basis when they are deemed to be impaired. The fair values of these investments and intangible assets are determined based on valuation techniques using the best information available, and may include management judgments, future performance projections, etc. An impairment charge to these investments is recorded when the cost of the investment exceeds its fair value and for equity method investments, this condition is determined to be other-than-temporary. Impairment charge to the intangible assets is recorded when their carrying amounts may not be recoverable.
F-22
AIFU INC.
Notes to the Unaudited Consolidated Financial Statements
(In thousands, except for shares and per share data)
| (t ) | Foreign Currencies |
The functional currency of the Company is the United States dollar (“USD”). Assets and liabilities are translated at the exchange rates at the balance sheet date, equity accounts are translated at historical exchange rates and revenues, expenses, gains and losses are translated using the average rate for the year. Translation adjustments are reported as cumulative translation adjustments and are shown as a separate component of other comprehensive income or loss in the unaudited consolidated statements of (loss) income and comprehensive (loss) income. The Group has chosen the Renminbi (“RMB”) as their reporting currency.
The functional currency of most of the Company’s subsidiaries is RMB. Transactions in other currencies are recorded in RMB at the rates of exchange prevailing when the transactions occur. Monetary assets and liabilities denominated in other currencies are translated into RMB at rates of exchange in effect at the balance sheet dates. Exchange gains and losses are recorded in the unaudited consolidated statements of (loss) income and comprehensive (loss) income.
.
| (u) | Foreign Currency Risk |
The RMB is not a freely convertible currency. The State Administration for Foreign Exchange, under the authority of the People’s Bank of China, controls the conversion of RMB into foreign currencies. The value of RMB is subject to changes in central government policies and international economic and political developments that affect supply and demand in the China Foreign Exchange Trading System market of cash and cash equivalents and restricted cash. The Group had aggregate amounts of RMB
| (v) | Translation into USD |
The consolidated financial statements of the Group are stated in RMB. Translations of amounts from RMB into USD are solely for the convenience of the readers outside of China and were calculated at the rate of US$
| (w) | Segment Reporting |
Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the Group’s chief operating decision maker in deciding how to allocate resources and in assessing performance. In accordance with ASC 280, Segment Reporting, operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”), in deciding how to allocate resources and in assessing performance. The Group uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Group’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Group’s reportable segments. The Group’s CODM has been identified as the chief executive officer (the “CEO”), who reviews consolidated results when making decisions about allocating resources and assessing performance of the Group.
In January 2025 the Group divested its entire equity interest in Guangdong Meidiya Investment Co., Ltd. and its subsidiaries, which comprised the Group’s claims-adjusting segment. Since completion of the disposal, the Group has ceased providing claims-adjusting services (see Note 4 for details). In the first half of 2026, the Group expanded into the distribution and sale of health and wellness products following the acquisition of a premium inventory of dark tea products on January 9, 2026. As of June 30, 2026, the Group operated two segments: (i) the insurance agency segment, which mainly consists of providing agency services for a wide range of life and non-life insurance products to individual clients; (ii) health and wellness segment which primarily consists of sales of premium tea products.
F-23
AIFU INC.
Notes to the Unaudited Consolidated Financial Statements
(In thousands, except for shares and per share data)
Substantially all revenues of the Group are derived in the PRC and all long-lived assets are located in the PRC.
In 2026, the Group expanded into the distribution and sale of health and wellness products after the acquisition of a premium inventory of dark tea products on January 9, 2026.
| (x) | Earnings per Share (“EPS”) or ADS |
Basic EPS is calculated by dividing the net income available to common shareholders by the weighted average number of ordinary shares outstanding during the year. Diluted EPS is calculated by using the weighted average number of ordinary shares outstanding adjusted to include the potentially dilutive effect of outstanding share-based awards, unless their inclusion in the calculation is anti-dilutive.
| (y) | Advertising Costs |
Advertising costs are expensed as incurred. Advertising costs amounted to RMB
| (z) | Lease |
The Group leases office space, vehicles and certain equipment under operating leases for terms ranging from short term (under 12 months) to
The Group determines whether a contract contains a lease at contract inception. A contract contains a lease if there is an identified asset and the Group has the right to control the use of the identified asset. At the commencement of each lease, management determines its classification as an operating or finance lease. For leases that qualify as operating leases, the Group recognizes a right-of-use (“ROU”) asset and a lease liability based on the present value of the lease payments over the lease term in the consolidated statements of balance sheet at commencement date. As all of the leases do not have implicit rates available, the Group uses incremental borrowing rates based on the information available at lease commencement date in determining the present value of future payments. The incremental borrowing rates are estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased assets are located.
The ROU asset is measured at the amount of the lease liabilities with adjustments, if applicable, for lease prepayments made prior to or at lease commencement, initial direct costs incurred and lease incentives. For office space leases, the Group identifies the lease and non-lease components (e.g., common-area maintenance costs) and accounts for non-lease components separately from lease component. The Group’s office space lease contracts have only one separate lease component and have no non-components (e.g., property tax or insurance). Most of the office space lease contracts have no non-lease components. For the office space lease contracts include non-lease components, the fixed lease payment is typically itemized in the office space lease contract for separate lease component and non-lease components. Therefore, the Group does not allocate the consideration in the contract to the separate lease component and the non-lease components.
Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The Group has made an accounting policy election to exempt leases with an initial term of
F-24
AIFU INC.
Notes to the Unaudited Consolidated Financial Statements
(In thousands, except for shares and per share data)
In addition, the Group does not have any related-party leases or sublease transactions.
| (aa) | Accumulated other comprehensive loss |
The Group presents comprehensive loss in the unaudited consolidated statements of (loss) income and comprehensive (loss) income with net income in a continuous statement.
Accumulated other comprehensive loss mainly represents foreign currency translation adjustments and changes in fair value of short term investments for the period.
| (ab) | Government grants |
Government grants primarily consist of financial subsidies received from provincial and local governments for operating a business in their jurisdictions and compliance with specific policies promoted by the local governments. The Group records such government subsidies as other income or reduction of expenses or cost of revenues when it has fulfilled all of its obligation related to the subsidy. The Group recognized RMB
| (ac) | Recently adopted accounting pronouncements |
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures, which provides guidance on the disaggregation information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The guidance is effective for annual periods beginning after December 15, 2024 on a prospective basis. Early adoption is permitted. The Group has adopted ASU 2023-09 in 2025 retrospectively and updated the income tax disclosure in Note 17.
In March 2024, the FASB issued ASU 2024-01, “Compensation-Stock Compensation (Topic 718): Scope Application of Profits Interest and similar Awards”. For public business entities, the amendments in this Update are effective for annual periods beginning after December 15, 2024, and interim periods within those annual periods. For all other entities, the amendments are effective for annual periods beginning after December 15, 2025, and interim periods within those annual periods. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. The Group has adopted ASU 2024-01 in 2025 with no material impact on the consolidated financial statements.
| (ad) | Recently issued accounting pronouncements not yet adopted |
In February 2025, the FASB issued ASU 2025-02, Liabilities (Topic 405): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 122 (“ASU 2025-02”), amends the Accounting Standards Codification to remove the text of SEC Staff Accounting Bulletin (“SAB”) 121, Accounting for Obligations to Safeguard Crypto-Assets an Entity Holds for Its Platform Users, as it has been rescinded by the issuance of SAB 122. ASU 2025-02 is effective immediately and is not expected to have an impact on the Group’s financial statements.
In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging (“Topic 815”) and Revenue from Contracts with Customers (“Topic 606”): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract (“ASU 2025-07”). ASU 2025-07, expands an existing scope exception under Topic 815 to exclude non-exchange-traded contracts where the underlying is based on the operations or activities specific to one of the contract parties. The Group is currently evaluating the impact of this ASU on its financial statements.
F-25
AIFU INC.
Notes to the Unaudited Consolidated Financial Statements
(In thousands, except for shares and per share data)
In November 2025, the FASB issued ASU 2025-08, Financial Instruments — Credit Losses (“Topic 326”): Purchased Loans (“ASU 2025-08”). The amendments expand the population of acquired loans subject to the gross-up approach, treating non-credit-deteriorated loans (excluding credit cards) as “seasoned” if purchased at least 90 days after origination or acquired in a business combination. ASU 2025-08 is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods within those annual reporting periods. Early adoption is permitted. The Group is currently evaluating the impact that adoption of this ASU will have on its interim financial statement disclosures.
In December 2025, the FASB issued ASU 2025-11, which clarifies the scope and disclosure requirements for interim financial reporting under ASC 270. The amendments introduce a principle requiring disclosure of events and transactions occurring after the end of the most recent annual reporting period that have a material impact on the entity and consolidate certain interim disclosure requirements. The amendments are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Group is currently evaluating the impact that adoption of this ASU will have on its interim financial statement disclosures.
(3) Acquisitions and disposals
Acquisitions in 2026
On January 9, 2026, the Group acquired
Acquisitions in 2025
In May 2025, the Group, through its subsidiary, acquired
Disposal of subsidiaries in 2025
| 1) | Disposal of Fanhua Blueplus Health Management Co., Ltd. (“Blueplus”) and Shenzhen Dianlian Information Technology Co., Ltd. (“Dianlian”） |
In February 2025, the Group’s wholly-owned subsidiary transferred its
F-26
AIFU INC.
Notes to the Unaudited Consolidated Financial Statements
(In thousands, except for shares and per share data)
| 2) | Disposal of Beijing Fanlian Investment Co., Ltd. |
In June 2025, the group disposed of
| 3） | Disposal of two agency companies |
During the fiscal year ended December 31, 2025, the Group disposed two agency companies, separately to independent third parties. The total cash consideration amounted to RMB
As of respective closing date of each of these disposals in the fiscal year ended December 31, 2025, the Group has completed the closing procedures of all the above transactions and has effectively transferred its control of these subsidiaries to the respective buyers.
(4) Discontinued operations
Disposal of Meidiya and its subsidiaries
A disposal is categorized as a discontinued operation if the disposal group is a component of an entity or group of components that meets the held for sale criteria, is disposed of by sale or other than by sale and represents a strategic shift that has or will have a major effect on an entity’s operations and financial results. The results of disposals that qualify as a discontinued operation are presented as such for all reporting periods presented. Results of discontinued operations include all revenues and expenses directly derived from such disposal group; general corporate overhead is not allocated to a discontinued operation. For disposals other than by sale, results of operations of a business would not be recorded as a discontinued operation until the period in which the business is actually disposed of other than by sale.
In January 2025, the Group disposed of
The Company’s sales of the Disposal Group represented a strategic business shift having a major effect on the Group’s operations and financial results. The results of operations for the Disposal Group are presented as discontinued operations on the consolidated statements of income (loss) and comprehensive (loss) income, and assets and liabilities are reflected as “Assets and Liabilities of Discontinued Operations” on the consolidated balance sheets for all periods presented. Amounts for all periods discussed below reflect the results of operations, financial condition and cash flows from the Company’s continuing operations, unless otherwise noted.
F-27
AIFU INC.
Notes to the Unaudited Consolidated Financial Statements
(In thousands, except for shares and per share data)
On January 1, 2025, the Group calculated a gain resulting from such disposition as follows:
Reconciliation of the carrying amounts of the major classes of assets and liabilities from the discontinued operations in the consolidated balance sheets as of January 1, 2025 is as follow.
| RMB | ||||
| Consideration | ||||
| As of | ||||
| January 1, | ||||
| 2025 | ||||
| Assets | RMB | |||
| Cash and cash equivalents and restricted cash | ||||
| Short term investments | ||||
| Accounts receivable, net | ||||
| Other receivables, net | ||||
| Other current assets, net | ||||
| Property, plant, and equipment, net | ||||
| Other non-current assets, net | ||||
| Right of use asset | ||||
| Total assets | ||||
| Liabilities | ||||
| Other payable and accrued expenses | ||||
| Accrued payroll | ||||
| Income tax payable | ||||
| Operating lease liabilities | ||||
| Deferred tax liabilities | ||||
| Total liabilities | ||||
| Total net assets of the Disposal Group | ||||
| Less: Non-controlling interests of the Disposal Group | ( | ) | ||
| Net assets of the Disposal Group contributable to the Group | ||||
| Gain on disposal of the Disposal Group | ||||
F-28
AIFU INC.
Notes to the Unaudited Consolidated Financial Statements
(In thousands, except for shares and per share data)
(5) Other Receivables, net
Other receivables, net consist of the following:
| As of December, 2025 | As of June 30, 2026 | |||||||
| RMB | RMB | |||||||
| Advances to staff (i) | ||||||||
| Rental deposits | ||||||||
| Loan receivable to third parties (ii) | ||||||||
| Consideration receivable from disposal of long-term investments (iii) | ||||||||
| Receivables consideration from share issuance (iv) | ||||||||
| Receivables from disposed subsidiaries (v) | ||||||||
| Other | ||||||||
| Less: Allowance for expected credit losses - other receivables | ( | ) | ( | ) | ||||
| Other receivables, net | ||||||||
The following table summarizes the movement of the Group’s allowance for expected credit losses of other receivable:
| For the six months ended, | ||||||||
| June 30, 2025 | June 30, 2026 | |||||||
| RMB | RMB | |||||||
| Balance at the beginning of the period | ||||||||
| Current period allowance for (reversal of) expected credit losses | ( | ) | ||||||
| Balance at the end of the period | ||||||||
| (i) | |
| (ii) | Amount mainly represented 1) term-loan (matures in June 2025 with extension) to Sichuan Tianyi Real Estate Development Co., Ltd. (“Sichuan Tianyi”) of RMB |
| (iii) | Amount as of June 30, 2026 primarily represented:1) the outstanding receivable of RMB |
| (iv) | Amount mainly represented subscription consideration receivable in connection with the share issuance completed in 2025, which was fully settled in April 2026. |
| (v) | Amount mainly represented receivables from disposed subsidiaries, of which RMB |
F-29
AIFU INC.
Notes to the Unaudited Consolidated Financial Statements
(In thousands, except for shares and per share data)
(6) Inventories, net
Inventories, net consist of the following:
| As of December 31, 2025 | As of June 30, 2026 | |||||||
| RMB | RMB | |||||||
| Finished goods | ||||||||
| Total | ||||||||
For the six months ended June 30, 2025 and 2026, the Group recognized inventories write-down of and in cost of revenue, respectively.
(7) Property, Plant and Equipment, net
Property, plant and equipment, net, is comprised of the following:
| As of December 31, 2025 | As of | |||||||
| RMB | RMB | |||||||
| Building | ||||||||
| Office equipment, furniture and fixtures | ||||||||
| Motor vehicles | ||||||||
| Leasehold improvements | ||||||||
| Total | ||||||||
| Less: Accumulated depreciation | ( | ) | ( | ) | ||||
| Construction in progress | ||||||||
impairment for property, plant and equipment was recorded for the six months ended June 30, 2025 and 2026. The depreciation expenses was RMB
F-30
AIFU INC.
Notes to the Unaudited Consolidated Financial Statements
(In thousands, except for shares and per share data)
(8) Other Current Assets
Other current assets consist of the following:
| As of December 31, 2025 | As of June 30, 2026 | |||||||
| RMB | RMB | |||||||
| Prepaid operating costs and miscellaneous daily expenses | ||||||||
| Excess input value-added tax (“VAT”) credits(i) | ||||||||
| Deferred offering costs | ||||||||
| Other | ||||||||
| (i) |
(9) Other Non-Current Assets, net
Other non-current assets, net consist of the following:
| As of December 31, 2025 | As of June 30, 2026 | |||||||
| RMB | RMB | |||||||
| Equity investments without readily determinable fair value (Note 2(k)) | ||||||||
| Long-term hybrid instrument (Note 2(k)) (i) | ||||||||
| Amount due from a third party (ii) | ||||||||
| Others | ||||||||
| Less: Allowance for expected credit losses | ( | ) | ( | ) | ||||
| Less: Impairment loss | ( | ) | ( | ) | ||||
The following table summarizes the movement of the Group’s allowance for expected credit losses of other non-current assets:
| For the six months ended, | ||||||||
| June 30, 2025 | June 30, 2026 | |||||||
| RMB | RMB | |||||||
| Balance at the beginning of the period | ||||||||
| Current period allowance for expected credit losses | ( | ) | ||||||
| Balance at the end of the period | ||||||||
| (i) |
| (ii) |
F-31
AIFU INC.
Notes to the Unaudited Consolidated Financial Statements
(In thousands, except for shares and per share data)
(10) Leases
The Group’s lease for office space includes only fixed rental payments with no variable lease payment terms. As of December 31, 2025 and June 30, 2026, there were no leases that have not yet commenced.
The following represents the aggregate ROU assets and related lease liabilities as of December 31, 2025 and June 30, 2026:
.
| As of December 31, 2025 | As of June 30, 2026 | |||||||
| RMB | RMB | |||||||
| Operating lease ROU assets | ||||||||
| Current operating lease liabilities | ||||||||
| Non-current operating lease liabilities | ||||||||
| Total operating lease liabilities | ||||||||
The weighted average lease term and discount rate as of December 31, 2025 and June 30, 2026 were as follows:
| As of December 31, 2025 | As of June 30, 2026 | |||||||
| Weighted average lease term: | ||||||||
| Operating leases | ||||||||
| Weighted average discount rate: | ||||||||
| Operating leases | % | % | ||||||
The components of lease expenses for the six months ended June 30, 2025 and 2026 were as follows:
| For the six months ended June 30, | |||||||
| 2025 | 2026 | ||||||
| RMB | RMB | ||||||
| Operating lease expense | |||||||
| Short term lease expense | |||||||
| Total | |||||||
F-32
AIFU INC.
Notes to the Unaudited Consolidated Financial Statements
(In thousands, except for shares and per share data)
Maturities of lease liabilities at June 30, 2026:
| Minimum Lease Payment | ||||
| RMB | ||||
| Years ending June 30: | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Total remaining undiscounted lease payments | ||||
| Less: Interest | ||||
| Total present value of lease liabilities | ||||
| Less: Current operating lease liabilities | ||||
| Non-current operating lease liabilities | ||||
(11) Other Payables and Accrued Expenses
Components of other payables and accrued expenses are as follows:
| As of December 31, 2025 | As of June 30, 2026 | |||||||
| RMB | RMB | |||||||
| Business and other tax payables | ||||||||
| Refundable deposits from employees and agents | ||||||||
| Professional fees | ||||||||
| Accrued expenses to third parties | ||||||||
| Accrued compensation to staff layoff | ||||||||
| Payable to third parties(i) | ||||||||
| Others | ||||||||
| Total | ||||||||
| (i) |
(12) Short-term loans
Short-term loans and total outstanding balance as of December 31, 2025 and June 30, 2026 amounted to RMB
As of December 31, 2025 and June 30, 2026, the weighted average interest rates for the outstanding borrowings were approximately
F-33
AIFU INC.
Notes to the Unaudited Consolidated Financial Statements
(In thousands, except for shares and per share data)
(13) Employee Benefit Plans
Employees of the Group located in the PRC are covered by the retirement schemes defined by local practice and regulations, which are essentially defined contribution plans.
In addition, the Group is required by law to contribute a certain percentage of applicable salaries for medical insurance benefits, unemployment and other statutory benefits. The contribution percentages may be different from district to district which is subject to the specific requirement of local regime government. The PRC government is directly responsible for the payments of the benefits to these employees.
For the six months ended June 30, 2025 and 2026, the Group contributed and accrued RMB
(14) Income Taxes
The Company is a tax exempted company incorporated in the Cayman Islands. Under the current laws of the Cayman Islands, the Company is not subject to tax on its income or capital gains. In addition, upon any payments of dividends by the Company to its shareholders, no Cayman Islands withholding tax is imposed.
Subsidiaries in Hong Kong are subject to Hong Kong Profits Tax rate at
The Group’s subsidiaries incorporated in the PRC are subject to the PRC Enterprise Income Tax and a unified
The Group’s subsidiaries that are the PRC tax resident are required to withhold the PRC withholding tax of
One of the Group’s wholly-owned subsidiaries, CNinsure Holdings Limited, was determined by Hong Kong Taxation Bureau to be a Hong Kong resident enterprise since July 2018. The Hong Kong resident certificate was issued by the Hong Kong Inland Revenue Department valid till the year ending December 31, 2026. Accordingly, CNinsure Holdings Limited qualified as a Hong Kong resident and was entitled to enjoy a reduced tax rate of
F-34
AIFU INC.
Notes to the Unaudited Consolidated Financial Statements
(In thousands, except for shares and per share data)
The Group accounts for uncertain income tax positions by prescribing a minimum recognition threshold in the financial statements. The Group’s liabilities for unrecognized tax benefits were included in other tax liabilities. As of December 31, 2025 and June 30, 2026, the balance of unrecognized tax benefits is comprised of amounts mainly arising from gain on disposal of subsidiaries and certain transfer pricing arrangements.
The movements of unrecognized tax benefits are as follows:
| RMB | ||||
| Balance as of January 1, 2025 | ||||
| Decrease in tax positions | ||||
| Balance as of December 31, 2025 | ||||
| Decrease in tax positions | ||||
| Balance as of June 30,2026 | ||||
The uncertain tax positions are related to tax years that remain subject to examination by the relevant tax authorities. Based on the outcome of any future examinations, or as a result of the expiration of statute of limitations for specific jurisdictions, it is reasonably possible that the related unrecognized tax benefits for tax positions taken regarding previously filed tax returns, might materially change from those recorded as liabilities for uncertain tax positions in the Group’s consolidated financial statements. In addition, the outcome of these examinations may impact the valuation of certain deferred tax assets (such as net operating losses) in future periods. The Group’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits, if any, as a component of income tax expense. The Group does not anticipate any significant increases or decreases to its liability for unrecognized tax benefits within the next twelve months.
According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of income taxes is due to computational errors made by the taxpayer. The statute of limitations will be extended to five years under special circumstances, which are not clearly defined, but an underpayment of income tax liability exceeding RMB
Income tax expenses are comprised of the following:
| For the six months ended June 30, | ||||||||
| 2025 | 2026 | |||||||
| RMB | RMB | |||||||
| Current tax expense | ||||||||
| Deferred tax benefit | ( | ( | ||||||
| Income tax expense | ||||||||
F-35
AIFU INC.
Notes to the Unaudited Consolidated Financial Statements
(In thousands, except for shares and per share data)
The principal components of the deferred income tax assets and liabilities are as follows:
| As of December 31, 2025 | As of June 30, 2026 | |||||||
| RMB | RMB | |||||||
| Deferred tax assets: | ||||||||
| Operating loss carryforward | ||||||||
| Intangible assets, net | ||||||||
| Litigation accrual | ||||||||
| Less: valuation allowances | ( | ) | ( | ) | ||||
| Total | ||||||||
| Deferred tax liabilities: | ||||||||
| Fair value adjustments in relation to equity investments | ||||||||
| Estimated profit arising from future renewal commissions | ||||||||
| PRC dividend withholding taxes | ||||||||
| Total | ||||||||
The Group considers positive and negative evidence to determine whether some portion or all of the deferred tax assets will more likely than not be realized. This assessment considers, among other matters, the nature, frequency and severity of recent losses, forecasts of future profitability, the duration of statutory carry forward periods, the Group’s experience with tax attributes expiring unused and tax planning alternatives. Valuation allowances have been established for deferred tax assets based on a more-likely-than-not threshold. The Group’s ability to realize deferred tax assets depends on its ability to generate sufficient taxable income within the carry forward periods provided for in the tax law. The Group has provided RMB
The Group had total operating loss carry-forwards of RMB
Reconciliation between the provision for income taxes computed by applying the PRC enterprise income rate of
| Six months ended June 30, | ||||||||||||||||
| 2025 | 2026 | |||||||||||||||
| RMB | % | RMB | % | |||||||||||||
| (Loss) Income from continuing operations before income taxes, share of (loss) income of affiliates, net | ( | ) | ||||||||||||||
| Computed income tax (benefit) expense at EIT tax rate | ( | ) | % | % | ||||||||||||
| Expenses not deductible for tax purposes: | ||||||||||||||||
| —Entertainment | % | % | ||||||||||||||
| —Provision for expected credit losses on financial assets (i) | % | |||||||||||||||
| —Other | % | |||||||||||||||
| Effect of different tax rates of subsidiaries operating in other jurisdictions | % | % | ||||||||||||||
| Change in valuation allowance | ( | ) | ( | )% | ( | ) | ( | )% | ||||||||
| Effect of non-taxable (income) loss (ii) | % | |||||||||||||||
| Unrecognized tax benefits arising from certain transfer pricing arrangements | % | |||||||||||||||
| Deferred income tax reverse | ( | ) | ( | )% | ( | ) | ( | )% | ||||||||
| Other | % | ( | ) | ( | )% | |||||||||||
| Income tax expense | % | % | ||||||||||||||
| (i) |
F-36
AIFU INC.
Notes to the Unaudited Consolidated Financial Statements
(In thousands, except for shares and per share data)
If the entities were to be non-resident for PRC tax purposes, dividends paid to it out of profits earned after January 1, 2008 would be subject to a withholding tax. In the case of dividends paid by PRC subsidiaries, the withholding tax would be
Aggregate undistributed earnings of the Group’s subsidiaries in the PRC that are available for distribution to the Group of approximately RMB
Under applicable accounting principles, a deferred tax liability should be recorded for taxable temporary differences attributable to the excess of financial reporting over tax basis, including those differences attributable to a more-than-50-percent-owned domestic subsidiary. However, recognition is not required in situations where the tax law provides a means by which the reported amount of that investment can be recovered tax-free and the enterprise expects that it will ultimately use that means.
(15) Capital Structure
Shares Structure
The Company was incorporated in the Cayman Islands on April 10, 2007. The original authorized share capital was US$
On October 31, 2024, the Company held an extraordinary general meeting (“EGM”) and obtained requisite shareholders’ approval to adopt a dual-class share structure. Under this structure, the authorized share capital was US$
On April 17, 2025, the Company obtained requisite shareholders’ approval to implement a share consolidation, under which every authorized issued and unissued shares of par value US$
On April 29, 2026, the Company held an extraordinary general meeting (“EGM”) and obtained requisite shareholders’ approval a special resolution that the par value of the issued and unissued class A ordinary shares and class B ordinary shares in the share capital of the Company be reduced from US$
F-37
AIFU INC.
Notes to the Unaudited Consolidated Financial Statements
(In thousands, except for shares and per share data)
As of June 30, 2026,
Issuance of new shares
On January 9, 2026, the Company issued an aggregate of
During 2025, the Company issued (i)
(16) Net (loss) Income per Share
As of December 31, 2025 and June 30, 2026, there were
The computation of basic and diluted net (loss) income per ordinary share is as follows:
| Six Months Ended June 30, | ||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| RMB | RMB | US$ | ||||||||||
| Net (loss) income from continuing operations | ( | ) | ||||||||||
| Less: Net loss attributable to the non-controlling interests | ( | ) | ( | ) | ( | ) | ||||||
| Net (loss) gain attributable to owners of the Company from continuing operations | ( | ) | ||||||||||
| Net gain from discontinued operations | ||||||||||||
| Less: Net income attributable to the non-controlling interests | ||||||||||||
| Net income attributable to the Company’s shareholders from discontinued operations | ||||||||||||
| Weighted average number of ordinary shares outstanding- basic and diluted | ||||||||||||
| Basic and diluted net (loss) income per ordinary share from continuing operations | ( | ) | ||||||||||
| Basic and diluted net (loss) income per ordinary share from discontinued operations | ||||||||||||
(17) Distribution of Profits
As stipulated by the relevant PRC laws and regulations applicable to China’s foreign investment enterprise, the Group’s subsidiaries in the PRC are required to maintain non-distributable reserves which include a statutory surplus reserve as of December 31, 2025 and June 30, 2026. Appropriations to the statutory surplus reserve are required to be made at not less than
The statutory surplus reserve is used to offset future losses. These reserves represent appropriations of retained earnings determined according to PRC law and may not be distributed. The accumulated amounts contributed to the statutory reserves were RMB
Under PRC laws and regulations, there are restrictions on the Company’s PRC subsidiaries with respect to transferring certain of their net assets to the Company either in the form of dividends, loans, or advances. Amounts of restricted net assets include paid in capital and statutory surplus reserve of the Company’s PRC subsidiaries, totaling RMB
F-38
AIFU INC.
Notes to the Unaudited Consolidated Financial Statements
(In thousands, except for shares and per share data)
(18) Related-party Balances and Transactions
The principal related-party balances as of December 31, 2025 and June 30, 2026, and transactions for the six months ended June 30, 2025 and 2026 are as follows:
| Name of Related Party | Relationship to the Group | |
| Maase Inc. (“MAASE”) | ||
| Chengdu Puyi Bohui Information Technology Co., | ||
| Puyi Enterprise Management Consulting Co., Ltd |
Related party transactions:
| (i) | On December 28, 2020, the Group entered into a framework strategic partnership agreement, or, the “Agreement”, with Puyi Enterprise Management Consulting Co., Ltd (“Puyi Consulting”), which was controlled by MAASE. Pursuant to the Agreement, both parties, on the basis of full compliance with relevant regulatory and legal requirements will share customer and channel resources and explore collaboration opportunities on the provision of value-added asset management services to Chinese households, by leveraging both parties’ respective strength in insurance and financial services. In order to diversify the Group’s services and product offerings, the Group provided referral services of publicly-raised and privately-raised fund products provided by MAASE’s clients, the Group referred MAASE’s financial advisors to their clients and MAASE’s financial advisors will be responsible for providing product information and handling purchasing procedures. For the six months ended June 30, 2025 and 2026, the Group incurred RMB |
| (ii) | For the six months ended June 30, 2026, the Group advanced additional loan of RMB |
| (iii) | As disclosed in Note (3), in June 2025, the Group disposed of |
Related-party Balances:
| As of December 31, 2025 | As of June 30, 2026 | |||||||
| RMB | RMB | |||||||
| Amount due from related parties | ||||||||
| Maase Inc.(i) | ||||||||
| Less: Allowance for credit loss | ( | ) | ( | ) | ||||
| Total | ||||||||
| (i) |
F-39
AIFU INC.
Notes to the Unaudited Consolidated Financial Statements
(In thousands, except for shares and per share data)
(19) Commitments and Contingencies
Lease commitments
The Group has entered into operating lease agreements for certain offices. Future minimum lease payments under non-cancellable operating leases with initial terms more than year are included in Note 10.
As of June 30, 2026, the total future minimum lease payments under non-cancellable short-term leases, including the agreed property management fee, with respect to the office are payable as follows:
| Lease Commitment | ||||
| RMB | ||||
| Within 1 year | ||||
| 2-5 years | ||||
| Total | ||||
Contingencies
As of June 30, 2026, the Group may be involved in certain legal proceedings, claims, and other disputes arising from the commercial operations, projects, employees, and other matters which, in general, are subject to uncertainties and in which the outcomes are not predictable. The Group determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. Although the outcomes of these legal proceedings cannot be predicted, the Group does not believe these actions, in the aggregate, will have a material adverse impact on its financial position, results of operations, or liquidity.
(20) Concentrations of Credit Risk
Concentration risks
Customers accounting for 10% or more of total net revenues excluding estimated renewal commissions are as follows:
| Six Months ended June 30, | ||||||||||||||||
| 2025 | % of sales | 2026 | % of sales | |||||||||||||
| RMB | RMB | |||||||||||||||
| Sinatay Life Insurance Co., Ltd. (“Sinatay”) | ||||||||||||||||
| Fanhua RONS Insurance Sales & Service Co., Ltd. | ||||||||||||||||
| Aeon Life Insurance Co., Ltd. (“Aeon”). | ||||||||||||||||
| Ruizhong Life Insurance Co., Ltd. | ||||||||||||||||
| Subtotal | ||||||||||||||||
| * |
F-40
AIFU INC.
Notes to the Unaudited Consolidated Financial Statements
(In thousands, except for shares and per share data)
Customers which accounted for 10% or more of gross accounts receivable excluding estimated renewal commissions are as follows:
| As of December 31, 2025 | % | As of June 30, 2026 | % | |||||||||||||
| Sinatay | % | % | ||||||||||||||
| Fanhua RONS Insurance Sales & Service Co., Ltd. | % | | % | |||||||||||||
| AVIVA-COFCO Life Insurance Co., Ltd. | % | % | ||||||||||||||
| Ruizhong Life Insurance Co., Ltd. | % | % | ||||||||||||||
| Subtotal | % | | % | |||||||||||||
| * |
The Group performs ongoing credit evaluations of its customers and generally does not require collateral on accounts receivable.
The Group places its cash and cash equivalents and short-term investments with financial institutions with low credit risk.
(21) Share-based Compensation
(a) 2022 Options
On August 12, 2022, the Group granted share options (“2022 Options”) to its independent directors to purchase up to
For the six months ended June 30, 2026, changes in the status of total outstanding options, were as follows:
| Number of options | Weighted average exercise price in USD | Weighted average remaining contractual life (In years) | Aggregate Intrinsic Value USD | |||||||||||||
| Outstanding as of December 31, 2025 | ||||||||||||||||
| Forfeited | ||||||||||||||||
| Expired | ( | ) | ||||||||||||||
| Outstanding as of June 30, 2026 | ||||||||||||||||
As certain independent directors resigned from the board in 2024, with the board approval, the vesting of the options granted to such independent directors has been accelerated on the date of resignation, and such vested options have since expired as they were not exercised within 90 days following the date of resignation. Options to purchase 2 Class A shares were forfeited in 2025 upon resignation of an independent director. For six months ended June 30, 2025 and 2026, share-based compensation expenses of and were recognized in connection with the 2022 Options, respectively. As of December 31, 2025 and June 30, 2026, unrecognized share-based compensation expense related to unvested share options granted to the independent directors was .
F-41
AIFU INC.
Notes to the Unaudited Consolidated Financial Statements
(In thousands, except for shares and per share data)
(b) Restricted Share Units (“RSUs”)
On August 16, 2023, the board of directors of the Group granted restricted share units (“RSUs”) of
On July 15, 2024, the board of directors of the Group granted an additional RSUs of
On November 17, 2024, the board of directors of the Group granted RSUs of
From February to April 2025, the board of the directors of the Group approved the grant of a total of
A summary of the activity of the service-based RSUs for the six months ended June 30, 2026 is presented as follows:
| Number of restricted shares | Weighted average grant-date fair value | |||||||
| US$ | ||||||||
| Unvested as of January 1, 2025 | ||||||||
| Granted | ||||||||
| Vested | ( | ) | ||||||
| Forfeited | ||||||||
| Unvested as of December 31, 2025 | ||||||||
| Granted | ||||||||
| Vested | ||||||||
| Forfeited | ( | ) | ||||||
| Unvested as of June 30,2026 | ||||||||
The Group recorded share-based compensation expense of RMB
F-42
AIFU INC.
Notes to the Unaudited Consolidated Financial Statements
(In thousands, except for shares and per share data)
(c) Million Dollar Round Table Options (“MDRT Options”)
2023 Million Dollar Round Table Options (“2023 MDRT Options”)
On February 6, 2023, the board of directors of the Group granted share options, or the 2023 MDRT Options, to its independent high-performing agents to purchase up to
2024 Million Dollar Round Table Options1 (“2024 MDRT Options 1”)
On April 16, 2024, the board of directors of the Group granted share options to certain MDRT agents or the 2024 MDRT Option to purchase up to
2024 Million Dollar Round Table Options 2 (“2024 MDRT Options 2”)
During the year of 2024, the board of directors of the Group granted share options to certain newly recruited agents and sales team leaders to purchase up to
F-43
AIFU INC.
Notes to the Unaudited Consolidated Financial Statements
(In thousands, except for shares and per share data)
The Group used the binomial option pricing model in determining the fair value of the options granted, which requires the input of highly subjective assumptions, including the expected life of the stock option, stock price volatility, dividend rate and risk-free interest rate.
| Assumptions | 2023 MDRT | 2024 MDRT 1 | 2024 MDRT 2 | |||||||||
| Expected dividend yield (Note i) | % | % | % | |||||||||
| Risk-free interest rates (Note ii) | % | % | ||||||||||
| Expected volatility (Note iii) | % | % | ||||||||||
| Expected life in years (Note iv) | ||||||||||||
| Exercise multiple (Note v) | ||||||||||||
| Fair value of options on grant date | US$ | US$ | US$ | |||||||||
| (i) | Expected dividend yield: |
The expected dividend yield was estimated by the Group based on its historical and future dividend policy.
| (ii) | Risk-free interest rate: |
Risk-free interest rate was estimated based on the US Government Bond yield and pro-rated according to the tenor of the options as of the valuation date.
| (iii) | Expected volatility: |
The volatility of the underlying ordinary shares was estimated based on the annualized standard deviation of the continuously compounded rate of return on the daily average adjusted share price of the Group as of the Valuation Date.
| (iv) | Expected life: |
The expected life was estimated based on the end of the vesting period and the contractual term of the award of the Options plan.
| (v) | Exercise multiple: |
The exercise multiple was estimated based on empirical studies.
A summary of share options outstanding as of June 30, 2026, and activity during the period ended, is presented below:
| Number of options | Weighted average exercise price in USD | Weighted average remaining contractual life (In years) | Aggregate Intrinsic Value USD | |||||||||||||
| Outstanding as of January 1, 2025 | ||||||||||||||||
| Granted | ||||||||||||||||
| Exercised | — | — | ||||||||||||||
| Forfeited | ( | ) | — | — | ||||||||||||
| Outstanding as of December 31, 2025 | ||||||||||||||||
| Granted | ||||||||||||||||
| Exercised | — | — | ||||||||||||||
| Forfeited | — | — | ||||||||||||||
| Outstanding as of June 30, 2026 | ||||||||||||||||
F-44
AIFU INC.
Notes to the Unaudited Consolidated Financial Statements
(In thousands, except for shares and per share data)
During the six months ended June 30, 2025, as the performance conditions for the outstanding share options were not met, the remaining unvested MDRT Options were forfeited, leading to the reversal of related share-based compensation expense of RMB
(22) Segment Reporting
During the fiscal year ended December 31, 2025, the Group disposed of Meidiya and its subsidiaries including the operating entity of its former claims adjusting business, which constituted a discontinued operation. As the discontinued operation previously formed the claims adjusting reportable segment, the comparative segment information has been retrospectively revised to reflect continuing operations only. As of June 30, 2026, the Group operated
The following table shows the Group’s operations by business segment for the six months ended June 30, 2025 and 2026. Other represents revenue and expenses that are
| For the six months ended June 30, 2026 | ||||||||||||||||||||
| Agency | H&W | Other | Consolidated | |||||||||||||||||
| RMB | RMB | RMB | RMB | USD | ||||||||||||||||
| (In thousands) | ||||||||||||||||||||
| Total revenues | ||||||||||||||||||||
| Operating costs and expenses: | — | — | — | — | — | |||||||||||||||
| Cost of revenues | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Selling expenses | ( | ) | ( | ) | ( | ) | ||||||||||||||
| General and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Total operating costs and expenses | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Operating profit (loss) | ( | ) | ||||||||||||||||||
| Loss from fair value change | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Investment loss | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Reversal of (Provision for) credit losses | ( | ) | ( | ) | ||||||||||||||||
| Interest income | ||||||||||||||||||||
| Financial cost | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Others,net | ( | ) | ||||||||||||||||||
| Income before income taxes | ||||||||||||||||||||
| Income Tax expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Net income | ||||||||||||||||||||
| Net loss attributable to non-controlling interests | ||||||||||||||||||||
| Net income attributable to AIFU Inc. | ||||||||||||||||||||
F-45
AIFU INC.
Notes to the Unaudited Consolidated Financial Statements
(In thousands, except for shares and per share data)
| For the six months ended June 30, 2025 | ||||||||||||
| Agency | Other | Consolidated | ||||||||||
| RMB | RMB | RMB | ||||||||||
| (In thousands) | ||||||||||||
| Total revenues | ||||||||||||
| Operating costs and expenses: | ||||||||||||
| Cost of revenues | ( | ) | ( | ) | ||||||||
| Selling expenses | ( | ) | ( | ) | ||||||||
| General and administrative expenses | ( | ) | ( | ) | ( | ) | ||||||
| Impairment loss | ||||||||||||
| Total operating costs and expenses | ( | ) | ( | ) | ( | ) | ||||||
| Operating profit (loss) | ( | ) | ( | ) | ||||||||
| Loss from fair value change | ( | ) | ( | ) | ||||||||
| Investment income | ||||||||||||
| Gains from disposal of subsidiaries | ||||||||||||
| Interest income | ||||||||||||
| Financial cost | ( | ) | ( | ) | ||||||||
| Provision for credit losses | ( | ) | ( | ) | ( | ) | ||||||
| Others,net | ||||||||||||
| Income (Loss) before income taxes | ( | ) | ( | ) | ||||||||
| Income tax expense | ( | ) | ( | ) | ( | ) | ||||||
| Net income (loss) | ( | ) | ( | ) | ||||||||
| Less: net loss attributable to non-controlling interests | ||||||||||||
| Net income (loss) attributable to AIFU Inc. | ( | ) | ( | ) | ||||||||
Substantially all of the Group’s revenues for the six months ended June 30, 2025 and 2026 were generated from the PRC. A substantial portion of the identifiable assets of the Group is located in the PRC. Accordingly, no geographical segments are presented.
(23) Subsequent events
On September 9, 2026, the Group entered into a share subscription agreement with Expansion Group Ltd. (“Expansion”), pursuant to which Expansion will subscribe for
On September 24, 2026, the Group entered into a definitive share purchase agreement with certain investors, pursuant to which the investors have agreed to subscribe for, and the Group has agreed to issue and sell to the investors, (i) an aggregate of
F-46