The information in this preliminary prospectus supplement is not complete and may be changed. This preliminary prospectus supplement is not an offer to sell the securities and is not soliciting offers to buy the securities in any jurisdiction where the offer or sale is not permitted.

 Filed Pursuant to Rule 424(b)(5)​

 Registration No. 333-265320 ​

SUBJECT TO COMPLETION, DATED JUNE 22, 2022

PRELIMINARY PROSPECTUS SUPPLEMENT

(to Prospectus dated May 31, 2022)

Tuya Inc.

7,300,000 Class A Ordinary Shares

We are offering 7,300,000 Class A ordinary shares, par value US$0.00005 per share, as part of a global offering (the “Global Offering”), consisting of an international offering of 6,570,000 Class A ordinary shares offered hereby, and a Hong Kong public offering of 730,000 Class A ordinary shares.

The public offering price for the international offering and the Hong Kong public offering is HK$       per Class A ordinary share, or approximately US$      per Class A ordinary share based on an exchange rate of HK$7.8494 to US$1.00.

Our American depositary shares (“ADSs”) are listed on the New York Stock Exchange under the symbol “TUYA.” On June 17, 2022, the last reported trading price of our ADSs on the New York Stock Exchange was US$2.25 per ADS, or HK$17.66 per Class A ordinary share, based upon an exchange rate of HK$7.8498 to US$1.00. Each ADS represents one Class A ordinary share.

We will determine the offer price for both the international offering and the Hong Kong public offering by reference to, among other factors, the closing price of our ADSs on the last trading day before the pricing of the Global Offering, which is expected to be on or about June 27, 2022. The maximum offer price for the Hong Kong public offering is HK$22.80, or US$2.90, per Class A ordinary share (equivalent to US$2.90 per ADS).

The allocation of Class A ordinary shares between the international offering and the Hong Kong public offering is subject to reallocation. For more information, see “Underwriting” beginning on page S-52 of this prospectus supplement. The public offering price in the international offering may differ from the public offering price in the Hong Kong public offering. See “Underwriting — Pricing.” The international offering contemplated herein consists of a U.S. offering and a non-U.S. offering made outside the United States in compliance with applicable laws. We are paying a registration fee for Class A ordinary shares sold in the United States, as well as for Class A ordinary shares initially offered and sold outside the United States in the Global Offering that may be resold from time to time into the United States.

We have applied to list our Class A ordinary shares on The Stock Exchange of Hong Kong Limited (the “Hong Kong Stock Exchange”) pursuant to the Hong Kong Stock Exchange Listing Rules under the stock code “2391.”

Investing in our ADSs and Class A ordinary shares involves risks. See “Risk Factors” beginning on page S-32 of this prospectus supplement and in any documents incorporated by reference into this prospectus supplement for a discussion of certain risks that should be considered in connection with an investment in our ADSs and Class A ordinary shares.

Tuya Inc. is not an operating company in China but a Cayman Islands holding company with no material operations of its own. Tuya Inc. conducts substantially all of its business operations in China through (i) its PRC subsidiaries, including Hangzhou Tuya Information Technology Co., Ltd. (“Tuya Information”), its wholly-owned subsidiary incorporated in the PRC, and (ii) Hangzhou Tuya Technology Co., Ltd. (“Hangzhou Tuya Technology”), the variable interest entity (the “VIE”), with which it has maintained contractual arrangements.

As used in this prospectus supplement, “Tuya,” “we,” “us,” “our company,” and “our” refer to Tuya Inc., our Cayman Islands holding company and its subsidiaries, unless otherwise indicated. We and our subsidiaries do not, and it is virtually impossible for us and our subsidiaries to, have any equity interests in the VIE as current PRC laws and regulations restrict foreign investment in companies that engage in value-added telecommunication services. As a result, we depend on certain contractual arrangements with the VIE to exert control over the business currently conducted by the VIE. This structure, which we refer to as the “VIE structure,” allows us to exercise control over the VIE. The VIE structure also allows us to be considered the primary beneficiary of the VIE for accounting purposes, thus consolidating its operating results in our financial statements under the U.S. GAAP, to the extent the conditions for consolidation of the VIE under U.S. GAAP are satisfied. As of the date of this prospectus supplement, due to PRC restrictions on foreign ownership of telecommunication businesses, we conduct a de minimis portion of our business through the VIE, and rely

on contractual arrangements among Tuya Information, the VIE and its nominee shareholders to exert control over the business operations of the VIE. The revenue generated by the VIE contributed less than 0.1% of our total revenue in each of 2019 and 2020, and the revenue contribution from the VIE was nil in 2021.

The VIE structure involves unique risks to investors. Investors in our equity securities should note that they are purchasing equity securities of Tuya Inc., a Cayman Islands holding company, rather than equity securities issued by our subsidiaries or the VIE. Neither such investors nor the holding company itself have an equity ownership in, direct investment in, or control of, through such ownership or investment, the VIE. Investors who are non-PRC residents may never directly hold equity interests in the VIE under current PRC laws and regulations. In addition, the VIE structure is subject to risks associated with the contractual arrangements with the VIE. As of the date of this prospectus supplement, to our best knowledge, our directors and management, the contractual arrangements with the VIE have not been tested in a court of law in the PRC. If the PRC government deems that our contractual arrangements with the VIE do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change or are interpreted differently in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations. Our holding company, our PRC subsidiaries, the VIE and investors in our company face uncertainty about potential future actions by the PRC government that could affect the legality and enforceability of the contractual arrangements with the VIE and, consequently, negatively affect the business, financial condition and results of operations of the VIE and our company as a whole. Our Class A ordinary shares or our ADSs may significantly decline in value or become worthless, if we are unable to effectively enforce our contractual control rights over the assets and the operations of the VIE. For a detailed description of the risks associated with the VIE structure, please refer to “Item 3. Key Information — 3. D. Risk Factors — Risks Related to Our Corporate Structure” in our annual report on Form 20-F for the fiscal year ended December 31, 2021, or our 2021 Form 20-F.

We also face various legal and operational risks and uncertainties related to doing business in China. For example, we face risks associated with regulatory approvals of offshore offerings, anti-monopoly regulatory actions, cybersecurity and data privacy, as well as the lack of inspection from the U.S. Public Company Accounting Oversight Board (the “PCAOB”) on our auditors. The PRC government has authority to regulate and exert influence on companies operating in the PRC, including their ability to conduct business, accept foreign investments or be listed on foreign stock exchanges. The PRC government may also intervene with or influence our operations as the government deems appropriate to further regulatory political and societal goals, among other things, which could result in an adverse impact on our operations and/or value of our Class A ordinary shares and the ADSs. The PRC government has recently published new policies that have significantly impacted our industry and we cannot rule out the possibility that it will in the future further release regulations or policies regarding our industry, including those that may have adverse impacts on our business, financial condition and results of operations. These actions may cause the value of such securities to significantly decline or in extreme cases, become worthless. For a more detailed discussion of these risks, see “Item 3. Key Information — 3.D. Risk Factors — Risks Related to Doing Business in China” and “Item 3. Key Information — 3.D. Risk Factors — Risks Related to Our Corporate Structure” in our 2021 Form 20-F.

The Holding Foreign Companies Accountable Act (the “HFCAA”) was enacted on December 18, 2020. The HFCAA states if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspection for the PCAOB for three consecutive years beginning in 2021, the SEC shall prohibit our shares or ADSs from being traded on a national securities exchange or in the over-the-counter trading market in the United States. On December 16, 2021, the PCAOB issued a report to notify the SEC of its determination that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong. The PCAOB identified our external auditor as one of the registered public accounting firms that the PCAOB is unable to inspect or investigate completely. The HFCAA or other efforts to increase U.S. regulatory access to audit information could cause investor uncertainty for affected issuers, including us, and the market price of the ADSs could be adversely affected. On May 26, 2022, we were conclusively identified by the SEC under the HFCAA as having filed audit reports issued by a registered public accounting firm that cannot be inspected or investigated completed by the PCAOB in connection with our filing of our 2021 Form 20-F. For more details, see “Item 3. Key Information — 3.D. Risk Factors — Risks Related to Doing Business in China — Our ADSs will be prohibited from trading in the United States under the Holding Foreign Companies Accountable Act, or the HFCAA, in 2024, if the PCAOB is unable to inspect or fully investigate auditors located in China, or 2023, if proposed changes to the law are enacted. The delisting of our ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment” in our 2021 Form 20-F.

Tuya Inc. is a holding company with no material operations of its own. As a result, although other means are available for us to obtain financing at the holding company level, Tuya Inc.’s ability to pay dividends to the shareholders and to service any debt it may incur may depend upon dividends paid by our PRC subsidiaries and service fees paid by the VIE in China. Under PRC law, Tuya Inc. may provide funding to our PRC subsidiaries through capital contributions or loans, subject to the approval of government authorities and limits on the amount of capital contributions and loans. If any of our subsidiaries incurs debt on its own behalf in the future, the instruments governing such debt may restrict its ability to pay dividends to Tuya Inc. In addition, our PRC subsidiaries are required to make appropriations to certain statutory reserve funds, which are not distributable as cash dividends except in the event of a solvent liquidation of the companies. For more details, see “Prospectus Supplement

Summary — Transfer of Funds and Other Assets through Our Organization” in this prospectus supplement. Tuya Inc. has not previously declared or paid any cash dividend or dividend in kind, and has no plan to declare or pay any dividends in the near future on our shares or the ADSs representing our Class A ordinary shares.

Neither the United States Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of these securities or determined that this prospectus supplement or the accompanying prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

This prospectus supplement, the accompanying prospectus and the documents referred to herein are not to be issued, circulated or distributed to the public in Hong Kong and do not constitute an offer to sell nor a solicitation of an offer to buy any securities to the public in Hong Kong. Neither this document nor anything referred to herein forms the basis for any contract or commitment whatsoever. For the avoidance of doubt, the publication of this prospectus supplement and the document referred to herein shall not be deemed to be an offer of securities made pursuant to a prospectus issued by or on behalf of us or any other person for the purposes of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong nor shall it constitute an advertisement, invitation or document containing an invitation to the public to enter into or offer to enter into an agreement to acquire, dispose of, subscribe for or underwrite securities for the purposes of the Securities and Futures Ordinance (Cap. 571) of Hong Kong. A copy of this prospectus supplement and the document referred to herein may, however, be issued in Hong Kong only to “professional investors” within the meaning as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made thereunder.

PRICE HK$      PER CLASS A ORDINARY SHARE

(1)

Equivalent to US$     per ADS, based upon each ADS representing one Class A ordinary share and an exchange rate of HK$7.8494 to US$1.00 as of June 10, 2022, as set forth in the H.10 statistical release of The Board of Governors of the Federal Reserve System.

​

(2)

See “Underwriting” beginning on page S-52 of this prospectus supplement for a description of the compensation payable to the underwriters.

​

(3)

Includes estimated net proceeds of HK$      from the sale of 730,000 Class A ordinary shares in the Hong Kong public offering.

​

We have granted the international underwriters an option, exercisable by the Joint Representatives, on behalf of the international underwriters, to purchase up to an additional 1,095,000 Class A ordinary shares at the public offering price until 30 days after the last day for the lodging of applications under the Hong Kong public offering. Morgan Stanley Asia Limited or its affiliates are expected to enter into a borrowing arrangement with Tenet Group Limited to facilitate the settlement of the over-allocations. Morgan Stanley Asia Limited or its affiliates are obligated to return the same number of Class A ordinary shares to Tenet Group Limited by exercising the option to purchase additional Class A ordinary shares from us or by making purchases in the open market. No fees or other remuneration will be paid by the underwriters to us or Tenet Group Limited for the loan of these Class A ordinary shares.

The underwriters expect to deliver the Class A ordinary shares against payment therefor through the facilities of the Central Clearing and Settlement System on or around           , 2022.

Joint Sponsors

Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers

Joint Bookrunners and Joint Lead Managers

Prospectus supplement dated            , 2022

 

TABLE OF CONTENTS

Prospectus Supplement

Prospectus

You should rely only on the information contained or incorporated by reference in this prospectus supplement, the accompanying prospectus, or any other offering materials we file with the SEC. We have not, Tenet Group Limited has not, and the underwriters have not, authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. None of the underwriters, Tenet Group Limited or us is making an offer to sell the securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus supplement, the accompanying prospectus and the documents incorporated by reference is accurate only as of each of their respective dates. Our business, financial condition, results of operations and prospects may have changed since those dates. Neither this prospectus supplement nor the accompanying prospectus constitutes an offer, or an invitation on our behalf or the underwriters to subscribe for and purchase, any of the Class A ordinary shares and may not be used for or in connection with an offer or solicitation by anyone, in any jurisdiction in which such an offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation.

 

S-i

 

ABOUT THIS PROSPECTUS SUPPLEMENT

This document consists of two parts. The first part is this prospectus supplement, which describes the specific terms of the Global Offering (as defined in this prospectus supplement under the “Underwriting” section) and other matters relating to us and our financial condition. The second part, the base prospectus, presents more general information about this offering. The base prospectus was included in the registration statement on Form F-3 (File No. 333-265320) that we filed with the SEC on May 31, 2022 and has been updated since that time with additional information that is incorporated by reference. Generally, when we refer only to the “prospectus,” we are referring to both parts combined, and when we refer to the “accompanying prospectus,” we are referring to the base prospectus as updated through incorporation by reference.

If information in this prospectus supplement differs from information in the accompanying prospectus, you should rely on the information in this prospectus supplement.

Other than the Hong Kong public offering, no action is being taken in any jurisdiction outside the United States to permit a public offering of the Class A ordinary shares, and no action is being taken in any jurisdiction outside the United States to permit the possession or distribution of this prospectus supplement or the accompanying prospectus in that jurisdiction. Persons who come into possession of this prospectus supplement or the accompanying prospectus in jurisdictions outside the United States are required to inform themselves about and to observe any restrictions as to the Global Offering and the distribution of this prospectus supplement and the accompanying prospectus applicable to that jurisdiction.

You should not consider any information in this prospectus supplement or the accompanying prospectus to be investment, legal or tax advice. You should consult your own counsel, accountants and other advisors for legal, tax, business, financial and related advice regarding the purchase of any of the securities offered by this prospectus supplement.

In this prospectus supplement, unless otherwise indicated or unless the context otherwise requires,

•

“ADSs” refers to the American depositary shares, each representing one Class A ordinary share;

​

•

“CAC” refers to the Cyberspace Administration of China;

​

•

“China” or “PRC” refers to the People’s Republic of China, excluding, for the purpose of this prospectus supplement only, Taiwan, Hong Kong and Macau;

​

•

“CIC” refers to China Insights Consultancy, an independent professional market research and consulting company;

​

•

“Class A ordinary share” refers to our Class A ordinary shares, par value US$0.00005 per share;

​

•

“Class B ordinary share” refers to our Class B ordinary shares, par value US$0.00005 per share;

​

•

“Hangzhou Tuya Technology” refers to Hangzhou Tuya Technology Co., Ltd.;

​

•

“Hong Kong Listing” refers to the listing of the Class A ordinary shares on the Main Board of the Hong Kong Stock Exchange;

​

•

“IoT” refers to Internet of Things, a concept of connecting physical objects, or “things,” that are embedded with communication modules, software, and other technologies for the purpose of connecting and exchanging information with other devices and systems over the internet or other communications networks;

​

•

“Listing Date” refers to the date, expected to be on or about July 5, 2022, on which the Class A ordinary shares are to be listed and on which dealings in the Class A ordinary shares are to be first permitted to take place on the Hong Kong Stock Exchange;

​

•

“MAA” or “Articles” refers to the eighth amended and restated memorandum and articles of association of our company, currently effective;

​

•

“NYSE” refers to the New York Stock Exchange;

​

•

“RMB” or “Renminbi” refers to the legal currency of the People’s Republic of China;

​

 

S-1

 

•

“SaaS” refers to software as a service, a cloud-based software licensing and delivery model in which software and associated data are centrally hosted and are available to end users over the internet;

​

•

“shares” or “ordinary shares” refer to our Class A and Class B ordinary shares, per value US$0.00005 per share;

​

•

“Tuya,” “we,” “us,” “our company,” and “our” refer to Tuya Inc., a Cayman Islands company and its subsidiaries, unless otherwise indicated;

​

•

“Tuya Information” refers to Hangzhou Tuya Information Technology Co., Ltd.;

​

•

“US$,” “dollars” or “U.S. dollars” refers to the legal currency of the United States; and

​

•

“variable interest entity,” or “VIE,” refers to the PRC entity, of which, through certain contractual arrangements, we have power to exert control over the management, and financial and operating policies and have the right to recognize and receive substantially all the economic benefits and in which we have an exclusive option to purchase all or part of the equity interests at the minimum price possible to the extent permitted by PRC law; the foregoing contractual arrangements allow us to be considered the primary beneficiary of the VIE for accounting purposes, and to consolidate its operating results in our financial statements under the U.S. GAAP to the extent the conditions for consolidation of the VIE under U.S. GAAP are satisfied.

​

Unless otherwise noted, all translations from Renminbi to U.S. dollars and from U.S. dollars to Renminbi in this prospectus supplement were made at RMB6.7081 to US$1.00, the exchange rate set forth in the H.10 statistical release of the Federal Reserve Board on June 10, 2022. We make no representation that any Renminbi or U.S. dollar amounts could have been, or could be, converted into U.S. dollars or Renminbi, as the case may be, at any particular rate, or at all.

All discrepancies in any table between the amounts identified as total amounts and the sum of the amounts listed therein are due to rounding.

 

S-2

 

WHERE YOU CAN FIND MORE INFORMATION

We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and in accordance with the Exchange Act, we file annual reports and other information with the SEC. Information that we file with the SEC can be obtained over the internet at the SEC’s website at www.sec.gov.

This prospectus supplement is part of a registration statement that we filed with the SEC, using a “shelf” registration process under the Securities Act of 1933, as amended (the “Securities Act”) relating to the securities to be offered. This prospectus supplement does not contain all of the information set forth in the registration statement, certain parts of which are omitted in accordance with the rules and regulations of the SEC. For further information with respect to Tuya Inc. and the securities, reference is hereby made to the registration statement and the prospectus contained therein. The registration statement, including the exhibits thereto, may be inspected on the SEC’s website.

 

S-3

 

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The SEC allows us to “incorporate by reference” the information that we file with or submit to the SEC, which means that we can disclose important information to you by referring you to those documents that are considered part of this prospectus supplement and the accompanying prospectus. Each document incorporated by reference is current only as of the date of such document, and the incorporation by reference of such documents should not create any implication that there has been no change in our affairs since such date. Information that we file with or submit to the SEC in the future and incorporate by reference will automatically update and supersede the previously filed information. See “Incorporation of Certain Documents by Reference” in the accompanying prospectus for more information. All of the documents incorporated by reference are available at www.sec.gov under Tuya Inc., CIK number 0001829118.

We incorporate by reference the documents listed below in this prospectus supplement.

•

Our annual report on Form 20-F for the fiscal year ended December 31, 2021 filed with the SEC on April 28, 2022 (File No. 001-40210), or our 2021 Form 20-F;

​

•

any future annual reports on Form 20-F filed with the SEC after the date of this prospectus and prior to the termination of the offering of the securities offered by this prospectus;

​

•

the description of the securities contained in our registration statement on Form 8-A filed with the SEC on March 12, 2021 pursuant to Section 12 of the Exchange Act, together with all amendments and reports filed for the purpose of updating that description;

​

•

Our current report on Form 6-K furnished to the SEC on June 22, 2022 (File No. 001-40210), or the Super 6-K; and

​

•

With respect to the offering of the securities under this prospectus supplement, any future reports on Form 6-K that we furnish to the SEC after the date of this prospectus supplement that are identified in such reports as being incorporated by reference in this prospectus supplement.

​

As you read the documents incorporated by reference, you may find inconsistencies in information from one document to another. If you find inconsistencies, you should rely on the statements made in the most recent document.

We will provide a copy of any or all of the information that has been incorporated by reference into the accompanying prospectus, other than exhibits to those documents unless such exhibits are specially incorporated by reference in this prospectus supplement upon written or oral request, to any person, including any beneficial owner of the securities, to whom a copy of this prospectus supplement is delivered, at no cost to such person. You may make such a request by writing or telephoning us at the following mailing address or telephone number:

Tuya Inc.
10/F, Building A, Huace Center
Xihu District, Hangzhou City, Zhejiang, 310012
People’s Republic of China
+86 0571-86915981
Attention: Investor Relations

 

S-4

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus supplement, the accompanying prospectus and the documents incorporated by reference therein may contain statements that constitute forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Many of the forward-looking statements contained in this prospectus supplement, the accompanying prospectus and the documents incorporated by reference therein can be identified by the use of forward-looking words such as “anticipate,” “believe,” “could,” “expect,” “should,” “plan,” “intend,” “estimate” and “potential,” among others.

Forward-looking statements appear in a number of places in this prospectus supplement, the accompanying prospectus and the documents incorporated by reference therein, and include, but are not limited to, statements regarding our intent, belief or current expectations. Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. Such statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied in the forward-looking statements due to various factors, including, but not limited to, those identified under the section entitled “Item 3. Key Information — 3.D. Risk Factors” in our 2021 Form 20-F and under the section entitled “Risk Factors” in Exhibit 99.1 to the Super 6-K. These risks and uncertainties include factors relating to:

•

general economic, political, demographic and business conditions in China and globally;

​

•

our ability to implement our growth strategies;

​

•

the success of operating initiatives, including advertising and promotional efforts and new product and service development by us and our competitors;

​

•

our ability to develop and apply our technologies to support and expand our product and service offerings;

​

•

our ability to compete and conduct our business in the future;

​

•

the expected growth of the IoT PaaS and SaaS industries in China and globally;

​

•

our ability to estimate customer demand properly;

​

•

the availability of qualified personnel and the ability to retain such personnel;

​

•

competition in the IoT PaaS and SaaS industries;

​

•

the COVID-19 pandemic and government measures taken in response thereto;

​

•

changes in government policies and regulations; and

​

•

other factors that may affect our financial condition, liquidity and results of operations.

​

This list of important factors is not exhaustive. We would like to caution you not to place undue reliance on these forward-looking statements. We operate in an evolving environment. New risks emerge from time to time and it is impossible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ from those contained in any forward-looking statement. We qualify all of our forward-looking statements by these cautionary statements.

You should not rely upon forward-looking statements as predictions of future events. Forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update them in light of new information or future developments or to release publicly any revisions to these statements in order to reflect later events or circumstances or to reflect the occurrence of unanticipated events.

 

S-5

 

S-6

 

S-7

 

​

S-8

 

​

S-9

 

​

S-10

 

​

S-11

 

​

S-12

 

S-13

 

S-14

 

​	​	​	Taxation Scenario(1) Statutory Tax and Standard Rates				​
Hypothetical pre-tax earnings(2)	​	​	​	​	100%	​	​
Tax on earnings at statutory rate of 25%	​	​	​	​	(25)%	​	​
Net earnings available for distribution	​	​	​	​	75%	​	​
Withholding tax at standard rate of 10%(3)	​	​	​	​	(7.5)%	​	​
Net distribution to Parent/Shareholders	​	​	​	​	67.5%	​	​

S-15

 

S-16

 

S-17

 

S-18

 

​

S-19

 

​

​

​

For the three months ended March 31,

​

​

​

​

2021

​

​

2022

​

​

​

​

(US$ in thousands)

​

​

​

​

(Unaudited)

​

​

(Unaudited)

​

Revenue

​

​

​

​

56,868

​

​

​

​

​

55,324

​

​

Cost of revenue

​

​

​

​

(33,485)

​

​

​

​

​

(32,504)

​

​

Gross profit

​

​

​

​

23,383

​

​

​

​

​

22,820

​

​

Operating expenses:

​

​

​

​

​

​

​

​

​

​

​

​

​

Research and development expenses(1)

​

​

​

​

(34,709)

​

​

​

​

​

(47,588)

​

​

Sales and marketing expenses(1)

​

​

​

​

(16,412)

​

​

​

​

​

(15,278)

​

​

General and administrative expenses(1)

​

​

​

​

(16,062)

​

​

​

​

​

(18,030)

​

​

Other operating incomes, net

​

​

​

​

2,523

​

​

​

​

​

2,594

​

​

Total operating expenses

​

​

​

​

(64,660)

​

​

​

​

​

(78,302)

​

​

Loss from operations

​

​

​

​

(41,277)

​

​

​

​

​

(55,482)

​

​

Other income/(loss)

​

​

​

​

​

​

​

​

​

​

​

​

​

Other non-operating incomes, net

​

​

​

​

—

​

​

​

​

​

653

​

​

Financial income, net

​

​

​

​

1,095

​

​

​

​

​

121

​

​

Foreign exchange loss, net

​

​

​

​

(325)

​

​

​

​

​

(101)

​

​

Loss before income tax expense

​

​

​

​

(40,507)

​

​

​

​

​

(54,809)

​

​

Income tax expense

​

​

​

​

(26)

​

​

​

​

​

(144)

​

​

Net loss

​

​

​

​

(40,533)

​

​

​

​

​

(54,953)

​

​

Net loss attributable to Tuya Inc.

​

​

​

​

(40,533)

​

​

​

​

​

(54,953)

​

​

Net loss attributable to ordinary shareholders

​

​

​

​

(40,533)

​

​

​

​

​

(54,953)

​

​

Net loss

​

​

​

​

(40,533)

​

​

​

​

​

(54,953)

​

​

Other comprehensive (loss)/income

​

​

​

​

​

​

​

​

​

​

​

​

​

Foreign currency translation

​

​

​

​

(371)

​

​

​

​

​

649

​

​

Total comprehensive loss attributable to Tuya Inc.

​

​

​

​

(40,904)

​

​

​

​

​

(54,304)

​

​

S-20

 

​

​

​

For the three months ended March 31,

​

​

​

​

2021

​

​

2022

​

​

​

​

(US$ in thousands)

​

​

​

​

(Unaudited)

​

​

(Unaudited)

​

Research and development expenses

​

​

​

​

3,845

​

​

​

​

​

4,130

​

​

Sales and marketing expenses

​

​

​

​

2,139

​

​

​

​

​

1,653

​

​

General and administrative expenses

​

​

​

​

10,798

​

​

​

​

​

11,873

​

​

Total

​

​

​

​

16,782

​

​

​

​

​

17,656

​

​

​

​

​

For the three months ended March 31,

​

​

​

​

2021

​

​

2022

​

​

​

​

(US$ in thousands)

​

​

​

​

(Unaudited)

​

​

(Unaudited)

​

IoT PaaS

​

​

​

​

49,778

​

​

​

​

​

41,774

​

​

Smart device distribution

​

​

​

​

4,758

​

​

​

​

​

7,797

​

​

SaaS and others

​

​

​

​

2,332

​

​

​

​

​

5,753

​

​

​

​

​

​

​

56,868

​

​

​

​

​

55,324

​

​

S-21

 

S-22

 

​

​

​

For the three months ended March 31,

​

​

​

​

2021

​

​

2022

​

​

​

​

(US$ in thousands)

​

​

​

​

(Unaudited)

​

​

(Unaudited)

​

Net loss

​

​

​

​

(40,533)

​

​

​

​

​

(54,953)

​

​

Adjustment:

​

​

​

​

​

​

​

​

​

​

​

​

​

Share-based compensation expenses

​

​

​

​

16,782

​

​

​

​

​

17,656

​

​

Non-GAAP adjusted loss (non-GAAP financial measure)

​

​

​

​

(23,751)

​

​

​

​

​

(37,297)

​

​

​

​

​

As of December 31, 2021

​

​

As of March 31, 2022

​

​

​

​

(US$ in thousands)

​

​

​

​

​

​

​

​

​

​

(Unaudited)

​

Current assets

​

​

​

​

​

​

​

​

​

​

​

​

​

Cash and cash equivalents

​

​

​

​

963,938

​

​

​

​

​

743,709

​

​

Restricted cash

​

​

​

​

638

​

​

​

​

​

1,129

​

​

Short-term investments

​

​

​

​

102,134

​

​

​

​

​

240,451

​

​

Accounts receivable, net

​

​

​

​

32,701

​

​

​

​

​

29,874

​

​

Notes receivable

​

​

​

​

1,393

​

​

​

​

​

2,659

​

​

Inventories, net

​

​

​

​

62,582

​

​

​

​

​

65,153

​

​

Prepayments and other current assets

​

​

​

​

27,882

​

​

​

​

​

23,883

​

​

Total current assets

​

​

​

​

1,191,268

​

​

​

​

​

1,106,858

​

​

Current Liabilities

​

​

​

​

​

​

​

​

​

​

​

​

​

Accounts payable

​

​

​

​

12,212

​

​

​

​

​

10,327

​

​

Advance from customers

​

​

​

​

31,088

​

​

​

​

​

31,736

​

​

Deferred revenue, current

​

​

​

​

9,254

​

​

​

​

​

8,474

​

​

Accruals and other current liabilities

​

​

​

​

50,847

​

​

​

​

​

31,707

​

​

Lease liabilities, current

​

​

​

​

5,697

​

​

​

​

​

5,607

​

​

Total current liabilities

​

​

​

​

109,098

​

​

​

​

​

87,851

​

​

Net current assets

​

​

​

​

1,082,170

​

​

​

​

​

1,019,007

​

​

S-23

 

S-24

 

S-25

 

S-26

 

​

S-27

 

​

S-28

 

​

S-29

 

S-30

 

S-31

 

RISK FACTORS

An investment in our Class A ordinary shares involves significant risks. You should carefully consider the risks described below together with the risks described in our 2021 Form 20-F, Exhibit 99.1 to the Super 6-K, and the other information contained in this prospectus supplement and the accompanying prospectus, including the documents incorporated by reference. Any of these risks could have a material adverse effect on our business, financial condition, and results of operations. In any such case, the market price of our Class A ordinary shares could decline, and you may Jose all or part of your investment.

Please see “Where You Can Find More Information” and “Incorporation of Certain Documents by Reference” for information on where you can find the documents we have filed with or furnished to the SEC and which are incorporated by reference in this prospectus supplement.

Risks Related to the Global Offering and the Dual Listing

Consummation of the Global Offering is subject to market and other conditions, and there can be no assurance that it will be completed on the terms described in this prospectus supplement, or at all.

Acceptance of all applications for shares offered in the Global Offering will be conditional on (i) the Hong Kong Stock Exchange granting approval for the listing of, and permission to deal in, the Class A ordinary shares in issue and to be issued as mentioned in this prospectus supplement, on the Main Board of the Hong Kong Stock Exchange and such approval not subsequently having been withdrawn or revoked prior to the Listing Date; (ii) the pricing of the shares offered in the Global Offering having been agreed between the Joint Representatives (for themselves and on behalf of the Underwriters) and the Company, and (iii) certain other conditions.

The satisfaction of these conditions is subject to market conditions and our compliance with applicable listing rules. For example, if with reference to the offer price of our shares sold in the Global Offering to be determined on the price determination date, the expected market capitalization of our company at the time of the Hong Kong Listing will not exceed HK$10 billion (i.e. the market capitalization requirements of a listing applicant seeking listing with weighted voting right (“WVR”) structure under Rule 8A.06(2) of the Hong Kong Listing Rules), the Global Offering may not proceed. For illustration purpose, based on the number of offer shares initially available under the Global Offering (i.e. 7,300,000 Class A ordinary shares), the offer price of our shares sold in the Global Offering shall be HK$17.29 or more per offer share to meet the market capitalization requirements of HK$10 billion under Rule 8A.06(2) of the Hong Kong Listing Rules. If any of the conditions to the Global Offering is not satisfied, due to our failure to meet the aforesaid Rule 8A.06(2) requirements or any other reasons, prior to the dates and times specified, the Global Offering will not proceed and will lapse. In addition, in such a situation, all application monies of investors in the Hong Kong public offering will be refunded, without interest, on terms described in the prospectus relating to the Hong Kong public offering.

An active trading market for our Class A ordinary shares on the Hong Kong Stock Exchange might not develop or be sustained and trading prices of our Class A ordinary shares might fluctuate significantly.

Following the completion of the Global Offering, we cannot assure you that an active trading market for our Class A ordinary shares on the Hong Kong Stock Exchange will develop or be sustained. The trading price or liquidity for the ADSs on the NYSE might not be indicative of those of our Class A ordinary shares on the Hong Kong Stock Exchange following the completion of the Global Offering. If an active trading market of our Class A ordinary shares on the Hong Kong Stock Exchange does not develop or is not sustained after the Global Offering, the market price and liquidity of our Class A ordinary shares could be materially and adversely affected.

In 2014, the Hong Kong, Shanghai, and Shenzhen stock exchanges collaborated to create an inter-exchange trading mechanism called Stock Connect that allows international and PRC investors to trade eligible equity securities listed in each other’s markets through the trading and clearing facilities of their home exchange. Stock Connect currently covers over 2,000 equity securities trading in the Hong Kong, Shanghai, and Shenzhen markets. Stock Connect allows PRC investors to trade directly in eligible equity securities listed on the Hong Kong Stock Exchange, known as Southbound Trading; without Stock Connect, PRC

 

S-32

 

investors would not otherwise have a direct and established means of engaging in Southbound Trading. In October 2019, the Shanghai and Shenzhen stock exchanges separately announced their amended implementation rules in connection with Southbound Trading to include shares of companies with a WVR structure to be traded through Stock Connect. However, since these rules are relatively new, there remains uncertainty as to the implementation details, especially with respect to shares of those companies with a secondary or dual-primary listing on the Hong Kong Stock Exchange. It is unclear whether and when the Class A ordinary shares of our company, a WVR company with a dual-primary listing in Hong Kong upon the Hong Kong Listing, will be eligible to be traded through Stock Connect, if at all. The ineligibility or any delay of our Class A ordinary shares for trading through Stock Connect will affect PRC investors’ ability to trade our Class A ordinary shares and therefore may limit the liquidity of the trading of our Class A ordinary shares on the Hong Kong Stock Exchange.

Since there will be a gap of several days between pricing and trading of our Class A ordinary shares, the price of the ADSs traded on the NYSE may fall during this period and could result in a fall in the price of our Class A ordinary shares to be traded on the Hong Kong Stock Exchange.

The offer price of our shares sold in the Global Offering is expected to be determined on the price determination date. However, our Class A ordinary shares will not commence trading on the Hong Kong Stock Exchange until they are delivered, which is expected to be a few business days after the price determination date. As a result, investors may not be able to sell or otherwise deal in our Class A ordinary shares during that period. Accordingly, holders of our Class A Ordinary Shares are subject to the risk that the trading price of our Class A Ordinary Shares could fall when trading commences as a result of adverse market conditions or other adverse developments that could occur between the Price Determination Date and the time trading begins. In particular, as the ADSs will continue to be traded on the NYSE and their price can be volatile, any fall in the price of the ADSs may result in a fall in the price of our Class A Ordinary Shares to be traded on the Hong Kong Stock Exchange.

There is uncertainty as to whether Hong Kong stamp duty will apply to the trading or conversion of our ADSs following our initial public offering in Hong Kong and listing of our Class A ordinary shares on the Hong Kong Stock Exchange

In connection with our initial public offering of Class A ordinary shares in Hong Kong, we will establish a branch register of members in Hong Kong (the “Hong Kong share register”). Our Class A Ordinary Shares that are traded on the Hong Kong Stock Exchange, including those to be issued in the Global Offering and those that may be converted from ADSs, will be registered on the Hong Kong share register, and the trading of these shares on the Hong Kong Stock Exchange will be subject to the Hong Kong stamp duty. To facilitate ADS-Class A ordinary shares conversion and trading between the NYSE and the Hong Kong Stock Exchange, we also intend to move a portion of our issued Class A ordinary shares from our register of members maintained in the Cayman Islands to our Hong Kong share register.

Under the Hong Kong Stamp Duty Ordinance, any person who effects any sale or purchase of Hong Kong stock, defined as stock the transfer of which is required to be registered in Hong Kong, is required to pay Hong Kong stamp duty. The stamp duty is currently set at a total rate of 0.26% of the greater of the consideration for, or the value of, shares transferred, with 0.13% payable by each of the buyer and the seller. See “Conversion between Class A Ordinary Shares and American Depositary Shares” for more details.

To the best of our knowledge, Hong Kong stamp duty has not been levied in practice on the trading or conversion of ADSs of companies that are listed in both the United States and Hong Kong and that have maintained all or a portion of their common shares, including common shares represented by ADSs, in their Hong Kong share registers. However, it is unclear whether, as a matter of Hong Kong law, the trading or conversion of ADSs of these dual-listed companies constitutes a sale or purchase of the underlying Hong Kong-registered common shares that is subject to Hong Kong stamp duty. We advise investors to consult their own tax advisors on this matter. If Hong Kong stamp duty is determined by the competent authority to apply to the trading or conversion of our ADSs, the trading price and the value of your investment in our Class A ordinary shares and/or ADSs may be affected.

 

S-33

 

The characteristics of the U.S. capital markets and the Hong Kong capital markets are different.

Upon the Hong Kong Listing, we will be subject to the Hong Kong Stock Exchange and the NYSE listing and regulatory requirements concurrently. The NYSE and the Hong Kong Stock Exchange have different trading hours, trading characteristics (including trading volume and liquidity), trading and listing rules, and investor bases (including different levels of retail and institutional participation). As a result of these differences, the trading prices of our Class A ordinary shares and the ADSs representing them might not be the same, even allowing for currency differences. Fluctuations in the price of the ADSs due to circumstances peculiar to its home capital market could materially and adversely affect the price of our Class A ordinary shares. Because of the different characteristics of the U.S. and Hong Kong capital markets, the historic market prices of the ADSs may not be indicative of the performance of our securities (including our Class A ordinary shares) after the Global Offering.

The deposit of our Class A ordinary shares for delivery of ADSs and the surrender of ADSs for cancellation and withdrawal of our Class A ordinary shares may adversely affect the liquidity or trading price of our securities.

The ADSs are currently traded on the NYSE. Subject to compliance with U.S. securities laws and the terms of the deposit agreement, holders of our Class A ordinary shares may deposit Class A ordinary shares with the depositary for delivery of ADSs. Any holder of ADSs may also withdraw the underlying Class A ordinary shares represented by the ADSs pursuant to the terms of the deposit agreement for trading on the Hong Kong Stock Exchange. In the event that a substantial number of Class A ordinary shares are deposited with the depositary for delivery of ADSs or that a substantial number of ADSs are surrendered for cancellation and withdrawal of our Class A ordinary shares, the liquidity and trading price of our Class A ordinary shares on the Hong Kong Stock Exchange and the ADSs on the NYSE may be adversely affected.

The time required for the deposit of our Class A ordinary shares for delivery of ADSs and the surrender of ADSs for cancellation and withdrawal of our Class A ordinary shares might be longer than expected and investors might not be able to settle or effect any sale of their securities during this period, and such actions may involve costs.

There is no direct trading or settlement between the NYSE and the Hong Kong Stock Exchange on which the ADSs and our Class A ordinary shares are respectively traded. In addition, the time differences between Hong Kong and New York, unforeseen market circumstances, or other factors may delay the deposit of Class A ordinary shares for delivery of the ADSs or the surrender of ADSs for cancellation and withdrawal of our Class A ordinary shares. Investors will be prevented from settling or effecting the sale of their securities during such periods of delay. In addition, we cannot assure you that any deposit of our Class A ordinary shares for delivery of ADSs or surrender of ADSs for cancellation and withdrawal of our Class A ordinary shares will be completed in accordance with the timelines that investors may anticipate.

Furthermore, the depositary for the ADSs is entitled to charge holders fees for various services including for the issuance of ADSs upon deposit of Class A ordinary shares, cancelation of ADSs, distributions of cash dividends or other cash distributions, distributions of ADSs pursuant to share dividends or other free share distributions, distributions of securities other than ADSs, and annual service fees. As a result, shareholders who deposit Class A ordinary shares for delivery of ADSs or surrender ADSs for cancellation and withdrawal of our Class A ordinary shares may not achieve the level of economic return they may anticipate.

We may be subject to securities litigation, which is expensive and could divert management attention.

Companies that have experienced volatility in the volume and market price of their shares have been subject to an increased incidence of securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, and, if adversely determined, could have a material adverse effect on our business, financial condition and results of operations.

Purchasers of our Class A ordinary shares will incur immediate and significant dilution and may experience further dilution if we issue additional shares or other equity securities in the future, including pursuant to the share incentive schemes.

The offer price of the Class A ordinary shares is higher than the net tangible asset value per ordinary share immediately prior to the Global Offering. Therefore, purchasers of the shares offered in the Global

 

S-34

 

Offering will experience an immediate dilution in pro forma net tangible asset value. In order to expand our business, we may consider offering and issuing additional shares or other equity securities in the future. Purchasers of the shares offered in the Global Offering may experience dilution in the net tangible asset value per share of their Class A ordinary shares if we issue additional shares or other equity securities in the future at a price which is lower than the net tangible asset value per ordinary share at that time. Furthermore, we may issue ordinary shares pursuant to the share incentive schemes, which would further dilute shareholders’ interests in our company.

You should read the entire prospectus supplement, accompanying prospectus and documents incorporated by reference therein carefully, and we caution you not to place any reliance on any information contained in press articles or other media regarding us or the Global Offering.

Subsequent to the date of this prospectus supplement but prior to the completion of the Global Offering, there may be press and media coverage regarding us and the Global Offering, which may contain, among other things, certain financial information, projections, valuations and other forward-looking information about us and the Global Offering. We have not authorized the disclosure of any such information in the press or media and do not accept responsibility for the accuracy or completeness of such press articles or other media coverage. We make no representation as to the appropriateness, accuracy, completeness or reliability of any of the projections, valuations or other forward-looking information about us. To the extent such statements are inconsistent with, or conflict with, the information contained in this prospectus supplement, accompanying prospectus and documents incorporated by reference therein, we disclaim responsibility for them. Accordingly, prospective investors are cautioned to make their investment decisions on the basis of the information contained in prospectus supplement, accompanying prospectus and documents incorporated by reference therein only and should not rely on any other information.

We do not accept any responsibility for the accuracy or completeness of any information reported by the press or other media, nor the fairness or appropriateness of any forecasts, views or opinions expressed by the press or other media regarding our shares, the Global Offering or us. We make no representation as to the appropriateness, accuracy, completeness or reliability of any such data or publication. Accordingly, prospective investors should not rely on any such information, reports or publications in making their decisions as to whether to invest in our Global Offering.

There is a significant risk that we will be a passive foreign investment company, or a PFIC, for 2022 or any future taxable year, which could result in adverse U.S. federal income tax consequences to U.S. investors in our Class A ordinary shares or ADSs.

As described under “Taxation — Material U.S. Federal Income Tax Considerations — Passive Foreign Investment Company Rules,” there is a significant risk that we will be a PFIC for 2022 and future taxable years. If we are a PFIC for any taxable year during which a U.S. taxpayer holds Class A ordinary shares or ADSs, the U.S. taxpayer generally will be subject to adverse U.S. federal income tax consequences, including increased tax liability on disposition gains and “excess distributions,” and additional reporting requirements. If we are a PFIC for any taxable year, these adverse tax consequences will generally continue to apply even if we cease to be a PFIC in a later taxable year, unless certain elections are made. See “Taxation — Material U.S. Federal Income Tax Considerations — Passive Foreign Investment Company Rules.”

 

S-35

 

USE OF PROCEEDS

We will determine the offer price for both the international offering and the Hong Kong public offering by reference to, among other factors, the closing price of our ADSs on the last trading day before the pricing of the Global Offering, which is expected to be on or about June 27, 2022. The maximum offer price for the Hong Kong public offering is HK$22.80, or US$2.90, per Class A ordinary share (equivalent to US$2.90 per ADS). Assuming (i) the offering price is HK$22.80 per Class A ordinary share, (ii) initially 6,570,000 Class A ordinary shares are allocated to the international offering and (iii) initially 730,000 Class A ordinary shares are allocated to the Hong Kong public offering, we estimate that we will receive net proceeds from the Global Offering of approximately HK$94.5 million, or US$12.0 million (or approximately HK$118.4 million, or US$15.1 million, if the Joint Representatives exercise in full, on behalf of the international underwriters, their option to purchase additional Class A ordinary shares), after deducting underwriting discounts and commissions and the estimated offering expenses payable by us.

The public offering price in the international offering may be higher than, or the same as, the public offering price in the Hong Kong public offering. In addition, the allocation of Class A ordinary shares between the Hong Kong public offering and the international offering is subject to reallocation as described in “Underwriting.”

We plan to use the net proceeds we will receive from the Global Offering for the following purposes:

(1)

Enhancing IoT Technologies and Infrastructure. Approximately 30% or approximately HK$28.3 million is expected to be used over the course of the next five years to enhance our leading IoT technologies and infrastructure.

​

(i)

We intend to invest substantially to upgrade our core technologies, including TTP, BTP, and AEP, expanding the range of features they offer, and enabling more innovative use cases. More specifically:

​

•

TTP.   We plan to continue to improve the reliability, security and functionality of TTP, and integrate it more closely with leading technologies, such as cloud computing, digital twins and AI-based algorithms, to allow our products to be used for more innovative use cases. For example, we will focus on using TTP to develop more “digital twins,” which are a visualized digital representation of various physical objects, processes, and systems through IoT technologies. Specifically, we are in the process of developing what we call “Building Twin” designed to accurately reflect a physical building and the services and facilities within it through data collected by IoT sensors. “Building Twin” will provide developers with the critical technology infrastructure that they need to develop IoT-enabled solutions, such as smart device monitoring systems or intelligent space management solutions, for a variety of verticals. We intend to first develop the “Building Twin” for selected verticals that we believe will maximize its value, such as smart home, smart building, and smart manufacturing, and may then roll it out to additional industries. We also intend to use insights generated from our digital twins to inform our AI-powered algorithms to help our customers design better products and improve operational efficiencies.

​

•

BTP.   We will invest in upgrading BTP to further strengthen the technology foundation of our IoT cloud development platform. This will lay the necessary technology groundwork for us to provide customers with more diversified IoT capabilities in ways that better suit their specific needs and preferences. For example, while our IoT PaaS has historically been delivered primarily through public infrastructure, we have recently leverage BTP to make it possible for selected customers to access IoT PaaS through their own private cloud infrastructure (i.e. the “private cloud” model) or a combination of public and private cloud infrastructure (the “hybrid cloud” model). We intend to roll out the private and hybrid cloud models to benefit more customers. As we enhance our BTP, we intend to regularly upgrade and continue to launch new versions of private and hybrid cloud solutions for our customers, making it possible for them to access more IoT services and capabilities through these two models.

​

 

S-36

 

•

AEP.   We also plan to enhance our AEP to expand our selection of IoT development tools, such as APIs and SDKs. With these efforts, we intend to create a more developer-friendly, low-code and no-code environment so that developers can more quickly and cost-efficiently create, customize, or integrate systems and functionality for their specific needs and use cases. As part of these endeavors, we intend to leverage our extensive expertise with IoT PaaS to build a unified development framework and the ancillary development tools for IoT SaaS developers, so that they can easily create bespoke solutions customized for specific verticals. We also plan to deliver more IoT development tools in what we call the “mini-programs” ​(i.e. lightweight applications running within another mobile app) format, so that developers and end-users can access them from the palm of their hands easily. Furthermore, we intend to continuously expand and refine our selection of “modularized” IoT capabilities. By being modularized, these IoT capabilities serve as basic building blocks that can be easily integrated and adapted to create more sophisticated, customized solutions and mobile applications. We will also focus on upgrading AEP and IoT development tools and capabilities that it enables and making them more easily configurable for specific needs across different verticals and use cases.

​

(ii)

We plan to continue to invest in technology infrastructure and other capital expenditure. We plan to enhance our IT systems by strengthening computing power and storage capabilities. We expect to procure more advanced elastic cloud computing and storage services and efficient hardware equipment to support our R&D efforts, which will further improve the efficiency of research and development process. In addition, we plan to invest in our internal systems to improve our internal information management and enhance data privacy protocols and information security management.

​

(iii)

We plan to further enhance our core capabilities such as IoT algorithms and data analytics. We also intend to invest in developing additional cutting-edge technologies for more innovative use cases, such as smart devices with 5G and outdoor cellular capabilities, IoT systems installed on two-wheelers, as well as IoT-enabled industrial automation.

​

(2)

Enhancing our product offerings.   Approximately 30% or approximately HK$28.3 million is expected to be used over the course of the next five years for expand and enhance our product offerings. More specifically:

​

(i)

IoT PaaS.   We will continue to enhance our IoT PaaS to reinforce our leadership in the IoT PaaS industry. We offer an extensive array of “modularized” IoT capabilities that can be easily customized and integrated to meet specific customer requirements. We intend to use these modularized capabilities to make our IoT PaaS more stable, easy-to-use and adaptable for customer needs and preferences. Furthermore, we also intend to invest further in making IoT PaaS compatible with additional connectivity protocols, more easily configurable for specific verticals and use cases. For example, since 2020, we have been successfully expanded our IoT PaaS to cover digital entertainment, consumer energy, outdoor and transportation categories. In 2022 and beyond, we will invest in making IoT PaaS more ease-to-use and easily adaptable for these categories and expand into additional categories and verticals. Additionally, as our customers globally access our IoT PaaS remotely via the Internet, we will continue to invest in improving the capacity, reliability and speed of IoT PaaS, including by establishing local data centers in key overseas locations, as well as offering more localized support and functionalities. We will also invest in enabling customers to more efficiently access IoT PaaS and deploy it on devices from broader categories and use cases, using the above-mentioned “private cloud” or “hybrid cloud,” or a combination of both, depending on the their specific business needs and preferences.

​

(ii)

Industry SaaS.   We intend to continue to upgrade Industry SaaS to make it more flexible, easy-to-deploy and compatible with devices of different categories. We will also focus on increasing adoption of our Industry SaaS across industrial, agriculture and various other different verticals. For example, as part of our initiatives to venture into the smart industry space, we are developing an Industry SaaS solution specifically for small- to medium-sized manufacturing

​

 

S-37

 

companies, by leveraging our extensive existing expertise in smart home and business. These new Industry SaaS solutions are designed to digitalize and streamline some of the most critical aspects of manufacturing companies’ daily operations — quality control, product traceability, and supply chain and inventory management — through IoT technologies and connected devices. As another example, as we help brands design mobile apps that control their smart devices, we realized they have a strong yet unmet need for tools to engage with the end-users. To this end, we are in the process of developing a dedicate SaaS solution to enable brands to attract, engage and monetize their online traffic.

(iii)

Value-added services.   We intend to continue to expand our offerings of value-add services to deliver a more engaging and convenient user experience. We have partnered with select independent software vendors and system integrators who help us tailor our value-added services for specific customers and use cases. We intend to further strengthen such partnerships to improve our ability to better serve more customers with diverse and specific needs.

​

Implementing the initiatives as set forth in (1) and (2) will require us to continue to retain, attract and recruit scientists, researchers and other R&D and product development employees. It will also require us to develop or acquire new technologies and increase our general R&D expenditures. As a result, we expect our research and development expenses to continue to increase in absolute amount. However, we expect that these initiatives will have a long-term positive impact on our revenues and growth prospects as they allow us deliver more compelling products and services, attract more customers, and expand our customers’ use of our IoT cloud development platform over time. In addition, the expansion of our offerings and increased sharing of the technology infrastructure are expected to lead to greater economies of scale, which in turn will have a positive effect on our long-term profitability.

(3)

Improving sales and marketing.   Approximately 15% or approximately HK$14.2 million is expected to be used over the course of the next five years for marketing and branding activities. More specifically:

​

(i)

We intend to continue to invest in expanding, retaining and training our sales team to attract new and retain existing customers and expand their use of our products and services over time. We will also provide our sales team with the resources they need to engage closely with our customers, especially key account customers encourage customers to try new products and services and expand their adoption of our IoT cloud development platform. We expect to use approximately HK$1.9 million to implement these initiatives.

​

(ii)

We plan to organize or participate in a variety of offline events, such as industry conferences, developer events, roadshows and exhibitions (e.g. Consumer Electronics Show (CES) and Mobile World Congress (MWC)), as well as online marketing campaigns to promote our brand and showcase our products and services to target customers and the global IoT developer community. We are looking to organize or participate in over 100 exhibitions and trade fairs, over 90 industry conferences and over 30 events for IoT developers, over the next five years. We expect to use approximately HK$4.7 million to implement these activities.

​

(iii)

We intend to invest to strengthen and expand our global network of channel partners to further grow our customer base, enhance our presence internationally and expand our sales touchpoints with prospective customers, partners, and end-users. We expect to use approximately HK$3.8 million to implement these activities.

​

(iv)

We will also enhance our brand awareness among end-users by promoting the “Powered by Tuya” concept through targeted branding and marketing activities. We expect to use approximately HK$3.8 million to implement these activities.

​

By implementing the initiatives set forth in (3) above, we expect to incur additional sales and marketing expenses due to increased sales team and expanded sales and marketing activities. However, we expect these initiatives to enable us to expand our customer base with greater cross-selling and up-selling opportunities which, in turn, benefits our revenue and profitability in the long run.

 

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(4)

Pursuing strategic partnerships, investments and acquisitions.   Approximately 15% or approximately HK$14.2 million will be used over the course of the next five years to pursue strategic partnerships, investments and acquisitions to implement our long-term growth strategies. We primarily target the following types of business:

​

(i)

Businesses with leading technology in industry value chain that complement our existing offerings and strengthen our value propositions to customers. These businesses primarily include market-leading and promising smart device brands, smart device manufacturers and IoT app developers that operate in the upstream or downstream sectors of the industry value chain other than IoT PaaS business, such as the manufacturers of chips, IoT solutions and IoT controlling devices. Through our platform, we intend to leverage their expertise to deliver better user experience, offer more innovative products, and work closely with them to increase overall penetration of IoT which we believe will have a lasting positive impact on the IoT and adjacent industries in the long run.

​

(ii)

System integrators and industry operators that can help us broaden our reach to customers. These businesses mainly include those who interact directly with end users across a wide range of use cases, such as hotel managers, residential or commercial property managers, and educational institutions. Through strategic partnerships, investments and acquisitions, we intend to collaborate with these businesses to deliver better IoT experience to end-users and leverage their existing large customer bases to tap into new use cases and markets.

​

According to CIC, there are more than 600 potential acquisition and investment targets in IoT sector in China in 2020 that meet the criteria outlined above. Save for certain strategic minority investment, we have not identified any specific target or entered into any agreements, commitments or understandings for any future partnerships, investments and acquisitions as of June 13, 2022.

We will continue to track potential acquisition or investment opportunities in areas that could have a synergistic effect with our existing business in terms of customer acquisition, technology innovation and product development. After identifying a suitable target, we will thoroughly assess synergies with our existing business in a prudent approach to make sure such acquisition or investments are beneficial to the long-term vitality of our business and operations.

(5)

Working capital and others.   Approximately 10% or approximately HK$9.4 million will be used over the course of the next five years for general corporate purposes and working capital needs.

​

To the extent that the net proceeds are not immediately applied to the above purposes and to the extent permitted by the relevant law and regulations, we will only place the net proceeds as short-term deposits only at licensed banks or financial institutions located in the PRC. In such event, we will comply with the appropriate disclosure requirements under the Hong Kong Listing Rules.

To the extent that our actual net proceeds from the Global Offering is higher or lower than our estimate above, we will increase or decrease our allocation of the net proceeds for the purposes set out above on a pro rata basis.

 

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CAPITALIZATION

The following table sets forth our capitalization as of March 31, 2022:

•

on an actual basis; and

​

•

on an adjusted basis giving effect to our issuance and sale in the Global Offering of 7,300,000 Class A ordinary shares, resulting in estimated net proceeds of HK$94.5 million (US$12.0 million), based on the assumed offer price of HK$22.80 or US$2.90, per Class A ordinary share (equivalent to US$2.90 per ADS), after deducting underwriting discounts and commissions and estimated offering expenses payable by us, and assuming (i) the Joint Representatives do not, on behalf of the international underwriters, exercise their option to purchase additional Class A ordinary shares, and (ii) no adjustment to the allocation of Class A ordinary shares between the Hong Kong public offering and the international offering.

​

This table should be read in conjunction with, and is qualified in its entirety by reference to, our audited consolidated financial statements and the notes thereto in our 2021 Form 20-F and Exhibit 99.2 to the Super 6-K, which are incorporated by reference in this prospectus supplement and accompanying prospectus.

 

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DILUTION

If you invest in our Class A ordinary shares in the Global Offering, your interest will be diluted to the extent of the difference between the public offering price per Class A ordinary shares and our net tangible book value per ordinary shares after this Global Offering. Dilution results from the fact that the public offering price per Class A ordinary share is substantially in excess of the net tangible book value per ordinary share attributable to the existing shareholders for our presently issued ordinary shares.

Our net tangible book value as of March 31, 2022 was US$1,052.1 million, or US$1.89 per ordinary share and US$1.89 per ADS. Net tangible book value represents the amount of our total consolidated tangible assets, less the amount of our total consolidated liabilities. Dilution is determined by subtracting net tangible book value per ordinary share, after giving effect to the additional proceeds we will receive from the Global Offering at an assumed offering price of HK$22.80, or US$2.90, per Class A ordinary share, after deducting underwriting discounts and commissions and estimated offering expenses payable by us, and the Joint Representatives do not, on behalf of the international underwriters, exercise their option to purchase additional Class A ordinary shares.

Without taking into account any other changes in such net tangible book value after March 31, 2022, other than to give effect to the estimated net proceeds we will receive from the issuance and sale of Class A ordinary shares in the Global Offering at an assumed offering price of HK$22.80, or US$2.90, per Class A ordinary share, after deduction of the underwriting discounts and commissions and estimated offering expenses payable by us, and assuming (i) the Joint Representatives do not, on behalf of the international underwriters, exercise their option to purchase additional Class A ordinary shares and (ii) no adjustment to the allocation of Class A ordinary shares between the Hong Kong public offering and the international offering, our as adjusted net tangible book value as of March 31, 2022 would have been US$1,064.4 million, or US$1.89 per ordinary share, or US$1.89 per ADS. This represents an immediate decrease in net tangible book value of US$0.00 per Class A ordinary share and US$0.00 per ADS to the existing shareholders and an immediate dilution in net tangible book value of US$1.01 per Class A ordinary share and US$1.01 per ADS to investors purchasing Class A ordinary shares in the Global Offering.

The following table illustrates such dilution:

The amount of dilution in net tangible book value to new investors in the Global Offering set forth above is determined after giving effect to the Global Offering from the public offering price per Class A ordinary share.

A US$1.00 increase (decrease) in the assumed offer price of HK$22.80, or US$2.90, per Class A ordinary share would increase (decrease) our as adjusted net tangible book value after giving effect to the Global Offering by US$7.0 million, the as adjusted net tangible book value per ordinary share and per ADS after giving effect to the Global Offering, by US$0.01 per ordinary share and US$0.01 per ADS and the dilution in net tangible book value per ordinary share and per ADS to new investors in the Global Offering by US$0.99 per Class A ordinary share and US$0.99 per ADS, assuming (i) no change to the number of Class A ordinary shares offered by us as set forth on the front cover page of this prospectus supplement; (ii) the Joint Representatives do not, on behalf of the international underwriters, exercise their option to purchase additional Class A ordinary shares; and (iii) no adjustment to the allocation of Class A ordinary shares between the Hong Kong public offering and the international offering and after deducting underwriting discounts and commissions.

If the Joint Representatives do not, on behalf of the international underwriters, exercise in full their option to purchase additional Class A ordinary shares, the as adjusted net tangible book value would be

 

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US$1.89 per ordinary share and US$1.89 per ADS, and the dilution in as adjusted net tangible book value to investors in the Global Offering would be US$1.01 per ordinary share and US$1.01 per ADS.

The discussion and tables above do not reflect any outstanding share options or granted but not yet vested restricted share units as of March 31, 2022. As of June 13, 2022, there were (i) 29,566,175 ordinary shares issuable upon exercise of outstanding share options; (ii) 5,736,500 granted but not yet vested restricted share units; and (iii) 5,433,895 ordinary shares reserved for future grant under our 2015 Equity Incentive Plan.

Translations of U.S. dollars into Hong Kong dollars relating to estimated net proceeds and the assumed offering price were made at HK$7.8494 to US$1.00, the exchange rate on June 10, 2022, as set forth in the H.10 statistical release of The Board of Governors of the Federal Reserve System.

 

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PRINCIPAL SHAREHOLDERS

The following table sets forth information concerning the beneficial ownership of our ordinary shares as of June 13, 2022 by:

•

each of our directors and executive officers; and

​

•

each person known to us to beneficially own more than 5% of our ordinary shares.

​

We have adopted a dual class voting structure. The calculations in the table below are based on (i) 491,846,560 Class A ordinary shares, including 5,433,895 Class A ordinary shares issued to the depositary bank for bulk issuance of ADSs reserved for future issuances upon the exercise or vesting of awards granted under our 2015 Equity Incentive Plan, and 20,257,999 Class A ordinary shares represented by ADSs that have been repurchased by us from open market, and 79,400,000 Class B ordinary shares as of June 13, 2022, and (ii) 499,146,560 Class A ordinary shares and 79,400,000 Class B ordinary shares outstanding immediately after the complete of the Global Offering, assuming the Joint Representatives do not, on behalf of the international underwriters, exercise their option to purchase additional Class A ordinary shares.

Beneficial ownership is determined in accordance with the rules and regulations of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, we have included shares that the person has the right to acquire within 60 days, including through the exercise of any option, warrant, or other right or the conversion of any other security. These shares, however, are not included in the computation of the percentage ownership of any other person.

 

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Notes:

*

Less than 1% of our total outstanding shares on an as-converted basis.

​

**

For each person and group included in this table, the percentage ownership is calculated by dividing the number of shares beneficially owned by such person or group, including sharers that such person or group has the right to acquire within 60 days after June 13, 2022. The total number of ordinary shares outstanding as of June 13, 2022 is 571,246,560. The total number of ordinary shares outstanding after the completion of the Global Offering will be 578,546,560, including 7,300,000 Class A ordinary shares to be sold by us in the Global Offering, assuming that the Joint Representatives do not, on behalf of the international underwriters, exercise their option to purchase additional Class A ordinary shares.

​

***

For each person and group included in this column, the percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our ordinary shares as a single class, excluding Class A ordinary shares issued to the depositary bank for bulk issuance of ADSs reserved for future issuances upon the exercise or vesting of awards granted under our 2015 Equity Incentive Plan and Class A ordinary shares represented by ADSs that have been repurchased by us from open market. Each Class A ordinary share entitles the holder to exercise one vote per share, and each Class B Ordinary Share currently entitles the holder to exercise 15 votes per share (and will be entitled the holder to 10 votes per share after amendment of our MAA in the first general meeting of our company to be convened within six months from the Listing Date, in which shareholders’ approval will be sought to amend the MAA) on any resolution tabled at the general meetings of our company, except for resolutions with respect to a limited number of reserved matters, in relation to which each ordinary share is entitled to one vote. See “Prospectus Supplement Summary — Our Articles of Association and Dual Class Voting Structure.”

​

†

The address of our directors and executive officers (except Ms. Qing Gao, Ms. Jing Hong, Mr. Sidney Xuande Huang, Mr. Changheng Qiu, Mr. Meng Xiong Kuok and Mr. Pak Tung Jason Yip) is Huace Center, Building A, 10/F, Xihu District,Hangzhou City Zhejiang, 310000, People’s Republic of China. The address of Ms. Qing Gao is 1 Jian Guo Men Wai Ave., China World Tower 3B, F26, 100004, Beijing, China. The address of Jing Hong is Suite 1213, 12/F West Tower, Genesis Beijing, No. 8 Xinyuan South Road, Chaoyang District, 100027 P.R. China. The address of Mr. Sidney Xuande Huang is 80 Holland Park, London W11 3SG, United Kingdom. The address of Mr. Changheng Qiu is Shangshangting 8-2201, Tangping Road, Hangzhou, China. The address of Mr. Meng Xiong Kuok is 93 Grange Road, #07-08 Grange Residences, Singapore 249614. The address of Mr. Pak Tung Jason Yip is Flat 902, Block G, Kornhill, Quarry Bay, Hong Kong.

​

††

Mr. Sidney Xuande Huang, Mr. Changheng Qiu, Mr. Meng Xiong Kuok and Mr. Pak Tung Jason Yip have accepted their appointments to be independent directors of our company, conditional and effective upon the Hong Kong Listing. Ms. Qing Gao will resign from our board of directors and the audit committee due to personal reasons, conditional and effective upon the Hong Kong Listing.

​

(1)

Represents 10,000,000 Class B ordinary shares held of record by Tuya Group Inc., a business company with limited liability incorporated under the laws of BVI wholly owned by Mr. Xueji (Jerry) Wang, (ii) 63,000,000 Class A ordinary shares held of record by Tenet Group Limited, a British Virgin Islands company, and (iii) 40,600,000 Class B ordinary shares held of record by Tenet Vision Limited, a limited liability company incorporated under the laws of BVI. Both of Tenet Group Limited and Tenet Vision Limited are ultimately wholly owned by the trustee of a trust constituted under the laws of the Cayman Islands, of which the settlor is Mr. Xueji (Jerry) Wang and the beneficiaries are Mr. Wang and Tuya Group Inc. Mr. Wang’s exercise of the voting power over the shares beneficially owned by him will be subject to his undertakings in connection with the Global Offering. See “Prospectus Supplement Summary — Our Articles of Association and Dual Class Voting Structure.” The registered address of each of Tuya Group Inc. and Tenet Group Limited is Craigmuir Chambers, Road Town, Tortola, VG 1110, British Virgin Islands. The registered address of Tenet Vision Limited is Coastal Building, Wickham’s Cay II, P.O. Box 2221, Road Town, Tortola, British Virgin Islands.

​

(2)

Represents 28,800,000 Class B ordinary shares held of record by Unileo Limited, a limited liability company incorporated under the laws of BVI wholly owned by Liaohan (Leo) Chen. Mr. Chen’s exercise of the voting power over the shares beneficially owned by him will be subject to his undertakings in connection with the Global Offering. See “Prospectus Supplement Summary — Our Articles of Association and Dual Class Voting Structure.” The registered address of Unileo Limited is Craigmuir Chambers, Road Town, Tortola. VG 1110, British Virgin Islands.

​

(3)

Represents 21,600,000 Class A ordinary shares held of record by Valgolden Limited, a limited liability company incorporated under the laws of BVI wholly owned by Mr. Ruixin Zhou. Mr. Zhou’s exercise of the voting power over the shares beneficially owned by him will be subject to his undertakings in connection with the Global Offering. See “Prospectus Supplement Summary — Our Articles of Association and Dual Class Voting Structure.” The registered address of Valgolden Limited is Craigmuir Chambers. Road Town, Tortola, VG 1110, British Virgin Islands.

​

(4)

Represents 12,222,267 Class A ordinary shares held of record by GTY Holdings Limited, a company registered in the Cayman Islands. The registered address of GTY Holdings Limited is Cayman Corporate Centre, 27 Hospital Road, George Town, Grand Cayman KY1-9008, Cayman Islands. Jing Hong is the beneficial owner and general partner of the funds that own GTY Holdings Limited.

​

(5)

Represents 111,923,991 Class A ordinary shares held of record by New Enterprise Associates 14, L.P. (“NEA 14”) and 11,360,642 Class A ordinary shares held of record by NEA 15 Opportunity Fund L.P. (“NEA 15-OF”). The shares directly held by NEA 14 are indirectly held by NEA Partners 14, L.P. (“Partners 14”), which is the sole general partner of NEA 14; NEA 14 GP, LTD (“NEA 14 LTD”), the sole general partner of Partners 14; and each of the individual directors of NEA 14 LTD (collectively, the “NEA 14 Directors”). The NEA 14 Directors comprise a former director of us and certain other individuals. Partners 14, NEA 14 LTD, and the NEA 14 Directors share voting and dispositive power with regard to the shares held directly by NEA 14. The

​

 

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shares directly held by NEA 15-OF are indirectly held by NEA Partners 15-OF, L.P. (“Partners 15-OF”), the sole general partner of NEA 15-OF; NEA 15 GP, LLC (“NEA 15 LLC”), which is the sole general partner of Partners 15-OF; and each of the individual managers of NEA 15 LLC (collectively, the “NEA 15 Managers”). The NEA 15 Managers comprise a former director of us and certain other individuals. Partner 15-OF, NEA 15 LLC and the NEA 15 Managers share voting and dispositive power with regard to the shares owned directly by NEA 15-OF. All indirect holders of the above referenced shares disclaim beneficial ownership of all applicable shares except to the extent of their actual pecuniary interest therein. The address for the above referenced NEA entities is 1954 Greenspring Drive, Suite 600, Timonium, MD 21093.

(6)

Represents 63,000,000 Class A ordinary shares held of record by Tenet Group Limited, a limited liability company incorporated under the laws of BVI which is wholly owned by Tenet Global Limited and ultimately controlled by Mr. Xueji (Jerry) Wang. Morgan Stanley Asia Limited or its affiliates expect to enter into a borrowing arrangement with Tenet Global Limited that is intended to facilitate the settlement of over-allocations. Morgan Stanley Asia Limited or its affiliates are obligated to return ordinary shares to Tenet Group Limited by exercising the option to purchase additional Class A ordinary shares from us or by making purchases in the open market. No fees or other remuneration will be paid by the underwriters to us or Tenet Group Limited for the loan of these Class A ordinary shares.

​

(7)

Represents (i) 55,924,749 Class A ordinary shares held of record by Tencent Mobility Limited, and (ii) 2,375,000 Class A ordinary shares represented by ADSs held of record by Image Frame Investment (HK) Limited. Both Tencent Mobility Limited and Image Frame Investment (HK) Limited are incorporated in Hong Kong and wholly-owned subsidiaries of Tencent. The registered address of Tencent Mobility Limited is Three Pacific Place, 1 Queen’s Road East, Wanchai, Hong Kong. Tencent Mobility Limited is wholly owned by Tencent Holdings Limited, a company listed on the Hong Kong Stock Exchange (Stock code: 00700).

​

(8)

Represents 40,600,000 Class B ordinary shares held of record by Tenet Vision Limited, a limited liability company incorporated under the laws of BVI wholly owned by Tenet Global Limited and ultimately controlled by Mr. Xueji (Jerry) Wang.

​

(9)

Represents 28,800,000 Class B ordinary shares held of record by Unileo Limited. Unileo Limited is wholly owned by Mr. Liaohan (Leo) Chen.

​

(10)

Represents 10,000,000 Class B ordinary shares held of record by Tuya Group Inc., a business company with limited liability incorporated under the laws of BVI wholly owned by Mr. Xueji (Jerry) Wang.

​

To our knowledge, as of June 13, 2022, a total of 129,203,589 Class A outstanding ordinary shares were held by four record holders in the United States, including the depositary of our ADS program, representing 22.6% of our total issued and outstanding ordinary shares on an as converted basis as of such date. The number of beneficial owners of the ADSs in the United States is likely to be much larger than the number of record holders of our ordinary shares in the United States.

We are not aware of any arrangement that may, at a subsequent date, result in change of control of our company.

Morgan Stanley Asia Limited or its affiliates are expected to enter into a borrowing arrangement with Tenet Group Limited to facilitate the settlement of over-allocations. Morgan Stanley Asia Limited or its affiliates are obligated to return Class A ordinary shares to Tenet Group Limited by exercising the option to purchase additional Class A ordinary shares from us or by making purchases in the open market.

 

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DIVIDEND POLICY

We have not previously declared or paid any cash dividend or dividend in kind and we have no plan to declare or pay any dividends in the foreseeable future on our shares or the ADSs representing our Class A ordinary shares. We currently intend to retain our available funds and any future earnings to operate and expand our business. We currently do not have any plan to require our PRC subsidiaries to distribute their retained earnings and intend to retain them to operate and expand our business in the PRC.

We are a holding company incorporated in the Cayman Islands. We rely principally on dividends from our PRC subsidiaries for our cash requirements, including any payment of dividends to our shareholders. PRC regulations may restrict the ability of our PRC subsidiaries to pay dividends to us. See “Item 4. Information on the Company — 4.B. Business Overview — Regulation — Regulation Related to Foreign Exchange” and “Item 3. Key Information — 3.D. Risk Factors — Risk Related to Doing Business in China — Governmental control of currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment” in our 2021 Form 20-F.

Our board of directors has discretion as to whether to distribute dividends, subject to certain requirements of Cayman Islands law. Under Cayman Islands law, a Cayman Islands company may pay a dividend out of either profit or share premium account, provided that in no circumstances may a dividend be paid if this would result in the company being unable to pay its debts as they fall due in the ordinary course of business. Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant. If we pay any dividends on our Class A ordinary shares, we will pay those dividends which are payable in respect of the Class A ordinary shares underlying the ADSs to the depositary, as the registered holder of such Class A ordinary shares, and the depositary then will pay such amounts to the ADS holders in proportion to the Class A ordinary shares underlying the ADSs held by such ADS holders, subject to the terms of the deposit agreement, including the fees and expenses payable thereunder. See “Item 12. Description of Securities Other Than Equity Securities — 12.D. American Depositary Shares” in our 2021 Form 20-F.

 

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SHARES ELIGIBLE FOR FUTURE SALE

Upon the completion of the Global Offering, we will have 499,146,560 Class A ordinary shares (or 500,241,560 Class A ordinary shares if international underwriters exercise in full their option to purchase additional Class A ordinary shares), including (i) 5,433,895 Class A ordinary shares issued to the depositary bank for bulk issuance of ADSs reserved for future issuances upon the exercise or vesting of awards granted under our 2015 Equity Incentive Plan and (ii) 20,257,999 Class A ordinary shares represented by ADSs that have been repurchase by us from the open market, as of June 13, 2022, and 79,400,000 Class B ordinary shares issued and outstanding.

All of the Class A ordinary shares sold in the Global Offering will be freely transferable without restriction or further registration under the Securities Act. Sales of substantial amounts of our Class A ordinary shares in the public market could materially and adversely affect prevailing market prices of our ADSs and Class A ordinary shares.

Lock-Up Agreements

In connection with the Global Offering, we have agreed that except for (a) the issue, offer or sale of the Class A ordinary shares by our company pursuant to the Global Offering (including pursuant to any international underwriters’ exercise of the option to purchase additional Class A ordinary shares), (b) the issue of Class A ordinary shares or ADSs pursuant to the 2015 Equity Incentive Plan, including one or more bulk issuances of such securities in contemplation of future issuances under the 2015 Equity Incentive Plan in compliance with the Hong Kong Listing Rules and applicable laws, (c) any capitalization issue, capital reduction or consolidation or sub-division of shares; (d) registration and issuance of ADSs and ADRs without enlarging the issued and outstanding share capital of our company as at the date of the Hong Kong underwriting agreement; or (e) repurchase of securities pursuant to our company’s share repurchase programs existing on the date of the international underwriting agreement to the extent in compliance with the Hong Kong Listing Rules and applicable laws, we will not, and will procure each other group entity not to, without the prior written consent of the Joint Sponsors and the Joint Representatives (for themselves only) and unless in compliance with the Hong Kong Listing Rules, at any time during the period commencing on the date of the Hong Kong underwriting agreement and ending on the date falling six months after the Listing Date. See “Underwriting — Lock-up Agreements.”

Rule 144

All of our ordinary shares outstanding prior to our initial public offering in 2021, or issued subsequent to our initial public offering in 2021 on an unregistered basis, are “restricted securities,” as that term is defined in Rule 144 under the Securities Act, and may be sold publicly in the United States only if they are subject to an effective registration statement under the Securities Act or pursuant to an exemption from the registration requirement such as those provided by Rule 144 and Rule 701 promulgated under the Securities Act. In general, under Rule 144 as currently in effect, beginning 90 days after we became a reporting company, a person who at the time of a sale is not, and has not been during the three months preceding the sale, an affiliate of ours and has beneficially owned our restricted securities for at least six months will be entitled to sell the restricted securities without registration under the Securities Act, subject only to the availability of current public information about us, and will be entitled to sell restricted securities beneficially owned for at least one year without restriction. Persons who are our affiliates and have beneficially owned our restricted securities for at least six months may sell a number of restricted securities within any three-month period that (together with any sales aggregated with them) does not exceed the greater of the following:

•

1% of the then outstanding Class A ordinary shares, in the form of ADSs or otherwise, which immediately after this offering will equal 4,991,465 Class A ordinary shares, assuming the international underwriters do not exercise their option to purchase additional Class A ordinary shares; or

​

•

the average weekly trading volume of our Class A ordinary shares, in the form of ADSs or otherwise, during the four calendar weeks preceding the date on which notice of the sale is filed with the SEC.

​

Sales by our affiliates under Rule 144 are also subject to certain requirements relating to manner of sale, notice and the availability of current public information about us.

 

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Rule 701

In general, under Rule 701 of the Securities Act as currently in effect, each of our employees, consultants or advisors who purchases our ordinary shares from us in connection with a compensatory stock plan or other written agreement executed prior to the completion of our initial public offering is eligible to resell those ordinary shares 90 days after we became a reporting company in reliance on Rule 144, but without compliance with some of the restrictions, including the holding period, contained in Rule 144. However, the Rule 701 shares would remain subject to lock-up arrangements and would only become eligible for sale when the lock-up period expires.

 

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CONVERSION BETWEEN CLASS A ORDINARY SHARES AND AMERICAN DEPOSITARY SHARES

Dealings and Settlement of Class A Ordinary Shares in Hong Kong

Dealings in our Class A ordinary shares on the Hong Kong Stock Exchange will be conducted in Hong Kong dollars. Our Class A ordinary shares will be traded on the Hong Kong Stock Exchange in board lots of 200 Class A ordinary shares.

The transaction costs of dealings in our Class A ordinary shares on the Hong Kong Stock Exchange include:

•

Hong Kong Stock Exchange trading fee of 0.005% of the consideration of the transaction, charged to each of the buyer and seller;

​

•

SFC transaction levy of 0.0027% of the consideration of the transaction, charged to each of the buyer and seller;

​

•

trading tariff of HK$0.50 on each and every purchase or sale transaction. The decision on whether or not to pass the trading tariff onto investors is at the discretion of brokers;

​

•

Financial Reporting Council transaction levy of 0.00015% of the consideration of the transaction, charged to each of the buyer and seller;

​

•

transfer deed stamp duty of HK$5.00 per transfer deed (if applicable), payable by the seller;

​

•

ad valorem stamp duty at a total rate of 0.26% of the value of the transaction, with 0.13% payable by each of the buyer and the seller;

​

•

stock settlement fee, which is currently 0.002% of the gross transaction value, subject to a minimum fee of HK$2.00 and a maximum fee of HK$100.00 per side per trade;

​

•

brokerage commission, which is freely negotiable with the broker (other than brokerage commissions for IPO transactions which are currently set at 1% of the subscription or purchase price and will be payable by the person subscribing for or purchasing the securities); and

​

•

the Hong Kong Share Registrar will charge between HK$2.50 to HK$20, depending on the speed of service (or such higher fee as may from time to time be permitted under the Hong Kong Listing Rules), for each transfer of ordinary shares from one registered owner to another, each share certificate canceled or issued by it and any applicable fee as stated in the share transfer forms used in Hong Kong.

​

Investors in Hong Kong must settle their trades executed on the Hong Kong Stock Exchange through their brokers directly or through custodians. For an investor in Hong Kong who has deposited his/her Class A ordinary shares in his/her stock account or in his/her designated CCASS participant’s stock account maintained with CCASS, settlement will be effected in CCASS in accordance with the General Rules of CCASS and CCASS Operational Procedures in effect from time to time. For an investor who holds the physical certificates, settlement certificates and the duly executed transfer forms must be delivered to his/her broker or custodian before the settlement date.

An investor may arrange with his/her broker or custodian on a settlement date in respect of his/her trades executed on the Hong Kong Stock Exchange. Under the Listing Rules and the General Rules of CCASS and CCASS Operational Procedures in effect from time to time, the date of settlement must be the second business day (a day on which the settlement services of CCASS are open for use by CCASS participants) following the trade date (T+2). For trades settled under CCASS, the General Rules of CCASS and CCASS Operational Procedures in effect from time to time provided that the defaulting broker may be compelled to compulsorily buy-in by HKSCC the day after the date of settlement (T+3), or if it is not practicable to do so on T+3, at any time thereafter. HKSCC may also impose fines from T+2 onwards.

Exchanges between Class A Ordinary Shares Trading in Hong Kong and ADSs

In connection with the initial public offering of our Class A ordinary shares in Hong Kong, we have established a Hong Kong share register, which will be maintained by our Hong Kong Share Registrar,

 

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Computershare Hong Kong Investor Services Limited. Our principal register of members, or the Cayman share register, will continue to be maintained by our principal share registrar, Maples Fund Services (Cayman) Limited. All Class A ordinary shares offered in the Hong Kong public offering will be registered on the Hong Kong share register in order to be listed and traded on the Hong Kong Stock Exchange. As described in further detail below, holders of ordinary shares registered on the Hong Kong share register will be able to exchange those Class A ordinary shares for ADSs, and vice versa.

Our ADSs

Our ADSs representing our Class A ordinary shares are currently traded on NYSE. Dealings in our ADSs are conducted in U.S. dollars.

ADSs may be held either:

•

directly (i) by having an American Depositary Receipt, also referred to as an ADR, which is a certificate evidencing a specific number of ADSs registered in the holder’s name; or (ii) by having uncertificated ADSs registered in the holder’s name; or

​

•

indirectly, by holding a security entitlement in ADSs through a broker or other financial institution that is a direct or indirect participant in The Depository Trust Company, also called DTC.

​

The depositary for our ADSs is The Bank of New York Mellon, whose office is located at 24 Greenwich Street, New York, New York 10286, United States.

Depositing Class A ordinary shares trading in Hong Kong for delivery of ADSs

An investor who holds the Class A ordinary shares registered in Hong Kong and wishes to receive delivery of ADSs that trade on NYSE must deposit or have his/her broker deposit the Class A ordinary shares with the depositary’s Hong Kong custodian, The Hong Kong and Shanghai Banking Corporation Limited, or the custodian, in exchange for ADSs. A deposit of Class A ordinary shares trading in Hong Kong in exchange for ADSs involves the following procedures:

•

If the Class A ordinary shares have been deposited with CCASS, the investor must transfer such Class A ordinary shares to the depositary’s account with the custodian within CCASS by following the CCASS procedures for transfer and submit and deliver a duly completed and signed ADS delivery form to the custodian via his/her broker.

​

•

If the Class A ordinary shares are held outside CCASS, the investor must arrange for the registration of a transfer of his/her Class A ordinary shares into the depositary’s name and delivery of evidence of that registration to the custodian, and must sign and deliver an ADS delivery form to the depositary.

​

•

Upon payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, if applicable, the depositary will register the corresponding number of ADSs in the name(s) requested by an investor and will deliver the ADSs as instructed in the ADS delivery form. For Class A ordinary shares deposited in CCASS, under normal circumstances, the above steps generally require two business days, provided that the investor has provided timely and complete instructions. For Class A ordinary shares held outside CCASS in physical form, the above steps may take 14 business days, or more, to complete. Temporary delays may arise. For example, the transfer books of the depositary may from time to time be closed to ADS issuances. The investor will be unable to trade the ADSs until the procedures are completed.

​

Surrender of ADSs for delivery of Class A ordinary shares trading in Hong Kong

An investor who holds ADSs and wishes to receive Class A ordinary shares that trade on the Hong Kong Stock Exchange must cancel the ADSs the investor holds and withdraw the Class A ordinary shares from our ADS program and cause his/her broker or other financial institution to trade such Class A ordinary shares on the Hong Kong Stock Exchange. An investor that holds ADSs indirectly through a broker or other financial institution should follow the procedures of the broker or financial institution and instruct the broker to arrange for cancellation of the ADSs, and transfer of the underlying Class A ordinary shares from the depositary’s account with the custodian within the CCASS system to the investor’s Hong Kong stock account.

 

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For investors holding ADSs directly, the following steps must be taken:

•

To withdraw the Class A ordinary shares from our ADS program, an investor who holds ADSs may turn in such ADSs at the office of the depositary (and the applicable ADR(s) if the ADSs are held in certificated form), and send an instruction to cancel such ADSs to the depositary. Those instructions must have a Medallion signature guarantee.

​

•

Upon payment or net of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, if applicable, the depositary will instruct the custodian to deliver the Class A ordinary shares underlying the canceled ADSs to the CCASS account designated by the investor.

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•

If an investor prefers to receive the Class A ordinary shares outside CCASS, he/she must so indicate in the instruction delivered to the depositary.

​

For the Class A ordinary shares to be received in CCASS, under normal circumstances, the above steps generally require two business days, provided that the investor has provided timely and complete instructions. For the Class A ordinary shares to be received outside CCASS in physical form, the above steps may take 14 business days, or more, to complete. The investor will be unable to trade the Class A ordinary shares on the Hong Kong Stock Exchange until the procedures are completed. Temporary delays may arise. For example, the transfer books of the depositary may from time to time be closed to ADS cancelations. In addition, completion of the above steps and procedures for delivery of Class A ordinary shares in a CCASS account is subject to there being a sufficient number of Class A ordinary shares on the Hong Kong share register to facilitate a withdrawal from the ADS program directly into the CCASS system. We are not under any obligation to maintain or increase the number of Class A ordinary shares on the Hong Kong share register to facilitate such withdrawals.

Depositary requirements

Before the depositary delivers ADSs or permits withdrawal of the Class A ordinary shares, the depositary may require:

•

production of satisfactory proof of the identity and genuineness of any signature or other information it deems necessary; and

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•

compliance with procedures it may establish, from time to time, consistent with the deposit agreement, including completion and presentation of transfer documents.

​

The depositary may refuse to deliver, transfer, or register issuances, transfers and cancelations of ADSs generally when the transfer books of the depositary or of the Hong Kong Share Registrar are closed or at any time if the depositary or we determine it advisable to do so.

All costs attributable to the transfer of the Class A ordinary shares to effect a withdrawal from or deposit of the Class A ordinary shares into our ADS program will be borne by the investor requesting the transfer or deposit. In particular, holders of Class A ordinary shares and ADSs should note that the Hong Kong Share Registrar will charge between HK$2.50 to HK$20, depending on the speed of service (or such higher fee as may from time to time be permitted under the Hong Kong Listing Rules), for each transfer of the Class A ordinary shares from one registered owner to another, each share certificate canceled or issued by it and any applicable fee as stated in the share transfer forms used in Hong Kong. In addition, holders of the Class A ordinary shares and ADSs must pay up to US$5.00 per 100 ADSs (or portion thereof) for each issuance of ADSs and each cancelation of ADSs, as the case may be, in connection with the deposit of the Class A ordinary shares into, or withdrawal of the Class A ordinary shares from, the ADS facility.

 

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UNDERWRITING

The Global Offering

The offering of our Class A ordinary shares is referred to herein as the “Global Offering.” The Global Offering comprises:

•

the offering of initially 730,000 Class A ordinary shares (subject to reallocation) in Hong Kong (the “Hong Kong offer shares”) as described in “— The Hong Kong Public Offering” below, which we refer to as the “Hong Kong public offering”; and

​

•

the offering of initially 6,570,000 Class A ordinary shares (subject to reallocation and the option of the international underwriters to purchase additional Class A ordinary shares mentioned below) (the “international offer shares” and together with the Hong Kong offer shares, the “Offer Shares”), as described in “— The International Offering” below, which we refer to as the “international offering.”

​

The international offering contemplated herein consists of a U.S. offering and a non-U.S. offering made outside the U.S. in compliance with applicable law. We are paying a registration fee for Class A ordinary shares sold in the United States, as well as for Class A ordinary shares initially offered and sold outside the United States in the Global Offering that may be resold from time to time into the United States.

China International Capital Corporation Hong Kong Securities Limited, Morgan Stanley Asia Limited and Merrill Lynch (Asia Pacific) Limited are acting as joint representatives (the “Joint Representatives”) and joint global coordinators (the “Joint Global Coordinators”) for the Global Offering.

Under the terms and subject to the conditions in the Hong Kong underwriting agreement (as defined below), the Hong Kong underwriters below (the “Hong Kong underwriters”) have severally agreed to apply or procure applications for the number of Class A ordinary shares indicated below.

Under the terms and subject to the conditions in the international underwriting agreement, the international underwriters for whom China International Capital Corporation Hong Kong Securities Limited Morgan Stanley Asia Limited and Merrill Lynch (Asia Pacific) Limited, are acting as the Joint Representatives, have severally agreed to purchase or procure purchasers to purchase from us, and we have agreed to sell to them or such purchasers, severally, the number of Class A ordinary shares indicated below:

The Hong Kong underwriters and the international underwriters are collectively referred to herein as the “underwriters”.

 

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Upon the closing of the Global Offering, we will have 499,146,560 outstanding Class A ordinary shares and 79,400,000 Class B ordinary shares, or 500,241,560 outstanding Class A ordinary shares if the Joint Representatives exercise in full, on behalf of the international underwriters, their option to purchase additional Class A ordinary shares from us.

The underwriters propose to offer our Class A ordinary shares at the public offering price listed on the cover page of this prospectus supplement. Subject to the conditions in the Hong Kong underwriting agreement and the international underwriting agreement, the underwriters are obligated, severally but not jointly, to take and pay for all of the Class A ordinary shares offered hereby if any such shares are taken. The offering of our Class A ordinary shares by the underwriters is subject to receipt and acceptance and subject to the underwriters’ right to reject any order in whole or in part.

Approval-in-principal has been granted by the Hong Kong Stock Exchange for the listing of, and permission to deal in, our Class A ordinary shares under the stock code “2391.” The shares will be traded in board lots of 200 shares each. The ADSs are listed on the New York Stock Exchange under the symbol “TUYA.” Each ADS represents one Class A ordinary share.

A prospectus supplement in electronic format may be made available on websites maintained by one or more underwriters, or selling group members, if any, participating in the Global Offering. The Joint Representatives may agree to allocate a number of our Class A ordinary shares to underwriters for sale to their online brokerage account holders. Internet distributions will be allocated by the Joint Representatives to underwriters that may make internet distributions on the same basis as other allocations.

The address of China International Capital Corporation Hong Kong Securities Limited is 29/F One International Finance Centre, 1 Harbour View Street, Central, Hong Kong. The address of Morgan Stanley Asia Limited is Level 46, International Commerce Centre, 1 Austin Road West, Kowloon, Hong Kong. The address of Merrill Lynch (Asia Pacific) Limited is 55/F, Cheung Kong Center, 2 Queen’s Road Central, Central, Hong Kong. The address of CMB International Capital Limited is 45/F, Champion Tower, 3 Garden Road, Central, Hong Kong. The address of Tiger Brokers (HK) Global Limited is 18th Floor, Central 88, 88 Des Voeux Road, Central, Hong Kong.

The Hong Kong Public Offering

Number of Class A ordinary shares initially offered

We are initially offering 730,000 Class A ordinary shares for subscription by the public in Hong Kong at the public offer price, representing 10% of the total number of Offer Shares initially available under the Global Offering. The number of Offer Shares initially offered under the Hong Kong public offering, subject to any reallocation of Offer Shares between the international offering and the Hong Kong public offering, will represent approximately 0.13% of the total shares in issue immediately following the completion of the Global Offering (assuming the option to purchase additional Class A ordinary shares is not exercised and without taking into account the shares to be issued pursuant to 2015 Equity Incentive Plan).

The Hong Kong public offering is open to members of the public in Hong Kong as well as to institutional and professional investors. Professional investors generally include brokers, dealers, companies (including fund managers) whose ordinary business involves dealing in shares and other securities and corporate entities that regularly invest in shares and other securities.

Completion of the Hong Kong public offering is subject to the conditions set out in “— Conditions of the Global Offering.”

Allocation

Allocation of Offer Shares to investors under the Hong Kong public offering will be based solely on the level of valid applications received under the Hong Kong public offering. The basis of allocation may vary, depending on the number of Hong Kong offer shares validly applied for by applicants. Such allocation could, where appropriate, consist of balloting, which could mean that some applicants may receive a higher allocation than others who have applied for the same number of Hong Kong offer shares, and those applicants who are not successful in the ballot may not receive any Hong Kong offer share.

 

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For allocation purposes only, the total number of Hong Kong offer shares available under the Hong Kong public offering (after taking into account any reallocation referred to below) will be divided equally (to the nearest board lot) into two pools: pool A and pool B. The Hong Kong offer shares in pool A will be allocated on an equitable basis to applicants who have applied for Hong Kong offer shares with an aggregate price of HK$5 million (excluding the brokerage, the SFC transaction levy, Financial Reporting Council transaction levy and the Hong Kong Stock Exchange trading fee payable) or less. The Hong Kong offer shares in pool B will be allocated on an equitable basis to applicants who have applied for Hong Kong offer shares with an aggregate price of more than HK$5 million (excluding the brokerage, the SFC transaction levy, Financial Reporting Council transaction levy and the Hong Kong Stock Exchange trading fee payable) and up to the total value in pool B.

Investors should be aware that applications in pool A and applications in pool B may receive different allocation ratios. If any Hong Kong offer shares in one (but not both) of the pools are unsubscribed, such unsubscribed Hong Kong offer shares will be transferred to the other pool to satisfy demand in that other pool and be allocated accordingly. For the purpose of the immediately preceding paragraph only, the “price” for Hong Kong offer shares means the price payable on application therefor (without regard to the public offer price as finally determined). Applicants can only receive an allocation of Hong Kong offer shares from either pool A or pool B and not from both pools. Multiple or suspected multiple applications under the Hong Kong public offering and any application for more than 365,000 Hong Kong offer shares is liable to be rejected.

Reallocation

The allocation of the Offer Shares between the Hong Kong public offering and the international offering is subject to reallocation. Paragraph 4.2 of Practice Note 18 of the Hong Kong Listing Rules requires a clawback mechanism to be put in place which would have the effect of increasing the number of Offer Shares under the Hong Kong public offering to a certain percentage of the total number of Offer Shares offered under the Global Offering if certain prescribed total demand levels are reached.

If the number of Offer Shares validly applied for under the Hong Kong public offering represents (a) 15 times or more but less than 50 times, (b) 50 times or more but less than 100 times and (c) 100 times or more of the total number of Offer Shares initially available under the Hong Kong public offering, then Offer Shares will be reallocated to the Hong Kong public offering from the international offering. As a result of such reallocation, the total number of Offer Shares available under the Hong Kong public offering will be increased to 2,190,000 Offer Shares (in the case of (a)), 2,920,000 Offer Shares (in the case of (b)) and 3,650,000 Offer Shares (in the case of (c)), representing 30%, 40% and 50% of the total number of Offer Shares initially available under the Global Offering, respectively (before any exercise of the option to purchase additional Class A ordinary shares). In each case, the additional Offer Shares reallocated to the Hong Kong public offering will be allocated between pool A and pool B and the number of Offer Shares allocated to the international offering will be correspondingly reduced in such manner as the Joint Representatives deem appropriate.

In addition, the Joint Representatives may allocate Offer Shares from the international offering to the Hong Kong public offering to satisfy valid applications under the Hong Kong public offering at the discretion of the Joint Representatives. In accordance with the Guidance Letter HKEX-GL91-18 issued by the Hong Kong Stock Exchange, if such allocation is done other than pursuant to Practice Note 18 of the Hong Kong Listing Rules, the maximum total number of Offer Shares that may be allocated to the Hong Kong public offering following such reallocation shall be not more than double the number of Offer Shares initially available to the Hong Kong public offering (i.e. 1,460,000 Offer Shares, representing 20% of the total number of Offer Shares initially available under the Global Offering).

If the Hong Kong public offering is not fully subscribed, the Joint Representatives may reallocate all or any unsubscribed Hong Kong offer shares to the international offering, in such proportions as the Joint Representatives deem appropriate.

Details of any reallocation of Offer Shares between the Hong Kong public offering and the international offering will be disclosed in the results announcement of the Hong Kong public offering, which is expected to be published on Monday, July 4, 2022.

 

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Applications

Each applicant under the Hong Kong public offering will be required to give an undertaking and confirmation in the application submitted by him/her that he/she and any person(s) for whose benefit he/she is making the application has not applied for or taken up, or indicated an interest for, and will not apply for or take up, or indicate an interest for, any International Offer Share under the international offering. Such applicant’s application is liable to be rejected if such undertaking and/or confirmation is/are breached and/or untrue (as the case may be) or if he/she has been or will be placed or allocated international offer shares under the international offering.

Applicants under the Hong Kong public offering are required to pay, on application, the maximum public offer price of HK$22.80 per Offer Share in addition to the brokerage, the SFC transaction levy, Financial Reporting Council transaction levy and the Hong Kong Stock Exchange trading fee payable on each Offer Share, amounting to a total of HK$4,605.96 for one board lot of 200 Offer Shares. If the public offer price is less than the maximum Hong Kong public offer price of HK$22.80 per Offer Share, appropriate refund payments (including the brokerage, the SFC transaction levy, Financial Reporting Council transaction levy and the Hong Kong Stock Exchange trading fee attributable to the surplus application monies) will be made to successful applicants, without interest.

Hong Kong Underwriting Agreement

We and the Hong Kong underwriters have entered into an underwriting agreement dated June 20, 2022, or the Hong Kong underwriting agreement, relating to the Hong Kong public offering.

The International Offering

The International Offering will consist of an initial offering of 6,570,000 Offer Shares offered by us (subject to reallocation and the option to purchase additional Class A ordinary shares), representing 90% of the total number of Offer Shares initially available under the Global Offering. The number of Offer Shares initially offered under the international offering, subject to any reallocation of Offer Shares between the international offering and the Hong Kong public offering, will represent approximately 1.14% of the total shares in issue immediately following the completion of the Global Offering (assuming the option to purchase additional Class A ordinary shares is not exercised and without taking into account the shares to be issued pursuant to the 2015 Equity Incentive Plan).

Allocation

The international offering includes the U.S. offering of the Offer Shares in the United States as well as the non-U.S. offering to institutional and professional investors and other investors in jurisdictions outside the United States. Professional investors generally include brokers, dealers, companies (including fund managers) whose ordinary business involves dealing in shares and other securities and corporate entities that regularly invest in shares and other securities. Allocation of Offer Shares pursuant to the international offering will be effected in accordance with the “book-building” process and based on a number of factors, including the level and timing of demand, the total size of the relevant investor’s invested assets or equity assets in the relevant sector and whether or not it is expected that the relevant investor is likely to buy further shares and/or hold or sell its shares after the Hong Kong Listing. Such allocation is intended to result in a distribution of the shares on a basis which would lead to the establishment of a solid professional and institutional shareholder base to our benefit and the benefit of the shareholders as a whole.

The Joint Representatives (on behalf of the underwriters) may require any investor who has been offered Offer Shares under the international offering and who has made an application under the Hong Kong public offering to provide sufficient information to the Joint Representatives so as to allow them to identify the relevant applications under the Hong Kong public offering and to ensure that they are excluded from any allocation of Offer Shares under the Hong Kong public offering.

Reallocation

The total number of Offer Shares to be issued or sold pursuant to the international offering may change as a result of the clawback arrangement described in “— The Hong Kong Public Offering — 

 

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Reallocation” above, the exercise of the option to purchase additional Class A ordinary shares in whole or in part and/or any reallocation of unsubscribed Offer Shares originally included in the Hong Kong public offering.

We expect to enter into an international underwriting agreement with, among others, the international underwriters dated the price determination date.

Pricing

Determining the Pricing of the Offer Price

Pricing for the Offer Shares for the purpose of the various offerings under the Global Offering will be determined on the price determination date, which is expected to be on or about Monday, June 27, 2022 and, in any event, no later than Monday, July 4, 2022, by agreement between the Joint Representatives (for themselves and on behalf of the underwriters) and us, and the number of Offer Shares to be allocated under the various offerings will be determined shortly thereafter.

The public offer price will be determined by reference to, among other factors, the closing price of the ADSs on the NYSE on the last trading day on or before the price determination date (which is accessible to the shareholders and potential investors at www.nyse.com/quote/XNYS:TUYA), and the public offer price will not be more than HK$22.80 per Hong Kong offer share. The historical prices of our ADSs and trading volume on the NYSE are set out below.

Notes:

(1)

We have not declared or paid any dividends on our ADSs or Shares since our inception and up to the June 13, 2022, including the periods presented.

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(2)

Average daily trading volume (“ADTV”) represents daily average number of our ADSs traded over the relevant period.

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Applicants under the Hong Kong public offering must pay, on application, the maximum public offer price of HK$22.80 per Offer Share plus brokerage of 1.0%, SFC transaction levy of 0.0027%, Hong Kong Stock Exchange trading fee of 0.005% and Financial Reporting Council transaction levy of 0.00015%, amounting to a total of HK$4,605.96 for one board lot of 200 Offer Shares.

The international offer price may be set at a level higher than the maximum public offer price if (a) the Hong Kong dollar equivalent of the closing trading price of the ADSs on the NYSE on the last trading day on or before the price determination date (on a per-share converted basis) were to exceed the maximum public offer price as stated in this prospectus and/or (b) we believe that it is in the best interest of the Company as a listed company to set the international offer price at a level higher than the maximum public offer price based on the level of interest expressed by professional and institutional investors during the bookbuilding process.

If the international offer price is set at or lower than the maximum public offer price, the public offer price must be set at such price which is equal to the international offer price. In no circumstances will the public offer price be set above the maximum public offer price as stated in this prospectus supplement or the international offer price.

The international underwriters will be soliciting from prospective investors’ indications of interest in acquiring Offer Shares in the international offering. Prospective professional and institutional investors will be required to specify the number of Offer Shares under the international offering they would be prepared to acquire either at different prices or at a particular price. This process, known as “book-building,” is expected to continue up to, and to cease on or about, the last day for lodging applications under the Hong Kong public offering.

 

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The Joint Representatives (for themselves and on behalf of the underwriters) may, where they deem appropriate, based on the level of interest expressed by prospective investors during the book-building process in respect of the international offering, and with the consent of the Company, reduce the number of Offer Shares offered below as stated in this prospectus at any time on or prior to the morning of the last day for lodging applications under the Hong Kong public offering. In such a case, we will, as soon as practicable following the decision to make such reduction, and in any event not later than the morning of the last day for lodging applications under the Hong Kong public offering, cause to be published on the websites of the Company and the Hong Kong Stock Exchange at ir.tuya.com and www.hkexnews.hk, respectively, notice of the reduction. The Company will also, as soon as practicable following the decision to make such change, issue a supplemental prospectus updating investors of the change in the number of Offer Shares being offered under the Global Offering, extend the period under which the Hong Kong public offering is opened for acceptance to allow potential investors sufficient time to consider their subscriptions or reconsider their submitted subscriptions. Upon the issue of such a notice, the revised number of Offer Shares will be final. If the number of Offer Shares is so reduced, applicants under the Hong Kong public offering who have already submitted an application will need to positively confirm their applications and all unconfirmed applications will not be valid.

Sales in the United States

Some of the international underwriters are expected to make offers and sales both inside and outside the United States through their respective selling agents. Any offers or sales in the United States will be conducted by broker-dealers registered with the SEC. Morgan Stanley Asia Limited will offer our Class A ordinary shares in the United States through its SEC-registered broker-dealer affiliate, Morgan Stanley & Co. LLC, in the United States. Merrill Lynch (Asia Pacific) Limited will offer our Class A ordinary shares in the United States through its SEC-registered broker-dealer affiliate, BofA Securities, Inc., in the United States. Some of the other international underwriters are not broker-dealers registered with the SEC, and do not intend to and will not offer or sell any of our Class A ordinary shares in the United States.

Commissions and Expenses

The following table shows the per Class A ordinary share and total underwriting discounts and commissions to be paid to the underwriters by us. These amounts include gross proceeds of the Global Offering that may be paid to the underwriters and are shown assuming both no exercise and full exercise of the international underwriters’ option to purchase up to an additional 1,095,000 Class A ordinary shares. Total underwriting discounts and commissions to be paid to the underwriters represent      % of the total gross proceeds of the Global Offering (assuming the option to purchase additional Class A ordinary shares is not exercised). This presentation assumes the public offering price in both the international offering and the Hong Kong public offering is HK$     .

The estimated offering expenses payable by us, including registration, filing and listing fees, printing fees and legal and accounting expenses, but exclusive of underwriting commissions and fees payable to the underwriters, are approximately HK$53.6 million (US$6.8 million) assuming the option to purchase additional Class A ordinary shares is not exercised.

International Underwriters’ Option to Purchase Additional Class A Ordinary Shares

In connection with the Global Offering, we have granted the international underwriters the right, exercisable by the Joint Representatives (for themselves and on behalf of the international underwriters) at any time until 30 days after the last day for lodging applications under the Hong Kong public offering, to purchase up to an aggregate of 1,095,000 additional Class A ordinary shares, representing not more than 15% of the total number of Class A ordinary shares initially available under the Global Offering, at the international offering price to, among other things, cover over-allocations in the international offering, if any.

 

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If the international underwriters’ option to purchase additional Class A ordinary shares is exercised in full, the additional Class A ordinary shares to be issued pursuant thereto will represent approximately 0.19% of our total Class A ordinary shares issued and outstanding immediately following the completion of the Global Offering. If the international underwriters exercise their option to purchase additional Class A ordinary shares, an announcement will be made.

Lock-Up Agreements

In connection with the Global Offering, we have undertaken to the joint sponsors and joint representatives that except for (a) the issue, offer or sale of the Offer Shares by our Company pursuant to the Global Offering (including pursuant to any exercise of the option to purchase additional Class A ordinary shares); (b) the issue of Class A ordinary share or ADSs pursuant to the 2015 Equity Incentive Plan, including one or more bulk issuances of such securities in contemplation of future issuances under the 2015 Equity Incentive Plan in compliance with the Hong Kong Listing Rules and applicable laws; (c) any capitalization issue, capital reduction or consolidation or sub-division of shares; (d) registration and issuance of ADSs and ADRs without enlarging the issued and outstanding share capital of our Company as at the date of the Hong Kong underwriting agreement; or (e) repurchase of securities pursuant to our Company’s share repurchase programs existing on the date of the international underwriting agreement to the extent in compliance with the Hong Kong Listing Rules and applicable laws, our Company will not, and will procure each other member of our Group not to, without the prior written consent of the Joint Sponsors and the Joint Representatives (for themselves only) and unless in compliance with the Hong Kong Listing Rules, at any time during the period commencing on the date of the Hong Kong underwriting agreement and ending on the date falling six months after the Listing Date (the “First Six-Month Period”):

(i)

offer, allot, issue, sell, accept subscription for, offer to allot, issue or sell, contract or agree to allot, issue or sell, mortgage, charge, pledge, hypothecate, lend, grant or sell any option, warrant, contract or right to subscribe for or purchase, grant or purchase any option, warrant, contract or right to allot, issue or sell, or otherwise transfer or dispose of or create an Encumbrance (as defined in the Hong Kong underwriting agreement) over, or agree to transfer or dispose of or create an Encumbrance over, either directly or indirectly, conditionally or unconditionally, any legal or beneficial interest in any Class A ordinary shares or other securities of our Company or any share or other securities of such other member of our Group, as applicable, or any interests in any of the foregoing (including, but not limited to, any securities that are convertible into or exercisable or exchangeable for, or that represent the right to receive, or any warrants or other rights to purchase, any Class A ordinary shares or other securities of our Company or any shares or other securities of such other member of our Group, as applicable, or any interest in any of the foregoing), or deposit any share or other securities of our Company or any shares or other securities of such member of our Group, as applicable, with a depositary in connection with the issue of depositary receipts; or

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(ii)

enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of subscription or ownership (legal or beneficial) of any Class A ordinary shares or other securities of our Company or any share or other securities of such other member of our Group, as applicable, or any interest therein (including, without limitation, any securities of which are convertible into or exchangeable or exercisable for, or represent the right to receive, or any warrants or other rights to purchase, any Class A ordinary shares or other securities of our Company or any share or other securities of such other member of our Group, as applicable, or any interest in any of the foregoing); or

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(iii)

enter into any transaction with the same economic effect as any transaction described in (i) or (ii) above; or

​

(iv)

offer to or contract to or agree to announce, or publicly disclose that our Company will or may enter into any such transaction described in (i), (ii) or (iii) above,

​

in each case, whether any such transaction described in (i), (ii) or (iii) above is to be settled by delivery of the Class A ordinary shares or other securities of our Company, in cash or otherwise (whether or not the issue

 

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of such Class A ordinary shares or other securities of our Company will be completed within the First Six-Month Period). For the avoidance of doubt, (i) above shall not apply to any issue of debt securities by our Company which are not convertible into equity securities of our Company or of any other member of our Group or any transfer or sales of existing Class A ordinary shares registered on any register of members of our Company as of the date of the Hong Kong underwriting agreement. In the event that, during the period of six months commencing on the date on which the First Six-Month Period expires (the “Second Six-Month Period”), our Company shall not enter into any of the transactions specified in (i), (ii) or (iii) above or offer to or agree to or announce any intention to effect any such transaction such that any controlling shareholder, directly or indirectly, would cease to be a controlling shareholder (within the meaning defined in the Hong Kong Listing Rules) of our Company. In the event that our Company enters into any of the transactions specified in (i), (ii) or (iii) above or offers to or agrees to or announces any intention to effect any such transaction, our Company shall take all reasonable steps to ensure that we will not create a disorderly or false market in the securities of our Company

Pursuant to the Hong Kong Listing Rules, we have undertaken to the Hong Kong Stock Exchange that we will not exercise our power to issue any further shares, or securities convertible into our equity securities (whether or not of a class already listed) or enter into any agreement to such an issue within six months from the Listing Date (whether or not such issue of shares or securities will be completed within six months from the Listing Date), except (a) pursuant to the Global Offering (including the international underwriters’ option to purchase additional Class A ordinary shares); or (b) under any of the circumstances provided under the Hong Kong Listing Rules.

In addition, pursuant to the Hong Kong Listing Rules, each of our controlling shareholders has undertaken to the Hong Kong Stock Exchange, the Joint Sponsors, the Joint Global Coordinators and our Company that, except pursuant to the Global Offering (including the international underwriters’ option to purchase additional Class A ordinary shares), each of them will not, and will procure that the relevant registered holder(s) of the shares in which any of them has a beneficial interest will not without the prior written consent of the Hong Kong Stock Exchange or unless otherwise in compliance with the Hong Kong Listing Rules: (i) at any time in the period commencing on the date by reference to which disclosure of its shareholding in the Company is made in this prospectus supplement and ending on the date which is six months from the Listing Date, either directly or indirectly, dispose of, nor enter into any agreement to dispose of or otherwise create any options, rights, interests or encumbrances in respect of any securities of the Company in which any of the controlling shareholders are shown in this prospectus supplement to be the beneficial owners; and (ii) at any time in the period of six months commencing from the date on which the period referred to in the above paragraph (i) expires, either directly or indirectly, dispose of, nor enter into any agreement to dispose of or otherwise create any options, rights, interests or encumbrances in respect of any securities of the Company to such extent that, immediately following such disposal or upon the exercise or enforcement of such options, rights, interests or encumbrances, our controlling shareholders will, directly or indirectly cease to be our controlling shareholders.

In addition, pursuant to the Hong Kong Listing Rules, each of our controlling shareholders has undertaken to the Hong Kong Stock Exchange and our Company that, within the period commencing on the date by reference to which disclosure of its shareholdings in our Company is made in this prospectus supplement and ending on the date which is 12 months from the Listing Date, it will and will procure that the relevant registered holder(s) will: (i) when it pledges or charges any securities of the Company beneficially owned by it in favor of an authorized institution (as defined under the Banking Ordinance (Chapter 155 of the Laws of Hong Kong)) for a bona fide commercial loan, immediately inform the Company of such pledge or charge together with the number of securities so pledged or charged; and (ii) when it receives indications, either verbal or written, from the pledgee or chargee of any securities of the Company that any of the pledged or charged securities will be disposed of, immediately inform the Company of such indications.

 

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Conditions of the Global Offering

Acceptance of all applications for Offer Shares will be conditional on:

•

the Hong Kong Stock Exchange granting approval for the listing of, and permission to deal in, the Class A ordinary shares in issue and to be issued pursuant to the Global Offering on the Main Board of the Hong Kong Stock Exchange and such approval not subsequently having been withdrawn or revoked prior to the Listing Date;

​

•

the pricing of the Offer Shares having been agreed between the Joint Representatives (for themselves and on behalf of the underwriters) and us;

​

•

the execution and delivery of the international underwriting agreement on or around the price determination date; and

​

•

the obligations of the Hong Kong underwriters under the Hong Kong underwriting agreement and the obligations of the international underwriters under the international underwriting agreement becoming and remaining unconditional and not having been terminated in accordance with the terms of the respective agreements,

​

in each case on or before the dates and times specified in the respective underwriting agreements (unless and to the extent such conditions are validly waived on or before such dates and times) and, in any event, not later than the date which is 30 days after the date of the Hong Kong prospectus.

If, for any reason, the pricing of the Offer Shares is not agreed between the Joint Representatives (for themselves and on behalf of the underwriters) and us on or before Monday, July 4, 2022, the Global Offering will not proceed and will lapse.

The consummation of each of the Hong Kong public offering and the international offering is conditional upon, among other things, the other offering becoming unconditional and not having been terminated in accordance with its terms.

Share certificates for the Offer Shares will only become valid at 8:00 a.m. on Tuesday, July 5, 2022, provided that the Global Offering has become unconditional in all respects at or before that time.

Dealings in the Class A Ordinary Shares

Assuming that the Hong Kong public offering becomes unconditional at or before 8:00 a.m. in Hong Kong on Tuesday, July 5, 2022, it is expected that dealings in the Class A ordinary shares on the Hong Kong Stock Exchange will commence at 9:00 a.m. on Tuesday, July 5, 2022.

The Class A ordinary shares will be traded in board lots of 200 Class A ordinary shares each and the stock code of the Class A ordinary shares will be 2391.

Indemnity

We have agreed to indemnify several underwriters and their affiliates against certain liabilities, including liabilities under the Securities Act, and to contribute to payments that the underwriters may be required to make in respect of those liabilities.

Stabilization

Stabilization is a practice used by underwriters in some markets to facilitate the distribution of securities. To stabilize, the underwriters may bid for, or purchase, the securities in the secondary market during a specified period of time, to retard and, if possible, prevent a decline in the initial public market price of the securities below the offer price. Such transactions may be effected in all jurisdictions where it is permissible to do so, in each case in compliance with all applicable laws and regulatory requirements, including those of Hong Kong. In Hong Kong, the price at which stabilization is effected is not permitted to exceed the public offer price.

 

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We have appointed Morgan Stanley Asia Limited as the stabilization manager. In connection with the Global Offering, the stabilizing manager (or any person acting for it), on behalf of the underwriters, may over-allocate or effect transactions with a view to stabilizing or supporting the market price of the Class A ordinary shares at a level higher than that which might otherwise prevail for a limited period after the Listing Date. However, there is no obligation on the stabilizing manager (or any person acting for it) to conduct any such stabilizing action. Such stabilizing action, if taken, (a) will be conducted at the absolute discretion of the stabilizing manager and in what the stabilizing manager reasonably regards as the best interest of us, (b) may be discontinued at any time and (c) is required to be brought to an end within 30 days after the last day for lodging applications under the Hong Kong public offering.

Stabilization action permitted in Hong Kong pursuant to the Securities and Futures (Price Stabilizing) Rules of the SFO includes (a) over-allocating for the purpose of preventing or minimizing any reduction in the market price of the Class A ordinary shares, (b) selling or agreeing to sell the Class A ordinary shares so as to establish a short position in them for the purpose of preventing or minimizing any reduction in the market price of the Class A ordinary shares, (c) purchasing, or agreeing to purchase, the Class A ordinary shares pursuant to the option to purchase additional Class A ordinary shares in order to close out any position established under paragraph (a) or (b) above, (d) purchasing, or agreeing to purchase, any of the Class A ordinary shares for the sole purpose of preventing or minimizing any reduction in the market price of the Class A ordinary shares, (e) selling or agreeing to sell any Class A ordinary shares in order to liquidate any position established as a result of those purchases and (f) offering or attempting to do anything as described in clauses (b), (c), (d) or (e) above.

Specifically, prospective applicants for and investors in the Offer Shares should note that:

•

the stabilizing manager (or any person acting for it) may, in connection with the stabilizing action, maintain a long position in the Class A ordinary shares;

​

•

there is no certainty as to the extent to which and the time or period for which the stabilizing manager (or any person acting for it) will maintain such a long position;

​

•

liquidation of any such long position by the stabilizing manager (or any person acting for it) and selling in the open market may have an adverse impact on the market price of the Class A ordinary shares;

​

•

no stabilizing action can be taken to support the price of the Class A ordinary shares for longer than the stabilization period, which will begin on the Listing Date, and is expected to expire on Wednesday, July 27, 2022, being the 30th day after the last day for lodging applications under the Hong Kong public offering. After this date, when no further stabilizing action may be taken, demand for the Class A ordinary shares, and therefore the price of the Class A ordinary shares, could fall;

​

•

the price of the Class A ordinary shares cannot be assured to stay at or above the public offer price by the taking of any stabilizing action; and

​

•

stabilizing bids or transactions effected in the course of the stabilizing action may be made at any price at or below the public offer price and can, therefore, be done at a price below the price paid by applicants for, or investors in, the Offer Shares.

​

We will ensure that an announcement in compliance with the Securities and Futures (Price Stabilizing) Rules of the SFO will be made within seven days of the expiration of the stabilization period.

In addition, stabilization transactions with respect to the ADSs may be effected by one of the underwriters or its affiliates before and after the listing of the Class A ordinary shares on the Hong Kong Stock Exchange in accordance with applicable laws and regulations.

Activities by Syndicate Members

The underwriters of the Hong Kong public offering and the international offering (together, the “Syndicate Members”) and their affiliates may each individually undertake a variety of activities (as further described below) which do not form part of the underwriting or stabilizing process.

 

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The Syndicate Members and their affiliates are diversified financial institutions with relationships in countries around the world. These entities engage in a wide range of commercial and investment banking, brokerage, funds management, trading, hedging, investing and other activities for their own account and for the account of others. In the ordinary course of their various business activities, the Syndicate Members and their respective affiliates may purchase, sell or hold a broad array of investments and actively traded securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments for their own account and for the accounts of their customers. Such investment and trading activities may involve or relate to our assets, securities and/or instruments and/or persons and entities with relationships with us and may also include swaps and other financial instruments entered into for hedging purposes in connection with our loans and other debt.

In relation to the Class A ordinary shares, the activities of the Syndicate Members and their affiliates could include acting as agent for buyers and sellers of the Class A ordinary shares, entering into transactions with those buyers and sellers in a principal capacity, including as a lender to initial purchasers of the Class A ordinary shares (which financing may be secured by the Class A ordinary shares) in the Global Offering, proprietary trading in the Class A ordinary shares, and entering into over the counter or listed derivative transactions or listed or unlisted securities transactions (including issuing securities such as derivative warrants listed on a stock exchange) which have as their underlying assets, assets including the Class A ordinary shares. Such transactions may be carried out as bilateral agreements or trades with selected counterparties. Those activities may require hedging activity by those entities involving, directly or indirectly, the buying and selling of the Class A ordinary shares, which may have a negative impact on the trading price of the Class A ordinary shares. All such activities could occur in Hong Kong and elsewhere in the world and may result in the Syndicate Members and their affiliates holding long and/or short positions in the Class A ordinary shares, in baskets of securities or indices including the Class A ordinary shares, in units of funds that may purchase the Class A ordinary shares, or in derivatives related to any of the foregoing.

In relation to issues by Syndicate Members or their affiliates of any listed securities having the Class A ordinary shares as their underlying securities, whether on the Hong Kong Stock Exchange or on any other stock exchange, the rules of the stock exchange may require the issuer of those securities (or one of its affiliates or agents) to act as a market maker or liquidity provider in the security, and this will also result in hedging activity in the Class A ordinary shares in most cases.

All such activities may occur both during and after the end of the stabilizing period described under “Stabilization” above. Such activities may affect the market price or value of the Class A ordinary shares, the liquidity or trading volume in the Class A ordinary shares and the volatility of the price of the Class A ordinary shares, and the extent to which this occurs from day to day cannot be estimated.

It should be noted that when engaging in any of these activities, the Syndicate Members will be subject to certain restrictions, including the following:

•

the Syndicate Members (other than the Stabilizing Manager or any person acting for it) must not, in connection with the distribution of the Offer Shares, effect any transactions (including issuing or entering into any option or other derivative transactions relating to the Offer Shares), whether in the open market or otherwise, with a view to stabilizing or maintaining the market price of any of the Offer Shares at levels other than those which might otherwise prevail in the open market; and

​

•

the Syndicate Members must comply with all applicable laws and regulations, including the market misconduct provisions of the SFO, including the provisions prohibiting insider dealing, false trading, price rigging and stock market manipulation.

​

Certain of the Syndicate Members or their respective affiliates have provided from time to time, and expect to provide in the future, investment banking and other services to us and certain of our affiliates for which such Syndicate Members or their respective affiliates have received or will receive customary fees and commissions.

In addition, the Syndicate Members or their respective affiliates may provide financing to investors to finance their subscriptions of the Offer Shares in the Global Offering.

 

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Selling Restrictions

Australia

No placement document, prospectus, product disclosure statement or other disclosure document has been lodged with the Australian Securities and Investments Commission (“ASIC”), in relation to this offering. This prospectus supplement, the accompanying prospectus or any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the Class A ordinary shares does not constitute a prospectus, product disclosure statement or other disclosure document under the Corporations Act 2001 (the “Corporations Act”), and does not purport to include the information required for a prospectus, product disclosure statement or other disclosure document under the Corporations Act.

Any offer in Australia of the shares may only be made to persons (the “Exempt Investors”) who are “sophisticated investors” ​(within the meaning of section 708(8) of the Corporations Act), “professional investors” ​(within the meaning of section 708(11) of the Corporations Act) or otherwise pursuant to one or more exemptions contained in section 708 of the Corporations Act so that it is lawful to offer the shares without disclosure to investors under Chapter 6D of the Corporations Act.

The shares applied for by Exempt Investors in Australia must not be offered for sale in Australia in the period of 12 months after the date of allotment under the offering, except in circumstances where disclosure to investors under Chapter 6D of the Corporations Act would not be required pursuant to an exemption under section 708 of the Corporations Act or otherwise or where the offer is pursuant to a disclosure document which complies with Chapter 6D of the Corporations Act. Any person acquiring shares must observe such Australian on-sale restrictions.

This prospectus supplement, the accompanying prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the Class A ordinary shares (i) contain general information only and do not take account of the investment objectives, financial situation or particular needs of any particular person; and (ii) do not contain any securities recommendations or financial product advice. Before making an investment decision, investors need to consider whether the information herein is appropriate to their needs, objectives and circumstances, and, if necessary, seek expert advice on those matters.

European Economic Area

In relation to each Member State of the European Economic Area (each a “Member State”), no Offer Shares have been offered or will be offered, pursuant to any offers contemplated in this Offering Circular, to the public in that Member State, except in that Member State at any time under the following exemptions under the Prospectus Regulation:

a)

to any legal entity which is a qualified investor as defined under the Prospectus Regulation;

​

b)

to fewer than 150 natural or legal persons (other than qualified investors as defined under the Prospectus Regulation), subject to obtaining the prior consent of the International Underwriters for any such offer; or

​

c)

in any other circumstances falling within Article 1(4) of the Prospectus Regulation,

​

provided that no such offer of Offer Shares shall result in a requirement for the publication by us or any International Underwriter of a prospectus pursuant to Article 3 of the Prospectus Regulation or of a supplement to a prospectus pursuant to Article 23 of the Prospectus Regulation.

Each person in a Relevant Member State who initially acquires the Offer Shares or to whom any offer is made will be deemed to have represented, warranted and agreed that:

i.

it is a “qualified investor” as defined in the Prospectus Regulation; and

​

ii.

in the case of any the Offer Shares being offered to a financial intermediary as that term is used in Article 5(1) of the Prospectus Regulation, each such financial intermediary will be deemed to have represented, acknowledged and agreed that (i) the Offer Shares acquired by it in the offer have

​

 

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not been acquired on a non-discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Relevant State other than qualified investors, as that term is defined in the Prospectus Regulation, or in circumstances in which the prior consent of the Joint Global Coordinators has been given to the offer or resale; or (ii) where such Offer Shares have been acquired by it on behalf of persons in any Relevant State other than qualified investors, the offer of the Offer Shares falls within one of the exemptions listed in points (b) to (d) of Article 1)4) of the Prospectus Regulation.

We, the Joint Representatives, the international underwriters and their affiliates will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements.

For the purposes of this provision, the expression an “offer of the Offer Shares to the public” in relation to any of the Offer Shares in any Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Offer Shares to be offered so as to enable an investor to decide to purchase or subscribe for the Offer Shares, and the expression “Prospectus Regulation” means Regulation (EU) 2017/1129.

Canada

The Class A ordinary shares may be sold only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the Class A ordinary shares must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws.

Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus supplement and the accompanying prospectus (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult with a legal advisor.

Pursuant to section 3A.3 (or, in the case of securities issued or guaranteed by the government of a non-Canadian jurisdiction, section 3A.4) of National Instrument 33-105 Underwriting Conflicts, or NI 33-105, the international underwriters are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with this offering.

Cayman Islands

The Class A ordinary shares may not be offered or sold, directly or indirectly, to the public or to any member of the public in the Cayman Islands.

Hong Kong

This prospectus supplement has not been and will not be registered with the Registrar of Companies in Hong Kong. The Offer Shares may not be offered or sold by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32, Laws of Hong Kong), or (ii) to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32, Laws of Hong Kong), or (iv) pursuant to a registered “prospectus” which complies with or is exempt from compliance with Part XII of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32, Laws of Hong Kong); and that there has not been issued and there will not be issued or will not be in the possession of any person for the purpose of issue, whether in Hong Kong or elsewhere, any advertisement, invitation or document relating to the Offer Shares, which is directed at, or the contents

 

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of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to Offer Shares which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571,Laws of Hong Kong) and any rules made thereunder.

In purchasing the international offer shares, save as otherwise permitted under the Hong Kong Listing Rules, as amended or supplemented from time to time or within the scope of any waivers or consents granted or to be granted by the Hong Kong Stock Exchange, you will be deemed to have represented to and agreed as follows:

•

you and your ultimate beneficial owners are not (an) existing beneficial owner(s) of any of our shares (including ADS);

​

•

you and your ultimate beneficial owners are independent of, and not connected or acting in concert with, any of the directors, chief executives or substantial shareholders of ours or any of our subsidiaries, or any of their respective close associates (as such term is defined in the Hong Kong Listing Rules);

​

•

you and your ultimate beneficial owners are not our affiliate or otherwise acting for our benefit;

​

•

you and your ultimate beneficial owners are not a director or existing shareholder of our Company, or a close associate (as such term is defined in the Hong Kong Listing Rules) of any director or existing shareholder of our Company or a nominee of any of the foregoing;

​

•

you and your ultimate beneficial owners are not making, have not made and will not make offers or sales of the Offer Shares to any core connected person (as the term is defined in the Hong Kong Listing Rules) of ours at the time of completion of this Global Offering;

​

•

you and your ultimate beneficial owners are not directly or indirectly funded or backed by us, any of the directors, substantial shareholders, chief executives of ours or any of our subsidiaries or any of their respective close associates (as defined in the Hong Kong Listing Rules) or any of the underwriters;

​

•

you and your ultimate beneficial owners are not a core connected person or person who will become a core connected person of our Company immediately upon completion of the Global Offering, the subscription for Offer Shares by you or any person on whose behalf you may be acting is not financed directly or indirectly by any of our core connected persons, and you or any person on whose behalf you may be acting is not taking instructions from any of our core connected persons in making this subscription for Offer Shares;

​

•

you and your ultimate beneficial owners are not (a) person(s) who is/are accustomed to take instructions from any of our core connected persons (as defined in the Hong Kong Listing Rules) in relation to the acquisition, disposal, voting or any other disposition of our securities;

​

•

whether you acquire the Offer Shares on your own behalf or as a fiduciary or agent, the Offer Shares are acquired only for the purpose of investment;

​

•

you will require any person for whose accounts you are purchasing our Offer Shares and any person to whom you may offer or sell any of our Offer Shares to comply with the provisions of this section;

​

•

you and your ultimate beneficial owners have not applied for, and will not apply for, any Hong Kong offer shares;

​

•

you are not a connected client (as defined in Appendix 6 to the Hong Kong Listing Rules) of any of the underwriters;

​

•

if you are a Hong Kong purchaser, your business involves the acquisition and disposal, or the holding, of securities (whether as principal or as agent) and you fall within the category of persons described as “professional investors” under the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder;

​

•

you have received a copy of this prospectus supplement and have not relied on any information, representation or warranty provided or made by or on behalf of the international underwriters, us,

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or any other party involved in the international offering other than information contained in this prospectus supplement, and that none of the international underwriters, their respective affiliates, and their respective officers, agents and employees will be liable for any information or omission in this prospectus supplement, and you are responsible for making your own examination of our Company and your own assessment of the merits and risks of investing in the Offer Shares;

•

you and your ultimate beneficial owners will comply with all laws, regulations and restrictions (including the selling restrictions contained in this prospectus supplement) which may be applicable in your and your ultimate beneficial owners’ jurisdiction and you and your ultimate beneficial owners have obtained or will obtain any consent, approval or authorization required for you and your ultimate beneficial owners to subscribe for and accept delivery of our Offer Shares and you acknowledge and agree that none of us, our affiliates and the international underwriters and their respective affiliates shall have any responsibility in this regard;

​

•

you and your ultimate beneficial owners will comply with all guidelines issued by, and all requirements of, the Securities and Futures Commission of Hong Kong (the “SFC”) and the Hong Kong Stock Exchange in relation to subscription and placings (including but not limited to the Hong Kong Listing Rules) and provide all information as may be required by the regulatory bodies, including, without limitation, the Hong Kong Stock Exchange and the SFC, and in particular, the details set out in Appendix 6 to the Hong Kong Listing Rules and information required to satisfy conditions under any waiver or consent. You acknowledge that failure to provide information required by the regulatory bodies may subject you to prosecution and you undertake to fully indemnify the international underwriters and us for any non-compliance with the Hong Kong Listing Rules and all applicable laws and regulations;

​

•

you had at all material times and still have full power and authority to enter into the contract to subscribe for or purchase our Offer Shares for your own account or for the account of one or more persons for whom you exercise investment discretion and your agreement to do so constitutes your valid and legally binding obligation and is enforceable in accordance with its terms;

​

•

you will not copy or otherwise distribute this prospectus supplement to any third party;

​

•

you will on demand indemnify and keep indemnified us, our affiliates, officers, agents and employees and the international underwriters and their respective affiliates, officers, agents and employees for losses or liabilities incurred by any of the foregoing arising out of or in connection with any breach of either the selling restrictions, or your agreement to subscribe for or acquire your allocated Offer Shares, or any other breach of your obligations or representations hereunder; and

​

•

(A) we, the international underwriters and others will rely upon the truth and accuracy of your acknowledgments, representations, warranties and agreements set out above, (B) if any of the representations or warranties deemed to have been made by you by virtue of your purchase of the Offer Shares are no longer accurate, you will promptly notify us and the international underwriters, and (C) if you are acquiring any of the Offer Shares as a fiduciary or agent for one or more accounts, you have sole investment discretion with respect to each such account and have full power to make the foregoing acknowledgments, representations, warranties and agreements on behalf of each such account.

​

Japan

The Class A ordinary shares have not been and will not be registered under the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948, as amended) and, accordingly, will not be offered or sold, directly or indirectly, in Japan, or for the benefit of any Japanese Person or to others for re-offering or resale, directly or indirectly, in Japan or to any Japanese Person, except in compliance with all applicable laws, regulations and ministerial guidelines promulgated by relevant Japanese governmental or regulatory authorities in effect at the relevant time. For the purposes of this paragraph, “Japanese Person” means any person resident in Japan, including any corporation or other entity organized under the laws of Japan.

Kingdom of Saudi Arabia

This prospectus supplement and the accompanying prospectus may not be distributed in the Kingdom of Saudi Arabia except to such persons as are permitted under the Offers of Securities Regulations issued by the Capital Market Authority of the Kingdom of Saudi Arabia (the “Capital Market Authority”).

 

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The Capital Market Authority does not make any representation as to the accuracy or completeness of this prospectus supplement and the accompanying prospectus, and expressly disclaims any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this prospectus supplement or the accompanying prospectus.

Prospective purchasers of the Class A ordinary shares under the international offering offered hereby should conduct their own due diligence on the accuracy of the information relating thereto. If you do not understand the contents of this prospectus supplement and the accompanying prospectus, you should consult an authorized financial adviser.

Korea

The Class A ordinary shares have not been and will not be registered with the Financial Services Commission of Korea for public offering in Korea under the Financial Investment Services and Capital Markets Act (the “FSCMA”), and none of the Class A ordinary shares may be offered, sold or delivered, or offered or sold to any person for re-offering or resale, directly or indirectly in Korea or to any resident of Korea except pursuant to applicable laws and regulations of Korea, including the FSCMA and the Foreign Exchange Transaction Law (the “FETL”) and the decrees and regulations thereunder. Furthermore, the Class A ordinary shares may not be resold to Korean residents unless the purchaser of the Class A ordinary shares complies with all applicable regulatory requirements (including, but not limited to, governmental approval requirements under the FETL and its subordinate decrees and regulations) in connection with the purchase of the Class A ordinary shares.

Malaysia

No prospectus or other offering material or document in connection with the offer and sale of the Class A ordinary shares has been or will be registered with the Securities Commission of Malaysia, or Commission, for the Commission’s approval pursuant to the Capital Markets and Services Act 2007. Accordingly, this prospectus supplement, the accompanying prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the Class A ordinary shares may not be circulated or distributed, nor may the Class A ordinary shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Malaysia other than (i) a closed end fund approved by the Commission; (ii) a holder of a Capital Markets Services License; (iii) a person who acquires the Class A ordinary shares as principal, if the offer is on terms that the Class A ordinary shares may only be acquired at a consideration of not less than RM250,000 (or its equivalent in foreign currencies) for each transaction; (iv) an individual whose total net personal assets or total net joint assets with his or her spouse exceeds RM3 million (or its equivalent in foreign currencies), excluding the value of the primary residence of the individual; (v) an individual who has a gross annual income exceeding RM300,000 (or its equivalent in foreign currencies) per annum in the preceding twelve months; (vi) an individual who, jointly with his or her spouse, has a gross annual income of RM400,000 (or its equivalent in foreign currencies), per annum in the preceding twelve months; (vii) a corporation with total net assets exceeding RM10 million (or its equivalent in a foreign currencies) based on the last audited accounts; (viii) a partnership with total net assets exceeding RM10 million (or its equivalent in foreign currencies); (ix) a bank licensee or insurance licensee as defined in the Labuan Financial Services and Securities Act 2010; (x) an Islamic bank licensee or takaful licensee as defined in the Labuan Financial Services and Securities Act 2010; and (xi) any other person as may be specified by the Commission; provided that, in the each of the preceding categories (i) to (xi), the distribution of the Class A ordinary shares is made by a holder of a Capital Markets Services License who carries on the business of dealing in securities. The distribution in Malaysia of this prospectus supplement is subject to Malaysian laws. This prospectus supplement and the accompanying prospectus do not constitute and may not be used for the purpose of public offering or an issue, offer for subscription or purchase, invitation to subscribe for or purchase any Class A ordinary shares requiring the registration of a prospectus with the Commission under the Capital Markets and Services Act 2007.

Singapore

This prospectus supplement and the accompanying prospectus have not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus supplement and any other document

 

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or material in connection with the offer or sale, or invitation for subscription or purchase, of the Class A ordinary shares may not be circulated or distributed, nor may the Class A ordinary shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore, or the SFA, (ii) to a relevant person pursuant to Section 275(1), or any person pursuant to Section 275(1A), and in accordance with the conditions specified in Section 275, of the SFA, or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.

Where the Class A ordinary shares are subscribed or purchased under Section 275 of the SFA by a relevant person which is:

(i)

a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or

​

(ii)

a trust (where the trustee is not an accredited investor) the sole purpose of which is to hold investments and each beneficiary of the trust is an individual who is an accredited investor, securities (as defined in Section 239(1) of the SFA) of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the Class A ordinary shares pursuant to an offer made under Section 275 of the SFA except:

​

(a)

to an institutional investor or to a relevant person defined in Section 275(2) of the SFA, or to any person arising from an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the SFA;

​

(b)

where no consideration is or will be given for the transfer;

​

(c)

where the transfer is by operation of law;

​

(d)

as specified in Section 276(7) of the SFA; or

​

(e)

as specified in Regulation 37A of the Securities and Futures (Offers of Investments) (Securities and Securities-based Derivatives Contracts) Regulations 2018.

​

In addition, investors in Singapore should note that the Class A ordinary shares acquired by them are subject to resale and transfer restrictions specified under Section 276 of the SFA, and they, therefore, should seek their own legal advice before effecting any resale or transfer of their Class A ordinary shares.

State of Kuwait

The Class A ordinary shares have not been registered, authorized or approved for offering, marketing or sale in the State of Kuwait pursuant to Securities and Investment Funds Law of Kuwait No. 31/1990, as amended, and its executive bylaw, and as such the Class A ordinary shares shall not be offered or sold in the State of Kuwait. Interested investors from the State of Kuwait who approach us or any of the underwriters acknowledge this restriction and that this prospectus supplement, the accompanying prospectus and any related materials shall be subject to all applicable foreign laws and rules; therefore, such investors must not disclose or distribute such materials to any other person.

Switzerland

The Class A ordinary shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange Ltd. (“SIX”) or any other stock exchange or other regulated trading facility in Switzerland. This offering circular has been prepared without regard to the disclosure standards for issuance of prospectuses under Article 652a or Article 1156 of the Swiss Code of Obligations or disclosure standards for listing prospectuses under Article 27 et seqq. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this prospectus supplement, nor the accompanying prospectus nor any other offering or marketing material relating to the Class A ordinary shares or the offering thereof may be publicly distributed or otherwise made publicly available in Switzerland.

 

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Neither this prospectus supplement, nor the accompanying prospectus nor any other offering or marketing material relating to the offering of the Class A ordinary shares, us or the Class A ordinary shares have been or will be filed with or approved by any Swiss regulatory authority. In particular, this prospectus supplement and the accompanying prospectus will not be filed with, and the offer of the Class A ordinary shares will not be supervised by, the Swiss Financial Market Supervisory Authority FINMA, and the offer of the Class A ordinary shares has not been and will not be authorized under the Swiss Federal Act on Collective Investment Schemes (“CISA”). The investor protection afforded to acquirers of interests in collective investment schemes under the CISA does not extend to acquirers of the Class A ordinary shares.

PRC

This prospectus supplement has not been and will not be circulated or distributed in the PRC, and the Class A ordinary shares may not be offered or sold, and will not be offered or sold to any person for re-offering or resale, directly or indirectly, to any residents of the PRC except pursuant to applicable laws and regulations of the PRC. For the purposes of this paragraph, the PRC does not include Taiwan, Hong Kong or Macau.

Taiwan

The Class A ordinary shares have not been and will not be registered with the Financial Supervisory Commission of Taiwan pursuant to relevant securities laws and regulations and may not be sold, issued or offered within Taiwan through a public offering or in circumstances which constitutes an offer within the meaning of the Securities and Exchange Act of Taiwan that requires a registration or approval of the Financial Supervisory Commission of Taiwan. No person or entity in Taiwan has been authorized to offer, sell, give advice regarding or otherwise intermediate the offering and sale of the Class A ordinary shares in Taiwan.

Qatar

This prospectus supplement and the accompanying prospectus is not intended to constitute an offer, sale or delivery of shares or other securities under the laws of the State of Qatar including the rules and regulations of Qatar Financial Centre Authority (“QFCA”) or the Qatar Financial Centre Regulatory Authority (“QFCRA”). The Class A ordinary shares have not been and will not be listed on the Qatar Exchange and are not subject to the rules and regulations of the DSM Internal Regulations applying to the Qatar Exchange, the Qatar Financial Markets Authority (“QFMA”), the Qatar Central Bank (“QCB”), the QFCA or the QFCRA, or any laws of the State of Qatar.

This prospectus supplement and the accompanying prospectus have not been and will not be:

(i)

lodged or registered with, or reviewed or approved by the QFCA, the QFCRA, the QCB or the QFMA; or

​

(ii)

authorized or licensed for distribution in the State of Qatar, and the information contained in this prospectus supplement or the accompanying prospectus does not, and is not intended to, constitute a public or general offer or other invitation in respect of shares or other securities in the State of Qatar or the QFC.

​

The offer of the Class A ordinary shares and interests therein do not constitute a public offer of securities in the State of Qatar under the Commercial Companies Law No. (5) of 2002 (as amended) or otherwise under any laws of the State of Qatar, including the rules and regulations of the QFCA or QFCRA.

The Class A ordinary shares are only being offered to a limited number of investors who are willing and able to conduct an independent investigation of the risks involved in an investment in such shares. No transaction will be concluded in the jurisdiction of the State of Qatar (including the jurisdiction of the Qatar Financial Centre). We are not regulated by the QCB, QFMA, QFC Authority, QFC Regulatory Authority or any other government authority in State of Qatar. We do not, by virtue of this offering circular, conduct any business in the State of Qatar. Our company is an entity regulated under laws outside the State of Qatar.

 

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United Arab Emirates

The Global Offering has not been approved or licensed by the UAE Central Bank or any other relevant licensing authority in the United Arab Emirates (including the Dubai International Financial Centre), and does not constitute a public offer of securities in the United Arab Emirates (including the Dubai International Financial Centre) in accordance with the Commercial Companies Law, Federal Law No. 8 of 1984 (as amended) or otherwise. Accordingly, the Class A ordinary shares may not be offered to the public in the United Arab Emirates (including the Dubai International Financial Centre).

The Class A ordinary shares may be offered, and this offering circular may be issued, only to a limited number of investors in the United Arab Emirates (including the Dubai International Financial Centre) who qualify as sophisticated investors under the relevant laws of the United Arab Emirates (and the Dubai International Financial Centre). The Class A ordinary shares will not be offered, sold, transferred or delivered to the public in the United Arab Emirates (including the Dubai International Financial Centre).

United Kingdom

In relation to the United Kingdom (“UK”) no Offer Shares have been offered or will be offered, pursuant to any offers contemplated in this Offering Circular, to the public in the UK, except under the following exemptions under Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 (the “UK Prospectus Regulation”):

a)

to any legal entity which is a qualified investor as defined under Article 2 of the UK Prospectus Regulation;

​

b)

to fewer than 150 natural or legal persons (other than qualified investors as defined under in Article 2 of the UK Prospectus Regulation), in the United Kingdom. subject to obtaining the prior consent of the International Underwriters for any such offer; or

​

c)

in any other circumstances falling within section 86 of the Financial Services and Markets Act 2000 (the “FSMA”),

​

provided that no such offer of Offer Shares shall require the publication by us, the international underwriters of a prospectus pursuant to Section 85 of the FSMA or of a supplement to a prospectus pursuant to Article 23 of the UK Prospectus Regulation. Each person in the UK who initially acquires the Offer Shares or to whom any offer is made will be deemed to have represented, warranted and agreed that:

i.

it is a “qualified investor” as defined in the UK Prospectus Regulation; and

​

ii.

in the case of any the Offer Shares being offered to a financial intermediary as that term is used in Article 5(1) of the UK Prospectus Regulation, each such financial intermediary will be deemed to have represented, acknowledged and agreed that (i) the Offer Shares acquired by it in the offer have not been acquired on a non-discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Relevant State other than qualified investors, as that term is defined in the UK Prospectus Regulation, or in circumstances in which the prior consent of the Joint Global Coordinators has been given to the offer or resale; or (ii) where such Offer Shares have been acquired by it on behalf of persons in any Relevant State other than qualified investors, the offer of the Offer Shares falls within one of the exemptions listed in section 86 of the FSMA.

​

For the purposes of this provision, the expression an “offer of the Offer Shares to the public” in relation to any of the Offer Shares in the UK means the communication in any form and by any means of sufficient information on the terms of the offer and the Offer Shares to be offered so as to enable an investor to decide to purchase or subscribe for the Offer Shares, and the expression “UK Prospectus Regulation” means Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018.

This prospectus supplement and any other material in relation to the Offer Shares described herein is directed only at, and available only to, and will be engaged only with (investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) (the “Order”) or (ii)

 

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high net-worth bodies corporate, unincorporated associations and partnerships and trustees of high value trusts falling within Articles 49(2)(a) to (d) of the Order, and/or (iii) other persons to whom it may lawfully be communicated (all such persons together being referred to as “relevant persons”). The Offer Shares are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such shares will be engaged in only with, relevant persons. This prospectus supplement is only directed at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Persons who are not relevant persons should not take any action on the basis of this prospectus supplement and should not act or rely on it or any of its contents.

 

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TAXATION

The following discussion of Cayman Islands, PRC, Hong Kong and U.S. federal income tax consequences of the ownership and disposition of the Class A ordinary shares or ADSs is based upon laws and relevant interpretations thereof in effect as of the date of this prospectus supplement, all of which are subject to change. This discussion does not deal with all possible tax consequences relating to the ownership and disposition of the Class A ordinary shares or ADSs, such as the tax consequences under state, local and other tax laws. To the extent that the discussion relates to matters of Cayman Islands tax law, it represents the opinion of the Maples and Calder (Hong Kong) LLP, our Cayman counsel. To the extent that the discussion relates to matters of PRC tax law, it represents the opinion of Jia Yuan Law Offices, our PRC legal counsel.

Cayman Islands Taxation

The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation, and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us or holders of the Class A ordinary shares or ADSs levied by the government of the Cayman Islands, except for stamp duties which may be applicable on instruments executed in, or after execution brought within the jurisdiction of the Cayman Islands. The Cayman Islands is not party to any double tax treaties that are applicable to any payments made to or by our company. There are no exchange control regulations or currency restrictions in the Cayman Islands.

Payments of dividends and capital in respect of the Class A ordinary shares or ADSs will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital to any holder of the Class A ordinary shares or ADSs, nor will gains derived from the disposal of the Class A ordinary shares or ADSs be subject to Cayman Islands income or corporation tax.

PRC Taxation

Under the PRC Enterprise Income Tax Law, (the “PRC EIT Law”), which became effective on January 1, 2008, amended on February 24, 2017 and December 29, 2018, an enterprise established outside the PRC with “de facto management bodies” within the PRC is considered a “resident enterprise” for PRC enterprise income tax purposes and is generally subject to a uniform 25% enterprise income tax rate on its worldwide income. Under the implementation regulations to the PRC EIT Law, a “de facto management body” is defined as a body that has material and overall management and control over the manufacturing and business operations, personnel and human resources, finances and properties of an enterprise.

In addition, the State Administration of Taxation (the “SAT”) issued the Notice Regarding the Determination of Chinese-Controlled Offshore Incorporated Enterprises as People’s Republic of China Tax Resident Enterprises on the Basis of De Facto Management Bodies (the “SAT Circular 82”), in April 2009, which specifies that certain offshore incorporated enterprises controlled by PRC enterprises or PRC enterprise groups will be classified as PRC resident enterprises if the following are located or resident in the PRC: (a) senior management personnel and departments that are responsible for daily production, operation and management; (b) financial and personnel decision making bodies; (c) key properties, accounting books, company seal, minutes of board meetings and shareholders’ meetings; and (d) half or more of the senior management or directors having voting rights. Further to SAT Circular 82, the SAT issued the Public Announcement of SAT on Promulgation of the Administrative Measures on Income Tax on Overseas Registered Chinese-funded Holding Resident Enterprises (Trial Implementation) (the “SAT Bulletin 45”), which took effect in September 1, 2011, to provide more guidance on the implementation of SAT Circular 82. SAT Bulletin 45 provides for procedures and administration details of determination on resident status and administration on post-determination matters. Our company is a company incorporated outside the PRC. As a holding company, its key assets are its ownership interests in its subsidiaries, and its key assets are located, and its records (including the resolutions of its board of directors and the resolutions of its shareholders) are maintained, outside the PRC. As such, we do not believe that our company meets all of the conditions above or is a PRC resident enterprise for PRC tax purposes. For the same reasons, we believe our other entities outside of China are not PRC resident enterprises either. However, the tax resident status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with

 

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respect to the interpretation of the term “de facto management body.” There can be no assurance that the PRC government will ultimately take a view that is consistent with us.

If the PRC tax authorities determine that our Cayman Islands holding company is a PRC resident enterprise for PRC enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow. For example, a 10% withholding tax would be imposed on dividends we pay to our non-PRC enterprise shareholders (including the ADS holders). In addition, non-resident enterprise shareholders (including the ADS holders) may be subject to PRC tax on gains realized on the sale or other disposition of ADSs or Class A ordinary shares, if such income is treated as sourced from within the PRC. Furthermore, if we are deemed a PRC resident enterprise, dividends paid to our non-PRC individual shareholders (including the ADS holders) and any gain realized on the transfer of ADSs or Class A ordinary shares by such shareholders may be subject to PRC tax at a rate of 20% (which, in the case of dividends, may be withheld at source by us). These rates may be reduced by an applicable tax treaty, but it is unclear whether non-PRC shareholders of our company would be able to obtain the benefits of any tax treaties between their country of tax residence and the PRC in the event that we are treated as a PRC resident enterprise. See “Item 3. Key Information —  3.D. Risk Factors — Risks Related to Doing Business in China — If we are classified as a PRC resident enterprise for PRC enterprise income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders and ADS holders” in our 2021 Form 20-F.

Hong Kong Taxation

In connection with the Hong Kong public offering, we will establish a Hong Kong share register. Dealings in our ordinary shares registered on our Hong Kong share register will be subject to Hong Kong stamp duty. The stamp duty is charged to each of the seller and purchaser at the ad valorem rate of 0.13% of the consideration for, or (if greater) the value of, our ordinary shares transferred. In other words, a total of 0.26% is currently payable on a typical sale and purchase transaction of our ordinary shares. In addition, a fixed duty of HK$5.00 is charged on each instrument of transfer (if required).

To facilitate ADS-ordinary share conversion and trading between the NYSE and the Hong Kong Stock Exchange, we also intend to move a portion of our issued ordinary shares from our Cayman share register to our Hong Kong share register. It is unclear whether, as a matter of Hong Kong law, the trading or conversion of ADSs constitutes a sale or purchase of the underlying Hong Kong-registered ordinary shares that is subject to Hong Kong stamp duty. We advise investors to consult their own tax advisors on this matter. See “Risk Factors — Risks Related to the Global Offering and the Dual Listing — There is uncertainty as to whether Hong Kong stamp duty will apply to the trading or conversion of our ADSs following our initial public offering in Hong Kong and listing of our Class A Ordinary Shares on the Stock Exchange.”

Material U.S. Federal Income Tax Considerations

The following are material U.S. federal income tax consequences to the U.S. Holders described below of owning and disposing of the Class A ordinary shares or ADSs, but it does not purport to be a comprehensive description of all of the tax considerations that may be relevant to a particular person’s decision to own ADSs. This discussion applies only to a U.S. Holder that acquires the Class A ordinary shares in this offering and holds them or the ADSs as capital assets for U.S. federal income tax purposes. In addition, it does not describe all of the tax consequences that may be relevant in light of a U.S. Holder’s particular circumstances, including alternative minimum tax or Medicare contribution tax consequences, and tax consequences applicable to U.S. Holders subject to special rules, such as:

•

certain financial institutions;

​

•

dealers or traders in securities that use a mark-to-market method of tax accounting;

​

•

persons holding Class A ordinary shares or ADSs as part of a straddle, conversion transaction, integrated transaction or similar transaction;

​

•

persons whose functional currency for U.S. federal income tax purposes is not the U.S. dollar;

​

•

entities classified as partnerships for U.S. federal income tax purposes (and investors therein);

​

•

tax-exempt entities, “individual retirement accounts” or “Roth IRAs”;

​

 

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•

persons that own or are deemed to own 10% or more of our stock by vote or value; or

​

•

persons holding Class A ordinary shares or ADSs in connection with a trade or business conducted outside the United States.

​

If an entity that is classified as a partnership for U.S. federal income tax purposes owns Class A ordinary shares or ADSs, the U.S. federal income tax treatment of its partners will generally depend on the status of its partners and the activities of the partnership. Partnerships owning Class A ordinary shares or ADSs and their partners should consult their tax advisers as to the particular U.S. federal income tax consequences of owning and disposing of Class A ordinary shares or ADSs.

This discussion is based on the Internal Revenue Code of 1986, as amended (the “Code”), administrative pronouncements, judicial decisions, final, temporary and proposed Treasury regulations and the income tax treaty between the United States and the PRC (the “Treaty”), all as of the date hereof, any of which is subject to change, possibly with retroactive effect. This discussion assumes that each obligation under the deposit agreement and any related agreement will be performed in accordance with its terms.

For purposes of this discussion, a “U.S. Holder” is a person that is, for U.S. federal income tax purposes, a beneficial owner of Class A ordinary shares or ADSs and:

•

a citizen or individual resident of the United States;

​

•

a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States, any state therein or the District of Columbia; or

​

•

an estate or trust the income of which is subject to U.S. federal income taxation regardless of its source.

​

Treasury regulations that apply to taxable years beginning on or after December 28, 2021 (the “Foreign Tax Credit Regulations”) may in some circumstances prohibit a U.S. person from claiming a foreign tax credit with respect to certain non-U.S. taxes that are not creditable under applicable income tax treaties. Accordingly, U.S. investors that are not eligible for Treaty benefits should consult their tax advisers regarding the creditability or deductibility of any PRC taxes imposed on dividends on, or dispositions of, the Class A ordinary shares or ADSs. The discussions below regarding the creditability or deductibility of PRC taxes do not apply to these investors.

In general, a U.S. Holder that owns ADSs will be treated as the owner of the underlying Class A ordinary shares represented by those ADSs for U.S. federal income tax purposes. Accordingly, no gain or loss will be recognized if a U.S. Holder exchanges ADSs for the underlying Class A ordinary shares represented by those ADSs, or exchanges Class A ordinary shares for ADSs representing those Class A ordinary shares.

This discussion does not address the effects of any state, local or non-U.S. tax laws, or any U.S. federal taxes other than income taxes (such as U.S. federal estate or gift tax consequences). U.S. Holders should consult their tax advisers concerning the U.S. federal, state, local and non-U.S. tax consequences of owning and disposing of Class A ordinary shares or ADSs in their particular circumstances.

Passive Foreign Investment Company Rules

In general, a non-U.S. corporation is a passive foreign investment company, or a PFIC, for any taxable year in which (i) 75% or more of its gross income consists of passive income or (ii) 50% or more of the average value of its assets (generally determined on a quarterly basis) consists of assets that produce, or are held for the production of, passive income. For purposes of the above calculations, a non-U.S. corporation that owns (or is treated as owning for U.S. federal income tax purposes), directly or indirectly, at least 25% by value of the shares of another corporation is treated as if it held its proportionate share of the assets of the other corporation and received directly its proportionate share of the income of the other corporation. Passive income generally includes dividends, interest, rents, royalties and investment gains. Cash is generally a passive asset for these purposes. The value of a company’s goodwill is an active asset under the PFIC rules to the extent attributable to activities that produce active income.

 

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Our PFIC status for any taxable year is a factual determination that can be made only after the end of that year and depends on the composition of our income and assets and the average value of our assets during that year. We hold a substantial amount of cash, and while that continues to be the case our PFIC status for any taxable year will depend primarily on the average value of our goodwill. The value of our goodwill may be determined, in large part, by reference to our market capitalization. Because our market capitalization has declined substantially since our initial public offering and has been volatile, there is a significant risk that we will be a PFIC for our taxable year 2022, and possibly future taxable years. For example, because our ADSs have been trading recently at low prices, we will likely be a PFIC for our taxable year of 2022 if (i) the value of our goodwill is determined by reference to our market capitalization, (ii) the amount of cash we hold for the remainder of 2022 remains substantial and (iii) the average of our market capitalization for the remainder of the year does not increase substantially following this offering. Moreover, it is not entirely clear how the contractual arrangements between us and the VIE will be treated for purposes of the PFIC rules, and we may be or become a PFIC if the VIE is not treated as owned by us for these purposes. For these reasons, there can be no assurance that we will not be a PFIC, and we cannot express any expectation regarding our PFIC status, for our current or any future taxable year.

If we are a PFIC for any taxable year and any entity in which we own or are treated as owning equity interests (including the VIE) is also a PFIC (any such entity, a “Lower-tier PFIC”), a U.S. Holder will be deemed to own a proportionate amount (by value) of the shares of each Lower-tier PFIC and will be subject to U.S. federal income tax according to the rules described in the subsequent paragraph on (i) certain distributions by a Lower-tier PFIC and (ii) dispositions of shares of Lower-tier PFICs, in each case as if the U.S. Holder held such shares directly, even though the U.S. Holder will not receive the proceeds of those distributions or dispositions.

In general, if we are a PFIC for any taxable year during which a U.S. Holder holds Class A ordinary shares or ADSs, gain recognized by such U.S. Holder on a sale or other disposition (including certain pledges) of its Class A ordinary shares or ADSs will be allocated ratably over that U.S. Holder’s holding period. The amounts allocated to the taxable year of the sale or disposition and to any year before we became a PFIC will be taxed as ordinary income. The amount allocated to each other taxable year will be subject to tax at the highest rate in effect for individuals or corporations, as appropriate, for that taxable year, and an interest charge will be imposed on the resulting tax liability for each such year. Furthermore, to the extent that distributions received by a U.S. Holder in any year on its Class A ordinary shares or ADSs exceed 125% of the average of the annual distributions on the shares or ADSs received during the preceding three taxable years or the U.S. Holder’s holding period for the shares or ADSs, whichever is shorter, such distributions will be subject to taxation in the same manner. If we are a PFIC for any taxable year during which a U.S. Holder owned Class A ordinary shares or ADSs, we will generally continue to be treated as a PFIC with respect to the U.S. Holder for all succeeding years during which the U.S. Holder owned Class A ordinary shares or ADSs, even if we cease to meet the threshold requirements for PFIC status, unless the U.S. Holder makes a timely “deemed sale” election, in which case any gain on the deemed sale will be taxed under the PFIC rules described above.

Alternatively, if we are a PFIC and if the Class A ordinary shares or ADSs are “regularly traded” on a “qualified exchange,” as defined in applicable Treasury regulations, a U.S. Holder of Class A ordinary shares or ADSs will be entitled to make a mark-to-market election that will result in tax treatment different from the general tax treatment for PFICs described in the preceding paragraph. The Class A ordinary shares or ADSs will be treated as “regularly traded” for any calendar year in which more than a de minimis quantity of the shares or ADSs are traded on a qualified exchange on at least 15 days during each calendar quarter. The NYSE, where our ADSs are listed, is a qualified exchange for this purpose. A non-U.S. exchange is a “qualified exchange” if it is regulated by a governmental authority in the jurisdiction in which the exchange is located and with respect to which certain other requirements are met. The Internal Revenue Service has not identified specific foreign exchanges that are “qualified” for this purpose. If a U.S. Holder of Class A ordinary shares or ADSs makes a valid mark-to-market election, the U.S. Holder generally will recognize as ordinary income any excess of the fair market value of the Class A ordinary shares or ADSs at the end of each taxable year in which we are a PFIC over their adjusted tax basis, and will recognize an ordinary loss in respect of any excess of the adjusted tax basis of the Class A ordinary shares or ADSs over their fair market value at the end of the taxable year (but only to the extent of the net amount of income previously included as a result of the mark-to-market election). If a U.S. Holder validly makes the election, the U.S.

 

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Holder’s tax basis in the Class A ordinary shares or ADSs will be adjusted to reflect the income or loss amounts recognized. Any gain recognized on the sale or other disposition of Class A ordinary shares or ADSs in a year when the Company is a PFIC will be treated as ordinary income and any loss will be treated as an ordinary loss (but only to the extent of the net amount of income previously included as a result of the mark-to-market election, with any excess treated as capital loss). If a U.S. Holder validly makes the mark-to-market election, distributions paid on the Class A ordinary shares or ADSs will be treated as discussed under “— Taxation of Distributions.” There is no law, regulation or administrative guidance that provides for a right to apply a mark-to-market treatment to any Lower-tier PFIC that is not publicly traded. Therefore, if we are a PFIC for any taxable year, U.S. Holders could be subject to the general PFIC rules described in the preceding paragraph with respect to any Lower-tier PFIC even if they make a valid mark-to-market election with respect to us.

We do not intend to provide the information that will otherwise enable U.S. Holders to make a “qualified electing fund election,” which would result in alternative treatment if we were a PFIC for any taxable year.

If we are a PFIC for any taxable year during which a U.S. Holder owns any Class A ordinary shares or ADSs, the U.S. Holder will generally be required to file annual reports with the Internal Revenue Service.

U.S. Holders should consult their tax advisers regarding the determination of whether we are a PFIC for any taxable year and the potential application of the PFIC rules to their ownership of Class A ordinary shares or ADSs.

Taxation of Distributions

This discussion is subject to the discussion under “— Passive Foreign Investment Company Rules” above.

Distributions paid on the Class A ordinary shares or ADSs, other than certain pro rata distributions of Class A ordinary shares or ADSs, will be treated as dividends to the extent paid out of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Because we do not maintain calculations of our earnings and profits under U.S. federal income tax principles, it is expected that distributions generally will be reported to U.S. Holders as dividends. Dividends will not be eligible for the dividends-received deduction generally available to U.S. corporations under the Code. Subject to applicable limitations, dividends paid by “qualified foreign corporations” to certain non-corporate U.S. investors are taxable at the favorable rates applicable to long-term capital gains. A non-U.S. corporation is treated as a qualified foreign corporation with respect to dividends paid on stock that is readily tradable on a securities market in the United States, such as the NYSE, where the ADSs are listed. Pursuant to the legislative history, a share is treated as readily tradable for these purposes if an American depositary receipt backed by that share is so traded. The favorable rate does not apply if the non-U.S. corporation is a PFIC for the taxable year of the corporation in which the dividend is paid or the preceding taxable year. Non-corporate U.S. Holders should consult their tax advisers to determine whether the favorable rate will apply to dividends they receive on any of our Class A ordinary shares or ADS, and whether they are subject to any rules that limit their ability to be taxed at this favorable rate.

Dividends will be included in a U.S. Holder’s income on the date of the U.S. Holder’s, or in the case of ADSs, the depositary’s, receipt. The amount of any dividend income paid in non-U.S. currency will be the U.S. dollar amount calculated by reference to the spot rate in effect on the date of receipt, regardless of whether the payment is in fact converted into U.S. dollars on such date. If the dividend is converted into U.S. dollars on the date of receipt, a U.S. Holder generally should not be required to recognize currency gain or loss in respect of the amount received. A U.S. Holder may have currency gain or loss if the dividend is converted into U.S. dollars after the date of receipt.

Dividends will be treated as foreign-source income for foreign tax credit purposes. As described in “— PRC Taxation,” dividends paid by us may be subject to PRC withholding tax. For U.S. federal income tax purposes, the amount of the dividend income will include any amounts withheld in respect of PRC withholding tax. Subject to applicable limitations, which vary depending upon the U.S. Holder’s circumstances, PRC taxes withheld from dividend payments (at a rate not exceeding the applicable rate

 

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provided in the Treaty) generally will be creditable against a U.S. Holder’s U.S. federal income tax liability. The rules governing foreign tax credits are complex and U.S. Holders should consult their tax advisers regarding the creditability of foreign taxes in their particular circumstances. In lieu of claiming a credit, a U.S. Holder may elect to deduct creditable PRC taxes in computing its taxable income, subject to applicable limitations. An election to deduct foreign taxes instead of claiming foreign tax credits applies to all creditable foreign taxes paid or accrued in the relevant taxable year.

Sale or Other Taxable Disposition of Class A Ordinary Shares or ADSs

This discussion is subject to the discussion under “— Passive Foreign Investment Company Rules” above.

For U.S. federal income tax purposes, gain or loss realized on the sale or other taxable disposition of Class A ordinary shares or ADSs will be capital gain or loss, and will be long-term capital gain or loss if the U.S. Holder has held the Class A ordinary shares or ADSs for more than one year. The amount of the gain or loss will equal the difference between the U.S. Holder’s tax basis in the Class A ordinary shares or ADSs disposed of and the amount realized on the disposition, in each case as determined in U.S. dollars.

As described in “— PRC Taxation” above, gain on the sale of Class A ordinary shares or ADSs may be subject to PRC taxes if we are treated as a PRC resident enterprise for PRC tax purposes. Under the Code, capital gain of U.S. persons is generally treated as U.S.-source income. However, a U.S. Holder may be able to elect to treat the gain as foreign-source income under the Treaty and claim a foreign tax credit in respect of any PRC income tax on dispositions. The Foreign Tax Credit Regulations generally preclude a U.S. Holder from claiming a foreign tax credit with respect to PRC income taxes on gain from dispositions of Class A ordinary shares or ADSs if the U.S. Holder does not elect to apply the benefits of the Treaty. However, in that case it is possible that any PRC taxes on disposition gain may either be deductible or reduce the amount realized on the disposition (even if the U.S. Holder has elected to claim a foreign tax credit for other non-U.S. taxes for the same taxable year).

Any Hong Kong stamp duty imposed on dealings in our Class A ordinary shares or ADSs will not be creditable against a U.S. Holder’s U.S. federal income tax liability. U.S. Holders should consult their tax advisers regarding whether any stamp duty may be deductible, or reduce the amount of gain (or increase the amount of loss) recognized upon the disposition of the Class A ordinary shares or ADSs.

The rules governing foreign tax credits and deductibility of foreign taxes are complex. U.S. Holders should consult their tax advisers regarding the consequences of the imposition of any non-U.S. tax on disposition gain, including the Treaty’s resourcing rule, any reporting requirements with respect to a Treaty-based return position and the creditability or deductibility of any non-U.S. tax on disposition gain in their particular circumstances (including any applicable limitations).

Information Reporting and Backup Withholding

Payments of dividends and sales proceeds from the sale or exchange of our Class A ordinary shares or ADSs that are made within the United States or through certain U.S.-related financial intermediaries generally are subject to information reporting, and may be subject to backup withholding, unless (i) the U.S. Holder is a corporation or other exempt recipient or (ii) in the case of backup withholding, the U.S. Holder provides a correct taxpayer identification number and certifies that it is not subject to backup withholding, generally on Internal Revenue Service Form W-9. Backup withholding is not an additional tax. The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a credit against the U.S. Holder’s U.S. federal income tax liability and may entitle it to a refund, provided that the required information is timely furnished to the Internal Revenue Service.

Certain U.S. Holders who are individuals (or certain specified entities) may be required to report information relating to their ownership of Class A ordinary shares or ADSs, or non-U.S. accounts through which Class A ordinary shares or ADSs are held. U.S. Holders should consult their tax advisers regarding their reporting obligations with respect to the Class A ordinary shares or ADSs.

 

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