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to
Cayman Islands | 7374 | Not Applicable | ||
(State or other jurisdiction of incorporation or organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification Number) |
Huanting Timothy Li | William Y. Chua | Leiming Chen | ||
Sidley Austin LLP Level 39, | Sullivan & Cromwell LLP | Simpson Thacher & | ||
Two International | 28th Floor | Bartlett LLP | ||
Finance Centre | Nine Queen’s Road | 35th Floor, ICBC Tower | ||
8 Finance Street | Central | 3 Garden Road | ||
Central, Hong Kong | Hong Kong | Central, Hong Kong | ||
(852) 2509-7888 | (852) 2826-8688 | (852) 2514-7600 |
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The information in this preliminary prospectus is not complete and may be changed. No one may sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. |
Per ADS | Total | |||
Public offering price | US$ | US$ | ||
Underwriting discounts and commissions | US$ | US$ | ||
Proceeds, before expenses, to SouFun Holdings Limited | US$ | US$ | ||
Proceeds, before expenses, to the selling shareholders | US$ | US$ |
Deutsche Bank Securities | Goldman Sachs (Asia) L.L.C. |
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• | “we,” “us,” “Company,” “our” or “SouFun” refers to SouFun Holdings Limited, SouFun.com Limited, the name of our Company prior to July 14,1999, and its PRC subsidiaries as follows: |
• | SouFun Media Technology (Beijing) Co., Ltd., or SouFun Media; | |
• | Beijing SouFun Network Technology Co., Ltd., or SouFun Network; | |
• | Beijing SouFun Information Consultancy Co., Ltd., or Beijing Information; | |
• | Beijing Zhong Zhi Shi Zheng Information Technology Co., Ltd., or Beijing Zhong Zhi Shi Zheng; | |
• | Shanghai SouFun Information Co., Ltd., or SouFun Shanghai; | |
• | SouFun Information (Shenzhen) Co., Ltd., or SouFun Shenzhen; | |
• | SouFun Information (Tianjin) Co., Ltd., or SouFun Tianjin; and | |
• | SouFun Information (Guangzhou) Co., Ltd., or SouFun Guangzhou; |
• | China Index Academy Limited, incorporated in Hong Kong, or China Index Academy; | |
• | Bravo Work Investments Limited, incorporated in Hong Kong, or Bravo Work; | |
• | Max Impact Investments Limited, incorporated in Hong Kong, or Max Impact; | |
• | Selovo Investments Limited, incorporated in the British Virgin Islands, or Selovo Investments; and | |
• | Pendiary Investments Limited, incorporated in the British Virgin Islands, or Pendiary Investments; |
• | Beijing SouFun Internet Information Service Co., Ltd., or Beijing Internet; | |
• | Beijing Jia Tian Xia Advertising Co., Ltd., or Beijing Advertising; | |
• | Beijing SouFun Science and Technology Development Co., Ltd., or Beijing Technology; | |
• | Beijing China Index Information Co., Ltd., or Beijing China Index; | |
• | Shanghai Jia Biao Tang Advertising Co., Ltd., or Shanghai JBT Advertising; | |
• | Shanghai SouFun Advertising Co., Ltd., or Shanghai Advertising; | |
• | Beijing Century Jia Tian Xia Technology Development Co., Ltd., or Beijing JTX Technology; | |
• | Tianjin Jia Tian Xia Advertising Co., Ltd., or Tianjin JTX Advertising; |
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• | Shanghai China Index Consultancy Co., Ltd., or Shanghai China Index; | |
• | Beijing Li Tian Rong Ze Technology Development Co., Ltd., or Beijing Li Tian Rong Ze; and | |
• | Tianjin Xin Rui Jia Tian Xia Advertising Co., Ltd., or Tianjin Xin Rui. |
• | “China” or “PRC” or “Chinese” refers to the People’s Republic of China, which, for geographical and statistical purposes, excludes the Hong Kong Special Administrative Region, the Macau Special Administrative Region and Taiwan; | |
• | “GFA” refers to gross floor area and “sq.m.” refers to square meter(s); | |
• | “shares” or “ordinary shares” refers to our ordinary shares, which, following this offering, will include both Class A ordinary shares and Class B ordinary shares; and | |
• | all references to “RMB” or “Renminbi” are to the legal currency of China, all references to “Hong Kong dollars” or “HK$” are to the legal currency of the Hong Kong Special Administrative Region, and all references to “U.S. dollars” or “US$” are to the legal currency of the United States of America. |
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• | Marketing services: We offer marketing services on our website, mainly through advertisements, to real estate developers in the marketing phase of new property developments, as well as to real estate agencies and other home furnishing and improvement vendors who wish to promote their products and services, including home furnishing and improvement products and services, furniture, electronics and other products. We also intend to integrate paid priority placement of customer links in keyword search results into our current search and search ranking services. The substantial majority of our revenues are derived from marketing services; | |
• | Listing services: We offer basic and special listing services. Basic listing services are mainly offered to real estate agents, brokers, property developers, property owners and managers and providers of home furnishing and improvement products and services, and allow them to post information on properties, home furnishing and improvement and other related products and services on our website. Special listings consist of a customized marketing program primarily involving the coordination and promotion of offline themed events; and | |
• | Other value-added services and products: We offer subscription-based access to our information database, research reports and “total web solution” services, which integrate our customers’ services and products into our website, and also include website design services. |
• | over 139,000 listings for new residential property complexes, approximately eight million listings of secondary and rental residential properties, as well as over 140,000 listings of commercial properties for sale and lease; | |
• | over 8,000 brands and one million listings from home furnishing and improvement vendors across China; and | |
• | content coverage of real estate-related content, search services, marketing and listing coverage of 106 cities in China. |
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• | Leading market position and national brand name with powerful network effects; | |
• | Broad geographic coverage with local market expertise and highly scalable business model; | |
• | Extensive customer relationships and strategic partnerships in China; | |
• | Robust technology platform with focus on user experience; and | |
• | Experienced management team with extensive industry knowledge and proven track record. |
• | Strengthen relationships with customers through premium, customized services; | |
• | Strategically phase in service offerings in our existing network of cities; | |
• | Leverage our user base to introduce and monetize additional product offerings; | |
• | Continue to enhance our technology platform and user interface to strengthen user experience; and | |
• | Selectively pursue strategic alliances and acquisitions. |
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• | whether the online marketing industry in China will continue to develop and our ability to obtain listings from our key customer groups, such as property developers, real estate agents, brokers, and property owners and managers; | |
• | our ability to compete successfully against our current or future competitors; | |
• | our ability to maintain and enhance brand awareness; | |
• | the performance of the real estate sector in China, which is heavily regulated, relatively immature and volatile, and subject to stringent government regulations that may change from time to time; | |
• | our ability to develop and maintain an effective system of internal controls over financial reporting; | |
• | uncertainties associated with the effectiveness of our contractual arrangements in providing operational control over our controlled consolidated entities in China, including effectiveness of voting proxies and our ability to enforce our rights under these contractual arrangements; and | |
• | the uncertain legal and regulatory environment in China for foreign-invested companies operating in the Internet and online advertising sectors. |
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(1) | Affiliates of IDG Technology Venture Investment Inc. include IDG-Accel China Capital L.P. and IDG-Accel China Capital Investors L.P. |
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(1) | Refers to the following three entities affiliated with Apax Partners LLP: Hunt7-A Guernsey L.P. Inc, Hunt7-B Guernsey L.P Inc and Hunt6-A Guernsey L.P. Inc. | |
(2) | Affiliates of IDG Technology Venture Investment Inc. include IDG-Accel China Capital L.P. and IDG-Accel China Capital Investors L.P. |
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Price per ADS | We currently estimate the initial public offering price will be between US$40.50 and US$42.50 per ADS. | |
ADSs offered by us | 246,914 ADSs | |
ADSs offered by the selling shareholders | 2,686,324 ADSs (or 3,126,310 ADSs if the underwriters exercise in full their over-allotment option to purchase additional ADSs). | |
ADSs outstanding immediately after this offering | 2,933,238 ADSs (or 3,373,224 ADSs if the underwriters exercise in full their over-allotment option to purchase additional ADSs). | |
Class A ordinary shares outstanding immediately after this offering | 49,007,482 Class A ordinary shares (or 50,767,426 Class A ordinary shares if the underwriters exercise in full their over-allotment option to purchase additional ADSs). | |
Class B ordinary shares outstanding immediately after this offering | 25,298,329 Class B ordinary shares (or 25,298,329 Class B ordinary shares if the underwriters exercise in full their over-allotment option to purchase additional ADSs). | |
Ordinary shares | Our share capital will consist of Class A and Class B ordinary shares upon completion of this offering. Holders of Class A ordinary shares and Class B ordinary shares will have the same rights except for voting and conversion rights. Each Class A ordinary share will be entitled to one vote on all matters subject to shareholders’ vote, and each Class B ordinary share will be entitled to 10 votes on all matters subject to shareholders’ vote. Each Class B ordinary share will be convertible into one Class A ordinary share at any time by its holder. Upon transfer of any Class B ordinary share by its holder to any person or entity that is not an affiliate of such holder (as defined in our amended and restated articles of association), such Class B ordinary share will be automatically and immediately converted into a Class A ordinary share. Class A ordinary shares will not be convertible into Class B ordinary shares under any circumstance. | |
Right to purchase additional ADSs | Telstra International, one of the selling shareholders, has granted to the underwriters the right, exercisable for 30 days after the date of this prospectus, to purchase from it up to an aggregate of 439,986 additional ADSs at the initial public offering price listed on the cover page of this prospectus, less underwriting discounts and commissions. |
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The ADSs | Each ADS represents four Class A ordinary shares, par value HK$1.00 per share. The ADSs will be evidenced by ADRs. The depositary will be the holder of the ordinary shares underlying the ADSs and you will have the rights of an ADR holder as provided in the deposit agreement among us, the depositary and owners and beneficial owners of ADSs from time to time. | |
You may surrender your ADSs to the depositary to withdraw the ordinary shares underlying your ADSs. The depositary will charge you a fee for such an exchange. | ||
We may amend or terminate the deposit agreement for any reason without your consent. If an amendment becomes effective, you will be bound by the deposit agreement as amended if you continue to hold your ADSs. | ||
To better understand the terms of the ADSs, you should carefully read the section in this prospectus entitled “Description of American Depositary Shares.” We also encourage you to read the deposit agreement, which is an exhibit to the registration statement that includes this prospectus. | ||
Use of proceeds | We plan to use the net proceeds we receive from this offering for general corporate purposes. See “Use of Proceeds” for additional information. | |
We will not receive any of the proceeds from the sale of the ADSs by the selling shareholders. | ||
Risk factors | See “Risk Factors” and other information included in this prospectus for a discussion of the risks and uncertainties you should carefully consider before deciding to invest in our ADSs. | |
Listing | We have received approval to list our ADSs on the New York Stock Exchange. Our ordinary shares will not be listed for trading on any exchange or quoted for trading on anyover-the-counter trading system. | |
Proposed New York Stock Exchange symbol | “SFUN” | |
Depositary | JPMorgan Chase Bank, N.A. | |
Lock-up | We, the selling shareholders, all of our other existing shareholders, General Atlantic Mauritius Limited, or General Atlantic,Hunt 7-A Guernsey L.P. Inc, Hunt 7-B Guernsey L.P. Inc and Hunt6-A Guernsey L.P. Inc, such three Hunt entities collectively, Apax, our directors and executive officers and a substantial majority of our option holders have agreed with the underwriters not to sell, transfer or dispose of any ADSs, ordinary shares or similar securities for a period of 180 days after the date of this prospectus. In addition, through a letter agreement, we have agreed to instruct JPMorgan Chase Bank, N.A., as |
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depositary, not to accept any deposit of any ordinary shares or issue any ADSs for 180 days after the date of this prospectus unless we consent to such deposit or issuance, and not to provide consent without the prior written consent of the representatives of the underwriters. The foregoing does not affect the right of ADS holders to cancel their ADSs and withdraw the underlying ordinary shares. See “Shares Eligible for Future Sale” and “Underwriting.” |
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Year ended December 31, | Six months ended June 30, | |||||||||||||||||||
2007 | 2008 | 2009 | 2009 | 2010 | ||||||||||||||||
(US$ in thousands, except per ordinary share and ADS data) | ||||||||||||||||||||
Consolidated statement of operations data | ||||||||||||||||||||
Revenues | ||||||||||||||||||||
Marketing services(1) | 46,552 | 86,252 | 102,367 | 29,503 | 45,586 | |||||||||||||||
Listing services | 9,885 | 16,070 | 17,559 | 5,398 | 14,006 | |||||||||||||||
Other value-added services and products | 1,439 | 1,802 | 7,123 | 2,056 | 8,593 | |||||||||||||||
Total revenues | 57,876 | 104,124 | 127,049 | 36,957 | 68,185 | |||||||||||||||
Cost of revenues | ||||||||||||||||||||
Cost of services | (12,630 | ) | (22,162 | ) | (26,484 | ) | (9,506 | ) | (18,164 | ) | ||||||||||
Cost of other value-added services and products | — | — | (4,863 | ) | (1,185 | ) | (6,887 | ) | ||||||||||||
Total cost of revenues | (12,630 | ) | (22,162 | ) | (31,347 | ) | (10,691 | ) | (25,051 | ) | ||||||||||
Gross profit | 45,246 | 81,962 | 95,702 | 26,266 | 43,134 | |||||||||||||||
Operating expenses: | ||||||||||||||||||||
Selling expenses | (13,221 | ) | (18,708 | ) | (25,186 | ) | (9,988 | ) | (16,742 | ) | ||||||||||
General and administrative expenses | (12,158 | ) | (19,857 | ) | (22,176 | ) | (9,379 | ) | (14,330 | ) | ||||||||||
Operating income: | 19,867 | 43,397 | 48,340 | 6,899 | 12,062 | |||||||||||||||
Foreign exchange gain (loss) | 8 | (2,826 | ) | (59 | ) | (17 | ) | (481 | ) | |||||||||||
Interest income (2) | 707 | 1,221 | 1,205 | 613 | 1,162 | |||||||||||||||
Realized gain—trading securities | — | — | 195 | 85 | 164 | |||||||||||||||
Government grant | 211 | 360 | 730 | 336 | 356 | |||||||||||||||
Income before income tax | 20,793 | 42,152 | 50,411 | 7,916 | 13,263 | |||||||||||||||
Income tax (expense)/benefit | (8,457 | ) | (18,805 | ) | 2,199 | (4,190 | ) | (7,965 | ) | |||||||||||
Net income | 12,336 | 23,347 | 52,610 | 3,726 | 5,298 | |||||||||||||||
Net income (loss) attributable to non-controlling interest | 125 | (34 | ) | (42 | ) | (20 | ) | (11 | ) | |||||||||||
Net income attributable to SouFun Holdings Limited shareholders | 12,211 | 23,381 | 52,652 | 3,746 | 5,309 | |||||||||||||||
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Year ended December 31, | Six months ended June 30, | |||||||||||||||||||
2007 | 2008 | 2009 | 2009 | 2010 | ||||||||||||||||
(US$ in thousands, except per ordinary share and ADS data) | ||||||||||||||||||||
Income per ordinary share | ||||||||||||||||||||
Basic | 0.16 | 0.32 | 0.71 | 0.05 | 0.07 | |||||||||||||||
Diluted(3) | 0.16 | 0.30 | 0.68 | 0.05 | 0.07 | |||||||||||||||
Dividend declared per ordinary share | 0.55 | — | 0.59 | — | — | |||||||||||||||
Income per ADS | ||||||||||||||||||||
Basic | 0.64 | 1.28 | 2.84 | 0.20 | 0.28 | |||||||||||||||
Diluted | 0.64 | 1.20 | 2.72 | 0.20 | 0.28 | |||||||||||||||
Dividend declared per ADS | 2.20 | — | 2.36 | — | — | |||||||||||||||
Weighted average number of ordinary shares outstanding | ||||||||||||||||||||
Basic | 74,020,217 | 74,020,217 | 73,986,129 | 74,020,217 | 73,932,217 | |||||||||||||||
Diluted | 76,997,410 | 77,092,197 | 77,418,960 | 77,386,202 | 77,851,697 | |||||||||||||||
Weighted average number of ADSs outstanding | ||||||||||||||||||||
Basic | 18,505,054 | 18,505,054 | 18,496,532 | 18,505,054 | 18,483,054 | |||||||||||||||
Diluted | 19,249,353 | 19,273,049 | 19,354,740 | 19,346,551 | 19,462,924 | |||||||||||||||
Share-based compensation included in: | ||||||||||||||||||||
Cost of revenues | 160 | 268 | 489 | 238 | 251 | |||||||||||||||
Selling expenses | 142 | 323 | 595 | 295 | 338 | |||||||||||||||
General and administrative expenses | 1,915 | 2,126 | 3,056 | 1,480 | 1,228 |
(1) | Marketing services include related-party amounts of nil and US$375,000 in the six months ended June 30, 2009 and 2010, respectively, relating to marketing services provided to the Hainan property developer that was the subject of the Dong Fang Xi Mei commitment deposit described in the section entitled “Certain Relationships and Related Party Transactions—Related Party Loans and Other Payments.” See note 10 to the unaudited interim condensed consolidated financial statements included elsewhere in this prospectus. | |
(2) | Interest income includes related party amounts of nil, nil, US$85,000, nil and US$305,000 in 2007, 2008 and 2009 and the six months ended June 30, 2009 and 2010, respectively. | |
(3) | Income per ordinary share (diluted) and income per ADS (diluted) for each year from 2007 to 2009 and the six months ended June 30, 2009 and 2010 have been computed, after considering the dilutive effect of the shares underlying employees’ share options and, as applicable, preferred shares. |
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• | on an actual basis; and | |
• | on an as adjusted basis to reflect the exercise of 1,125,000 vested stock options by Media Partner to purchase 1,125,000 Class A ordinary shares, the issuance of 20,882non-voting ordinary shares to Telstra International upon its exercise of 41,250 vested stock options by means of net-share settlement and the issuance and sale of 987,656 Class A ordinary shares in the form of ADSs by us in this offering based on the initial public offering price shown on the front cover of this prospectus, after deducting the estimated offering expenses payable by us. A US$1.00 increase (decrease) in the assumed initial public offering price of US$41.50 per ADS, the mid-point of the estimated range of the initial public offering price, would increase (decrease) the amounts representing total current assets, total assets, total SouFun Holdings Limited’s equity, total shareholders’ equity and shareholders’ equity by US$0.9 million. |
As of December 31, | As of June 30, | |||||||||||||||
2008 | 2009 | 2010 | ||||||||||||||
Actual | Actual | Actual | As Adjusted | |||||||||||||
(US$ in thousands) | ||||||||||||||||
Consolidated balance sheet data | ||||||||||||||||
Total current assets | 102,861 | 149,224 | 176,745 | 114,414 | ||||||||||||
Total assets | 107,246 | 154,494 | 185,079 | 194,125 | ||||||||||||
Total current liabilities | 79,867 | 124,306 | 132,187 | 132,187 | ||||||||||||
Total liabilities | 93,858 | 129,993 | 141,628 | 141,628 | ||||||||||||
Total SouFun Holdings Limited’s equity | 13,283 | 24,438 | 43,399 | 52,445 | ||||||||||||
Non-controlling interests | 105 | 63 | 52 | 52 | ||||||||||||
Total shareholders’ equity | 13,388 | 24,501 | 43,451 | 52,497 | ||||||||||||
Total liabilities and shareholders’ equity | 107,246 | 154,494 | 185,079 | 194,125 |
Year ended December 31, | Six months ended June 30, | |||||||||||||||||||
2007 | 2008 | 2009 | 2009 | 2010 | ||||||||||||||||
(US$ in thousands) | ||||||||||||||||||||
Consolidated cash flow data | ||||||||||||||||||||
Net cash generated from operating activities | 30,493 | 44,568 | 65,966 | 24,005 | 18,198 | |||||||||||||||
Net cash (used in) generated from investing activities | (7,596 | ) | (2,598 | ) | (12,034 | ) | 8,927 | (5,600 | ) | |||||||||||
Net cash used in financing activities | (2,647 | ) | (16,210 | ) | (24,789 | ) | (24,241 | ) | — | |||||||||||
Net increase in cash and cash equivalents | 21,774 | 28,954 | 29,217 | 8,713 | 13,129 | |||||||||||||||
Cash and cash equivalents at beginning of year/period | 12,294 | 34,068 | 63,022 | 63,022 | 92,239 | |||||||||||||||
Cash and cash equivalents at end of year/period | 34,068 | 63,022 | 92,239 | 71,735 | 105,368 |
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• | the amount of user traffic on our website, our ability to achieve user demographic characteristics that are attractive to advertisers, and our ability to demonstrate such user traffic and demographic characteristics through our website traffic tracking tools and reporting systems; | |
• | potential downward pressure on online marketing pricing due to increased competition from other online advertisers and traditional online advertising media; and | |
• | widespread adoption of technologies that permit Internet users to selectively block unwanted web views, including advertisements on web pages. |
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• | restrictive monetary policies adopted by the PRC government, including any significant increase in interest rates; | |
• | adverse developments in the credit marketsand/or mortgage financing markets resulting from PRC government policies; | |
• | policies regarding land supply; | |
• | significant increases in transaction costs as a result of changes in PRC government policies regarding real estate transaction taxes, such as the recent announcement regarding the reinstatement of a sales tax on residential property sales by individuals within five years of purchase; | |
• | adverse changes in PRC government policies regarding the acquisitionand/or ownership of real estate; | |
• | adverse changes in PRC national or local government policies or practices regarding brokerage, referral or franchise business or related fees and commissions; or | |
• | other PRC government policies or regulations that burden real estate transactions or ownership. |
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• | any breakdown or system failure resulting in a sustained shutdown of our servers, including failures which may be attributable to sustained power shutdowns, or efforts to gain unauthorized access to our systems causing loss or corruption of data or malfunctions of software or hardware; | |
• | any disruption or failure in the national backbone network, which would prevent our customers and users from accessing our website; | |
• | any damage from fire, flood, earthquake and other natural disasters; and | |
• | computer viruses, hackings and similar events. |
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• | seasonality of the real estate market and real estate consumers’ purchasing patterns; |
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• | our ability to retain existing customers and attract new customers for our marketing and listing services; | |
• | the amount and timing of our operating expenses and capital expenditures; | |
• | the adoption of new, or changes to existing, governmental regulations; | |
• | a shortfall in our revenues relative to our forecasts and a decline in our operating results; and | |
• | economic conditions in general and specific to the real estate industry and to China. |
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• | risks associated with the assimilation of new operations, services, technologies and personnel; | |
• | unforeseen or hidden liabilities; | |
• | the diversion of resources from our existing businesses and technologies; | |
• | the inability to generate sufficient revenues to offset the costs and expenses of acquisitions; and | |
• | potential loss of, or harm to, relationships with employees, customers and users as a result of the integration of new businesses. |
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• | revoking the business and operating licenses of our PRC subsidiaries or consolidated controlled entities, whose business and operating licenses are essential to the operation of our business; | |
• | levying fines of the greater of RMB500,000 or an amount up to five times the revenues generated from operating activities violating the relevant regulations; | |
• | confiscating our income or the income of our PRC subsidiariesand/or consolidated controlled entities; | |
• | shutting down our servers or blocking our website; |
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• | discontinuing or restricting our operations or the operations of our PRC subsidiariesand/or consolidated controlled entities; | |
• | imposing conditions or requirements with which we, our PRC subsidiariesand/or consolidated controlled entities may not be able to comply; | |
• | requiring us, our PRC subsidiariesand/or consolidated controlled entities to restructure the relevant ownership structure, operations or contractual arrangements; and | |
• | taking other regulatory or enforcement actions that could be harmful to our business. |
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• | revoking the business and operating licenses of SouFun Media and SouFun Network; | |
• | imposing fines or confiscating income of SouFun Media and SouFun Network; and | |
• | requiring SouFun Media and SouFun Network to cease operations. |
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• | announcements of competitive developments; | |
• | regulatory developments in our target markets which affect us, our users, our customers or our competitors; | |
• | actual or anticipated fluctuations in our quarterly results of operations; | |
• | failure of our quarterly financial and results of operations to meet market expectations or failure to meet our previously announced guidance; | |
• | changes in financial estimates by securities research analysts; | |
• | changes in the economic performance or market valuations of other Internet or online real estate and home furnishing and improvement services companies; | |
• | additions or departures of our executive officers and other key personnel; | |
• | announcements regarding intellectual property litigation (or potential litigation) involving us or any of our directors and officers; | |
• | fluctuations in the exchange rates between the U.S. dollar and the Renminbi; | |
• | release or expiration of the underwriters’ post-offeringlock-up or other transfer restrictions on our outstanding ordinary shares and ADSs; and/or | |
• | sales or perceived sales of additional ordinary shares or ADSs. |
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• | Our new articles of association provide for a dual-class ordinary share structure; and | |
• | Our new articles of association permit our board of directors, without further action by our shareholders, to issue preferred shares with special voting rights compared to our ordinary shares. |
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• | any change in the laws, rules and regulations of the central and local governments in China and the rules, regulations and policies of MIIT, and other relevant government authorities relating to all aspects of our business; | |
• | general economic, market and business conditions in China; | |
• | macroeconomic policies of the PRC government; | |
• | changes or volatility in interest rates, foreign exchange rates, equity prices or other rates or prices; | |
• | the effects of competition in the Internet industry on the demand for and price of our services; | |
• | various business opportunities that we may pursue; and | |
• | the risk factors discussed in this prospectus as well as other factors and uncertainties beyond our control. |
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• | Beijing Internet holds an ICP license issued by the Beijing Telecommunications Administration Bureau forwww.villachina.comand provides marketing and listing services relating to China’s real estate and home furnishing and improvement sectors. Beijing Internet also holds licenses for the provision of value-added telecommunications services within the mobile networks of Beijing; | |
• | Beijing Technology holds an ICP license issued by the Beijing Telecommunications Administration Bureau forwww.soufun.comand has received approval to operate electronic bulletin board services on such website. Beijing Technology also holds a license issued by the Beijing Bureau of Radio and Television for producing and distributing videos, and a license issued by the State Administration of Radio, Film and Television for broadcasting real estate information audio and video programs onwww.soufun.com. Beijing Technology provides marketing and listing services relating to China’s real estate and home furnishing and improvement sectors; | |
• | Beijing China Index holds an ICP license issued by the Beijing Telecommunications Administration Bureau forwww.landlist.cnand has received approval to operate electronic bulletin board services on that website. Beijing China Index provides other |
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value-added services such as information database and research services relating to China’s real estate and home furnishing and improvement sectors; |
• | Beijing JTX Technology holds an ICP license forwww.jiatx.comissued by the Beijing Telecommunications Administration Bureau and has been approved for operating electronic bulletin board services on that website. Beijing JTX Technology also holds a license for the provision of value-added telecommunications services within Beijing. Beijing JTX Technology provides marketing and listing services relating to China’s home furnishing and improvement business; and | |
• | Each of Beijing Advertising, Shanghai JBT Advertising, Shanghai Advertising, Tianjin JTX Advertising and Tianjin Xin Rui is allowed to provide marketing and listing services, as the case may be, including design, production, agency and publication of advertisements in accordance with the business scope indicated in each of their respective business licenses and provide marketing and listing services relating to China’s real estate and home furnishing and improvement business. |
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(1) | Affiliates of IDG Technology Venture Investment Inc. include IDG-Accel China Capital L.P. and IDG-Accel China Capital Investors L.P. |
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(1) | Refers to the following three entities affiliated with Apax Partners LLP: Hunt7-A Guernsey L.P. Inc, Hunt7-B Guernsey L.P Inc and Hunt6-A Guernsey L.P. Inc. | |
(2) | Affiliates of IDG Technology Venture Investment Inc. include IDG-Accel China Capital L.P. and IDG-Accel China Capital Investors L.P. |
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• | payment of service fees by our consolidated controlled entities to SouFun Network in respect of its provision of exclusive technical and consulting services to our consolidated controlled entities, together with a pledge of the equity interests of our consolidated controlled entities to ensure compliance with the exclusive technical consultancy and services agreements; | |
• | consolidation of the control over our consolidated controlled entities at an operational level under the operating and shareholders’ proxy agreements; | |
• | advances to Mr. Mo and Mr. Dai for them to make capital contributions to our consolidated controlled entities; | |
• | an exclusive call option granted to us to become the registered holder of the equity interests in our consolidated controlled entities at a cost equivalent to the advances to Mr. Mo and Mr. Dai, as and when permitted by PRC laws, rules and regulations; and |
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• | an obligation on SouFun Media and SouFun Network, as the case may be, as reasonably requested by the consolidated controlled entities, to provide appropriate funds to the consolidated controlled entities for major losses resulting from their business and operations. |
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• | the relevant consolidated controlled entity is unable to pay fees due pursuant to the technical consultancy and services agreement; | |
• | the shareholders of the relevant consolidated controlled entity violate any of the warranties or guarantees in the equity pledge agreement; | |
• | the shareholders of the relevant consolidated controlled entity violate any of the terms of the equity pledge agreement; | |
• | the shareholders of the relevant consolidated controlled entity transfer their assets in the consolidated controlled entity without the written consent of SouFun Network; | |
• | the relevant consolidated controlled entity is in violation of loan agreements with third parties requiring it to accelerate payment of its debts or is in such violation that causes SouFun Network to believe the relevant consolidated controlled entity’s capability to perform the exclusive technical consultancy and services agreement with SouFun Network has been adversely affected; | |
• | the shareholders of the relevant consolidated controlled entity are unable to perform their ordinary debt obligations or payments; | |
• | where the relevant equity pledge agreement cannot be performed as a result of any newly issued laws, or the pledgor is not able to perform its obligations under the exclusive technical consultancy and services agreement with SouFun Network; | |
• | where all government approvals related to the performance of the relevant equity pledge agreement are amended, terminated or cease to be effective; | |
• | where there is an adverse change to the financial condition of the shareholders, and the change causes SouFun Network to believe the shareholders’ capability to perform the obligations under the exclusive technical consultancy and services agreement has been adversely affected; | |
• | where the successor of the relevant consolidated controlled entity is only able to partially perform or refuses to perform its obligations under the exclusive technical consultancy and services agreement; and | |
• | where laws and regulations render the shareholders of the relevant consolidated controlled entity unable to enforce their pledge rights under the equity pledge agreement. |
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• | Amendments and Supplements to the Exclusive Technical Consultancy and Services Agreements. The 2010 Amendments provide that SouFun Network and our consolidated controlled entities may negotiate to adjust the criteria for determining service fees set forth in the exclusive technical consultancy and services agreements, and any adjustment to such service fees must be approved by SouFun Network. The 2010 Amendments further provide that SouFun Network can unilaterally extend the term of the exclusive technical consultancy and services agreements and such request will be unconditionally agreed to by our consolidated controlled entities. |
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• | Amendments and Supplements to the Operating Agreements. The 2010 Amendments provide that the consolidated controlled entities and shareholders of the consolidated controlled entities should abide by the corporate policies and guidelines provided by SouFun Network, including the recruitment and dismissal of relevant employees of the consolidated controlled entities, the daily operations and management of the consolidated controlled entities as well as the financial management system of the consolidated controlled entities. Moreover, the 2010 Amendments provide that the annual budgets of our consolidated controlled entities shall be examined and approved by SouFun Network, including but not limited to profit estimates, operating capital, pricing strategies and payment policies. Additionally, our consolidated controlled entities’ operating costs may not exceed the annual budget approved by SouFun Network. SouFun Network is also obligated to provide proper capital support or other financial support to our consolidated controlled entities on their reasonable demand and the supporting methods and plans shall be negotiated by SouFun Network and our consolidated controlled entities based upon the specific circumstances of our consolidated controlled entities. | |
• | Amendments and Supplements to the Exclusive Call Option Agreements. The 2010 Amendments provide an additional restrictive covenant on the part of our consolidated controlled entities that allows us, upon our unilateral decision, to request our consolidated controlled entities to make donations to SouFun Network, to the extent permitted by applicable laws, rules and regulations, at the time and in the amount and form designated by us. Our consolidated controlled entities covenanted not to reject such a request under any circumstances. The 2010 Amendments also provide an additional restrictive covenant on the part of the shareholders of our consolidated controlled entities that requires them to immediately transfer all the profits distributed from our consolidated controlled entities to us upon our request, which provides us with an alternative method to secure operating revenues and profits from our consolidated controlled subsidiaries that are in excess of their operating expenses or capital needs, should our consolidated controlled subsidiaries fail to pay service fees to us pursuant to the exclusive technical consultancy and service agreements. The 2010 Amendments further provide that SouFun Network can unilaterally extend the term of the exclusive call option agreements and such request will be unconditionally agreed to by our consolidated controlled entities. |
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• | each of our Structure Contracts is legal, valid and binding on the contracting parties under applicable PRC laws, rules and regulations; | |
• | the execution, delivery, effectiveness, enforceability and performance of each of our Structure Contracts do not violate any published PRC laws, rules and regulations currently in force and effect; | |
• | none of our Structure Contracts contravene any published PRC laws, rules and regulations currently in force and effect; and | |
• | no filings, registrations, consents, approvals, permits, authorizations, certificates and licenses of any PRC government authorities are currently required in connection with the execution, delivery, effectiveness, performance and enforceability of each Structure Contract, provided that the pledges of equity interests under the Structure Contracts should be registered with competent PRC government authorities, and provided further that the exercise of the call option in the future must be approved and registered by competent PRC government authorities. |
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• | on an actual basis; and | |
• | on an as adjusted basis to reflect the exercise of 1,125,000 vested stock options by Media Partner to purchase 1,125,000 Class A ordinary shares, the issuance of 20,882 non-voting ordinary shares to Telstra International upon its exercise of 41,250 vested stock options by means of net-share settlement and the issuance and sale of 987,656 Class A ordinary shares in the form of ADSs by us in this offering based on the initial public offering price of US$41.50 per ADS, the mid-point of the estimated range of the initial public offering price shown on the front cover of this prospectus, after deducting the estimated offering expenses payable by us. |
As of June 30, 2010 | ||||||||
Actual | As Adjusted | |||||||
(US$ in thousands) | ||||||||
Shareholders’ equity | ||||||||
Ordinary shares, par value of HK$1.00 per share, 600,000,000 shares authorized, 73,932,217 shares issued and outstanding as of December 31, 2009 and June 30, 2010 | 9,489 | 9,760 | ||||||
Additional paid-in capital(1) | 22,225 | 31,791 | ||||||
Accumulated other comprehensive income | 6,376 | 6,376 | ||||||
Retained earnings | 5,309 | 4,518 | ||||||
Total SouFun Holdings Limited’s equity(1) | 43,399 | 52,445 | ||||||
Non-controlling interests | 52 | 52 | ||||||
Total shareholders’ equity(1) | 43,451 | 52,497 | ||||||
Total capitalization(1) | 43,451 | 52,497 |
(1) | Assuming the number of ADSs offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting estimated offering expenses payable by us, a US$1.00 increase (decrease) in the assumed initial public offering price of US$10.38 per ordinary share would increase (decrease) each of additionalpaid-in capital and total SouFun Holdings Limited’s equity, total shareholders’ equity and total capitalization by US$0.9 million. |
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Assumed initial public offering price per ordinary share | US$ | 10.38 | ||
Net tangible book value per ordinary share as of June 30, 2010 | US$ | 0.57 | ||
Increase in net tangible book value per ordinary share attributable to existing shareholders | US$ | 0.11 | ||
Net tangible book value per ordinary share after giving effect to this offering, the exercise of 1,125,000 vested stock options by Media Partner and the issuance of 20,882 non-voting ordinary shares to Telstra International upon its exercise of vested options | US$ | 0.68 | ||
Dilution in net tangible book value per ordinary share to new investors | US$ | 9.7 | ||
Percentage dilution in net tangible book value per ordinary share to new investors | 93.5 | % | ||
Dilution in net tangible book value per ADS to new investors | US$ | 38.78 | ||
Percentage dilution in net tangible book value per ADS to new investors | 93.5 | % |
• | our pro forma net tangible book value after giving effect to this offering by US$0.9 million, | |
• | our pro forma net tangible book value per ordinary share and per ADS after giving effect to this offering by US$0.01 per ordinary share and US$0.04 per ADS, and | |
• | the dilution in our pro forma net tangible book value per ordinary share and per ADS to new investors in this offering by US$0.99 per ordinary share and US$3.96 per ADS, |
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Average | ||||||||||||||||||||||||
Price | Average | |||||||||||||||||||||||
Ordinary Shares | Per Ordinary | Price | ||||||||||||||||||||||
Purchased | Total Consideration | Share | Per ADS | |||||||||||||||||||||
Number | Percent | Amount | Percent | Equivalent | Equivalent | |||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Existing shareholders* | 75,078,099 | 98.7 | % | US$ | 8,808 | 46.2 | % | US$ | 0.12 | US$ | 0.48 | |||||||||||||
New investors | 987,656 | 1.3 | 10,247 | 53.8 | 10.38 | 41.50 | ||||||||||||||||||
Total | 76,065,755 | 100 | % | US$ | 19,054 | 100 | % | |||||||||||||||||
* | Including the exercise of 1,125,000 vested stock options by Media Partner for an aggregate purchase price of US$307,500 and the exercise of vested stock option by Telstra International to purchase 20,882 non-voting ordinary shares by Telstra International by means of net-share settlement. |
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Renminbi Per U.S. Dollar Exchange Rate | ||||||||||||||||
Low | High | Average (1) | Period-End | |||||||||||||
2005 | 8.2765 | 8.0702 | 8.1826 | 8.0702 | ||||||||||||
2006 | 8.0702 | 7.8041 | 7.9579 | 7.8041 | ||||||||||||
2007 | 7.8127 | 7.2946 | 7.5806 | 7.2946 | ||||||||||||
2008 | 7.2946 | 6.7800 | 6.9193 | 6.8225 | ||||||||||||
2009 | 6.8470 | 6.8176 | 6.8295 | 6.8259 | ||||||||||||
2010 (through August 27) | ||||||||||||||||
February | 6.8330 | 6.8258 | 6.8285 | 6.8258 | ||||||||||||
March | 6.8270 | 6.8254 | 6.8262 | 6.8258 | ||||||||||||
April | 6.8275 | 6.8229 | 6.8256 | 6.8247 | ||||||||||||
May | 6.8310 | 6.8245 | 6.8275 | 6.8305 | ||||||||||||
June | 6.8323 | 6.7815 | 6.8184 | 6.7815 | ||||||||||||
July | 6.7807 | 6.7709 | 6.7762 | 6.7735 | ||||||||||||
August (through August 27) | 6.8038 | 6.7670 | 6.7855 | 6.7977 |
(1) | Annual averages are calculated using the exchange rates on the last day of each calendar month during that year. Monthly averages are calculated using the average of the daily exchange rates during that month. |
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Year ended December 31, | Six months ended June 30, | |||||||||||||||||||||||||||
2005 | 2006 | 2007 | 2008 | 2009 | 2009 | 2010 | ||||||||||||||||||||||
(US$ in thousands, except per ordinary share and ADS data and number of shares and ADSs) | ||||||||||||||||||||||||||||
Consolidated statement of operations data | ||||||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||||
Marketing services(1) | 12,491 | 30,638 | 46,552 | 86,252 | 102,367 | 29,503 | 45,586 | |||||||||||||||||||||
Listing services | 4,532 | 4,633 | 9,885 | 16,070 | 17,559 | 5,398 | 14,006 | |||||||||||||||||||||
Other value-added services and products | 981 | 3,532 | 1,439 | 1,802 | 7,123 | 2,056 | 8,593 | |||||||||||||||||||||
Total Revenues | 18,004 | 38,803 | 57,876 | 104,124 | 127,049 | 36,957 | 68,185 | |||||||||||||||||||||
Cost of revenues | ||||||||||||||||||||||||||||
Cost of services | (5,748 | ) | (8,214 | ) | (12,630 | ) | (22,162 | ) | (26,484 | ) | (9,506 | ) | (18,164 | ) | ||||||||||||||
Cost of other value-added services and products | — | — | — | — | (4,863 | ) | (1,185 | ) | (6,887 | ) | ||||||||||||||||||
Total cost of revenues | (5,748 | ) | (8,214 | ) | (12,630 | ) | (22,162 | ) | (31,347 | ) | (10,691 | ) | (25,051 | ) | ||||||||||||||
Gross profit | 12,256 | 30,589 | 45,246 | 81,962 | 95,702 | 26,266 | 43,134 | |||||||||||||||||||||
Operating expenses | ||||||||||||||||||||||||||||
Selling expenses | (4,308 | ) | (9,404 | ) | (13,221 | ) | (18,708 | ) | (25,186 | ) | (9,988 | ) | (16,742 | ) | ||||||||||||||
General and administrative expenses | (5,083 | ) | (14,703 | ) | (12,158 | ) | (19,857 | ) | (22,176 | ) | (9,379 | ) | (14,330 | ) | ||||||||||||||
Operating income | 2,865 | 6,482 | 19,867 | 43,397 | 48,340 | 6,899 | 12,062 | |||||||||||||||||||||
Foreign exchange gain (loss) | 61 | (9 | ) | 8 | (2,826 | ) | (59 | ) | (17 | ) | (481 | ) | ||||||||||||||||
Interest income (2) | 149 | 278 | 707 | 1,221 | 1,205 | 613 | 1,162 | |||||||||||||||||||||
Realized gain—trading securities | — | — | — | — | 195 | 85 | 164 |
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Year ended December 31, | Six months ended June 30, | |||||||||||||||||||||||||||
2005 | 2006 | 2007 | 2008 | 2009 | 2009 | 2010 | ||||||||||||||||||||||
(US$ in thousands, except per ordinary share and ADS data and number of shares and ADSs) | ||||||||||||||||||||||||||||
Government grant | — | 114 | 211 | 360 | 730 | 336 | 356 | |||||||||||||||||||||
Income before income tax | 3,075 | 6,865 | 20,793 | 42,152 | 50,411 | 7,916 | 13,263 | |||||||||||||||||||||
Income tax (expense)/benefit | (210 | ) | (1,340 | ) | (8,457 | ) | (18,805 | ) | 2,199 | (4,190 | ) | (7,965 | ) | |||||||||||||||
Net income | 2,865 | 5,525 | 12,336 | 23,347 | 52,610 | 3,726 | 5,298 | |||||||||||||||||||||
Net income (loss) attributable to non-controlling interest | — | 14 | 125 | (34 | ) | (42 | ) | (20 | ) | (11 | ) | |||||||||||||||||
Net income attributable to SouFun Holdings Limited shareholders | 2,865 | 5,511 | 12,211 | 23,381 | 52,652 | 3,746 | 5,309 | |||||||||||||||||||||
Income per ordinary share | ||||||||||||||||||||||||||||
Basic | 0.04 | 0.08 | 0.16 | 0.32 | 0.71 | 0.05 | 0.07 | |||||||||||||||||||||
Diluted(3) | 0.04 | 0.07 | 0.16 | 0.30 | 0.68 | 0.05 | 0.07 | |||||||||||||||||||||
Dividend declared per ordinary share | — | — | 0.55 | — | 0.59 | — | — | |||||||||||||||||||||
Income per ADS | ||||||||||||||||||||||||||||
Basic | 0.16 | 0.32 | 0.64 | 1.28 | 2.84 | 0.20 | 0.28 | |||||||||||||||||||||
Diluted | 0.16 | 0.28 | 0.64 | 1.20 | 2.72 | 0.20 | 0.28 | |||||||||||||||||||||
Dividend declared per ADS | — | — | 2.20 | — | 2.36 | — | — | |||||||||||||||||||||
Weighted average number of ordinary shares outstanding | ||||||||||||||||||||||||||||
Basic | 67,576,741 | 66,353,603 | 74,020,217 | 74,020,217 | 73,986,129 | 74,020,217 | 73,932,217 | |||||||||||||||||||||
Diluted | 74,770,880 | 77,239,648 | 76,997,410 | 77,092,197 | 77,418,960 | 77,386,202 | 77,851,697 | |||||||||||||||||||||
Weighted average number of ADSs outstanding | ||||||||||||||||||||||||||||
Basic | 16,894,185 | 16,588,401 | 18,505,054 | 18,505,054 | 18,496,532 | 18,505,054 | 18,483,054 | |||||||||||||||||||||
Diluted | 18,692,720 | 19,309,912 | 19,249,353 | 19,273,049 | 19,354,740 | 19,346,551 | 19,462,924 | |||||||||||||||||||||
Share-based compensation included in: | ||||||||||||||||||||||||||||
Cost of revenues | 45 | 555 | 160 | 268 | 489 | 238 | 251 | |||||||||||||||||||||
Selling expenses | 25 | 231 | 142 | 323 | 595 | 295 | 338 | |||||||||||||||||||||
General and administrative expenses | 530 | 5,068 | 1,915 | 2,126 | 3,056 | 1,480 | 1,228 |
(1) | Marketing services include related-party amounts of nil and US$375,000 in the six months ended June 30, 2009 and 2010, respectively, relating to marketing services provided to the Hainan property developer that was the subject of the Dong Fang Xi Mei commitment deposit described in the section entitled “Certain Relationships and Related Party Transactions—Related Party Loans and Other Payments.” See note 10 to the unaudited interim condensed consolidated financial statements included elsewhere in this prospectus. | |
(2) | Interest income includes related party amounts of nil, nil, nil, nil, US$85,000, nil and US$305,000 in 2005, 2006, 2007, 2008, 2009 and the six months ended June 30, 2009 and 2010, respectively. | |
(3) | Income per ordinary share (diluted) and income per ADS (diluted) for each year from 2007 to 2009 and the six months ended June 30, 2009 and 2010 have been computed, after considering the dilutive effect of the shares underlying employees’ share options and, as applicable, preferred shares. |
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As of | ||||||||||||||||||||||||
As of December 31, | June 30, | |||||||||||||||||||||||
2005 | 2006 | 2007 | 2008 | 2009 | 2010 | |||||||||||||||||||
(US$ in thousands) | ||||||||||||||||||||||||
Consolidated balance sheet data | ||||||||||||||||||||||||
Total current assets | 18,873 | 31,779 | 63,557 | 102,861 | 149,224 | 176,745 | ||||||||||||||||||
Total assets | 19,917 | 33,057 | 66,757 | 107,246 | 154,494 | 185,079 | ||||||||||||||||||
Total current liabilities | 10,445 | 22,092 | 75,343 | 79,867 | 124,306 | 132,187 | ||||||||||||||||||
Total liabilities | 10,445 | 22,652 | 82,047 | 93,858 | 129,993 | 141,628 | ||||||||||||||||||
Total SouFun Holdings Limited’s equity | (72,512 | ) | 10,391 | (15,429 | ) | 13,283 | 24,438 | 43,399 | ||||||||||||||||
Non-controlling interests | — | 14 | 139 | 105 | 63 | 52 | ||||||||||||||||||
Total shareholders’ equity | (72,512 | ) | 10,405 | (15,290 | ) | 13,388 | 24,501 | 43,451 | ||||||||||||||||
Total liabilities, preferred shares and shareholders’ equity | 19,917 | 33,057 | 66,757 | 107,246 | 154,494 | 185,079 |
Six months | ||||||||||||||||||||
Year ended December 31, | ended June 30, | |||||||||||||||||||
2007 | 2008 | 2009 | 2009 | 2010 | ||||||||||||||||
(US$ in thousands) | ||||||||||||||||||||
Consolidated cash flow data | ||||||||||||||||||||
Net cash generated from operating activities | 30,493 | 44,568 | 65,966 | 24,005 | 18,198 | |||||||||||||||
Net cash (used in) generated from investing activities | (7,596 | ) | (2,598 | ) | (12,034 | ) | 8,927 | (5,600 | ) | |||||||||||
Net cash used in financing activities | (2,647 | ) | (16,210 | ) | (24,789 | ) | (24,241 | ) | — | |||||||||||
Net increase in cash and cash equivalents | 21,774 | 28,954 | 29,218 | 8,713 | 13,129 | |||||||||||||||
Cash and cash equivalents at beginning ofyear/period | 12,294 | 34,068 | 63,022 | 63,022 | 92,239 | |||||||||||||||
Cash and cash equivalents at end ofyear/period | 34,068 | 63,022 | 92,240 | 71,735 | 105,368 |
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CONDITION AND RESULTS OF OPERATIONS
• | Marketing services: We offer marketing services on our website, mainly through advertisements, to real estate developers in the marketing phase of new property developments, as well as to real estate agencies and other home-related vendors who wish to promote their products and services, including home furnishing and improvement products and services, furniture, electronics and other products. We also intend to integrate paid priority placement of customer links in keyword search results into our current search and search ranking services. The substantial majority of our revenues are derived from marketing services; | |
• | Listing services: We offer basic and special listing services. Basic listings services are mainly offered to real estate agents, brokers, property developers, property owners and managers and providers of home furnishing and improvement products and services, and allow them to post information on properties, home furnishing and improvement and other related products and services on our website. Special listings consist of a customized marketing program primarily involving the coordination and promotion of offline themed events; and | |
• | Other value-added services and products: We offer subscription-based access to our information database, research reports and “total web solution” services, which integrate our customers’ services and products into our websites, and also include website design services. |
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• | a risk-free interest rate of 3.61%, 1.69% and 3.39% in 2007, 2008 and 2009, respectively; | |
• | an expected dividend yield of 0%, 1% and 0% in 2007, 2008 and 2009, respectively; | |
• | an expected volatility range of 53.20%, 77.67% and 36.03% in 2007, 2008 and 2009, respectively; and | |
• | a weighted average expected life of 4.45 years, 3.59 years and 6.32 years in 2007, 2008 and 2009, respectively. |
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• | a risk-free interest rate of 3.24-3.44%, 1.14-3.39% and 1.75-2.52% in 2007, 2008 and 2009 and 1.62%-1.95% and 1.70%-2.65% in the six months ended June 30, 2009 and 2010, respectively; | |
• | an expected dividend yield of 0%, 1% and 0% in 2007, 2008 and 2009 and 0% and 0% in the six months ended June 30, 2009 and 2010, respectively; | |
• | an expected volatility range of 53.20%, 77.67% and 36.03% in 2007, 2008 and 2009 and 51.91% and 39.82% in the six months ended June 30, 2009 and 2010, respectively; and | |
• | a weighted average expected life of 0 year in each of 2007, 2008 and 2009 and 0 year in the six months ended June 30, 2009 and 2010, respectively. |
• | No material changes in the existing political, legal, fiscal and economic conditions in China; | |
• | No major changes in the tax rates applicable to our subsidiaries and consolidated controlled entities in China; | |
• | Our ability to retain competent management, key personnel and technical staff to support our ongoing operations; and | |
• | No material deviation in industry trends and market conditions from economic forecasts. |
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Grant date | December 31, 2009 | |
Grantees | Employees | |
Number of options granted | 2,067,308 | |
Exercise price per ordinary share | US$10.00 | |
Vesting schedule | ||
December 31, 2010 | 10.0% | |
December 31, 2011 | 20.0% | |
December 31, 2012 | 40.0% | |
December 31, 2013 | 30.0% | |
Estimated fair value of ordinary share at grant date | US$6.73 | |
Estimated fair value of options per ordinary share at grant date | US$1.95 | |
Total amount of compensation cost to be recognized during vesting period | US$2,020,497 | |
Total amount recognized as expense in 2009 | Nil | |
Total amount recognized as expense as of June 30, 2010 | US$249,819 |
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Grant date | April 20, 2010 | |
Grantee | Telstra International | |
Number of options granted | 37,500 | |
Exercise price per ordinary share | US$10.00 | |
Vesting schedule | ||
April 20, 2011 | 10.0% | |
April 20, 2012 | 20.0% | |
April 20, 2013 | 40.0% | |
April 20, 2014 | 30.0% | |
Estimated fair value of ordinary share at grant date | US$6.90 | |
Estimated fair value of options per ordinary share at grant date | US$2.22 | |
Total amount of compensation cost to be recognized during vesting period | US$83,611 | |
Total amount recognized as expense as of June 30, 2010 | US$4,059 |
• | the significant increase in our revenues and operating income in the six months ended June 30, 2010 compared to the same period in 2009, which exceeded our forecasts for our business performance and results of operations; |
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• | the continued growth in our financial results despite the tightening measures announced by the PRC government in April 2010 that were targeted at the PRC property market; | |
• | the strengthening of our sales and marketing team and our editorial and production team through hiring additional personnel; | |
• | the enhancement of our internal control system through (i) the recent hiring of three accountants who are U.S. GAAP-accredited, (ii) the expected appointment of three independent directors to our board of directors, including an independent director who meets the criteria of an audit committee financial expert, (iii) the employment of three internal auditors, and (iv) the creation of a five-member compliance team to be responsible for annual review of our policies and procedures relating to internal control over financial reporting and regularly reviewing and updating internal control documents; | |
• | China’s economy continuing to show robust growth during this period, which was evidenced by a number of indicators, including accelerating annualized quarter-over-quarter GDP growth in the second quarter of 2010; and | |
• | the completion of this offering, which will result in the increased liquidity and marketability of our ordinary shares. |
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• | improve the effectiveness of our entity-wide internal control over financial reporting, including strengthening our corporate governance structure by establishing an audit committee, an effective internal audit function, a code of conduct, anti-fraud policies, a whistle-blower system, employee complaint handling procedures for accounting and auditing matters and procedures for the authorization and approval of related-party transactions; | |
• | improve our processes and controls, including the strengthening of our procedures on the preparation, review, approval and disclosure of financial reports in preparation for becoming a listed company, the increase in the number of financial staff with relevant accounting knowledge and experience with U.S. GAAP, improvements and regular updating of documentation of our processes and controls, such as accounting manuals and creation of policies on the maintenance and custody of written and electronic control evidence, such as working papers and supporting documents; and | |
• | improve our IT controls, including the creation of formal access controls over the opening, cancellation and authorization of an account in our application systems, improved management of important application systems and segregation of our accounting responsibility and financial software system administration. |
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• | will appoint three independent directors to our board of directors and established an audit committee, which will be effective upon closing of this offering. Our audit committee will be composed of the three independent directors; | |
• | strengthened our internal audit team by employing three internal auditors in 2010 and ensuring that our internal audit team will directly report to our audit committee; | |
• | amended our current code of conduct and code of ethics, in accordance with the requirements of Sarbanes-Oxley, which will set forth our anti-fraud policies and create a whistle-blower system for handling employee complaints. We will distribute such policies to all employees through training and written acknowledgements; | |
• | assembled a five-member team from our finance department to be responsible for the preparation of financial statements under U.S. GAAP. We hired three accountants, two of whom are U.S. GAAP-accredited with the knowledge and experience in the preparation of financial statements in accordance with U.S. GAAP, to join our finance department; | |
• | set up an integrated financial reporting process, including procedures on the preparation, review, approval and disclosure of financial reports; | |
• | intend to organize quarterly training sessions on U.S. GAAP for our finance department in the form of workshops, seminars and newsletters as well as requiring our finance personnel to participate in annual in-house or public U.S. GAAP training courses; | |
• | set up a compliance team consisting of five people selected from our finance, internal audit, operations, IT and human resources departments, which will be responsible for reviewing our policies and procedures relating to internal control over financial reporting on an annual basis and regularly reviewing and updating internal control documents; | |
• | established a custody policy for the retention of key control documentation, which will be distributed to all employees and be subject to periodic compliance tests by our internal audit department; | |
• | strengthened checking procedures between our operating data and the data in our accounting system, which will be implemented on a monthly basis; | |
• | established access authority management and IT system account management policies and began to require appropriate internal approvals before the opening of any accounts. |
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In addition, our system administrator will periodically send a list of users’ access authority to the relevant departments for review and confirmation and will work with our human resources department to periodically update account access for any movements in employees; |
• | adopted an IT emergency management and reporting policy, including reporting procedures and documentation required to be logged upon the occurrence of an IT accident and established two separate systems to achieve (i) close monitoring of important application systems and (ii) timely documentation of the results of system inspection. The system administrator will also periodically inspect such information in the system log files and document the results of such inspection for our records; and | |
• | appointed IT personnel to administer our financial software system to segregate the responsibilities relating to business operations and the administration of our IT system. |
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Year ended December 31, | Six months ended June 30, | |||||||||||||||||||||||||||||||||||||||
2007 | 2008 | 2009 | 2009 | 2010 | ||||||||||||||||||||||||||||||||||||
Percentage | Percentage | Percentage | Percentage | Percentage | ||||||||||||||||||||||||||||||||||||
Amount | of revenues | Amount | of revenues | Amount | of revenues | Amount | of revenues | Amount | of revenues | |||||||||||||||||||||||||||||||
(US$ in thousands, except percentages) | ||||||||||||||||||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||||||||||||||||
Marketing services (1) | 46,552 | 80.4 | % | 86,252 | 82.8 | % | 102,367 | 80.6 | % | 29,503 | 79.8 | % | 45,586 | 66.9 | % | |||||||||||||||||||||||||
Listing services | 9,885 | 17.1 | 16,070 | 15.4 | 17,559 | 13.8 | 5,398 | 14.6 | 14,006 | 20.5 | % | |||||||||||||||||||||||||||||
Other value-added services and products | 1,439 | 2.5 | 1,802 | 1.8 | 7,123 | 5.6 | 2,056 | 5.6 | 8,593 | 12.6 | % | |||||||||||||||||||||||||||||
Total revenues | 57,876 | 100.0 | % | 104,124 | 100.0 | % | 127,049 | 100.0 | % | 36,957 | 100.0 | % | 68,185 | 100.0 | % | |||||||||||||||||||||||||
Cost of revenues | ||||||||||||||||||||||||||||||||||||||||
Cost of services | (12,630 | ) | (21.8 | )% | (22,162 | ) | (21.3 | )% | (26,484 | ) | (20.8 | )% | (9,506 | ) | (25.7 | )% | (18,164 | ) | (26.6 | )% | ||||||||||||||||||||
Cost of other value-added services and products | — | — | — | — | (4,863 | ) | (3.9 | ) | (1,185 | ) | (3.2 | ) | (6,887 | ) | (10.1 | ) | ||||||||||||||||||||||||
Total cost of revenues | (12,630 | ) | (21.8 | )% | (22,162 | ) | (21.3 | )% | (31,347 | ) | (24.7 | )% | (10,691 | ) | (28.9 | )% | (25,051 | ) | (36.7 | )% | ||||||||||||||||||||
Gross profit | 45,246 | 78.2 | 81,962 | 78.7 | 95,702 | 75.3 | 26,266 | 71.1 | 43,134 | 63.3 | ||||||||||||||||||||||||||||||
Operating expenses | ||||||||||||||||||||||||||||||||||||||||
Selling expenses | (13,221 | ) | (22.8 | ) | (18,708 | ) | (18.0 | ) | (25,186 | ) | (19.8 | ) | (9,988 | ) | (27.0 | ) | (16,742 | ) | (24.6 | ) | ||||||||||||||||||||
General and administrative expenses | (12,158 | ) | (21.1 | ) | (19,857 | ) | (19.0 | ) | (22,176 | ) | (17.5 | ) | (9,379 | ) | (25.4 | ) | (14,330 | ) | (21.0 | ) | ||||||||||||||||||||
Operating income | 19,867 | 34.3 | 43,397 | 41.7 | 48,340 | 38.0 | 6,899 | 18.7 | 12,062 | 17.7 | ||||||||||||||||||||||||||||||
Foreign exchange gain (loss) | 8 | 0.0 | (2,826 | ) | (2.7 | ) | (59 | ) | (0.0 | ) | (17 | ) | nil | (481 | ) | (0.7 | ) | |||||||||||||||||||||||
Interest income (2) | 707 | 1.2 | 1,221 | 1.2 | 1,205 | 0.9 | 613 | 1.7 | 1,162 | 1.7 | ||||||||||||||||||||||||||||||
Realized gain—trading securities | — | 0.0 | — | 0.0 | 195 | 0.2 | 85 | 0.2 | 164 | 0.2 | ||||||||||||||||||||||||||||||
Government grant | 211 | 0.4 | 360 | 0.3 | 730 | 0.6 | 336 | 0.9 | 356 | 0.5 | ||||||||||||||||||||||||||||||
Income before income tax | 20,793 | 35.9 | 42,152 | 40.5 | 50,411 | 39.7 | 7,916 | 21.4 | 13,263 | 19.5 | ||||||||||||||||||||||||||||||
Income tax (expense)/benefit | (8,457 | ) | (14.6 | ) | (18,805 | ) | (18.1 | ) | 2,199 | 1.7 | (4,190 | ) | (11.3 | ) | (7,965 | ) | (11.7 | ) | ||||||||||||||||||||||
Net income | 12,336 | 21.3 | 23,347 | 22.4 | 52,610 | 41.4 | 3,726 | 10.1 | 5,298 | 7.8 | ||||||||||||||||||||||||||||||
Net income (loss) attributable to non- controlling interest | 125 | 0.2 | (34 | ) | (0.0 | ) | (42 | ) | (0.0 | ) | (20 | ) | (0.1 | ) | (11 | ) | nil | |||||||||||||||||||||||
Net income attributable to our shareholders | 12,211 | 21.1 | % | 23,381 | 22.4 | % | 52,652 | 41.4 | % | 3,746 | 10.1 | % | 5,309 | 7.8 | % | |||||||||||||||||||||||||
Share-based compensation included in: | ||||||||||||||||||||||||||||||||||||||||
Cost of revenues | 160 | 0.3 | % | 268 | 0.3 | % | 489 | 0.4 | % | 238 | 0.6 | % | 251 | 0.4 | % | |||||||||||||||||||||||||
Selling expenses | 142 | 0.2 | % | 323 | 0.3 | % | 595 | 0.5 | % | 295 | 0.8 | % | 338 | 0.5 | % | |||||||||||||||||||||||||
General and administrative expenses | 1,915 | 3.3 | % | 2,126 | 2.0 | % | 3,056 | 2.4 | % | 1,480 | 4.0 | % | 1,228 | 1.8 | % |
(1) | Marketing services include related-party amounts of nil and US$375,000 in the six months ended June 30, 2009 and 2010, respectively, relating to marketing services provided to the Hainan property developer that was the subject of the Dong Fang Xi Mei commitment deposit described in the section entitled “Certain Relationships and Related Party Transactions—Related Party Loans and Other Payments.” See note 10 to the unaudited interim condensed consolidated financial statements included elsewhere in this prospectus. | |
(2) | Interest income includes related party amounts of nil, nil, US$85,000, and US$305,000 in 2007, 2008 and 2009 and the six months ended June 30, 2009 and 2010, respectively. |
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2007 | 2008 | 2009 | 2009 | 2010 | ||||||||||||||||||||||||||||||||||||
Percentage | Percentage | Percentage | Percentage | Percentage | ||||||||||||||||||||||||||||||||||||
of marketing | of marketing | of marketing | of marketing | of marketing | ||||||||||||||||||||||||||||||||||||
service | service | service | service | service | ||||||||||||||||||||||||||||||||||||
Amount | revenues | Amount | revenues | Amount | revenues | Amount | revenues | Amount | revenues | |||||||||||||||||||||||||||||||
(US$ in thousands, except percentages) | ||||||||||||||||||||||||||||||||||||||||
New home | 39,188 | 84.2 | % | 75,535 | 87.6 | % | 87,134 | 85.1 | % | 26,219 | 88.9 | % | 38,721 | 84.9 | % | |||||||||||||||||||||||||
Secondary and rental | 309 | 0.7 | 554 | 0.6 | 537 | 0.5 | 252 | 0.9 | 344 | 0.8 | ||||||||||||||||||||||||||||||
Home furnishing and improvement | 7,055 | 15.1 | 10,163 | 11.8 | 14,696 | 14.4 | 3,032 | 10.3 | 6,521 | 14.3 | ||||||||||||||||||||||||||||||
Total marketing service revenues | 46,552 | 100.0 | % | 86,252 | 100.0 | % | 102,367 | 100.0 | % | 29,503 | 100.0 | % | 45,586 | 100.0 | % | |||||||||||||||||||||||||
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2007 | 2008 | 2009 | 2009 | 2010 | ||||||||||||||||||||||||||||||||||||
Percentage of | Percentage of | Percentage of | Percentage of | Percentage of | ||||||||||||||||||||||||||||||||||||
listing | listing | listing | listing | listing | ||||||||||||||||||||||||||||||||||||
service | service | service | service | service | ||||||||||||||||||||||||||||||||||||
Amount | revenues | Amount | revenues | Amount | revenues | Amount | revenues | Amount | revenues | |||||||||||||||||||||||||||||||
(US$ in thousands, except percentages) | ||||||||||||||||||||||||||||||||||||||||
Basic listing | 4,924 | 49.8 | % | 8,593 | 53.5 | % | 11,513 | 65.6 | % | 3,230 | 59.8 | % | 10,649 | 76.0 | % | |||||||||||||||||||||||||
Special listing | 4,961 | 50.2 | 7,477 | 46.5 | 6,046 | 34.4 | 2,168 | 40.2 | 3,359 | 24.0 | ||||||||||||||||||||||||||||||
Total | 9,885 | 100.0 | % | 16,070 | 100.0 | % | 17,559 | 100.0 | % | 5,398 | 100.0 | % | 14,008 | 100.0 | % | |||||||||||||||||||||||||
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2007 | 2008 | 2009 | 2009 | 2010 | ||||||||||||||||||||||||||||||||||||
Percentage | Percentage | Percentage | Percentage | Percentage | ||||||||||||||||||||||||||||||||||||
of total | of total | of total | of total | of total | ||||||||||||||||||||||||||||||||||||
operating | operating | operating | operating | operating | ||||||||||||||||||||||||||||||||||||
Amount | expenses | Amount | expenses | Amount | expenses | Amount | expenses | Amount | expenses | |||||||||||||||||||||||||||||||
(US$ in thousands, except percentages) | ||||||||||||||||||||||||||||||||||||||||
Selling expenses | 13,221 | 52.1 | % | 18,708 | 48.5 | % | 25,186 | 53.2 | % | 9,988 | 51.6 | % | 16,742 | 53.9 | % | |||||||||||||||||||||||||
General and administrative expenses | 12,158 | 47.9 | 19,857 | 51.5 | 22,176 | 46.8 | 9,379 | 48.4 | 14,330 | 46.1 | ||||||||||||||||||||||||||||||
Total | 25,379 | 100.0 | % | 38,565 | 100.0 | % | 47,362 | 100.0 | % | 19,367 | 100.0 | % | 31,072 | 100.0 | % | |||||||||||||||||||||||||
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Three months ended | ||||||||||||||||||||||||
March 31, | June 30, | September 30, | December 31, | March 31, | June 30, | |||||||||||||||||||
2009 | 2009 | 2009 | 2009 | 2010 | 2010 | |||||||||||||||||||
(US$ in thousands) | ||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||
Marketing services | 11,868 | 17,635 | 24,832 | 48,032 | 17,925 | 27,661 | ||||||||||||||||||
Listing services | 2,266 | 3,132 | 4,629 | 7,532 | 5,706 | 8,300 | ||||||||||||||||||
Other value-added services and products | 651 | 1,405 | 1,848 | 3,219 | 2,818 | 5,775 | ||||||||||||||||||
Total revenues | 14,785 | 22,172 | 31,309 | 58,783 | 26,449 | 41,736 | ||||||||||||||||||
Cost of revenues | ||||||||||||||||||||||||
Cost of services | (4,420 | ) | (5,086 | ) | (6,413 | ) | (10,565 | ) | (8,228 | ) | (9,935 | ) | ||||||||||||
Cost of other value-added services and products | (268 | ) | (917 | ) | (1,593 | ) | (2,085 | ) | (2,274 | ) | (4,613 | ) | ||||||||||||
Total cost of revenues | (4,688 | ) | (6,003 | ) | (8,006 | ) | (12,650 | ) | (10,502 | ) | (14,549 | ) | ||||||||||||
Gross profit | 10,097 | 16,169 | 23,303 | 46,133 | 15,947 | 27,187 | ||||||||||||||||||
Operating expenses | ||||||||||||||||||||||||
Selling expenses | (5,019 | ) | (4,969 | ) | (6,355 | ) | (8,843 | ) | (6,974 | ) | (9,768 | ) | ||||||||||||
General and administrative expenses | (4,334 | ) | (5,045 | ) | (5,598 | ) | (7,199 | ) | (6,019 | ) | (8,311 | ) | ||||||||||||
Operating income | 744 | 6,155 | 11,350 | 30,091 | 2,954 | 9,108 | ||||||||||||||||||
Foreign exchange gain (loss) | 8 | (25 | ) | (19 | ) | (23 | ) | (24 | ) | (457 | ) | |||||||||||||
Interest income (Including related party amount of nil, nil, nil, US$85, US$183 and US$122 for the three months ended March 31, June 30, September 30, and December 31, 2009 and March 31 and June 30, 2010, respectively) | 356 | 257 | 265 | 327 | 630 | 532 | ||||||||||||||||||
Realized gain—trading securities | 85 | — | 110 | — | 113 | 51 | ||||||||||||||||||
Government grants | 151 | 185 | 126 | 268 | 191 | 165 | ||||||||||||||||||
Income before income tax | 1,344 | 6,572 | 11,832 | 30,663 | 3,864 | 9,399 | ||||||||||||||||||
Income tax (expense) benefit | (1,028 | ) | (3,162 | ) | 9,325 | (2,936 | ) | (1,496 | ) | (6,469 | ) | |||||||||||||
Net income | 316 | 3,410 | 21,157 | 27,727 | 2,368 | 2,930 | ||||||||||||||||||
Net loss attributable to non-controlling interests | (10 | ) | (10 | ) | (10 | ) | (12 | ) | (6 | ) | (5 | ) | ||||||||||||
Net income attributable to SouFun Holdings Limited shareholders | 326 | 3,420 | 21,167 | 27,739 | 2,374 | 2,935 | ||||||||||||||||||
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Year ended | ||||||||||||||||||||
December 31, | Six months ended June 30, | |||||||||||||||||||
2007 | 2008 | 2009 | 2009 | 2010 | ||||||||||||||||
(US$ in thousands) | ||||||||||||||||||||
Net cash generated from operating activities | 30,493 | 44,568 | 65,966 | 24,005 | 18,198 | |||||||||||||||
Net cash generated from (used in) investing activities | (7,596 | ) | (2,598 | ) | (12,034 | ) | 8,927 | (5,600 | ) | |||||||||||
Net cash used in financing activities | (2,647 | ) | (16,210 | ) | (24,789 | ) | (24,241 | ) | — | |||||||||||
Net increase in cash and cash equivalents | 21,774 | 28,954 | 29,217 | 8,713 | 13,129 | |||||||||||||||
Cash and cash equivalents at beginning of year/period | 12,294 | 34,068 | 63,022 | 63,022 | 92,239 | |||||||||||||||
Cash and cash equivalents at end of year/period | 34,068 | 63,022 | 92,239 | 71,735 | 105,368 |
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As of | As of | |||||||
December 31, 2009 | June 30, 2010 | |||||||
(US$ in thousands) | ||||||||
Operating lease commitments: | ||||||||
Less than 1 year | 3,333 | 4,942 | ||||||
1—3 years | 4,543 | 6,586 | ||||||
3—5 years | — | 23 | ||||||
More than 5 years | — | — | ||||||
Total | 7,876 | 11,551 | ||||||
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Year ended December 31, | ||||||||||||||||||||||||
CAGR | ||||||||||||||||||||||||
2004 | 2005 | 2006 | 2007 | 2008 | 2004 - 2008 | |||||||||||||||||||
China GDP (RMB in billions) | 15,988 | 18,322 | 21,192 | 25,731 | 30,067 | 17.1 | % | |||||||||||||||||
China GDP per capita (RMB) | 12,336 | 14,053 | 16,165 | 19,524 | 22,698 | 16.5 | % |
Year ended December 31, | ||||||||||||||||||||
2004 | 2005 | 2006 | 2007 | 2008 | ||||||||||||||||
Urban population (in millions) | 542.8 | 562.1 | 577.1 | 593.8 | 606.7 | |||||||||||||||
Total population (in millions) | 1,300.0 | 1,307.6 | 1,314.5 | 1,321.3 | 1,328.0 | |||||||||||||||
Urbanization rate (%) | 41.8 | 43.0 | 43.9 | 44.9 | 45.7 | |||||||||||||||
Per capita disposable income of urban households (RMB) | 9,422 | 10,493 | 11,760 | 13,786 | 15,781 |
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Year ended December 31, | ||||||||||||||||||||||||
2004 | 2005 | 2006 | 2007 | 2008 | 2009 | |||||||||||||||||||
Number of Internet users in China (in millions) | 94 | 111 | 137 | 210 | 298 | 384 | ||||||||||||||||||
Internet penetration rates in China (%) | 7.3 | 8.5 | 10.5 | 16.0 | 22.6 | 28.9 | ||||||||||||||||||
Internet penetration rates in the United States (%) | 64.8 | 68.0 | 68.9 | 71.8 | 74.0 | 76.2 | ||||||||||||||||||
Internet penetration rates in Japan (%) | 62.4 | 66.9 | 68.7 | 74.3 | 75.4 | 76.8 |
Year ended December 31, | ||||||||||||||||||||||||||||||||||||||||
CAGR | ||||||||||||||||||||||||||||||||||||||||
2004 | 2005 | 2006 | 2007 | 2008 | 2009E | 2010E | 2011E | 2012E | 2004 -2012E | |||||||||||||||||||||||||||||||
(RMB in billions) | ||||||||||||||||||||||||||||||||||||||||
Online advertising revenues in China | 2.3 | 4.1 | 6.1 | 10.6 | 17.0 | 21.6 | 30.9 | 43.6 | 58.5 | 49.9 | % |
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Year ended December 31, | ||||||||||||||||||||
2004 | 2005 | 2006 | 2007 | 2008 | ||||||||||||||||
(RMB in millions) | ||||||||||||||||||||
China online advertising spending by major industries | ||||||||||||||||||||
Real estate | 174.2 | 457.5 | 538.2 | 720.2 | 972.9 | |||||||||||||||
Other major industries (1) | 1,417.5 | 1,773.2 | 2,484.0 | 3,934.4 | 6,346.5 | |||||||||||||||
Total | 1,591.7 | 2,230.7 | 3,022.2 | 4,654.6 | 7,319.3 |
(1) | Other major industries include IT products, transportation, network services, communication, consumer electronics, financial services, food and beverage, retail and services and apparel. |
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Year ended December 31, | ||||||||||||||||||||||||
CAGR | ||||||||||||||||||||||||
2004 | 2005 | 2006 | 2007 | 2008 | 2004 - 2008 | |||||||||||||||||||
Total GFA of residential properties sold (sq.m. in millions) | 338.2 | 495.9 | 554.2 | 701.4 | 592.8 | 15.1 | % | |||||||||||||||||
Total GFA of properties sold (sq.m. in millions) | 382.3 | 554.9 | 618.6 | 773.6 | 659.7 | 14.6 | ||||||||||||||||||
Average selling price of residential properties (RMB per sq.m.) | 2,608 | 2,937 | 3,119 | 3,645 | 3,576 | 8.2 | ||||||||||||||||||
Average selling price of properties sold (RMB per sq.m.) | 2,778 | 3,168 | 3,367 | 3,864 | 3,800 | 8.1 | ||||||||||||||||||
Total revenues of residential properties sold (RMB in billions) | 1,036.0 | 1,456.4 | 1,728.8 | 2,556.6 | 2,119.6 | 19.6 | ||||||||||||||||||
Total revenues of properties sold (RMB in billions) | 1,260.1 | 1,757.6 | 2,082.6 | 2,988.9 | 2,506.8 | 18.8 | % |
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• | more rigorous administration of real estate loans; | |
• | measures to regulate and control the real estate development projects; | |
• | promulgation of relevant tax measures to discourage speculation in the real estate market; and | |
• | additional measures to discourage speculation on luxury residences. |
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• | Marketing services: We offer marketing services on our website, mainly through advertisements, to real estate developers in the marketing phase of new property developments as well as to real estate agencies and other home furnishing and improvement vendors who wish to promote their products and services, including home furnishing and improvement products and services, furniture, electronics and other products. We also intend to integrate paid priority placement of customer links in keyword search results into our current search and search ranking services. The substantial majority of our revenues are derived from marketing services; | |
• | Listing services: We offer basic and special listing services. Basic listing services are mainly offered to real estate agents, brokers, property developers, property owners and managers and providers of home furnishing and improvement products and services, and allow them to post information on properties, home furnishing and improvement and other related products and services on our website. Special listings consist of a customized marketing program primarily involving the coordination and promotion of offline themed events; and | |
• | Other value-added services and products: We offer subscription-based access to our information database, research reports and “total web solution” services, which integrate our customers’ services and products into our website, and also include website design services. |
• | over 139,000 listings for new residential property complexes, approximately eight million listings of secondary and rental properties, as well as over 140,000 listings of commercial properties for sale and lease; | |
• | over 8,000 brands and one million listings from home furnishing and improvement vendors across China; and | |
• | content coverage of real estate-related content, search services, marketing and listing coverage of 106 cities in China. |
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• | real estate developers; | |
• | real estate professionals, such as agents and brokers; | |
• | retailers and other suppliers of home furnishing and improvement products and services; | |
• | home design, decoration and re-modeling companies; and | |
• | banks offering residential mortgage loan products. |
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• | Visitor traffic: According to CR-Nielsen, our website received a weekly average of over 8.2 million and 9.8 million unique visitors in 2008 and 2009, respectively; | |
• | Page views: According to DCCI, our website generated over 14.7 billion total page views in 2009; |
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• | Market share: According to CR-Nielsen, our website obtained a 46.3% market share of the online real estate advertising market in China in 2009 in terms of estimated real estate-related online advertising revenues; and | |
• | Members: As of June 30, 2010, we had over 17.6 million registered members of our website and had 3.0 million registered members of our SouFun membership card. |
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• | Real estate and home furnishing and improvement websites offering listing and marketing services in China including real estate websites sponsored or supported by local governments in China, which may be able to use such government connections to develop relationships with locally-active real estate developers; | |
• | traditional advertising media such as general-purpose and real estate-focused newspapers, magazines, television and outdoor advertising that compete for overall advertising spending; | |
• | websites focused on real estate research services in China; and | |
• | online listing service providers, whether general-purpose Internet portals or regional websites dedicated to online listing. |
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Editorial and production | 2,407 | |||
Sales and marketing | 1,649 | |||
Technical and research | 303 | |||
Management and general administrative | 451 | |||
Total | 4,810 | |||
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• | formulating and enforcing telecommunications industry policy, standards and regulations; | |
• | granting licenses to provide telecommunications and Internet services; | |
• | formulating tariff and service charge policies for telecommunications and Internet services; | |
• | supervising the operations of telecommunications and Internet service providers; and | |
• | maintaining fair and orderly market competition among operators. |
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• | The Foreign Investment Industrial Guidance Catalog; | |
• | The Administrative Regulations on Foreign-invested Advertising Enterprises; and | |
• | The Circular Regarding Investment in the Advertising Industry by Foreign Investors through Equity Acquisition. |
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• | each of the Structure Contracts is legal, valid and binding on the contracting parties under applicable PRC laws, rules and regulations; | |
• | the execution, delivery, effectiveness, enforceability and performance of each of the Structure Contracts do not violate any published PRC laws, rules and regulations currently in force and effect; | |
• | none of our Structure Contracts contravenes any published PRC laws, rules and regulations currently in force and effect; and | |
• | no filings, registrations, consents, approvals, permits, authorizations, certificates and licenses of any PRC government authorities are currently required in connection with the execution, delivery, effectiveness, performance and enforceability of each Structure Contract, provided that the pledges of equity interests under the Structure Contracts should be registered with competent PRC government authorities, and provided further that the exercise of the call option in the future must be approved and registered by competent PRC government authorities. |
• | The Telecommunications Regulations (2000); | |
• | The Catalog of Classes of Telecommunications Business; | |
• | The Administrative Measures for Telecommunications Business Operating Licenses; and | |
• | The Internet Information Services Administrative Measures. |
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• | The Advertising Law; | |
• | The Administration of Advertising Regulations; and | |
• | The Implementation Rules for the Administration of Advertising Regulations. |
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• | gain improper entry into a computer or system of national strategic importance; | |
• | disseminate politically disruptive information; | |
• | leak government secrets; | |
• | spread false commercial information; or | |
• | infringe intellectual property rights. |
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Name | Age | Position | ||||
Tianquan Vincent MO | 46 | Executive chairman of the board of directors | ||||
Bruce J. AKHURST(1) | 50 | Director | ||||
John STANHOPE(1) | 59 | Director | ||||
Quan ZHOU | 52 | Director | ||||
Shan LI(2) | 47 | Independent director | ||||
Qian ZHAO(3) | 41 | Independent director | ||||
Sam Hanhui Sun(3) | 38 | Independent director | ||||
Jeff Xuesong LENG(4) | 40 | Director | ||||
Thomas Nicholas HALL(4) | 42 | Director | ||||
Richard Jiangong DAI(4) | 36 | President, chief executive officer and director | ||||
Lanying GUAN | 42 | Chief financial officer | ||||
Jian LIU | 34 | Chief operations officer |
(1) | Bruce J. Akhurst and John Stanhope will resign from our board of directors and cease to be our directors immediately prior to the effectiveness of the registration statement onForm F-1, of which this prospectus forms a part. | |
(2) | Shan Li will become an independent director immediately following the effectiveness of the registration statement on Form F-1, of which this prospectus forms a part. | |
(3) | Qian Zhao and Sam Hanhui Sun will become independent directors immediately following the effectiveness of the registration statement on Form F-1, of which this prospectus forms a part. | |
(4) | Jeff Xuesong Leng, Thomas Nicholas Hall and Jiangong Richard Dai will become directors immediately following the effectiveness of the registration statement on Form F-1, of which this prospectus forms a part. |
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• | convening shareholders’ meetings and reporting its work to shareholders at such meetings; | |
• | implementing shareholders’ resolutions; | |
• | determining our business plans and investment proposals; | |
• | formulating our profit distribution plans and loss recovery plans; | |
• | determining our debt and finance policies and proposals for the increase or decrease in our registered capital and the issuance of debentures; | |
• | formulating our major acquisition and disposition plans, and plans for merger, division or dissolution; |
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• | proposing amendments to our amended and restated memorandum and articles of association; and | |
• | exercising any other powers conferred by the shareholders’ meetings or under our amended and restated memorandum and articles of association. |
• | selecting the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; | |
• | annually reviewing an independent auditors’ report describing the auditing firm’s internal quality control procedures, any material issues raised by the most recent internal quality control review, or peer review, of the independent auditors and all relationships between the independent auditors and us; | |
• | setting clear hiring policies for employees or former employees of the independent auditors; | |
• | reviewing with the independent auditors any audit problems or difficulties and management’s response; | |
• | reviewing and approving all proposed related-party transactions, as defined in Item 404 ofRegulation S-K; | |
• | discussing the annual audited financial statements with management and the independent auditors; | |
• | discussing with management and the independent auditors major issues regarding accounting principles and financial statement presentations; | |
• | reviewing reports prepared by management or the independent auditors relating to significant financial reporting issues and judgments; | |
• | discussing earnings press releases, as well as financial information and earnings guidance provided to analysts and rating agencies; | |
• | reviewing with management and the independent auditors the effect of regulatory and accounting initiatives, as well as off-balance sheet structures on our financial statements; | |
• | discussing policies with respect to risk assessment and risk management; |
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• | reviewing major issues as to the adequacy of our internal controls and any special audit steps adopted to address material issues raised by internal quality control reviews or peer reviews by the independent auditors; | |
• | timely reviewing reports from the independent auditors regarding all critical accounting policies and practices to be used by us, all alternative treatments of financial information within U.S. GAAP that have been discussed with management and all other material written communications between the independent auditors and management; | |
• | establishing procedures for the receipt, retention and treatment of complaints received from our employees regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters; | |
• | annually reviewing and reassessing the adequacy of our audit committee charter; | |
• | handling such other matters that are specifically delegated to our audit committee by our board of directors from time to time; | |
• | meeting separately, periodically, with management, internal auditors and the independent auditors; and | |
• | reporting regularly to the full board of directors. |
• | reviewing and making recommendations to our board of directors regarding our compensation policies and forms of compensation provided to our directors and officers; | |
• | reviewing and determining bonuses for our officers and other employees; | |
• | reviewing and determining share-based compensation for our directors, officers, employees and consultants; | |
• | administering our equity incentive plans in accordance with their respective terms; and | |
• | such other matters that are specifically delegated to the compensation committee by our board of directors from time to time. |
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Number of | Number of | Number of | ||||||||||||||||||
Class A | Class B | non-voting | ||||||||||||||||||
ordinary | ordinary | ordinary | ||||||||||||||||||
shares to be | shares to be | shares to be | Exercise price | |||||||||||||||||
issued upon | issued upon | issued upon | per ordinary | |||||||||||||||||
exercise of | exercise of | exercise of | share | Date of | ||||||||||||||||
options | options | options | (US$) | Date of grant | expiration | |||||||||||||||
Mr. Mo(1) | — | — | 225,000 | US$ | 5.00 | December 31, 2006 | December 30, 2016 | |||||||||||||
— | — | 225,000 | 5.00 | December 31, 2007 | December 30, 2017 | |||||||||||||||
— | — | 225,000 | 5.00 | December 31, 2008 | December 30, 2018 | |||||||||||||||
— | — | 225,000 | 10.00 | December 31, 2009 | December 30, 2019 | |||||||||||||||
Media Partner / Mr. Mo(1) | — | 250,000 | (2) | — | 0.13 | June 18, 1999 | June 17, 2014 | |||||||||||||
— | 250,000 | (2) | — | 0.26 | June 30, 2000 | June 29, 2015 | ||||||||||||||
— | 250,000 | (2) | — | 0.26 | October 1, 2001 | September 30, 2016 | ||||||||||||||
— | 250,000 | (2) | — | 0.26 | June 30, 2002 | June 29, 2017 | ||||||||||||||
— | 125,000 | (2) | — | 0.64 | October 1, 2002 | September 30, 2017 | ||||||||||||||
Next Decade / Mr. Mo(1) | — | 1,754,500 | — | 5.00 | September 30, 2006 | September 29, 2021 | ||||||||||||||
Aceview Investment Limited / Mr. Dai | 250,000 | — | — | 0.13 | June 18, 1999 | June 17, 2014 | ||||||||||||||
82,000 | — | — | 4.06 | September 1, 1999 | August 30, 2014 | |||||||||||||||
100,000 | — | — | 0.26 | June 30, 2000 | June 29, 2015 | |||||||||||||||
100,000 | — | — | 0.26 | October 1, 2001 | September 30, 2016 | |||||||||||||||
100,000 | — | — | 0.26 | June 30, 2002 | June 29, 2017 | |||||||||||||||
50,000 | — | — | 0.64 | October 1, 2002 | September 30, 2017 | |||||||||||||||
55,000 | — | — | 1.97 | October 28, 2004 | October 27, 2019 | |||||||||||||||
— | — | 18,750 | 5.00 | December 31, 2006 | December 30, 2016 | |||||||||||||||
— | — | 18,750 | 5.00 | December 31, 2007 | December 30, 2017 | |||||||||||||||
— | — | 18,750 | 5.00 | December 31, 2008 | December 30, 2018 | |||||||||||||||
— | — | 18,750 | 10.00 | December 31, 2009 | December 30, 2019 | |||||||||||||||
Shan Li | — | * | — | 4.06 | June 18, 1999 | June 17, 2014 | ||||||||||||||
— | * | — | 0.13 | September 1, 1999 | August 30, 2014 | |||||||||||||||
— | * | — | 1.97 | April 28, 2004 | April 27, 2019 | |||||||||||||||
— | — | * | 5.00 | December 31, 2006 | December 30, 2016 | |||||||||||||||
— | — | * | 5.00 | December 31, 2007 | December 30, 2017 | |||||||||||||||
— | — | * | 5.00 | December 31, 2008 | December 30, 2018 | |||||||||||||||
— | — | * | 10.00 | December 31, 2009 | December 30, 2019 | |||||||||||||||
Quan Zhou | — | * | — | 1.97 | April 28, 2004 | April 27, 2019 | ||||||||||||||
— | — | * | 5.00 | December 31, 2006 | December 30, 2016 | |||||||||||||||
— | — | * | 5.00 | December 31, 2007 | December 30, 2017 | |||||||||||||||
— | — | * | 5.00 | December 31, 2008 | December 30, 2018 | |||||||||||||||
— | — | * | 10.00 | December 31, 2009 | December 30, 2019 | |||||||||||||||
Newtech Ventures Limited / Quan Zhou | — | * | — | US$ | 0.13 | September 1, 1999 | August 30, 2014 | |||||||||||||
Telstra International | — | — | * | (3) | 5.00 | December 31, 2006 | December 30, 2016 | |||||||||||||
— | — | * | (3) | 5.00 | December 31, 2007 | December 30, 2017 | ||||||||||||||
— | — | * | (3) | 5.00 | December 31, 2008 | December 30, 2018 | ||||||||||||||
— | — | * | (3) | 10.00 | December 31, 2009 | December 30, 2019 | ||||||||||||||
— | — | * | (3) | 10.00 | April 20, 2010 | April 20, 2020 | ||||||||||||||
Jian Liu | * | — | — | 0.26 | October 1, 2001 | September 30, 2016 | ||||||||||||||
* | — | — | 0.64 | October 1, 2002 | September 30, 2017 | |||||||||||||||
* | — | — | 1.97 | October 28, 2004 | October 27, 2019 | |||||||||||||||
— | — | * | 5.00 | December 31, 2006 | December 30, 2016 | |||||||||||||||
— | — | * | 5.00 | December 31, 2007 | December 30, 2017 | |||||||||||||||
— | — | * | 5.00 | December 31, 2008 | December 30, 2018 | |||||||||||||||
— | — | * | 10.00 | December 31, 2009 | December 30, 2019 |
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Number of | Number of | Number of | ||||||||||||||||||
Class A | Class B | non-voting | ||||||||||||||||||
ordinary | ordinary | ordinary | ||||||||||||||||||
shares to be | shares to be | shares to be | Exercise price | |||||||||||||||||
issued upon | issued upon | issued upon | per ordinary | |||||||||||||||||
exercise of | exercise of | exercise of | share | Date of | ||||||||||||||||
options | options | options | (US$) | Date of grant | expiration | |||||||||||||||
Lanying Guan | * | — | — | 1.97 | October 28, 2004 | October 27, 2019 | ||||||||||||||
— | — | * | 5.00 | December 31, 2006 | December 30, 2016 | |||||||||||||||
— | — | * | 5.00 | December 31, 2007 | December 30, 2017 | |||||||||||||||
— | — | * | 5.00 | December 31, 2008 | December 30, 2018 | |||||||||||||||
— | — | * | US$ | 10.00 | December 31, 2009 | December 30, 2019 | ||||||||||||||
Other individuals as a group | 3,959,050 | (4) |
* | Upon exercise of all options granted, would beneficially own less than 1.0% of our outstanding ordinary shares. | |
(1) | Represents options granted to Mr. Mo in his capacity as our executive chairman. Pursuant to resolutions passed by our board of directors on August 4, 2010, our board of directors resolved that such options be assigned and allocated to Media Partner and Next Decade. | |
(2) | On August 4, 2010, Media Partner exercised all of its 1,125,000 outstanding and vested stock options to purchase 1,125,000 Class B ordinary shares at an exercise price ranging from US$0.13 per share to US$0.64 per share for an aggregate purchase consideration of US$307,500. | |
(3) | Represents options granted to Bruce J. Akhurst and John Stanhope in their capacity as our directors. Pursuant to resolutions passed by our board of directors on April 20, 2010, our board of directors resolved that such options be assigned and allocated to Telstra International. Mr. Akhurst and Mr. Stanhope disclaim beneficial ownership of the options held by Telstra International. |
(4) | Includes special share options exercisable into 2,426,550 non-voting ordinary shares which were granted to individuals other than our directors and executive officers. |
• | attract and retain the best available personnel; | |
• | to provide an additional incentive to our employees, directors and consultants; and | |
• | to promote the success of the Company’s business. |
• | any full-time or part-time employees, executives or officers of us, our parent or any of our subsidiaries; | |
• | any directors, including non-executive directors and independent non-executive directors, of us, our parent or any of our subsidiaries; | |
• | any advisers, consultants and agents to us or any of our subsidiaries; and | |
• | such other persons who, in the sole opinion of our board of directors or its designated committee, has made contributions to the business or other development of us. |
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• | each person known to us to own beneficially more than 5.0% of our ordinary shares; | |
• | our directors and executive officers as a group; and | |
• | each selling shareholder participating in this offering. |
Percentage | ||||||||||||||||||||||||||||
of votes | ||||||||||||||||||||||||||||
Ordinary shares | Ordinary shares | held | ||||||||||||||||||||||||||
beneficially owned | Ordinary shares to be | beneficially owned | after this | |||||||||||||||||||||||||
prior to this offering (1) | sold in this offering (1)(2) | after this offering (1)(2) | offering (1) | |||||||||||||||||||||||||
Number (3) | Percent (3) | Number (3) | Percent (3) | Number (3) | Percent (3) | Percent (3) | ||||||||||||||||||||||
Principal and Selling Shareholders: | ||||||||||||||||||||||||||||
Telstra International Holdings Limited (4) | 40,747,044 | 50.5 | % | 7,304,008 | 9.1 | % | — | — | — | |||||||||||||||||||
Media Partner Technology Limited (5) | 11,355,645 | 14.1 | % | — | — | 11,355,645 | 13.9 | % | 34.5 | % | ||||||||||||||||||
Next Decade Investments Limited (5)(13) | 11,985,145 | 14.9 | % | — | — | 14,849,345 | 18.2 | % | 37.3 | % | ||||||||||||||||||
IDG Technology Venture Investment, Inc. and its affiliates (6) | 10,184,405 | 12.6 | % | 3,441,288 | 4.3 | 6,743,117 | 8.3 | % | 5.2 | % | ||||||||||||||||||
General Atlantic Mauritius Limited (7)(13) | — | — | — | — | 15,347,720 | 18.8 | % | 4.7 | % | |||||||||||||||||||
Apax (8)(13) | — | — | — | — | 15,347,720 | 18.8 | % | 4.7 | % | |||||||||||||||||||
Directors and Executive Officers (9): | ||||||||||||||||||||||||||||
Mr. Mo (10) | 23,588,290 | 29.3 | — | — | 26,452,490 | 32.4 | % | 72.5 | % | |||||||||||||||||||
Shan Li (11) | 2,770,985 | 3.4 | — | — | 2,869,749 | 3.5 | % | 8.4 | % | |||||||||||||||||||
Quan Zhou(12) | * | * | — | — | * | * | * | |||||||||||||||||||||
Bruce J. Akhurst | * | * | * | * | — | — | — | |||||||||||||||||||||
John Stanhope | * | * | * | * | — | — | — | |||||||||||||||||||||
Jeff Xuesong Leng(7) | — | — | — | — | 15,347,720 | 18.8 | % | 4.7 | % | |||||||||||||||||||
Thomas Nicholas Hall (8) | — | — | — | — | 15,347,720 | 18.8 | % | 4.7 | % | |||||||||||||||||||
Richard Jiangong Dai | * | * | — | — | * | * | * | |||||||||||||||||||||
Lanying Guan | * | * | — | — | * | * | * | |||||||||||||||||||||
Jian Liu | * | * | — | — | * | * | * | |||||||||||||||||||||
All directors and executive officers as a group | 27,565,525 | 34.2 | % | * | * | 61,223,929 | 75.0 | % | 90.7 | % |
* | Less than 1.0% of total outstanding shares. | |
(1) | Telstra International has agreed to sell 15,347,720 Class A ordinary shares to General Atlantic, 15,347,720 Class A ordinary shares to Apax, 888,888 Class A ordinary shares to Next Decade, one of our corporate shareholders, which is held in an irrevocable discretionary trust established by Mr. Mo, our founder and executive chairman, and 98,764 Class A ordinary shares to Digital Link, a company wholly owned by Shan Li, a director of our company, in the Telstra Private Placement, subject to certain conditions. In the event the underwriters of this offering fail to exercise their over-allotment option under the underwriting agreement, Telstra International has agreed to sell to General Atlantic and Apax, and General Atlantic and Apax have agreed to buy from Telstra International, 879,972 and 879,972 additional Class A ordinary shares, respectively, at the initial public offering price in a transaction exempt from registration under the Securities Act. See “Certain Relationships and Related Party Transactions—Telstra Private Placement.” |
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(2) | Assumes that the underwriters have not exercised their over-allotment option. | |
(3) | The number of ordinary shares outstanding used in calculating the percentage for each listed person includes the ordinary shares subject to options exercisable by such person within 60 days after the date of this prospectus. The calculation of this number also assumes the conversion of the shares of all of our existing shareholders, except IDG-Accel China Capital L.P. and IDG-Accel China Capital Investors L.P., into Class B ordinary shares immediately prior to the closing of this offering. | |
(4) | Telstra International, a Bermuda company, is wholly owned by Telstra Holdings Proprietary Limited, which is in turn wholly owned by Telstra Corporation Limited, a company listed on the Australian Stock Exchange and the New Zealand Stock Exchange. The address of Telstra International is Clarendon House, 2 Church Street, Hamilton HM11, Bermuda. | |
(5) | All of the shares of Media Partner, a British Virgin Islands company, and Next Decade, a British Virgin Islands company, are held in irrevocable discretionary family trusts established by Mr. Mo, our founder and executive chairman. The address of Media Partner and Next Decade is P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands. See note (10) below. | |
(6) | IDG Technology, a Massachusetts corporation, is wholly owned by International Data Group Inc., a Massachusetts corporation, which is controlled by Patrick McGovern, the majority shareholder, founder and chairman of International Data Group Inc. The address of IDG Technology is 5 Speen Street, Framingham MA 01701, U.S.A. On March 26, 2010, IDG Technology transferred 5,344,856 ordinary shares and 246,582 ordinary shares to IDG-Accel China Capital L.P. and IDG-Accel China Capital Investors L.P., respectively. Upon conversion of our ordinary shares into Class A and Class B ordinary shares, IDG Technology will hold 4,592,967 Class B ordinary shares, and IDG-Accel China Capital L.P. and IDG-Accel China Capital Investors L.P., together, will hold 5,591,438 Class A ordinary shares. 15,264 Class A ordinary shares are held indirectly by Quan Zhou, our director, through IDG-Accel China Capital Investors L.P. IDG-Accel China Capital L.P. is a Cayman Islands exempted limited partnership located at Walkers SPV Limited, Walker House, 87 Mary Street, George Town, Grand Cayman, KY1-9002 Cayman Islands and is a fund affiliated with IDG Technology. IDG-Accel China Capital Investors L.P. is a Cayman Islands exempted limited partnership located at Walkers SPV Limited, Walker House, 87 Mary Street, George Town, Grand Cayman, KY1-9002 Cayman Islands and is also a fund affiliated with IDG Technology. | |
(7) | Includes 15,347,720 Class A ordinary shares that General Atlantic has agreed to purchase from Telstra International in the Telstra Private Placement. General Atlantic GenPar (Mauritius) Limited, or GenPar, controls the management of General Atlantic by virtue of its ownership of a majority of General Atlantic’s voting shares. General Atlantic LLC owns all the shares of GenPar. There are twenty-four managing directors of General Atlantic LLC. Upon consummation of the Telstra Private Placement, Jeff Xuesong Leng, a managing director of General Atlantic LLC, will be appointed to our board of directors. Jeff Xuesong Leng disclaims beneficial ownership of such securities except to the extent of his pecuniary interest therein. See “Certain Relationships and Related Party Transactions—Telstra Private Placement.” The mailing address of General Atlantic is 6th Floor, Tower A, 1 CyberCity, Ebene, Mauritius. |
(8) | Includes 3,846,216 Class A ordinary shares, 7,242,737 Class A ordinary shares and 4,258,767 Class A ordinary shares that each of Hunt7-A Guernsey L.P. Inc, Hunt 7-B Guernsey L.P. Inc and Hunt6-A Guernsey L.P. Inc has agreed to purchase from Telstra International in the Telstra Private Placement. Hunt7-A GP Limited controls the management of Hunt7-A Guernsey L.P. Inc by virtue of its limited partnership agreement; Hunt7-B GP Limited controls the management of Hunt 7-B Guernsey L.P. Inc by virtue of its limited partnership agreement and Hunt6-A GP Limited controls the management of Hunt6-A Guernsey L.P. Inc by virtue of its limited partnership agreement. Upon consummation of the Telstra Private Placement, one Apax designee, Thomas Nicholas Hall, will be appointed to our board of directors. Such Apax designee disclaims beneficial ownership of such securities except to the extent of his pecuniary interest therein. See “Certain Relationships and Related Party Transactions—Private Placement.” The mailing address of each Apax entity is Third Floor, Royal Bank Place, 1 Glategny Esplanade, St Peter Port, Guernsey GY1 2HJ. |
(9) | The address of our current directors and executive officers isc/o 8th Floor, Tower 3, Xihuan Plaza, No. 1 Xizhimenwai Avenue, Xicheng District, Beijing 100044 China. | |
(10) | Includes 11,985,145 ordinary shares held by Next Decade, 11,355,645 ordinary shares held by Media Partner and 247,500 ordinary shares subject to options exercisable by Mr. Mo within 60 days after the date of this prospectus. The equity interests of Mr. Mo, our founder and executive chairman, in Next Decade and Media Partner are held in two irrevocable discretionary trusts established by Mr. Mo for the benefit of his designated family members. Mr. Mo, as a part of his estate planning, through an irrevocable discretionary family trust arrangement, transferred to this family trust all of his equity ownership in Next Decade, which holds of record an aggregate of 11,985,145 ordinary shares of our share capital. Mr. Mo established this family trust by a deed of settlement, dated June 8, 2006, as amended, as the ultimate holder of the ordinary shares held of record by Next Decade. The family trust has been established for the benefit of Mr. Mo’s designated family members, |
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including a corporate entity wholly-owned and controlled by one of his family members, as well as other persons and corporations that may be so designated under the deed of settlement, and has a trust period of 100 years unless earlier terminated by the trustee subject to any applicable rule against perpetuities. Mr. Mo continues to act as the protector of the trust. Credit Suisse Trust Limited acts as the trustee of the trust. | ||
In addition, Mr. Mo, as a part of his estate planning, through a similar irrevocable discretionary family trust arrangement, transferred to his family trust all of his equity ownership in Media Partner, which holds of record an aggregate of 11,355,645 ordinary shares of our share capital. Mr. Mo established this family trust by a deed of settlement, dated April 16, 2010, as the ultimate holder of the ordinary shares held of record by Media Partner. The family trust has been established for the benefit of Mr. Mo’s designated family members, including a corporate entity wholly-owned and controlled by one of his family members, as well as other persons or corporations that may be so designated under the deed of settlement, and has a trust period of 150 years unless earlier terminated by the trustee subject to any applicable rule against perpetuities. Mr. Mo continues to act as the protector of the trust. Deutsche Bank International Trust Co. (Cayman) Limited acts as the trustee of the trust. | ||
Upon the closing of the Telstra Private Placement, which will occur simultaneously with the closing of this offering, Next Media will also acquire 888,888 Class A ordinary shares from Telstra International. | ||
(11) | Includes 2,770,985 ordinary shares held by Digital Link, a British Virgin Islands company, which is wholly owned by Mr. Shan Li, a director of our Company. The address of Digital Link is Apt 3B, Taggart Tower, 109 Repulse Bay Road, Hong Kong. Upon the closing of the Telstra Private Placement, which will occur simultaneously with the closing of this offering, Digital Link will also acquire 98,764 Class A ordinary shares from Telstra International. | |
(12) | Includes ordinary shares held by IDG-Accel China Capital Investors L.P., a Cayman Islands exempted limited partnership, which is partially owned by Mr. Quan Zhou, a director of our Company. The address of IDG-Accel China Capital Investors L.P. is Walkers SPV Limited, Walker House, 87 Mary Street, George Town, Grand Cayman, KY1-9002 Cayman Islands. IDG-Accel China Capital Investors L.P. is a fund affiliated with IDG Technology. | |
(13) | In connection with the Telstra Private Placement, General Atlantic and Apax granted Next Decade an option to purchase 987,656 Class A ordinary shares from each of General Atlantic and Apax, if the Telstra Private Placement is consummated at the initial offering price as disclosed on the cover of this prospectus. The option will expire on the second anniversary of the completion of the Telstra Private Placement and may only be exercised in full and not in part. The exercise price for the option is the initial public offering price of each Class A ordinary share, plus 5.0% per annum on such price, to the date of exercise. The number of shares subject to the options and the exercise price are subject to customary anti-dilution adjustments. If the closing of this offering has not occurred on or before September 30, 2010 (or the date that is three business days after September 30, 2010 if an underwriting agreement has been entered into in the three business days prior to September 30, 2010 and is not terminated), the Telstra Private Placement contemplates an alternative pricing for the private sale as disclosed in the section entitled “Certain Relationships and Related Party Transactions — Telstra Private Placement — Share Purchase Agreement.” |
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• | three years after the effective date of this offering; or | |
• | such time at which all registrable securities held by such holder can be sold in any three-month period without registration in compliance with Rule 144 of the Securities Act. |
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• | is a company that conducts its business outside the Cayman Islands; | |
• | is exempted from certain requirements of the Cayman Companies Law, including the filing of an annual return of its shareholders with the Registrar of Companies; | |
• | does not have to make its register of shareholders open to inspection; and | |
• | may obtain an undertaking against the imposition of any future taxation. |
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• | increase our capital by such sum, to be divided into shares of such amounts, as the resolution may prescribe; | |
• | consolidate and divide all or any of our share capital into shares of larger amount than our existing shares; |
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• | cancel any shares which at the date of the passing of the resolution have not been taken or agreed to be taken by any person, and diminish the amount of our share capital by the amount of the shares so cancelled subject to the provisions of the Cayman Companies Law; | |
• | sub-divide our shares or any of them into shares of a smaller amount than is fixed by our amended and restated memorandum of association, subject nevertheless to the Cayman Companies Law, and so that the resolution whereby any share issub-divided may determine that, as between the holders of the shares resulting from such subdivision, one or more of the shares may have any such preferred or other special rights over or may have such deferred rights or be subject to any such restrictions as compared with the others as we have power to attach to unissued or new shares; and | |
• | divide shares into several classes and, without prejudice to any special rights previously conferred on the holders of existing shares, attach to the shares respectively any preferential, deferred, qualified or special rights, privileges, conditions or such restrictions which in the absence of any such determination in general meeting may be determined by our directors. |
• | the instrument of transfer is lodged with us accompanied by the certificate for the share to which it relates and such other evidence as our directors may reasonably require to show the right of the transferor to make the transfer; | |
• | the instrument of transfer is in respect of only one class of share; | |
• | the instrument of transfer is properly stamped (in circumstances where stamping is required); | |
• | in the case of a transfer to joint holders, the number of joint holders to whom the share is to be transferred does not exceed four; and | |
• | a fee of such maximum sum as the New York Stock Exchange may determine to be payable or such lesser sum as our directors may from time to time require is paid to us for such registration. |
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• | all checks or warrants in respect of dividends of such shares, not being less than three in number, for any sums payable in cash to the holder of such shares have remained uncashed for a period of 12 years prior to the publication of the advertisement and during the three months referred to in third bullet point below; | |
• | we have not during that time received any indication of the whereabouts or existence of the shareholder or person entitled to such shares by death, bankruptcy or operation of law; and | |
• | we have caused an advertisement to be published in newspapers in the manner stipulated by our amended and restated articles of association, giving notice of our intention to sell these shares, and a period of three months has elapsed since such advertisement and the New York Stock Exchange has been notified of such intention. |
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• | the company is not proposing to act illegally orultra viresand the statutory provisions as to majority vote have been complied with; | |
• | the shareholders have been fairly represented at the meeting in question; | |
• | the arrangement is such as a businessman would reasonably approve; and | |
• | the arrangement is not one that would more properly be sanctioned under some other provision of the Cayman Companies Law or that would amount to a “fraud on the minority.” |
• | a company is acting or proposing to act illegally or beyond the scope of its authority; | |
• | the act complained of, although not beyond the scope of its authority, could be effected duly if authorized by more than a simple majority vote which has not been obtained; and | |
• | those who control the company are perpetrating a “fraud on the minority.” |
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• | require a majority of our directors to be independent; or | |
• | provide for cumulative voting. While there is nothing under the Companies Law of the Cayman Islands which specifically prohibits or restricts the creation of cumulative voting rights for the election of our directors, unlike the requirement under Delaware law that cumulative voting for the election of directors is permitted only if expressly authorized in the certificate of incorporation, it is not a concept that is accepted as a common practice in the Cayman Islands, and we have made no provision in our amended and restated articles of association to allow cumulative voting for such elections. |
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• | the designation of the series; | |
• | the number of shares of the series; | |
• | the dividend rights, dividend rates, conversion rights, voting rights; and | |
• | the rights and terms of redemption and liquidation preferences. |
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• | Cash. The depositary will distribute any U.S. dollars available to it resulting from a cash dividend or other cash distribution or the net proceeds of sales of any other distribution or portion thereof (to the extent applicable), on an averaged or other practicable basis, subject to (i) appropriate adjustments for taxes withheld, (ii) such distribution being impermissible or impracticable with respect to certain registered ADR holders, and (iii) deduction of the depositary’s expenses in (1) converting any foreign currency to U.S. dollars to the extent that it determines that such conversion may be made on a reasonable basis, (2) transferring foreign currency or U.S. dollars to the United States by such means as the depositary may determine to the extent that it determines that such transfer may be made on a reasonable basis, (3) obtaining any approval or license of any governmental authority required for such conversion or transfer, which is obtainable at a reasonable cost and within a reasonable time and (4) making any sale by public or private means in any commercially reasonable manner.If exchange rates fluctuate during a time when the depositary cannot convert a foreign currency, you may lose some or all of the value of the distribution. | |
• | Ordinary shares. In the case of a distribution in ordinary shares, the depositary will issue additional ADRs to evidence the number of ADSs representing such ordinary shares. Only whole ADSs will be issued. Any ordinary shares which would result in fractional ADSs will be sold and the net proceeds will be distributed in the same manner as cash to the ADR holders entitled thereto. | |
• | Rights to receive additional ordinary shares. In the case of a distribution of rights to subscribe for additional ordinary shares or other rights, if we provide evidence satisfactory to the depositary that it may lawfully distribute such rights, the depositary will distribute warrants or other instruments in the discretion of the depositary representing such rights. However, if we do not furnish such evidence, the depositary may: |
• | sell such rights if practicable and distribute the net proceeds in the same manner as cash to the ADR holders entitled thereto; or | |
• | if it is not practicable to sell such rights, do nothing and allow such rights to lapse, in which case ADR holders will receive nothing. |
• | Other Distributions. In the case of a distribution of securities or property other than those described above, the depositary may either (i) distribute such securities or property in any manner it deems equitable and practicable or (ii) to the extent the depositary deems distribution of such securities or property not to be equitable and practicable, sell such securities or property and distribute any net proceeds in the same way it distributes cash. |
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• | temporary delays caused by closing our transfer books or those of the depositary or the deposit of ordinary shares in connection with voting at a shareholders’ meeting, or the payment of dividends; | |
• | the payment of fees, taxes and similar charges; or | |
• | compliance with any U.S. or foreign laws or governmental regulations relating to the ADRs or to the withdrawal of deposited securities. |
• | to receive any distribution on or in respect of ordinary shares, | |
• | to give instructions for the exercise of voting rights at a meeting of holders of ordinary shares, | |
• | to pay the fee assessed by the depositary for administration of the ADR program and for any expenses as provided for in the ADR, or | |
• | receive any notice or to act in respect of other matters |
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• | a fee of U.S.$1.50 per ADR or ADRs for transfers of certificated or direct registration ADRs; | |
• | a fee of up to U.S.$0.05 per ADS for any cash distribution made pursuant to the deposit agreement; | |
• | a fee of up to U.S.$0.05 per ADS per calendar year (or portion thereof) for services performed by the depositary in administering the ADRs (which fee may be charged on a periodic basis during each calendar year and shall be assessed against holders of ADRs as of the record date or record dates set by the depositary during each calendar year and shall be payable in the manner described in the next succeeding provision); | |
• | reimbursement of such fees, charges and expenses as are incurred by the depositaryand/or any of the depositary’s agents (including, without limitation, the custodian and expenses incurred on behalf of holders in connection with compliance with foreign exchange control regulations or any law or regulation relating to foreign investment) in |
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connection with the servicing of the ordinary shares or other deposited securities, the delivery of deposited securities or otherwise in connection with the depositary’s or its custodian’s compliance with applicable law, rule or regulation (which charge shall be assessed on a proportionate basis against holders as of the record date or dates set by the depositary and shall be payable at the sole discretion of the depositary by billing such holders or by deducting such charge from one or more cash dividends or other cash distributions); |
• | a fee for the distribution of securities (or the sale of securities in connection with a distribution), such fee being in an amount equal to the fee for the execution and delivery of ADSs which would have been charged as a result of the deposit of such securities (treating all such securities as if they were ordinary shares) but which securities or the net cash proceeds from the sale thereof are instead distributed by the depositary to those holders entitled thereto; | |
• | stock transfer or other taxes and other governmental charges; | |
• | cable, telex and facsimile transmission and delivery charges incurred at your request in connection with the deposit or delivery of ordinary shares; | |
• | transfer or registration fees for the registration of transfer of deposited securities on any applicable register in connection with the deposit or withdrawal of deposited securities; and | |
• | expenses of the depositary in connection with the conversion of foreign currency into U.S. dollars. |
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(1) | amend the form of ADR; | |
(2) | distribute additional or amended ADRs; | |
(3) | distribute cash, securities or other property it has received in connection with such actions; | |
(4) | sell any securities or property received and distribute the proceeds as cash; or | |
(5) | none of the above. |
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• | payment with respect thereto of (i) any stock transfer or other tax or other governmental charge, (ii) any stock transfer or registration fees in effect for the registration of transfers of ordinary shares or other deposited securities upon any applicable register and (iii) any applicable fees and expenses described in the deposit agreement; | |
• | the production of proof satisfactory to it of (i) the identity of any signatory and genuineness of any signature and (ii) such other information, including without limitation, information as to citizenship, residence, exchange control approval, beneficial ownership of any securities, compliance with applicable law, regulations, provisions of or governing deposited securities and terms of the deposit agreement and the ADRs, as it may deem necessary or proper; and | |
• | compliance with such regulations as the depositary may establish consistent with the deposit agreement. |
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• | any present or future law, rule, regulation, fiat, order or decree of the United States, the Cayman Islands, The People’s Republic of China (including the Hong Kong Special Administrative Region) or any other country, or of any governmental or regulatory authority or securities exchange or market or automated quotation system, the provisions of or governing any deposited securities, any present or future provision of our charter, any act of God, war, terrorism or other circumstance beyond our, the depositary’s or our respective agents’ control shall prevent, delay or subject to any civil or criminal penalty any act which the deposit agreement or the ADRs provide shall be done or performed by us, the depositary or our respective agents (including, without limitation, voting); | |
• | it exercises or fails to exercise discretion under the deposit agreement or the ADRs; | |
• | it performs its obligations under the deposit agreement and ADRs without gross negligence or bad faith; | |
• | it takes any action or refrains from taking any action in reliance upon the advice of or information from legal counsel, accountants, any person presenting ordinary shares for deposit, any registered holder of ADRs, or any other person believed by it to be competent to give such advice or information; or | |
• | it relies upon any written notice, request, direction or other document believed by it to be genuine and to have been signed or presented by the proper party or parties. |
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• | be a party to and bound by the terms of the deposit agreement and the applicable ADR or ADRs, and | |
• | appoint the depositary its attorney-in-fact, with full power to delegate, to act on its behalf and to take any and all actions contemplated in the deposit agreement and the applicable ADR or ADRs, to adopt any and all procedures necessary to comply with applicable laws and to take such action as the depositary in its sole discretion may deem necessary or appropriate to carry out the purposes of the deposit agreement and the applicable ADR and ADRs, the taking of such actions to be the conclusive determinant of the necessity and appropriateness thereof. |
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• | any ordinary shares or depositary shares representing ordinary shares; | |
• | any shares of our subsidiaries or controlled affiliates or depositary shares representing those shares; or | |
• | any securities that are substantially similar to the ordinary shares or depositary shares referred to above, including any securities that are convertible into, exchangeable for or otherwise represent the right to receive ordinary shares, other shares or depositary shares referred to above; |
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• | 1.0% of the then outstanding ordinary shares, in the form of ADSs or otherwise, which will equal approximately 760,657 ordinary shares immediately after this offering; or | |
• | the average weekly trading volume of our 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. |
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• | dealers in securities or currencies; | |
• | traders in securities that elect to use amark-to-market method of accounting for securities holdings; | |
• | banks or other financial institutions; | |
• | insurance companies; | |
• | tax-exempt organizations; |
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• | partnerships and other entities treated as partnerships for U.S. federal income tax purposes or persons holding ordinary shares or ADSs through any such entities; | |
• | real estate investment trusts; | |
• | regulated investment companies; | |
• | persons that hold ADSs as part of a hedge, straddle, constructive sale, conversion transaction or other integrated investment; | |
• | U.S. holders (as defined below) whose functional currency for tax purposes is not the U.S. dollar; | |
• | persons liable for alternative minimum tax; or | |
• | persons who actually or constructively own 10.0% or more of the total combined voting power of all classes of our shares (including ADSs) entitled to vote. |
• | a citizen or resident of the United States for U.S. federal income tax purposes; | |
• | a corporation, or other entity taxable as a corporation, that was created or organized in or under the laws of the United States or any political subdivision of the United States; | |
• | an estate the income of which is subject to U.S. federal income tax regardless of its source; or | |
• | a trust, if (a) a court within the United States is able to exercise primary supervision over its administration and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (b) the trust has a valid election in effect to be treated as a U.S. person. |
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Number | ||||
Underwriters | of ADSs | |||
Deutsche Bank Securities Inc. | ||||
Goldman Sachs (Asia) L.L.C. | ||||
Total | 2,933,238 | |||
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Total fees | ||||||||||||
Without exercise of | With full exercise | |||||||||||
over-allotment | of over-allotment | |||||||||||
Fee per ADS | option | option | ||||||||||
Discounts and commissions paid by us | US$ | US$ | US$ | |||||||||
Discounts and commissions paid by the selling shareholders | US$ | US$ | US$ |
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SEC registration fee | US$ | 10,222 | ||
FINRA filing fee | 10,454 | |||
New York Stock Exchange listing fee | 125,000 | |||
Legal fees and expenses (other than the selling shareholders) | 1,248,785 | |||
Accounting fees and expenses | 851,765 | |||
Printing fees | 400,000 | |||
Other fees and expenses | 506,547 | |||
Total | US$ | 3,157,714 | * | |
* | Of which US$1.9 million has already been expensed by us in the first two quarters of 2010. |
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F-2 | ||||
F-3 | ||||
F-5 | ||||
F-6 | ||||
F-7 | ||||
F-8 | ||||
Unaudited Interim Condensed Consolidated Financial Statements | ||||
F-39 | ||||
F-41 | ||||
F-42 | ||||
F-43 |
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CONSOLIDATED BALANCE SHEETS
(Amounts in thousands of United States dollar (“US$”)
except for number of shares)
As at December 31, | ||||||||||
Notes | 2008 | 2009 | ||||||||
US$ | US$ | |||||||||
ASSETS | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | 63,022 | 92,239 | ||||||||
Short-term investments | 4 | 24,873 | 28,558 | |||||||
Accounts receivable (net of allowance of US$3,330 and US$4,432 for 2008 and 2009, respectively) | 5 | 11,350 | 13,985 | |||||||
Prepayment and other current assets | 6 | 1,400 | 1,952 | |||||||
Amounts due from related parties | 15 | 786 | 7,629 | |||||||
Deferred tax assets, current | 13 | 1,430 | 471 | |||||||
Inventories | — | 4,390 | ||||||||
Total current assets | 102,861 | 149,224 | ||||||||
Non-current assets: | ||||||||||
Property and equipment, net | 7 | 3,841 | 4,220 | |||||||
Deferred tax assets, non current | 13 | — | 507 | |||||||
Other non-current assets | 544 | 543 | ||||||||
Total Non-current assets | 4,385 | 5,270 | ||||||||
Total assets | 107,246 | 154,494 | ||||||||
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CONSOLIDATED BALANCE SHEETS—(Continued)
(Amounts in thousands of United States dollar (“US$”)
except for number of shares)
As at December 31, | ||||||||||
Notes | 2008 | 2009 | ||||||||
US$ | US$ | |||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||
Current liabilities: | ||||||||||
Deferred revenue | 8 | 15,953 | 28,795 | |||||||
Accrued expenses and other liabilities | 9 | 29,399 | 37,342 | |||||||
Dividend payable | 10 | 24,200 | 43,906 | |||||||
Share based compensation liability | 14 | 9,887 | 11,129 | |||||||
Income tax payable | 13 | 428 | 3,134 | |||||||
Total current liabilities | 79,867 | 124,306 | ||||||||
Deferred tax liability, non-current | 13 | 13,991 | 5,687 | |||||||
Total liabilities | 93,858 | 129,993 | ||||||||
Commitments and contingencies | 17 | |||||||||
Shareholders’ equity: | ||||||||||
Ordinary shares (par value of Hong Kong Dollar (HK$) 1 per share at December 31, 2008 and 2009, respectively; Authorized—600,000,000 shares at December 31, 2008 and 2009 respectively; Issued and outstanding—74,020,217 and 73,932,217 shares at December 31, 2008 and 2009, respectively) | 11 | 9,501 | 9,489 | |||||||
Additional paid-in capital | 35,707 | 9,279 | ||||||||
Accumulated other comprehensive income | 5,582 | 5,670 | ||||||||
Accumulated deficits | (37,507 | ) | — | |||||||
Total SouFun Holdings Limited’s equity | 13,283 | 24,438 | ||||||||
Noncontrolling interests | 105 | 63 | ||||||||
Total shareholders’ equity | 13,388 | 24,501 | ||||||||
Total liabilities and shareholders’ equity | 107,246 | 154,494 | ||||||||
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CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands of United States dollar (“US$”)
except for number of shares and per share data)
For the Year Ended December 31, | ||||||||||||||
Notes | 2007 | 2008 | 2009 | |||||||||||
US$ | US$ | US$ | ||||||||||||
Revenues | ||||||||||||||
Marketing services | 46,552 | 86,252 | 102,367 | |||||||||||
Listing services | 9,885 | 16,070 | 17,559 | |||||||||||
Other value-added services and products | 1,439 | 1,802 | 7,123 | |||||||||||
Total revenues | 57,876 | 104,124 | 127,049 | |||||||||||
Cost of revenues | ||||||||||||||
Cost of services | (12,630 | ) | (22,162 | ) | (26,484 | ) | ||||||||
Cost of other value-added services and products | — | — | (4,863 | ) | ||||||||||
Total cost of revenues | (12,630 | ) | (22,162 | ) | (31,347 | ) | ||||||||
Gross profit | 45,246 | 81,962 | 95,702 | |||||||||||
Operating expenses: | ||||||||||||||
Selling expenses | (13,221 | ) | (18,708 | ) | (25,186 | ) | ||||||||
General and administrative expenses | (12,158 | ) | (19,857 | ) | (22,176 | ) | ||||||||
Operating income | 19,867 | 43,397 | 48,340 | |||||||||||
Foreign exchange gain (loss) | 8 | (2,826 | ) | (59 | ) | |||||||||
Interest income (Including related party amount of nil, nil and US$85 for the years ended December 31, 2007, 2008 and 2009, respectively) | 15 | 707 | 1,221 | 1,205 | ||||||||||
Realized gain—trading securities | 4 | — | — | 195 | ||||||||||
Government grants | 211 | 360 | 730 | |||||||||||
Income before income tax | 20,793 | 42,152 | 50,411 | |||||||||||
Income tax (expense) benefit | 13 | (8,457 | ) | (18,805 | ) | 2,199 | ||||||||
Net income | 12,336 | 23,347 | 52,610 | |||||||||||
Net income (loss) attributable to noncontrolling interests | 125 | (34 | ) | (42 | ) | |||||||||
Net income attributable to SouFun Holdings Limited shareholders | 12,211 | 23,381 | �� | 52,652 | ||||||||||
Earnings per share | ||||||||||||||
Basic | 19 | 0.16 | 0.32 | 0.71 | ||||||||||
Diluted | 19 | 0.16 | 0.30 | 0.68 | ||||||||||
Weighted average number of ordinary shares outstanding: | ||||||||||||||
Basic | 19 | 74,020,217 | 74,020,217 | 73,986,129 | ||||||||||
Diluted | 19 | 76,997,410 | 77,092,197 | 77,418,960 |
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For the Year Ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
US$ | US$ | US$ | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||
Net income | 12,336 | 23,347 | 52,610 | |||||||||
Adjustments to reconcile net income to net cash generated from operating activities: | ||||||||||||
Share-based compensation | 2,217 | 2,717 | 4,140 | |||||||||
Depreciation of property and equipment | 410 | 1,051 | 1,213 | |||||||||
Deferred tax expense (benefit) | 5,589 | 5,550 | (7,860 | ) | ||||||||
Allowance for doubtful accounts | 1,152 | 3,220 | 4,430 | |||||||||
Unrealized foreign exchange loss | — | 2,824 | 41 | |||||||||
Changes in operating assets and liabilities: | ||||||||||||
Increase in accounts receivable | (2,855 | ) | (9,345 | ) | (7,053 | ) | ||||||
Increase in prepayments and other current assets | (411 | ) | (243 | ) | (551 | ) | ||||||
Increase in other non-current assets | (566 | ) | (15 | ) | (52 | ) | ||||||
Increase in accrued expenses and other liabilities | 4,598 | 14,864 | 7,912 | |||||||||
Increase in deferred revenue | 8,151 | 132 | 12,821 | |||||||||
Change in inventories | — | — | (4,390 | ) | ||||||||
(Decrease) increase in income tax payable | (128 | ) | 466 | 2,705 | ||||||||
Net cash generated from operating activities | 30,493 | 44,568 | 65,966 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||
Payment for short-term investments | (23,158 | ) | (24,047 | ) | (35,864 | ) | ||||||
Proceeds received from maturity of short-term investments | 17,203 | 23,339 | 32,204 | |||||||||
Acquisition of property and equipment | (1,651 | ) | (1,967 | ) | (1,642 | ) | ||||||
Proceeds from disposal of property and equipment | — | — | 107 | |||||||||
Change in amount due from related parties | 10 | 77 | (6,839 | ) | ||||||||
Net cash used in investing activities | (7,596 | ) | (2,598 | ) | (12,034 | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||
Repurchase of shares and vested options | — | — | (548 | ) | ||||||||
Payment of dividends | (2,647 | ) | (16,210 | ) | (24,241 | ) | ||||||
Net cash used in financing activities | (2,647 | ) | (16,210 | ) | (24,789 | ) | ||||||
Exchange rate effect on cash and cash equivalents | 1,524 | 3,194 | 74 | |||||||||
Net increase in cash and cash equivalents | 21,774 | 28,954 | 29,217 | |||||||||
Cash and cash equivalents at beginning of year | 12,294 | 34,068 | 63,022 | |||||||||
Cash and cash equivalents at end of year | 34,068 | 63,022 | 92,239 | |||||||||
Supplemental schedule of cash flow information: | ||||||||||||
Income tax paid | 131 | 307 | 1,657 | |||||||||
Acquisition of property and equipment through utilization of deposits | — | 96 | 52 | |||||||||
Non-monetary exchange of services for prepaid cards | — | — | 9,252 |
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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Amounts in thousands of United States Dollar (“US$”)
except for number of shares)
Total SouFun Holdings Limited’s Equity | ||||||||||||||||||||||||||||
Accumulated | ||||||||||||||||||||||||||||
Number of | Additional | Other | ||||||||||||||||||||||||||
Ordinary | Ordinary | Paid-in | Comprehensive | Accumulated | Noncontrolling | |||||||||||||||||||||||
Shares | Shares | Capital | Income | Deficits | Interests | Total Equity | ||||||||||||||||||||||
Balance as of January 1, 2007 | 74,020,217 | 9,501 | 73,531 | 459 | (73,099 | ) | 14 | 10,406 | ||||||||||||||||||||
Comprehensive income | ||||||||||||||||||||||||||||
Net income for the year | — | — | — | — | 12,211 | — | 12,211 | |||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | 1,764 | — | — | 1,764 | |||||||||||||||||||||
Total comprehensive income | 13,975 | |||||||||||||||||||||||||||
Share-based compensation | — | — | 1,274 | — | — | — | 1,274 | |||||||||||||||||||||
Dividend declared | — | (41,070 | ) | — | — | — | (41,070 | ) | ||||||||||||||||||||
Noncontrolling interests | — | — | — | — | — | 125 | 125 | |||||||||||||||||||||
Balance as of December 31, 2007 | 74,020,217 | 9,501 | 33,735 | 2,223 | (60,888 | ) | 139 | (15,290 | ) | |||||||||||||||||||
Comprehensive income | ||||||||||||||||||||||||||||
Net income for the year | — | — | — | — | 23,381 | — | 23,381 | |||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | 3,359 | — | — | 3,359 | |||||||||||||||||||||
Total comprehensive income | 26,740 | |||||||||||||||||||||||||||
Share-based compensation | — | — | 1,972 | — | — | — | 1,972 | |||||||||||||||||||||
Noncontrolling interests | — | — | — | — | — | (34 | ) | (34 | ) | |||||||||||||||||||
Balance as of December 31, 2008 | 74,020,217 | 9,501 | 35,707 | 5,582 | (37,507 | ) | 105 | 13,388 | ||||||||||||||||||||
Comprehensive income | ||||||||||||||||||||||||||||
Net income for the year | — | — | — | — | 52,652 | — | 52,652 | |||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | 88 | — | — | 88 | |||||||||||||||||||||
Total comprehensive income | 52,740 | |||||||||||||||||||||||||||
Share-based compensation | — | — | 2,898 | — | — | — | 2,898 | |||||||||||||||||||||
Repurchase of ordinary shares | (88,000 | ) | (12 | ) | — | — | (429 | ) | — | (441 | ) | |||||||||||||||||
Repurchase of vested options | — | — | (107 | ) | — | — | — | (107 | ) | |||||||||||||||||||
Dividend declared | — | — | (29,219 | ) | — | (14,716 | ) | — | (43,935 | ) | ||||||||||||||||||
Noncontrolling interests | — | — | — | — | — | (42 | ) | (42 | ) | |||||||||||||||||||
Balance as of December 31, 2009 | 73,932,217 | 9,489 | 9,279 | 5,670 | — | 63 | 24,501 | |||||||||||||||||||||
F-7
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
1. | ORGANIZATION AND BASIS OF PRESENTATION |
Percentage of | ||||||||||
Date of | Place of | Ownership by the | ||||||||
Company | Establishment | Establishment | Company | Principal Activities | ||||||
Selovo Investments Limited (“Selovo”) | August 10, 2007 | British Virgin Islands (“BVI”) | 100% | Investment holding | ||||||
Pendiary Investments Limited (“Pendiary”) | August 16, 2007 | BVI | 100% | Investment holding | ||||||
Max Impact Investments Limited (“Max Impact”) | October 26, 2007 | Hong Kong | 100% | Investment holding | ||||||
Bravo Work Investments limited (“Bravo Work”) | October 29, 2007 | Hong Kong | 100% | Investment holding | ||||||
China Index Academy Limited (“China Index”) | August 7, 2000 | Hong Kong | 100% | Investment holding | ||||||
Beijing SouFun Information Consultancy Co., Ltd. (“Beijing Information”) | August 5, 1999 | PRC | 90% | Provision of technology and information services | ||||||
Shanghai SouFun Information Co., Ltd (“SouFun Shanghai”) | May 31, 2000 | PRC | 100% | Provision of technology and information consultancy services | ||||||
SouFun Information (Shenzhen) Co., Ltd (“SouFun Shenzhen”) | June 23, 2000 | PRC | 100% | Provision of technology and information consultancy services | ||||||
SouFun Information (Tianjin) Co Ltd (“SouFun Tianjin”) | March 2, 2001 | PRC | 100% | Provision of technology and information consultancy services |
F-8
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
Percentage of | ||||||||||
Date of | Place of | Ownership by the | ||||||||
Company | Establishment | Establishment | Company | Principal Activities | ||||||
SouFun Media Technology (Beijing) Co., Ltd. (“SouFun Media”) | November 28, 2002 | PRC | 100% | Provision of technology and information services | ||||||
SouFun.Information (Guangzhou) Co. Ltd, (“SouFun Guangzhou”) | November 28, 2002 | PRC | 100% | Provision of technology and information consultancy services | ||||||
Beijing SouFun Network Technology Co., Ltd. (“SouFun Network”) | March 16, 2006 | PRC | 100% | Provision of technology and information services | ||||||
Zhongzhishizheng Data Technology (Beijing) Co., Ltd. (“Beijing Zhongzhi”) | June 5, 2007 | PRC | 100% | Provision of technology and information services | ||||||
Beijing Jia Tian Xia Advertising Co., Ltd. (“Beijing Advertising”) | September 1, 2000 | PRC | Nil | Provision of marketing services and listing services | ||||||
Beijing SouFun Internet Information Service Co., Ltd. (“Beijing Internet”) | December 17, 2003 | PRC | Nil | Provision of marketing services and listing services | ||||||
Beijing China Index Information Co., Ltd. (“Beijing China Index”) | November 8, 2004 | PRC | Nil | Provision of other value-added services and products | ||||||
Shanghai Jia Biao Tang Advertising Co., Ltd. (“Shanghai JBT Advertising”) | July 7, 2005 | PRC | Nil | Provision of marketing services and listing services | ||||||
Beijing SouFun Science and Technology Development Co., Ltd. (“Beijing Technology“) | March 14, 2006 | PRC | Nil | Provision of marketing services and listing services |
F-9
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
Percentage of | ||||||||||
Date of | Place of | Ownership by the | ||||||||
Company | Establishment | Establishment | Company | Principal Activities | ||||||
Shanghai China Index Consultancy Co., Ltd. (“Shanghai China Index”) | December 12, 2006 | PRC | Nil | Provision of other value-added services and products | ||||||
Shanghai SouFun Advertising Co., Ltd. (“Shanghai Advertising”) | December 12, 2006 | PRC | Nil | Provision of marketing services and listing services | ||||||
Beijing Century Jia Tian Xia Technology Development Co., Ltd. (“Beijing JTX Technology”) | December 21, 2006 | PRC | Nil | Provision of marketing services and listing services | ||||||
Tianjin Jia Tian Xia Advertising Co., Ltd. (“Tianjin JTX Advertising”) | November 22, 2007 | PRC | Nil | Provision of marketing services and listing services | ||||||
Tianjin Xin Rui Jia Tian Xia Advertising Co., Ltd. (“Tianjin Xin Rui”) | September 1, 2009 | PRC | Nil | Provision of marketing services and listing services | ||||||
Beijing Li Tian Rong Ze Science &Technology Development Co. Ltd. (“Beijing Li Tian Rong Ze”) | September 10, 2009 | PRC | Nil | Provision of marketing services and listing services |
F-10
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
F-11
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
• | the WOFEs have unilateral discretion in setting the technical service fees charged to the PRC Domestic Entities; | |
• | the WOFEs are obligated to provide financial support to the PRC Domestic Entities in the event the PRC Domestic Entities incur losses; | |
• | the annual budget of the PRC Domestic Entities should be assessed and approved by the WOFEs; | |
• | the legal shareholders agree to remit any dividends, received from the PRC Domestic Entities, to the WOFEs; and | |
• | the PRC Domestic Entities are obligated to transfer their entire retained earnings after deduction of PRC income tax to the WOFEs upon the WOFEs’ request. |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
F-12
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
F-13
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
Category | Estimated Useful Life | Estimated Residual Value | ||||
Office equipment | 5 years | 5-10 | % | |||
Motor vehicles | 5 years | 5 | % | |||
Leasehold improvement | shorter of lease term or 5 years | — |
F-14
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
F-15
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
F-16
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
F-17
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
F-18
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
F-19
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
3. | CONCENTRATION OF RISKS |
F-20
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
December 31, | ||||||||||
2008 | 2009 | |||||||||
US$ | US$ | |||||||||
Held-to-maturity securities | ||||||||||
—Fixed rate time deposits | 8,779 | 21,235 | ||||||||
—Adjustable rate investments | 1) | 8,779 | — | |||||||
Trading securities | ||||||||||
—Adjustable rate investments | 2) | 7,315 | 7,323 | |||||||
24,873 | 28,558 | |||||||||
1) | As of December 31, 2008, the Group owned US$8,779 of held-to-maturity securities which mature in February 27, 2009. This investment will pay variable interest ranging from 3% to 3.1% based on a formula linked to an interest rate index (i.e., SHIBOR). As of December 31, 2008 and 2009, the fair value of held-to-maturity securities approximate to their carrying value. |
F-21
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
2) | As of December 31, 2009, the Group owned US$7,323 (2008—US$7,315) of trading securities which mature in March 15, 2010 (2008—January 29, 2009). This investment will pay variable interest ranging from 1.98% to 6% (2008—3.15% to 6%) based on a formula linked to a trading range between the Euro and US$ (2008—trading range between Australian dollar and US$). | |
As of December 31, 2008 and 2009, the fair value of trading securities approximated their carrying value. |
Gross | Gross | |||||||||||||||
Unrealized | Unrealized | |||||||||||||||
Carrying Value | Gains | Losses | Fair Value | |||||||||||||
US$ | US$ | US$ | US$ | |||||||||||||
Trading securities | ||||||||||||||||
—Adjustable rate investments | 7,323 | — | — | 7,323 | ||||||||||||
5. | ACCOUNTS RECEIVABLE |
December 31, | ||||||||
2008 | 2009 | |||||||
US$ | US$ | |||||||
Accounts receivable | 14,680 | 18,417 | ||||||
Allowance for doubtful accounts | (3,330 | ) | (4,432 | ) | ||||
Accounts receivable, net | 11,350 | 13,985 | ||||||
For the | ||||||||
Years Ended | ||||||||
December 31, | ||||||||
2008 | 2009 | |||||||
Movement in allowance for doubtful accounts: | ||||||||
Balance at beginning of the year | 1,192 | 3,330 | ||||||
Additional provision charged to expenses | 3,220 | 4,430 | ||||||
Write-offs | (1,231 | ) | (3,332 | ) | ||||
Foreign currency adjustment | 149 | 4 | ||||||
Balance at end of the year | 3,330 | 4,432 | ||||||
F-22
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
6. | PREPAYMENTS AND OTHER CURRENT ASSETS |
December 31, | ||||||||
2008 | 2009 | |||||||
US$ | US$ | |||||||
Prepaid expenses | 365 | 514 | ||||||
Advance to employees | 540 | 355 | ||||||
Rental and other deposits | 264 | 625 | ||||||
Interest receivables | 222 | 334 | ||||||
Others | 9 | 124 | ||||||
1,400 | 1,952 | |||||||
December 31, | ||||||||
2008 | 2009 | |||||||
US$ | US$ | |||||||
Office equipment | 4,623 | 6,015 | ||||||
Motor vehicles | 651 | 526 | ||||||
Leasehold improvement | 957 | 1,185 | ||||||
Total | 6,231 | 7,726 | ||||||
Less: Accumulated depreciation | (2,390 | ) | (3,506 | ) | ||||
3,841 | 4,220 | |||||||
8. | DEFERRED REVENUE |
9. | ACCRUED EXPENSES AND OTHER LIABILITIES |
December 31, | ||||||||
2008 | 2009 | |||||||
US$ | US$ | |||||||
Payroll and welfare benefit | 3,951 | 5,487 | ||||||
Other taxes and surcharges payable | 7,066 | 11,921 | ||||||
Accrued unrecognized tax benefits and related interests and penalties (note 13) | 17,391 | 18,705 | ||||||
Others | 991 | 1,229 | ||||||
29,399 | 37,342 | |||||||
F-23
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
10. | DIVIDEND PAYABLE |
11. | SHAREHOLDERS’ EQUITY |
12. | RESTRICTED NET ASSETS |
F-24
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
F-25
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
F-26
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
For the Year Ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
US$ | US$ | US$ | ||||||||||
Non-PRC | (180 | ) | (3,194 | ) | (174 | ) | ||||||
PRC | 20,973 | 45,346 | 50,585 | |||||||||
20,793 | 42,152 | 50,411 | ||||||||||
For the Year Ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
US$ | US$ | US$ | ||||||||||
Current tax expense | 2,868 | 13,255 | 5,661 | |||||||||
Deferred tax expense (benefit) | 5,589 | 5,550 | (7,860 | ) | ||||||||
8,457 | 18,805 | (2,199 | ) | |||||||||
For the Year Ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
US$ | US$ | US$ | ||||||||||
Income before income taxes | 20,793 | 42,152 | 50,411 | |||||||||
Income tax computed at applicable tax rates (2007: 33% 2008 and 2009: 25%) | 6,862 | 10,538 | 12,603 | |||||||||
Effect of different tax rates in different jurisdictions | 61 | 734 | 20 | |||||||||
Non-deductible expenses | 2,765 | 1,799 | 2,245 | |||||||||
Effect of preferential tax rate | (8,391 | ) | (2,931 | ) | (10,691 | ) | ||||||
Effect of tax rate changes | 1,451 | — | (9,525 | ) | ||||||||
Investment basis difference in PRC Domestic Entities | 4,551 | 6,599 | 1,488 | |||||||||
Changes in valuation allowance | 130 | 203 | 364 | |||||||||
Decrease in unrecognized tax benefits | — | (24 | ) | (165 | ) | |||||||
Changes in interest and penalty on unrecognized tax benefits | 1,028 | 1,887 | 1,462 | |||||||||
8,457 | 18,805 | (2,199 | ) | |||||||||
F-27
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
For the Year Ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
US$ | US$ | US$ | ||||||||||
Balance—beginning | 767 | 2,667 | 13,810 | |||||||||
Additions related to tax positions in current year | 1,900 | 10,985 | — | |||||||||
Reductions related to tax positions in prior years | — | (24 | ) | (165 | ) | |||||||
Foreign currency adjustment | — | 182 | 12 | |||||||||
Balance—end | 2,667 | 13,810 | 13,657 | |||||||||
For the Year Ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
US$ | US$ | US$ | ||||||||||
(amounts in thousands except for the per share data) | ||||||||||||
The aggregate amount | (8,391 | ) | (2,931 | ) | (10,691 | ) | ||||||
The aggregate effect on basic and diluted earnings per share: | ||||||||||||
—Basic | 0.11 | 0.04 | 0.14 | |||||||||
—Diluted | 0.11 | 0.04 | 0.14 | |||||||||
F-28
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
December 31, | ||||||||
2008 | 2009 | |||||||
US$ | US$ | |||||||
Deferred tax assets, current portion | ||||||||
Accrued expenses | 715 | 471 | ||||||
Net operating losses | 715 | — | ||||||
Inventories | — | 123 | ||||||
Total deferred tax assets, current portion | 1,430 | 594 | ||||||
Deferred tax assets, non-current portion | ||||||||
Net operating losses | 688 | 1,335 | ||||||
Less: valuation allowance | (688 | ) | (828 | ) | ||||
Total deferred tax assets, non-current portion | — | 507 | ||||||
Deferred tax liabilities, current portion | ||||||||
Deferred revenue | — | (123 | ) | |||||
Deferred tax liabilities, non-current portion | ||||||||
Investment basis in PRC Domestic Entities | (13,991 | ) | (5,687 | ) | ||||
Deferred tax assets, current portion, net | 1,430 | 471 | ||||||
Deferred tax assets, non-current portion, net | — | 507 | ||||||
Deferred tax liabilities, non-current portion, net | (13,991 | ) | (5,687 | ) | ||||
F-29
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
14. | SHARE-BASED PAYMENTS |
F-30
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
Weighted- | Weighted- | Weighted | ||||||||||||||||||
Average | Average | Average | ||||||||||||||||||
per Share | Grant-date | Remaining | Aggregated | |||||||||||||||||
Number of | Exercise | Fair Value | Contractual | Intrinsic | ||||||||||||||||
Options Granted to Employees | Shares* | Price | per Share | Term (Years) | Value | |||||||||||||||
Outstanding, January 1, 2007 | 4,865,838 | |||||||||||||||||||
Granted | 992,554 | US$ | 2.81 | |||||||||||||||||
Outstanding, December 31, 2007 | 5,858,392 | |||||||||||||||||||
Granted | 986,554 | US$ | 3.75 | |||||||||||||||||
Outstanding, December 31, 2008 | 6,844,946 | US$ | 3.81 | US$ | 1.69 | |||||||||||||||
Granted | 1,033,654 | US$ | 10.00 | US$ | 1.95 | |||||||||||||||
Repurchased | (35,000 | ) | US$ | 1.97 | US$ | 0.59 | ||||||||||||||
Outstanding, December 31, 2009 | 7,843,600 | US$ | 4.53 | US$ | 1.73 | 8.86 | US$ | 20,658 | ||||||||||||
Vested and expected to vest at December 31, 2009 | 7,843,600 | US$ | 4.53 | US$ | 1.73 | 8.86 | US$ | 20,658 | ||||||||||||
Exercisable at December 31, 2009 | 4,498,783 | US$ | 3.04 | US$ | 1.10 | 8.49 | US$ | 16,743 | ||||||||||||
* | Including both voting and non voting shares. |
F-31
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
2007 | 2008 | 2009 | ||||||||||
Risk-free interest rate | 3.61 | % | 1.69 | % | 3.39 | % | ||||||
Dividend yield | — | 1 | % | — | ||||||||
Expected volatility range | 53.20 | % | 77.67 | % | 36.03 | % | ||||||
Weighted average expected life | 4.45 years | 3.59 years | 6.32 years |
2007 | 2008 | 2009 | ||||||||||
Risk-free interest rate | 3.24%- 3.44% | 1.14%-3.39% | 1.75%-2.52% | |||||||||
Dividend yield | — | 1% | — | |||||||||
Expected volatility range | 53.20% | 77.67% | 36.03% | |||||||||
Weighted average expected life | — | — | — |
For the Year Ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
US$ | US$ | US$ | ||||||||||
Cost of revenues | 160 | 268 | 489 | |||||||||
Selling expenses | 142 | 323 | 595 | |||||||||
General and administrative expenses | 1,915 | 2,126 | 3,056 | |||||||||
2,217 | 2,717 | 4,140 | ||||||||||
15. | RELATED PARTY TRANSACTIONS |
Name of Related Parties | Relationship with the Group | |
Tianquan Vincent Mo | Executive chairman of the board of directors | |
Jiangong Dai | Chief executive officer of the Company | |
CNED Hengshui Zhong Cheng Wanyuan Home Co., Ltd. (“Hengshui”) | A company under the control of Mr. Tianquan Vincent Mo |
F-32
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
b) | The Group had the following related party transactions for the years ended December 31, 2007 2008 and 2009: |
2007 | 2008 | 2009 | ||||||||||
US$ | US$ | US$ | ||||||||||
Short-term interest-free loans to: | ||||||||||||
Tianquan Vincent Mo | — | 279 | 326 | |||||||||
Jiangong Dai | — | 272 | 264 | |||||||||
Repayment of interest-free loans by: | ||||||||||||
Tianquan Vincent Mo | 179 | 292 | 198 | |||||||||
Jiangong Dai | — | 317 | 235 | |||||||||
Short-term Loan to: | ||||||||||||
Hengshui | — | — | 7,323 | |||||||||
Repayment of short-term loan by: | ||||||||||||
Hengshui | — | — | 637 | |||||||||
Interest on loan to: | ||||||||||||
Hengshui | — | — | 85 |
c) | The Group had the following related party balances at the end of the period: |
As at December 31, | ||||||||
2008 | 2009 | |||||||
US$ | US$ | |||||||
Amount due from related parties: | ||||||||
Tianquan Vincent Mo * | 493 | 621 | ||||||
Jiangong Dai * | 293 | 322 | ||||||
Hengshui ** | — | 6,686 | ||||||
786 | 7,629 | |||||||
* | The balances as of December 31, 2008 and 2009 were unsecured, interest-free and repayable on demand. | |
** | The loan bears a stated interest rate of 10% per annum with a fixed repayment term of 6 months. |
16. | EMPLOYEE DEFINED CONTRIBUTION PLAN |
F-33
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
17. | COMMITMENTS AND CONTINGENCIES |
US$ | ||||
2010 | 3,333 | |||
2011 | 2,480 | |||
2012 | 2,063 | |||
7,876 | ||||
18. | SEGMENT REPORTING |
F-34
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
19. | EARNINGS PER SHARE |
2007 | 2008 | 2009 | ||||||||||
US$ | US$ | US$ | ||||||||||
(amounts in thousands except for the number of shares and per share data) | ||||||||||||
Numerator: | ||||||||||||
Net income attributable to ordinary shareholders used in calculating income per ordinary share—basic and diluted | 12,211 | 23,381 | 52,652 | |||||||||
Denominator: | ||||||||||||
Weighted average number of ordinary shares outstanding used in calculating basic earnings per share | 74,020,217 | 74,020,217 | 73,986,129 | |||||||||
Employee stock options | 2,977,193 | 3,071,980 | 3,432,831 | |||||||||
Weighted average number of ordinary shares outstanding used in calculating diluted earnings per share | 76,997,410 | 77,092,197 | 77,418,960 | |||||||||
Basic earnings per share | 0.16 | 0.32 | 0.71 | |||||||||
Diluted earnings per share | 0.16 | 0.30 | 0.68 | |||||||||
20. | FAIR VALUE MEASUREMENT |
F-35
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
Fair Value Measurement at December 31, 2009 | ||||||||||||||||
Quoted Prices in | ||||||||||||||||
Active Markets for | Significant Other | Unobservable | Fair Value at | |||||||||||||
Identical Assets | Observable Inputs | Inputs | December 31, | |||||||||||||
(Level 1) | (Level 2) | (Level 3) | 2009 | |||||||||||||
US$ | US$ | US$ | US$ | |||||||||||||
Trading securities: | ||||||||||||||||
Adjustable rate structured notes | — | 7,323 | — | 7,323 | ||||||||||||
Fair Value Measurement at December 31, 2008 | ||||||||||||||||
Quoted Prices in | ||||||||||||||||
Active Markets for | Significant Other | Unobservable | Fair Value at | |||||||||||||
Identical Assets | Observable Inputs | Inputs | December 31, | |||||||||||||
(Level 1) | (Level 2) | (Level 3) | 2008 | |||||||||||||
US$ | US$ | US$ | US$ | |||||||||||||
Trading securities: | ||||||||||||||||
Adjustable rate structured notes | — | 7,315 | — | 7,315 | ||||||||||||
21. | SUBSEQUENT EVENTS |
F-36
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
22. | PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION (See Note 12) |
As at December 31, | ||||||||
2008 | 2009 | |||||||
US$ | US$ | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash | 83 | 112 | ||||||
Amount due from related party | 245 | 245 | ||||||
Total current assets | 328 | 357 | ||||||
Non-current assets: | ||||||||
Investment in subsidiaries and PRC Domestic Entities | 53,024 | 108,703 | ||||||
Total assets | 53,352 | 109,060 | ||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accrued expenses and other liabilities | 3 | 3 | ||||||
Dividend Payable | 24,200 | 43,906 | ||||||
Amount due to subsidiaries | 15,866 | 40,713 | ||||||
Total liabilities | 40,069 | 84,622 | ||||||
Commitments and contingencies | ||||||||
Shareholders’ equity: | ||||||||
Ordinary shares (par value of HK$1 per share at December 31, 2008 and 2009, respectively; Authorized—600,000,000 shares at December 31, 2008 and 2009 respectively; Issued and outstanding—74,020,217 and 73,932,217 shares at December 31, 2008 and 2009, respectively) | 9,501 | 9,489 | ||||||
Additional paid-in capital | 35,707 | 9,279 | ||||||
Accumulated other comprehensive income | 5,582 | 5,670 | ||||||
Accumulated deficits | (37,507 | ) | — | |||||
Total shareholders’ equity | 13,283 | 24,438 | ||||||
Total liabilities, and shareholders’ equity | 53,352 | 109,060 | ||||||
F-37
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
For the Year Ended | For the Year Ended | For the Year Ended | ||||||||||
December 31, 2007 | December 31, 2008 | December 31, 2009 | ||||||||||
US$ | US$ | US$ | ||||||||||
General and administrative expenses | (62 | ) | — | — | ||||||||
Operating loss | (62 | ) | — | — | ||||||||
Equity in profits of subsidiaries and PRC Domestic Entities | 12,269 | 20,557 | 52,611 | |||||||||
Foreign exchange loss | — | 2,824 | 41 | |||||||||
Interest income | 4 | — | — | |||||||||
Net income | 12,211 | 23,381 | 52,652 | |||||||||
2007 | 2008 | 2009 | ||||||||||
US$ | US$ | US$ | ||||||||||
Net cash used in operating activities | (58 | ) | (3 | ) | — | |||||||
Net cash (used in) provided by investing activities | (127 | ) | 16 | 29 | ||||||||
Net (decrease) increase in cash | (185 | ) | 13 | 29 | ||||||||
Cash at beginning of the year | 255 | 70 | 83 | |||||||||
Cash at end of the year | 70 | 83 | 112 | |||||||||
Supplemental schedule of cash flow information: | ||||||||||||
Dividend paid by subsidiaries of the Company: | 2,647 | 16,210 | 24,241 |
F-38
Table of Contents
As at | ||||||||||
December 31, | June 30, | |||||||||
Notes | 2009* | 2010 | ||||||||
US$ | US$ | |||||||||
(Unaudited) | ||||||||||
ASSETS | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | 92,239 | 105,368 | ||||||||
Short-term investments | 2 | 28,558 | 37,550 | |||||||
Accounts receivable (net of allowance of US$4,432 and US$4,045 as of December 31, 2009 and June 30, 2010, respectively) | 3 | 13,985 | 11,948 | |||||||
Prepayment and other current assets | 4 | 1,952 | 2,655 | |||||||
Amounts due from related parties | 10 | 7,629 | 10,529 | |||||||
Deferred tax assets, current | 471 | 473 | ||||||||
Inventories | 4,390 | 8,222 | ||||||||
Total current assets | 149,224 | 176,745 | ||||||||
Non-current assets: | ||||||||||
Property and equipment, net | 5 | 4,220 | 6,778 | |||||||
Deferred tax assets, non current | 507 | 527 | ||||||||
Other non-current assets | 543 | 1,029 | ||||||||
Total Non-current assets | 5,270 | 8,334 | ||||||||
Total assets | 154,494 | 185,079 | ||||||||
* | Amounts for the year ended December 31, 2009 were derived from the December 31, 2009 audited consolidated financial statements. |
F-39
Table of Contents
As at | ||||||||||
December 31, | June 30, | |||||||||
Notes | 2009* | 2010 | ||||||||
US$ | US$ | |||||||||
(Unaudited) | ||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||
Current liabilities: | ||||||||||
Deferred revenue (including related party amount of nil and US$183 as at December 31, 2009 and June 30, 2010, respectively) | 28,795 | 54,346 | ||||||||
Accrued expenses and other liabilities | 6 | 37,342 | 31,061 | |||||||
Dividend payable | 43,906 | 44,147 | ||||||||
Share based compensation liability | 9 | 11,129 | — | |||||||
Income tax payable | 3,134 | 2,633 | ||||||||
Total current liabilities | 124,306 | 132,187 | ||||||||
Deferred tax liability, non-current | 8 | 5,687 | 9,441 | |||||||
Total liabilities | 129,993 | 141,628 | ||||||||
Commitments and contingencies | 12 | |||||||||
Shareholders’ equity: | ||||||||||
Ordinary shares (par value of Hong Kong Dollar (HK$) 1 per share; Authorized—600,000,000 shares; Issued and outstanding—73,932,217 shares and 73,932,217 shares as at December 31, 2009 and June 30, 2010, respectively) | 9,489 | 9,489 | ||||||||
Additional paid-in capital | 9,279 | 22,225 | ||||||||
Accumulated other comprehensive income | 15 | 5,670 | 6,376 | |||||||
Retained earnings | — | 5,309 | ||||||||
Total SouFun Holdings Limited’s equity | 24,438 | 43,399 | ||||||||
Noncontrolling interests | 63 | 52 | ||||||||
Total shareholders’ equity | 24,501 | 43,451 | ||||||||
Total liabilities and shareholders’ equity | 154,494 | 185,079 | ||||||||
* | Amounts for the year ended December 31, 2009 were derived from the December 31, 2009 audited consolidated financial statements. |
F-40
Table of Contents
UNAUDITED CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands of United States Dollar (“US$”)
except for number of shares and per share data)
For the Six Months Ended | ||||||||||
June 30, | ||||||||||
Notes | 2009 | 2010 | ||||||||
US$ | US$ | |||||||||
(Unaudited) | (Unaudited) | |||||||||
Revenues | ||||||||||
Marketing services(including related party amount of nil and US$375 for the six months ended June 30, 2009 and 2010, respectively) | 10 | 29,503 | 45,586 | |||||||
Listing services | 5,398 | 14,006 | ||||||||
Other value-added services and products | 2,056 | 8,593 | ||||||||
Total revenues | 36,957 | 68,185 | ||||||||
Cost of revenues | ||||||||||
Cost of services | (9,506 | ) | (18,164 | ) | ||||||
Cost of value-added services and products | (1,185 | ) | (6,887 | ) | ||||||
Total cost of revenues | (10,691 | ) | (25,051 | ) | ||||||
Gross profit | 26,266 | 43,134 | ||||||||
Operating expenses: | ||||||||||
Selling expenses | (9,988 | ) | (16,742 | ) | ||||||
General and administrative expenses | (9,379 | ) | (14,330 | ) | ||||||
Operating income | 6,899 | 12,062 | ||||||||
Foreign exchange loss | (17 | ) | (481 | ) | ||||||
Interest income (including related party amount of nil and US$305 for the six months ended June 30, 2009 and 2010, respectively) | 613 | 1,162 | ||||||||
Realized gain—trading securities | 85 | 164 | ||||||||
Government grants | 336 | 356 | ||||||||
Income before income tax | 7,916 | 13,263 | ||||||||
Income tax expense | 8 | (4,190 | ) | (7,965 | ) | |||||
Net income | 3,726 | 5,298 | ||||||||
Net loss attributable to noncontrolling interests | (20 | ) | (11 | ) | ||||||
Net income attributable to SouFun Holdings Limited shareholders | 3,746 | 5,309 | ||||||||
Earnings per share | 13 | |||||||||
Basic | 0.05 | 0.07 | ||||||||
Diluted | 0.05 | 0.07 | ||||||||
Weighted average number of ordinary shares outstanding: | 13 | |||||||||
Basic | 74,020,217 | 73,932,217 | ||||||||
Diluted | 77,386,202 | 77,851,697 |
F-41
Table of Contents
For the Six Months Ended | ||||||||
June 30, | ||||||||
2009 | 2010 | |||||||
US$ | US$ | |||||||
(Unaudited) | (Unaudited) | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net income | 3,726 | 5,298 | ||||||
Adjustments to reconcile net income to net cash generated from operating activities: | ||||||||
Share-based compensation | 2,013 | 1,817 | ||||||
Depreciation of property and equipment | 601 | 982 | ||||||
Deferred tax expense | 353 | 3,706 | ||||||
Allowance for doubtful accounts | 1,484 | 1,609 | ||||||
Unrealized foreign exchange loss | 17 | 483 | ||||||
Changes in operating assets and liabilities: | ||||||||
(Decrease) increase in accounts receivable | (1,113 | ) | 488 | |||||
Increase in prepayments and other current assets | (147 | ) | (689 | ) | ||||
Increase in other non-current assets | — | (481 | ) | |||||
Increase (decrease) in accrued expenses and other liabilities | 1,764 | (6,463 | ) | |||||
Increase in deferred revenue (including related party amounts of nil and US$183 for the six months ended June 30, 2009 and 2010, respectively) | 14,262 | 25,297 | ||||||
Change in inventories | (1,792 | ) | (3,791 | ) | ||||
Increase (decrease) in income tax payable | 2,837 | (519 | ) | |||||
Deposit paid to related parties for services | — | (9,539 | ) | |||||
Net cash generated from operating activities | 24,005 | 18,198 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Payment for short-term investments | (13,174 | ) | (32,244 | ) | ||||
Proceeds received from maturity of short-term investments | 21,957 | 23,456 | ||||||
Acquisition of property and equipment | (67 | ) | (3,558 | ) | ||||
Proceeds from disposal of property and equipment | 91 | 53 | ||||||
Change in amount due from related parties | 120 | — | ||||||
Repayment of loan from a related party | — | 6,693 | ||||||
Net cash generated from (used in) investing activities | 8,927 | (5,600 | ) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Payment of dividends | (24,241 | ) | — | |||||
Net cash used in financing activities | (24,241 | ) | — | |||||
Exchange rate effect on cash and cash equivalents | 22 | 531 | ||||||
Net increase in cash and cash equivalents | 8,713 | 13,129 | ||||||
Cash and cash equivalents at beginning of period | 63,022 | 92,239 | ||||||
Cash and cash equivalents at end of period | 71,735 | 105,368 | ||||||
Supplemental schedule of cash flow information: | ||||||||
Income tax paid | 570 | 2,246 | ||||||
Non-monetary exchange of services for prepaid cards | 4,371 | 11,891 |
F-42
Table of Contents
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
F-43
Table of Contents
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
F-44
Table of Contents
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
• | the WOFEs have unilateral discretion in setting the technical service fees charged to the PRC Domestic Entities; | |
• | the WOFEs are obligated to provide financial support to the PRC Domestic Entities in the event the PRC Domestic Entities incur losses; | |
• | the annual budget of the PRC Domestic Entities should be assessed and approved by the WOFEs; | |
• | the legal shareholders agree to remit any dividends, received from the PRC Domestic Entities, to the WOFEs; and | |
• | the PRC Domestic Entities are obligated to transfer their entire retained earnings after deduction of PRC income tax to the WOFEs upon the WOFEs’ request. |
F-45
Table of Contents
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
2. | SHORT TERM INVESTMENTS |
December 31, | June 30, | |||||||
2009 | 2010 | |||||||
US$ | US$ | |||||||
(Unaudited) | ||||||||
Held-to-maturity securities | ||||||||
—Fixed rate time deposits | 21,235 | 30,187 | ||||||
Trading securities | ||||||||
—Adjustable rate investments (1) | 7,323 | 7,363 | ||||||
28,558 | 37,550 | |||||||
(1) | As of June 30, 2010, the Group owned US$7,363 (December 31, 2009—US$7,323) of trading securities which mature in September 29, 2010 (December 31, 2009—March 15, 2010). This investment will pay variable interest ranging from 1.5% to 6% (December 31, 2009—1.98% to 6%) based on a formula linked to a trading range between the Euro and US$. |
Gross | Gross | |||||||||||||||
Carrying | Unrealized | Unrealized | Fair | |||||||||||||
Value | Gains | Losses | Value | |||||||||||||
US$ | US$ | US$ | US$ | |||||||||||||
Trading securities | ||||||||||||||||
—Adjustable rate investments | 7,363 | — | — | 7,363 | ||||||||||||
F-46
Table of Contents
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
3. | ACCOUNTS RECEIVABLE |
December 31, | June 30, | |||||||
2009 | 2010 | |||||||
US$ | US$ | |||||||
(Unaudited) | ||||||||
Accounts receivable | 18,417 | 15,993 | ||||||
Allowance for doubtful accounts | (4,432 | ) | (4,045 | ) | ||||
Accounts receivable, net | 13,985 | 11,948 | ||||||
For the Six Months Ended | ||||||||
June 30, | ||||||||
2009 | 2010 | |||||||
US$ | US$ | |||||||
(Unaudited) | (Unaudited) | |||||||
Movement in allowance for doubtful accounts: | ||||||||
Balance at beginning of the period | 3,330 | 4,432 | ||||||
Additional provision charged to expense | 1,484 | 1,609 | ||||||
Write-offs | (2,223 | ) | (2,021 | ) | ||||
Foreign currency adjustment | — | 25 | ||||||
Balance at end of the period | 2,591 | 4,045 | ||||||
4. | PREPAYMENTS AND OTHER CURRENT ASSETS |
December 31, | June 30, | |||||||
2009 | 2010 | |||||||
US$ | US$ | |||||||
(Unaudited) | ||||||||
Prepaid expenses | 514 | 684 | ||||||
Advance to employees | 355 | 799 | ||||||
Rental and other deposits | 625 | 551 | ||||||
Interest receivables | 334 | 598 | ||||||
Others | 124 | 23 | ||||||
1,952 | 2,655 | |||||||
F-47
Table of Contents
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
5. | PROPERTY AND EQUIPMENT, NET |
December 31, | June 30, | |||||||
2009 | 2010 | |||||||
US$ | US$ | |||||||
(Unaudited) | ||||||||
Office equipment | 6,015 | 8,519 | ||||||
Motor vehicles | 526 | 755 | ||||||
Leasehold improvement | 1,185 | 1,965 | ||||||
Total | 7,726 | 11,239 | ||||||
Less: Accumulated depreciation | (3,506 | ) | (4,461 | ) | ||||
4,220 | 6,778 | |||||||
6. | ACCRUED EXPENSES AND OTHER LIABILITIES |
December 31, | June 30, | |||||||
2009 | 2010 | |||||||
US$ | US$ | |||||||
(Unaudited) | ||||||||
Payroll and welfare benefit | 5,487 | 7,842 | ||||||
Other taxes and surcharges payable | 11,921 | 10,753 | ||||||
Accrued unrecognized tax benefits and related interests and penalties | 18,705 | 10,644 | ||||||
Others | 1,229 | 1,822 | ||||||
37,342 | 31,061 | |||||||
7. | RESTRICTED NET ASSETS |
F-48
Table of Contents
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
8. | TAXATION |
F-49
Table of Contents
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
9. | SHARE-BASED PAYMENTS |
Weighted- | Weighted- | Weighted | ||||||||||||||||||
Average | Average | Average | ||||||||||||||||||
per Share | Grant-date | Remaining | Aggregated | |||||||||||||||||
Number of | Exercise | Fair Value | Contractual | Intrinsic | ||||||||||||||||
Options Granted to Employees | Shares* | Price | per Share | Term (Years) | Value | |||||||||||||||
Outstanding, December 31, 2009 | 7,843,600 | US$ | 4.53 | US$ | 1.73 | |||||||||||||||
Granted | 37,500 | US$ | 10.00 | US$ | 2.23 | |||||||||||||||
Forfeited | 28,168 | US$ | 6.99 | US$ | 2.64 | |||||||||||||||
Expired | 28,382 | US$ | 3.94 | US$ | 1.12 | |||||||||||||||
Reclassified from liability awards | 1,739,500 | US$ | 0.15 | US$ | 0.02 | |||||||||||||||
Outstanding, June 30, 2010 | 9,564,050 | US$ | 3.78 | US$ | 1.42 | 8.07 | 34,879 | |||||||||||||
Vested and expected to vest at June 30, 2010 | 9,564,050 | US$ | 3.78 | US$ | 1.42 | 8.07 | 34,879 | |||||||||||||
Exercisable at June 30, 2010 | 6,258,150 | US$ | 2.29 | US$ | 0.79 | 7.65 | 30,148 | |||||||||||||
* | Including both voting and nonvoting shares. |
F-50
Table of Contents
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
For Six Months Ended | For Six Months Ended | |||||||
June 30, | June 30 | |||||||
2009 | 2010 | |||||||
US$ | US$ | |||||||
Risk-free interest rate | 1.62%-1.95 | % | 1.70%-2.65 | % | ||||
Dividend yield | — | — | ||||||
Expected volatility range | 51.91 | % | 39.82 | % | ||||
Weighted average expected life | — | — | ||||||
Suboptimal exercise factor | 1.5 | 1.5 |
For Six Months Ended | ||||
June 30, | ||||
2010* | ||||
US$ | ||||
Risk-free interest rate | 2.47%-4.27 | % | ||
Dividend yield | — | |||
Expected volatility range | 39.72 | % | ||
Weighted average expected life | — to 7.80 years | |||
Suboptimal exercise factor | 1.5 |
* | No equity awards granted in the six months ended June 30, 2009 |
For the Six Months Ended | ||||||||
June 30, | ||||||||
2009 | 2010 | |||||||
US$ | US$ | |||||||
(Unaudited) | (Unaudited) | |||||||
Cost of revenues | 238 | 251 | ||||||
Selling expenses | 295 | 338 | ||||||
General and administrative expenses | 1,480 | 1,228 | ||||||
2,013 | 1,817 | |||||||
F-51
Table of Contents
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
10. | RELATED PARTY TRANSACTIONS |
a) | Related Parties |
Name of Related Parties | Relationship with the Group | |
Tianquan Vincent Mo | Executive chairman of the board of directors | |
Jiangong Dai | Chief executive officer of the Company | |
CNED Hengshui Zhong Cheng Wanyuan Home CO., Ltd. (“Hengshui”) | A company under the control of Mr. Tianquan Vincent Mo | |
Beijing Dong Fang Xi Mei Investment Consulting Co., Ltd. (“Dong Fang Xi Mei”) | A company under the control of Mr. Tianquan Vincent Mo |
b) | The Group had the following related party transactions for each of the periods stated below: |
For the Six Months Ended | ||||||||
June 30, | ||||||||
2009 | 2010 | |||||||
US$ | US$ | |||||||
(Unaudited) | (Unaudited) | |||||||
Short-term interest-free loans to: | ||||||||
Tianquan Vincent Mo | 116 | 12 | ||||||
Repayment of interest-free loans by: | ||||||||
Jiangong Dai | 235 | — | ||||||
Repayment of loan by: | ||||||||
Hengshui | — | 6,693 | ||||||
Interest on loan to: | ||||||||
Hengshui | — | 305 | ||||||
Commitment deposit paid to: | ||||||||
Hengshui | — | 7,342 | ||||||
Commitment deposit paid to: | ||||||||
Dong Fang Xi Mei | — | 2,197 | ||||||
Marketing services provided to: | ||||||||
Dong Fang Xi Mei | — | 375 | ||||||
Advance received from: | ||||||||
Hengshui | — | 183 |
F-52
Table of Contents
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
c) | The Group had the following related party balances at the end of the period: |
December 31, | June 30, | |||||||
2009 | 2010 | |||||||
US$ | US$ | |||||||
Amount due from related parties: | ||||||||
Tianquan Vincent Mo* | 621 | 633 | ||||||
Jiangong Dai* | 322 | 324 | ||||||
Hengshui** | 6,686 | 7,363 | ||||||
Dong Fang Xi Mei*** | — | 2,209 | ||||||
7,629 | 10,529 | |||||||
Advance from related party: | ||||||||
Hengshui** | — | 183 | ||||||
* | The balances as of December 31, 2009 and June 30, 2010 were unsecured, interest-free and repayable on demand. | |
** | The amount as of December 31, 2009 represents a loan to Hengshui. The loan bears a stated interest rate of 10% per annum with a fixed repayment term of 6 months. The amount has been repaid on May 5, 2010. | |
On May 4, 2010, the Company paid a commitment deposit of US$7,342 to Hengshui in exchange for being appointed as its exclusive online marketing or listing service provider. The deposit is interest free. Hengshui has pledged as collateral an unperfected security interest over some of its properties. The deposit will be repaid within six months after the date of receipt of the deposit by Hengshui. | ||
*** | The amount represents a commitment deposit of US$2,197 paid by the Company to Dong Fang Xi Mei in exchange for being appointed the exclusive online marketing or listing service provider for a property development in Hainan, China. The deposit is interest-free and is not secured by any collateral or security interest. The deposit was to be repaid within six months after the date of receipt of the deposit by Dong Fang Xi Mei. However, pursuant to a termination agreement dated July 5, 2010, Dong Fang Xi Mei returned to the Company the commitment deposit in full on July 16, 2010 and the online marketing services contract was terminated. |
11. | EMPLOYEE DEFINED CONTRIBUTION PLAN |
F-53
Table of Contents
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
12. | COMMITMENTS AND CONTINGENCIES |
US$ | ||||
Six months ended December 31, | ||||
2010 | 2,666 | |||
Years ended December 31, | ||||
2011 | 4,609 | |||
2012 | 3,849 | |||
2013 | 427 | |||
11,551 | ||||
F-54
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NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
13. | EARNINGS PER SHARE |
For the Six Months Ended | ||||||||
June 30, | ||||||||
2009 | 2010 | |||||||
US$ | US$ | |||||||
(Unaudited) | (Unaudited) | |||||||
(amounts in thousands except for the number of shares and per share data) | ||||||||
Numerator: | ||||||||
Net income attributable to ordinary shareholders used in calculating earnings per ordinary share—basic and diluted | 3,746 | 5,309 | ||||||
Denominator: | ||||||||
Weighted average number of ordinary shares outstanding used in calculating basic earnings per share | 74,020,217 | 73,932,217 | ||||||
Employee stock options* | 3,365,985 | 3,919,480 | ||||||
Weighted average number of ordinary shares outstanding used in calculating diluted income per share | 77,386,202 | 77,851,697 | ||||||
Basic earnings per share | 0.05 | 0.07 | ||||||
Diluted earnings per share | 0.05 | 0.07 | ||||||
* | Options to purchase 1,979,108 ordinary shares (exercise price of US$5 per share) and 2,039,258 ordinary shares (exercise price range from US$5 to US$10 per share) were outstanding during the six months ended June 30, 2009 and 2010 but were not included in the computation of diluted earnings per share because the options’ exercise price was greater than the average fair value of the ordinary shares and, therefore, the effect would be antidilutive. |
14. | FAIR VALUE MEASUREMENT |
F-55
Table of Contents
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
Fair Value Measurement at June 30, 2010 | ||||||||||||||||
Quoted Prices in | ||||||||||||||||
Active | ||||||||||||||||
Markets for | Significant Other | Unobservable | Fair Value at | |||||||||||||
Identical Assets | Observable Inputs | Inputs | June 30, | |||||||||||||
(Level 1) | (Level 2) | (Level 3) | 2010 | |||||||||||||
US$ | US$ | US$ | US$ | |||||||||||||
Trading securities: | ||||||||||||||||
Adjustable rate structured notes | — | 7,363 | — | 7,363 | ||||||||||||
15. | COMPREHENSIVE INCOME |
For the Six Months Ended | ||||||||
June 30, | ||||||||
2009 | 2010 | |||||||
US$ | US$ | |||||||
(unaudited) | (unaudited) | |||||||
Net income | 3,726 | 5,298 | ||||||
Change in cumulative translation adjustment | 24 | 741 | ||||||
Comprehensive income | 3,750 | 6,039 | ||||||
December 31, | June 30, | |||||||
2009 | 2010 | |||||||
US$ | US$ | |||||||
(audited) | (unaudited) | |||||||
Cumulative translation adjustment | 5,670 | 6,376 | ||||||
16. | SUBSEQUENT EVENTS |
F-56
Table of Contents
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS—(Continued)
(Amounts in thousands of United States Dollar (“US$”),
except for number of shares and per share data)
F-57
Table of Contents
Deutsche Bank Securities | Goldman Sachs (Asia) L.L.C. |
Table of Contents
Item 6. | Indemnification of Directors and Officers |
Item 7. | Recent Sales of Unregistered Securities |
Underwriting | ||||||||||||||||
Number of | Consideration | discount and | ||||||||||||||
Purchaser | Date of sale or issuance | securities | (US$/share) | commission | ||||||||||||
Certain directors, officers and employees as a group | December 31, 2007 | options to purchase a total of 992,554 non-voting ordinary shares | US$ | 5.00 | Not applicable | |||||||||||
Certain directors, officers and employees as a group | December 31, 2008 | options to purchase a total of 986,554 non-voting ordinary shares | US$ | 5.00 | Not applicable | |||||||||||
Certain directors, officers and employees as a group | December 31, 2009 | options to purchase a total of 1,033,654 non-voting ordinary shares | US$ | 10.00 | Not applicable | |||||||||||
Certain directors, officers and employees as a group | April 20, 2010 | options to purchase a total of 18,750 non-voting ordinary shares | US$ | 10.00 | Not applicable |
II-1
Table of Contents
Item 8. | Exhibits and Financial Statement Schedules |
Exhibit No. | Description of Exhibit | |||
1 | .1 | Form of Underwriting Agreement | ||
3 | .1 | Third Amended and Restated Memorandum and Articles of Association of the Registrant | ||
3 | .2 | Fourth Amended and Restated Memorandum and Articles of Association of the Registrant | ||
4 | .1 | Specimen ordinary share certificate | ||
4 | .2 | Specimen American depositary receipt, incorporated by reference to Registration Statement on Form F-6 (Registration No. 333- ) filed with the SEC | ||
4 | .3 | Form of Deposit Agreement, incorporated by reference to Registration Statement on Form F-6 (Registration No. 333- ) filed with the SEC | ||
4 | .4 | Shareholders’ Agreement, dated August 31, 2006 | ||
4 | .5 | Stock Related Award Incentive Plan of 1999 | ||
4 | .6 | 2010 Stock Incentive Plan | ||
4 | .7 | Investor’s Rights Agreement among the Registrant, General Atlantic, Apax, Next Decade, Media Partner and Digital Link, dated August 13, 2010 | ||
4 | .8 | Registration Rights Agreement among the Registrant, General Atlantic and Apax, dated August 13, 2010 | ||
4 | .9 | Options Exercise Agreement among Telstra International, the Registrant and Mr. Mo, dated August 12, 2010 | ||
5 | .1 | Opinion of Conyers, Dill & Pearman, Cayman Islands special counsel to the Registrant, regarding the validity of the ordinary shares being registered | ||
8 | .1 | Opinion of Conyers, Dill & Pearman, special Cayman Islands tax counsel to the Registrant, regarding tax matters | ||
8 | .2 | Opinion of Sidley Austin LLP regarding certain U.S. tax matters | ||
10 | .1 | Form of Employment Agreement | ||
10 | .2 | Form of Indemnification Agreement | ||
10 | .3 | Form of Loan Agreement between and among SouFun Network or SouFun Media and Mr. Mo and Mr. Dai as shareholders of a consolidated controlled entity | ||
10 | .4 | Form of Equity Pledge Agreement among SouFun Network or SouFun Media, Mr. Mo and/or Mr. Dai and/or other shareholders of a consolidated controlled entity pledging the shares of the consolidated controlled entity | ||
10 | .5 | Form of Shareholders’ Proxy Agreement among SouFun Network or SouFun Media, a consolidated controlled entity, Mr. Mo and/or Mr. Dai and/or other shareholders of the consolidated controlled entity | ||
10 | .6 | Form of Operating Agreement among SouFun Network or SouFun Media, a consolidated controlled entity, Mr. Mo and/or Mr. Dai and/or other shareholders of the consolidated controlled entity | ||
10 | .7 | Form of Exclusive Technical Consultancy and Services Agreement between SouFun Network or SouFun Media and a consolidated controlled entity | ||
10 | .8 | Form of Exclusive Call Option Agreement among SouFun Holdings Limited, Mr. Mo and/or Mr. Dai and/or other shareholders of a consolidated controlled entity, the consolidated controlled entity and SouFun Network and/or SouFun Media | ||
10 | .9 | Form of Amendment Agreement Relating to Exclusive Technical Consultancy and Services Agreement, Exclusive Call Option Agreement, Operating Agreement and Other Agreements among SouFun Network and/or SouFun Media, a consolidated controlled entity, Mr. Mo, Mr. Dai and/or other shareholders of the consolidated controlled entity and SouFun Holdings Limited | ||
10 | .10 | Form of Intra-group Memorandum of Understanding between SouFun Network or SouFun Media and a consolidated controlled entity |
II-2
Table of Contents
Exhibit No. | Description of Exhibit | |||
10 | .11 | Web Promotion Technical Service Contract, dated April 23, 2010, between CNED Hengshui Zhongcheng Wanyuan Home Co., Ltd. and SouFun Media | ||
10 | .12 | Individual Entrustment Loan Agreement, dated November 5, 2009, between CNED Hengshui Zhongcheng Wanyuan Home Co., Ltd., as borrower, and Bank of Communications, as lender, with SouFun Media, as principal | ||
10 | .13 | Web Promotion Technical Service Contract, dated February 5, 2010, between Beijing Dong Fang Xi Mei Investment Consulting Co., Ltd. and Beijing Technology | ||
10 | .14 | Termination Agreement With Respect to Web Promotion and Technical Service Contract, dated July 5, 2010, between Beijing Dong Fang Xi Mei Investment Consulting Co., Ltd. and Beijing SouFun Technical Development Co. Ltd. | ||
10 | .15 | Web Promotion Technical Service Contract, dated July 16, 2010, between Beijing Wei Ye Hang Real Estate Agency Co., Ltd. and Beijing SouFun Technical Development Co. Ltd. | ||
10 | .16 | Indemnity Agreement among Mr. Mo, CNED Hengshui Zhengcheng Wanyuan Home Co., Ltd. and the Registrant | ||
10 | .17* | Fee Letter Agreement, dated September 15, 2010, by and among the Registrant, Telstra International and IDG | ||
21 | .1 | List of subsidiaries of the Registrant | ||
23 | .1 | Consent of Ernst & Young Hua Ming | ||
23 | .2 | Consent of Conyers Dill & Pearman (included in Exhibit 5.1) | ||
23 | .3 | Consent of King & Wood | ||
23 | .4 | Consent of Jones Lang LaSalle Sallmanns Limited | ||
23 | .5 | Consent of CR-Nielsen | ||
23 | .6 | Consent of Data Center of China Internet | ||
23 | .7 | Consent of Shenzhen Union Strength Business Consulting Co., Ltd. | ||
23 | .8 | Consent of CCPIT Patent & Trademark Law Office | ||
23 | .9 | Consent of Qian Zhao, an independent director appointee | ||
23 | .10 | Consent of Sam Hanhui Sun, an independent director appointee | ||
23 | .11 | Consent of Jeff Xuesong Leng, an independent director appointee | ||
23 | .12 | Consent of Thomas Nicholas Hall, an independent director appointee | ||
24 | .1 | Power of Attorney (included on page II-5 of this Registration Statement) | ||
99 | .1 | Code of Business Conduct and Ethics of the Registrant | ||
99 | .2 | Anti-Fraud and Whistle-Blower Policy of the Registrant |
* | Filed herewith |
Item 9. | Undertakings |
II-3
Table of Contents
II-4
Table of Contents
By: | /s/ Tianquan Vincent Mo |
Signature | Capacity | |||
/s/ Tianquan Vincent Mo Tianquan Vincent Mo | Executive Chairman | |||
/s/ Quan Zhou Quan Zhou | Director | |||
/s/ Shan Li Shan Li | Director | |||
/s/ Richard Jiangong Dai Richard Jiangong Dai | President and Chief Executive Officer (principal executive officer) | |||
/s/ Lan Ying Guan Lan Ying Guan | Chief Financial Officer (principal financial officer) | |||
/s/ Ji Wenting Ji Wenting | Principal Accounting Officer |
II-5
Table of Contents
By: | /s/ Kate Ledyard |
Title: | Manager Law Debenture Corporate Services Inc. |
II-6
Table of Contents
Exhibit No. | Description of Exhibit | |||
1 | .1 | Form of Underwriting Agreement | ||
3 | .1 | Third Amended and Restated Memorandum and Articles of Association of the Registrant | ||
3 | .2 | Fourth Amended and Restated Memorandum and Articles of Association of the Registrant | ||
4 | .1 | Specimen ordinary share certificate | ||
4 | .2 | Specimen American depositary receipt, incorporated by reference to Registration Statement on Form F-6 (Registration No. 333- ) filed with the SEC | ||
4 | .3 | Form of Deposit Agreement, incorporated by reference to Registration Statement on Form F-6 (Registration No. 333- ) filed with the SEC | ||
4 | .4 | Shareholders’ Agreement, dated August 31, 2006 | ||
4 | .5 | Stock Related Award Incentive Plan of 1999 | ||
4 | .6 | 2010 Stock Incentive Plan | ||
4 | .7 | Investor’s Rights Agreement among the Registrant, General Atlantic, Apax, Next Decade, Media Partner and Digital Link, dated August 13, 2010 | ||
4 | .8 | Registration Rights Agreement among the Registrant, General Atlantic and Apax, dated August 13, 2010 | ||
4 | .9 | Options Exercise Agreement among Telstra International, the Registrant and Mr. Mo, dated August 12, 2010 | ||
5 | .1 | Opinion of Conyers, Dill & Pearman, Cayman Islands special counsel to the Registrant, regarding the validity of the ordinary shares being registered | ||
8 | .1 | Opinion of Conyers, Dill & Pearman, special Cayman Islands tax counsel to the Registrant, regarding tax matters | ||
8 | .2 | Opinion of Sidley Austin LLP regarding certain U.S. tax matters | ||
10 | .1 | Form of Employment Agreement | ||
10 | .2 | Form of Indemnification Agreement | ||
10 | .3 | Form of Loan Agreement between and among SouFun Network or SouFun Media and Mr. Mo and Mr. Dai as shareholders of a consolidated controlled entity | ||
10 | .4 | Form of Equity Pledge Agreement among SouFun Network or SouFun Media, Mr. Mo and/or Mr. Dai and/or other shareholders of a consolidated controlled entity pledging the shares of the consolidated controlled entity | ||
10 | .5 | Form of Shareholders’ Proxy Agreement among SouFun Network or SouFun Media, a consolidated controlled entity, Mr. Mo and/or Mr. Dai and/or other shareholders of the consolidated controlled entity | ||
10 | .6 | Form of Operating Agreement among SouFun Network or SouFun Media, a consolidated controlled entity, Mr. Mo and/or Mr. Dai and/or other shareholders of the consolidated controlled entity | ||
10 | .7 | Form of Exclusive Technical Consultancy and Services Agreement between SouFun Network or SouFun Media and a consolidated controlled entity | ||
10 | .8 | Form of Exclusive Call Option Agreement among SouFun Holdings Limited, Mr. Mo and/or Mr. Dai and/or other shareholders of a consolidated controlled entity, the consolidated controlled entity and SouFun Network and/or SouFun Media | ||
10 | .9 | Form of Amendment Agreement Relating to Exclusive Technical Consultancy and Services Agreement, Exclusive Call Option Agreement, Operating Agreement and Other Agreements among SouFun Network and/or SouFun Media, a consolidated controlled entity, Mr. Mo, Mr. Dai and/or other shareholders of the consolidated controlled entity and SouFun Holdings Limited | ||
10 | .10 | Form of Intra-group Memorandum of Understanding between SouFun Network or SouFun Media and a consolidated controlled entity |
Table of Contents
Exhibit No. | Description of Exhibit | |||
10 | .11 | Web Promotion Technical Service Contract, dated April 23, 2010, between CNED Hengshui Zhongcheng Wanyuan Home Co., Ltd. and SouFun Media | ||
10 | .12 | Individual Entrustment Loan Agreement, dated November 5, 2009, between CNED Hengshui Zhongcheng Wanyuan Home Co., Ltd., as borrower, and Bank of Communications, as lender, with SouFun Media, as principal | ||
10 | .13 | Web Promotion Technical Service Contract, dated February 5, 2010, between Beijing Dong Fang Xi Mei Investment Consulting Co., Ltd. and Beijing Technology | ||
10 | .14 | Termination Agreement With Respect to Web Promotion and Technical Service Contract, dated July 5, 2010, between Beijing Dong Fang Xi Mei Investment Consulting Co., Ltd. and Beijing SouFun Technical Development Co., Ltd. | ||
10 | .15 | Web Promotion Technical Service Contract, dated July 16, 2010, between Beijing Wei Ye Hang Real Estate Agency Co., Ltd. and Beijing SouFun Technical Development Co. Ltd. | ||
10 | .16 | Indemnity Agreement among Mr. Mo, CNED Hengshui Zhengcheng Wanyuan Home Co., Ltd. and the Registrant | ||
10 | .17* | Fee Letter Agreement, dated September 15, 2010, by and among the Registrant, Telstra International and IDG | ||
21 | .1 | List of subsidiaries of the Registrant | ||
23 | .1 | Consent of Ernst & Young Hua Ming | ||
23 | .2 | Consent of Conyers Dill & Pearman (included in Exhibit 5.1) | ||
23 | .3 | Consent of King & Wood | ||
23 | .4 | Consent of Jones Lang LaSalle Sallmanns Limited | ||
23 | .5 | Consent of CR-Nielsen | ||
23 | .6 | Consent of Data Center of China Internet | ||
23 | .7 | Consent of Shenzhen Union Strength Business Consulting Co., Ltd. | ||
23 | .8 | Consent of CCPIT Patent & Trademark Law Office | ||
23 | .9 | Consent of Qian Zhao, an independent director appointee | ||
23 | .10 | Consent of Sam Hanhui Sun, an independent director appointee | ||
23 | .11 | Consent of Jeff Xuesong Leng, an independent director appointee | ||
23 | .12 | Consent of Thomas Nicholas Hall, an independent director appointee | ||
24 | .1 | Power of Attorney (included on page II-5 of this Registration Statement) | ||
99 | .1 | Code of Business Conduct and Ethics of the Registrant | ||
99 | .2 | Anti-Fraud and Whistle-Blower Policy of the Registrant |
* | Filed herewith |