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SECURITIES AND EXCHANGE COMMISSION
o | REGISTRATION STATEMENT PURSUANT TO SECTION 12(B) OR 12(G) OF THE SECURITIES EXCHANGE ACT OF 1934 |
þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(Translation of Registrant’s name into English)
(Jurisdiction of incorporation or organization)
No. 333 North Chengdu Road
Shanghai, PRC 200041
People’s Republic of China
(Address of principal executive offices)
E-House (China) Holdings Limited
No. 333 North Chengdu Road
Shanghai, PRC 200041
People’s Republic of China
Phone: +86 21 6133 0808
Facsimile: +86 21 6133 0707
(Name, telephone, e-mail and/or facsimile number and address of company contact person)
Title of each class | Name of exchange on which registered | |
American Depositary Shares, each representing one ordinary share, par value $0.001 per share | New York Stock Exchange |
None
(Title of Class)
None
(Title of Class)
Large accelerated filerþ | Accelerated filero | Non-accelerated filero |
US GAAPþ | International Financial Reporting Standards as issued by the International Accounting Standards Boardo | Othero |
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Exhibit 4.5 | ||||||||
Exhibit 4.6 | ||||||||
Exhibit 4.9 | ||||||||
Exhibit 4.10 | ||||||||
Exhibit 4.13 | ||||||||
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Exhibit 4.16 | ||||||||
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Exhibit 4.18 | ||||||||
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Exhibit 4.22 | ||||||||
Exhibit 4.23 | ||||||||
Exhibit 4.24 | ||||||||
Exhibit 4.25 | ||||||||
Exhibit 4.26 | ||||||||
Exhibit 4.27 | ||||||||
Exhibit 4.28 | ||||||||
Exhibit 8.1 | ||||||||
Exhibit 12.1 | ||||||||
Exhibit 12.2 | ||||||||
Exhibit 13.1 | ||||||||
Exhibit 13.2 | ||||||||
Exhibit 15.1 | ||||||||
Exhibit 15.2 |
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• | “China” or “PRC” refers to the People’s Republic of China, excluding, for the purpose of this annual report only, Taiwan, Hong Kong and Macau; |
• | “CRIC system” refers to our proprietary real estate information database and analysis system; |
• | “shares” or “ordinary shares” refers to our ordinary shares, par value $0.001 per share; |
• | “ADSs” refers to our American depositary shares, each of which represents one ordinary share; |
• | “primary real estate market” refers to the market for newly constructed residential and commercial real properties, “primary real estate agency services” refers to agency services provided for the primary real estate market, “secondary real estate market” refers to the market for existing residential and commercial real properties, and “secondary real estate brokerage services” refers to brokerage services provided for the secondary real estate market; |
• | “The China Real Estate Top 10 Committee” refers to a real estate market research task force jointly organized by the China Real Estate Association, the Enterprise Research Institute of Development Research Center of the State Council of PRC, the Institute of Real Estate Studies of Tsinghua University and the China Index Academy; and |
• | all references to “RMB” or “Renminbi” are to the legal currency of China; all references to “$,” “dollars,” “US$” and “U.S. dollars” are to the legal currency of the United States; and all references to “HKD” and “Hong Kong dollars” are to the legal currency of the Hong Kong Special Administrative Region. |
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• | our anticipated growth strategies; |
• | our future business development, results of operations and financial condition; |
• | expected changes in our revenues and certain cost or expense items; |
• | our ability to attract clients and further enhance our brand recognition; and |
• | trends and competition in the real estate services industry. |
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As of and for the Year Ended December 31, | ||||||||||||||||||||
2005 | 2006 | 2007 | 2008 | 2009 | ||||||||||||||||
(in thousands of $, except share, per share and per ADS data) | ||||||||||||||||||||
Consolidated Statement of Operations Data: | ||||||||||||||||||||
Total revenues | 38,661 | 55,999 | 121,016 | 154,487 | 299,538 | |||||||||||||||
Cost of revenues | (10,818 | ) | (10,244 | ) | (23,510 | ) | (31,856 | ) | (70,343 | ) | ||||||||||
Selling, general and administrative expenses | (13,250 | ) | (21,322 | ) | (45,546 | ) | (77,197 | ) | (125,721 | ) | ||||||||||
Gain from settlement of pre-existing relationship | — | — | — | — | 2,101 | |||||||||||||||
Income from operations | 14,593 | 24,433 | 51,960 | 45,434 | 105,575 | |||||||||||||||
Net income | 11,416 | 18,462 | 43,750 | 39,488 | 117,382 | |||||||||||||||
Net (income) loss attributable to non-controlling interest | (268 | ) | (355 | ) | (2,024 | ) | 88 | (17,104 | ) | |||||||||||
Net income attributable to E-House shareholders | 11,148 | 18,107 | 41,726 | 39,576 | 100,278 | |||||||||||||||
Earnings per ordinary share and ADS(1): | ||||||||||||||||||||
Basic | $ | 0.22 | $ | 0.27 | $ | 0.62 | $ | 0.48 | $ | 1.26 | ||||||||||
Diluted | $ | 0.22 | $ | 0.27 | $ | 0.56 | $ | 0.48 | $ | 1.25 | ||||||||||
Dividends per ordinary share: | ||||||||||||||||||||
Basic | 0.07 | 0.08 | — | — | — | |||||||||||||||
Weighted average number of ordinary shares used in per share calculations: | ||||||||||||||||||||
Basic | 50,000,000 | 50,000,000 | 60,386,083 | 81,818,972 | 79,643,079 | |||||||||||||||
Diluted | 50,000,000 | 67,372,353 | 74,555,709 | 82,110,430 | 80,456,210 | |||||||||||||||
Consolidated Balance Sheet Data: | ||||||||||||||||||||
Cash and cash equivalents | 12,712 | 24,306 | 101,148 | 225,663 | 548,062 | |||||||||||||||
Total assets | 48,231 | 89,430 | 329,553 | 519,913 | 1,472,125 | |||||||||||||||
Total current liabilities | 39,895 | 28,751 | 54,510 | 108,672 | 115,147 | |||||||||||||||
Mezzanine equity | — | 24,828 | — | — | — | |||||||||||||||
Total E-House shareholders’ equity | 5,242 | 32,370 | 271,173 | 403,298 | 857,766 |
Note: | (1) Each ADS represents one ordinary share. |
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Exchange Rate | ||||||||||||||||
Period | Period End | Average(1) | Low | High | ||||||||||||
2005 | 8.0702 | 8.1826 | 8.2765 | 8.0702 | ||||||||||||
2006 | 7.8041 | 7.9579 | 8.0702 | 7.8041 | ||||||||||||
2007 | 7.2946 | 7.5806 | 7.8127 | 7.2946 | ||||||||||||
2008 | 6.8225 | 6.9193 | 7.2946 | 6.7800 | ||||||||||||
2009 | 6.8259 | 6.8295 | 6.8470 | 6.8176 | ||||||||||||
November | 6.8265 | 6.8270 | 6.8300 | 6.8255 | ||||||||||||
December | 6.8259 | 6.8275 | 6.8299 | 6.8244 | ||||||||||||
2010 | ||||||||||||||||
January | 6.8268 | 6.8269 | 6.8295 | 6.8258 | ||||||||||||
February | 6.8258 | 6.8285 | 6.8330 | 6.8258 | ||||||||||||
March | 6.8269 | 6.8262 | 6.8270 | 6.8254 | ||||||||||||
April (through April 16, 2010) | 6.8253 | 6.8252 | 6.8263 | 6.8229 |
(1) | Annual averages are calculated from month-end rates. Monthly averages are calculated using the average of the daily rates during the relevant period. |
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• | Down payment for the first self-use housing unit purchased by a family with a gross construction area of more than 90 square meters must be no less than 30% of the purchase price; |
• | The minimum down payment for the second housing unit purchased by a family is increased from 40% to 50% and the loan interest rate must be no less than 110% of benchmark lending interest rate; |
• | Down payment for the third or more housing unit purchased by any family and the loan interest rate must be further increased significantly based on the rate for the first and second housing units, as determined by commercial banks based on their assessment of the risks; |
• | In regions where commercial housing unit prices are too high or have risen too fast or supply of housing units is insufficient, commercial banks may suspend extending loans to families for their purchases of the third or more housing unit, and may suspend extending loans to individuals for their purchase of housing units outside the region where they reside if they cannot furnish evidence of their payment of tax or social insurance premium for at least one year locally in the region where the subject housing units are located; and |
• | Local governments are allowed to limit the total number of housing units one can purchase in certain period in light of the local situation. |
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• | revoking the business and operating licenses of our PRC subsidiaries and affiliates; |
• | discontinuing or restricting our PRC subsidiaries’ and affiliates’ operations; |
• | imposing fines or confiscating the income of our PRC subsidiaries or affiliates; |
• | imposing conditions or requirements with which we or our PRC subsidiaries and affiliates may not be able to comply; |
• | requiring us or our PRC subsidiaries and affiliates to restructure the relevant ownership structure or operations; or |
• | taking other regulatory or enforcement actions that could be harmful to our business. |
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• | actual or anticipated fluctuations in our quarterly operating results; |
• | changes in financial estimates by securities research analysts; |
• | conditions in the real estate industry in China; |
• | changes in the economic performance or market valuations of other real estate services companies; |
• | announcements by us or our competitors of new products, acquisitions, strategic partnerships, joint ventures or capital commitments; |
• | addition or departure of key personnel; |
• | fluctuations of exchange rates between the RMB and U.S. dollar or other foreign currencies; |
• | sales or repurchases of our ADSs or ordinary shares; and |
• | general economic or political conditions in China. |
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• | primary real estate agency services, |
• | secondary real estate brokerage services, |
• | real estate information and consulting services, |
• | real estate advertising services, |
• | real estate online services, and |
• | real estate investment fund management. |
For the Year Ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
Total GFA of new properties sold (thousands of square meters) | 3,985 | 4,115 | 11,098 | |||||||||
Total value of new properties sold (millions of $) | 3,929 | 4,478 | 12,732 |
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• | Data Subscription Services.CRIC markets and sells, on a subscription basis, the use of its CRIC system. |
• | Data Integration Services.In addition to basic subscriptions, CRIC also offers data integration services by leveraging the information and data contained in the CRIC system and its flexible design and analytical capabilities. These premium services include, in addition to access to the CRIC system, periodic research reports and analysis that suit the specific needs and requirements of individual clients. |
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• | data on developments in 75 cities across China, consisting of data on over 37,400 residential developments, over 5,100 office buildings, over 5,900 commercial developments and over 39,700 parcels of land for development; |
• | over 15,400 research reports written by CRIC’s research staff and by the researchers at the E-House Research and Training Institute; |
• | over 40 categories of statistics for China and each of 75 cities across China; and |
• | over 32,500 real estate—related news articles. |
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• | In transactions where first time homebuyers purchase units with floor areas of 90 square meters or less, the deed tax rate is reduced to 1%; |
• | all residential real estate transactions by individuals are exempt from stamp tax; and |
• | all residential real estate transactions by individuals are exempt from land appreciation tax. |
• | From January 1, 2009 to December 31, 2009, |
• | sales of ordinary housing units held by individuals for at least two years are exempt from business tax; |
• | sales of ordinary housing units held by individuals for less than two years are subject to business tax on the difference between the sales price and the purchase price; |
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• | sales of non-ordinary housing units held by individuals for at least two years are subject to business tax on the difference between the sales price and the purchase price; |
• | sales of non-ordinary housing units held by individuals for less than two years are subject to business tax on the sales price; and |
• | The urban real estate tax is abolished and domestic enterprises, foreign enterprises, foreign-funded enterprises and individuals shall pay real estate tax in accordance with the Interim Regulation on Real Estate Tax. |
• | while sales of ordinary housing units held by individuals for at least five years are exempt from business tax, sales of ordinary housing units held by individuals for less than five years are subject to business tax on the difference between the sales price and the original purchase price; |
• | sales of non-ordinary housing units held by individuals for at least five years are subject to business tax on the difference between the sales price and the purchase price; |
• | sales of non-ordinary housing units held by individuals for less than five years are subject to business tax on the sales price. |
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• | Down payment for the first self-use housing unit purchased by a family with a gross construction area of more than 90 square meters must be no less than 30% of the purchase price; |
• | Down payment for the second housing unit purchased by a family is increased from 40% to 50% and the loan interest rate must be no less than 110% of benchmark lending interest rate; |
• | Down payment for the third or more housing unit purchased by any family and the loan interest rate must be further increased significantly based on the rate for the first and second housing units, as determined by commercial banks based on their assessment of the risks; |
• | In regions where commercial housing unit prices are too high or have risen too fast or supply of housing units is insufficient, commercial banks may suspend extending loans to families for their purchases of the third or more housing unit, and may suspend extending loans to individuals for their purchase of housing units outside the region where they reside if they cannot furnish evidence of their payment of tax or social insurance premium for at least one year locally in the region where the subject housing units are located; and |
• | Local governments are allowed to limit the total numbers of housing units one can purchase in certain period in light of the local situation. |
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• | CRIC is able to exert effective control over Beijing Leju; |
• | a substantial portion of the economic benefits of Beijing Leju are transferred to CRIC; and |
• | CRIC has an exclusive option to purchase all of the equity interests in Beijing Leju to the extent permitted by PRC law. |
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• | CRIC is able to exert effective control over Tian Zhuo and its subsidiaries; |
• | a substantial portion of the economic benefits of Tian Zhuo and its subsidiaries are transferred to CRIC; and |
• | CRIC has an exclusive option to purchase all of the equity interests in Tian Zhuo to the extent permitted by PRC law. |
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![(STRUCTURE)](https://capedge.com/proxy/20-F/0000950123-10-037752/c99400c9940001.gif)
(1) | Tian Zhuo is a variable interest entity established in China in 2008 and is 90% owned by Mr. Xin Zhou, our executive chairman, and 10% owned by Mr. Xudong Zhu. We effectively control Tian Zhuo through contractual arrangements. See “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Contractual Agreements with Tian Zhuo.” | |
(2) | Beijing Leju is a variable interest entity established in China in 2008 and is 80% owned by Mr. Xudong Zhu and 20% owned by Mr. Jun Luo. We effectively control Beijing Leju through contractual arrangements. See “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Contractual Agreements with Beijing Leju.” |
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For The Year Ended December 31, | ||||||||||||||||||||||||
2007 | 2008 | 2009 | ||||||||||||||||||||||
$ | % | $ | % | $ | % | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Primary real estate agency services | 100,933 | 83.4 | 88,602 | 57.4 | 183,154 | 61.2 | ||||||||||||||||||
Secondary real estate brokerage services | 11,888 | 9.8 | 14,837 | 9.6 | 28,448 | 9.5 | ||||||||||||||||||
Real estate information and consulting services | 8,195 | 6.8 | 49,116 | 31.8 | 61,707 | 20.6 | ||||||||||||||||||
Real estate advertising services | 932 | 0.6 | 11,400 | 3.8 | ||||||||||||||||||||
Real estate online services | 13,830 | 4.6 | ||||||||||||||||||||||
Real estate fund management | — | — | 1,000 | 0.6 | 1,000 | 0.3 | ||||||||||||||||||
Total revenues | 121,016 | 100.0 | 154,487 | 100.0 | 299,539 | 100.0 |
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• | total GFA of the properties we sell; |
• | total transaction value of the properties we sell; and |
• | commission rates. |
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Number of Ordinary | ||||||||
Shares Underlying | ||||||||
Grant Date | Options Granted | Exercise Price | ||||||
March 9, 2007 | 300,000 | $ | 5.50 | |||||
July 17, 2007 | 640,833 | $ | 5.37 | (1) | ||||
July 23, 2007 | 66,666 | $ | 5.37 | (1) | ||||
January 7, 2008 | 412,166 | $ | 5.37 | (1) | ||||
January 10, 2008 | 21,500 | $ | 5.37 | (1) | ||||
April 15, 2008 | 702,000 | $ | 5.37 | (1) | ||||
June 12, 2008 | 10,000 | $ | 5.37 | (1) | ||||
August 3, 2008 | 100,000 | $ | 5.37 | (1) |
(1) | On November 7, 2008, our board of directors authorized the adjustment of the exercise price of some previously granted options to $5.37 per ordinary share and authorized the amendment and restatement of options granted pursuant to our share incentive plan. Modifications subsequently made to selected granted options pursuant to this authorization did not affect the manner in which we recognize share-based compensation expense. |
Number of Restricted | ||||||||
Grant Date | Shares Granted | Grant Price | ||||||
May 16, 2007 | 436,364 | (1) | $ | 3.30 | ||||
December 21, 2009 | 919,000 | $ | 0 |
(1) | On May 16, 2007, options to purchase 436,364 ordinary shares granted earlier on November 28, 2006 were surrendered for cancellation in exchange for the same number of restricted shares having the same vesting schedule and a purchase price equal to the original option exercise price. |
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• | the nature of our business and the contracts and agreements relating to our business; |
• | the global economic outlook in general and the specific economic and competitive elements affecting our business; |
• | the nature and prospects of the real estate services industry in China; |
• | the growth of our operations; and |
• | our business risks. |
• | Weighted average costs of capital, or WACC, of 13.2% and 14.3%, respectively, was used. This was the combined result of the changes in risk-free rate and industry average beta and the decrease in our company-specific risks; and |
• | Discount for Lack of Marketability, or DLOM, of 6% was used for both valuations. This took into consideration our proposed offering in several months. |
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Number of Ordinary | ||||||||
Shares Underlying | ||||||||
Grant Date | Options Granted | Exercise Price | ||||||
January 1, 2009 | 5,114,914 | (1) | $ | 3.00 | ||||
July 15, 2009 | 989,000 | $ | 6.00 | |||||
July 30, 2009 | 300,000 | $ | 6.00 | |||||
September 24, 2009 | 1,284,500 | $ | 8.00 |
(1) | Options to purchase 756,000 ordinary shares granted on January 1, 2009 were later modified on July 15, 2009. The number of these options was reduced to 251,500 and the vesting schedule was shortened to one to two years from two to four year. |
Number of Restricted | ||||||||
Grant Date | Shares Granted | Grant Price | ||||||
July 30, 2009 | 250,000 | (1) | $ | 3.00 | ||||
July 30, 2009 | 50,000 | (2) | $ | 6.00 |
(1) | On July 30, 2009, options to purchase 250,000 ordinary shares granted earlier on January 1, 2009 were surrendered for cancellation in exchange for the same number of restricted shares having the same vesting schedule and a purchase price equal to the original option exercise price. | |
(2) | On July 30, 2009, options to purchase 50,000 ordinary shares granted earlier on July 15, 2009 were surrendered for cancellation in exchange for the same number of restricted shares having the same vesting schedule and a purchase price equal to the original option exercise price. |
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For the Year Ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
(in thousands of $) | ||||||||||||
Consolidated Statement of Operations Data: | ||||||||||||
Revenues | 121,016 | 154,487 | 299,538 | |||||||||
Cost of revenues | (23,510 | ) | (31,856 | ) | (70,343 | ) | ||||||
Selling, general and administrative expenses | (45,546 | ) | (77,197 | ) | (125,721 | ) | ||||||
Gain from settlement of pre-existing relationship | — | — | 2,101 | |||||||||
Income from operations | 51,960 | 45,434 | 105,575 | |||||||||
Interest expense | (622 | ) | (2,420 | ) | (216 | ) | ||||||
Interest income | 2,490 | 3,063 | 1,039 | |||||||||
Other income, net | 199 | 1,970 | 8,780 | |||||||||
Income before taxes, equity in affiliates and non-controlling interest | 54,027 | 48,047 | 115,178 | |||||||||
Income tax expenses | (10,277 | ) | (8,713 | ) | (19,924 | ) | ||||||
Income before equity in affiliates and non-controlling interest | 43,750 | 39,334 | 95,254 | |||||||||
Income from investment in affiliates | — | 154 | 22,128 | |||||||||
Net income | 43,750 | 39,488 | 117,382 | |||||||||
Net (income)/loss attributable to non-controlling interest | (2,024 | ) | 88 | (17,104 | ) | |||||||
Net income attributable to E-House shareholders | 41,726 | 39,576 | 100,278 | |||||||||
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Real estate | ||||||||||||||||||||||||||||||||
Primary | Secondary | information | ||||||||||||||||||||||||||||||
real estate | real estate | and | Real estate | Real estate | ||||||||||||||||||||||||||||
agency | brokerage | consulting | advertising | online | Real estate | |||||||||||||||||||||||||||
services | service | service | service | service | fund | Non- | ||||||||||||||||||||||||||
2009 | segment | segment | segment | segment | segment | management | allocated | Total | ||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||
Revenues from external customers | 183,154,000 | 28,447,714 | 61,707,295 | 11,399,710 | 13,829,937 | 1,000,000 | — | 299,538,656 | ||||||||||||||||||||||||
Cost of revenues | (55,655,737 | ) | (1,877,546 | ) | (1,865,697 | ) | (6,014,185 | ) | (4,930,280 | ) | — | — | (70,343,445 | ) | ||||||||||||||||||
Selling general and administrative expenses | (47,241,533 | ) | (26,123,163 | ) | (22,723,019 | ) | (5,690,497 | ) | (11,359,944 | ) | (647,754 | ) | (11,935,269 | ) | (125,721,179 | ) | ||||||||||||||||
Gain from settlement of preexisting relationship | — | — | 2,100,832 | — | — | — | 2,100,832 | |||||||||||||||||||||||||
Income (loss) from operations | 80,256,730 | 447,005 | 39,219,411 | (304,972 | ) | (2,460,287 | ) | 352,246 | (11,935,269 | ) | 105,574,864 | |||||||||||||||||||||
Interest expenses | — | — | — | — | — | — | (215,854 | ) | (215,854 | ) | ||||||||||||||||||||||
Interest income | 591,772 | 29,130 | 166,521 | 27,635 | 23,722 | 1,922 | 198,087 | 1,038,789 | ||||||||||||||||||||||||
Other income/(expense), net | 1,842,672 | 279,030 | 2,481,451 | — | 5,814 | (1,810 | ) | 4,173,213 | 8,780,370 | |||||||||||||||||||||||
Income (loss) before taxes and equity in an associate | 82,691,174 | 755,165 | 41,867,383 | (277,337 | ) | (2,430,751 | ) | 352,358 | (7,779,823 | ) | 115,178,169 | |||||||||||||||||||||
Income tax benefit (expense) | (15,981,753 | ) | 2,204,395 | (6,710,032 | ) | (553,666 | ) | 957,085 | 159,890 | — | (19,924,081 | ) | ||||||||||||||||||||
Income (loss) before equity in affiliates | 66,709,421 | 2,959,560 | 35,157,351 | (831,003 | ) | (1,473,666 | ) | 512,248 | (7,779,823 | ) | 95,254,088 | |||||||||||||||||||||
Income from investment in affiliates | 112,628 | — | — | — | 22,015,607 | — | 22,128,235 | |||||||||||||||||||||||||
Net income (loss) | 66,822,049 | 2,959,560 | 35,157,351 | (831,003 | ) | 20,541,941 | 512,248 | (7,779,823 | ) | 117,382,323 | ||||||||||||||||||||||
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Real estate | ||||||||||||||||||||||||||||
Secondary | information | |||||||||||||||||||||||||||
Primary real | real estate | and | Real estate | Real estate | ||||||||||||||||||||||||
estate agency | brokerage | consulting | advertising | fund | ||||||||||||||||||||||||
2008 | services | services | services | services | management | Non-allocated | Total | |||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||
Revenues | 88,601,982 | 14,836,943 | 49,116,061 | 932,469 | 1,000,000 | — | 154,487,455 | |||||||||||||||||||||
Cost of revenues | (27,232,660 | ) | (1,725,941 | ) | (2,855,398 | ) | (41,849 | ) | — | — | (31,855,848 | ) | ||||||||||||||||
Selling, general and administrative expenses | (34,075,314 | ) | (20,209,062 | ) | (13,776,504 | ) | (1,865,669 | ) | (463,351 | ) | (6,807,731 | ) | (77,197,631 | ) | ||||||||||||||
Income (loss) from operations | 27,294,008 | (7,098,060 | ) | 32,484,159 | (975,049 | ) | 536,649 | (6,807,731 | ) | 45,433,976 | ||||||||||||||||||
Interest expenses | — | — | — | — | — | (2,420,468 | ) | (2,420,468 | ) | |||||||||||||||||||
Interest income | 551,576 | 30,475 | 415,512 | 3,779 | 4,373 | 2,056,798 | 3,062,513 | |||||||||||||||||||||
Other income/(expense), net | 1,422,744 | 22,483 | (1,323,858 | ) | — | — | 1,849,112 | 1,970,481 | ||||||||||||||||||||
Income (loss) before taxes and equity in an associate | 29,268,328 | (7,045,102 | ) | 31,575,813 | (971,270 | ) | 541,022 | (5,322,289 | ) | 48,046,502 | ||||||||||||||||||
Income tax benefit (expense) | (4,153,861 | ) | 52,535 | (4,917,503 | ) | 196,488 | 109,783 | — | (8,712,558 | ) | ||||||||||||||||||
Income (loss) before equity in affiliates | 25,114,467 | (6,992,567 | ) | 26,658,310 | (774,782 | ) | 650,805 | (5,322,289 | ) | 39,333,944 | ||||||||||||||||||
Income from investment in affiliates | — | — | — | — | — | 153,700 | 153,700 | |||||||||||||||||||||
Net income/(loss) | 25,114,467 | (6,992,567 | ) | 26,658,310 | (774,782 | ) | 650,805 | (5,168,589 | ) | 39,487,644 | ||||||||||||||||||
Real estate | ||||||||||||||||||||
Secondary | information | |||||||||||||||||||
Primary real | real estate | and | ||||||||||||||||||
estate agency | brokerage | consulting | ||||||||||||||||||
service | service | service | ||||||||||||||||||
2007 | segment | segment | segment | Non-allocated | Total | |||||||||||||||
$ | $ | $ | $ | $ | ||||||||||||||||
Revenues from external customers | 100,932,992 | 11,888,443 | 8,195,165 | — | 121,016,600 | |||||||||||||||
Cost of revenues | (22,614,660 | ) | — | (895,405 | ) | — | (23,510,065 | ) | ||||||||||||
Selling, general and administrative expenses | (23,195,466 | ) | (14,997,248 | ) | (4,985,048 | ) | (2,368,038 | ) | (45,545,800 | ) | ||||||||||
Income/(loss) from operations | 55,122,866 | (3,108,805 | ) | 2,314,712 | (2,368,038 | ) | 51,960,735 | |||||||||||||
Interest expense | — | — | — | (621,903 | ) | (621,903 | ) | |||||||||||||
Interest income | 693,975 | 36,274 | 192,961 | 1,566,458 | 2,489,668 | |||||||||||||||
Other income/(expense), net | 406,452 | 96,372 | (156,825 | ) | (148,107 | ) | 197,892 | |||||||||||||
Income (loss) before taxes | 56,223,293 | (2,976,159 | ) | 2,350,848 | (1,571,590 | ) | 54,026,392 | |||||||||||||
Income tax benefit (expense) | (9,987,535 | ) | (4,506 | ) | (284,999 | ) | — | (10,277,040 | ) | |||||||||||
Net income/(loss) | 46,235,758 | (2,980,665 | ) | 2,065,849 | (1,571,590 | ) | 43,749,352 | |||||||||||||
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• | Primary Real Estate Agency Services. Revenues from our primary real estate agency services increased by 107% from $88.6 million in 2008 to $183.2 million in 2009. This increase was primarily due to increases in total GFA and transaction value of new properties sold by 170% and 184%, respectively, for the full year of 2009 compared to 2008, partially offset by a lower average commission rate of 1.4% for 2009 compared to 2.0% for 2008. The lower average commission rate in 2009 resulted from there being a smaller portion of our total GFA for which a bonus commission is included in the commission structure. |
• | Secondary Real Estate Brokerage Services. Revenues from our secondary real estate brokerage services increased by 92% from $14.8 million in 2008 to $28.4 million in 2009. This increase was primarily due to higher total secondary real estate transaction volume under improved market conditions, despite a slight decrease in the total number of our secondary real estate brokerage stores from 115 as of December 31, 2008 to 109 as of December 31, 2009. The increase was also contributed by our brokerage storefronts’ support of our sales effort in the primary real estate agency services market primarily by promoting and selling any remaining unsold units of primary real estate projects. |
• | Real Estate Information and Consulting Services. Revenues from real estate information and consulting services increased by 26% from $49.1 million in 2008 to $61.7 million in 2009. The increase was primarily due to further expansion of the coverage and marketing of the CRIC database as well as higher consulting revenues resulting from increased numbers of consulting clients and projects in 2009. |
• | Real Estate Advertising Services. Revenues from real estate advertising services increased substantially from $0.9 million in 2008 to $11.4 million in 2009. The increase in revenues from real estate advertising services was attributable to wider acceptance and brand recognition of CRIC’s advertising design services and our launch of advertising resale services in 2009. We provide advertising resale services by making wholesale purchases of advertising space in print and other media in Shanghai and reselling it to developer clients. |
• | Real Estate Online Services. Revenues from real estate online services were $13.8 million in 2009. CRIC completed its acquisition of COHT concurrently with its initial public offering in October 2009 and started reporting COHT’s business as a new line of business in the fourth quarter of 2009. COHT generates revenues through operating a real estate Internet business in China that provides region-specific real estate news and information, property data and access to online communities via local websites. |
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• | Primary Real Estate Agency Segment. Selling, general and administrative expenses for our primary real estate agency segment increased by 39% from $34.1 million in 2008 to $47.2 million in 2009. This increase was primarily due to an increase of $10.0 million in bonuses tied to our company’s performance in 2009 and an increase of $6.6 million in allowance for doubtful accounts in 2009, partially offset by a decrease of $2.3 million in marketing expenses in 2009. |
• | Secondary Real Estate Brokerage Service Segment. Selling, general and administrative expenses for our secondary real estate brokerage service segment increased by 29% from $20.2 million in 2008 to $26.1 million in 2009. This increase was primarily due to an increase in staff salaries and commissions by $4.7 million as a result of our larger number of staff and higher transaction volume and an increase by $1.4 million in bonuses tied to our company’s performance in 2009. |
• | Real Estate Information and Consulting Service Segment. Selling, general and administrative expense for real estate information and consulting service segment increased by 65% from $13.8 million in 2008 to $22.7 million in 2009, mainly due to higher salaries and rental and office expenses associated with an expansion of our operations. |
• | Real Estate Advertising Service Segment.Selling, general and administrative expenses for real estate advertising service segment increased by 205% from $1.9 million in 2008 to $5.7 million in 2009, mainly due to higher salaries and rental expenses associated with increased personnel and office space. |
• | Real Estate Online Service Segment.CRIC acquired COHT, the entity which had operated SINA’s online real estate business, in October 2009. $11.4 million of our selling, general and administrative expenses in 2009 was attributable to the acquired online real estate business. |
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• | Primary Real Estate Agency Services. Revenues from our primary real estate agency services decreased by 12% from $100.9 million in 2007 to $88.6 million in 2008. This decrease was primarily due to a lower average commission rate of 2.0% in 2008, compared to 2.6% in 2007. This was partially offset by increases in both the GFA and total transaction value of new properties sold. The GFA of properties we sold increased from approximately 4.0 million square meters in 2007 to approximately 4.1 million square meters in 2008 and the total transaction value of the properties we sold increased from $3.9 billion in 2007 to $4.5 billion in 2007. |
• | Secondary Real Estate Brokerage Services. Revenues from our secondary real estate brokerage services increased by 25% from $11.9 million in 2007 to $14.8 million in 2008. Revenue growth was negatively affected by reduced secondary real estate transaction volume in 2008 as a result of slower growth in China’s economy and deterioration of the demand for real estate purchases. As of December 31, 2008, we had a total of 115 secondary real estate brokerage stores in five cities in China, compared to 160 stores as of December 31, 2007, as a result of our decision to reduce the number of stores in response to deteriorating market conditions and in an effort to decrease operating expenses. |
• | Real Estate Information and Consulting Services. Revenues from our real estate information and consulting services increased by 499% from $8.2 million in 2007 to $49.1 million in 2008. This growth was primarily due to substantial consulting revenues derived from strategic arrangements we entered into with major developers covering multiple cities and projects and an increase in the number and size of consulting projects completed for other developers. The increase also resulted from the completion of a number of consulting projects associated with land transfer in 2008. |
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• | Primary Real Estate Agency Segment. Selling, general and administrative expenses for our primary real estate agency segment increased by 47% from $23.2 million in 2007 to $34.1 million in 2008 primarily due to an increase in staff salaries for our management employees by $2.7 million as a result of hiring additional staff and increases in salaries, and an increase in marketing, consulting, rental and travel expenses by $5.8 million as a result of hiring new employees and expanding our operations. |
• | Secondary Real Estate Brokerage Service Segment. Selling, general and administrative expenses for our secondary real estate brokerage service segment increased by 35% from $15.0 million in 2007 to $20.2 million in 2008 primarily due to an increase in staff salaries by $3.2 million as a result of a larger number of staff, and an increase in rental and administrative expenses for our brokerage storefronts by $3.7 million as a result of operating a higher average number of stores in 2008 than in 2007. |
• | Real Estate Information and Consulting Service Segment. Selling, general and administrative expense for our real estate information and consulting service segment increased by 176% from $5.0 million in 2007 to $13.8 million in 2008 primarily due to an increase in staff salaries for our management employees by $5.5 million as a result of hiring additional staff and increases in salaries, and an increase in marketing, consulting, rental, travel and other administrative expenses by $5.4 million as a result of hiring new employees and expanding our operations. |
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For the Year Ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
(in thousands of $) | ||||||||||||
Net cash (used in) provided by operating activities | (81,273 | ) | 77,973 | 129,101 | ||||||||
Net cash (used in) provided by investing activities | (4,169 | ) | (26,455 | ) | 1,913 | |||||||
Net cash provided by (used in) financing activities | 160,777 | 70,037 | 191,229 | |||||||||
Net increase (decrease) in cash and cash equivalents | 76,842 | 124,515 | 322,399 | |||||||||
Cash and cash equivalents at beginning of the period | 24,306 | 101,148 | 225,663 | |||||||||
Cash and cash equivalents at end of the period | 101,148 | 225,663 | 548,062 |
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Payment Due by Period | ||||||||||||||||||||
Less than | More than | |||||||||||||||||||
Total | 1 year | 1-3 year | 3-5 year | 5 years | ||||||||||||||||
(in thousands of $) | ||||||||||||||||||||
Operating lease obligations | 21,696 | 8,196 | 6,545 | 1,541 | 5,414 | |||||||||||||||
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Directors and Executive Officers | Age | Position/Title | ||||
Xin Zhou | 42 | Executive Chairman | ||||
Jianjun Zang | 42 | Director and Acting Chief Executive Officer | ||||
Neil Nanpeng Shen | 42 | Director | ||||
Bing Xiang | 47 | Independent Director | ||||
Hongchao Zhu | 50 | Independent Director | ||||
May Wu | 42 | Independent Director | ||||
Jeffrey Zhijie Zeng | 41 | Independent Director | ||||
Yunchang Gu | 66 | Independent Director | ||||
Canhao Huang | 52 | Executive Director | ||||
Li-Lan Cheng | 45 | Chief Financial Officer | ||||
Zuyu Ding | 36 | Co-President of CRIC | ||||
Jun Luo | 42 | Co-President of CRIC | ||||
Ber Jen Ko | 46 | Head of Secondary Brokerage Service |
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Ordinary Shares | ||||||||||||
Underlying | ||||||||||||
Options/Restricted | Exercise Price(2) | Date of | Date of | |||||||||
Name | Shares | ($/Share) | Grant | Expiration | ||||||||
Jianjun Zang | 40,000 | 5.37 | April 15, 2008 | April 14, 2018 | ||||||||
80,000 | N/A | December 21,2009 | N/A | |||||||||
Neil Nanpeng Shen | 40,000 | 5.50 | March 9, 2007 | March 8, 2017 | ||||||||
20,000 | 5.37 | April 15, 2008 | April 14, 2018 | |||||||||
10,000 | N/A | December 21,2009 | N/A | |||||||||
Bing Xiang | 40,000 | 5.50 | March 9, 2007 | March 8, 2017 | ||||||||
20,000 | 5.37 | April 15, 2008 | April 14, 2018 | |||||||||
10,000 | N/A | December 21,2009 | N/A | |||||||||
Hongchao Zhu | 40,000 | 5.50 | March 9, 2007 | March 8, 2017 | ||||||||
20,000 | 5.37 | April 15, 2008 | April 14, 2018 | |||||||||
10,000 | N/A | December 21,2009 | N/A | |||||||||
May Wu | 40,000 | 5.37 | April 15, 2008 | April 14, 2018 | ||||||||
20,000 | 5.37 | August 3, 2008 | August 2, 2018 | |||||||||
15,000 | N/A | December 21,2009 | N/A | |||||||||
Jeffrey Zhijie Zeng | 40,000 | 5.37 | August 3, 2008 | August 2, 2018 | ||||||||
10,000 | N/A | December 21,2009 | N/A | |||||||||
Yunchang Gu | 40,000 | 5.37 | August 3, 2008 | August 2, 2018 | ||||||||
10,000 | N/A | December 21,2009 | N/A | |||||||||
Canhao Huang | 40,000 | 5.37 | April 15, 2008 | April 14, 2018 | ||||||||
50,000 | N/A | December 21,2009 | N/A | |||||||||
Li-Lan Cheng | 436,364 | (1) | 3.30 | November 28, 2006 | N/A | |||||||
40,000 | 5.37 | April 15, 2008 | April 14, 2018 | |||||||||
80,000 | N/A | December 21,2009 | N/A | |||||||||
Zuyu Ding | 100,000 | 5.37 | July 17, 2007 | July 16, 2017 | ||||||||
40,000 | 5.37 | April 15, 2008 | April 14, 2018 | |||||||||
Ber Jen Ko | 80,000 | 5.50 | March 9, 2007 | March 8, 2017 | ||||||||
20,000 | 5.37 | April 15, 2008 | April 14, 2018 | |||||||||
30,000 | N/A | December 21,2009 | N/A | |||||||||
Other Individuals as a group | 2,187,165 | (2)(3) | 5.37 to 5.50 | March 9, 2007 to | March 8, 2017 to | |||||||
December 21,2009 | August 2, 2018 |
(1) | These options were subsequently surrendered for cancellation in exchange for the same number of restricted shares having the same vesting schedule and a purchase price equal to the original option exercise price. | |
(2) | On November 7, 2008, our board of directors authorized the adjustment of the exercise price of some previously granted options to $5.37 per ordinary share and authorized the amendment of the terms of options granted pursuant to the E-House plan. Modifications subsequently made to selected options pursuant to this authorization did not affect the manner in which we recognize share-based compensation expense. | |
(3) | As of March 31, 2010, options and restricted shares representing an aggregate of 329,835 ordinary shares previously granted to various individuals have been cancelled. |
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Ordinary Shares | Exercise Price | |||||||||||
Name | Underlying Options | ($/Share) | Date of Grant | Date of Expiration | ||||||||
Xin Zhou | 1,250,000 | 3.00 | January 1, 2009 | December 31, 2018 | ||||||||
500,000 | 0.65 | April 23, 2009 | April 22, 2015 | |||||||||
Jianjun Zang | 25,000 | 3.00 | January 1, 2009 | December 31, 2018 | ||||||||
50,000 | 8.00 | September 24, 2009 | September 23, 2019 | |||||||||
Neil Nanpeng Shen | 40,000 | 8.00 | September 24, 2009 | September 23, 2019 | ||||||||
Bing Xiang | 20,000 | 8.00 | September 24, 2009 | September 23, 2019 | ||||||||
Hongchao Zhu | 20,000 | 8.00 | September 24, 2009 | September 23, 2019 | ||||||||
May Wu | 30,000 | 8.00 | September 24, 2009 | September 23, 2019 | ||||||||
Jeffrey Zhijie Zeng | 20,000 | 8.00 | September 24, 2009 | September 23, 2019 | ||||||||
Yunchang Gu | 20,000 | 8.00 | September 24, 2009 | September 23, 2019 | ||||||||
Canhao Huang | 25,000 | 3.00 | January 1, 2009 | December 31, 2018 | ||||||||
50,000 | 8.00 | September 24, 2009 | September 23, 2019 | |||||||||
Li-Lan Cheng | 250,000 | (1) | 3.00 | January 1, 2009 | N/A | |||||||
50,000 | (1) | 6.00 | July 15, 2009 | N/A | ||||||||
Zuyu Ding | 1,000,000 | 3.00 | January 1, 2009 | December 31, 2018 | ||||||||
Jun Luo | 50,000 | 3.00 | January 1, 2009 | December 31, 2018 | ||||||||
1,000,000 | 0.64 | September 6,2008 | September 5,2014 | |||||||||
Ber Jen Ko | 10,000 | 3.00 | January 1, 2009 | December 31, 2018 | ||||||||
20,000 | 8.00 | September 24, 2009 | September 23, 2019 | |||||||||
Other Individuals as a group | 7,154,294 | 0.64 to 8.00 | September 6, 2008 | September 5, 2014 | ||||||||
September 24, 2009 | September 23, 2019 |
(1) | These options were subsequently surrendered for cancellation in exchange for the same number of restricted shares having the same vesting schedule and a purchase price equal to the original option exercise price. |
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• | appointing the independent auditors and pre-approving all audit and non-audit services permitted to be performed by 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 of Regulation S-K under the Securities Act; |
• | discussing the annual audited financial statements with management and the independent auditors; |
• | reviewing major issues as to the adequacy of our internal controls and any special audit steps adopted in light of material control deficiencies; and |
• | meeting separately and periodically with management and the independent auditors. |
• | reviewing and evaluating at least annually and, if necessary, revising the compensation policies adopted by our management; |
• | reviewing and evaluating at least annually the performance, and determining the compensation, of our chief executive officer; |
• | reviewing and approving our chief executive officer’s employment agreement and amendments thereto, and severance arrangement, if any; |
• | reviewing all annual bonus, long-term incentive compensation, share option, employee pension and welfare benefit plans; and |
• | reviewing and approving director and executive officer indemnification and insurance matters, and any employee loans in an amount equal to or greater than $60,000. |
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• | recommending to our board of directors for nomination or appointment by the board such candidates as the committee has found to be well qualified and willing and ready to be elected or reelected to serve as our members of our board or its committees or to fill any vacancies on our board or its committees, respectively; |
• | reviewing annually the composition of our board of directors and its committees in light of the characteristics of independence, qualification, experience and availability of the board members; |
• | developing and recommending to our board of directors a set of corporate governance guidelines and principles applicable to our company; and |
• | monitoring of compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our internal rules and procedures to ensure compliance with applicable laws and regulations. |
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Number of | Percentage of | |||||||
Employees | Employees | |||||||
Corporate Offices | 1,118 | 15.6 | % | |||||
Research Department | 1,190 | 16.7 | % | |||||
Sales Staff | 4,844 | 67.7 | % | |||||
Total | 7,152 | 100.0 | % |
• | each of our directors and executive officers; and |
• | each person known to us to own beneficially more than 5.0% of our ordinary shares. |
Shares Beneficially Owned | ||||||||
Immediately | ||||||||
Number | % | |||||||
Directors and Executive Officers:(1) | ||||||||
Xin Zhou(2)(†) | 20,272,100 | 25.27 | ||||||
Jianjun Zang(3) (†) | 2,731,149 | 3.40 | ||||||
Neil Nanpeng Shen(4) | 6,103,330 | 7.60 | ||||||
Bing Xiang | * | * | ||||||
Hongchao Zhu | * | * | ||||||
May Wu | * | * | ||||||
Jeffrey Zhijie Zeng | * | * | ||||||
Yunchang Gu | * | * | ||||||
Canhao Huang (†) | * | * | ||||||
Li-Lan Cheng | * | * | ||||||
Zuyu Ding (†) | * | * | ||||||
Jun Luo | — | — | ||||||
Ber Jen Ko | * | * | ||||||
All Directors and Executive Officers as a Group(†) | 26,928,148 | 33.43 | ||||||
Principal Shareholders: | ||||||||
Orbis Investment Management (B.V.I) Limited and affiliates(5) | 14,430,921 | 17.99 | ||||||
On Chance Inc.(6) (†) | 10,294,800 | 12.83 | ||||||
Jun Heng Investment Limited(7) (†) | 9,977,300 | 12.44 | ||||||
CHF Investment Limited(8) | 5,474,343 | 6.82 | ||||||
Smart Create Group Limited(9) | 5,250,000 | 6.54 |
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* | Less than 1% of our total outstanding shares. | |
† | Each of these directors and executive officers is a beneficial owner of our shares through On Chance Inc., Jun Heng Investment Limited or both, as the case may be. On Chance Inc. is also a shareholder of Jun Heng Investment Limited. | |
(1) | Except where otherwise disclosed in the footnotes below, the business address of each of our directors and executive officers is 17/F, Merchandise Harvest Building (East), No. 333 North Chengdu Road, Shanghai, PRC 200041, People’s Republic of China. | |
(2) | Includes 10,294,800 ordinary shares and 9,977,300 ordinary shares respectively held by On Chance Inc. and Jun Heng Investment Limited. Each of On Chance Inc. and Jun Heng Investment Limited is a company incorporated in British Virgin Islands and controlled by Mr. Zhou. As a result, Mr. Zhou is deemed to be the beneficial owner of 20,272,100 ordinary shares of our company. Mr. Zhou disclaims beneficial ownership of these 20,272,100 ordinary shares except to the extent of his pecuniary interest therein. | |
(3) | Represents 2,717,816 ordinary shares held by Jun Heng Investment Limited that is approximately 27.24% owned by Mr. Zang and 13,333 ordinary shares issuable upon exercise of options held by Mr. Zang within 60 days from March 31, 2010. | |
(4) | Includes 5,250,000 ordinary shares directly held by Smart Create Group Limited, a British Virgin Islands company that is controlled by Mr. Shen, 800,000 ordinary shares directly held by Smart Master International Limited, a British Virgin Islands company solely owned and controlled by Mr. Shen, and 53,330 ordinary shares that Mr. Shen has the right to acquire upon exercise of options within 60 days after March 31, 2010. Mr. Shen, a shareholder of Smart Create Group Limited, has been granted a voting proxy by the other shareholders of Smart Create Group Limited to vote on their behalf. Mr. Shen disclaims beneficial ownership of these 5,250,000 ordinary shares except to the extent of his pecuniary interest therein. The business address of Mr. Shen is Suite 2215, 22/F, Two Pacific Place, 88 Queensway Road, Hong Kong. | |
(5) | Based on Schedule 13G filed by Orbis Investment Management (B.V.I.) Limited, Orbis Investment Management Limited and Orbis Asset Management Limited on February 12, 2010. Orbis Investment Management (B.V.I.) Limited is a company organized under the laws of the British Virgin Islands. Orbis Investment Management Limited and Orbis Asset Management Limited are companies organized under the laws of Bermuda. The address of their principal business office is 25 Front Street Hamilton, Bermuda HM11. | |
(6) | On Chance Inc. is a company incorporated in British Virgin Islands and 95% owned by Xin Zhou. The registered address of On Chance Inc. is Sea Meadow House, Blackburne Highway, Road Town, Tortola, British Virgin Islands. | |
(7) | Jun Heng Investment Limited is a company incorporated in British Virgin Islands and controlled by Xin Zhou. The registered address of Jun Heng Investment Limited is Beaufort House, P.O. Box 438, Road Town, Tortola, British Virgin Islands. | |
(8) | Based on Schedule 13G filed by CHF Investment Limited on February 10, 2010, a British Virgin Islands company, with the registered address at Kingston Chambers, P.O. Box 173, Road Town, Tortola, British Virgin Islands. Voting and investment power of shares beneficially held by CHF Investment Limited is exercised by a committee which consists of Mark Qiu, Hung Shih, Li Zhenzhi, Charles Pieper and Nicole Arnaboldi. The address for these committee members is c/o China Renaissance Capital Investment, L.P., M&C Corporate Services Limited, P.O. Box 309GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands. Such persons disclaim beneficial ownership of these 4,909,541 ordinary shares except to the extent of their pecuniary interest therein. | |
(9) | Smart Create Group Limited is a company incorporated in British Virgin Islands and controlled by Neil Nanpeng Shen. The registered address of Smart Create Group Limited is P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands. |
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• | general finance and accounting support; |
• | human resources management support; |
• | administrative support; |
• | internal control and internal audit support; |
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• | operational management support; |
• | legal support; and |
• | information technology support. |
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Sales Price ($) | ||||||||
High | Low | |||||||
2007 (from August 9) | 36.45 | 12.26 | ||||||
2008 | 28.09 | 4.00 | ||||||
First quarter | 28.09 | 10.05 | ||||||
Second quarter | 18.38 | 10.32 | ||||||
Third quarter | 11.75 | 6.69 | ||||||
Fourth quarter | 8.87 | 4.00 | ||||||
2009 | 24.39 | 5.60 | ||||||
First quarter | 8.80 | 5.60 | ||||||
Second quarter | 16.98 | 7.65 | ||||||
Third quarter | 24.39 | 13.51 | ||||||
Fourth quarter | 23.94 | 16.70 | ||||||
October | 23.94 | 16.76 | ||||||
November | 21.40 | 16.70 | ||||||
December | 22.15 | 17.87 | ||||||
2010 | ||||||||
First quarter | 20.53 | 15.49 | ||||||
January | 19.49 | 15.49 | ||||||
February | 18.22 | 15.65 | ||||||
March | 20.53 | 18.08 | ||||||
April (through April 22) | 20.40 | 17.11 |
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• | banks; |
• | insurance companies; |
• | regulated investment companies; |
• | real estate investment trusts; |
• | broker-dealers; |
• | traders that elect to mark-to-market; |
• | U.S. expatriates; |
• | tax-exempt entities; |
• | persons liable for alternative minimum tax; |
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• | persons holding an ADS or ordinary share as part of a straddle, hedging, conversion or integrated transaction; |
• | persons that actually or constructively own 10% or more of the total combined voting power of all classes of our voting stock; |
• | persons who acquired ADSs or ordinary shares pursuant to the exercise of any employee share option or otherwise as compensation; or |
• | persons holding ADSs or ordinary shares through partnerships or other pass-through entities. |
• | an individual who is a citizen or resident of the United States; |
• | a corporation (or other entity taxable as a corporation) organized under the laws of the United States, any State thereof or the District of Columbia; |
• | an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or |
• | a trust that (1) is subject to the primary supervision of a court within the United States and the control of one or more U.S. persons for all substantial decisions or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person. |
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• | at least 75% of its gross income for such year is passive income, or |
• | at least 50% of the value of its assets (based on an average of the quarterly values of the assets) during such year is attributable to assets that produce passive income or are held for the production of passive income (the “asset test”). |
• | the excess distribution or gain will be allocated ratably over your holding period for the ADSs or ordinary shares, |
• | the amount allocated to the current taxable year, and any taxable years in your holding period prior to the first taxable year in which we were a PFIC, will be treated as ordinary income, and |
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• | the amount allocated to each other year will be subject to the highest tax rate in effect for individuals or corporations, as applicable, for each such year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year. |
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• | a fee of $1.50 per ADS or ADSs for transfers of certificated or direct registration ADSs; |
• | a fee of up to $0.05 per ADS (or portion thereof) for any cash distribution made pursuant to the deposit agreement; |
• | an aggregate fee of up to $0.05 per ADS (or portion thereof) per calendar year for services performed by the depositary in administering the ADSs (which fee may be charged on a periodic basis during each calendar year and shall be assessed against holders of our ADSs as of the record date or record dates set by the depositary during each calendar year and shall be payable at the sole discretion of the depositary by billing these holders or by deducting the charges from one or more cash dividends or other cash distributions); |
• | any other charge payable by the depositary or any of the depositary’s agents, including, without limitation, the custodian, or the agents of the depositary’s agents in connection with the servicing of our ordinary shares or other deposited securities (which charge shall be assessed against registered holders of our ADSs 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 registered 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 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; |
• | 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; |
• | expenses of the depositary in connection with the conversion of foreign currency into U.S. dollars; and |
• | such fees and expenses as are incurred by the depositary (including without limitation expenses incurred in connection with compliance with foreign exchange control regulations or any law or regulation relating to foreign investment) in delivery of deposited securities or otherwise in connection with the depositary’s or its custodian’s compliance with applicable laws, rules or regulations. |
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For the Year Ended December 31, | ||||||||
2008 | 2009 | |||||||
Audit fees(1) | 1,020,648 | 1,024,737 | ||||||
Audit-related fees(2) | 374,073 | 969,927 | ||||||
Tax fees(3) | 22,219 | — |
(1) | “Audit fees” means the aggregate fees billed for professional services rendered by our principal auditors for the audit of our annual financial statements and the review of our comparative interim financial statements. | |
(2) | “Audit related fees” represents aggregate fees billed for professional services rendered by our principal auditors for the assurance and related services. The audit-related fees in 2008 were billed for professional services rendered for the issuance of the audit and review of financial statements and other assurance services rendered in connection with our initial public offering in 2007 and expenses incurred during 2007 for our subsequent follow-on offering in January 2008. The audit-related fees in 2009 were billed for the professional services rendered for the issuance of the audit and review of financial statements and other assurance services rendered in connection with CRIC’s initial public offering in 2009. | |
(3) | “Tax fees” represents aggregate fees billed for professional services rendered by our principal auditors for tax compliance, tax advice and tax planning. |
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Total Number of Shares | Approximate Dollar | |||||||||||||||
Purchased as Part of | Value of Shares that | |||||||||||||||
Total Number of Shares | Average Price Paid Per | Publicly Announced | may Yet Be Purchased | |||||||||||||
Period | Purchased | Share | Plans | Under the Plans | ||||||||||||
January 14-21 | 158,274 | $ | 5.97 | 158,274 | 0 |
Exhibit Number | Description of Document | |||
1.1 | Amended and Restated Memorandum and Articles of Association (incorporated by reference to Exhibit 3.2 from our F-1 registration statement (File No. 333-148729), as amended, initially filed with the Commission on January 17, 2008) | |||
4.1 | E-House Share Incentive Plan, as amended and restated on October 16, 2008 (incorporated by reference to Exhibit 10.1 from our S-8 registration statement (File No. 333-148058), filed with the Commission on December 23, 2008) | |||
4.2 | CRIC Share Incentive Plan adopted as of September 9, 2008 (incorporated by reference to Exhibit 4.2 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on May 4, 2009) | |||
4.3 | Form of Indemnification Agreement with the Registrant’s directors (incorporated by reference to Exhibit 10.2 from our F-1 registration statement (File No. 333-148729), as amended, initially filed with the Commission on January 17, 2008) |
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Exhibit Number | Description of Document | |||
4.4 | Form of Employment Agreement with the Registrant’s senior executives (incorporated by reference to Exhibit 10.3 from our F-1 registration statement (File No. 333-148729), as amended, initially filed with the Commission on January 17, 2008) | |||
4.5 | * | English translation of Equity Pledge Agreement, dated July 20, 2009, between Shanghai CRIC Information Technology Co., Ltd., Shanghai Tian Zhuo Advertising Co., Ltd., Xin Zhou and Xudong Zhu. | ||
4.6 | * | English translation of Exclusive Call Option Agreement dated July 20, 2009 between Shanghai CRIC Information Technology Co., Ltd., Shanghai Tian Zhuo Advertising Co., Ltd., Xin Zhou and Xudong Zhu. | ||
4.7 | English translation of Loan Agreement, dated April 1, 2008, between Shanghai CRIC Information Technology Co., Ltd. and Xin Zhou. (incorporated by reference to Exhibit 4.8 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on May 4, 2009) | |||
4.8 | English translation of Loan Agreement, dated September 8, 2008, between Shanghai CRIC Information Technology Co., Ltd. and Xin Zhou. (incorporated by reference to Exhibit 4.10 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on May 4, 2009) | |||
4.9 | * | English translation of Loan Agreement, dated July 20, 2009, between Shanghai CRIC Information Technology Co., Ltd. and Xin Zhou. | ||
4.10 | * | English translation of Loan Agreement, dated July 20, 2009, between Shanghai CRIC Information Technology Co., Ltd., Xin Zhou and Xudong Zhu. | ||
4.11 | English translation of Loan Agreement, dated April 1, 2008, between Shanghai Tian Zhuo Advertising Co., Ltd. and Xin Zhou. (incorporated by reference to Exhibit 4.9 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on May 4, 2009) | |||
4.12 | English translation of Loan Agreement, dated September 8, 2008, between Shanghai Tian Zhuo Advertising Co., Ltd. and Xin Zhou. (incorporated by reference to Exhibit 4.11 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on May 4, 2009) | |||
4.13 | * | English translation of Shareholder Voting Rights Proxy Agreement, dated July 20, 2009, between Shanghai CRIC Information Technology Co., Ltd., Shanghai Tian Zhuo Advertising Co., Ltd., Xin Zhou and Xudong Zhu. | ||
4.14 | English translation of Consultancy Service Agreement, dated April 1, 2008, between Shanghai CRIC Information Technology Co., Ltd. and Shanghai Tian Zhuo Advertising Co., Ltd. (incorporated by reference to Exhibit 4.13 from our annual report on Form 20-F (File No. 001-33616), filed with the Commission on May 4, 2009) | |||
4.15 | * | English translation of Exclusive Call Option Agreement dated September 29, 2009 between Shanghai SINA Leju Information Technology Co., Ltd., Beijing Visheng Leju Information Services Co., Ltd., Xudong Zhu and Jun Luo. | ||
4.16 | * | English translation of Loan Agreement dated September 29, 2009 between Shanghai SINA Leju Information Technology Co., Ltd., Xudong Zhu and Jun Luo. |
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Exhibit Number | Description of Document | |||
4.17 | * | English translation of Shareholder Voting Rights Proxy Agreement dated September 29, 2009 between Shanghai SINA Leju Information Technology Co., Ltd., Beijing Visheng Leju Information Services Co., Ltd., Xudong Zhu and Jun Luo. | ||
4.18 | * | English translation of Equity Pledge Agreement dated September 29, 2009 between Shanghai SINA Leju Information Technology Co., Ltd., Beijing Visheng Leju Information Services Co., Ltd., Xudong Zhu and Jun Luo. | ||
4.19 | * | English translation of Exclusive Technical Support Agreement dated May 8, 2008 between Shanghai SINA Leju Information Technology Co., Ltd. and Beijing Visheng Leju Information Services Co., Ltd. | ||
4.20 | * | Share Purchase Agreement, dated as of July 23, 2009, and Amendment Agreement to the Share Purchase Agreement, dated September 29, 2009, between the Registrant and SINA Corporation. | ||
4.21* | Shareholders Agreement, dated as of October 21, 2009, by and among the Registrant, E-House (China) Holdings Limited and SINA Corporation. | |||
4.22* | Registration Rights Agreement, dated as of October 21, 2009, by and among the Registrant, E-House (China) Holdings Limited and SINA Corporation .. | |||
4.23 | * | Master Transaction Agreement, dated as of July 27, 2009, between the Registrant and E-House (China) Holdings Limited. | ||
4.24 | * | Offshore Transitional Services Agreement, dated as of July 27, 2009, between the Registrant and E-House (China) Holdings Limited. | ||
4.25 | * | English translation of Onshore Transitional Services Agreement, dated as of July 27, 2009, between Shanghai CRIC Information Technology Co., Ltd. and Shanghai Real Estate Sales (Group) Co., Ltd. | ||
4.26 | * | Non-Competition Agreement, dated as of July 27, 2009, between the Registrant and E-House (China) Holdings Limited. | ||
4.27 | * | English translation of Consulting and Services Agreement, dated as of June 30, 2009, between Shanghai CRIC Information Technology Co., Ltd. and Shanghai Real Estate Sales (Group) Co., Ltd. | ||
4.28 | * | English translation of Onshore Cooperation Agreement, dated as of August 31, 2009, among Shanghai Real Estate Sales (Group) Co., Ltd., Shanghai CRIC Information Technology Co., Ltd. and Shanghai Tian Zhuo Advertising Co., Ltd. |
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Exhibit Number | Description of Document | |||
8.1 | * | Subsidiaries of the Registrant | ||
11.1 | Code of Business Conduct and Ethics of the Registrant (incorporated by reference to Exhibit 99.1 from our F-1 registration statement (File No. 333-144451), as amended, initially filed with the Commission on July 10, 2007) | |||
12.1 | * | CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||
12.2 | * | CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||
13.1 | * | CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||
13.2 | * | CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||
15.1 | * | Consent of Deloitte Touche Tohmatsu CPA Ltd. | ||
15.2 | * | Consent of Fangda Partners |
* | Filed with this Annual Report on Form 20-F. |
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E-HOUSE (CHINA) HOLDINGS LIMITED | ||||
By: | /s/ Xin Zhou | |||
Name: | Xin Zhou | |||
Title: | Executive Chairman of the Board of Directors |
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FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
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F-4 | ||||
F-5 | ||||
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F-8 |
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E-House (China) Holdings Limited
April 23, 2010
F-2
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E-House (China) Holdings Limited
April 23, 2010
F-3
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(In U.S. dollar except for share data)
December 31, | ||||||||
2008 | 2009 | |||||||
$ | $ | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | 225,663,324 | 548,061,884 | ||||||
Restricted cash | 23,930,951 | 8,056,527 | ||||||
Marketable securities | 8,096,038 | — | ||||||
Customer deposits, net of allowance for doubtful accounts of $438,942 and $523,196 at December 31, 2008 and 2009, respectively | 71,855,522 | 38,958,140 | ||||||
Unbilled accounts receivable, net of allowance for doubtful accounts of $1,628,326 and $12,113,824 at December 31, 2008 and 2009, respectively | 83,617,483 | 120,020,485 | ||||||
Accounts receivable, net of allowance for doubtful accounts of $1,330,631 and $1,162,900 at December 31, 2008 and 2009, respectively | 36,667,535 | 33,452,323 | ||||||
Properties held for sale | 1,064,789 | 3,064,810 | ||||||
Advance payment for properties, current | 7,718,169 | 8,108,299 | ||||||
Deferred tax assets | 3,815,688 | 13,337,020 | ||||||
Prepaid expenses and other current assets | 17,752,283 | 18,697,780 | ||||||
Amounts due from related parties | 749,074 | 1,042,303 | ||||||
Total current assets | 480,930,856 | 792,799,571 | ||||||
Property and equipment, net | 9,622,486 | 16,218,641 | ||||||
Intangible assets, net | 3,433,205 | 202,694,693 | ||||||
Investment in affiliates | 5,062,394 | 398,396 | ||||||
Goodwill | 7,457,763 | 452,659,692 | ||||||
Deferred tax assets, non-current | 1,435,262 | 1,847,245 | ||||||
Customer deposits, non-current | 1,285,954 | 981,222 | ||||||
Other non-current assets | 10,685,625 | 4,525,320 | ||||||
TOTAL ASSETS | 519,913,545 | 1,472,124,780 | ||||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities: | ||||||||
Short-term borrowings | 21,947,100 | — | ||||||
Accounts payable | 1,492,242 | 9,864,773 | ||||||
Accrued payroll and welfare expenses | 11,628,750 | 31,418,709 | ||||||
Income tax payable | 17,560,407 | 38,225,826 | ||||||
Other tax payable | 6,638,047 | 12,072,447 | ||||||
Deposits payable | 39,212,152 | — | ||||||
Amounts due to related parties | 621,518 | 1,050,000 | ||||||
Advance from property buyers | 1,166,342 | 6,587,093 | ||||||
Other current liabilities | 8,406,075 | 15,928,381 | ||||||
Total current liabilities | 108,672,633 | 115,147,229 | ||||||
Deferred tax liabilities | 705,980 | 42,326,523 | ||||||
Other non-current liabilities | 3,544,927 | 1,331,323 | ||||||
Total liabilities | 112,923,540 | 158,805,075 | ||||||
Commitments and contingencies (Note 22) | ||||||||
Equity: | ||||||||
Ordinary shares ($0.001 par value): 1,000,000,000 and 1,000,000,000 shares authorized, 79,769,481 and 80,145,869 shares issued and outstanding, as of December 31, 2008 and 2009, respectively | 79,770 | 80,146 | ||||||
Additional paid-in capital | 301,812,186 | 656,592,898 | ||||||
Retained earnings | 85,296,056 | 184,749,251 | ||||||
Accumulated other comprehensive income | 16,110,460 | 16,344,294 | ||||||
Total E-House equity | 403,298,472 | 857,766,589 | ||||||
Non-controlling interests | 3,691,533 | 455,553,116 | ||||||
Total equity | 406,990,005 | 1,313,319,705 | ||||||
TOTAL LIABILITIES AND EQUITY | 519,913,545 | 1,472,124,780 | ||||||
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(In U.S. dollar except for share data)
Years Ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
$ | $ | $ | ||||||||||
Total revenues | 121,016,600 | 154,487,455 | 299,538,656 | |||||||||
Cost of revenues | (23,510,065 | ) | (31,855,848 | ) | (70,343,445 | ) | ||||||
Selling, general and administrative expenses | (45,545,800 | ) | (77,197,631 | ) | (125,721,179 | ) | ||||||
Gain from settlement of pre-existing relationship | — | — | 2,100,832 | |||||||||
Income from operations | 51,960,735 | 45,433,976 | 105,574,864 | |||||||||
Interest expense | (621,903 | ) | (2,420,468 | ) | (215,854 | ) | ||||||
Interest income | 2,489,668 | 3,062,513 | 1,038,789 | |||||||||
Other income, net | 197,892 | 1,970,481 | 8,780,370 | |||||||||
Income before taxes and equity in affiliates | 54,026,392 | 48,046,502 | 115,178,169 | |||||||||
Income tax expense | (10,277,040 | ) | (8,712,558 | ) | (19,924,081 | ) | ||||||
Income before equity in affiliates | 43,749,352 | 39,333,944 | 95,254,088 | |||||||||
Income from equity in affiliates | — | 153,700 | 22,128,235 | |||||||||
Net income | 43,749,352 | 39,487,644 | 117,382,323 | |||||||||
Less: Net income (loss) attributable to non-controlling interests | 2,023,537 | (88,380 | ) | 17,104,023 | ||||||||
Net income attributable to E-House shareholders | 41,725,815 | 39,576,024 | 100,278,300 | |||||||||
Earnings per share: | ||||||||||||
Basic | $ | 0.62 | $ | 0.48 | $ | 1.26 | ||||||
Diluted | $ | 0.56 | $ | 0.48 | $ | 1.25 | ||||||
Shares used in computation: | ||||||||||||
Basic | 60,386,083 | 81,818,972 | 79,643,079 | |||||||||
Diluted | 74,555,709 | 82,110,430 | 80,456,210 |
F-5
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AND COMPREHENSIVE INCOME
(In U.S. dollar)
Retained | Accumulated | |||||||||||||||||||||||||||||||
Additional | Earnings | Other | Total | |||||||||||||||||||||||||||||
Ordinary | Paid-in | (Accumulated | Comprehensive | Non-controlling | Total | Comprehensive | ||||||||||||||||||||||||||
Shares | Capital | Deficit) | Income | Interests | Equity | Income | ||||||||||||||||||||||||||
Number | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||
Balance at January 1, 2007 | 50,000,000 | 50,000 | 18,399,306 | 12,979,130 | 941,755 | 2,328,394 | 34,698,585 | |||||||||||||||||||||||||
Series A redeemable convertible preferred shares converted into ordinary shares | 13,157,895 | 13,158 | 24,815,254 | — | — | — | 24,828,412 | — | ||||||||||||||||||||||||
Issuance of ordinary shares, net of issuance costs | 13,167,500 | 13,168 | 165,249,586 | — | — | — | 165,262,754 | — | ||||||||||||||||||||||||
Vesting of restricted shares | 148,364 | 148 | 489,453 | — | — | — | 489,601 | — | ||||||||||||||||||||||||
Net income | — | — | — | 41,725,815 | — | 2,023,537 | 43,749,352 | 43,749,352 | ||||||||||||||||||||||||
Dividends to non-controlling interests | — | — | — | — | — | (845,268 | ) | (845,268 | ) | — | ||||||||||||||||||||||
Capital contribution by non-controlling interest | — | — | — | — | — | 224,550 | 224,550 | — | ||||||||||||||||||||||||
Non-controlling interest recognized in connection with business acquisition | — | — | — | — | — | 219,791 | 219,791 | — | ||||||||||||||||||||||||
Purchase from non-controlling interest | — | — | — | — | — | (1,218,583 | ) | (1,218,583 | ) | — | ||||||||||||||||||||||
Adoption of ASC 740 uncertain tax positions | — | — | — | (200,000 | ) | — | — | (200,000 | ) | — | ||||||||||||||||||||||
Share-based compensation | — | — | 952,889 | — | — | — | 952,889 | — | ||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | 5,743,358 | 186,179 | 5,929,537 | 5,929,537 | ||||||||||||||||||||||||
Balance at December 31, 2007 | 76,473,759 | 76,474 | 209,906,488 | 54,504,945 | 6,685,113 | 2,918,600 | 274,091,620 | 49,678,889 | ||||||||||||||||||||||||
Issuance of ordinary shares, net of issuance costs | 6,000,000 | 6,000 | 97,392,482 | — | — | — | 97,398,482 | — | ||||||||||||||||||||||||
Repurchase of shares | (2,848,278 | ) | (2,848 | ) | (10,563,338 | ) | (8,784,913 | ) | — | — | (19,351,099 | ) | — | |||||||||||||||||||
Vesting of restricted shares | 144,000 | 144 | 475,056 | — | — | — | 475,200 | — | ||||||||||||||||||||||||
Net income | — | — | — | 39,576,024 | — | (88,380 | ) | 39,487,644 | 39,487,644 | |||||||||||||||||||||||
Dividends to non-controlling interest | — | — | — | — | — | (346,939 | ) | (346,939 | ) | — | ||||||||||||||||||||||
Non-controlling interest recognized in connection with business acquisition | — | — | — | — | — | 1,173,582 | 1,173,582 | — | ||||||||||||||||||||||||
Share-based compensation | — | — | 4,601,498 | — | — | — | 4,601,498 | — | ||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | 9,425,347 | 34,670 | 9,460,017 | 9,460,017 | ||||||||||||||||||||||||
Balance at December 31, 2008 | 79,769,481 | 79,770 | 301,812,186 | 85,296,056 | 16,110,460 | 3,691,533 | 406,990,005 | 48,947,661 | ||||||||||||||||||||||||
Net income | — | — | — | 100,278,300 | — | 17,104,023 | 117,382,323 | 117,382,323 | ||||||||||||||||||||||||
Repurchase of shares | (277,174 | ) | (277 | ) | (1,048,703 | ) | (825,105 | ) | — | — | (1,874,085 | ) | — | |||||||||||||||||||
Share-based compensation | — | — | 10,185,511 | — | — | 1,735,043 | 11,920,554 | — | ||||||||||||||||||||||||
Excise of share options | 509,562 | 509 | 2,753,597 | — | — | — | 2,754,106 | — | ||||||||||||||||||||||||
Vesting of restricted shares | 144,000 | 144 | 434,586 | — | — | — | 434,730 | — | ||||||||||||||||||||||||
Replacement of COHT share options | — | — | 7,486,795 | — | — | 7,474,001 | 14,960,796 | — | ||||||||||||||||||||||||
Capital injection and non-controlling interest recognized in connection with business acquisition | — | — | — | — | — | 1,260,780 | 1,260,780 | — | ||||||||||||||||||||||||
Purchase from non-controlling interest | — | — | (17,446,572 | ) | — | 77,597 | (19,880,354 | ) | (37,249,329 | ) | — | |||||||||||||||||||||
Recognition of change in E-House’s economic interests in CRIC | — | — | 352,415,498 | — | — | 444,287,620 | 796,703,118 | — | ||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | 156,237 | (119,530 | ) | 36,707 | 36,707 | |||||||||||||||||||||||
Balance at December 31, 2009 | 80,145,869 | 80,146 | 656,592,898 | 184,749,251 | 16,344,294 | 455,553,116 | 1,313,319,705 | 117,419,030 | ||||||||||||||||||||||||
F-6
Table of Contents
(In U.S. dollar)
Years Ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
$ | $ | $ | ||||||||||
Operating activities: | ||||||||||||
Net income | 43,749,352 | 39,487,644 | 117,382,323 | |||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||||||
Depreciation and amortization | 2,328,527 | 4,114,761 | 10,162,437 | |||||||||
Gain from settlement of pre-existing relationship | — | — | (2,100,832 | ) | ||||||||
Income from equity in affiliates | — | (153,700 | ) | (22,128,235 | ) | |||||||
Allowance for doubtful accounts | 2,359,752 | 2,583,853 | 13,937,173 | |||||||||
Share-based compensation | 952,889 | 4,601,498 | 11,920,554 | |||||||||
Others | 196,084 | 237,895 | 1,030,759 | |||||||||
Changes in operating assets and liabilities: | ||||||||||||
Restricted cash | (829,127 | ) | 1,887,622 | (6,852,856 | ) | |||||||
Customer deposits | (121,452,918 | ) | 56,359,296 | 32,813,578 | ||||||||
Accounts receivable | (31,388,959 | ) | (57,191,210 | ) | (37,823,690 | ) | ||||||
Marketable securities | — | (8,096,038 | ) | 8,096,038 | ||||||||
Amounts due from related parties | (1,900,060 | ) | 2,024,914 | 731,809 | ||||||||
Deferred taxes | (2,941,810 | ) | (2,119,638 | ) | (9,933,315 | ) | ||||||
Prepaid expenses and other current assets | 2,190,645 | (5,610,975 | ) | 5,752,434 | ||||||||
Other non-current assets | (1,026,750 | ) | 2,308,366 | 3,180,863 | ||||||||
Accounts payable | 277,021 | (155,316 | ) | (4,188,599 | ) | |||||||
Accrued payroll and welfare expenses | 8,532,783 | (1,108,809 | ) | 19,538,868 | ||||||||
Income tax payable | 10,834,505 | (325,654 | ) | 20,534,956 | ||||||||
Other tax payable | 2,951,409 | 1,076,658 | 5,434,026 | |||||||||
Amounts due to related parties | 1,621,999 | (1,475,685 | ) | (146,075 | ) | |||||||
Deposits payable | — | 39,212,152 | (39,212,152 | ) | ||||||||
Other current liabilities | 2,271,595 | 315,506 | 1,473,279 | |||||||||
Other non-current liabilities | — | — | (502,102 | ) | ||||||||
Net cash provided by (used in) operating activities | (81,273,063 | ) | 77,973,140 | 129,101,241 | ||||||||
Investing activities: | ||||||||||||
Deposit for and purchase of property and equipment | (4,287,825 | ) | (5,136,016 | ) | (6,315,343 | ) | ||||||
Advance payment for properties | — | (15,620,751 | ) | — | ||||||||
Purchase of subsidiaries, net of cash acquired | (568,640 | ) | (2,399,326 | ) | 3,243,113 | |||||||
Prepayment for acquisition | — | (1,594,823 | ) | — | ||||||||
Investment in affiliates | — | (2,500,000 | ) | (329,468 | ) | |||||||
Proceeds from sale of property held for sale | 627,027 | 749,999 | 5,080,606 | |||||||||
Proceeds from disposal of property and equipment | 16,597 | 46,193 | 233,968 | |||||||||
Collection of loans from related parties | 43,885 | — | — | |||||||||
Net cash provided by (used in) investing activities | (4,168,956 | ) | (26,454,724 | ) | 1,912,876 | |||||||
Financing activities: | ||||||||||||
Net proceeds from short-term borrowings | — | 42,482,100 | — | |||||||||
Purchases of non-controlling interests | (1,331,400 | ) | (65,999 | ) | (37,290,289 | ) | ||||||
Repayment of short-term borrowings | (4,233,916 | ) | (27,380,000 | ) | (21,947,100 | ) | ||||||
Restricted cash-pledged accounts | — | (22,727,280 | ) | 22,727,280 | ||||||||
Advance from a related party | 1,440,001 | — | 1,050,000 | |||||||||
Contribution from non-controlling interests | — | — | 1,175,244 | |||||||||
Proceeds from exercise of options | — | — | 2,754,106 | |||||||||
Proceeds from issuance of ordinary shares, net of paid issuance costs for 2007 and 2008 of $16,106,695 and $4,488,986, respectively | 165,612,754 | 97,505,014 | — | |||||||||
Proceeds from issuance of ordinary shares of CRIC upon initial public offering, net of paid issuance costs of $23,548,949 | — | — | 224,851,051 | |||||||||
Payment of E-House’s offering costs | — | (220,804 | ) | (74,629 | ) | |||||||
Repurchase of shares | — | (19,208,685 | ) | (2,016,499 | ) | |||||||
Dividends to non-controlling interests | (644,194 | ) | (346,937 | ) | — | |||||||
Loans from related parties | 1,264,698 | — | — | |||||||||
Repayment of loans from related parties | (1,331,797 | ) | — | — | ||||||||
Net cash provided by financing activities | 160,776,146 | 70,037,409 | 191,229,164 | |||||||||
Effect of exchange rate changes | 1,507,415 | 2,959,952 | 155,279 | |||||||||
Net increase in cash and cash equivalents | 76,841,542 | 124,515,777 | 322,398,560 | |||||||||
Cash and cash equivalents at the beginning of the year | 24,306,005 | 101,147,547 | 225,663,324 | |||||||||
Cash and cash equivalents at the end of the year | 101,147,547 | 225,663,324 | 548,061,884 | |||||||||
Supplemental disclosure of cash flow information: | ||||||||||||
Interest paid | 621,903 | 2,396,514 | 252,481 | |||||||||
Income taxes paid | 3,559,865 | 12,466,793 | 9,398,214 | |||||||||
Non-cash investing and financing activities: | ||||||||||||
Acquisition of property held for sale — Accounts receivable | 859,850 | 183,839 | 3,471,273 | |||||||||
Advance payment for property held for sale — Accounts receivable | — | 1,098,721 | — | |||||||||
Issuance of ordinary shares for business acquisition | 572,000,004 | |||||||||||
Offering cost to be paid | 350,000 | 235,728 | 146,451 | |||||||||
Replacement of share option for combination | — | — | 14,960,796 | |||||||||
Capitalization of costs for repurchase of shares — other current liabilities | — | 142,414 | — | |||||||||
Provision for ASC 740 uncertain tax positions | 200,000 | — | — | |||||||||
Non-controlling interest recognized in connection with business acquisition | — | — | 85,536 |
F-7
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2007, 2008 AND 2009
(In U.S. dollar)
Date of | Place of | Percentage of | ||||||||||
incorporation | incorporation | Ownership | ||||||||||
Shanghai Real Estate Sales (Group) Co., Limited | 15-Aug-00 | PRC | 100 | % | ||||||||
Shanghai City Rehouse Agent Consultants Co., Ltd. | 17-May-02 | PRC | 85 | % | ||||||||
E-House Real Estate Asset Management Co., Ltd. | 22-Aug-06 | Cayman | 51 | % | ||||||||
China Real Estate Information Corporation | 21-Aug-08 | Cayman | 52 | % | ||||||||
Shanghai Tian Zhuo Advertising Co., Ltd. | 27-Feb-08 | PRC | VIE | |||||||||
Beijing Visheng Leju Information Services Co., Ltd. | 13-Feb-08 | PRC | VIE |
F-8
Table of Contents
F-9
Table of Contents
As of December 31, 2009 | ||||
$ | ||||
Total assets | 15,367,010 | |||
Total liabilities | 13,584,892 |
As of December 31, 2009 | ||||
$ | ||||
Total assets | 4,697,532 | |||
Total liabilities | 6,703,036 |
F-10
Table of Contents
F-11
Table of Contents
F-12
Table of Contents
Leasehold improvements | Over the shorter of the lease term or their estimated useful lives | |
Buildings | 30 years | |
Furniture, fixtures and equipment | 5 years | |
Motor vehicles | 5 years |
F-13
Table of Contents
F-14
Table of Contents
F-15
Table of Contents
F-16
Table of Contents
2007 | 2008 | 2009 | ||||||||||
$ | $ | $ | ||||||||||
Balance as of January 1, | 52,551 | 2,441,796 | 3,397,899 | |||||||||
Provisions for doubtful accounts | 2,359,752 | 2,583,853 | 13,739,796 | |||||||||
Business acquisition | — | — | 2,440,358 | |||||||||
Write offs | — | (1,691,021 | ) | (5,787,424 | ) | |||||||
Changes due to foreign exchange | 29,493 | 63,271 | 9,291 | |||||||||
Balance as of December 31, | 2,441,796 | 3,397,899 | 13,799,920 | |||||||||
F-17
Table of Contents
Years Ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
Net income attributable to E-House ordinary shareholders — basic | $ | 37,263,701 | $ | 39,576,024 | $ | 100,278,300 | ||||||
Incremental income from CRIC* | — | — | $ | 750,308 | ||||||||
Amount allocated to Series A Shares for participating rights to dividends | $ | 4,462,114 | $ | — | $ | — | ||||||
Net income attributable to E-House ordinary shareholders — diluted | $ | 41,725,815 | $ | 39,576,024 | $ | 101,028,608 | ||||||
Weighted average ordinary shares outstanding | 60,386,083 | 81,818,972 | 79,643,079 | |||||||||
Share options | 397,393 | 291,458 | 813,131 | |||||||||
Series A preferred shares | 13,772,233 | — | — | |||||||||
Weighted average number of ordinary shares outstanding — diluted | 74,555,709 | 82,110,430 | 80,456,210 | |||||||||
Basic earnings per share | $ | 0.62 | $ | 0.48 | $ | 1.26 | ||||||
Diluted earnings per share | $ | 0.56 | $ | 0.48 | $ | 1.25 | ||||||
* | In calculating diluted earnings per share, the amount of CRIC’s net income included in net income attributable to E-House’s ordinary shareholders is calculated by multiplying CRIC’s diluted EPS by the weighted average number of CRIC shares held by E-House’s during the period, which may result in net income attributable to E-House ordinary shareholders, for purposes of computing diluted earnings per share, being different from that actually recorded in the consolidated statements of operations. This difference is presented as incremental income from CRIC. |
F-18
Table of Contents
2007 | 2008 | 2009 | ||||||||||
$ | $ | $ | ||||||||||
Net income attributable to E-House | 41,725,815 | 39,576,024 | 100,278,300 | |||||||||
Transfers (to) from the non-controlling interest: | ||||||||||||
Increase in E-House’s additional paid-in capital for sale of 71,400,000 CRIC common shares | — | — | 352,415,498 | |||||||||
Decrease in E-House’s additional paid-in capital for purchase of 3,033,333 CRIC common shares | — | — | (17,446,572 | ) | ||||||||
Net transfers (to) from non-controlling interest | — | — | 334,968,926 | |||||||||
Change from net income attributable to E-House and transfers (to) from non-controlling interest | 41,725,815 | 39,576,024 | 435,247,226 | |||||||||
F-19
Table of Contents
F-20
Table of Contents
F-21
Table of Contents
As of December 31 | ||||||||
2008 | 2009 | |||||||
$ | $ | |||||||
Advance payment for advertising placement | 7,654,577 | 1,400,862 | ||||||
Prepaid expenses | 1,987,959 | 3,717,377 | ||||||
Other receivable from developers | — | 6,730,444 | ||||||
Others | 8,109,747 | 6,849,097 | ||||||
Total | 17,752,283 | 18,697,780 | ||||||
F-22
Table of Contents
Allocated | Amortization | |||||||
Value | Period | |||||||
$ | ||||||||
Cash acquired | 1,700,000 | |||||||
Intangible assets: | ||||||||
Advertising rights | 2,162,972 | 10 years | ||||||
Customer contract backlog | 252,607 | 6 months | ||||||
License to CRIC database | 793,115 | 10 years | ||||||
Total | 4,908,694 | |||||||
Amount | ||||
$ | ||||
Fair value of CRIC’s shares issued* | 572,000,004 | |||
Replacement of COHT share options | 14,960,796 | |||
Consideration | 586,960,800 | |||
Fair value of the CRIC’s investment in COHT held before the business combination** | 27,078,000 | |||
Total value to be allocated in purchase accounting | 614,038,800 | |||
* | The fair value of the 47,666,667 ordinary shares issued by the CRIC was based on the IPO offering price of CRIC’s ADS. | |
** | As a result of the Company obtaining control over COHT, the Company’s previously held equity interest was remeasured to fair value of $27,078,000, with the excess of fair value over the carrying amount recognized as a gain of $21,453,221. |
F-23
Table of Contents
Allocated Value | Amortization Period | |||||||
$ | ||||||||
Total tangible assets acquired | 26,703,269 | |||||||
Liabilities assumed | (17,432,772 | ) | ||||||
Intangible assets acquired: | ||||||||
— License agreements with SINA | 80,660,000 | 10 years | ||||||
— Real estate advertising agency agreement with SINA | 106,790,000 | 10 years | ||||||
— CRIC database license agreement | 8,300,000 | 9 years | ||||||
— Customer relationship | 5,580,000 | 10 years | ||||||
— Contract backlog | 110,000 | 1 year | ||||||
Goodwill | 444,885,665 | |||||||
Deferred tax liabilities | (41,557,362 | ) | ||||||
Total | 614,038,800 | |||||||
F-24
Table of Contents
Allocated Value | Amortization Period | |||||||
$ | ||||||||
Cash | 1,265,772 | |||||||
Other current assets | 1,463,529 | |||||||
Liabilities assumed | (4,390,507 | ) | ||||||
Leasehold improvement | 2,077,479 | 5-20 years | ||||||
Prepaid rent | 4,348,647 | 20 years | ||||||
Favorable lease term | 2,428,110 | 20 years | ||||||
Total | 7,193,030 | |||||||
Allocated Value | Amortization Period | |||||||
$ | ||||||||
Cash acquired | 1,759,968 | |||||||
Intangible assets | ||||||||
—Customer advertising designing contracts | 130,924 | 3 months | ||||||
—Non-compete agreement | 145,720 | 5 years | ||||||
Goodwill | 674,847 | |||||||
Deferred tax liabilities | (32,731 | ) | ||||||
Total | 2,678,728 | |||||||
Allocated Value | Amortization Period | |||||||
$ | ||||||||
Tangible assets acquired | 1,217,304 | |||||||
Liabilities assumed | (1,434,594 | ) | ||||||
Intangible assets—Non-compete agreement | 853,192 | 5 years | ||||||
Goodwill | 4,028,514 | |||||||
Deferred tax liabilities | (213,298 | ) | ||||||
Total | 4,451,118 | |||||||
F-25
Table of Contents
Year ended December 31 | ||||||||
2008 | 2009 | |||||||
$ | $ | |||||||
Revenue | 188,794,455 | 324,343,683 | ||||||
Net income | 29,260,101 | 94,508,704 | ||||||
Earnings per share: | ||||||||
Basic | 0.36 | 1.19 | ||||||
Diluted | 0.36 | 0.96 |
As of December 31 | ||||||||
2008 | 2009 | |||||||
$ | $ | |||||||
Leasehold improvements | 4,815,820 | 9,215,325 | ||||||
Buildings | 1,124,993 | 3,755,633 | ||||||
Furniture, fixtures and equipment | 6,493,426 | 9,374,457 | ||||||
Motor vehicles | 4,130,132 | 4,068,224 | ||||||
Total | 16,564,371 | 26,413,639 | ||||||
Less: Accumulated depreciation | (6,941,885 | ) | (10,194,998 | ) | ||||
Property and equipment, net | 9,622,486 | 16,218,641 | ||||||
F-26
Table of Contents
As of December 31, | ||||||||
2008 | 2009 | |||||||
$ | $ | |||||||
Intangible assets not subject to amortization are comprised of the following: | ||||||||
Trademark | 698,133 | 698,787 | ||||||
Intangible assets subject to amortization are comprised of the following: | ||||||||
Customer contracts | 5,192,903 | 3,353,240 | ||||||
Non-compete agreements | 998,912 | 1,612,112 | ||||||
Computer software licenses | 850,976 | 2,027,248 | ||||||
License agreements with SINA | — | 80,660,000 | ||||||
Advertising agency agreement | — | 106,790,000 | ||||||
Database license | — | 8,300,000 | ||||||
Customer relationship | — | 5,788,603 | ||||||
Favorable lease term | — | 2,428,110 | ||||||
7,042,791 | 210,959,313 | |||||||
Less: Accumulated amortization | ||||||||
Customer contracts | (3,951,845 | ) | (2,903,452 | ) | ||||
Non-compete agreements | — | (388,634 | ) | |||||
Computer software licenses | (355,874 | ) | (661,625 | ) | ||||
License agreements with SINA | — | (2,016,500 | ) | |||||
Advertising agency agreement | — | (2,617,402 | ) | |||||
Database license | — | (244,118 | ) | |||||
Customer relationship | — | (40,622 | ) | |||||
Favorable lease term | — | (91,054 | ) | |||||
Intangible assets subject to amortization, net | 2,735,072 | 201,995,906 | ||||||
Total intangible assets, net | 3,433,205 | 202,694,693 | ||||||
F-27
Table of Contents
Primary | Secondary | Real estate | ||||||||||||||||||||||
real estate | real estate | information | Real estate | Real estate | ||||||||||||||||||||
agency | brokerage | and consulting | advertising | online | ||||||||||||||||||||
services | services | services | services | services | ||||||||||||||||||||
segment | segment | segment | segment | segment | Total | |||||||||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||||||||||||
Balance as of January 1, 2008 | 2,481,073 | 68,325 | — | — | — | 2,549,398 | ||||||||||||||||||
Goodwill recognized upon acquisition | — | — | 4,028,514 | 674,847 | — | 4,703,361 | ||||||||||||||||||
Exchange rate translation | 200,305 | 4,699 | — | — | — | 205,004 | ||||||||||||||||||
Balance as of December 31, 2008 | 2,681,378 | 73,024 | 4,028,514 | 674,847 | — | 7,457,763 | ||||||||||||||||||
Goodwill recognized upon acquisition | — | — | 322,275 | — | 444,885,665 | 445,207,940 | ||||||||||||||||||
Exchange rate translation | 2,511 | 68 | — | (8,590 | ) | — | (6,011 | ) | ||||||||||||||||
Balance as of December 31, 2009 | 2,683,889 | 73,092 | 4,350,789 | 666,257 | 444,885,665 | 452,659,692 | ||||||||||||||||||
F-28
Table of Contents
As of December 31 | ||||||||
2008 | 2009 | |||||||
$ | $ | |||||||
Advance payment for advertising placement, non-current portion (note 5) | 2,889,702 | — | ||||||
Advance payment for properties, non-current portion (note 4) | 7,791,586 | — | ||||||
Other non-current assets | 4,337 | 4,525,320 | ||||||
Total | 10,685,625 | 4,525,320 | ||||||
F-29
Table of Contents
F-30
Table of Contents
Years Ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
$ | $ | $ | ||||||||||
Gain from sale of marketable securities | 525,220 | 405,781 | 3,436,713 | |||||||||
Project management fees | 339,181 | — | — | |||||||||
Government subsidies | — | 1,247,468 | 4,759,411 | |||||||||
Reimbursement income from depository agent | — | 778,196 | 626,888 | |||||||||
Loss from sales of property | — | — | (121,639 | ) | ||||||||
Foreign exchange gain (loss) | (666,509 | ) | (460,964 | ) | 78,997 | |||||||
Total other income | 197,892 | 1,970,481 | 8,780,370 | |||||||||
Years Ended December 31 | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
$ | $ | $ | ||||||||||
Current Tax | ||||||||||||
PRC | 13,127,387 | 9,328,732 | 29,967,894 | |||||||||
Other | — | 1,549,525 | 48,961 | |||||||||
13,127,387 | 10,878,257 | 30,016,855 | ||||||||||
Deferred Tax | ||||||||||||
PRC | (2,850,347 | ) | (2,165,699 | ) | (10,092,774 | ) | ||||||
Other | — | — | — | |||||||||
(2,850,347 | ) | (2,165,699 | ) | (10,092,774 | ) | |||||||
Income tax expense | 10,277,040 | 8,712,558 | 19,924,081 | |||||||||
F-31
Table of Contents
F-32
Table of Contents
As of December 31 | ||||||||
2008 | 2009 | |||||||
$ | $ | |||||||
Deferred tax assets: | ||||||||
Accrued salary expenses | 1,682,580 | 7,099,622 | ||||||
Bad debt provision | 740,439 | 4,374,469 | ||||||
Net operating loss carryforwards | 5,537,472 | 3,553,681 | ||||||
Other | 497,831 | 313,578 | ||||||
Gross deferred tax assets | 8,458,322 | 15,341,350 | ||||||
Valuation allowance | (3,207,372 | ) | (157,085 | ) | ||||
Total deferred tax assets | 5,250,950 | 15,184,265 | ||||||
Analysis as: | ||||||||
Current | 3,815,688 | 13,337,020 |
F-33
Table of Contents
As of December 31 | ||||||||
2008 | 2009 | |||||||
$ | $ | |||||||
Non-current | 1,435,262 | 1,847,245 | ||||||
Deferred tax liabilities: | ||||||||
Amortization of intangible and other assets | 705,980 | 42,326,523 | ||||||
Total deferred tax liabilities | 705,980 | 42,326,523 | ||||||
Analysis as: | ||||||||
Current | — | — | ||||||
Non-current | 705,980 | 42,326,523 | ||||||
2007 | 2008 | 2009 | ||||||||||
$ | $ | $ | ||||||||||
Balance as of January 1, | 994,564 | 2,015,366 | 3,207,372 | |||||||||
Additions | 1,005,463 | 1,847,356 | 28,273 | |||||||||
Business acquisition | — | — | 292,638 | |||||||||
Releases | (91,077 | ) | (827,828 | ) | (3,372,782 | ) | ||||||
Changes due to foreign exchange | 106,416 | 172,478 | 1,584 | |||||||||
Balance as of December 31, | 2,015,366 | 3,207,372 | 157,085 | |||||||||
Year Ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
PRC income tax rate | 33.00 | % | 25.00 | % | 25.00 | % | ||||||
Expenses not deductible for tax purposes | 1.08 | % | 0.48 | % | 0.31 | % | ||||||
Tax exemption granted to group | (1.66 | %) | — | — | ||||||||
Effect of lower rates in certain domestic locations | (14.35 | %) | (9.13 | %) | (6.79 | %) | ||||||
Effect of different tax rate of subsidiary operation in other jurisdiction | (0.46 | %) | (0.37 | %) | 1.68 | % | ||||||
Effect of new income tax law | (0.70 | %) | — | |||||||||
Valuation allowance movement | 2.11 | % | 2.23 | % | (2.90 | %) | ||||||
19.02 | % | 18.21 | % | 17.30 | % | |||||||
F-34
Table of Contents
Year Ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
$ | $ | $ | ||||||||||
The aggregate dollar effect | 633,549 | — | 1,433,584 | |||||||||
Per share effect —basic | 0.01 | — | 0.02 | |||||||||
Per share effect—diluted | 0.01 | — | 0.02 |
F-35
Table of Contents
2007 | 2008 | |||||||
Average risk-free rate of return | 4.76 | % | 3.98 | % | ||||
Contractual life of option | 10 years | 10 years | ||||||
Average estimated volatility rate | 62.7 | % | 59.3 | % | ||||
Average dividend yield | 0.00 | % | 0.00 | % |
Weighted | ||||||||||||||||
Weighted | average | |||||||||||||||
average | remaining | Aggregate | ||||||||||||||
Number of | exercise | contractual | intrinsic | |||||||||||||
options | price | term | value of options | |||||||||||||
$ | $ | |||||||||||||||
Outstanding, as of January 1, 2009 | 2,314,166 | 5.39 | ||||||||||||||
Granted | — | |||||||||||||||
Exercised | (509,562 | ) | 5.40 | |||||||||||||
Forfeited | (45,167 | ) | 5.37 | |||||||||||||
Cancelled | — | |||||||||||||||
Outstanding, as of December 31, 2009 | 1,759,437 | 5.38 | 8.0 | 22,411,580 | ||||||||||||
Vested and expected to vest as of December 31, 2009 | 1,654,984 | 5.38 | 7.9 | 21,079,810 | ||||||||||||
Exercisable as of December 31, 2009 | 602,605 | 5.38 | 7.9 | 7,674,968 |
F-36
Table of Contents
No. of | Weighted average | |||||||
restricted shares | grant-date fair value | |||||||
$ | ||||||||
Unvested as of January 1, 2009 | 144,000 | 1.39 | ||||||
Granted | 931,000 | 16.40 | ||||||
Vested | (144,000 | ) | 1.39 | |||||
Forfeited | — | — | ||||||
Unvested as of December 31, 2009 | 931,000 | 16.40 | ||||||
F-37
Table of Contents
2009 | ||||
Average risk-free rate of return | 3.22 | % | ||
Contractual life of option | 10 years | |||
Average estimated volatility rate | 71.79 | % | ||
Average dividend yield | 0.00 | % |
F-38
Table of Contents
2009 | ||||
Average risk-free rate of return | 2.47 | % | ||
Contractual life of option | 5.2 years | |||
Average estimated volatility rate | 63.18 | % | ||
Average dividend yield | 0.00 | % |
Weighted | ||||||||||||||||
Weighted | average | |||||||||||||||
average | remaining | Aggregate | ||||||||||||||
Number of | exercise | contractual | intrinsic | |||||||||||||
options | price | term | value of options | |||||||||||||
$ | $ | |||||||||||||||
Outstanding, as of January 1, 2009 | — | — | — | |||||||||||||
Granted | 8,692,000 | 4.23 | ||||||||||||||
Replacement under the Options Replacement Program | 3,609,000 | 0.64 | ||||||||||||||
Exercised | — | |||||||||||||||
Forfeited | (154,500 | ) | 4.43 | |||||||||||||
Modified | (504,500 | ) | 3.00 | |||||||||||||
Cancelled | (300,000 | ) | 3.50 | |||||||||||||
Outstanding, as of December 31, 2009 | 11,342,000 | 3.16 | 7.86 | 88,649,505 | ||||||||||||
Vested and expected to vest as of December 31, 2009 | 10,681,370 | 3.16 | 7.86 | 83,485,999 | ||||||||||||
Exercisable as of December 31, 2009 | 615,469 | 0.64 | 4.97 | 6,361,154 |
F-39
Table of Contents
No. of | Weighted average | |||||||
restricted shares | grant-date fair value | |||||||
$ | ||||||||
Unvested as of January 1, 2009 | — | — | ||||||
Granted | 300,000 | 2.59 | ||||||
Vested | — | — | ||||||
Forfeited | — | — | ||||||
Unvested as of December 31, 2009 | 300,000 | 2.59 |
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Table of Contents
F-41
Table of Contents
Secondary real | Real estate | |||||||||||||||||||||||||||||||
Primary real | estate | information | Real estate | Real estate | ||||||||||||||||||||||||||||
estate agency | brokerage | and consulting | advertising | online | Real estate fund | |||||||||||||||||||||||||||
2009 | services | services | services | services | services | management | Non-allocated | Total | ||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||
Revenues from external customers | 183,154,000 | 28,447,714 | 61,707,295 | 11,399,710 | 13,829,937 | 1,000,000 | — | 299,538,656 | ||||||||||||||||||||||||
Cost of revenues | (55,655,737 | ) | (1,877,546 | ) | (1,865,697 | ) | (6,014,185 | ) | (4,930,280 | ) | — | — | (70,343,445 | ) | ||||||||||||||||||
Selling, general and administrative expenses | (47,241,533 | ) | (26,123,163 | ) | (22,723,019 | ) | (5,690,497 | ) | (11,359,944 | ) | (647,754 | ) | (11,935,269 | ) | (125,721,179 | ) | ||||||||||||||||
Gain from settlement of pre-existing relationship | — | — | 2,100,832 | — | — | — | — | 2,100,832 | ||||||||||||||||||||||||
Income (loss) from operations | 80,256,730 | 447,005 | 39,219,411 | (304,972 | ) | (2,460,287 | ) | 352,246 | (11,935,269 | ) | 105,574,864 | |||||||||||||||||||||
Interest expenses | — | — | — | — | — | — | (215,854 | ) | (215,854 | ) | ||||||||||||||||||||||
Interest income | 591,772 | 29,130 | 166,521 | 27,635 | 23,722 | 1,922 | 198,087 | 1,038,789 | ||||||||||||||||||||||||
Other income(expense), net | 1,842,672 | 279,030 | 2,481,451 | — | 5,814 | (1,810 | ) | 4,173,213 | 8,780,370 | |||||||||||||||||||||||
Income (loss) before taxes and equity in an associate | 82,691,174 | 755,165 | 41,867,383 | (277,337 | ) | (2,430,751 | ) | 352,358 | (7,779, 823 | ) | 115,178,169 | |||||||||||||||||||||
Income tax benefit (expense) | (15,981,753 | ) | 2,204,395 | (6,710,032 | ) | (553,666 | ) | 957,085 | 159,890 | — | (19,924,081 | ) | ||||||||||||||||||||
Income (loss) before equity in affiliates | 66,709,421 | 2,959,560 | 35,157,351 | (831,003 | ) | (1,473,666 | ) | 512, 248 | (7,779, 823 | ) | 95,254,088 | |||||||||||||||||||||
Income from investment in affiliates | 112,628 | — | — | — | 22,015,607 | — | — | 22,128,235 | ||||||||||||||||||||||||
Net income (loss) | 66,822,049 | 2,959,560 | 35,157,351 | (831,003 | ) | 20,541,941 | 512, 248 | (7,779,823 | ) | 117,382,323 | ||||||||||||||||||||||
F-42
Table of Contents
Secondary | Real estate | Real estate | |||||||||||||||||||||||||||
Primary real | real estate | information | Real estate | fund | |||||||||||||||||||||||||
estate agency | brokerage | and consulting | advertising | management | |||||||||||||||||||||||||
2008 | services | services | services | services | and others | Non-allocated | Total | ||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
Revenues | 88,601,982 | 14,836,943 | 49,116,061 | 932,469 | 1,000,000 | — | 154,487,455 | ||||||||||||||||||||||
Cost of revenues | (27,232,660 | ) | (1,725,941 | ) | (2,855,398 | ) | (41,849 | ) | — | — | (31,855,848 | ) | |||||||||||||||||
Selling, general and administrative expenses | (34,075,314 | ) | (20,209,062 | ) | (13,776,504 | ) | (1,865,669 | ) | (463,351 | ) | (6,807,731 | ) | (77,197,631 | ) | |||||||||||||||
Income (loss) from operations | 27,294,008 | (7,098,060 | ) | 32,484,159 | (975,049 | ) | 536,649 | (6,807,731 | ) | 45,433,976 | |||||||||||||||||||
Interest expenses | — | — | — | — | — | (2,420,468 | ) | (2,420,468 | ) | ||||||||||||||||||||
Interest income | 551,576 | 30,475 | 415,512 | 3,779 | 4,373 | 2,056,798 | 3,062,513 | ||||||||||||||||||||||
Other income (expense), net | 1,422,744 | 22,483 | (1,323,858 | ) | — | — | 1,849,112 | 1,970,481 | |||||||||||||||||||||
Income (loss) before taxes and equity in an associate | 29,268,328 | (7,045,102 | ) | 31,575,813 | (971,270 | ) | 541,022 | (5,322,289 | ) | 48,046,502 | |||||||||||||||||||
Income tax benefit (expense) | (4,153,861 | ) | 52,535 | (4,917,503 | ) | 196,488 | 109,783 | — | (8,712,558 | ) | |||||||||||||||||||
Income (loss) before equity in affiliates | 25,114,467 | (6,992,567 | ) | 26,658,310 | (774,782 | ) | 650,805 | (5,322,289 | ) | 39,333,944 | |||||||||||||||||||
Income from investment in affiliates | — | — | — | — | — | 153,700 | 153,700 | ||||||||||||||||||||||
Net income (loss) | 25,114,467 | (6,992,567 | ) | 26,658,310 | (774,782 | ) | 650,805 | (5,168,589 | ) | 39,487,644 | |||||||||||||||||||
F-43
Table of Contents
Secondary | Real estate | |||||||||||||||||||
Primary real | real estate | information | ||||||||||||||||||
estate agency | brokerage | and consulting | ||||||||||||||||||
2007 | services | services | services | Non-allocated | Total | |||||||||||||||
$ | $ | $ | $ | $ | ||||||||||||||||
Revenues from external customers | 100,932,992 | 11,888,443 | 8,195,165 | — | 121,016,600 | |||||||||||||||
Cost of revenues | (22,614,660 | ) | — | (895,405 | ) | — | (23,510,065 | ) | ||||||||||||
Selling, general and administrative expenses | (23,195,466 | ) | (14,997,248 | ) | (4,985,048 | ) | (2,368,038 | ) | (45,545,800 | ) | ||||||||||
Income (loss) from operations | 55,122,866 | (3,108,805 | ) | 2,314,712 | (2,368,038 | ) | 51,960,735 | |||||||||||||
Interest expense | — | — | — | (621,903 | ) | (621,903 | ) | |||||||||||||
Interest income | 693,975 | 36,274 | 192,961 | 1,566,458 | 2,489,668 | |||||||||||||||
Other income (expense), net | 406,452 | 96,372 | (156,825 | ) | (148,107 | ) | 197,892 | |||||||||||||
Income (loss) before taxes | 56,223,293 | (2,976,159 | ) | 2,350,848 | (1,571,590 | ) | 54,026,392 | |||||||||||||
Income tax benefit (expense) | (9,987,535 | ) | (4,506 | ) | (284,999 | ) | — | (10,277,040 | ) | |||||||||||
Net income (loss) | 46,235,758 | (2,980,665 | ) | 2,065,849 | (1,571,590 | ) | 43,749,352 | |||||||||||||
Years Ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
$ | $ | $ | ||||||||||
Customer A | * | 32,498,047 | 70,541,996 | |||||||||
Customer B | 25,478,208 | * | * | |||||||||
Customer C | 17,710,007 | * | * |
* | Indicates the revenue from these customers was less than 10% in the stated periods. |
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Years Ended December 31, | ||||||||
2008 | 2009 | |||||||
$ | $ | |||||||
Customer B | 20,533,748 | 19,021,127 |
* | Indicates the accounts receivable from the customer was less than 10% as at the stated year end. |
Years Ended December 31, | ||||||||
2008 | 2009 | |||||||
$ | $ | |||||||
Customer F | * | 13,912,841 | ||||||
Customer G | * | 7,322,550 | ||||||
Customer H | * | 7,322,550 | ||||||
Customer I | * | 4,393,530 | ||||||
Customer A | 29,262,800 | * | ||||||
Customer D | 14,631,400 | * | ||||||
Customer E | 9,949,352 | * |
* | Indicates the customer deposits from customers was less than 10% as at the stated year end. |
As of December 31, | ||||||||
2008 | 2009 | |||||||
$ | $ | |||||||
Customer and supplier | 386,857 | 17,146 | ||||||
Other | 362,217 | 1,025,157 | ||||||
Total amounts due from related parties | 749,074 | 1,042,303 | ||||||
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Table of Contents
As of December 31, | ||||||||
2008 | 2009 | |||||||
$ | $ | |||||||
Management | (475,204 | ) | (1,050,000 | ) | ||||
Other | (146,314 | ) | — | |||||
Total amounts due to related parties | (621,518 | ) | (1,050,000 | ) | ||||
Years Ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
$ | $ | $ | ||||||||||
Revenue — Shanghai Yueshun Real Estate Development Co., Ltd. | 2,801,505 | 321 | 102,708 | |||||||||
As of December 31, | ||||||||
2008 | 2009 | |||||||
$ | $ | |||||||
Accounts receivable — Shanghai Yueshun Real Estate Development Co., Ltd. | 386,857 | 17,146 | ||||||
As of December 31 | ||||||||
2008 | 2009 | |||||||
$ | $ | |||||||
E-House China Real Estate Investment Fund I, L.P. (1) | — | 1,025,157 | ||||||
E-House Property Investment 1 (China) Limited (2) | 362,217 | — | ||||||
Total amounts due from other related parties | 362,217 | 1,025,157 | ||||||
Shanghai Jin Yue Real Estate Development Co., Ltd. (3) | (146,314 | ) | — | |||||
Total amounts payable to other related parties | (146,314 | ) | — | |||||
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Table of Contents
Notes: | ||
(1) | Entity is partially owned by Xin Zhou and Neil Nanpeng Shen, directors of the Company (note (d) below). The amount receivable represents payment made on behalf of E-House China Real Estate Investment Fund I, L.P.. The amount is unsecured, interest free and has no fixed repayment term. The amount was repaid in March 2010. | |
(2) | Entity is partially owned by Xin Zhou and Neil Nanpeng Shen, directors of the Company. In connection with a primary real estate project, the entity contributed 50% of the customer deposit paid to the developer client and is entitled to 50% of the project’s profits. For the years ended December 31, 2007, E-House Property Investment 1 (China) Limited had earned $1,621,998 from the project, all of which was recorded as cost of sales and was payable as of December 31, 2007. The Company was entitled to $339,181 in fund management fees from the project, all of which was recorded as other income and as a receivable as of December 31, 2007. | |
(3) | Xin Zhou is a director of the entity. The amount payable represents a loan to the Company. The amount is unsecured, interest free and has no fixed repayment term. |
F-47
Table of Contents
Year ending December 31 | $ | |||
2010 | 8,195,973 | |||
2011 | 4,316,599 | |||
2012 | 2,228,061 | |||
2013 | 1,009,978 | |||
2014 | 530,809 | |||
Total | 16,281,420 | |||
F-48