Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2016shares | |
Document and Entity Information | |
Entity Registrant Name | ChinaCache International Holdings Ltd. |
Entity Central Index Key | 1,498,576 |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2016 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | No |
Entity Filer Category | Non-accelerated Filer |
Entity Common Stock, Shares Outstanding | 409,339,219 |
Document Fiscal Year Focus | 2,016 |
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS | Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) |
Current assets: | |||
Cash and cash equivalents | $ 19,433,000 | ¥ 134,924,000 | ¥ 606,796,000 |
Accounts receivable (net of allowance for doubtful accounts of RMB54,638 and RMB63,921(US$9,207) as of December 31, 2015 and 2016, respectively) | 27,450,000 | 190,587,000 | 243,431,000 |
Prepaid expenses and other current assets | 8,206,000 | 56,976,000 | 31,560,000 |
Short term investment | 26,169,000 | ||
Deferred tax assets | 17,923,000 | ||
Amount due from a subsidiary held for sale | 7,658,000 | 53,169,000 | 435,000 |
Assets held for sale | 182,988,000 | 1,270,483,000 | 1,060,543,000 |
Total current assets | 245,735,000 | 1,706,139,000 | 1,986,857,000 |
Non-current assets: | |||
Property and equipment, net | 499,946,000 | ||
Intangible assets, net | 10,898,000 | ||
Long term investments | 4,920,000 | 34,159,000 | 50,157,000 |
Deferred tax assets | 11,368,000 | ||
Long term deposits and other non-current assets | 5,261,000 | 36,525,000 | 59,390,000 |
Total non-current assets | 10,181,000 | 70,684,000 | 631,759,000 |
TOTAL ASSETS | 255,916,000 | 1,776,823,000 | 2,618,616,000 |
Current liabilities: | |||
Short-term loan (including short-term loan of the VIEs without recourse to the Company of nil and RMB29,311 (US$4,222) as of December 31, 2015 and 2016, respectively) | 4,222,000 | 29,311,000 | |
Accounts payable (including accounts payable of the VIEs without recourse to the Company of RMB202,223 and RMB298,231 (US$42,954) as of December 31, 2015 and 2016, respectively) | 43,435,000 | 301,569,000 | 205,593,000 |
Accrued employee benefits (including accrued employee benefits of the VIEs without recourse to the Company of RMB33,151 and RMB36,159 (US$5,208) as of December 31, 2015 and 2016, respectively) | 6,659,000 | 46,233,000 | 44,690,000 |
Accrued expenses and other payables (including accrued expenses and other payables of the VIEs without recourse to the Company of RMB61,195 and RMB30,933 (US$4,455) as of December 31, 2015 and 2016, respectively) | 7,590,000 | 52,697,000 | 76,409,000 |
Income tax payable (including income taxes payable of the VIEs without recourse to the Company of RMB6,884 and RMB6,121 (US$882) as of December 31, 2015 and 2016, respectively) | 2,005,000 | 13,924,000 | 13,513,000 |
Liabilities for uncertain tax positions (including liabilities for uncertain tax positions of the VIEs without recourse to the Company of RMB6,006 and RMB4,689 (US$675) as of December 31, 2015 and 2016, respectively) | 1,443,000 | 10,020,000 | 11,337,000 |
Amounts due to related parties | 3,000 | 18,000 | 18,000 |
Current portion of long term loan (including current portion of long term loan of the VIEs without recourse to the Company of nil and nil as of December 31, 2015 and 2016, respectively) | 553,000 | 3,840,000 | 7,180,000 |
Current portion of capital lease obligations (including current portion of capital lease obligations of the VIEs without recourse to the Company of RMB69,918 and RMB72,614 (US$10,459) as of December 31, 2015 and 2016, respectively) | 10,493,000 | 72,851,000 | 70,615,000 |
Deferred government grant (including deferred government grant of the VIEs without recourse to the Company of RMB16,360 and RMB13,000 (US$1,872) as of December 31, 2015 and 2016, respectively) | 1,872,000 | 13,000,000 | 16,360,000 |
Amount due to a subsidiary held for sale (including amount due to a subsidiary held for sale of the VIEs without recourse to the Company of RMB297,935 and RMB12,606(US$1,816) as of December 31, 2015 and 2016, respectively) | 2,602,000 | 18,063,000 | 319,536,000 |
Liabilities held for sale | 187,622,000 | 1,302,658,000 | 1,014,449,000 |
Total current liabilities | 268,499,000 | 1,864,184,000 | 1,779,700,000 |
Non-current liabilities: | |||
Long-term loan | 4,340,000 | ||
Non-current portion of capital lease obligations (including non-current portion of capital lease obligations of the VIEs without recourse to the Company of RMB104,213 and RMB43,951 (US$6,330) as of December 31, 2015 and 2016, respectively) | 6,330,000 | 43,951,000 | 104,450,000 |
Deferred government grant (including deferred government grant of the VIEs without recourse to the Company of RMB8,439 and RMB11,208 (US$1,614) as of December 31, 2015 and 2016, respectively) | 1,614,000 | 11,208,000 | 8,439,000 |
Total non-current liabilities | 7,944,000 | 55,159,000 | 117,229,000 |
Total liabilities | 276,443,000 | 1,919,343,000 | 1,896,929,000 |
Commitments and contingencies | |||
Shareholders' equity / (deficit) | |||
Ordinary shares (US$0.0001 par value; 1,000,000,000 and 1,000,000,000 shares authorized; 400,069,875 and 409,339,219 shares issued and outstanding as of December 31, 2015 and 2016, respectively) | 48,000 | 334,000 | 310,000 |
Additional paid-in capital | 225,033,000 | 1,562,408,000 | 1,473,468,000 |
Treasury stock | (3,533,000) | (24,531,000) | (94,275,000) |
Statutory reserves | 191,000 | 1,326,000 | 1,326,000 |
Accumulated deficit | (242,324,000) | (1,682,459,000) | (663,506,000) |
Accumulated other comprehensive income | 103,000 | 717,000 | 3,903,000 |
Total ChinaCache International Holdings Ltd. shareholders' equity / (deficit) | (20,482,000) | (142,205,000) | 721,226,000 |
Noncontrolling interest | (45,000) | (315,000) | 461,000 |
Total shareholder's equity / (deficit) | (20,527,000) | (142,520,000) | 721,687,000 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY / (DEFICIT) | $ 255,916,000 | ¥ 1,776,823,000 | ¥ 2,618,616,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) $ in Thousands | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2016CNY (¥)shares | Dec. 31, 2015CNY (¥)shares |
Short-term loan of the VIEs without recourse to the Company | $ 4,222 | ¥ 29,311,000 | |
Accounts receivable, allowance for doubtful accounts (in CNY and dollars) | 9,207 | 63,921,000 | ¥ 54,638,000 |
Accounts payable of the VIEs without recourse to the Company | 43,435 | 301,569,000 | 205,593,000 |
Accrued employee benefits of the VIEs without recourse to the Company | 6,659 | 46,233,000 | 44,690,000 |
Accrued expenses and other payables of the VIEs without recourse to the Company | 7,590 | 52,697,000 | 76,409,000 |
Income taxes payable of the VIEs without recourse to the Company | 2,005 | 13,924,000 | 13,513,000 |
Liabilities for uncertain tax positions of the VIEs without recourse to the Company | 1,443 | 10,020,000 | 11,337,000 |
Current portion of long term loan of the VIEs without recourse to the Company | 553 | 3,840,000 | 7,180,000 |
Current portion of capital lease obligations of the VIEs without recourse to the Company | 10,493 | 72,851,000 | 70,615,000 |
Deferred government grant (including deferred government grant of the VIEs without recourse to the Company of RMB16,360 and RMB13,000 (US$1,872) as of December 31, 2015 and 2016, respectively) | 1,872 | 13,000,000 | 16,360,000 |
Amount due to a subsidiary held for sale of the VIEs without recourse to the Company | 2,602 | 18,063,000 | 319,536,000 |
Non-current portion of capital lease obligations of the VIEs without recourse to the Company | 6,330 | 43,951,000 | 104,450,000 |
Deferred government grant of the VIEs without recourse to the Company, non-current | $ 1,614 | ¥ 11,208,000 | ¥ 8,439,000 |
Ordinary shares, par value (in dollars per share) | $ / shares | $ 0.0001 | ||
Ordinary shares, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 |
Ordinary shares, shares issued (in shares) | 386,503,123 | 386,503,123 | 400,069,875 |
Ordinary shares, shares outstanding (in shares) | 409,339,219 | 409,339,219 | 400,069,875 |
Consolidated Variable Interest Entity (VIEs) | |||
Short-term loan of the VIEs without recourse to the Company | $ 4,222 | ¥ 29,311,000 | ¥ 0 |
Accounts receivable, allowance for doubtful accounts (in CNY and dollars) | 9,112 | 63,266,000 | 54,171,000 |
Accounts payable of the VIEs without recourse to the Company | 42,954 | 298,231,000 | 202,223,000 |
Accrued employee benefits of the VIEs without recourse to the Company | 5,208 | 36,159,000 | 33,151,000 |
Accrued expenses and other payables of the VIEs without recourse to the Company | 4,455 | 30,933,000 | 61,195,000 |
Income taxes payable of the VIEs without recourse to the Company | 882 | 6,121,000 | 6,884,000 |
Liabilities for uncertain tax positions of the VIEs without recourse to the Company | 675 | 4,689,000 | 6,006,000 |
Current portion of long term loan of the VIEs without recourse to the Company | ¥ | 0 | 0 | |
Current portion of capital lease obligations of the VIEs without recourse to the Company | 10,459 | 72,614,000 | 69,918,000 |
Deferred government grant (including deferred government grant of the VIEs without recourse to the Company of RMB16,360 and RMB13,000 (US$1,872) as of December 31, 2015 and 2016, respectively) | 1,872 | 13,000,000 | 16,360,000 |
Amount due to a subsidiary held for sale of the VIEs without recourse to the Company | 1,816 | 12,606,000 | 297,935,000 |
Non-current portion of capital lease obligations of the VIEs without recourse to the Company | 6,330 | 43,951,000 | 104,213,000 |
Deferred government grant of the VIEs without recourse to the Company, non-current | $ 1,614 | ¥ 11,208,000 | ¥ 8,439,000 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2016CNY (¥)¥ / sharesshares | Dec. 31, 2015CNY (¥)¥ / sharesshares | Dec. 31, 2014CNY (¥)¥ / sharesshares | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||||
Net revenues | $ 151,842 | ¥ 1,054,235,000 | ¥ 1,353,627,000 | ¥ 1,384,273,000 |
Cost of revenues | (155,237) | (1,077,810,000) | (1,041,412,000) | (966,558,000) |
Gross profit (loss) | (3,395) | (23,575,000) | 312,215,000 | 417,715,000 |
Other operating Income (loss) | (2,743) | (19,044,000) | 13,911,000 | |
Sales and marketing expenses | (13,482) | (93,603,000) | (115,621,000) | (127,843,000) |
General and administrative expenses | (36,872) | (256,007,000) | (202,518,000) | (144,003,000) |
Provision for doubtful accounts receivable and other receivable | (1,298) | (9,010,000) | 3,892,000 | (46,977,000) |
Transaction tax on assets transfer | ¥ | (27,733,000) | |||
Research and development expenses | (14,982) | (104,018,000) | (103,110,000) | (116,381,000) |
Impairment of long lived assets | (57,482) | (399,094,000) | 0 | 0 |
Impairment of long-term investments | (2,627) | (18,240,000) | 0 | 0 |
Operating loss | (132,881) | (922,591,000) | (118,964,000) | (17,489,000) |
Interest income | 672 | 4,669,000 | 4,618,000 | 5,529,000 |
Interest expense | (1,678) | (11,647,000) | (13,158,000) | (8,220,000) |
Other income | 769 | 5,336,000 | 2,991,000 | 6,298,000 |
Foreign exchange gain | 2,047 | 14,209,000 | 13,164,000 | 3,944,000 |
Loss before income taxes | (131,071) | (910,024,000) | (111,349,000) | (9,938,000) |
Income tax benefit (expense) | (609) | (4,229,000) | 22,614,000 | 3,097,000 |
Net loss | (131,680) | (914,253,000) | (88,735,000) | (6,841,000) |
Less: net loss attributable to noncontrolling interest | (112) | (776,000) | (44,000) | |
Net loss attributable to the Company's shareholders | $ (131,568) | ¥ (913,477,000) | ¥ (88,691,000) | ¥ (6,841,000) |
Loss per share | ||||
Basic (in CNY or dollars per share) | (per share) | $ (0.32) | ¥ (2.24) | ¥ (0.22) | ¥ (0.02) |
Diluted (in CNY or dollars per share) | (per share) | $ (0.32) | ¥ (2.24) | ¥ (0.22) | ¥ (0.02) |
Shares used in loss per share computations: | ||||
Basic (in shares) | 408,189,722 | 408,189,722 | 407,149,509 | 403,401,928 |
Diluted (in shares) | 408,189,722 | 408,189,722 | 407,149,509 | 403,401,928 |
Foreign currency translation | $ (42) | ¥ (293,000) | ¥ 264,000 | ¥ 46,000 |
Unrealized holding gain on available-for-sale investments | 95 | 659,000 | 1,853,000 | 583,000 |
Amounts reclassified from accumulated other comprehensive income | (512) | (3,552,000) | ||
Total other comprehensive income (loss), net of tax | (459) | (3,186,000) | 2,117,000 | 629,000 |
Comprehensive loss | (132,139) | (917,439,000) | (86,618,000) | (6,212,000) |
Less: comprehensive loss attributable to noncontrolling interests | (112) | (776,000) | (44,000) | |
Comprehensive loss attributable to the Company's shareholders | $ (132,027) | ¥ (916,663,000) | ¥ (86,574,000) | ¥ (6,212,000) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS | 12 Months Ended | |||
Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | |
Cash flows from operating activities: | ||||
Net loss | $ (131,680,000) | ¥ (914,253,000) | ¥ (88,735,000) | ¥ (6,841,000) |
Depreciation of property and equipment | 22,357,000 | 155,225,000 | 153,313,000 | 94,826,000 |
Amortization of intangible assets and land use right | 557,000 | 3,869,000 | 4,298,000 | 2,202,000 |
Provision for doubtful accounts receivable and other receivable | 1,298,000 | 9,010,000 | (3,892,000) | 46,977,000 |
Impairment of long lived assets | 57,482,000 | 399,094,000 | 0 | 0 |
Impairment of long term investments | 2,627,000 | 18,240,000 | 0 | 0 |
(Gain) loss from disposal of property and equipment | 292,000 | 2,028,000 | 137,000 | (1,076,000) |
Deferred tax (benefit) expense | 450,000 | 3,125,000 | (25,279,000) | (14,934,000) |
Interest expense | 199,000 | 1,380,000 | 4,729,000 | 2,031,000 |
Foreign exchange gain | (2,038,000) | (14,151,000) | (9,009,000) | (3,916,000) |
Gain from sale of short term investments | (512,000) | (3,552,000) | ||
Share-based compensation | 12,246,000 | 85,025,000 | 48,606,000 | 17,037,000 |
Changes in operating assets and liabilities: | ||||
Accounts receivable | 6,026,000 | 41,840,000 | 80,296,000 | (60,234,000) |
Prepaid expense and other current assets | (158,000) | (1,095,000) | (77,405,000) | 487,000 |
Long term deposits and other non-current assets | (176,000) | (1,221,000) | (35,009,000) | (19,042,000) |
Amounts due from related parties | (703,000) | |||
Accounts payable | 14,603,000 | 101,392,000 | (50,227,000) | 52,071,000 |
Accrued employee benefits | 156,000 | 1,085,000 | 1,048,000 | 1,094,000 |
Deferred government grant | (85,000) | (591,000) | (12,561,000) | 13,000,000 |
Accrued expenses and other payables | (10,539,000) | (73,174,000) | 789,445,000 | 148,463,000 |
Income tax payable | (66,000) | (456,000) | (9,279,000) | 8,944,000 |
Net cash provided by (used in) operating activities | (26,961,000) | (187,180,000) | 770,476,000 | 280,386,000 |
Cash flows from investing activities: | ||||
Purchases of property and equipment and intangible assets | (8,531,000) | (59,234,000) | (90,172,000) | (253,252,000) |
Cash paid for short term investment (Note 9) | (50,000,000) | |||
Cash receipts from sales of short term investment (Note 9) | 7,713,000 | 53,552,000 | ||
Cash paid for long term investment (Note 10) | (323,000) | (2,242,000) | (2,302,000) | (13,260,000) |
Cash received from sale of short term investment (Note 10) | 3,864,000 | 26,828,000 | ||
Cash paid for cloud infrastructure construction in progress (Note 9) | (32,017,000) | (222,292,000) | (290,345,000) | (161,488,000) |
Proceeds from disposal of property and equipment | 144,000 | 998,000 | 470,000 | 6,282,000 |
Net cash used in investing activities | (29,150,000) | (202,390,000) | (432,349,000) | (421,718,000) |
Cash flows from financing activities: | ||||
Consideration paid to selling shareholders (Note 21) | (183,858,000) | |||
Proceeds received on behalf of selling shareholders (Note 21) | 183,858,000 | |||
Proceeds from issuance of ordinary shares (Note 21) | 158,044,000 | |||
Proceeds from bank borrowings (Note 11) | 4,222,000 | 29,311,000 | 81,540,000 | |
Repayment of bank borrowings | (1,106,000) | (7,680,000) | (67,180,000) | (62,840,000) |
Proceeds from employee share options exercised | 1,092,000 | 7,579,000 | 16,993,000 | 13,975,000 |
Changes in restricted cash | 68,191,000 | (8,191,000) | ||
Payment of capital lease obligation | (10,723,000) | (74,453,000) | (32,202,000) | (4,909,000) |
Payment for repurchase of ordinary shares | (5,675,000) | (39,402,000) | (93,891,000) | |
Investment from minority shareholder | 1,292,000 | |||
Net cash provided by (used in) financing activities | (12,190,000) | (84,645,000) | (106,797,000) | 177,619,000 |
Net increase (decrease) in cash and cash equivalents | (68,301,000) | (474,215,000) | 231,330,000 | 36,287,000 |
Cash and cash equivalents at beginning of the year | 88,754,000 | 616,218,000 | 375,879,000 | 338,092,000 |
Effect of foreign exchange rate changes on cash | 2,105,000 | 14,617,000 | 9,009,000 | 1,500,000 |
Cash and cash equivalents at end of the year (Note 4) | 22,558,000 | 156,620,000 | 616,218,000 | 375,879,000 |
Supplemental disclosures of cash flow information: | ||||
Income taxes paid (refunded) | (534,000) | (3,709,000) | 13,319,000 | 2,862,000 |
Interest paid | 1,479,000 | 10,267,000 | 8,389,000 | 6,903,000 |
Interest received | 672,000 | 4,669,000 | 4,618,000 | 5,529,000 |
Supplemental disclosures of non-cash activities: | ||||
Acquisition of property and equipment included in accrued expenses and other payables | (2,362,000) | (16,397,000) | (32,241,000) | (146,425,000) |
Acquisition of property and equipment through capital leases | $ 8,531,000 | ¥ 59,234,000 | ¥ 189,708,000 | ¥ 37,728,000 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY ¥ in Thousands, $ in Thousands | Ordinary sharesUSD ($)shares | Ordinary sharesCNY (¥)shares | Additional paid-in capitalUSD ($) | Additional paid-in capitalCNY (¥) | Treasury StockUSD ($) | Treasury StockCNY (¥) | Statutory reservesUSD ($) | Statutory reservesCNY (¥) | Accumulated deficitUSD ($) | Accumulated deficitCNY (¥) | Accumulated other comprehensive incomeUSD ($) | Accumulated other comprehensive incomeCNY (¥) | Noncontrolling interestsUSD ($) | Noncontrolling interestsCNY (¥) | USD ($)shares | CNY (¥)shares |
Balance at beginning of year at Dec. 31, 2013 | ¥ 282 | ¥ 1,247,730 | ¥ (73,101) | ¥ 1,326 | ¥ (524,261) | ¥ 1,157 | ¥ 653,133 | |||||||||
Balance at beginning of year (in shares) at Dec. 31, 2013 | shares | 374,464,476 | 374,464,476 | ||||||||||||||
Net loss | (6,841) | (6,841) | ||||||||||||||
Other comprehensive loss | ||||||||||||||||
Foreign currency translation adjustment | 46 | 46 | ||||||||||||||
Unrealized holding gain on available-for-sale investment | 583 | 583 | ||||||||||||||
Options and restricted shares award to employees (Note 16 (a) (b)) | 17,037 | 17,037 | ||||||||||||||
Issuance of new shares (Note 21) | ¥ 16 | 155,962 | 155,978 | |||||||||||||
Issuance of new shares (in shares) (Note 21) | shares | 24,894,647 | 24,894,647 | ||||||||||||||
Exercise of employee stock options | ¥ 9 | 3,349 | 25,766 | (14,113) | ¥ 15,011 | |||||||||||
Exercise of employee stock options (in shares) | shares | 12,501,376 | 12,501,376 | 0 | 0 | ||||||||||||
Restricted shares vested | ¥ 3 | (3) | 5,395 | (5,395) | ||||||||||||
Restricted shares vested (in shares) | shares | 2,507,698 | 2,507,698 | 0 | 0 | ||||||||||||
Shares issued to depository bank (in shares) (Note 23) | shares | 31,379,008 | 31,379,008 | ||||||||||||||
Settlement of share options exercised with shares held by depository bank (in shares) | shares | (15,009,074) | (15,009,074) | ||||||||||||||
Balance at end of year at Dec. 31, 2014 | ¥ 310 | 1,424,075 | (41,940) | 1,326 | (550,610) | 1,786 | ¥ 834,947 | |||||||||
Balance at end of year (in shares) at Dec. 31, 2014 | shares | 430,738,131 | 430,738,131 | ||||||||||||||
Net loss | (88,691) | ¥ (44) | (88,735) | |||||||||||||
Other comprehensive loss | ||||||||||||||||
Foreign currency translation adjustment | 264 | 264 | ||||||||||||||
Unrealized holding gain on available-for-sale investment | 1,853 | 1,853 | ||||||||||||||
Capital contributed by noncontrolling Interest | 787 | 505 | 1,292 | |||||||||||||
Options and restricted shares award to employees (Note 16 (a) (b)) | 48,606 | 48,606 | ||||||||||||||
Repurchase of shares | (93,891) | (93,891) | ||||||||||||||
Repurchase of shares (in shares) | shares | (30,832,160) | (30,832,160) | ||||||||||||||
Exercise of employee stock options | 20,166 | (2,815) | ¥ 17,351 | |||||||||||||
Exercise of employee stock options (in shares) | shares | 8,776,032 | 8,776,032 | 8,776,032 | 8,776,032 | ||||||||||||
Restricted shares vested | 21,390 | (21,390) | ||||||||||||||
Restricted shares vested (in shares) | shares | 9,291,500 | 9,291,500 | 9,291,500 | 9,291,500 | ||||||||||||
Shares issued to depository bank (in shares) (Note 23) | shares | 163,904 | 163,904 | ||||||||||||||
Settlement of share options exercised with shares held by depository bank (in shares) | shares | (18,067,532) | (18,067,532) | ||||||||||||||
Balance at end of year at Dec. 31, 2015 | ¥ 310 | 1,473,468 | (94,275) | 1,326 | (663,506) | 3,903 | 461 | ¥ 721,687 | ||||||||
Balance at end of year (in shares) at Dec. 31, 2015 | shares | 400,069,875 | 400,069,875 | ||||||||||||||
Net loss | (913,477) | (776) | $ (131,680) | (914,253) | ||||||||||||
Other comprehensive loss | ||||||||||||||||
Foreign currency translation adjustment | (293) | (42) | (293) | |||||||||||||
Unrealized holding gain on available-for-sale investment | 659 | 95 | 659 | |||||||||||||
Amounts reclassified from accumulated other comprehensive income | (3,552) | $ (512) | (3,552) | |||||||||||||
Options and restricted shares award to employees (Note 16 (a) (b)) | 85,025 | 85,025 | ||||||||||||||
Repurchase of shares | (39,402) | (39,402) | ||||||||||||||
Repurchase of shares (in shares) | shares | (13,730,656) | (13,730,656) | ||||||||||||||
Exercise of employee stock options | ¥ 1 | 3,938 | 4,122 | (452) | ¥ 7,609 | |||||||||||
Exercise of employee stock options (in shares) | shares | 1,325,241 | 1,325,241 | 1,325,241 | 1,325,241 | ||||||||||||
Restricted shares vested | ¥ 23 | (23) | 105,024 | (105,024) | ||||||||||||
Restricted shares vested (in shares) | shares | 33,762,181 | 33,762,181 | 33,762,181 | 33,762,181 | ||||||||||||
Shares issued to depository bank (in shares) (Note 23) | shares | 23,000,000 | 23,000,000 | ||||||||||||||
Settlement of share options exercised with shares held by depository bank (in shares) | shares | (35,087,422) | (35,087,422) | ||||||||||||||
Balance at end of year at Dec. 31, 2016 | $ 48 | ¥ 334 | $ 225,033 | ¥ 1,562,408 | $ (3,533) | ¥ (24,531) | $ 191 | ¥ 1,326 | $ (242,324) | ¥ (1,682,459) | $ 103 | ¥ 717 | $ (45) | ¥ (315) | $ (20,527) | ¥ (142,520) |
Balance at end of year (in shares) at Dec. 31, 2016 | shares | 409,339,219 | 409,339,219 |
ORGANIZATION
ORGANIZATION | 12 Months Ended |
Dec. 31, 2016 | |
ORGANIZATION | |
ORGANIZATION | 1. ORGANIZATION ChinaCache International Holdings Ltd. (the ‘‘Company’’) was incorporated under the laws of the Cayman Islands on June 29, 2005 and its principal activity is investment holding. The founders of the Company are Mr. Wang Song and his spouse Kou Xiaohong (the “Founders”). The Company through its subsidiaries and variable interest entities noted below are principally engaged in the provision of content and application delivery total solutions in the People’s Republic of China (the “PRC”). As of December 31, 2016, subsidiaries of the Company and variable interest entities (“VIEs”) where the Company is the primary beneficiary include the following: Date of Place of Percentage of Principal activities Subsidiaries ChinaCache Network Technology (Beijing) Ltd. (“ChinaCache Beijing”) August 25, 2005 The PRC % Provision of Technical Consultation services ChinaCache North America Inc. (“ChinaCache US”) August 16, 2007 United States of America % Provision of Content and Application Delivery services JNet Holdings Limited (“JNet Holdings”) September 27, 2007 British Virgin Islands % Investment holding ChinaCache Networks Hong Kong Ltd. (“ChinaCache HK”) April 7, 2008 Hong Kong % Provision of Content and Application Delivery services ChinaCache Xin Run Technology (Beijing) Co., Ltd. (“Xin Run”) July 18, 2011 The PRC %** Construction of the cloud infrastructure Metasequoia Investment Inc. (“Metasequoia”) March 28, 2012 British Virgin Islands % Investment holding Chinacache Ireland Limited (“Chinacache IE”) November 18, 2013 Ireland % Provision of Content and Beijing Shou Ming Technology Co., Ltd. (“Beijing Shou Ming”) August 15, 2014 The PRC %** Computer hardware, technology development Beijing Shuo Ge Technology Co., Ltd. (“Beijing Shuo Ge”) August 15, 2014 The PRC %** Mechanical equipment lease Beijing Zhao Du Technology Co., Ltd. (“Beijing Zhao Du”) August 15, 2014 The PRC %** IT system integration, electronic equipment ChinaCache Networks Limited (“ChinaCache UK”) March 10, 2016 England and Wales % Provision of Content and Application Delivery services ChinaCache Assets LLC (“CCAL”) August 10, 2016 United States of America % Real estate management VIEs Beijing Blue I.T. Technologies Co., Ltd. (“Beijing Blue IT” )* June 7, 1998 The PRC — Provision of Content and Application Delivery services Beijing Jingtian Technology Limited (“Beijing Jingtian”) * September 1, 2005 The PRC — Provision of Content and Application Delivery services * The equity interest of Beijing Blue IT and Beijing Jingtian are held by the Founders and two employees of the Company, respectively (collectively the “Nominee Shareholders”). ** On November 16, 2015, Xin Run received a capital injection of RMB1,292,000 (US$202,000) from Tianjin Shuishan Technology Co., Ltd, a PRC Company wholly owned by the Founders. As a result, the percentage of the Company’s equity ownership in Xin Run and Xin Run’s wholly-owned subsidiaries, Beijing Shou Ming, Beijing Shuo Ge and Beijing Zhao Du, decreased from 100% as of December 31, 2014 to 99% as of December 31, 2015 and 2016). The following is a summary of the various VIE agreements: Exclusive option agreements Pursuant to the exclusive option agreement amongst the Company and the Nominee Shareholders, the Nominee Shareholders irrevocably granted the Company or its designated party, an exclusive option to purchase all or part of the equity interests held by the Nominee Shareholders in Beijing Blue IT, when and to the extent permitted under PRC law, at an amount equal to either a) the outstanding loan amount pursuant to the loan agreement owed by the Nominee Shareholders or b) the lowest permissible purchase price as set by PRC law. Such consideration, if in excess of the outstanding loan amount, when received by the Nominee Shareholders upon the exercise of the exclusive option is required to be remitted in full to ChinaCache Beijing. Beijing Blue IT cannot declare any profit distributions or grant loans in any form without the prior written consent of the Company. The Nominee Shareholders must remit in full any funds received from Beijing Blue IT to ChinaCache Beijing, in the event any distributions are made by the VIEs pursuant to any written consents of the Company. This agreement was valid for ten years and expired on September 23, 2015. Such agreement was renewed for an additional ten years to September 23, 2025. Such agreement can be renewed for an additional ten years at the sole discretion of the Company, and the times of such renewals are unlimited. On January 20, 2016, in conjunction to the newly increased register capital of Blue IT, such agreements were updated and will expire on January 20, 2026. The agreement may be renewed for an additional 10 years at the Company’s sole discretion, and the times of such renewals are unlimited. A similar exclusive option agreement was signed by ChinaCache Beijing with Beijing Jingtian . Exclusive business cooperation agreements Pursuant to the exclusive business cooperation agreement between ChinaCache Beijing and the VIEs, ChinaCache Beijing is to provide exclusive business support, technical and consulting services including technical services, business consultations, access to intellectual property licenses, equipment or property leasing, marketing consultancy, system integration, product research and development and system maintenance in return for fees in an amount as determined and adjustable at the sole discretion of ChinaCache Beijing. The service fees charged to Beijing Blue IT are based on methods set forth in the technical support and service agreement and technical consultation and training agreement, as further discussed below. The service fees charged to Beijing Jingtian is based on 100% of Beijing Jingtian’s net income. This agreement was valid for ten years and expired on September 23, 2015. Such agreement was renewed for an additional ten years to September 23, 2025. Prior to this agreement’s and subsequent agreements’ expiration dates, ChinaCache Beijing can at its sole discretion renew at a term of its choice through written confirmation. Exclusive technical support and service agreement/Exclusive technical consultation and training agreement/Equipment leasing agreement Pursuant to these agreements between ChinaCache Beijing and Beijing Blue IT, ChinaCache Beijing is to provide research and development, technical support, consulting, training and equipment leasing services in return for fees, which is adjustable at the sole discretion of ChinaCache Beijing. The fees charged to Blue IT include an annual fixed amount and a variable quarterly amount which is determined based on the following factors: · the number of ChinaCache Beijing’s employees who provided the services pursuant to the business cooperation agreement to Beijing Blue IT during the quarter (the “Quarterly Services”) and the qualifications of the employees; · the number of hours ChinaCache Beijing’s employees spent to provide the Quarterly Services; · operating expenses incurred by ChinaCache Beijing to provide the Quarterly Services; · nature and value of the Quarterly Services; and · Beijing Blue IT’s operating revenue for the quarter. The original term of each of these three agreements was five years running from September 23, 2005, and each of the agreements was renewed in September 2010 for a five year term which expired on September 23, 2015. In September 2015, each of such agreements was renewed for an additional five years to September 23, 2020. The term of the equipment leasing agreement can be extended solely by ChinaCache Beijing by written notice prior to the expiration of the term, and the extended term shall be determined by ChinaCache Beijing. The exclusive business cooperation agreement, exclusive technical support and service agreement, exclusive technical consultation and training agreement, and equipment leasing agreement are collectively referred to as “Service Agreements”. Loan agreements The Company provided a loan facility of RMB10,000,000 to the Nominee Shareholders of Beijing Blue IT for the purpose of providing capital to Beijing Blue IT to develop its business. In addition, the Company also agreed to provide unlimited financial support to Beijing Blue IT for its operations and agree to forego the right to seek repayment in the event Beijing Blue IT is unable to repay such funding. The loan agreement between the Company and the Nominee Shareholders of Beijing Blue IT is valid for ten years and expires on September 23, 2015. Such agreement was renewed for an additional ten years to September 23, 2025. Such agreement can be extended for another ten years upon mutual written consent of the Company and the Nominee Shareholders of Beijing Blue IT. On January 20, 2016, the Nominee Shareholders of Beijing Blue IT. entered into another loan agreement with the Company. Pursuant to these agreements, the Company provided an interest-free loan facility of RMB10,000,000 to the Nominee Shareholders of Beijing Blue IT. for the purpose of subscribing for the capital increase of Beijing Blue IT. The term of the loan agreement is ten years and expires on January 20, 2026. The term of the loan agreement may be extended upon mutual written consent of the parties. On December 19, 2016, the Nominee Shareholders of Beijing Blue IT. entered into another loan agreement with the Company. Pursuant to these agreements, the Company provided an interest-free loan facility of RMB20,000,000 to the Nominee Shareholders of Beijing Blue IT. for the purpose of purchasing the increased capital of Beijing Blue IT. The term of the loan agreement is ten years and expires on December 19, 2026. The term of the loan agreement may be extended upon mutual written consent of the parties. ChinaCache Beijing also provided a loan of RMB8,500,000 to the Nominee Shareholders of Beijing Jingtian for their investment in the registered share capital. In addition, the Company, through ChinaCache Beijing, agreed to provide unlimited financial support to Beijing Jingtian for their operations and agree to forego the right to seek repayment in the event this VIE are unable to repay such funding. The loan agreement between ChinaCache Beijing and the Nominee Shareholders of Beijing Jingtian is valid for ten years and expires on December 3, 2022. Such agreement can be extended upon mutual written consent of ChinaCache Beijing and the Nominee Shareholders of Beijing Jingtian. Power of attorney agreements The Nominee Shareholders entered into the power of attorney agreement whereby they granted an irrevocable proxy of the voting rights underlying their respective equity interests in the VIEs to ChinaCache Beijing, which includes, but are not limited to, all the shareholders’ rights and voting rights empowered to the Nominee Shareholders by the company law and the Company’s Article of Association. This agreement remains continuously valid, as long as the Nominee Shareholders continue to be the shareholders of the VIEs. Subsequently, ChinaCache Beijing assigned the power of attorney agreement to ChinaCache Beijing’s shareholders or a party designated by ChinaCache Beijing’s shareholders, to whom it granted an irrevocable proxy of the voting rights underlying their respective equity interests in the VIEs, which includes, but are not limited to, all the shareholders’ rights and voting rights empowered to the Nominee Shareholders by the company law and the Company’s Article of Association. Share pledge agreements Pursuant to the share pledge agreement between ChinaCache Beijing and the Nominee Shareholders, the Nominee Shareholders have pledged all their equity interests in the VIEs to guarantee the performance of the VIEs’ obligations under the Service Agreements. If the VIEs breach their respective contractual obligations under the business cooperation agreements, ChinaCache Beijing, as pledgee, will be entitled to certain rights, including the right to sell the pledged equity interests. The Nominee Shareholders agreed not to transfer, sell, pledge, dispose of or otherwise create any new encumbrance on their equity interests in the VIEs without the prior written consent of ChinaCache Beijing. This agreement is continuously valid until all payments due under the above VIE agreements have been fulfilled by the VIEs. Despite the lack of technical majority ownership, there exists a parent-subsidiary relationship between the Company and the VIEs through the irrevocable power of attorney agreements, whereby the Nominee Shareholders effectively assigned all of their voting rights underlying their equity interest in the VIEs to the Company. In addition, the Company, either directly or through ChinaCache Beijing, obtained effective control over the VIEs through the ability to exercise all the rights of the VIEs’ shareholders pursuant to the share pledge agreements and the exclusive option agreements. The Company demonstrates its ability and intention to continue to exercise the ability to absorb substantially all of the expected losses directly through the loan agreements. In addition, the Company also demonstrates its ability to receive substantially all of the economic benefits of the VIEs through ChinaCache Beijing using the Service Agreements. Thus, the Company is the primary beneficiary of the VIEs and consolidates the VIEs under by Accounting Standards Codification (“ASC”) Subtopic 810-10 (“ASC 810-10”) “Consolidation: Overall”. Legal compliance Assessing the legal validity and compliance of these above noted arrangements are a precursor to the Company’s ability to consolidate the results of operations and financial condition of its VIEs. In the opinion of the Company’s management and PRC counsel, (i) the ownership structure of the VIEs are in compliance with existing PRC laws and regulations; (ii) each of the currently effective documents under the contractual arrangements among us, our PRC subsidiary, PRC consolidated variable interest entities and their shareholders governed by PRC law are valid, binding and enforceable, and will not result in any violation of PRC laws or regulations currently in effect and (iii) the Company’s business operations are in compliance with existing PRC laws and regulations in all material respects. However, there is significant consolidation judgment due to the existence of substantial uncertainties regarding the interpretation and application of current and future PRC laws and regulations. Accordingly, the Company cannot be assured that PRC regulatory authorities will not ultimately take a contrary view to its opinion. If the current ownership structure of the Company and its contractual arrangements with its VIEs is found to be in violation of any existing or future PRC laws and regulations, the Company may be required to restructure its ownership structure and operations in the PRC. To the extent that changes to and new PRC laws and regulations prohibit the Company’s VIE arrangements from also complying with the principles of consolidation, then the Company would no longer be able to consolidate and therefore would have to deconsolidate the financial position and results of operations of its VIEs. In the opinion of management, the likelihood of loss and deconsolidation in respect of the Company’s current ownership structure or the contractual arrangements with its VIEs is remote based on current facts and circumstances. There was no pledge or collateralization of the VIEs’ assets. Creditors of the VIEs have no recourse to the general credit of the Company, who is the primary beneficiary of the VIEs, and such amounts have been parenthetically presented on the face of the consolidated balance sheets. The Consolidated VIEs operate the data centers and own facilities including data center buildings, leasehold improvements, fiber optic cables, computers and network equipment, which are recognized in the Company’s consolidated financial statements. They also hold certain value-added technology licenses, registered copyrights, trademarks and registered domain names, including the official website, which are also considered as revenue-producing assets. However, none of such assets was recorded on the Company’s consolidated balance sheets as such assets were all acquired or internally developed with insignificant cost and expensed as incurred. In addition, the Company also hires data center operation and marketing workforce for its daily operations and such costs are expensed when incurred. The Company has not provided any financial or other support that it was not previously contractually required to provide to the Consolidated VIEs during the periods presented. Unrecognized revenue-producing assets held by the VIEs mainly include licenses, such as the Internet Content Provision License, the Value-Added Telecommunication Services Operating License, the Online Culture Operating Permit, and trademarks, patents, copy rights and the domain names. However, none of such assets was recorded on the Company’s consolidated balance sheets as such assets were all acquired or internally developed with insignificant cost and expensed as incurred. Recognized revenue-producing assets held by the VIEs include core technology, trademarks and domain names. Unrecognized revenue-producing assets, including customer lists for provision of content and application delivery total solutions, as well as trademarks, are held by the Wholly Foreign Owned Enterprises (“WFOEs”). The following tables represent the financial information of the consolidated VIEs as of December 31, 2015 and 2016 and for the years ended December 31, 2014, 2015 and 2016 before eliminating the intercompany balances and transactions between the consolidated VIEs and other entities within the Group: As of December 31, 2015 2016 RMB RMB US$ ASSETS: Current assets: Cash and cash equivalents Accounts receivable (net of allowance for doubtful accounts of RMB54,171 and RMB63,266 (US$9,112) as of December 31, 2015 and 2016, respectively) Prepaid expenses and other current assets Deferred tax assets — — Amounts due from inter-companies (1) Total current assets Non-current assets: Property and equipment, net — — Intangible assets, net — — Long term investments Deferred tax assets — — Long term deposits and other non-current assets Total non-current assets TOTAL ASSETS As of December 31, 2015 2016 RMB RMB US$ LIABILITIES: Current liabilities: Short-term loan — Accounts payable Accrued employee benefits Accrued expenses and other payables Income tax payable Liabilities for uncertain tax positions Amounts due to inter-companies (1) Amount due to a subsidiary held for sale (2) Current portion of capital lease obligations Deferred government grant Total current liabilities Non-current liabilities: Non-current portion of capital lease obligations Deferred government grant Total non-current liabilities Total liabilities (1) Amount due from/to inter-companies consist of intercompany receivables/payables to the other companies within the Group. (2) Information with respect to a subsidiary held for sale is discussed in Note 9. For the Years Ended December 31, 2014 2015 2016 RMB’000 RMB’000 RMB’000 US$’000 Net revenues - Third party customers - Inter-companies Net profit (loss) ) ) ) For the Years Ended December 31, 2014 2015 2016 RMB’000 RMB’000 RMB’000 US$’000 Net cash provided by (used in) operating activities ) ) Net cash used in investing activities ) ) ) ) Net cash used in financing activities ) ) ) ) |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2016 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”). (b) Liquidity The Company experienced a net loss of approximately RMB6,841,000, RMB88,735,000, and RMB914,253,000 (US$131,680,000) for the years ended December 31, 2014, 2015 and 2016, respectively, and negative cash flows from operations of approximately RMB187 million for the year ended December 31, 2016. As of December 31, 2016, the Company had a net current liability amounting to RMB158,045,000 (US$22,764,000). These conditions raise substantial doubt about the Company’s ability to continue as a going concern. When preparing the consolidated financial statements as of December 31, 2016 and for the year then ended, the Company’s management concluded that a going concern basis of preparation was appropriate after analyzing the forecasted cash flows for the next twelve months, which indicates that the Company will have sufficient liquidity through November 2018. In preparing the forecasted cash flow analysis, management took into account of a) the cash inflows to be funded by credit facilities approximately RMB610,000,000, and b) the improvement of the net cash inflow from the CDN operations as the Company planned to control its operating costs and to further negotiate with vendors for more favorable payment terms. Meanwhile, the Company will continue to implement the sale of Xin Run and to exit the cloud infrastructure development business. As a result, management prepared the consolidated financial statements assuming the Company will continue as a going concern. However, there is no assurance that the credit facilities can be drawn down in a timely manner or the improvement in the CDN operation cash flows can be achieved as planned. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. (c) Principles of consolidation The consolidated financial statements include the financial statements of the Company, its subsidiaries and the VIEs for which the Company is the primary beneficiary. All significant inter-company transactions and balances between the Company, its subsidiaries and the VIEs are eliminated upon consolidation. Results of acquired subsidiaries or VIEs are consolidated from the date on which control is transferred to the Company. (d) Use of estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Areas where management uses subjective judgment include, but are not limited to, estimating the useful lives of long-lived assets and intangible assets, impairment of long-term investments, long-lived assets and intangible assets, allowance for doubtful debts, accounting for deferred income taxes, and accounting for share-based compensation arrangements. The valuation of and accounting for the Company’s financial instruments also require significant estimates and judgments provided by management. Changes in facts and circumstances may result in revised estimates. Actual results could differ from those estimates, and as such, differences may be material to the consolidated financial statements. (e) Foreign currency The functional currency of the Company and each of its subsidiaries and VIEs is the Renminbi (“RMB”), except for ChinaCache US, CCAL, ChinaCache HK, Chinacache IE, and ChinaCache UK, which are the United States dollar (“US$”), US$, Hong Kong dollar (“HK$”), Euro (“EUR”) and Great Britain Pound (“GBP”) respectively, as determined based on the criteria of Accounting Standards Codification (“ASC”) 830 (“ASC 830”) “ Foreign Currency Matters ”. The reporting currency of the Company is also the RMB. Transactions denominated in foreign currencies are re-measured into the functional currency at the exchange rates prevailing on the transaction dates. Foreign currency denominated financial assets and liabilities are re-measured at the balance sheet date exchange rate. Exchange gains and losses are included in foreign exchange gains and losses in the consolidated statements of comprehensive loss. Assets and liabilities of ChinaCache US, CCAL, ChinaCache HK, Chinacache IE, and ChinaCache UK are translated into RMB at fiscal year-end exchange rates. Income and expense items are translated at average exchange rates prevailing during the fiscal year. The resulting translation adjustments are recorded in other comprehensive income (loss). (f) Convenience translation Amounts in US$ are presented for the convenience of the reader and are translated at the noon buying rate of US$1.00 to RMB6.9430 on December 30, 2016 in the City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York. No representation is made that the RMB amounts could have been, or could be, converted into US$ at such rate. (g) Cash and cash equivalents Cash and cash equivalents consists of cash on hand and demand deposits placed with banks or other financial institutions which are unrestricted as to withdrawal and use and have original maturities less than three months. For the purpose of the consolidated statements of cash flows, cash and cash equivalents also consist of cash and cash equivalents included in assets held for sale. (h) Restricted cash Restricted cash represents amounts held by a bank as security for the short term loan and, therefore, are not available for the Group’s use. (i) Accounts receivable and allowance for doubtful accounts Accounts receivable are carried at net realizable value. An allowance for doubtful accounts is recorded in the period when loss is probable based on an assessment of specific evidence indicating troubled collection, historical experience, accounts aging and other factors. An accounts receivable is written off after all collection effort has ceased. (j) Property and equipment Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets, as follows: Optical Fibers 20 years Computer equipment 3-5 years Furniture, fixtures and office equipment 5 years Motor vehicles 10 years Leasehold improvements Over the shorter of lease term or the estimated useful lives of the assets Freehold land in United States of America Indefinite Building 40 years Repair and maintenance costs are charged to expense when incurred, whereas the cost of betterments that extend the useful life of property and equipment are capitalized as additions to the related assets. Retirement, sale and disposals of assets are recorded by removing the cost and related accumulated depreciation with any resulting gain or loss reflected in the consolidated statements of comprehensive loss. Property and equipment that are purchased or constructed which require a period of time before the assets are ready for their intended use are accounted for as construction-in-progress. Construction-in-progress is recorded at acquisition cost, including installation costs. Construction-in-progress is transferred to specific property and equipment accounts and commences depreciation when these assets are ready for their intended use. The Company did not recognize any capitalized interest during the years ended December 31, 2014, 2015 and 2016. (k) Land use right The land use right represent the amounts paid and relevant costs incurred for the right to use land in the PRC and are recorded at purchase cost less accumulated amortization. Amortization is provided on a straight-line basis over the terms of the respective land use right agreement. (l) Intangible assets Intangible assets are carried at cost less accumulated amortization and any impairment. Intangible assets with a finite useful life are amortized using the straight-line method over the estimated economic life of the intangible assets as follows: Purchased software 5 years (m) Long-lived assets (disposal group) to be disposed of by sale The Group classifies long-lived assets and disposal groups as held for sale if their carrying amounts will be recovered principally through disposal by sale rather than through continuing use. Such long-lived assets and disposal groups are measured at the lower of their carrying amount and fair value less costs to sell. Costs to sell are the incremental costs directly attributable to the sale, excluding the finance costs and income tax expense. The criteria for held for sale classification is regarded as met only when the sale is highly probable and the asset or disposal group is available for immediate sale in its present condition. Actions required to complete the sale should indicate that it is unlikely that significant changes to the sale will be made or that the decision to sell will be withdrawn. Property and equipment, land use right and intangible assets are not depreciated or amortized once classified as held for sale. Assets and liabilities classified as held for sale are presented separately as current items in the consolidated balance sheets. A disposal group qualifies as discontinued operation if it is a component of an entity that either has been disposed of, or is classified as held for sale, and the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. (n) Impairment of long-lived assets The Company evaluates its long-lived assets or asset group, including intangible assets with finite lives, for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying amount of an asset or a group of long-lived assets may not be recoverable. When these events occur, the Company evaluates for impairment by comparing the carrying amount of the assets to future undiscounted net cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, the Company would recognize an impairment loss based on the excess of the carrying amount of the asset group over its fair value. For long-lived assets held for sale, assets are written down to fair value less cost to sell. Fair value is generally determined by discounting the cash flows expected to be generated by the assets, when the market prices are not readily available for the long-lived assets. Impairment charge of RMB399,094,000 was recognized for the year ended December 31, 2016. (2015 and 2014, nil). (o) Investments Held to maturity investments All highly liquid investments with stated maturities of greater than 90 days but less than 365 days are classified as short-term investments. Investments that are expected to be realized in cash during the next 12 months are also included in short-term investments. The Company accounts for short-term investments in accordance with ASC Topic 320 (“ASC 320”), Investments - Debt and Equity Securities . The Company classifies the short-term investments in debt and equity securities as “held-to-maturity”, “trading” or “available-for-sale”, whose classification determines the respective accounting methods stipulated by ASC 320. Dividend and interest income for all categories of investments in securities are included in earnings. Any realized gains or losses, if any, on the sale of the short-term investments are determined on a specific identification method, and such gains and losses are reflected in earnings during the period in which gains or losses are realized. The securities that the Company has positive intent and ability to hold to maturity are classified as held-to-maturity securities and stated at amortized cost. For individual securities classified as held-to-maturity securities, the Company evaluates whether a decline in fair value below the amortized cost basis is other-than-temporary in accordance with the Company’s policy and ASC 320. When the Company intends to sell an impaired debt security or it is more-likely-than-not that it will be required to sell prior to recovery of its amortized cost basis, an other-than-temporary impairment is deemed to have occurred. In these instances, the other-than-temporary impairment loss is recognized in earnings equal to the entire excess of the debt security’s amortized cost basis over its fair value at the balance sheet date of the reporting period for which the assessment is made. When the Company does not intend to sell an impaired debt security and it is more-likely-than-not that it will not be required to sell prior to recovery of its amortized cost basis, the Company must determine whether or not it will recover its amortized cost basis. If the Company concludes that it will not, an other-than-temporary impairment exists and that portion of the credit loss is recognized in earnings, while the portion of loss related to all other factors is recognized in other comprehensive loss. Available-for-sale investments Investments not classified as trading or as held-to-maturity are classified as available-for-sale securities. Such available-for-sale investments are reported at fair value, with unrealized gains and losses recorded in accumulated other comprehensive income (loss) in shareholders’ equity. Realized gains or losses are charged to earnings during the period in which the gain or loss is realized. If the Company determines a decline in fair value is other-than-temporary, the cost basis of the individual security is written down to its estimated fair value. The new cost basis will not be adjusted for subsequent recoveries in fair value. Determination of whether declines in value are other-than-temporary requires significant judgment. Subsequent increases and decreases in the fair value of available-for-sale securities will be included in other comprehensive income (loss) except for an other-than-temporary impairment, which would be charged to current period earnings. No impairment of available-for-sale investment was recognized for each of the three years ended December 31, 2016. Trading Securities The securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities. Unrealized holding gains and losses for trading securities are included in earnings. Investment in limited partnerships — Equity method/ Cost Where consolidation is not appropriate, the Company applies the equity method of accounting that is consistent with ASC 323 “Investments - Equity Method and Joint Ventures” to limited partnerships in which the Company holds either (a) a five percent or greater interest or (b) less than a five percent interest when the Company has more than virtually no influence over the operating or financial policies of the limited partnership. The Company considers certain qualitative factors in assessing whether it has more than virtually no influence for partnership interests of less than five percent. For investments other than those described in (a) and (b) above, the Company applies the cost method of accounting that is consistent with ASC 325 “Investments — Other”. Cost Method Investment In accordance with ASC subtopic 325-20 (“ASC 325-20”), Investments-Other: Cost Method Investments, for investments which are not in-substance common stock and hence, do not have readily determinable fair values or investments in an investee over which the Company does not have significant influence, the Company carries the investment at cost and only adjusts for other-than-temporary declines in fair value and distributions of earnings that exceed the Company’s share of earnings since its investment. Management regularly evaluates the impairment of the cost method investments based on performance and financial position of the investee as well as other evidence of market value. Such evaluation includes, but is not limited to, reviewing the investee’s cash position, recent financing, projected and historical financial performance, cash flow forecasts and financing needs. An impairment loss is recognized in earnings equal to the excess of the investment’s cost over its fair value at the balance sheet date of the reporting period for which the assessment is made. The fair value would then become the new cost basis of investment. Impairment of cost method investment for the years ended December 31, 2014, 2015 and 2016 were nil, nil and RMB18,240,000 (US$2,627,000), respectively. (p) Fair value of financial instruments The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, restricted cash, accounts receivable, other receivables included in prepaid expenses, short-term investments and other current assets, short term loan, accounts payables, balances with related parties and other payables, approximate their fair values because of the short-term maturity of these instruments. The carrying amounts of long-term loan approximate its fair value since it bears interest rate which approximates market interest rates. Available-for-sale investments were initially recognized at cost and subsequently remeasured at the end of each reporting period with the adjustment in its fair value recognized in accumulated other comprehensive income (loss). The Company, with the assistance of an independent third party valuation firm, determined the estimated fair value of its available-for-sale investments that are recognized in the consolidated financial statements. (q) Revenue recognition The Company provides a portfolio of content and application delivery total solutions within its one class of services, such as, web page content services; file transfer services; rich media streaming services; guaranteed application delivery; managed internet data services; cloud hosting services; content bridging services; mobile internet solution; and value-added services to its customers that in turn improve the performance, reliability and scalability of their internet services and applications. Consistent with the criteria of ASC 605, “Revenue Recognition”, the Company recognizes revenue from sales of these services when there is a signed sales agreement with fixed or determinable fees, services have been provided to the customer and collection of the resulting customer’s receivable is reasonably assured. The Company’s services are provided under the terms of a one-year master service agreement, which will typically accompany a one-year term renewal option with the same terms and conditions. Customers can choose at the outset of the arrangement to either use the Company’s services through a monthly fixed bandwidth or traffic volume usage and fee arrangement or choose a plan based on actual bandwidth or traffic volume used during the month at fixed pre-set rates. The Company recognizes and bills for revenue for excess usage, if any, in the month of its occurrence to the extent a customer’s usage of the services exceeds their pre-set monthly fixed bandwidth usage and fee arrangements. The rates as specified in the master service agreements are fixed for the duration of the contract term and are not subject to adjustment. The Company may charge its customers an initial set-up fee prior to the commencement of their services. To date these amounts have been insignificant, however, the Company’s policy is to record these initial set-up fees as deferred revenue and recognize them as revenue ratably over the estimated life of the customer arrangement. Business tax and related surcharges on revenues earned from provision of services to customers is recorded as a deduction from gross revenue to derive net revenue in the same period in which the related revenue is recognized. The business tax and related surcharges expenses for the years ended December 31, 2014, 2015 and 2016 amounted to approximately RMB10,598,000, RMB nil and RMB nil (US$nil), respectively. Effective in September 2012, 6% of value-added tax, or VAT, replaced the original 5% business tax in Beijing as a result of the PRC government’s pilot VAT reform program, which applies to all services provided by Chinacache Beijing and Beijing Jingtian and certain services provided by Beijing Blue IT. Effective in June 2014, 6% of VAT replaced the original 3% business tax in Beijing as a result of the PRC government’s pilot VAT reform program on telecom industry, which applies to all services provided by Beijing Blue IT. (r) Cost of revenues Cost of revenue consists primarily of depreciation of the Company’s long-lived assets, amortization of acquired intangible assets, maintenance, purchase of bandwidth and other overhead expenses directly attributable to the provision of content and application delivery total solutions. Prior to September 2012, ChinaCache Beijing was subject to business tax and other surcharges on certain revenues earned for exclusive business support, technical and consulting services provided to the Company’s VIEs, pursuant to the VIE agreements (Note 1). Since September 2012, all service provided by ChinaCache Beijing is subject to VAT. Effective since June 2014, all the services provided by the Group in Mainland China, including VIEs are subject to VAT. Such business tax, VAT (to the extent that is non-deductible) and other surcharges are accrued and charged to cost of revenues as the related exclusive business support, technical and consulting services are rendered. (s) Advertising expenditures Advertising expenditures are expensed as incurred. Advertising expenditures, included in sales and marketing expenses, amounted to approximately RMB450,000, RMB678,000 and RMB233,000 (US$34,000), for the years ended December 31, 2014, 2015 and 2016, respectively. (t) Research and development costs Research and development costs consist primarily of payroll and related personnel costs for minor routine upgrades and related enhancements to the Company’s services and network. Costs incurred in the development of the Company’s services are expensed as incurred. To date, the amount of costs qualifying for capitalization has been insignificant. (u) Government Grant Government grant are provided by the relevant PRC municipal government authorities to subsidize the cost of certain research and development projects. The amount of such government grant is determined solely at the discretion of the relevant government authorities and there is no assurance that the Company will continue to receive these government grant in the future. Government grant are recognized when it is probable that the Company will comply with the conditions attached to them, and the grant are received. When the grant relates to an expense item, it is recognized as deferred government grant and released to the consolidated statements of comprehensive loss over the period necessary to match the grant on a systematic basis to the costs that it is intended to compensate, as other operating income. Where the grant relates to an asset, it is recognized as deferred government grant and released to the consolidated statements of comprehensive loss in equal amounts over the expected useful life of the related asset, when operational, as other operating income. Government grant received by the Company also consist of unrestricted grant which are received on an unsolicited and unconditional basis to support the growth of the Company and do not relate to the Company’s operating activities. Unrestricted grant are classified as non-operating income and recorded in other income on the consolidated statements of comprehensive loss upon receipt. For the years ended December 31, 2014, 2015 and 2016, the Company received unrestricted grant amounting to RMB5,282,000, RMB685,000 and RMB2,250,000 (US$324,000), respectively. (v) Leases Leases are classified at the inception date as either a capital lease or an operating lease. The Company did not enter into any leases whereby it is the lessor for any of the periods presented. As the lessee, a lease is a capital lease if any of the following conditions exists: a) ownership is transferred to the lessee by the end of the lease term, b) there is a bargain purchase option, c) the lease term is at least 75% of the property’s estimated remaining economic life, or d) the present value of the minimum lease payments at the beginning of the lease term is 90% or more of the fair value of the leased property to the lessor at the inception date. A lease involving integral equipment is a capital lease only if condition (a) or (b) exists. A capital lease is accounted for as if there was an acquisition of an asset and an incurrence of an obligation at the inception of the lease. All other leases are accounted for as operating leases wherein rental payments are expensed on a straight-line basis over the periods of their respective leases. The Company leases office space and employee accommodation under operating lease agreements. Certain of the lease agreements contain rent holidays. Rent holidays are considered in determining the straight-line rent expense to be recorded over the lease term. The lease term begins on the date of initial possession of the lease property for purposes of recognizing lease expense on a straight-line basis over the term of the lease. The excess of rent expense and rent paid, as the case may be for respective leases, is recorded as deferred rental included in the prepaid expenses and other current assets in the consolidated balance sheets. (w) Income taxes The Company follows the liability method in accounting for income taxes in accordance to ASC topic 740 (“ASC 740”), Income Taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company records a valuation allowance against deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The Company adopted ASC 740 to account for uncertainty in income taxes. ASC 740 clarifies the accounting for uncertainty in income taxes by prescribing the recognition threshold a tax position is required to meet before being recognized in the consolidated financial statements. The Company has elected to classify interest and penalties related to unrecognized tax benefits, if and when required, as part of “interest expense” and “other expenses,” respectively, in the consolidated statements of comprehensive loss. (x) Share-based compensation Share options and restricted shares award granted to employees are accounted for under ASC 718 Compensation — Stock Compensation. In accordance with ASC 718, the Company determines whether a share option or restricted shares award should be classified and accounted for as a liability award or an equity award. All grants of share options and restricted shares award to employees classified as equity award are recognized in the financial statements over their requisite service periods based on their grant date fair values. The Company has elected to recognize compensation expenses using the accelerated method for its share options and restricted share award granted. For restricted share awards granted with performance conditions, the Company commences recognition of the related compensation expense if it is probable the defined performance condition will be met. To the extent that the Company determines that it is probable that a different number of share-based awards will vest depending on the outcome of the performance condition, the cumulative effect of the change in estimate is recognized in the period of change. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in the subsequent period if actual forfeitures differ from initial estimates. Forfeiture rate is estimated based on historical and future expectations of employee turnover rates and are adjusted to reflect future changes in circumstances and facts, if any. Share-based compensation expense is recorded net of estimated forfeitures such that expense was recorded only for those share-based award that are expected to vest. During the years ended December 31, 2014, 2015 and 2016, the Company estimated that the forfeiture rate for both the management group and the non-management group was zero. To the extent the Company revises this estimate in the future, the share-based payments could be materially impacted in the period of revision, as well as in following periods. The Company, with the assistance of an independent valuation firm, determined the estimated fair values of the share options granted to employees and non-employees using the binomial option pricing model. (y) Loss per share In accordance with ASC 260, “ Earnings per Share”, basic loss per share is computed by dividing net loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year. Diluted loss per share is calculated by dividing net loss attributable to ordinary shareholders as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares consist of the ordinary shares issuable upon the conversion of the share options, using the treasury stock method. Ordinary share equivalents are excluded from the computation of diluted per share if their effects would be anti-dilutive. (z) Comprehensive loss Comprehensive loss is defined as the decrease in equity of the Company during a period from transactions and other events and circumstances excluding transactions resulting from investments by owners and distributions to owners. Comprehensive loss is reported in the consolidated statements of comprehensive loss. Accumulated other comprehensive income of the Company includes foreign currency translation adjustments related to ChinaCache US, CCAL, ChinaCache HK and Chinacache IE, and Chinacache UK whose functional currency are US$, US$, HK$, EUR and GBP respectively, and the change in fair value of available-for-sale investments (Note 10) and their corresponding deferred tax impact, if any. (aa) Segment reporting The Company follows ASC 280, ““ Segment Reporting.” The Company’s Chief Executive Officer or chief operating decision-maker reviews the consolidated financial results when making decisions about allocating resources and assessing the performance of the Company as a whole and hence, the Company has only one reportable segment. The Company operates and manages its business as a single segment through the provision of a single class of global services for accelerating and improving the delivery of content and applications over the Internet. As the Company’s long-lived assets are substantially all located in the PRC and substantially all the Company’s revenues are derived from within the PRC, no geographical segments are presented. (bb) Employee benefits The full-time employees of the Company’s PRC subsidiaries are entitled to staff welfare benefits including medical care, housing fund, unemployment insurance and pension benefits, which are government mandated defined contribution plans. These entities are required to accrue for these benefits based on certain percentages of the employees’ respective salaries, subject to certain ceilings, in accordance with the relevant PRC regulations, and make cash contributions to the state-sponsored plans out of the amounts accrued. The total amounts for such employee benefits, which were expensed as incurred, were RMB46,178,000, RMB53,820,000 and RMB53,669,000 (US$7,730,000) for the years ended December 31, 2014, 2015 and 2016, respectively. (cc) Share Repurchase Program Pursuant to a Board of Directors’ resolution on December 18, 2014 (“2014 Share Repurchase Plan”), August 24, 2015 (“August 2015 Share Repurchase Plan”) and December 28, 2015 (“December 2015 Share Repurchase Plan”), the Company’s management is authorized to repurchase up to US$10 million, US$6 million and US$5 million of the Company’s ADSs, respectively. Each of the Share Repurchase Plan is effective for 12 months. During the year ended December 31, 201 |
CONCENTRATION OF RISK
CONCENTRATION OF RISK | 12 Months Ended |
Dec. 31, 2016 | |
CONCENTRATION OF RISK | |
CONCENTRATION OF RISK | 3. CONCENTRATION OF RISK (a) Credit risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable, other receivables included in prepaid expenses, short-term investment and other current assets, available-for-sale investments and amounts due from related parties. As of December 31, 2015 and 2016, RMB519,914,000 and RMB118,835,000 (US$17,116,000), respectively, were deposited with major financial institutions located in the PRC, RMB51,108,000 and RMB28,744,000 (US$4,140,000), respectively, were deposited with in the major financial institutions located in the Hong Kong Special Administration Region, RMB1,218,000 and RMB2,375,000 (US$342,000), respectively held in the major financial institutions located in Europe, and RMB43,978,000 and RMB6,666,000 (US$960,000), respectively held in the major financial institutions in United States of America. Management believes that these financial institutions are of high credit quality and continually monitor the credit worthiness of these financial institutions. Historically, deposits in Chinese banks are secure due to the state policy on protecting depositors’ interests. However, China promulgated a new Bankruptcy Law in August 2006 that came into effect on June 1, 2007, which contains a separate article expressly stating that the State Council may promulgate implementation measures for the bankruptcy of Chinese banks based on the Bankruptcy Law. Under the new Bankruptcy Law, a Chinese bank may go into bankruptcy. In addition, since China’s concession to the World Trade Organization, foreign banks have been gradually permitted to operate in China and have been significant competitors against Chinese banks in many aspects, especially since the opening of the Renminbi business to foreign banks in late 2006. Therefore, the risk of bankruptcy of those Chinese banks in which the Company has deposits has increased. In the event of bankruptcy of one of the banks which holds the Company’s deposits, it is unlikely to claim its deposits back in full since it is unlikely to be classified as a secured creditor based on PRC laws. (b) Business, supplier, customer, and economic risk The Company participates in a relatively young and dynamic industry that is heavily reliant and also susceptible to complementary and/or competitive technological advancements. The Company believes that changes in any of the following areas could have a material adverse effect on the Company’s future financial position, results of operations or cash flows: (i) Business Risk - Third parties may develop technological or business model innovations that address content delivery requirements in a manner that is, or is perceived to be, equivalent or superior to the Company’s services. If competitors introduce new products or services that compete with, or surpass the quality, price or performance of the Company’s services, the Company may be unable to renew its agreements with existing customers or attract new customers at the prices and levels that allow the Company to generate reasonable rates of return on its investment. (ii) Supplier Risk - Changes in key telecommunications resources suppliers and certain strategic relationships with telecom carriers. The Company’s operations are dependent upon communications capacity provided by the third-party telecom carriers and third-party controlled end-user access network. There can be no assurance that the Company are adequately prepared for unexpected increases in bandwidth demands by its customers. The communications capacity the Company has leased may become unavailable for a variety of reasons, such as physical interruption, technical difficulties, contractual disputes, or the financial health of its third-party providers. Any failure of these network providers to provide the capacity the Company requires may result in a reduction in, or interruption of, service to its customers. For the years ended on December 31, 2014, 2015 and 2016, 97%, 95% and 91% of bandwidth resources in term of costs were leased from the two major PRC telecom carriers, China Telecom and China Unicom. (iii) Customer Risk - Revenue concentration on certain customers. The success of the Company’s business going forward will rely in part on Company’s ability to continue to obtain and expand business from existing customers while also attracting new customers. Although the Company has a diversified base of customers covering its one class of services, such as, web page content services; file transfer services; rich media streaming service; guaranteed application services; managed internet data services; cloud hosting services; content bridging services; mobile internet solution; and value-added services, the Company does depend on a limited number of customers for a substantial portion of their revenue, and the loss of, or a significant shortfall in demand from, these customers could significantly harm the Company’s results of operations. Details of the revenues for customers accounting for 10% or more of total revenues are as follows: Years as of December 31, 2014 2015 2016 RMB’000 RMB’000 RMB’000 US$’000 Customer A Details of the accounts receivables for customers accounting for 10% or more of total accounts receivable are as follows: Years as of December 31, 2015 2016 RMB’000 RMB’000 US$’000 Customer A Customer B * *not greater than 10% (iv) Emerging or unproven business models of customers. Many of the Company’s existing and potential customers are pursuing emerging or unproven business models which, if unsuccessful, could lead to a substantial decline in demand for the Company’s services, and the Company’s growth and prospects may be materially and adversely affected. (v) Political, economic and social uncertainties. The Company’s operations could be adversely affected by significant political, economic and social uncertainties in the PRC. Although the PRC government has been pursuing economic reform policies for more than 20 years, no assurance can be given that the PRC government will continue to pursue such policies or that such policies may not be significantly altered, especially in the event of a change in leadership, social or political disruption or unforeseen circumstances affecting the PRC political, economic and social conditions. There is also no guarantee that the PRC government’s pursuit of economic reforms will be consistent or effective. (vi) Regulatory restrictions. The applicable PRC laws, rules and regulations currently prohibit foreign ownership of companies that provide content and application delivery services. Accordingly, the Company’s subsidiary, ChinaCache Beijing is currently ineligible to apply for the required licenses for providing content and application delivery services in China. As a result, the Company operates its business in the PRC through its VIEs, which holds the licenses and permits required to provide content and application delivery services in the PRC. The PRC Government may also choose at any time to block access to the Company’s customers’ content which could also materially impact the Company’s ability to generate revenue. (c) Currency convertibility risk Substantially all of the Company’s businesses are transacted in RMB, which is not freely convertible into foreign currencies. On January 1, 1994, the PRC government abolished the dual rate system and introduced a single rate of exchange as quoted daily by the People’s Bank of China. However, the unification of the exchange rates does not imply the convertibility of RMB into US$ or other foreign currencies. All foreign exchange transactions continue to take place either through the People’s Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People’s Bank of China. Approval of foreign currency payments by the People’s Bank of China or other institutions requires submitting a payment application form together with suppliers’ invoices, shipping documents and signed contracts. (d) Foreign currency exchange rate risk From July 21, 2005, the RMB is permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. The depreciation of the RMB against US$ was approximately 2.5%, 4.4% and 7.2% in the years ended December 31, 2014, 2015 and 2016, respectively. Most of revenues and costs of the Company are denominated in RMB, while a portion of cash and cash equivalents, short-term financial assets and investments are denominated in U.S. dollars. Any significant revaluation of RMB may materially and adversely affect the Company’s cash flows, revenues, earnings and financial position, and the value of, and any dividends payable on, the ADS in US$. |
CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS | 12 Months Ended |
Dec. 31, 2016 | |
CASH AND CASH EQUIVALENTS | |
CASH AND CASH EQUIVALENTS | 4. CASH AND CASH EQUIVALENTS December 31, 2015 2016 RMB’000 RMB’000 US$’000 Cash and cash equivalents on the consolidated balance sheets Cash and cash equivalents included in assets held for sale (Note 9) Cash and cash equivalents on the consolidated statements of cash flows |
ACCOUNTS RECEIVABLE, NET
ACCOUNTS RECEIVABLE, NET | 12 Months Ended |
Dec. 31, 2016 | |
ACCOUNTS RECEIVABLE, NET | |
ACCOUNTS RECEIVABLE, NET | 5. ACCOUNTS RECEIVABLE, NET Accounts receivable and allowance for doubtful accounts consist of the following: December 31, 2015 2016 RMB’000 RMB’000 US$’000 Accounts receivable Less: allowance for doubtful accounts ) ) ) As of December 31, 2015 and 2016, all accounts receivable were due from third party customers. An analysis of the allowance for doubtful accounts is as follows: December 31, 2015 2016 RMB’000 RMB’000 US$’000 Balance, beginning of year Additions for the current year Deductions for the current year -Recovery ) ) ) Balance, end of year |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2016 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 6. PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consist of the following: December 31, 2015 2016 RMB’000 RMB’000 US$’000 Prepaid expense for bandwidth and servers (i) Income tax receivable — — Staff field advances Capital lease deposit — Other deposit and receivables i. Prepaid expense for bandwidth and servers represents the unamortized portion of prepaid payments made to the Company’s telecom operators and certain technology companies, who provide the Company with access to bandwidth and network servers. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2016 | |
PROPERTY AND EQUIPMENT, NET | |
PROPERTY AND EQUIPMENT, NET | 7. PROPERTY AND EQUIPMENT, NET Property and equipment, including those held under capital leases, consists of the following: December 31, 2015 2016 RMB’000 RMB’000 US$’000 At cost: Optical fibers Computer equipment Furniture and fixtures Leasehold improvements Motor vehicles Freehold land — Building — Less: accumulated depreciation ) ) ) Less: impairment — ) ) — — For the years ended December 31, 2014, 2015 and 2016, depreciation expenses were RMB94,826,000, RMB153,313,000 and RMB155,225,000 (US$22,357,000), respectively, and were included in the following captions: For the years ended December 31, 2014 2015 2016 RMB’000 RMB’000 RMB’000 US$’000 Cost of revenue Sales and marketing expenses General and administrative expenses Research and development expenses The Company accounted for the leases of certain computer equipment and optical fibers as capital leases as leases that transfer substantially all the benefits and risks incidental to the ownership of assets. The carrying amounts of the Company’s property and equipment held under capital leases at respective balance sheet dates were as follows: December 31, 2015 2016 RMB’000 RMB’000 US$’000 At Cost: Optical fibers Computer equipment Less: accumulated depreciation ) ) ) Less: impairment — ) ) — — As the intangible assets were fully impaired as of December 31, 2016, the estimated accrued amortization expense for each of the five succeeding fiscal year is nil. Depreciation of property and equipment held under capital leases was RMB3,523,000, RMB34,074,000 and RMB48,473,000 (US$6,981,000) for the years ended December 31, 2014, 2015 and 2016, respectively. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2016 | |
INTANGIBLE ASSETS | |
INTANGIBLE ASSETS | 8. INTANGIBLE ASSETS The following table presents the Company’s intangible assets as of the respective balance sheet dates: December 31, 2015 2016 RMB’000 RMB’000 US$’000 Purchased software, net Addition Less: amortization ) ) ) Less: impairment — ) ) Reclassified to assets held for sale (Note 9) ) — — — — As the intangible assets were fully impaired as of December 31, 2016, the estimated accrued amortization expense for each of the five succeeding fiscal year is nil. |
ASSETS HELD FOR SALE _ LIABILIT
ASSETS HELD FOR SALE / LIABILITIES HELD FOR SALE | 12 Months Ended |
Dec. 31, 2016 | |
ASSETS HELD FOR SALE / LIABILITIES HELD FOR SALE | |
ASSETS HELD FOR SALE / LIABILITIES HELD FOR SALE | 9. ASSETS HELD FOR SALE / LIABILITIES HELD FOR SALE On November 27, 2015, the Company has entered into definitive sale and purchase agreements to dispose of 60% equity interest of its subsidiary, Xin Run, to three parties, including a 38% interest to a company owned by the Founders (the “2015 Agreement”). Xin Run owns and will operate ChinaCache’s Atecsys Cloud Data Center (“Atecsys”) and is expected to build China’s first Internet Exchange. As a result, assets and liabilities subject to the purchase and sale agreements have been classified as held for sale in the Company’s consolidated balance sheet at December 31, 2015. On March 6, 2017, the Company entered into a new definitive agreement to sell 79% of its equity interest in Xin Run to a group of investors for RMB221 million in cash before fees and expenses, including a 52.67% interest to two companies owned by the Founders. The completion of the transaction is subject to customary closing conditions, including obtaining requisite governmental registration. The transaction has been approved by the Board of Directors of the Company, acting upon the unanimous recommendation of its audit committee, consisting of independent and disinterested directors. The Company terminated the 2015 Agreement. Assets and liabilities classified as held for sale are required to be recorded at the lower of carrying value or fair value less any costs to sell. As of December 31, 2015 and 2016, the carrying value of Xin Run’s assets were less than fair value less costs to sell, and accordingly, no adjustment to the asset value was necessary. The gain or loss on disposal, along with the continuing operations of the disposal group, will be reported in the Company’s consolidated statement of comprehensive loss. The transaction does not meet the criteria to be classified as discontinued operations under the amended guidance of ASC Topics 205 and 360 because the component does not comprise a major component of the Company’s operations. The major classes of assets and liabilities held for sale were as follows: December 31 2015 2016 RMB’000 RMB’000 US$’000 Cash and cash equivalents Accounts receivable, net — Prepaid expenses and other current assets (i) Short term investment (ii) — — Amounts due from ChinaCache Beijing and Beijing Blue IT Property and equipment, net Intangible assets, net Land use right, net (iii) Deferred tax assets Accrued tax on intercompany transactions Cloud infrastructure construction in progress (iv) Long term deposits and other non-current assets Assets held for sale Accounts payable — Accrued employee benefits Accrued expenses and other payables (v) Income tax payable Liabilities for uncertain tax positions Amounts due to the Company Liabilities held for sale (i) Including refundable prepaid commission fee for the potential sales of certain buildings as part of the cloud infrastructure, which was RMB99,700,000 and RMB99,700,000 (US$15,391,000) for the years end December 31, 2015 and 2016, respectively. (ii) Short term investment represents the investment in variable rate deposits issued by a certain commercial bank, which matured on May 4, 2016. (iii) The Company’s land use right is related to payment to acquire a land use right of approximately 39,000 square meters of land in Beijing Shunyi District, on which the Company plans to develop a cloud infrastructure. According to the land use right contract, the Company has a 50-year use right over the land, which is used as the basis for amortization. Amortization expense for land use right for the years ended December 31, 2014, 2015 and 2016 was RMB1,033,000, RMB1,044,000 and nil, respectively. (iv) As of December 31, 2015 and 2016, the Company capitalized RMB467,746,000 and RMB977,194,000 (US$140,745,000) of costs which were directly attributable to the development of the cloud infrastructure. v. Including advances from two potential buyers for certain buildings as part of the cloud infrastructure, which was RMB997,000,000 and RMB997,000,000 (US$153,910,000) for the years end December 31, 2015 and 2016, respectively. The balance as of December 31, 2016 also included a provision for late delivery penalty of RMB30,778,000 (US$4,433,000). The provision was made for the delay in the handover of a building given disputes with buyer on the standard of delivery and acceptance of the building, which was charged to other operating income/(loss) in the consolidated statements of comprehensive loss. The operating results of the disposal group during the three years ended December 31, 2016 that are not presented within discontinued operations are summarized as follow: For the years ended December 31, 2014 2015 2016 RMB’000 RMB’000 RMB’000 US$’000 Net revenue — — ) ) Loss before income taxes ) ) )* )* * Loss before income taxes for the year ended December 31, 2016 included transaction tax on assets transfer of Nil (2014: Nil and 2015: RMB27,733,000). Loss before income taxes attributable to the noncontrolling interest for the year ended December 31, 2016 was RMB1,074,000 (US$155,000) (2014: Nil and 2015: Nil). |
INVESTMENTS
INVESTMENTS | 12 Months Ended |
Dec. 31, 2016 | |
INVESTMENTS | |
INVESTMENTS | 10. INVESTMENTS Short term investments Short term investments consisted of the following: December 31, 2015 2016 RMB’000 RMB’000 US$’000 Available-for-sale investment: Investment in a mutual fund — — — — The Company has accounted for the investment in the mutual fund as an available-for-sale investment, where such investment will be carried at fair value, with unrealized gains and losses excluded from earnings and reported as a net amount as other comprehensive income (loss) in the consolidated statements of comprehensive loss until realized. On July 2, 2016, the Company redeemed all of the remaining investment in the mutual fund with a consideration of RMB26,828,000 (US$3,864,000) and reclassified the accumulated unrealized gain recorded in accumulated other comprehensive income of RMB3,552,000 (US$512,000) to other income in the consolidated statements of comprehensive loss on the date of redemption. Long term investments Long term investments consisted of the following: December 31, 2015 2016 RMB’000 RMB’000 US$’000 Cost investments: PRC Fund United States Fund Investment in Flashapp Inc. (“Flashapp”) Investment in ordinary shares of an unlisted company in PRC (“Investee A”) Investment in preferred shares of an unlisted company in PRC (“Investee B”) — Available-for-sale investments: Investment in preferred shares of an unlisted company in PRC (“Investee C”) Investment in convertible loan of an unlisted company in Cayman Islands (“Investee D”) Less: accumulated impairment ) ) ) Total Cost investments In 2011, the Company entered into agreements with a PRC Fund and a United States Fund and made investments of RMB3,103,000 and RMB6,033,000, respectively, as a limited partner. In 2012, the Company made an additional RMB3,000,000 investment to each the PRC Fund and the United States Fund. In 2013, the Company made an additional RMB1,500,000 and RMB4,814,000 investment to each of the PRC Fund and the United States Fund, respectively. In 2014, the Company made an additional RMB1,500,000 and RMB2,692,000 investment to each of the PRC Fund and the United States Fund, respectively. In 2015, the Company made an additional RMB1,000,000 and RMB1,303,000 investment to each of the PRC Fund and the United States Fund, respectively. In 2016, the Company made an additional RMB1,842,000 (US$265,000) investment to the United States Fund. Given that the Company holds less than five percent interest in each fund, the Company has accounted for such investments using the cost method. In 2013, the Company entered into an agreement with Flashapp, an unlisted company in Cayman Island to purchase 13,971,428 Series A Preferred Shares for RMB12,240,000. The Company has the contingent redemption right on or after five years from the issuance date to request redemption of all its Series A Preferred Shares holders, at a redemption price equal to 120% of its original issuance price. The Board of Directors of Flashapp shall consist of five persons, where the Company, as a majority of Series A Preferred Shares may appoint two directors. The Company, through the directors appointed, has the ability to exercise significant influence over the operating and financial policies of Flashapp and hence, Flashapp is a related party of the Company (Note 20). However, the Series A Preferred Shares are not in-substance common stock and therefore the Company has accounted for the investment as cost method investment carried at cost. In 2016, the Company believed that there was a decline in value that was other-than-temporary and recorded RMB12,240,000 (US$1,763,000) in “impairment of long term investments” in the consolidated statement of comprehensive loss. On August 25, 2014, the Company entered into an agreement with an unlisted company in the PRC (“Investee A”) to acquire 6.25% interest for RMB6,000,000 (US$967,000). The Company has accounted for the investment as cost method investments carried at cost. In 2016, the Company believed that there was a decline in value that was other-than-temporary, and recorded RMB6,000,000 (US$864,000) in “impairment of long term investments” in the consolidated statement of comprehensive loss. Available-for-sale investments Investment in investee C was fully impaired in 2013. On February 19, 2014, the Company entered into an agreement with an unlisted company in Cayman Islands (“Investee D”) to issue a convertible loan of RMB3,068,000 (US$494,000) at an interest rate of US prime rate plus 2% for 2 years. The Company has the right to request conversion of all its convertible loan upon Investee D’s successful Series A financing, at a price less than 25% of its Series A financing price. The Company has accounted for the investment of convertible loan as an available-for-sale investment where such investment will be carried at fair value, with unrealized gains and losses reported as other comprehensive income (loss) in the consolidated statements of comprehensive loss until realized. In 2016, the Company agreed to extend the terms of the convertible loan to August 19, 2017 and expected to exercise its conversion option upon the completion of Series A financing. As of December 31, 2016, the fair value of the investment in Investee D was RMB3,973,000 (US$572,000) (December 31, 2015: RMB 3,973,000). |
SHORT-TERM LOAN
SHORT-TERM LOAN | 12 Months Ended |
Dec. 31, 2016 | |
SHORT-TERM LOAN | |
SHORT-TERM LOAN | 11. SHORT-TERM LOAN Short-term loan consisted of the following: December 31, 2015 2016 RMB’000 RMB’000 US$’000 Bank borrowings — Total — In June 2014, the Company entered into a short-term loan arrangement with SPD Bank (Beijing) of RMB60 million with an interest rate of 7.2% per annum and a maturity term of twelve months. The total amount of RMB68 million fixed deposit from the Company was pledged to secure the loan in June 2014, which was recorded as restricted cash in the consolidated balance sheets. The loan was subsequently repaid in June 2015 with the corresponding pledged deposit released. On July 21, November 8 and December 21, 2016, the Company entered into short-term loan agreements with Jiangsu Bank (Beijing) of RMB9,371,000 (US$1,350,000), RMB9,940,000 (US$1,432,000) and RMB10,000,000 (US$1,440,000) with an interest rate of 5.655% per annum and a maturity term of twelve months, respectively. |
ACCRUED EXPENSES AND OTHER PAYA
ACCRUED EXPENSES AND OTHER PAYABLES | 12 Months Ended |
Dec. 31, 2016 | |
ACCRUED EXPENSES AND OTHER PAYABLES | |
ACCRUED EXPENSES AND OTHER PAYABLES | 12. ACCRUED EXPENSES AND OTHER PAYABLES Accrued expenses and other payables consisted of the following: December 31, 2015 2016 RMB’000 RMB’000 US$’000 Payables for purchase of property and equipment Advance from customers Other tax payables ) ) ) Other accrued expenses Total |
LONG TERM LOAN
LONG TERM LOAN | 12 Months Ended |
Dec. 31, 2016 | |
LONG TERM LOAN | |
LONG TERM LOAN | 13. LONG TERM LOAN On June 27 and September 25, 2014, the Company entered into two unsecured long-term loan arrangements with the Bank of Jiangsu (Beijing Branch), the principal of which were RMB17,040,000 and RMB4,500,000, respectively, with an annual interest rate of 6.175%. Future installment repayment schedule according to the loan agreements are as follows: December 31, 2016 RMB’000 US$’000 2017 Total |
DEFERRED GOVERNMENT GRANT
DEFERRED GOVERNMENT GRANT | 12 Months Ended |
Dec. 31, 2016 | |
DEFERRED GOVERNMENT GRANT | |
DEFERRED GOVERNMENT GRANT | 14. DEFERRED GOVERNMENT GRANT Deferred government grant consisted of the following: December 31, 2015 2016 RMB’000 RMB’000 US$’000 Beginning Received Recognized as income during the year ) ) ) Ending Including: current portion During the years ended December 31, 2015 and 2016, the Company received RMB1,350,000 and RMB11,450,000 (US$1,649,000) of government grants, respectively, from the relevant PRC government authorities. The government grant received is required to be used in research and development projects and refundable until the intended projects pass government inspection. During the years ended December 31, 2015 and 2016, a certain government grant complied with the attached conditions. Hence, relevant government grants of RMB13,911,000 and RMB12,041,000 (US$1,735,000), respectively, was recognized in the consolidated statements of comprehensive loss in other operating income during the years ended December 31, 2015 and 2016, respectively. |
CAPITAL LEASE OBLIGATIONS
CAPITAL LEASE OBLIGATIONS | 12 Months Ended |
Dec. 31, 2016 | |
CAPITAL LEASE OBLIGATIONS | |
CAPITAL LEASE OBLIGATIONS | 15. CAPITAL LEASE OBLIGATIONS Certain computer equipment and optical fibers were acquired through capital leases entered into by the Company. Future minimum lease payments under non-cancellable capital lease arrangements are as follows: December 31, 2016 RMB’000 US$’000 2017 2018 2019 Total minimum lease payment Less: amount representing interest ) ) Present value of remaining minimum lease payment Including: current portion |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2016 | |
SHARE-BASED COMPENSATION | |
SHARE-BASED COMPENSATION | 16. SHARE-BASED COMPENSATION In order to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants and promote the success of the Company’s business, the Company adopted a stock option plan in 2007 (the “2007 Plan”). Under the 2007 Plan, the Company may grant options to its employees, directors and consultants to purchase an aggregate of no more than 14,000,000 ordinary shares of the Company, subject to different vesting requirements. The 2007 Plan was approved by the Board of Directors and shareholders of the Company on October 16, 2008. On May 28, 2009, the Company adopted a new stock option plan (the “2008 Plan”) which allows the Company to grant options to its employees, directors and consultants to purchase an aggregate of no more than 8,600,000 ordinary shares of the Company, subject to different vesting requirements. On May 20, 2010, the Company adopted a new stock option plan (the “2010 Plan”) which allows the Company to grant options to its employees, directors and consultants to purchase an aggregate of no more than 9,000,000 ordinary shares of the Company, subject to different vesting requirements. On June 20, 2011, the Company adopted a new stock option plan (the “2011 Plan”) which allows the Company to grant options to its employees, directors and consultants to purchase an aggregate of no more than 22,000,000 ordinary shares of the Company, subject to different vesting requirements. On July 2, 2012, the Company approved amendments to the 2011 Plan which provide, in effect, that the maximum aggregate number of ordinary shares that may be issued pursuant to all awards (the “Award Pool”) under the 2011 Plan shall be equal to five percent of the total issued and outstanding ordinary shares as of July 2, 2012; provided that, the ordinary shares reserved in the Award Pool shall be increased automatically if and whenever the unissued ordinary shares reserved in the Award Pool accounts for less than one percent of the total then issued and outstanding ordinary shares, as a result of which increase the unused ordinary shares reserved in the Award Pool immediately after each such increase shall equal to five percent of the then issued and outstanding ordinary shares. The 2007 Plan, 2008 Plan, 2010 Plan and 2011 Plan (collectively, the “Option Plans”) will be administered by the Compensation Committee as set forth in the Option Plans (the “Plan Administrator”). The board of directors of a committee designated by the board will administer the plan to execute option agreements with those persons selected by the Plan Administrator and issue ordinary shares of the Company upon exercise of any options so granted pursuant to the terms of an option agreement. The 2007 and 2008 Option Plans contain the same terms and conditions. All options granted under the 2007 and 2008 Option Plans have a term of nine years from the option grant date and have two different vesting schedules: 1) vest 100% on the stated vesting commencement date in the grantee’s option agreement; or 2) vest 50% on the second anniversary of the stated vesting commencement date and 25% on the third and fourth anniversaries of the stated vesting commencement date. All options granted under the 2010 Option Plan have a term of seven to ten years from the option grant date and have three different vesting schedules: 1) vest 100% on the stated vesting commencement date in the grantee’s option agreement; 2) vest 25% on the first, second, third and fourth anniversaries of the stated vesting commencement date; or 3) vest 25% on the first anniversary of the stated vesting commencement date and 6.25% every quarter for each of the second, third and fourth anniversaries of the stated vesting commencement date. All options granted under the 2011 Option Plan have a term of six to ten years from the option grant date and have four different vesting schedules: 1) vest 100% on the stated vesting commencement date in the grantee’s option agreement; or 2) vest 25% on the first, second, third and fourth anniversaries of the stated vesting commencement date; or 3) vest 25% on the first anniversary of the stated vesting commencement date and 6.25% every quarter for each of the second, third and fourth anniversaries of the stated vesting commencement date; or 4) vest one-third on the first, second and third anniversaries of the stated vesting commencement date. During the years ended December 31, 2014, 2015 and 2016, the Company granted 5,734,480, nil and nil options, respectively, to a combination of employees and directors of the Company at exercise prices ranging from US$0.24 to US$0.53. As of December 31, 2016, options to purchase 11,811,536 of ordinary shares were outstanding and options to purchase 7,294,209 ordinary shares were available for future grant under the option plans. The binomial option pricing model was applied in determining the estimated fair value of the options granted to employees and non-employees. The model requires the input of highly subjective assumptions including the estimated expected stock price volatility, the expected price multiple at which employees are likely to exercise share options. For expected volatilities, the Company has made reference to the historical price volatilities of ordinary shares of several comparable companies in the same industry as the Company. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury Bills yield in effect at the time of grant. (a) Options Granted to Employees The following table summarized the Company’s employee share option activity under the option plans: Number of Weighted Weighted Aggregate (US$) (Years) (US$’000) Outstanding, January 1, 2015 Vested and expected to vest at January 1, 2015 Exercised ) Forfeited ) Outstanding, December 31, 2015 Vested and expected to vest at December 31, 2015 Exercisable at December 31, 2015 Exercised ) Forfeited ) Outstanding, December 31, 2016 Vested and expected to vest at December 31, 2016 Exercisable at December 31, 2016 The aggregated intrinsic value of stock options outstanding and exercisable at December 31, 2016 was calculated based on the closing price of the Company’s ordinary shares on December 31, 2016 of US$2.56 per ADS (equivalent to US$0.16 per ordinary share). The total intrinsic value of stock options exercised during the years ended December 31, 2014, 2015 and 2016 was RMB79,729,000, RMB29,241,000 and RMB3,132,000 (US$451,000), respectively. As of December 31, 2016, there was RMB164,000 (US$24,000) of unrecognized share-based compensation cost related to share options issued to employees, which are expected to be recognized following the accelerated method over the remaining vesting periods of different tranches, ranging from 0.25 years to 1 years. The Company calculated the estimated fair value of the options granted in 2014 using the binomial option pricing model with the following assumptions: December 23, 2014 Suboptimal exercise factor Risk-free interest rates % Expected volatility % Expected dividend yield % Weighted average fair value of share option The total fair value of options vested during the years ended December 31, 2014, 2015 and 2016 was RMB14,064,000, RMB3,098,000, and RMB590,000 (US$85,000), respectively. (b) Restricted Shares Award Granted to Employees On December 23, 2014, the Company issued 11,265,520 shares of restricted shares to the employees and directors under 2011 Plan. The restricted shares shall become vested in each year of 2014, 2015, 2016 and 2017, respectively. On December 11, 2015, the Company issued 40,106,656 shares of restricted shares to the employees and directors under 2011 Plan. The restricted shares shall become vested in each year of 2016, 2017 and 2018, respectively. As of December 31, 2016, there was RMB10,419,000 (US$1,501,000) of unrecognized share-based compensation cost, net of estimated forfeitures, related to unvested restricted shares which is expected to be recognized over a weighted-average period of 0.7 year. Total unrecognized compensation cost may be adjusted for future changes in estimated forfeitures. The following table summarized the Company’s restricted shares award issued under the 2011 Plan: Number of Weighted average (US$) Outstanding, January 1, 2015 Granted Vested ) Forfeited ) Outstanding, December 31, 2015 Expected to vest at December 31, 2015 Granted — — Vested ) Forfeited ) Outstanding, December 31, 2016 Expected to vest at December 31, 2016 The cost of the restricted shares is determined using the fair value (determined based on the fair market value of the Company’s ordinary shares on the grant date, or if the grant date is not a trading day then the immediately preceding trading date), net of expected forfeitures. The aggregate fair value of the unvested restricted shares for the year ended December 31, 2015 and 2016 was RMB125,097,000 and RMB22,268,000 (US$3,207,000). The total fair value of restricted shares vested during the years ended December 31, 2015 and 2016 was RMB29,492,000 and RMB103,433,000 (US$14,897,000), respectively. (c) Options Granted to Non-employees The aggregated intrinsic value of share options outstanding and exercisable at December 31, 2016 was calculated based on the closing price of the Company’s ordinary shares on December 31, 2016 of US$2.56 per ADS (equivalent to US$0.16 per ordinary share). As of December 31, 2016, the Company has options issued to non-employees outstanding to purchase an aggregate of 873,000 shares with an exercise price below the closing price of the Company’s ordinary shares on December 31, 2016, resulting in an aggregate intrinsic value of RMB696,000 (US$100,000). (d) Restricted Share Award Granted to A Non-employee On December 31, 2016, the Company granted restricted shares of 454,912 shares to a former employee, which were immediately vested. The fair market value of the Company’s ordinary shares on the grant date of RMB1,320,000 (US$194,000) was recorded in “general and administrative expense” in the consolidated statement of comprehensive loss. A total compensation expense relating to all options and restricted shares recognized for the years ended December 31, 2014, 2015 and 2016 is as follows: For the years ended December 31, 2014 2015 2016 (RMB)’000 (RMB)’000 (RMB)’000 (US$)’000 Cost of revenues Sales and marketing expenses General and administration expenses Research and development expenses |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME | 12 Months Ended |
Dec. 31, 2016 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | 17. ACCUMLATED OTHER COMPREHENSIVE INCOME The movement of accumulated other comprehensive income is as follows: Foreign currency Unrealized Total Note RMB’000 RMB’000 RMB’000 Balance as of January 1, 2015 ) Other comprehensive income before reclassification Balance as of December 31, 2015 Other comprehensive income before reclassification ) Amounts reclassified from accumulated other comprehensive income — ) ) Balance as of December 31, 2016 ) Balance as of December 31, 2016, in US$ ) The amount reclassified out of accumulated other comprehensive income represented realized gain on the available-for-sale investment on the date of redemption, which was then recorded in other income in the consolidated statements of comprehensive income. The amount reclassified was determined on the basis of specific identification. |
MAINLAND CHINA EMPLOYEE CONTRIB
MAINLAND CHINA EMPLOYEE CONTRIBUTION PLAN | 12 Months Ended |
Dec. 31, 2016 | |
MAINLAND CHINA EMPLOYEE CONTRIBUTION PLAN | |
MAINLAND CHINA EMPLOYEE CONTRIBUTION PLAN | 18. MAINLAND CHINA EMPLOYEE CONTRIBUTION PLAN As stipulated by the regulations of the PRC, full-time employees of the Company in the PRC participate in a government-mandated multiemployer defined contribution plan organized by municipal and provincial governments. Under the plan, certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to employees. The Company is required to make contributions to the plan based on certain percentages of employees’ salaries. The total expenses for the plan were RMB46,178,000, RMB53,820,000 and RMB53,669,000 (US$7,730,000) for the years ended December 31, 2014, 2015 and 2016, respectively. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2016 | |
INCOME TAXES | |
INCOME TAXES | 19. INCOME TAXES Enterprise income tax Cayman Islands The Company is a tax exempt company incorporated in the Cayman Islands and conducts substantially all of its business through its subsidiaries and VIEs. Ireland ChinaCache Ireland limited was registered in Mahon, Cork, Ireland in 2013. The entity is subject to Ireland Income Tax (12.5%). United States of America ChinaCache North America, Inc. and CCAL was registered in California, United States of America in 2007 and 2016 respectively. The entity is subject to both California State Income Tax (8.84%) and Federal Income Tax (graduated income tax rate up to 35%) on its taxable income under the current laws of the state of California and United States of America. United Kingdom ChinaCache Networks (UK) Limited was registered in England and Wales, United Kingdom in 2016. The entity is subject to United Kingdom Tax (20%). Hong Kong ChinaCache Networks (Hong Kong) Limited, the Company’s wholly owned subsidiary incorporated in Hong Kong, is subject to Hong Kong corporate income tax at a rate of 16.5% on the estimated assessable profits arising in Hong Kong. The PRC The Company’s subsidiaries and the VIEs that are each incorporated in the PRC are subject to Corporate Income Tax (“CIT”) on the taxable income as reported in their respective statutory financial statements adjusted in accordance with the new PRC Enterprise Income Tax Laws (“PRC Income Tax Laws”) effective from January 1, 2008. Pursuant to the PRC Income Tax Laws, the Company’s PRC subsidiaries and the VIEs are subject to a CIT statutory rate of 25%. Under the PRC Income Tax Laws, an enterprise which qualifies as a High and New Technology Enterprise (“the HNTE”) is entitled to a preferential tax rate of 15% provided it continues to meet HNTE qualification standards on an annual basis. ChinaCache Beijing qualifies as an HNTE and is entitled for a preferential tax rate of 15% from 2013 to 2015. ChinaCache Beijing reapplied the HNTE status in 2016 and received official approval as the HNTE in December 2016. Thus, the company has qualification to apply a preferential tax rate of 15% in deferred tax computation. Beijing Blue IT has applied for renewal of HNTE status from 2015 to 2018 and received official approval as High and New Technology Enterprise in July 2015, and therefore is eligible for a preferential tax rate of 15% effective from 2015 to 2018 if it continues to qualify on an annual basis. In accordance with the PRC Income Tax Laws, enterprises established under the laws of foreign countries or regions but whose “place of effective management” is located within the PRC are considered PRC tax resident enterprises and subject to PRC income tax at the rate of 25% on worldwide income. The definition of “place of effective management” refers to an establishment that exercises, in substance, overall management and control over the production and business, personnel, accounting, properties, etc. of an enterprise. As of December 31, 2016, no applicable detailed interpretation or guidance has been issued to define “place of effective management”. Furthermore, as of December 31, 2016, the administrative practice associated with interpreting and applying the concept of “place of effective management” is unclear. Based on the assessment of facts and circumstances available at December 31, 2016, management believes none of its non-PRC entities are more likely than not PRC tax resident enterprises. It is possible the assessment of tax residency status may change in the next twelve months, pending announcement of new PRC tax rules in the future. The Company will continue to monitor its tax status. Loss before income tax expense consists of: For the years ended December 31, 2014 2015 2016 RMB’000 RMB’000 RMB’000 US$’000 Non-PRC ) ) ) PRC ) ) ) ) ) ) ) ) The income tax expense (benefit) comprises: For the years ended December 31, 2014 2015 2016 RMB’000 RMB’000 RMB’000 US$’000 Current Deferred ) ) ) ) The reconciliation of tax computed by applying the statutory income tax rate of 25% applicable to the PRC operations to income tax (benefit) expense for the years ended December 31, 2014, 2015 and 2016, is as follows: For the years ended December 31, 2014 2015 2016 RMB’000 RMB’000 RMB’000 US$’000 Loss before income tax expense ) ) ) ) Income tax computed at PRC statutory tax rate of 25% ) ) ) ) Preferential tax rates International rate differences ) ) ) Additional 50% tax deduction for qualified research and development expenses ) ) ) ) Non-deductible expenses Effect of changes in tax rates on deferred taxes ) ) Changes in unrecognized tax benefits ) ) ) Changes in the valuation allowance ) Other permanent difference ) — — Income tax expense (benefit) ) ) Deferred tax assets and liabilities reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of deferred tax assets and liabilities are as follows: For the years ended December 31, 2015 2016 (RMB’000) (RMB’000) (US$’000) Deferred tax assets: Current: - Allowance for doubtful accounts - Deferred government grant - Accruals Less: valuation allowance — ) ) Net current deferred tax assets — — Non-current: - Tax losses - Property and equipment - Deferred government grant - Intangible assets - Long-term investment impairment — - Impairment loss for long-lived assets — Less: valuation allowance ) ) ) Net non-current deferred tax assets — — Total Deferred tax assets — — Valuation allowances have been provided where, based on all available evidence, management determined that deferred tax assets are not more likely than not to be realizable in future years. As of December 31, 2016, the Company has net operating tax losses carried forward from its PRC subsidiaries, as per filed tax returns, of RMB66,445,090 (US$9,570,000), which will expire between 2017 and 2021. As of December 31, 2016, the Company intends to permanently reinvest the undistributed earnings from its foreign subsidiaries to fund future operations. The amount of unrecognized deferred tax liabilities for temporary differences related to investments in foreign subsidiaries is not determined because such a determination is not practicable. Unrecognized Tax Benefits As of December 31, 2015 and 2016, the Company recorded an unrecognized tax benefit of RMB22,978,000 and RMB21,558,000 (US$ 3,105,000), respectively, of which RMB6,828,000 and RMB6,725,000 (US$968,000), respectively, are presented on a net basis against the deferred tax assets related to tax loss carry forwards on the consolidated balance sheets. The unrecognized tax benefit is mainly related to under-reported income and transfer pricing for certain subsidiaries and VIEs. The amount of unrecognized tax benefits will change in the next 12 months, pending clarification of current tax law or audit by the tax authorities, however, an estimate of the range of the possible change cannot be made at this time. As of December 31, 2015 and 2016, all of the unrecognized tax benefits, if ultimately recognized, will impact the effective tax rate. The Company recorded penalty of RMB99,000, RMB2,206,000 and reversal of penalty of RMB658,000 (US$95,000) and interest expense of RMB2,031,000, RMB1,619,000 and RMB868,000 (US$125,000) for the years ended December 31, 2014, 2015 and 2016, respectively. As of December 31, 2016, the Company’s tax years ended December 31, 2006 through 2016 remain open for statutory examination by tax authorities. A roll-forward of accrued unrecognized tax benefits is as follows: December 31, 2015 2016 RMB’000 RMB’000 US$’000 Balance—beginning Increase based on tax positions related to the current year — — Decrease of tax positions related to prior year ) ) ) Reclassified as liabilities held for sale (Note 9) ) — — Balance—ending |
RELATED PARTY BALANCES AND TRAN
RELATED PARTY BALANCES AND TRANSACTIONS | 12 Months Ended |
Dec. 31, 2016 | |
RELATED PARTY BALANCES AND TRANSACTIONS | |
RELATED PARTY BALANCES AND TRANSACTIONS | 20. RELATED PARTY BALANCES AND TRANSACTIONS In addition to the information disclosed elsewhere in the financial statements, the principal related parties with which the Company had transactions during the years presented are as follows: Name of Related Parties Relationship with the Company Mr. Wang Song The Co-Founder and Director of the Company Ms. Kou Xiaohong The Co-Founder and Director of the Company Flashapp A company under the significant influence of the Company The Company had the following related party balances as of December 31, 2015 and 2016 and related party transactions during the year then ended: Ms. Kou Flashapp Total Balance as of January 1, 2015 ) — ) Service charge by Flash app — ) ) Service fee paid to Flash app — Balance as of December 31, 2015 ) — ) Service charge by Flash app — — — Service fee paid to Flash app — — — Balance as of December 31, 2016 ) — ) Balance as of December 31, 2016 (US$’000) ) — ) |
ISSUANCE OF ORDINARY SHARES FRO
ISSUANCE OF ORDINARY SHARES FROM EQUITY OFFERING | 12 Months Ended |
Dec. 31, 2016 | |
ISSUANCE OF ORDINARY SHARES FROM EQUITY OFFERING | |
ISSUANCE OF ORDINARY SHARES FROM EQUITY OFFERING | 21. ISSUANCE OF ORDINARY SHARES FROM EQUITY OFFERING In March 2014, the Company issued 24,894,647 ordinary shares to a group of institutional investors for an aggregate cash consideration of RMB158,044,000. In addition, the group of institutional investors purchased 28,960,922 ordinary shares from the Company’s existing shareholders for a total cash consideration of RMB183,858,000 which was paid to the selling shareholders through the Company. |
RESTRICTED NET ASSETS
RESTRICTED NET ASSETS | 12 Months Ended |
Dec. 31, 2016 | |
RESTRICTED NET ASSETS | |
RESTRICTED NET ASSETS | 22. RESTRICTED NET ASSETS The Company’s ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiaries. Relevant PRC statutory laws and regulations permit payments of dividends by the Company’s PRC subsidiaries only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the consolidated financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of the Company’s subsidiaries. In accordance with the PRC Regulations on Enterprises with Foreign Investment and the articles of association of the Company’s PRC subsidiaries, a foreign-invested enterprise established in the PRC is required to provide certain statutory reserves, namely general reserve fund, the enterprise expansion fund and staff welfare and bonus fund which are appropriated from net profit as reported in the enterprise’s PRC statutory accounts. A foreign-invested enterprise is required to allocate at least 10% of its annual after-tax profit to the general reserve until such reserve has reached 50% of its respective registered capital based on the enterprise’s PRC statutory accounts. Appropriations to the enterprise expansion fund and staff welfare and bonus fund are at the discretion of the board of directors for all foreign-invested enterprises. The aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends. ChinaCache Beijing was established as a foreign-invested enterprise and, therefore, is subject to the above mandated restrictions on distributable profits. As of December 31, 2015 and 2016, the Company had appointed RMB1,326,000 and RMB1,326,000 (US$191,000), respectively in its statutory reserves. Foreign exchange and other regulations in the PRC may further restrict the Company’s VIEs from transferring funds to the Company in the form of dividends, loans and advances. Amounts restricted include paid-in capital and statutory reserves of the Company’s PRC Subsidiaries and the equity of VIEs, as determined pursuant to PRC generally accepted accounting principles. As of December 31, 2016, restricted net assets of the Company’s PRC subsidiaries and VIEs were RMB323,289,000 (US$46,563,000). |
LOSS PER SHARE
LOSS PER SHARE | 12 Months Ended |
Dec. 31, 2016 | |
LOSS PER SHARE | |
LOSS PER SHARE | 23. LOSS PER SHARE Basic and diluted loss per share for each of the periods presented are calculated as follows: For the Year Ended 2014 2015 2016 (RMB’000) (RMB’000) (RMB’000) (US$’000) Numerator: Net loss attributable to ordinary shareholders: ) ) ) ) Denominator: Number of shares outstanding, opening Weighted average number of shares issued Weighted average number of shares repurchased ) ) ) ) Weighted-average number of shares outstanding — Basic Weighted-average number of shares outstanding — Diluted Loss per share -Basic ) ) ) ) -Diluted ) ) ) ) The effects of share options have been excluded from the computation of diluted loss per share for the years ended December 31, 2014, 2015 and 2016 as their effects would be anti-dilutive. During 2014, the Company reissued 31,379,008 treasury stock to its share depositary bank which will be used to settle stock option awards upon their exercise. During 2015, the Company reissued 163,904 treasury stock to its share depositary bank which will be used to settle stock option awards upon their exercise. During 2016, the Company issued 23,000,000 treasury stock to its share depositary bank which will be used to settle stock option awards upon their exercise. No consideration was received by the Company for this issuance of ordinary shares. These ordinary shares are legally issued and outstanding but are treated as escrowed shares for accounting purposes and therefore, have been excluded from the computation of loss per share. Any ordinary shares not used in the settlement of stock option awards will be returned to the Company. During 2016, treasury stock was used to settle the exercise of 1,325,241 share options and 33,762,181 shares of restricted shares vested, respectively (2015: exercise of share options 8,776,032 and restricted shares vested 9,291,500, 2014: nil). |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | 12 Months Ended |
Dec. 31, 2016 | |
FAIR VALUE MEASUREMENT | |
FAIR VALUE MEASUREMENT | 24. FAIR VALUE MEASUREMENT The Company applies ASC topic 820, “ Fair Value Measurements and Disclosures” . ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. ASC 820 requires disclosures to be provided on fair value measurement. ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1 — Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 — Include other inputs that are directly or indirectly observable in the marketplace. Level 3 — Unobservable inputs which are supported by little or no market activity. ASC 820 describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. In accordance with ASC 820, the available-for-sale investment of the mutual fund is classified within Level 1 as the Company measures the fair value using quoted trading prices that are published on a regular basis. The available-for-sale investment in convertible loan of investee D is classified within Level 3 and determined based on option pricing model using the discount curve of market interest rates. The fair value of the investment was determined by management with the assistance of an independent third party valuation firm. Investment in the RMB’000 Fair value at January 1, 2015 Changes in fair value Fair value at December 31, 2015 and January 1, 2016 Fair value at December 31, 2016 Fair value at December 31, 2016 (US$’000) The Company’s valuation techniques used to measure the fair value was derived from management’s assumptions of estimations. Changes in the fair value of the available-for-sale investment will be recorded in other comprehensive income (loss). |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2016 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 25. COMMITMENTS AND CONTINGENCIES (a) Operating Leases The Company leases facilities in the PRC under non-cancelable operating leases expiring on different dates. Total rental expense under all operating leases was RMB20,568,000, RMB22,100,000 and RMB21,962,000 (US$3,163,000) for the years ended December 31, 2014, 2015 and 2016, respectively. As of December 31, 2016, the Company had future minimum lease payments under non-cancelable operating leases with initial terms of one-year or more in relation to office premises consist of the following: December 31, 2016 RMB’000 US$’000 2017 2018 (b) Purchase Commitments As of December 31, 2016, the Company had outstanding purchase commitments in relation to bandwidth and cloud infrastructure of RMB216,106,000 (US$31,126,000). (c) Contingencies The Company and certain of its current and former officers and directors have been named as defendants in a putative shareholder class action lawsuit filed in the United States District Court for the Central District of California filed on October 9, 2015. The action — purportedly brought on behalf of a class of persons who allegedly suffered damages as a result of their trading activities related to our ADSs from March 27, 2015 to August 20, 2015 — alleges that certain of our statements in press releases, quarterly earnings calls, and an SEC filing contained misstatements or omissions related to our High Performance Cloud Cache platform and asserts claims under Sections 10(b) and 20(a) of the U.S. Securities Exchange Act. On January 5, 2016, the court appointed a lead plaintiff and approved the lead plaintiff’s selection of lead counsel. On February 19, 2016, the lead plaintiff filed a First Amended Complaint. On April 4, 2016, the Company filed a motion to dismiss the First Amended Complaint without prejudice and allowed plaintiffs to file another amended complaint. On September 14, 2016, the lead plaintiff filed a Second Amended Complaint. On October 14, 2016, the Company filed a motion to dismiss the Second Amended Complaint. On January 9, 2017, the Court granted the Company’s motion to dismiss the Second Amended Complaint without prejudice and allowed the lead plaintiff to file a Third Amended Complaint if he so chooses. Instead of filing another amended complaint, on February 28, 2017, the lead plaintiff filed a motion for judgment on the pleadings, which the Court granted on March 1, 2017. As a result, the Court entered a judgment in favor of the Company and against the lead plaintiff with prejudice and dismissed claims against the officer defendants without prejudice. The officer defendants have not yet been served with the Complaint. On March 6, 2017, Mr. Xu filed a notice of appeal of the District Court’s order granting the Company’s motion to dismiss and other related orders to the U.S. Court of Appeals for the Ninth Circuit (the “Court of Appeals”). On September 13, 2017, the lead plaintiff filed with the Court of Appeals a motion for extension of time to file its opening brief, reporting to the Court of Appeals that the lead plaintiff and the Company reached an agreement in principle for the settlement of the purported class action, which settlement would require approval by the District Court. On September 14, 2017, the Court of Appeals granted the lead plaintiff’s motion for extension of time to file its opening brief. On November 7, 2017, the lead plaintiff filed with the Court of Appeals another motion for extension of time to file its opening brief, which motion was granted by the Court of Appeals on November 9, 2017. As the case remains in its preliminary stages, management cannot reliable estimate the likelihood of an unfavorable outcome or any estimate of the amount or range of any potential loss. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 12 Months Ended |
Dec. 31, 2016 | |
SUBSEQUENT EVENT | |
SUBSEQUENT EVENT | 26. SUBSEQUENT EVENT In addition to the information disclosed elsewhere in the financial statements, there are the following subsequent events: In February 2016, about 30 of employees initiated arbitration for labor dispute against Xin Run, Beijing Shouming, Beijing Zhao Du and Xin Run’s Tianjin Branch with Shunyi Labor Dispute Arbitration Committee and Chaoyang Labor Dispute Arbitration Committee. They withdrew the arbitration request once in June 2016 and later re-initiated the arbitration proceeding in May 2017. The arbitrators ruled that the subsidiaries should pay compensation in the amount of approximately RMB600,000 (US$86,000) to those employees. The arbitration award was supported by the judgement of trial court. The Company have appealed the judgement to the appellate court in October 2017 and it is still pending for final judgment. In July 2017, a claim was raised by the construction company of the data center buildings against Xin Run, for the alleged non-payment of construction fees of RMB73,900,000 (US$10,644,000) and the relating interest. Management believes that the claims are without merit and intends to defend the claims vigorously. Considering the preliminary status of the trial, management cannot reasonably predict the result and potential financial impact of this pending claim, if any. In July 2017, Xin Run sold two data center buildings through transferring all of its equity interests in Beijing Zhao Du to Beijing Federation of Supply and Marketing Cooperatives, or BFSMC. In August 2017, Xin Run, initiated a lawsuit against BFSMC, in Beijing, arising out of the Company’s sale of two data center buildings. Xin Run sought the payment of RMB105,600,000 (US$15,210,000) to the Company immediately upon the completion of equity transfer of Beijing Zhao Du. In September 2017, BFSMC filed a counterclaim to sue for, among others, the late delivery penalties and other relating losses. Management is of the view that the proceeding is at a preliminary stage, therefore it is impossible at this stage to properly evaluate the outcome. Therefore, no provision has been made for this case. On October 17, 2017, Xin Run obtained a two-year credit facility of RMB120,000,000 (US$17,284,000) from a commercial bank in China at 150% benchmark interest rate per annum. The credit facility can be used to cover working capital as well as capital expenditure. On October 18, 2017, Xin Run received a commitment from a third party financial institution for a credit facility of RMB200,000,000 (US$28,806,000), pending the registration of Xin Run’s assets that are pledge as collateral. The credit facility should be used to settle the amount due to a specific vendor first, with the remaining portion available for working capital. On October 20, 2017, Xin Run obtained an eighteen-month credit facility of RMB50,000,000 (US$7,201,000) from a commercial bank in China, at 10.00% per annum. The credit facility can be used to cover working capital as well as for capital expenditure. On October 30, 2017, Xin Run obtained a three-year credit facility of RMB240,000,000 (US$34,567,000) from a commercial bank in China, at 8.00% per annum. The credit facility includes RMB 150,000,000 (US$21,604,000) for working capital and RMB90,000,000 (US$12,963,000) for capital expenditure. The credit facility is secured by Xin Run’s assets, while Mr. Wang Song, the co-founder and director of the Group, takes joint-and-several liability. On November 7, 2017, the first RMB150,000,000 (US$21,604,000) was drawn down and used as working capital. |
CONDENSED FINANCIAL INFORMATION
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | 12 Months Ended |
Dec. 31, 2016 | |
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | |
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | 27. CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY CONDENSED BALANCE SHEETS (Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”)) As of December 31, 2015 2016 RMB RMB US$ ASSETS: Current assets: Cash and cash equivalents Prepaid expenses and other current assets Short term investment — — Total current assets Non-current assets: Property and equipment, net — — Long term investments Investments in subsidiaries and consolidated VIEs ) ) Total non-current assets ) ) TOTAL ASSETS ) ) LIABILITIES AND SHAREHOLDERS’ EQUITY/(DEFICIT): Current liabilities: Accrued employee benefits — — — Accrued expenses and other payables Total current liabilities Total liabilities Shareholders’ equity/(deficit): Ordinary shares (US$0.0001 par value; 1,000,000,000 and 1,000,000,000 shares authorized; 400,069,875 and 409,339,219 shares issued and outstanding as of December 31, 2015 and 2016, respectively) Additional paid-in capital Treasury stock ) ) ) Statutory reserves Accumulated deficit ) ) ) Accumulated other comprehensive income Total shareholders’ equity/(deficit) ) ) TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY/(DEFICIT) ) ) CONDENSED STATEMENTS OF COMPREHENSIVE LOSS (Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”)) For the years ended December 31, 2014 2015 2016 RMB RMB RMB US$ General and administrative expenses ) ) ) ) Impairment of long term investments — — ) ) Operating loss ) ) ) ) Interest income Other income — Foreign exchange gain Share of losses from subsidiaries and consolidated VIEs ) ) ) ) Loss before income taxes ) ) ) ) Income tax expense — — — — Net loss ) ) ) ) Foreign currency translation ) ) Unrealized gain from available-for-sale investments Amounts reclassified from accumulated other comprehensive income — — ) ) Total other comprehensive income (loss), net of tax ) ) Comprehensive loss ) ) ) ) CONDENSED STATEMENTS OF CASH FLOWS (Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”)) For the years ended December 31, 2014 2015 2016 RMB RMB RMB US$ Net cash used in operating activities ) ) ) ) Cash flows from investing activities: Cash given to subsidiaries and consolidated VIEs ) — — — Cash paid for long term investments ) ) ) ) Cash received from sale of short term investment — — Net cash provided by (used in) investing activities ) ) Cash flows from financing activities: Consideration paid to selling shareholders ) — — — Proceeds received on behalf of selling shareholders — — — Proceeds from issuance of ordinary shares — — — Proceeds from employee share options exercised Cash guaranteed as restricted cash — — — Cash received from an off-shore subsidiary — — — Payment for repurchase of ordinary shares — ) ) ) Net cash generated by (used in) financing activities ) ) ) Net decrease in cash and cash equivalents ) ) ) ) Cash and cash equivalents at beginning of the year Effect of foreign exchange rate changes on cash Cash and cash equivalents at end of the year (a) Basis of presentation The condensed financial information of the Company has been prepared using the same accounting policies as set out in the Company’s consolidated financial statements except that the Company used the equity method to account for investment in its subsidiaries and VIEs. The Company records its investment in its subsidiaries and VIEs under the equity method of accounting. Such investment is presented on the balance sheets as “Investment in subsidiaries” and share of their income as “Share of losses from subsidiaries and Consolidated VIEs” on the statements of comprehensive loss. The PRC subsidiary and VIEs have restrictions on their ability to pay dividends to the Company under PRC laws and regulations (Note 22). The subsidiaries and VIEs did not pay any dividends to the Company for the years presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted by reference to the consolidated financial statements. (b) Commitments The Company does not have significant commitments or long-term obligations as of any of the periods presented. |
SUMMARY OF SIGNIFICANT ACCOUN34
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of presentation | (a) Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”). |
Liquidity | (b) Liquidity The Company experienced a net loss of approximately RMB6,841,000, RMB88,735,000, and RMB914,253,000 (US$131,680,000) for the years ended December 31, 2014, 2015 and 2016, respectively, and negative cash flows from operations of approximately RMB187 million for the year ended December 31, 2016. As of December 31, 2016, the Company had a net current liability amounting to RMB158,045,000 (US$22,764,000). These conditions raise substantial doubt about the Company’s ability to continue as a going concern. When preparing the consolidated financial statements as of December 31, 2016 and for the year then ended, the Company’s management concluded that a going concern basis of preparation was appropriate after analyzing the forecasted cash flows for the next twelve months, which indicates that the Company will have sufficient liquidity through November 2018. In preparing the forecasted cash flow analysis, management took into account of a) the cash inflows to be funded by credit facilities approximately RMB610,000,000, and b) the improvement of the net cash inflow from the CDN operations as the Company planned to control its operating costs and to further negotiate with vendors for more favorable payment terms. Meanwhile, the Company will continue to implement the sale of Xin Run and to exit the cloud infrastructure development business. As a result, management prepared the consolidated financial statements assuming the Company will continue as a going concern. However, there is no assurance that the credit facilities can be drawn down in a timely manner or the improvement in the CDN operation cash flows can be achieved as planned. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
Principles of consolidation | (c) Principles of consolidation The consolidated financial statements include the financial statements of the Company, its subsidiaries and the VIEs for which the Company is the primary beneficiary. All significant inter-company transactions and balances between the Company, its subsidiaries and the VIEs are eliminated upon consolidation. Results of acquired subsidiaries or VIEs are consolidated from the date on which control is transferred to the Company. |
Use of estimates | (d) Use of estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Areas where management uses subjective judgment include, but are not limited to, estimating the useful lives of long-lived assets and intangible assets, impairment of long-term investments, long-lived assets and intangible assets, allowance for doubtful debts, accounting for deferred income taxes, and accounting for share-based compensation arrangements. The valuation of and accounting for the Company’s financial instruments also require significant estimates and judgments provided by management. Changes in facts and circumstances may result in revised estimates. Actual results could differ from those estimates, and as such, differences may be material to the consolidated financial statements. |
Foreign currency | (e) Foreign currency The functional currency of the Company and each of its subsidiaries and VIEs is the Renminbi (“RMB”), except for ChinaCache US, CCAL, ChinaCache HK, Chinacache IE, and ChinaCache UK, which are the United States dollar (“US$”), US$, Hong Kong dollar (“HK$”), Euro (“EUR”) and Great Britain Pound (“GBP”) respectively, as determined based on the criteria of Accounting Standards Codification (“ASC”) 830 (“ASC 830”) “ Foreign Currency Matters ”. The reporting currency of the Company is also the RMB. Transactions denominated in foreign currencies are re-measured into the functional currency at the exchange rates prevailing on the transaction dates. Foreign currency denominated financial assets and liabilities are re-measured at the balance sheet date exchange rate. Exchange gains and losses are included in foreign exchange gains and losses in the consolidated statements of comprehensive loss. Assets and liabilities of ChinaCache US, CCAL, ChinaCache HK, Chinacache IE, and ChinaCache UK are translated into RMB at fiscal year-end exchange rates. Income and expense items are translated at average exchange rates prevailing during the fiscal year. The resulting translation adjustments are recorded in other comprehensive income (loss). |
Convenience translation | (f) Convenience translation Amounts in US$ are presented for the convenience of the reader and are translated at the noon buying rate of US$1.00 to RMB6.9430 on December 30, 2016 in the City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York. No representation is made that the RMB amounts could have been, or could be, converted into US$ at such rate. |
Cash and cash equivalents | (g) Cash and cash equivalents Cash and cash equivalents consists of cash on hand and demand deposits placed with banks or other financial institutions which are unrestricted as to withdrawal and use and have original maturities less than three months. For the purpose of the consolidated statements of cash flows, cash and cash equivalents also consist of cash and cash equivalents included in assets held for sale. |
Restricted cash | (h) Restricted cash Restricted cash represents amounts held by a bank as security for the short term loan and, therefore, are not available for the Group’s use. |
Accounts receivable and allowance for doubtful accounts | (i) Accounts receivable and allowance for doubtful accounts Accounts receivable are carried at net realizable value. An allowance for doubtful accounts is recorded in the period when loss is probable based on an assessment of specific evidence indicating troubled collection, historical experience, accounts aging and other factors. An accounts receivable is written off after all collection effort has ceased. |
Property and equipment | (j) Property and equipment Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets, as follows: Optical Fibers 20 years Computer equipment 3-5 years Furniture, fixtures and office equipment 5 years Motor vehicles 10 years Leasehold improvements Over the shorter of lease term or the estimated useful lives of the assets Freehold land in United States of America Indefinite Building 40 years Repair and maintenance costs are charged to expense when incurred, whereas the cost of betterments that extend the useful life of property and equipment are capitalized as additions to the related assets. Retirement, sale and disposals of assets are recorded by removing the cost and related accumulated depreciation with any resulting gain or loss reflected in the consolidated statements of comprehensive loss. Property and equipment that are purchased or constructed which require a period of time before the assets are ready for their intended use are accounted for as construction-in-progress. Construction-in-progress is recorded at acquisition cost, including installation costs. Construction-in-progress is transferred to specific property and equipment accounts and commences depreciation when these assets are ready for their intended use. The Company did not recognize any capitalized interest during the years ended December 31, 2014, 2015 and 2016. |
Land use right | (k) Land use right The land use right represent the amounts paid and relevant costs incurred for the right to use land in the PRC and are recorded at purchase cost less accumulated amortization. Amortization is provided on a straight-line basis over the terms of the respective land use right agreement. |
Intangible assets | (l) Intangible assets Intangible assets are carried at cost less accumulated amortization and any impairment. Intangible assets with a finite useful life are amortized using the straight-line method over the estimated economic life of the intangible assets as follows: Purchased software 5 years |
Long-lived assets (disposal group) to be disposed of by sale | (m) Long-lived assets (disposal group) to be disposed of by sale The Group classifies long-lived assets and disposal groups as held for sale if their carrying amounts will be recovered principally through disposal by sale rather than through continuing use. Such long-lived assets and disposal groups are measured at the lower of their carrying amount and fair value less costs to sell. Costs to sell are the incremental costs directly attributable to the sale, excluding the finance costs and income tax expense. The criteria for held for sale classification is regarded as met only when the sale is highly probable and the asset or disposal group is available for immediate sale in its present condition. Actions required to complete the sale should indicate that it is unlikely that significant changes to the sale will be made or that the decision to sell will be withdrawn. Property and equipment, land use right and intangible assets are not depreciated or amortized once classified as held for sale. Assets and liabilities classified as held for sale are presented separately as current items in the consolidated balance sheets. A disposal group qualifies as discontinued operation if it is a component of an entity that either has been disposed of, or is classified as held for sale, and the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. |
Impairment of long-lived assets | (n) Impairment of long-lived assets The Company evaluates its long-lived assets or asset group, including intangible assets with finite lives, for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying amount of an asset or a group of long-lived assets may not be recoverable. When these events occur, the Company evaluates for impairment by comparing the carrying amount of the assets to future undiscounted net cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, the Company would recognize an impairment loss based on the excess of the carrying amount of the asset group over its fair value. For long-lived assets held for sale, assets are written down to fair value less cost to sell. Fair value is generally determined by discounting the cash flows expected to be generated by the assets, when the market prices are not readily available for the long-lived assets. Impairment charge of RMB399,094,000 was recognized for the year ended December 31, 2016. (2015 and 2014, nil). |
Investments | (o) Investments Held to maturity investments All highly liquid investments with stated maturities of greater than 90 days but less than 365 days are classified as short-term investments. Investments that are expected to be realized in cash during the next 12 months are also included in short-term investments. The Company accounts for short-term investments in accordance with ASC Topic 320 (“ASC 320”), Investments - Debt and Equity Securities . The Company classifies the short-term investments in debt and equity securities as “held-to-maturity”, “trading” or “available-for-sale”, whose classification determines the respective accounting methods stipulated by ASC 320. Dividend and interest income for all categories of investments in securities are included in earnings. Any realized gains or losses, if any, on the sale of the short-term investments are determined on a specific identification method, and such gains and losses are reflected in earnings during the period in which gains or losses are realized. The securities that the Company has positive intent and ability to hold to maturity are classified as held-to-maturity securities and stated at amortized cost. For individual securities classified as held-to-maturity securities, the Company evaluates whether a decline in fair value below the amortized cost basis is other-than-temporary in accordance with the Company’s policy and ASC 320. When the Company intends to sell an impaired debt security or it is more-likely-than-not that it will be required to sell prior to recovery of its amortized cost basis, an other-than-temporary impairment is deemed to have occurred. In these instances, the other-than-temporary impairment loss is recognized in earnings equal to the entire excess of the debt security’s amortized cost basis over its fair value at the balance sheet date of the reporting period for which the assessment is made. When the Company does not intend to sell an impaired debt security and it is more-likely-than-not that it will not be required to sell prior to recovery of its amortized cost basis, the Company must determine whether or not it will recover its amortized cost basis. If the Company concludes that it will not, an other-than-temporary impairment exists and that portion of the credit loss is recognized in earnings, while the portion of loss related to all other factors is recognized in other comprehensive loss. Available-for-sale investments Investments not classified as trading or as held-to-maturity are classified as available-for-sale securities. Such available-for-sale investments are reported at fair value, with unrealized gains and losses recorded in accumulated other comprehensive income (loss) in shareholders’ equity. Realized gains or losses are charged to earnings during the period in which the gain or loss is realized. If the Company determines a decline in fair value is other-than-temporary, the cost basis of the individual security is written down to its estimated fair value. The new cost basis will not be adjusted for subsequent recoveries in fair value. Determination of whether declines in value are other-than-temporary requires significant judgment. Subsequent increases and decreases in the fair value of available-for-sale securities will be included in other comprehensive income (loss) except for an other-than-temporary impairment, which would be charged to current period earnings. No impairment of available-for-sale investment was recognized for each of the three years ended December 31, 2016. Trading Securities The securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities. Unrealized holding gains and losses for trading securities are included in earnings. Investment in limited partnerships — Equity method/ Cost Where consolidation is not appropriate, the Company applies the equity method of accounting that is consistent with ASC 323 “Investments - Equity Method and Joint Ventures” to limited partnerships in which the Company holds either (a) a five percent or greater interest or (b) less than a five percent interest when the Company has more than virtually no influence over the operating or financial policies of the limited partnership. The Company considers certain qualitative factors in assessing whether it has more than virtually no influence for partnership interests of less than five percent. For investments other than those described in (a) and (b) above, the Company applies the cost method of accounting that is consistent with ASC 325 “Investments — Other”. Cost Method Investment In accordance with ASC subtopic 325-20 (“ASC 325-20”), Investments-Other: Cost Method Investments, for investments which are not in-substance common stock and hence, do not have readily determinable fair values or investments in an investee over which the Company does not have significant influence, the Company carries the investment at cost and only adjusts for other-than-temporary declines in fair value and distributions of earnings that exceed the Company’s share of earnings since its investment. Management regularly evaluates the impairment of the cost method investments based on performance and financial position of the investee as well as other evidence of market value. Such evaluation includes, but is not limited to, reviewing the investee’s cash position, recent financing, projected and historical financial performance, cash flow forecasts and financing needs. An impairment loss is recognized in earnings equal to the excess of the investment’s cost over its fair value at the balance sheet date of the reporting period for which the assessment is made. The fair value would then become the new cost basis of investment. Impairment of cost method investment for the years ended December 31, 2014, 2015 and 2016 were nil, nil and RMB18,240,000 (US$2,627,000), respectively. |
Fair value of financial instruments | (p) Fair value of financial instruments The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, restricted cash, accounts receivable, other receivables included in prepaid expenses, short-term investments and other current assets, short term loan, accounts payables, balances with related parties and other payables, approximate their fair values because of the short-term maturity of these instruments. The carrying amounts of long-term loan approximate its fair value since it bears interest rate which approximates market interest rates. Available-for-sale investments were initially recognized at cost and subsequently remeasured at the end of each reporting period with the adjustment in its fair value recognized in accumulated other comprehensive income (loss). The Company, with the assistance of an independent third party valuation firm, determined the estimated fair value of its available-for-sale investments that are recognized in the consolidated financial statements. |
Revenue recognition | (q) Revenue recognition The Company provides a portfolio of content and application delivery total solutions within its one class of services, such as, web page content services; file transfer services; rich media streaming services; guaranteed application delivery; managed internet data services; cloud hosting services; content bridging services; mobile internet solution; and value-added services to its customers that in turn improve the performance, reliability and scalability of their internet services and applications. Consistent with the criteria of ASC 605, “Revenue Recognition”, the Company recognizes revenue from sales of these services when there is a signed sales agreement with fixed or determinable fees, services have been provided to the customer and collection of the resulting customer’s receivable is reasonably assured. The Company’s services are provided under the terms of a one-year master service agreement, which will typically accompany a one-year term renewal option with the same terms and conditions. Customers can choose at the outset of the arrangement to either use the Company’s services through a monthly fixed bandwidth or traffic volume usage and fee arrangement or choose a plan based on actual bandwidth or traffic volume used during the month at fixed pre-set rates. The Company recognizes and bills for revenue for excess usage, if any, in the month of its occurrence to the extent a customer’s usage of the services exceeds their pre-set monthly fixed bandwidth usage and fee arrangements. The rates as specified in the master service agreements are fixed for the duration of the contract term and are not subject to adjustment. The Company may charge its customers an initial set-up fee prior to the commencement of their services. To date these amounts have been insignificant, however, the Company’s policy is to record these initial set-up fees as deferred revenue and recognize them as revenue ratably over the estimated life of the customer arrangement. Business tax and related surcharges on revenues earned from provision of services to customers is recorded as a deduction from gross revenue to derive net revenue in the same period in which the related revenue is recognized. The business tax and related surcharges expenses for the years ended December 31, 2014, 2015 and 2016 amounted to approximately RMB10,598,000, RMB nil and RMB nil (US$nil), respectively. Effective in September 2012, 6% of value-added tax, or VAT, replaced the original 5% business tax in Beijing as a result of the PRC government’s pilot VAT reform program, which applies to all services provided by Chinacache Beijing and Beijing Jingtian and certain services provided by Beijing Blue IT. Effective in June 2014, 6% of VAT replaced the original 3% business tax in Beijing as a result of the PRC government’s pilot VAT reform program on telecom industry, which applies to all services provided by Beijing Blue IT. |
Cost of revenues | (r) Cost of revenues Cost of revenue consists primarily of depreciation of the Company’s long-lived assets, amortization of acquired intangible assets, maintenance, purchase of bandwidth and other overhead expenses directly attributable to the provision of content and application delivery total solutions. Prior to September 2012, ChinaCache Beijing was subject to business tax and other surcharges on certain revenues earned for exclusive business support, technical and consulting services provided to the Company’s VIEs, pursuant to the VIE agreements (Note 1). Since September 2012, all service provided by ChinaCache Beijing is subject to VAT. Effective since June 2014, all the services provided by the Group in Mainland China, including VIEs are subject to VAT. Such business tax, VAT (to the extent that is non-deductible) and other surcharges are accrued and charged to cost of revenues as the related exclusive business support, technical and consulting services are rendered. |
Advertising expenditures | (s) Advertising expenditures Advertising expenditures are expensed as incurred. Advertising expenditures, included in sales and marketing expenses, amounted to approximately RMB450,000, RMB678,000 and RMB233,000 (US$34,000), for the years ended December 31, 2014, 2015 and 2016, respectively. |
Research and development costs | (t) Research and development costs Research and development costs consist primarily of payroll and related personnel costs for minor routine upgrades and related enhancements to the Company’s services and network. Costs incurred in the development of the Company’s services are expensed as incurred. To date, the amount of costs qualifying for capitalization has been insignificant. |
Government Grants | (u) Government Grant Government grant are provided by the relevant PRC municipal government authorities to subsidize the cost of certain research and development projects. The amount of such government grant is determined solely at the discretion of the relevant government authorities and there is no assurance that the Company will continue to receive these government grant in the future. Government grant are recognized when it is probable that the Company will comply with the conditions attached to them, and the grant are received. When the grant relates to an expense item, it is recognized as deferred government grant and released to the consolidated statements of comprehensive loss over the period necessary to match the grant on a systematic basis to the costs that it is intended to compensate, as other operating income. Where the grant relates to an asset, it is recognized as deferred government grant and released to the consolidated statements of comprehensive loss in equal amounts over the expected useful life of the related asset, when operational, as other operating income. Government grant received by the Company also consist of unrestricted grant which are received on an unsolicited and unconditional basis to support the growth of the Company and do not relate to the Company’s operating activities. Unrestricted grant are classified as non-operating income and recorded in other income on the consolidated statements of comprehensive loss upon receipt. For the years ended December 31, 2014, 2015 and 2016, the Company received unrestricted grant amounting to RMB5,282,000, RMB685,000 and RMB2,250,000 (US$324,000), respectively. |
Leases | (v) Leases Leases are classified at the inception date as either a capital lease or an operating lease. The Company did not enter into any leases whereby it is the lessor for any of the periods presented. As the lessee, a lease is a capital lease if any of the following conditions exists: a) ownership is transferred to the lessee by the end of the lease term, b) there is a bargain purchase option, c) the lease term is at least 75% of the property’s estimated remaining economic life, or d) the present value of the minimum lease payments at the beginning of the lease term is 90% or more of the fair value of the leased property to the lessor at the inception date. A lease involving integral equipment is a capital lease only if condition (a) or (b) exists. A capital lease is accounted for as if there was an acquisition of an asset and an incurrence of an obligation at the inception of the lease. All other leases are accounted for as operating leases wherein rental payments are expensed on a straight-line basis over the periods of their respective leases. The Company leases office space and employee accommodation under operating lease agreements. Certain of the lease agreements contain rent holidays. Rent holidays are considered in determining the straight-line rent expense to be recorded over the lease term. The lease term begins on the date of initial possession of the lease property for purposes of recognizing lease expense on a straight-line basis over the term of the lease. The excess of rent expense and rent paid, as the case may be for respective leases, is recorded as deferred rental included in the prepaid expenses and other current assets in the consolidated balance sheets. |
Income taxes | (w) Income taxes The Company follows the liability method in accounting for income taxes in accordance to ASC topic 740 (“ASC 740”), Income Taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company records a valuation allowance against deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The Company adopted ASC 740 to account for uncertainty in income taxes. ASC 740 clarifies the accounting for uncertainty in income taxes by prescribing the recognition threshold a tax position is required to meet before being recognized in the consolidated financial statements. The Company has elected to classify interest and penalties related to unrecognized tax benefits, if and when required, as part of “interest expense” and “other expenses,” respectively, in the consolidated statements of comprehensive loss. |
Share-based compensation | (x) Share-based compensation Share options and restricted shares award granted to employees are accounted for under ASC 718 Compensation — Stock Compensation. In accordance with ASC 718, the Company determines whether a share option or restricted shares award should be classified and accounted for as a liability award or an equity award. All grants of share options and restricted shares award to employees classified as equity award are recognized in the financial statements over their requisite service periods based on their grant date fair values. The Company has elected to recognize compensation expenses using the accelerated method for its share options and restricted share award granted. For restricted share awards granted with performance conditions, the Company commences recognition of the related compensation expense if it is probable the defined performance condition will be met. To the extent that the Company determines that it is probable that a different number of share-based awards will vest depending on the outcome of the performance condition, the cumulative effect of the change in estimate is recognized in the period of change. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in the subsequent period if actual forfeitures differ from initial estimates. Forfeiture rate is estimated based on historical and future expectations of employee turnover rates and are adjusted to reflect future changes in circumstances and facts, if any. Share-based compensation expense is recorded net of estimated forfeitures such that expense was recorded only for those share-based award that are expected to vest. During the years ended December 31, 2014, 2015 and 2016, the Company estimated that the forfeiture rate for both the management group and the non-management group was zero. To the extent the Company revises this estimate in the future, the share-based payments could be materially impacted in the period of revision, as well as in following periods. The Company, with the assistance of an independent valuation firm, determined the estimated fair values of the share options granted to employees and non-employees using the binomial option pricing model. |
Loss per share | (y) Loss per share In accordance with ASC 260, “ Earnings per Share”, basic loss per share is computed by dividing net loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year. Diluted loss per share is calculated by dividing net loss attributable to ordinary shareholders as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares consist of the ordinary shares issuable upon the conversion of the share options, using the treasury stock method. Ordinary share equivalents are excluded from the computation of diluted per share if their effects would be anti-dilutive. |
Comprehensive loss | (z) Comprehensive loss Comprehensive loss is defined as the decrease in equity of the Company during a period from transactions and other events and circumstances excluding transactions resulting from investments by owners and distributions to owners. Comprehensive loss is reported in the consolidated statements of comprehensive loss. Accumulated other comprehensive income of the Company includes foreign currency translation adjustments related to ChinaCache US, CCAL, ChinaCache HK and Chinacache IE, and Chinacache UK whose functional currency are US$, US$, HK$, EUR and GBP respectively, and the change in fair value of available-for-sale investments (Note 10) and their corresponding deferred tax impact, if any. |
Segment reporting | (aa) Segment reporting The Company follows ASC 280, ““ Segment Reporting.” The Company’s Chief Executive Officer or chief operating decision-maker reviews the consolidated financial results when making decisions about allocating resources and assessing the performance of the Company as a whole and hence, the Company has only one reportable segment. The Company operates and manages its business as a single segment through the provision of a single class of global services for accelerating and improving the delivery of content and applications over the Internet. As the Company’s long-lived assets are substantially all located in the PRC and substantially all the Company’s revenues are derived from within the PRC, no geographical segments are presented. |
Employee benefits | (bb) Employee benefits The full-time employees of the Company’s PRC subsidiaries are entitled to staff welfare benefits including medical care, housing fund, unemployment insurance and pension benefits, which are government mandated defined contribution plans. These entities are required to accrue for these benefits based on certain percentages of the employees’ respective salaries, subject to certain ceilings, in accordance with the relevant PRC regulations, and make cash contributions to the state-sponsored plans out of the amounts accrued. The total amounts for such employee benefits, which were expensed as incurred, were RMB46,178,000, RMB53,820,000 and RMB53,669,000 (US$7,730,000) for the years ended December 31, 2014, 2015 and 2016, respectively. |
Share Repurchase Program | (cc) Share Repurchase Program Pursuant to a Board of Directors’ resolution on December 18, 2014 (“2014 Share Repurchase Plan”), August 24, 2015 (“August 2015 Share Repurchase Plan”) and December 28, 2015 (“December 2015 Share Repurchase Plan”), the Company’s management is authorized to repurchase up to US$10 million, US$6 million and US$5 million of the Company’s ADSs, respectively. Each of the Share Repurchase Plan is effective for 12 months. During the year ended December 31, 2016, the Company had repurchased 166,802 ADSs amounting to US$1,185,000 (equivalent to RMB7,659,000) and 691,364 ADSs amounting to US$4,912,000 (equivalent to RMB31,743,000) under the August 2015 Share Repurchase Plan and the December 2015 Share Repurchase Plan, respectively (2014:Nil and 2015:1,300,715 ADSs, US$10,000,000 (RMB63,375,000) under the 2014 Share Repurchase Plan and 626,295 ADSs, US$4,815,000 (RMB30,516,000) under the August 2015 Share Repurchase Plan). As of December 31, 2016, all the aforementioned Repurchase Plans have been completed. The Company accounted for those shares repurchase as Treasury Stock at cost in accordance to ASC Subtopic 505-30 (“ASC 505-30”), Treasury Stock, and is shown separately in the Shareholders’ Equity as the Company has not yet decided on the ultimate disposition of those ADSs acquired. When the Company uses the treasury stock to settle the exercise of share options and restricted shares vested, the difference between the proceeds received upon settlement and the repurchase price is debited into accumulated deficit. When the Company decides to retire the treasury stock, the difference between the original issuance price and the repurchase price is debited into accumulated deficit. |
Recent Accounting Pronouncement | (dd) Recent Accounting Pronouncement In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09 (“ASU 2014-09”), Revenue from Contracts with Customers. ASU 2014-09 supersedes the revenue recognition requirements in ASC 605, and requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. ASU 2014-09 is originally effective for the annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. ASU 2015-14, Revenue from Contracts with Customers , defers the effective date of ASU 2014-09 by one year. As a result, ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017 and interim periods therein. Early adoption is permitted to the original effective date. Management is developing an adoption plan based on which the Company is in the process of evaluating the effects of adopting ASC606, including the selection of the adoption method, the identification of differences using sample contracts, if any, from the application of current revenue recognition standard and the impact of such differences, if any, on its consolidated financial statements. In November 2015, the FASB issued ASU No. 2015-17 (“ASU 2015-17”), Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes . ASU 2015-17 simplifies the presentation of deferred income taxes by eliminating the separate classification of deferred income tax liabilities and assets into current and noncurrent amounts in the consolidated balance sheets. The amendments in the update require that all deferred tax liabilities and assets be classified as noncurrent in the consolidated balance sheets. The amendments in this update are effective for fiscal years beginning after December 15, 2016, and interim periods therein and may be applied either prospectively or retrospectively to all periods presented. Early adoption is permitted. After the adoption of ASU 2015-17, all the current deferred tax assets will be reclassified as noncurrent deferred tax assets on the consolidated balance sheets. In February 2016, the FASB issued ASU No. 2016-02 (“ASU 2016-02”), Leases. ASU 2016-02 specifies the accounting for leases. For operating leases, ASU 2016-02 requires a lessee to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in its balance sheet. The standard also requires a lessee to recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term, on a generally straight-line basis. ASU 2016-02 is effective for public companies for annual reporting periods and interim periods within those years beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09 (“ASU 2016-09”), Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . ASU 2016-09 involves several aspects of the accounting for employee share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows and accounting for forfeitures. Some of the areas apply only to nonpublic entities. In terms of accounting for forfeitures, companies will have to elect whether to account for forfeitures of share-based payments by (1) recognizing forfeitures of awards as they occur (e.g., when an award does not vest because the employee leaves the company) or (2) estimating the number of awards expected to be forfeited and adjusting the estimate when it is likely to change, as is currently required. The standard is effective for public business entities for annual periods beginning after December 15, 2016, and interim periods therein. The Company will make an election at the entity level using a modified retrospective transition method, with a cumulative-effect adjustment to retained earnings. The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13 (“ASU 2016-13”), Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . ASU 2016-13 changes the impairment model for most financial assets and certain other instruments. The standard will replace “incurred loss” approach with an “expected loss” model for instruments measured at amortized cost. For available-for-sale debt securities, entities will be required to record allowances rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. The standard is effective for public business entities for annual periods beginning after December 15, 2019, and interim periods therein. Early adoption is permitted. The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18 (“ASU 2016-18”), Statement of Cash Flows (Topic 230): Restricted Cash . ASU 2016-18 requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This standard is effective for public business entities in the first quarter of 2018. Early adoption is permitted. The Company is currently evaluating the effect that this guidance will have on our consolidated financial statements and related disclosures. In January 2017, FASB issued ASU No. 2017-01(“ASU 2017-01”), Business Combinations (Topic 805): Clarifying the Definition of a Business . The ASU affects all companies and other reporting organizations that must determine whether they have acquired or sold a business. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The ASU is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements. |
Comparative information | (ee) Comparative information Certain items in prior years’ consolidated financial statements have been reclassified to conform to the current period’s presentation to facilitate comparison. |
ORGANIZATION (Tables)
ORGANIZATION (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
ORGANIZATION | |
Schedule of subsidiaries of the Company and variable interest entities where the Company is the primary beneficiary | As of December 31, 2016, subsidiaries of the Company and variable interest entities (“VIEs”) where the Company is the primary beneficiary include the following: Date of Place of Percentage of Principal activities Subsidiaries ChinaCache Network Technology (Beijing) Ltd. (“ChinaCache Beijing”) August 25, 2005 The PRC % Provision of Technical Consultation services ChinaCache North America Inc. (“ChinaCache US”) August 16, 2007 United States of America % Provision of Content and Application Delivery services JNet Holdings Limited (“JNet Holdings”) September 27, 2007 British Virgin Islands % Investment holding ChinaCache Networks Hong Kong Ltd. (“ChinaCache HK”) April 7, 2008 Hong Kong % Provision of Content and Application Delivery services ChinaCache Xin Run Technology (Beijing) Co., Ltd. (“Xin Run”) July 18, 2011 The PRC %** Construction of the cloud infrastructure Metasequoia Investment Inc. (“Metasequoia”) March 28, 2012 British Virgin Islands % Investment holding Chinacache Ireland Limited (“Chinacache IE”) November 18, 2013 Ireland % Provision of Content and Beijing Shou Ming Technology Co., Ltd. (“Beijing Shou Ming”) August 15, 2014 The PRC %** Computer hardware, technology development Beijing Shuo Ge Technology Co., Ltd. (“Beijing Shuo Ge”) August 15, 2014 The PRC %** Mechanical equipment lease Beijing Zhao Du Technology Co., Ltd. (“Beijing Zhao Du”) August 15, 2014 The PRC %** IT system integration, electronic equipment ChinaCache Networks Limited (“ChinaCache UK”) March 10, 2016 England and Wales % Provision of Content and Application Delivery services ChinaCache Assets LLC (“CCAL”) August 10, 2016 United States of America % Real estate management VIEs Beijing Blue I.T. Technologies Co., Ltd. (“Beijing Blue IT” )* June 7, 1998 The PRC — Provision of Content and Application Delivery services Beijing Jingtian Technology Limited (“Beijing Jingtian”) * September 1, 2005 The PRC — Provision of Content and Application Delivery services * The equity interest of Beijing Blue IT and Beijing Jingtian are held by the Founders and two employees of the Company, respectively (collectively the “Nominee Shareholders”). ** On November 16, 2015, Xin Run received a capital injection of RMB1,292,000 (US$202,000) from Tianjin Shuishan Technology Co., Ltd, a PRC Company wholly owned by the Founders. As a result, the percentage of the Company’s equity ownership in Xin Run and Xin Run’s wholly-owned subsidiaries, Beijing Shou Ming, Beijing Shuo Ge and Beijing Zhao Du, decreased from 100% as of December 31, 2014 to 99% as of December 31, 2015 and 2016). |
Schedule of financial information of the consolidated VIEs before eliminating the intercompany balances and transactions between the consolidated VIEs and other entities within the Group | As of December 31, 2015 2016 RMB RMB US$ ASSETS: Current assets: Cash and cash equivalents Accounts receivable (net of allowance for doubtful accounts of RMB54,171 and RMB63,266 (US$9,112) as of December 31, 2015 and 2016, respectively) Prepaid expenses and other current assets Deferred tax assets — — Amounts due from inter-companies (1) Total current assets Non-current assets: Property and equipment, net — — Intangible assets, net — — Long term investments Deferred tax assets — — Long term deposits and other non-current assets Total non-current assets TOTAL ASSETS As of December 31, 2015 2016 RMB RMB US$ LIABILITIES: Current liabilities: Short-term loan — Accounts payable Accrued employee benefits Accrued expenses and other payables Income tax payable Liabilities for uncertain tax positions Amounts due to inter-companies (1) Amount due to a subsidiary held for sale (2) Current portion of capital lease obligations Deferred government grant Total current liabilities Non-current liabilities: Non-current portion of capital lease obligations Deferred government grant Total non-current liabilities Total liabilities (1) Amount due from/to inter-companies consist of intercompany receivables/payables to the other companies within the Group. (2) Information with respect to a subsidiary held for sale is discussed in Note 9. For the Years Ended December 31, 2014 2015 2016 RMB’000 RMB’000 RMB’000 US$’000 Net revenues - Third party customers - Inter-companies Net profit (loss) ) ) ) For the Years Ended December 31, 2014 2015 2016 RMB’000 RMB’000 RMB’000 US$’000 Net cash provided by (used in) operating activities ) ) Net cash used in investing activities ) ) ) ) Net cash used in financing activities ) ) ) ) |
SUMMARY OF SIGNIFICANT ACCOUN36
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of estimated useful lives of property and equipment | Optical Fibers 20 years Computer equipment 3-5 years Furniture, fixtures and office equipment 5 years Motor vehicles 10 years Leasehold improvements Over the shorter of lease term or the estimated useful lives of the assets Freehold land in United States of America Indefinite Building 40 years |
Schedule of estimated economic life of the intangible assets | Purchased software 5 years |
CONCENTRATION OF RISK (Tables)
CONCENTRATION OF RISK (Tables) - Customer risk | 12 Months Ended |
Dec. 31, 2016 | |
Revenues | |
CONCENTRATION OF RISK | |
Schedule of concentration risk | Years as of December 31, 2014 2015 2016 RMB’000 RMB’000 RMB’000 US$’000 Customer A |
Accounts receivables | |
CONCENTRATION OF RISK | |
Schedule of concentration risk | Years as of December 31, 2015 2016 RMB’000 RMB’000 US$’000 Customer A Customer B * *not greater than 10% |
CASH AND CASH EQUIVALENTS (Tabl
CASH AND CASH EQUIVALENTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
CASH AND CASH EQUIVALENTS | |
Schedule of cash and cash equivalents | December 31, 2015 2016 RMB’000 RMB’000 US$’000 Cash and cash equivalents on the consolidated balance sheets Cash and cash equivalents included in assets held for sale (Note 9) Cash and cash equivalents on the consolidated statements of cash flows |
ACCOUNTS RECEIVABLE, NET (Table
ACCOUNTS RECEIVABLE, NET (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
ACCOUNTS RECEIVABLE, NET | |
Schedule of accounts receivable and allowance for doubtful accounts | December 31, 2015 2016 RMB’000 RMB’000 US$’000 Accounts receivable Less: allowance for doubtful accounts ) ) ) |
Schedule of analysis of the allowance for doubtful accounts | December 31, 2015 2016 RMB’000 RMB’000 US$’000 Balance, beginning of year Additions for the current year Deductions for the current year -Recovery ) ) ) Balance, end of year |
PREPAID EXPENSES AND OTHER CU40
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | |
Schedule of prepaid expenses and other current assets | December 31, 2015 2016 RMB’000 RMB’000 US$’000 Prepaid expense for bandwidth and servers (i) Income tax receivable — — Staff field advances Capital lease deposit — Other deposit and receivables i. Prepaid expense for bandwidth and servers represents the unamortized portion of prepaid payments made to the Company’s telecom operators and certain technology companies, who provide the Company with access to bandwidth and network servers. |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
PROPERTY AND EQUIPMENT, NET | |
Schedule of property and equipment, including those held under capital leases | December 31, 2015 2016 RMB’000 RMB’000 US$’000 At cost: Optical fibers Computer equipment Furniture and fixtures Leasehold improvements Motor vehicles Freehold land — Building — Less: accumulated depreciation ) ) ) Less: impairment — ) ) — — |
Schedule of depreciation expenses | For the years ended December 31, 2014 2015 2016 RMB’000 RMB’000 RMB’000 US$’000 Cost of revenue Sales and marketing expenses General and administrative expenses Research and development expenses |
Schedule of carrying amounts of the company's property and equipment held under capital leases at respective balance sheet dates | December 31, 2015 2016 RMB’000 RMB’000 US$’000 At Cost: Optical fibers Computer equipment Less: accumulated depreciation ) ) ) Less: impairment — ) ) — — |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
INTANGIBLE ASSETS | |
Schedule of the Company's intangible assets | December 31, 2015 2016 RMB’000 RMB’000 US$’000 Purchased software, net Addition Less: amortization ) ) ) Less: impairment — ) ) Reclassified to assets held for sale (Note 9) ) — — — — |
ASSETS HELD FOR SALE _ LIABIL43
ASSETS HELD FOR SALE / LIABILITIES HELD FOR SALE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
ASSETS HELD FOR SALE / LIABILITIES HELD FOR SALE | |
Schedule of major classes of assets and liabilities held for sale | December 31 2015 2016 RMB’000 RMB’000 US$’000 Cash and cash equivalents Accounts receivable, net — Prepaid expenses and other current assets (i) Short term investment (ii) — — Amounts due from ChinaCache Beijing and Beijing Blue IT Property and equipment, net Intangible assets, net Land use right, net (iii) Deferred tax assets Accrued tax on intercompany transactions Cloud infrastructure construction in progress (iv) Long term deposits and other non-current assets Assets held for sale Accounts payable — Accrued employee benefits Accrued expenses and other payables (v) Income tax payable Liabilities for uncertain tax positions Amounts due to the Company Liabilities held for sale (i) Including refundable prepaid commission fee for the potential sales of certain buildings as part of the cloud infrastructure, which was RMB99,700,000 and RMB99,700,000 (US$15,391,000) for the years end December 31, 2015 and 2016, respectively. (ii) Short term investment represents the investment in variable rate deposits issued by a certain commercial bank, which matured on May 4, 2016. (iii) The Company’s land use right is related to payment to acquire a land use right of approximately 39,000 square meters of land in Beijing Shunyi District, on which the Company plans to develop a cloud infrastructure. According to the land use right contract, the Company has a 50-year use right over the land, which is used as the basis for amortization. Amortization expense for land use right for the years ended December 31, 2014, 2015 and 2016 was RMB1,033,000, RMB1,044,000 and nil, respectively. (iv) As of December 31, 2015 and 2016, the Company capitalized RMB467,746,000 and RMB977,194,000 (US$140,745,000) of costs which were directly attributable to the development of the cloud infrastructure. v. Including advances from two potential buyers for certain buildings as part of the cloud infrastructure, which was RMB997,000,000 and RMB997,000,000 (US$153,910,000) for the years end December 31, 2015 and 2016, respectively. The balance as of December 31, 2016 also included a provision for late delivery penalty of RMB30,778,000 (US$4,433,000). The provision was made for the delay in the handover of a building given disputes with buyer on the standard of delivery and acceptance of the building, which was charged to other operating income/(loss) in the consolidated statements of comprehensive loss. |
Schedule of operating results of the disposal group | For the years ended December 31, 2014 2015 2016 RMB’000 RMB’000 RMB’000 US$’000 Net revenue — — ) ) Loss before income taxes ) ) )* )* * Loss before income taxes for the year ended December 31, 2016 included transaction tax on assets transfer of Nil (2014: Nil and 2015: RMB27,733,000). Loss before income taxes attributable to the noncontrolling interest for the year ended December 31, 2016 was RMB1,074,000 (US$155,000) (2014: Nil and 2015: Nil). |
INVESTMENT (Tables)
INVESTMENT (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
INVESTMENTS | |
Schedule of short term investments | December 31, 2015 2016 RMB’000 RMB’000 US$’000 Available-for-sale investment: Investment in a mutual fund — — — — |
Schedule of long term investments | December 31, 2015 2016 RMB’000 RMB’000 US$’000 Cost investments: PRC Fund United States Fund Investment in Flashapp Inc. (“Flashapp”) Investment in ordinary shares of an unlisted company in PRC (“Investee A”) Investment in preferred shares of an unlisted company in PRC (“Investee B”) — Available-for-sale investments: Investment in preferred shares of an unlisted company in PRC (“Investee C”) Investment in convertible loan of an unlisted company in Cayman Islands (“Investee D”) Less: accumulated impairment ) ) ) Total |
SHORT-TERM LOAN (Tables)
SHORT-TERM LOAN (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
SHORT-TERM LOAN | |
Schedule of short-term loan | December 31, 2015 2016 RMB’000 RMB’000 US$’000 Bank borrowings — Total — |
ACCRUED EXPENSES AND OTHER PA46
ACCRUED EXPENSES AND OTHER PAYABLES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
ACCRUED EXPENSES AND OTHER PAYABLES | |
Schedule of accrued expenses and other payables | December 31, 2015 2016 RMB’000 RMB’000 US$’000 Payables for purchase of property and equipment Advance from customers Other tax payables ) ) ) Other accrued expenses Total |
LONG TERM LOAN (Tables)
LONG TERM LOAN (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
LONG TERM LOAN | |
Schedule of future installment repayment to long term loan agreements | December 31, 2016 RMB’000 US$’000 2017 Total |
DEFERRED GOVERNMENT GRANT (Tabl
DEFERRED GOVERNMENT GRANT (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
DEFERRED GOVERNMENT GRANT | |
Schedule of deferred government grant | December 31, 2015 2016 RMB’000 RMB’000 US$’000 Beginning Received Recognized as income during the year ) ) ) Ending Including: current portion |
CAPITAL LEASE OBLIGATIONS (Tabl
CAPITAL LEASE OBLIGATIONS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
CAPITAL LEASE OBLIGATIONS | |
Schedule of future minimum lease payments under non-cancellable capital lease arrangements | December 31, 2016 RMB’000 US$’000 2017 2018 2019 Total minimum lease payment Less: amount representing interest ) ) Present value of remaining minimum lease payment Including: current portion |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
SHARE-BASED COMPENSATION | |
Summary of the Company's restricted shares award ("RSUs") issued under 2011 Plan | Number of Weighted average (US$) Outstanding, January 1, 2015 Granted Vested ) Forfeited ) Outstanding, December 31, 2015 Expected to vest at December 31, 2015 Granted — — Vested ) Forfeited ) Outstanding, December 31, 2016 Expected to vest at December 31, 2016 |
Schedule of total compensation expense relating to all options and RSUs recognized | For the years ended December 31, 2014 2015 2016 (RMB)’000 (RMB)’000 (RMB)’000 (US$)’000 Cost of revenues Sales and marketing expenses General and administration expenses Research and development expenses |
Employees | |
SHARE-BASED COMPENSATION | |
Summary of entity's share option activity | Number of Weighted Weighted Aggregate (US$) (Years) (US$’000) Outstanding, January 1, 2015 Vested and expected to vest at January 1, 2015 Exercised ) Forfeited ) Outstanding, December 31, 2015 Vested and expected to vest at December 31, 2015 Exercisable at December 31, 2015 Exercised ) Forfeited ) Outstanding, December 31, 2016 Vested and expected to vest at December 31, 2016 Exercisable at December 31, 2016 |
Schedule of assumptions used in calculation of estimated fair value of the options | December 23, 2014 Suboptimal exercise factor Risk-free interest rates % Expected volatility % Expected dividend yield % Weighted average fair value of share option |
ACCUMULATED OTHER COMPREHENSI51
ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | |
Schedule of movement of accumulated other comprehensive income | Foreign currency Unrealized Total Note RMB’000 RMB’000 RMB’000 Balance as of January 1, 2015 ) Other comprehensive income before reclassification Balance as of December 31, 2015 Other comprehensive income before reclassification ) Amounts reclassified from accumulated other comprehensive income — ) ) Balance as of December 31, 2016 ) Balance as of December 31, 2016, in US$ ) |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
INCOME TAXES | |
Schedule of Loss from continuing operations before income tax expense | For the years ended December 31, 2014 2015 2016 RMB’000 RMB’000 RMB’000 US$’000 Non-PRC ) ) ) PRC ) ) ) ) ) ) ) ) |
Schedule of income tax expense (benefit) | For the years ended December 31, 2014 2015 2016 RMB’000 RMB’000 RMB’000 US$’000 Current Deferred ) ) ) ) |
Schedule of reconciliation of tax computed by applying the statutory income tax rate to income tax (benefit) expense | For the years ended December 31, 2014 2015 2016 RMB’000 RMB’000 RMB’000 US$’000 Loss before income tax expense ) ) ) ) Income tax computed at PRC statutory tax rate of 25% ) ) ) ) Preferential tax rates International rate differences ) ) ) Additional 50% tax deduction for qualified research and development expenses ) ) ) ) Non-deductible expenses Effect of changes in tax rates on deferred taxes ) ) Changes in unrecognized tax benefits ) ) ) Changes in the valuation allowance ) Other permanent difference ) — — Income tax expense (benefit) ) ) |
Schedule of the components of deferred tax assets and liabilities | For the years ended December 31, 2015 2016 (RMB’000) (RMB’000) (US$’000) Deferred tax assets: Current: - Allowance for doubtful accounts - Deferred government grant - Accruals Less: valuation allowance — ) ) Net current deferred tax assets — — Non-current: - Tax losses - Property and equipment - Deferred government grant - Intangible assets - Long-term investment impairment — - Impairment loss for long-lived assets — Less: valuation allowance ) ) ) Net non-current deferred tax assets — — Total Deferred tax assets — — |
Schedule of roll-forward of accrued unrecognized tax benefits | December 31, 2015 2016 RMB’000 RMB’000 US$’000 Balance—beginning Increase based on tax positions related to the current year — — Decrease of tax positions related to prior year ) ) ) Reclassified as liabilities held for sale (Note 9) ) — — Balance—ending |
RELATED PARTY BALANCES AND TR53
RELATED PARTY BALANCES AND TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
RELATED PARTY BALANCES AND TRANSACTIONS | |
Schedule of related party relationships | Name of Related Parties Relationship with the Company Mr. Wang Song The Co-Founder and Director of the Company Ms. Kou Xiaohong The Co-Founder and Director of the Company Flashapp A company under the significant influence of the Company |
Schedule of related party balances | Ms. Kou Flashapp Total Balance as of January 1, 2015 ) — ) Service charge by Flash app — ) ) Service fee paid to Flash app — Balance as of December 31, 2015 ) — ) Service charge by Flash app — — — Service fee paid to Flash app — — — Balance as of December 31, 2016 ) — ) Balance as of December 31, 2016 (US$’000) ) — ) |
LOSS PER SHARE (Tables)
LOSS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
LOSS PER SHARE | |
Schedule of basic and diluted loss per share | For the Year Ended 2014 2015 2016 (RMB’000) (RMB’000) (RMB’000) (US$’000) Numerator: Net loss attributable to ordinary shareholders: ) ) ) ) Denominator: Number of shares outstanding, opening Weighted average number of shares issued Weighted average number of shares repurchased ) ) ) ) Weighted-average number of shares outstanding — Basic Weighted-average number of shares outstanding — Diluted Loss per share -Basic ) ) ) ) -Diluted ) ) ) ) |
FAIR VALUE MEASUREMENT (Tables)
FAIR VALUE MEASUREMENT (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
FAIR VALUE MEASUREMENT | |
Schedule of reconciliation of assets measured at fair value on a recurring basis using significant unobservable inputs | Investment in the RMB’000 Fair value at January 1, 2015 Changes in fair value Fair value at December 31, 2015 and January 1, 2016 Fair value at December 31, 2016 Fair value at December 31, 2016 (US$’000) |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
COMMITMENTS AND CONTINGENCIES | |
Schedule of future minimum lease payments under non-cancelable operating leases | December 31, 2016 RMB’000 US$’000 2017 2018 |
CONDENSED FINANCIAL INFORMATI57
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | |
Schedule of condensed balance sheets | (Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”)) As of December 31, 2015 2016 RMB RMB US$ ASSETS: Current assets: Cash and cash equivalents Prepaid expenses and other current assets Short term investment — — Total current assets Non-current assets: Property and equipment, net — — Long term investments Investments in subsidiaries and consolidated VIEs ) ) Total non-current assets ) ) TOTAL ASSETS ) ) LIABILITIES AND SHAREHOLDERS’ EQUITY/(DEFICIT): Current liabilities: Accrued employee benefits — — — Accrued expenses and other payables Total current liabilities Total liabilities Shareholders’ equity/(deficit): Ordinary shares (US$0.0001 par value; 1,000,000,000 and 1,000,000,000 shares authorized; 400,069,875 and 409,339,219 shares issued and outstanding as of December 31, 2015 and 2016, respectively) Additional paid-in capital Treasury stock ) ) ) Statutory reserves Accumulated deficit ) ) ) Accumulated other comprehensive income Total shareholders’ equity/(deficit) ) ) TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY/(DEFICIT) ) ) |
Schedule of condensed statements of comprehensive loss | (Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”)) For the years ended December 31, 2014 2015 2016 RMB RMB RMB US$ General and administrative expenses ) ) ) ) Impairment of long term investments — — ) ) Operating loss ) ) ) ) Interest income Other income — Foreign exchange gain Share of losses from subsidiaries and consolidated VIEs ) ) ) ) Loss before income taxes ) ) ) ) Income tax expense — — — — Net loss ) ) ) ) Foreign currency translation ) ) Unrealized gain from available-for-sale investments Amounts reclassified from accumulated other comprehensive income — — ) ) Total other comprehensive income (loss), net of tax ) ) Comprehensive loss ) ) ) ) |
Schedule of condensed statements of cash flows | (Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”)) For the years ended December 31, 2014 2015 2016 RMB RMB RMB US$ Net cash used in operating activities ) ) ) ) Cash flows from investing activities: Cash given to subsidiaries and consolidated VIEs ) — — — Cash paid for long term investments ) ) ) ) Cash received from sale of short term investment — — Net cash provided by (used in) investing activities ) ) Cash flows from financing activities: Consideration paid to selling shareholders ) — — — Proceeds received on behalf of selling shareholders — — — Proceeds from issuance of ordinary shares — — — Proceeds from employee share options exercised Cash guaranteed as restricted cash — — — Cash received from an off-shore subsidiary — — — Payment for repurchase of ordinary shares — ) ) ) Net cash generated by (used in) financing activities ) ) ) Net decrease in cash and cash equivalents ) ) ) ) Cash and cash equivalents at beginning of the year Effect of foreign exchange rate changes on cash Cash and cash equivalents at end of the year |
ORGANIZATION (Details)
ORGANIZATION (Details) | Dec. 19, 2016CNY (¥) | Jan. 20, 2016CNY (¥) | Nov. 16, 2015USD ($) | Nov. 16, 2015CNY (¥) | Sep. 23, 2005 | Sep. 30, 2010 | Dec. 31, 2016CNY (¥)agreement | Dec. 31, 2015CNY (¥) | Dec. 31, 2014 | |
Organization | ||||||||||
Capital injection from a PRC company wholly owned by the Founders | ¥ 1,292,000 | |||||||||
Exclusive Option Agreements | ||||||||||
Organization | ||||||||||
Variable interest entity agreement term | 10 years | |||||||||
Variable interest entity renewed additional term | 10 years | |||||||||
Beijing Jingtian | Exclusive Business Cooperation Agreements | ||||||||||
Organization | ||||||||||
Service fees charged on percentage of net income | 100.00% | |||||||||
Beijing Blue IT | Loan Agreements | ||||||||||
Organization | ||||||||||
Variable interest entity agreement term | 10 years | |||||||||
Variable interest entity renewed additional term | 10 years | |||||||||
Loan facility provided to the Nominee Shareholders of the variable interest entity | ¥ 10,000,000 | |||||||||
ChinaCache Beijing | ||||||||||
Organization | ||||||||||
Percentage of ownership | 100.00% | |||||||||
ChinaCache Beijing | Exclusive Business Cooperation Agreements | ||||||||||
Organization | ||||||||||
Variable interest entity agreement term | 10 years | |||||||||
Variable interest entity renewed additional term | 10 years | |||||||||
ChinaCache Beijing | Beijing Jingtian | Loan Agreements | ||||||||||
Organization | ||||||||||
Variable interest entity agreement term | 10 years | |||||||||
Loan facility provided to the Nominee Shareholders of the variable interest entity | ¥ 8,500,000 | |||||||||
ChinaCache Beijing | Beijing Blue IT | Exclusive technical support and service agreement/Exclusive technical consultation and training agreement/Equipment leasing agreement | ||||||||||
Organization | ||||||||||
Variable interest entity agreement term | 5 years | |||||||||
Variable interest entity renewed additional term | 5 years | 5 years | ||||||||
Number of agreements with VIEs | agreement | 3 | |||||||||
ChinaCache North America, Inc. | ||||||||||
Organization | ||||||||||
Percentage of ownership | 100.00% | |||||||||
JNet Holdings Limited ("JNet Holdings") | ||||||||||
Organization | ||||||||||
Percentage of ownership | 100.00% | |||||||||
ChinaCache Networks Hong Kong Ltd. ("ChinaCache HK") | ||||||||||
Organization | ||||||||||
Percentage of ownership | 100.00% | |||||||||
Xin Run | ||||||||||
Organization | ||||||||||
Percentage of ownership | [1] | 99.00% | ||||||||
Percentage of ownership, before transfer | 100.00% | |||||||||
Percentage of ownership, after transfer | 99.00% | 99.00% | ||||||||
Xin Run | Tianjin Shuishan Technology Co., Ltd | ||||||||||
Organization | ||||||||||
Capital injection from a PRC company wholly owned by the Founders | $ 202,000 | ¥ 1,292,000 | ||||||||
Metasequoia Investment Inc. ("Metasequoia") | ||||||||||
Organization | ||||||||||
Percentage of ownership | 100.00% | |||||||||
ChinaCache Ireland Limited ("ChinaCache IE") | ||||||||||
Organization | ||||||||||
Percentage of ownership | 100.00% | |||||||||
Beijing Shou Ming | ||||||||||
Organization | ||||||||||
Percentage of ownership | [1] | 99.00% | ||||||||
Percentage of ownership, before transfer | 100.00% | |||||||||
Percentage of ownership, after transfer | 99.00% | 99.00% | ||||||||
Beijing Shuo Ge | ||||||||||
Organization | ||||||||||
Percentage of ownership | [1] | 99.00% | ||||||||
Percentage of ownership, before transfer | 100.00% | |||||||||
Percentage of ownership, after transfer | 99.00% | 99.00% | ||||||||
Beijing Zhao Du | ||||||||||
Organization | ||||||||||
Percentage of ownership | [1] | 99.00% | ||||||||
Percentage of ownership, before transfer | 100.00% | |||||||||
Percentage of ownership, after transfer | 99.00% | 99.00% | ||||||||
ChinaCache Networks Limited ("ChinaCache UK") | ||||||||||
Organization | ||||||||||
Percentage of ownership | 100.00% | |||||||||
ChinaCache Assets LLC ("CCAL") | ||||||||||
Organization | ||||||||||
Percentage of ownership | 100.00% | |||||||||
ChinaCache Holdings | Beijing Blue IT | Loan Agreements | ||||||||||
Organization | ||||||||||
Variable interest entity agreement term | 10 years | 10 years | ||||||||
Interest-free loan facility | ¥ 20,000,000 | ¥ 10,000,000 | ||||||||
[1] | On November 16, 2015, Xin Run received a capital injection of RMB1,292,000 (US$202,000) from Tianjin Shuishan Technology Co., Ltd, a PRC Company wholly owned by the Founders. As a result, the percentage of the Company’s equity ownership in Xin Run and Xin Run’s wholly-owned subsidiaries, Beijing Shou Ming, Beijing Shuo Ge and Beijing Zhao Du, decreased from 100% as of December 31, 2014 to 99% as of December 31, 2015 and 2016). |
ORGANIZATION - FINANCIAL INFORM
ORGANIZATION - FINANCIAL INFORMATION (Details) $ in Thousands | 12 Months Ended | |||||||
Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015USD ($) | Dec. 31, 2015CNY (¥) | ||
Organization | ||||||||
Pledge or collateralization of assets | ¥ 0 | |||||||
Current assets: | ||||||||
Cash and cash equivalents | $ 19,433 | 134,924,000 | ¥ 606,796,000 | |||||
Accounts receivable (net of allowance for doubtful accounts of RMB54,171 and RMB63,266 (US$9,112) as of December 31, 2015 and 2016, respectively) | 27,450 | 190,587,000 | 243,431,000 | |||||
Accounts receivable, allowance for doubtful accounts (in CNY and dollars) | 9,207 | ¥ 58,871,000 | 63,921,000 | $ 7,870 | 54,638,000 | |||
Prepaid expenses and other current assets | 8,206 | 56,976,000 | 31,560,000 | |||||
Deferred tax assets | 17,923,000 | |||||||
Total current assets | 245,735 | 1,706,139,000 | 1,986,857,000 | |||||
Non-current assets: | ||||||||
Property and equipment, net | 499,946,000 | |||||||
Intangible assets, net | 10,898,000 | |||||||
Long term investments | 4,920 | 34,159,000 | 50,157,000 | |||||
Deferred tax assets | 11,368,000 | |||||||
Long term deposits and other non-current assets | 5,261 | 36,525,000 | 59,390,000 | |||||
Total non-current assets | 10,181 | 70,684,000 | 631,759,000 | |||||
Current liabilities: | ||||||||
Short-term loan | 4,222 | 29,311,000 | ||||||
Accounts payable | 43,435 | 301,569,000 | 205,593,000 | |||||
Accrued employee benefits | 6,659 | 46,233,000 | 44,690,000 | |||||
Accrued expenses and other payables | 7,590 | 52,697,000 | 76,409,000 | |||||
Income tax payable | 2,005 | 13,924,000 | 13,513,000 | |||||
Liabilities for uncertain tax positions | 1,443 | 10,020,000 | 11,337,000 | |||||
Amount due to a subsidiary held for sale | 2,602 | 18,063,000 | 319,536,000 | |||||
Current portion of capital lease obligations | 10,493 | 72,851,000 | 70,615,000 | |||||
Deferred government grant | 1,872 | 13,000,000 | 16,360,000 | |||||
Total current liabilities | 268,499 | 1,864,184,000 | 1,779,700,000 | |||||
Non-current liabilities: | ||||||||
Non-current portion of capital lease obligations | 6,330 | 43,951,000 | 104,450,000 | |||||
Deferred government grant | 1,614 | 11,208,000 | 8,439,000 | |||||
Total non-current liabilities | 7,944 | 55,159,000 | 117,229,000 | |||||
Net revenues | ||||||||
Net profit (loss) | (131,680) | ¥ (914,253,000) | ¥ (88,735,000) | (6,841,000) | ||||
Net cash provided by (used in) operating activities | (26,961) | (187,180,000) | 770,476,000 | 280,386,000 | ||||
Net cash used in investing activities | (29,150) | (202,390,000) | (432,349,000) | (421,718,000) | ||||
Net cash used in financing activities | (12,190) | (84,645,000) | (106,797,000) | 177,619,000 | ||||
Consolidated Variable Interest Entity (VIEs) | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | 9,349 | 64,909,000 | 426,754,000 | |||||
Accounts receivable (net of allowance for doubtful accounts of RMB54,171 and RMB63,266 (US$9,112) as of December 31, 2015 and 2016, respectively) | 16,675 | 115,774,000 | 185,310,000 | |||||
Accounts receivable, allowance for doubtful accounts (in CNY and dollars) | 9,112 | 63,266,000 | 54,171,000 | |||||
Prepaid expenses and other current assets | 5,427 | 37,679,000 | 16,316,000 | |||||
Deferred tax assets | 15,833,000 | |||||||
Amounts due from inter-companies | [1] | 1,182 | 8,209,000 | 69,709,000 | ||||
Total current assets | 32,633 | 226,571,000 | 713,922,000 | |||||
Non-current assets: | ||||||||
Property and equipment, net | 428,943,000 | |||||||
Intangible assets, net | 10,635,000 | |||||||
Long term investments | 1,513 | 10,503,000 | 16,103,000 | |||||
Deferred tax assets | 9,744,000 | |||||||
Long term deposits and other non-current assets | 5,253 | 36,470,000 | 59,256,000 | |||||
Total non-current assets | 6,766 | 46,973,000 | 524,681,000 | |||||
TOTAL ASSETS | 39,399 | 273,544,000 | 1,238,603,000 | |||||
Current liabilities: | ||||||||
Short-term loan | 4,222 | 29,311,000 | ||||||
Accounts payable | 42,954 | 298,231,000 | 202,223,000 | |||||
Accrued employee benefits | 5,208 | 36,159,000 | 33,151,000 | |||||
Accrued expenses and other payables | 4,455 | 30,933,000 | 61,195,000 | |||||
Income tax payable | 882 | 6,121,000 | 6,884,000 | |||||
Liabilities for uncertain tax positions | 675 | 4,689,000 | 6,006,000 | |||||
Amounts due to inter-companies | [1] | 40,530 | 281,400,000 | 375,054,000 | ||||
Amount due to a subsidiary held for sale | 1,816 | 12,606,000 | 297,935,000 | |||||
Current portion of capital lease obligations | 10,459 | 72,614,000 | 69,918,000 | |||||
Deferred government grant | 1,872 | 13,000,000 | 16,360,000 | |||||
Total current liabilities | 113,073 | 785,064,000 | 1,068,726,000 | |||||
Non-current liabilities: | ||||||||
Non-current portion of capital lease obligations | 6,330 | 43,951,000 | 104,213,000 | |||||
Deferred government grant | 1,614 | 11,208,000 | 8,439,000 | |||||
Total non-current liabilities | 7,944 | 55,159,000 | 112,652,000 | |||||
Total liabilities | 121,017 | ¥ 840,223,000 | ¥ 1,181,378,000 | |||||
Net revenues | ||||||||
-Third party customers | 94,840 | 658,475,000 | 1,048,454,000 | 1,189,247,000 | ||||
-Inter-companies | 46,257 | 321,161,000 | 234,333,000 | 120,783,000 | ||||
Net profit (loss) | (90,385) | (627,544,000) | (2,503,000) | 15,146,000 | ||||
Net cash provided by (used in) operating activities | (42,173) | (292,806,000) | 398,301,000 | 252,790,000 | ||||
Net cash used in investing activities | (2,195) | (15,240,000) | (81,448,000) | (184,318,000) | ||||
Net cash used in financing activities | $ (7,749) | ¥ (53,798,000) | ¥ (31,539,000) | ¥ (4,432,000) | ||||
[1] | Amount due from/to inter-companies consist of intercompany receivables/payables to the other companies within the Group. |
SUMMARY OF SIGNIFICANT ACCOUN60
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - LIQUIDITY (Details) | 12 Months Ended | 23 Months Ended | ||||
Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | Nov. 30, 2018CNY (¥) | Dec. 31, 2016CNY (¥) | |
Net loss | $ 131,680,000 | ¥ 914,253,000 | ¥ 88,735,000 | ¥ 6,841,000 | ||
Negative cash flows from operations | 26,961,000 | ¥ 187,180,000 | ¥ (770,476,000) | ¥ (280,386,000) | ||
Net current liability | $ 22,764,000 | ¥ 158,045,000 | ||||
Forecast | ||||||
Cash inflows to be funded by credit facilities | ¥ 610,000,000 |
SUMMARY OF SIGNIFICANT ACCOUN61
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONVENIENCE TRANSLATION (Details) - ¥ / $ | 12 Months Ended | |
Dec. 31, 2016 | Dec. 30, 2016 | |
Convenience translation | ||
Noon buying rate (in CNY per dollar) | 0.1440 | |
Optical Fibers | ||
Property and equipment | ||
Estimated useful lives of the assets | 20 years | |
Computer equipment | Minimum | ||
Property and equipment | ||
Estimated useful lives of the assets | 3 years | |
Computer equipment | Maximum | ||
Property and equipment | ||
Estimated useful lives of the assets | 5 years | |
Furniture, fixtures and office equipment | ||
Property and equipment | ||
Estimated useful lives of the assets | 5 years | |
Motor vehicles | ||
Property and equipment | ||
Estimated useful lives of the assets | 10 years | |
Building | ||
Property and equipment | ||
Estimated useful lives of the assets | 40 years |
SUMMARY OF SIGNIFICANT ACCOUN62
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - INTANGIBLE ASSETS (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Purchased software | |
Intangible assets | |
Estimated economic life of the intangible assets | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN63
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - IMPAIRMENT OF LONG-LIVED ASSETS & INVESTMENT (Details) | 12 Months Ended | |||
Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | |
Impairment of long-lived assets | ||||
Impairment of long-lived assets | $ 57,482,000 | ¥ 399,094,000 | ¥ 0 | ¥ 0 |
Investments | ||||
Impairment of available-for-sale investment | 2,627,000 | 18,240,000 | 0 | 0 |
Impairment of cost method investment | $ 2,627,000 | ¥ 18,240,000 | ¥ 0 | ¥ 0 |
SUMMARY OF SIGNIFICANT ACCOUN64
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - REVENUE RECOGNITION (Details) | 1 Months Ended | 12 Months Ended | ||||
Jun. 30, 2014 | Sep. 30, 2012 | Dec. 31, 2016USD ($)class | Dec. 31, 2016CNY (¥)class | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | |
Revenue recognition | ||||||
Number of class of services in a portfolio of content and application delivery to total solutions | 1 | 1 | ||||
Term of master service agreement | 1 year | 1 year | ||||
Term of renewal option of master service agreement | 1 year | 1 year | ||||
Business tax and related surcharges expenses | $ 0 | ¥ 0 | ¥ 0 | ¥ 10,598,000 | ||
ChinaCache Beijing | All services | ||||||
Revenue recognition | ||||||
Value-added tax | 6.00% | |||||
Business tax rate (as a percent) | 5.00% | |||||
Beijing Jingtian | All services | ||||||
Revenue recognition | ||||||
Value-added tax | 6.00% | |||||
Business tax rate (as a percent) | 5.00% | |||||
Beijing Blue IT | All services | ||||||
Revenue recognition | ||||||
Value-added tax | 6.00% | |||||
Business tax rate (as a percent) | 3.00% | |||||
Beijing Blue IT | Certain services | ||||||
Revenue recognition | ||||||
Value-added tax | 6.00% | |||||
Business tax rate (as a percent) | 5.00% |
SUMMARY OF SIGNIFICANT ACCOUN65
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - ADVERTISING, GOVERNMENT GRANT AND SEGMENT REPORTING (Details) | 12 Months Ended | |||
Dec. 31, 2016USD ($)segment | Dec. 31, 2016CNY (¥)segment | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | |
Advertising expenditures | ||||
Advertising expenditures, included in sales and marketing expenses | $ 34,000 | ¥ 233,000 | ¥ 678,000 | ¥ 450,000 |
Government Grant | ||||
Unrestricted grant received | $ 324,000 | ¥ 2,250,000 | ¥ 685,000 | ¥ 5,282,000 |
Share-based compensation | ||||
Estimated forfeiture rate for both the management group and the non-management group | 0.00% | 0.00% | 0.00% | 0.00% |
Segment reporting | ||||
Number of reportable segment | 1 | 1 | ||
Number of geographical segments | 0 | 0 | ||
Employee benefits | ||||
Employee benefits incurred under defined contribution plans | $ 7,730,000 | ¥ 53,669,000 | ¥ 53,820,000 | ¥ 46,178,000 |
SUMMARY OF SIGNIFICANT ACCOUN66
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - SHARE REPURCHASE PROGRAM (Details) | 12 Months Ended | ||||||||
Dec. 31, 2016USD ($)shares | Dec. 31, 2016CNY (¥)shares | Dec. 31, 2015USD ($)shares | Dec. 31, 2015CNY (¥)shares | Dec. 31, 2014USD ($)shares | Dec. 31, 2014CNY (¥)shares | Dec. 28, 2015USD ($) | Aug. 24, 2015USD ($) | Dec. 18, 2014USD ($) | |
Share Repurchase Program | |||||||||
Shares repurchased, value | ¥ | ¥ 39,402,000 | ¥ 93,891,000 | |||||||
2014 Share Repurchase Plan | |||||||||
Share Repurchase Program | |||||||||
Shares repurchased, value | $ 10,000,000 | 63,375,000 | $ 0 | ¥ 0 | |||||
August 2015 Share Repurchase Plan | |||||||||
Share Repurchase Program | |||||||||
Shares repurchased, value | $ 4,815,000 | ¥ 30,516,000 | |||||||
ADS | 2014 Share Repurchase Plan | |||||||||
Share Repurchase Program | |||||||||
Repurchases authorized (in US$) | $ | $ 10,000,000 | ||||||||
Number of shares repurchased | shares | 1,300,715 | 1,300,715 | 0 | 0 | |||||
ADS | August 2015 Share Repurchase Plan | |||||||||
Share Repurchase Program | |||||||||
Repurchases authorized (in US$) | $ | $ 6,000,000 | ||||||||
Number of shares repurchased | shares | 166,802 | 166,802 | 626,295 | 626,295 | |||||
Shares repurchased, value | $ 1,185,000 | ¥ 7,659,000 | |||||||
ADS | December 2015 Share Repurchase Plan | |||||||||
Share Repurchase Program | |||||||||
Repurchases authorized (in US$) | $ | $ 5,000,000 | ||||||||
Number of shares repurchased | shares | 691,364 | 691,364 | |||||||
Shares repurchased, value | $ 4,912,000 | ¥ 31,743,000 |
CONCENTRATION OF RISK (Details)
CONCENTRATION OF RISK (Details) | 12 Months Ended | |||
Dec. 31, 2016USD ($)item | Dec. 31, 2015CNY (¥) | Dec. 31, 2014 | Dec. 31, 2016CNY (¥)item | |
Credit risk | PRC | ||||
CONCENTRATION OF RISK | ||||
Amounts deposited with major financial institutions | $ 17,116,000 | ¥ 519,914,000 | ¥ 118,835,000 | |
Credit risk | HK | ||||
CONCENTRATION OF RISK | ||||
Amounts deposited with major financial institutions | 4,140,000 | 51,108,000 | 28,744,000 | |
Credit risk | Europe | ||||
CONCENTRATION OF RISK | ||||
Amounts deposited with major financial institutions | 342,000 | 1,218,000 | 2,375,000 | |
Credit risk | United States of America | ||||
CONCENTRATION OF RISK | ||||
Amounts deposited with major financial institutions | $ 960,000 | ¥ 43,978,000 | ¥ 6,666,000 | |
Supplier risk | Costs of bandwidth resources | ||||
CONCENTRATION OF RISK | ||||
Number of major PRC telecom carriers | 2 | 2 | ||
Supplier risk | Costs of bandwidth resources | Two major PRC telecom carriers | ||||
CONCENTRATION OF RISK | ||||
Percentage of concentration risk | 91.00% | 95.00% | 97.00% |
CONCENTRATION OF RISK - TOTAL R
CONCENTRATION OF RISK - TOTAL REVENUE & TOTAL ACCOUNTS RECEIVABLE (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | Dec. 31, 2016CNY (¥) | |
CONCENTRATION OF RISK | |||||
Total revenues | $ 151,842 | ¥ 1,054,235 | ¥ 1,353,627 | ¥ 1,384,273 | |
Accounts receivable | $ 27,450 | ¥ 243,431 | ¥ 190,587 | ||
Minimum period for which the PRC government has been pursuing economic reform policies | 20 years | 20 years | |||
Percentage of depreciation of the RMB against US$ | 7.20% | 7.20% | 4.40% | 2.50% | |
Revenues | Customer risk | Customer A | |||||
CONCENTRATION OF RISK | |||||
Total revenues | $ 49,953 | ¥ 346,826 | ¥ 269,925 | ¥ 167,437 | |
Accounts receivables | Customer risk | Customer A | |||||
CONCENTRATION OF RISK | |||||
Accounts receivable | 9,771 | ¥ 52,072 | 67,840 | ||
Accounts receivables | Customer risk | Customer B | |||||
CONCENTRATION OF RISK | |||||
Accounts receivable | $ 3,258 | ¥ 22,618 | |||
Accounts receivables | Customer risk | Maximum | Customer B | |||||
CONCENTRATION OF RISK | |||||
Concentration risk (as a percent) | 10.00% |
CASH AND CASH EQUIVALENTS (Deta
CASH AND CASH EQUIVALENTS (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015USD ($) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | Dec. 31, 2013CNY (¥) |
CASH AND CASH EQUIVALENTS | ||||||
Cash and cash equivalents on the consolidated balance sheets | $ 19,433 | ¥ 134,924 | ¥ 606,796 | |||
Cash and cash equivalents included in assets held for sale (Note 9) | 3,125 | 21,696 | 9,422 | |||
Cash and cash equivalents on the consolidated statements of cash flows | $ 22,558 | ¥ 156,620 | $ 88,754 | ¥ 616,218 | ¥ 375,879 | ¥ 338,092 |
ACCOUNTS RECEIVABLE, NET (Detai
ACCOUNTS RECEIVABLE, NET (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | |
Accounts receivable and allowance for doubtful accounts | ||||||
Accounts receivable | $ 36,657 | ¥ 254,508 | ¥ 298,069 | |||
Less: allowance for doubtful accounts | $ (7,870) | ¥ (54,638) | ¥ (58,871) | (9,207) | (63,921) | (54,638) |
Accounts receivable, net | $ 27,450 | ¥ 190,587 | ¥ 243,431 | |||
Analysis of the allowance for doubtful accounts | ||||||
Balance, beginning of year | 7,870 | 54,638 | 58,871 | |||
Additions for the current year | 1,480 | 10,273 | 17,800 | |||
Deductions for the current year - Recovery | (143) | (990) | (22,033) | |||
Balance, end of year | $ 9,207 | ¥ 63,921 | ¥ 54,638 |
PREPAID EXPENSES AND OTHER CU71
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) |
Prepaid expenses and other current assets | |||
Prepaid expense for bandwidth and servers | $ 301 | ¥ 2,087 | ¥ 2,268 |
Income tax receivable | 5,785 | ||
Staff field advances | 866 | 6,012 | 5,817 |
Capital lease deposit | 3,429 | 23,809 | |
Other deposit and receivables | 3,610 | 25,068 | 17,690 |
Total | $ 8,206 | ¥ 56,976 | ¥ 31,560 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) | 12 Months Ended | ||||
Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | Dec. 31, 2016CNY (¥) | |
PROPERTY AND EQUIPMENT, NET | |||||
Property and equipment, at cost | $ 137,797,000 | ¥ 936,572,000 | ¥ 956,721,000 | ||
Less: accumulated depreciation | (81,922,000) | (436,626,000) | (568,781,000) | ||
Less: impairment | (55,875,000) | (387,940,000) | |||
Property and equipment, net | 499,946,000 | ||||
Depreciation expenses | 22,357,000 | ¥ 155,225,000 | 153,313,000 | ¥ 94,826,000 | |
Cost of revenues | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Depreciation expenses | 18,828,000 | 130,724,000 | 131,102,000 | 79,348,000 | |
Sales and marketing expenses | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Depreciation expenses | 20,000 | 138,000 | 49,000 | 198,000 | |
General and administrative expenses | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Depreciation expenses | 1,699,000 | 11,799,000 | 9,191,000 | 5,796,000 | |
Research and development expenses | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Depreciation expenses | 1,810,000 | ¥ 12,564,000 | 12,971,000 | ¥ 9,484,000 | |
Optical Fibers | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Property and equipment, at cost | 1,887,000 | 13,100,000 | 13,100,000 | ||
Computer equipment | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Property and equipment, at cost | 123,311,000 | 884,461,000 | 856,150,000 | ||
Furniture, fixtures and office equipment | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Property and equipment, at cost | 4,893,000 | 9,759,000 | 33,971,000 | ||
Leasehold improvements | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Property and equipment, at cost | 2,776,000 | 19,267,000 | 19,277,000 | ||
Motor vehicles | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Property and equipment, at cost | 1,472,000 | ¥ 9,985,000 | 10,215,000 | ||
Freehold land | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Property and equipment, at cost | 2,801,000 | 19,446,000 | |||
Building | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Property and equipment, at cost | $ 657,000 | ¥ 4,562,000 |
PROPERTY AND EQUIPMENT, NET - C
PROPERTY AND EQUIPMENT, NET - CARRYING AMOUNT (Details) | 12 Months Ended | ||||
Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | Dec. 31, 2016CNY (¥) | |
PROPERTY AND EQUIPMENT, NET | |||||
Property and equipment held under capital leases, at cost | $ 36,968,000 | ¥ 240,536,000 | ¥ 256,670,000 | ||
Less: accumulated depreciation | (12,955,000) | (41,472,000) | (89,945,000) | ||
Less: impairment | (24,013,000) | (166,725,000) | |||
Property and equipment held under capital leases, net | 199,064,000 | ||||
Depreciation of property and equipment held under capital leases | 6,981,000 | ¥ 48,473,000 | 34,074,000 | ¥ 3,523,000 | |
Optical Fibers | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Property and equipment held under capital leases, at cost | 1,887,000 | 13,100,000 | 13,100,000 | ||
Computer equipment | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Property and equipment held under capital leases, at cost | $ 35,081,000 | ¥ 227,436,000 | ¥ 243,570,000 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | |
Changes in intangible assets | ||||
Purchased software, net, beginning of year | ¥ 10,898 | |||
Less: amortization | $ (557) | (3,869) | ¥ (4,298) | ¥ (2,202) |
Less: impairment | (1,689) | (11,728) | ||
Purchased software, net, end of year | 10,898 | |||
Estimated annual amortization expense for each of the five succeeding fiscal years | ||||
2,017 | 0 | |||
2,018 | 0 | |||
2,019 | 0 | |||
2,020 | 0 | |||
2,021 | 0 | |||
Purchased software | ||||
Changes in intangible assets | ||||
Purchased software, net, beginning of year | 1,570 | 10,898 | 10,321 | |
Addition | 676 | 4,699 | 7,016 | |
Less: amortization | $ (557) | ¥ (3,869) | (3,254) | |
Reclassified to assets held for sale (Note 9) | (3,185) | |||
Purchased software, net, end of year | ¥ 10,898 | ¥ 10,321 |
ASSETS HELD FOR SALE _ LIABIL75
ASSETS HELD FOR SALE / LIABILITIES HELD FOR SALE (Details) | Mar. 06, 2017CNY (¥)item | Nov. 27, 2015item | Dec. 31, 2016USD ($)m²individual | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | Dec. 31, 2016CNY (¥)m²individual | |||
Major classes of assets and liabilities held for sale | ||||||||||
Cash and cash equivalents | $ 3,125,000 | ¥ 9,422,000 | ¥ 21,696,000 | |||||||
Assets held for sale | 182,988,000 | 1,060,543,000 | 1,270,483,000 | |||||||
Liabilities held for sale | 187,622,000 | 1,014,449,000 | 1,302,658,000 | |||||||
Amortization expense | 557,000 | ¥ 3,869,000 | 4,298,000 | ¥ 2,202,000 | ||||||
Costs capitalized | 140,745,000 | 467,746,000 | 977,194,000 | |||||||
Transaction tax from intercompany sales | 27,733,000 | |||||||||
Net revenue | [1] | (352,000) | (2,442,000) | |||||||
Xin Run | ||||||||||
ASSETS HELD FOR SALE / LIABILITIES HELD FOR SALE [Line Items] | ||||||||||
Percentage of equity interest to be sold | 79.00% | 60.00% | ||||||||
Number of parties | item | 3 | |||||||||
Consideration in cash for sale of equity interest | ¥ 221,000,000 | |||||||||
Xin Run | Companies owned by the Founders | ||||||||||
ASSETS HELD FOR SALE / LIABILITIES HELD FOR SALE [Line Items] | ||||||||||
Percentage of equity interest to be sold | 52.67% | 38.00% | ||||||||
Number of parties | item | 2 | |||||||||
Xin Run | Assets/liabilities held-for-sale | ||||||||||
Major classes of assets and liabilities held for sale | ||||||||||
Cash and cash equivalents | 3,125,000 | 9,422,000 | 21,696,000 | |||||||
Accounts receivable, net | 248,000 | 1,721,000 | ||||||||
Prepaid expenses and other current assets | 14,635,000 | 101,217,000 | 101,612,000 | |||||||
Short term investment | 50,000,000 | |||||||||
Property and equipment, net | 3,103,000 | 12,375,000 | 21,541,000 | |||||||
Intangible assets, net | 797,000 | 3,185,000 | 5,532,000 | |||||||
Land use right, net | 7,053,000 | 48,880,000 | 48,966,000 | |||||||
Deferred tax assets | 3,824,000 | 377,000 | 26,553,000 | |||||||
Accrued tax on intercompany transactions | 2,478,000 | 17,205,000 | 17,205,000 | |||||||
Cloud infrastructure construction in progress | 140,745,000 | 467,746,000 | 977,194,000 | |||||||
Long term deposits and other non-current assets | 4,379,000 | 30,600,000 | 30,400,000 | |||||||
Assets held for sale | 182,989,000 | 1,060,543,000 | 1,270,483,000 | |||||||
Accounts payable | 780,000 | 5,416,000 | ||||||||
Accrued employee benefits | 498,000 | 2,900,000 | 3,460,000 | |||||||
Accrued expenses and other payables | 177,573,000 | 1,003,895,000 | 1,232,881,000 | |||||||
Income tax payable | 420,000 | 2,406,000 | 2,919,000 | |||||||
Liabilities for uncertain tax positions | 693,000 | 4,813,000 | 4,813,000 | |||||||
Amounts due to the Company | 7,658,000 | 435,000 | 53,169,000 | |||||||
Liabilities held for sale | 187,622,000 | 1,014,449,000 | 1,302,658,000 | |||||||
Prepaid commission fee for the potential sales of certain buildings | $ 15,391,000 | 99,700,000 | ¥ 99,700,000 | |||||||
Number of potential buyers for certain buildings as part of the Cloud infrastructure | individual | 2 | 2 | ||||||||
Advances from potential buyers of part of cloud infrastructure | $ 153,910,000 | 997,000,000 | ¥ 997,000,000 | |||||||
Provision for late delivery penalty | 4,433,000 | 30,778,000 | ||||||||
Loss before income taxes | (15,469,000) | [1] | (107,399,000) | [1] | (57,010,000) | (15,554,000) | ||||
Transaction tax on assets transfer | 0 | 27,733,000 | 0 | |||||||
Loss before income taxes attributable to the noncontrolling interest | 155,000 | ¥ 1,074,000 | 0 | 0 | ||||||
Xin Run | Assets/liabilities held-for-sale | ChinaCache Beijing and Beijing Blue IT | ||||||||||
Major classes of assets and liabilities held for sale | ||||||||||
Amounts due from ChinaCache Beijing and Beijing Blue IT | $ 2,602,000 | 319,536,000 | ¥ 18,063,000 | |||||||
Land use right | ||||||||||
Major classes of assets and liabilities held for sale | ||||||||||
Area of asset acquired | m² | 39,000 | 39,000 | ||||||||
Estimated economic life of the intangible assets | 50 years | 50 years | ||||||||
Amortization expense | ¥ 0 | ¥ 1,044,000 | ¥ 1,033,000 | |||||||
[1] | Loss before income taxes for the year ended December 31, 2016 included transaction tax on assets transfer of Nil (2014: Nil and 2015: RMB27,733,000). Loss before income taxes attributable to the noncontrolling interest for the year ended December 31, 2016 was RMB1,074,000 (US$155,000) (2014: Nil and 2015: Nil). |
INVESTMENTS - SHORT TERM INVEST
INVESTMENTS - SHORT TERM INVESTMENTS (Details) | Jul. 02, 2016USD ($) | Jul. 02, 2016CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) |
Short term investment | |||||
Short-term available-for-sale investments | ¥ 26,169,000 | ||||
Consideration received from sale of available-for-sale investments | $ 3,864,000 | ¥ 26,828,000 | |||
Mutual fund | |||||
Short term investment | |||||
Short-term available-for-sale investments | ¥ 26,169,000 | ||||
Consideration received from sale of available-for-sale investments | $ 3,864,000 | ¥ 26,828,000 | |||
Reclassification of accumulated unrealized gain recorded in accumulated other comprehensive income to other income | $ 512,000 | ¥ 3,552,000 |
INVESTMENTS - LONG TERM INVESTM
INVESTMENTS - LONG TERM INVESTMENTS (Details) | Feb. 19, 2014USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015USD ($) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | Dec. 31, 2013CNY (¥)directorshares | Dec. 31, 2012CNY (¥) | Dec. 31, 2011CNY (¥) | Dec. 31, 2016CNY (¥) | Aug. 25, 2014USD ($) | Aug. 25, 2014CNY (¥) | Feb. 19, 2014CNY (¥) |
LONG TERM INVESTMENTS | |||||||||||||
Less: accumulated impairment | $ (2,874,000) | ¥ (1,716,000) | ¥ (19,956,000) | ||||||||||
Long term Investments | 4,920,000 | 50,157,000 | 34,159,000 | ||||||||||
Other than temporary impairment of cost method investments | 2,627,000 | ¥ 18,240,000 | 0 | ¥ 0 | |||||||||
PRC Fund | |||||||||||||
LONG TERM INVESTMENTS | |||||||||||||
Long term cost investments | $ 1,455,000 | 10,103,000 | ¥ 10,103,000 | ||||||||||
Additional investment | ¥ | 1,000,000 | 1,500,000 | ¥ 1,500,000 | ¥ 3,000,000 | ¥ 3,103,000 | ||||||||
PRC Fund | Maximum | |||||||||||||
LONG TERM INVESTMENTS | |||||||||||||
Percentage of interest in cost method investments | 5.00% | 5.00% | |||||||||||
United States Fund | |||||||||||||
LONG TERM INVESTMENTS | |||||||||||||
Long term cost investments | $ 2,835,000 | 17,841,000 | ¥ 19,683,000 | ||||||||||
Additional investment | $ 265,000 | 1,842,000 | $ 1,303,000 | ¥ 2,692,000 | ¥ 4,814,000 | ¥ 3,000,000 | ¥ 6,033,000 | ||||||
United States Fund | Maximum | |||||||||||||
LONG TERM INVESTMENTS | |||||||||||||
Percentage of interest in cost method investments | 5.00% | 5.00% | |||||||||||
Investment in Flashapp Inc. ("Flashapp") | |||||||||||||
LONG TERM INVESTMENTS | |||||||||||||
Long term cost investments | $ 1,763,000 | 12,240,000 | ¥ 12,240,000 | ||||||||||
Number of persons on Board of Directors | director | 5 | ||||||||||||
Number of Board Directors may be appointed by the entity | director | 2 | ||||||||||||
Other than temporary impairment of cost method investments | 1,763,000 | 12,240,000 | |||||||||||
Investment in Flashapp Inc. ("Flashapp") | Series A Preferred Shares | |||||||||||||
LONG TERM INVESTMENTS | |||||||||||||
Number of units or shares purchased of cost method investments | shares | 13,971,428 | ||||||||||||
Cost of investment of cost method investments | ¥ | ¥ 12,240,000 | ||||||||||||
Period from the issuance date on or after which the company has the right to request redemption of cost method investments | 5 years | ||||||||||||
Redemption price as a percentage of original issuance price of cost method investments | 120.00% | ||||||||||||
Investee A | |||||||||||||
LONG TERM INVESTMENTS | |||||||||||||
Long term cost investments | 864,000 | 6,000,000 | 6,000,000 | ||||||||||
Percentage of interest in cost method investments | 6.25% | 6.25% | |||||||||||
Cost of investment of cost method investments | $ 967,000 | ¥ 6,000,000 | |||||||||||
Other than temporary impairment of cost method investments | 864,000 | ¥ 6,000,000 | |||||||||||
Investee B | |||||||||||||
LONG TERM INVESTMENTS | |||||||||||||
Long term cost investments | 58,000 | 400,000 | |||||||||||
Investee C | |||||||||||||
LONG TERM INVESTMENTS | |||||||||||||
Long term available-for-sale investments, before accumulated impairment | 247,000 | 1,716,000 | 1,716,000 | ||||||||||
Investee D | |||||||||||||
LONG TERM INVESTMENTS | |||||||||||||
Long term available-for-sale investments, before accumulated impairment | 572,000 | 3,973,000 | 3,973,000 | ||||||||||
Cost of available-for-sale investment | $ 494,000 | ¥ 3,068,000 | |||||||||||
Fair value of investments | $ 572,000 | ¥ 3,973,000 | ¥ 3,973,000 | ||||||||||
Basis of spread rate | prime rate | ||||||||||||
Margin (as a percent) | 2.00% | ||||||||||||
Term of debt | 2 years | ||||||||||||
Investee D | Maximum | |||||||||||||
LONG TERM INVESTMENTS | |||||||||||||
Conversion price as a percentage of Series A financing price | 25.00% |
SHORT-TERM LOAN (Details)
SHORT-TERM LOAN (Details) | 1 Months Ended | 12 Months Ended | |||||||
Jun. 30, 2014CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 21, 2016USD ($) | Dec. 21, 2016CNY (¥) | Nov. 08, 2016USD ($) | Nov. 08, 2016CNY (¥) | Jul. 21, 2016USD ($) | Jul. 21, 2016CNY (¥) | |
Short-term loan | |||||||||
Bank borrowings | $ 4,222,000 | ¥ 29,311,000 | |||||||
Total | $ 4,222,000 | ¥ 29,311,000 | |||||||
SPD Bank (Beijing) | Short-term loan | |||||||||
Short-term loan | |||||||||
Bank borrowings | ¥ 60,000,000 | ||||||||
Interest rate (as a percent) | 7.20% | ||||||||
Maturity term | 12 months | ||||||||
Fixed deposit from Chinacache Holdings pledged to secure the loan | ¥ 68,000,000 | ||||||||
Jiangsu Bank (Beijing) | Short-term loan | |||||||||
Short-term loan | |||||||||
Bank borrowings | $ 1,440,000 | ¥ 10,000,000 | $ 1,432,000 | ¥ 9,940,000 | $ 1,350,000 | ¥ 9,371,000 | |||
Interest rate (as a percent) | 5.655% | 5.655% | |||||||
Maturity term | 12 months |
ACCRUED EXPENSES AND OTHER PA79
ACCRUED EXPENSES AND OTHER PAYABLES (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) |
ACCRUED EXPENSES AND OTHER PAYABLES | |||
Payables for purchase of property and equipment | $ 2,362 | ¥ 16,397 | ¥ 30,377 |
Advance from customers | 1,459 | 10,128 | 15,146 |
Other tax payables | (1,118) | (7,761) | (5,261) |
Other accrued expenses | 4,887 | 33,933 | 36,147 |
Total | $ 7,590 | ¥ 52,697 | ¥ 76,409 |
LONG TERM LOAN (Details)
LONG TERM LOAN (Details) $ in Thousands | Sep. 25, 2014CNY (¥) | Jun. 27, 2014CNY (¥) | Sep. 25, 2014item | Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2014CNY (¥) | Dec. 31, 2016CNY (¥) |
Debt Instrument [Line Items] | |||||||
Principal of long-term loan | $ 4,222 | ¥ 29,311,000 | ¥ 81,540,000 | ||||
Unsecured loan | |||||||
Future installment repayment | |||||||
2,017 | 553 | ¥ 3,840,000 | |||||
Total | $ 553 | ¥ 3,840,000 | |||||
Jiangsu Bank (Beijing) | Unsecured loan | |||||||
Debt Instrument [Line Items] | |||||||
Number of unsecured loans borrowed | item | 2 | ||||||
Interest rate (as a percent) | 6.175% | 6.175% | |||||
Jiangsu Bank (Beijing) | Unsecured loan one | |||||||
Debt Instrument [Line Items] | |||||||
Principal of long-term loan | ¥ 17,040,000 | ||||||
Jiangsu Bank (Beijing) | Unsecured loan two | |||||||
Debt Instrument [Line Items] | |||||||
Principal of long-term loan | ¥ 4,500,000 |
DEFERRED GOVERNMENT GRANT (Deta
DEFERRED GOVERNMENT GRANT (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2016CNY (¥) | |
Deferred government grant | ||||
Beginning | $ 3,572 | ¥ 24,799 | ¥ 37,360 | |
Received | 1,649 | 11,450 | 1,350 | |
Recognized as income during the year | (1,735) | (12,041) | (13,911) | |
Ending | 3,486 | ¥ 24,208 | 24,799 | |
Including: current portion | $ 1,872 | ¥ 16,360 | ¥ 13,000 |
CAPITAL LEASE OBLIGATIONS (Deta
CAPITAL LEASE OBLIGATIONS (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) |
Future minimum lease payments under non-cancellable capital lease arrangements | |||
2,017 | $ 11,132 | ¥ 77,290 | |
2,018 | 6,278 | 43,586 | |
2,019 | 222 | 1,542 | |
Total minimum lease payment | 17,632 | 122,418 | |
Less: amount representing interest | (809) | (5,616) | |
Present value of remaining minimum lease payment | 16,823 | 116,802 | |
Current portion of capital lease obligations | $ 10,493 | ¥ 72,851 | ¥ 70,615 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - Options | Jul. 02, 2012 | Dec. 31, 2016item$ / sharesshares | Dec. 31, 2015$ / sharesshares | Dec. 31, 2014$ / sharesshares | Jun. 20, 2011shares | May 20, 2010shares | May 28, 2009shares | Oct. 16, 2008shares |
SHARE-BASED COMPENSATION | ||||||||
Options granted (in shares) | 0 | 0 | 5,734,480 | |||||
Options to purchase ordinary shares, outstanding (in shares) | 11,811,536 | |||||||
Number of ordinary shares available for future grant | 7,294,209 | |||||||
Maximum | ||||||||
SHARE-BASED COMPENSATION | ||||||||
Exercise price (in CNY or dollars per share) | $ / shares | $ 0.53 | $ 0.53 | $ 0.53 | |||||
Minimum | ||||||||
SHARE-BASED COMPENSATION | ||||||||
Exercise price (in CNY or dollars per share) | $ / shares | $ 0.24 | $ 0.24 | $ 0.24 | |||||
2007 Plan | ||||||||
SHARE-BASED COMPENSATION | ||||||||
Aggregate number of shares that can be purchased | 14,000,000 | |||||||
2008 Plan | ||||||||
SHARE-BASED COMPENSATION | ||||||||
Aggregate number of shares that can be purchased | 8,600,000 | |||||||
2010 Plan | ||||||||
SHARE-BASED COMPENSATION | ||||||||
Aggregate number of shares that can be purchased | 9,000,000 | |||||||
Number of different vesting schedules | item | 3 | |||||||
2010 Plan | Maximum | ||||||||
SHARE-BASED COMPENSATION | ||||||||
Expiration term of options granted | 10 years | |||||||
2010 Plan | Minimum | ||||||||
SHARE-BASED COMPENSATION | ||||||||
Expiration term of options granted | 7 years | |||||||
2010 Plan | Vesting schedule one | ||||||||
SHARE-BASED COMPENSATION | ||||||||
Percentage of options vesting on the stated vesting commencement date | 100.00% | |||||||
2010 Plan | Vesting schedule two | ||||||||
SHARE-BASED COMPENSATION | ||||||||
Percentage of options vesting on the second anniversary of the stated vesting commencement date | 25.00% | |||||||
Percentage of options vesting on the third anniversary of the stated vesting commencement date | 25.00% | |||||||
Percentage of options vesting on the fourth anniversary of the stated vesting commencement date | 25.00% | |||||||
Percentage of options vesting on the first anniversary of the stated vesting commencement date | 25.00% | |||||||
2010 Plan | Vesting schedule three | ||||||||
SHARE-BASED COMPENSATION | ||||||||
Percentage of options vesting on the first anniversary of the stated vesting commencement date | 25.00% | |||||||
Percentage of options vesting each quarter for the second anniversary of the stated vesting commencement date | 6.25% | |||||||
Percentage of options vesting each quarter for the third anniversary of the stated vesting commencement date | 6.25% | |||||||
Percentage of options vesting each quarter for the fourth anniversary of the stated vesting commencement date | 6.25% | |||||||
2011 Plan | ||||||||
SHARE-BASED COMPENSATION | ||||||||
Aggregate number of shares that can be purchased | 22,000,000 | |||||||
Percentage of ordinary shares reserved in the Award Pool to the then issued and outstanding ordinary shares, immediately after automatic increase pursuant to the plan | 5.00% | |||||||
Number of different vesting schedules | item | 4 | |||||||
2011 Plan | Maximum | ||||||||
SHARE-BASED COMPENSATION | ||||||||
Specified percentage of total issued and outstanding ordinary shares which can be issued under the plan | 5.00% | |||||||
Expiration term of options granted | 10 years | |||||||
2011 Plan | Minimum | ||||||||
SHARE-BASED COMPENSATION | ||||||||
Threshold percentage of the unissued ordinary shares reserved in the Award Pool to the total then issued and outstanding ordinary shares, under which the shares reserved in the Award Pool shall be increased automatically | 1.00% | |||||||
Expiration term of options granted | 6 years | |||||||
2011 Plan | Vesting schedule one | ||||||||
SHARE-BASED COMPENSATION | ||||||||
Percentage of options vesting on the stated vesting commencement date | 100.00% | |||||||
2011 Plan | Vesting schedule two | ||||||||
SHARE-BASED COMPENSATION | ||||||||
Percentage of options vesting on the second anniversary of the stated vesting commencement date | 25.00% | |||||||
Percentage of options vesting on the third anniversary of the stated vesting commencement date | 25.00% | |||||||
Percentage of options vesting on the fourth anniversary of the stated vesting commencement date | 25.00% | |||||||
Percentage of options vesting on the first anniversary of the stated vesting commencement date | 25.00% | |||||||
2011 Plan | Vesting schedule three | ||||||||
SHARE-BASED COMPENSATION | ||||||||
Percentage of options vesting on the first anniversary of the stated vesting commencement date | 25.00% | |||||||
Percentage of options vesting each quarter for the second anniversary of the stated vesting commencement date | 6.25% | |||||||
Percentage of options vesting each quarter for the third anniversary of the stated vesting commencement date | 6.25% | |||||||
Percentage of options vesting each quarter for the fourth anniversary of the stated vesting commencement date | 6.25% | |||||||
2011 Plan | Vesting schedule four | ||||||||
SHARE-BASED COMPENSATION | ||||||||
Percentage of options vesting on the second anniversary of the stated vesting commencement date | 33.00% | |||||||
Percentage of options vesting on the third anniversary of the stated vesting commencement date | 33.00% | |||||||
Percentage of options vesting on the first anniversary of the stated vesting commencement date | 33.00% | |||||||
2007 and 2008 Option Plans | ||||||||
SHARE-BASED COMPENSATION | ||||||||
Expiration term of options granted | 9 years | |||||||
Number of different vesting schedules | item | 2 | |||||||
2007 and 2008 Option Plans | Vesting schedule one | ||||||||
SHARE-BASED COMPENSATION | ||||||||
Percentage of options vesting on the stated vesting commencement date | 100.00% | |||||||
2007 and 2008 Option Plans | Vesting schedule two | ||||||||
SHARE-BASED COMPENSATION | ||||||||
Percentage of options vesting on the second anniversary of the stated vesting commencement date | 50.00% | |||||||
Percentage of options vesting on the third anniversary of the stated vesting commencement date | 25.00% | |||||||
Percentage of options vesting on the fourth anniversary of the stated vesting commencement date | 25.00% |
SHARE-BASED COMPENSATION - STOC
SHARE-BASED COMPENSATION - STOCK OPTION ACTIVITY & OPTION PRICING MODEL (Details) | Dec. 23, 2014item$ / shares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2016CNY (¥)shares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2015CNY (¥)shares | Dec. 31, 2014USD ($)$ / sharesshares | Dec. 31, 2014CNY (¥)shares | Dec. 31, 2016CNY (¥)shares |
Number of options | ||||||||
Exercised (in shares) | shares | (1,325,241) | (1,325,241) | (8,776,032) | (8,776,032) | 0 | 0 | ||
ADS | ||||||||
Aggregate intrinsic value | ||||||||
Closing price of ordinary shares (in dollars per share) | $ 2.56 | |||||||
Ordinary shares | ||||||||
Aggregate intrinsic value | ||||||||
Closing price of ordinary shares (in dollars per share) | $ 0.16 | |||||||
Options | ||||||||
Number of options | ||||||||
Granted (in shares) | shares | 0 | 0 | 0 | 0 | 5,734,480 | 5,734,480 | ||
Outstanding at the end of the period (in shares) | shares | 11,811,536 | 11,811,536 | ||||||
Options | Minimum | ||||||||
Weighted average Exercise price | ||||||||
Granted (in dollars per shares) | $ 0.24 | $ 0.24 | $ 0.24 | |||||
Options | Maximum | ||||||||
Weighted average Exercise price | ||||||||
Granted (in dollars per shares) | $ 0.53 | $ 0.53 | $ 0.53 | |||||
Options | Employees | ||||||||
Number of options | ||||||||
Outstanding at the beginning of the period (in shares) | shares | 13,760,054 | 13,760,054 | 24,442,758 | 24,442,758 | ||||
Vested and expected to vest at the beginning of the period (in shares) | shares | 13,760,054 | 13,760,054 | 24,442,758 | 24,442,758 | ||||
Exercised (in shares) | shares | (1,325,241) | (1,325,241) | (6,980,032) | (6,980,032) | ||||
Forfeited (in shares) | shares | (1,496,736) | (1,496,736) | (3,682,672) | (3,682,672) | ||||
Outstanding at the end of the period (in shares) | shares | 10,938,077 | 10,938,077 | 13,760,054 | 13,760,054 | 24,442,758 | 24,442,758 | ||
Vested and expected to vest at the end of the period (in shares) | shares | 10,938,077 | 10,938,077 | 13,760,054 | 13,760,054 | 24,442,758 | 24,442,758 | ||
Exercisable at the end of the period (in shares) | shares | 10,318,816 | 9,521,520 | 10,318,816 | |||||
Weighted average Exercise price | ||||||||
Outstanding at the beginning of the period (in dollars per shares) | $ 0.27 | $ 0.32 | ||||||
Vested and expected to vest at the beginning of the period (in dollars per shares) | 0.27 | 0.32 | ||||||
Exercised (in dollars per shares) | 0.24 | 0.37 | ||||||
Forfeited (in dollars per shares) | 0.39 | 0.43 | ||||||
Outstanding at the end of the period (in dollars per shares) | 0.25 | 0.27 | $ 0.32 | |||||
Vested and expected to vest at the end of the period (in dollars per shares) | 0.25 | 0.27 | $ 0.32 | |||||
Exercisable at the end of the period (in dollars per shares) | $ 0.22 | $ 0.21 | ||||||
Weighted average remaining contractual term (Years) | ||||||||
Outstanding at the end of the period | 4 years 7 months 2 days | 4 years 7 months 2 days | 5 years 10 months 28 days | 5 years 10 months 28 days | 7 years 7 months 6 days | 7 years 7 months 6 days | ||
Vested and expected to vest at the end of the period | 4 years 7 months 2 days | 4 years 7 months 2 days | 5 years 10 months 28 days | 5 years 10 months 28 days | 7 years 7 months 6 days | 7 years 7 months 6 days | ||
Exercisable at the end of the period | 4 years 5 months 23 days | 4 years 5 months 23 days | 5 years 10 months 28 days | 5 years 10 months 28 days | ||||
Aggregate intrinsic value | ||||||||
Outstanding at the beginning of the period (in dollars) | $ | $ 3,358,000 | $ 6,466,000 | ||||||
Vested and expected to vest at the beginning of the period (in dollars) | $ | 3,358,000 | 6,466,000 | ||||||
Vested and expected to vest at the end of the period (in dollars) | $ | 76,000 | 3,358,000 | $ 6,466,000 | |||||
Exercisable at the end of the period (in dollars) | $ | 76,000 | 2,920,000 | ||||||
Outstanding at the end of the period (in dollars) | $ | 76,000 | $ 3,358,000 | $ 6,466,000 | |||||
Total intrinsic value of stock options exercised | 451,000 | ¥ 3,132,000 | ¥ 29,241,000 | ¥ 79,729,000 | ||||
Unrecognized share-based compensation cost (in CNY or dollars) | 24,000 | ¥ 164,000 | ||||||
Assumptions used in calculation of estimated fair value of options | ||||||||
Suboptimal exercise factor | item | 2.8 | |||||||
Risk-free interest rates (as a percent) | 2.18% | |||||||
Expected volatility (as a percent) | 55.60% | |||||||
Expected dividend yield (as a percent) | 0.00% | |||||||
Weighted average fair value of share option (in dollars per share) | $ 0.311 | |||||||
Total fair value of options vested | $ 85,000 | ¥ 590,000 | ¥ 3,098,000 | ¥ 14,064,000 | ||||
Options | Employees | Minimum | ||||||||
Aggregate intrinsic value | ||||||||
Period over which unrecognized share-based compensation cost are expected to be recognized | 3 months | 3 months | ||||||
Options | Employees | Maximum | ||||||||
Aggregate intrinsic value | ||||||||
Period over which unrecognized share-based compensation cost are expected to be recognized | 1 year | 1 year |
SHARE-BASED COMPENSATION - REST
SHARE-BASED COMPENSATION - RESTRICTED SHARES AWARD (Details) - Restricted shares | Dec. 11, 2015shares | Dec. 23, 2014shares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2016CNY (¥)shares | Dec. 31, 2015$ / sharesshares | Dec. 31, 2015CNY (¥)shares | Dec. 31, 2016CNY (¥)shares |
Number of ordinary shares | |||||||
Outstanding at the beginning of the period (in shares) | 44,406,588 | 44,406,588 | 14,925,016 | ||||
Granted (in shares) | 40,106,656 | ||||||
Vested (in shares) | (34,645,085) | (34,645,085) | (9,291,500) | ||||
Forfeited (in shares) | (2,743,280) | (2,743,280) | (1,333,584) | ||||
Outstanding at the end of the period (in shares) | 7,018,223 | 7,018,223 | 44,406,588 | ||||
Expected to vest at the end of the period (in shares) | 7,018,223 | 44,406,588 | 7,018,223 | ||||
Weighted average grant date fair value | |||||||
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 0.43 | $ 0.50 | |||||
Granted (in dollars per share) | $ / shares | 0.43 | ||||||
Vested (in dollars per share) | $ / shares | 0.43 | 0.49 | |||||
Forfeited (in dollars per share) | $ / shares | 0.44 | 0.52 | |||||
Outstanding at the end of the period (in dollars per share) | $ / shares | 0.46 | 0.43 | |||||
Expected to vest at the end of the period (in dollars per share) | $ / shares | $ 0.46 | $ 0.43 | |||||
Aggregate fair value of the unvested restricted shares | $ 3,207,000 | ¥ 22,268,000 | ¥ 125,097,000 | ||||
Total fair value of restricted shares vested | 14,897,000 | ¥ 103,433,000 | ¥ 29,492,000 | ||||
2011 Plan | Employees and directors | |||||||
SHARE-BASED COMPENSATION | |||||||
Shares issued (in shares) | 40,106,656 | 11,265,520 | |||||
Unrecognized share-based compensation cost | $ 1,501,000 | ¥ 10,419,000 | |||||
Period over which unrecognized share-based compensation cost are expected to be recognized | 8 months 12 days | 8 months 12 days |
SHARE-BASED COMPENSATION - SHAR
SHARE-BASED COMPENSATION - SHARE OPTIONS ISSUED TO NON-EMPLOYEES (Details) | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2016CNY (¥)shares |
ADS | ||
SHARE-BASED COMPENSATION | ||
Closing price of ordinary shares (in dollars per share) | $ 2.56 | |
Ordinary shares | ||
SHARE-BASED COMPENSATION | ||
Closing price of ordinary shares (in dollars per share) | $ 0.16 | |
Options | Non-employees | ||
SHARE-BASED COMPENSATION | ||
Options outstanding with exercise price below the closing price of the entity's ordinary share (in shares) | shares | 873,000 | 873,000 |
Aggregate intrinsic value | $ 100,000 | ¥ 696,000 |
SHARE-BASED COMPENSATION - RE87
SHARE-BASED COMPENSATION - RESTRICTED SHARE AWARD GRANTED TO NON-EMPLOYEE (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016USD ($)shares | Dec. 31, 2016CNY (¥)shares | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | |
Share-based compensation | ||||
Total compensation expense | $ 12,246 | ¥ 85,025 | ¥ 48,606 | ¥ 17,037 |
RSUs | Non-employees | ||||
Share-based compensation | ||||
Granted (in shares) | 454,912 | 454,912 | ||
Vested (in shares) | 454,912 | 454,912 | ||
Cost of revenues | ||||
Share-based compensation | ||||
Total compensation expense | $ 859 | ¥ 5,961 | 3,670 | 951 |
Sales and marketing expenses | ||||
Share-based compensation | ||||
Total compensation expense | 397 | 2,753 | 2,882 | 2,167 |
General and administrative expenses | ||||
Share-based compensation | ||||
Total compensation expense | 10,440 | 72,483 | 38,796 | 10,612 |
General and administrative expenses | RSUs | Non-employees | ||||
Share-based compensation | ||||
Total fair value of restricted shares vested | 194,000 | 1,320,000 | ||
Research and development expenses | ||||
Share-based compensation | ||||
Total compensation expense | $ 550 | ¥ 3,828 | ¥ 3,258 | ¥ 3,307 |
ACCUMULATED OTHER COMPREHENSI88
ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | |
Movement in accumulated other comprehensive income | |||
Balance at beginning of year | ¥ 721,687 | ¥ 834,947 | |
Amounts reclassified from accumulated other comprehensive income | $ (512) | (3,552) | |
Balance at end of year | (20,527) | (142,520) | 721,687 |
Accumulated other comprehensive income | |||
Movement in accumulated other comprehensive income | |||
Balance at beginning of year | 3,903 | 1,786 | |
Other comprehensive income before reclassification | 366 | 2,117 | |
Amounts reclassified from accumulated other comprehensive income | (3,552) | ||
Balance at end of year | 103 | 717 | 3,903 |
Foreign currency translation | |||
Movement in accumulated other comprehensive income | |||
Balance at beginning of year | 105 | (159) | |
Other comprehensive income before reclassification | (293) | 264 | |
Balance at end of year | (27) | (188) | 105 |
Unrealized holding gain on available-for-sale investments | |||
Movement in accumulated other comprehensive income | |||
Balance at beginning of year | 3,798 | 1,945 | |
Other comprehensive income before reclassification | 659 | 1,853 | |
Amounts reclassified from accumulated other comprehensive income | (3,552) | ||
Balance at end of year | $ 130 | ¥ 905 | ¥ 3,798 |
MAINLAND CHINA EMPLOYEE CONTR89
MAINLAND CHINA EMPLOYEE CONTRIBUTION PLAN (Details) | 12 Months Ended | |||
Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | |
MAINLAND CHINA EMPLOYEE CONTRIBUTION PLAN | ||||
Total expenses for the plan | $ 7,730,000 | ¥ 53,669,000 | ¥ 53,820,000 | ¥ 46,178,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | |
Income taxes | ||||
Statutory tax rate (as a percent) | 25.00% | 25.00% | 25.00% | 25.00% |
Loss before income tax expense | ||||
Non-PRC | $ (5,628) | ¥ (39,075) | ¥ (2,302) | ¥ 8,533 |
PRC | (125,443) | (870,949) | (109,047) | (18,471) |
Loss before income taxes | (131,071) | (910,024) | (111,349) | (9,938) |
Income tax expense (benefit) | ||||
Current | 159 | 1,104 | 2,665 | 11,837 |
Deferred | 450 | 3,125 | (25,279) | (14,934) |
Income tax expense (benefit) | $ 609 | ¥ 4,229 | ¥ (22,614) | ¥ (3,097) |
PRC | ||||
Income taxes | ||||
Statutory tax rate (as a percent) | 25.00% | 25.00% | ||
PRC | HNTE | ||||
Income taxes | ||||
Preferential tax rate (as a percent) | 15.00% | 15.00% | ||
ChinaCache Ireland Limited ("ChinaCache IE") | Ireland | ||||
Income taxes | ||||
Foreign statutory corporate income tax rate (as a percent) | 12.50% | 12.50% | ||
ChinaCache North America, Inc. | United States of America | Maximum | ||||
Income taxes | ||||
Foreign statutory corporate income tax rate (as a percent) | 35.00% | 35.00% | ||
ChinaCache North America, Inc. | United States of America | California | ||||
Income taxes | ||||
State Income Tax (as a percent) | 8.84% | 8.84% | ||
ChinaCache Assets LLC ("CCAL") | United States of America | Maximum | ||||
Income taxes | ||||
Foreign statutory corporate income tax rate (as a percent) | 35.00% | 35.00% | ||
ChinaCache Assets LLC ("CCAL") | United States of America | California | ||||
Income taxes | ||||
State Income Tax (as a percent) | 8.84% | 8.84% | ||
ChinaCache Networks Limited ("ChinaCache UK") | United Kingdom | ||||
Income taxes | ||||
Foreign statutory corporate income tax rate (as a percent) | 20.00% | 20.00% | ||
ChinaCache Networks Hong Kong Ltd. ("ChinaCache HK") | HK | ||||
Income taxes | ||||
Foreign statutory corporate income tax rate (as a percent) | 16.50% | 16.50% | ||
ChinaCache Beijing | PRC | HNTE | Tax Year 2013 to 2015 | ||||
Income taxes | ||||
Preferential tax rate (as a percent) | 15.00% | 15.00% | ||
Beijing Blue IT | PRC | HNTE | Tax Year 2015 to 2018 | ||||
Income taxes | ||||
Preferential tax rate (as a percent) | 15.00% | 15.00% |
INCOME TAXES - TAX RECONCILIATI
INCOME TAXES - TAX RECONCILIATION (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | |
INCOME TAXES | ||||
PRC statutory income tax rate (as a percent) | 25.00% | 25.00% | 25.00% | 25.00% |
Percentage of tax deduction for qualified research and development expenses | 50.00% | 50.00% | 50.00% | 50.00% |
Reconciliation of tax computed by applying statutory income tax rate to the income tax expense | ||||
Loss before income tax expense | $ (131,071) | ¥ (910,024) | ¥ (111,349) | ¥ (9,938) |
Income tax computed at PRC statutory tax rate of 25% | (32,768) | (227,506) | (27,838) | (2,485) |
Preferential tax rates | 9,907 | 68,787 | 3,335 | 2,192 |
International rate differences | (51) | (361) | (1,745) | 2,169 |
Additional 50% tax deduction for qualified research and development expenses | (1,428) | (9,915) | (9,531) | (10,861) |
Non-deductible expenses | 3,688 | 25,611 | 18,564 | 8,629 |
Effect of changes in tax rates on deferred taxes | 317 | 2,203 | (1,406) | (5,575) |
Changes in unrecognized tax benefits | (190) | (1,316) | (1,939) | 616 |
Changes in the valuation allowance | 21,134 | 146,726 | (1,949) | 1,980 |
Other permanent difference | (105) | 238 | ||
Income tax expense (benefit) | $ 609 | ¥ 4,229 | ¥ (22,614) | ¥ (3,097) |
INCOME TAXES - COMPONENTS OF DE
INCOME TAXES - COMPONENTS OF DEFERRED TAX ASSETS AND LIABILITIES (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) |
Current: | |||
- Allowance for doubtful accounts | $ 1,347 | ¥ 9,349 | ¥ 8,392 |
- Deferred government grant | 281 | 1,950 | 2,454 |
- Accruals | 974 | 6,764 | 7,077 |
Less: valuation allowance | (2,602) | (18,063) | |
Net current deferred tax assets | 17,923 | ||
Non-current: | |||
- Tax losses | 7,938 | 55,122 | 8,112 |
- Property and equipment | 353 | 2,451 | 2,093 |
- Deferred government grant | 242 | 1,681 | 1,266 |
- Intangible assets | 89 | 615 | 322 |
- Long-term investment impairment | 130 | 900 | |
- Impairment loss for long lived assets | 9,840 | 68,318 | |
Less: valuation allowance | $ (18,592) | ¥ (129,087) | (425) |
Net non-current deferred tax assets | 11,368 | ||
Total Deferred tax assets | ¥ 29,291 |
INCOME TAXES - OPERATING LOSS C
INCOME TAXES - OPERATING LOSS CARRYFORWARDS (Details) - Dec. 31, 2016 | USD ($) | CNY (¥) |
PRC Subsidiaries | ||
Income taxes | ||
Net tax operating losses | $ 9,570,000 | ¥ 66,445,090 |
INCOME TAXES - UNRECOGNIZED TAX
INCOME TAXES - UNRECOGNIZED TAX BENEFITS (Details) | 12 Months Ended | ||||
Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | Dec. 31, 2016CNY (¥) | |
INCOME TAXES | |||||
Unrecognized tax benefits | $ 3,105,000 | ¥ 22,978,000 | ¥ 21,558,000 | ||
Unrecognized tax benefit presented on a net basis against the deferred tax assets related to tax loss carry forwards | $ 968,000 | 6,828,000 | ¥ 6,725,000 | ||
Period in which the amount of unrecognized tax benefits will change | 12 months | 12 months | |||
Penalty expense | $ (95,000) | ¥ (658,000) | 2,206,000 | ¥ 99,000 | |
Interest expense | 125,000 | 868,000 | 1,619,000 | 2,031,000 | |
Roll-forward of accrued unrecognized tax benefits | |||||
Balance-beginning | 2,616,000 | 18,165,000 | 24,917,000 | ||
Increase based on tax positions related to the current year | 321,000 | ||||
Decrease of tax positions related to prior year | (205,000) | (1,420,000) | (2,260,000) | ||
Reclassified as liabilities held for sale (Note 9) | (4,813,000) | ||||
Balance-ending | $ 2,411,000 | ¥ 16,745,000 | ¥ 18,165,000 | ¥ 24,917,000 |
RELATED PARTY BALANCES AND TR95
RELATED PARTY BALANCES AND TRANSACTIONS - RELATIONSHIP WITH THE COMPANY (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Mr. Wang Song | |
Related party balances and transactions | |
Relationship with the Company | The Co-Founder and Director of the Company |
Ms. Kou Xiaohong | |
Related party balances and transactions | |
Relationship with the Company | The Co-Founder and Director of the Company |
Flashapp | |
Related party balances and transactions | |
Relationship with the Company | A company under the significant influence of the Company |
RELATED PARTY BALANCES AND TR96
RELATED PARTY BALANCES AND TRANSACTIONS - DUE FROM RELATED PARTY (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | |
Changes in related party balances | |||
Balance at the beginning of the period | ¥ (18) | ¥ (18) | |
Service charged by related party | (81) | ||
Service fee paid to related party | 81 | ||
Balance at the end of the period | $ (3) | (18) | (18) |
Ms. Kou Xiaohong | |||
Changes in related party balances | |||
Balance at the beginning of the period | (18) | (18) | |
Service fee paid to related party | |||
Balance at the end of the period | $ (3) | (18) | (18) |
Flashapp | |||
Changes in related party balances | |||
Service charged by related party | (81) | ||
Service fee paid to related party | ¥ 81 |
ISSUANCE OF ORDINARY SHARES F97
ISSUANCE OF ORDINARY SHARES FROM EQUITY OFFERING (Details) - CNY (¥) | 1 Months Ended | 12 Months Ended |
Mar. 31, 2014 | Dec. 31, 2014 | |
Issuance of ordinary shares | ||
Value of shares issued (in RMB or US$) | ¥ 158,044,000 | |
Total cash consideration paid to the selling shareholders | ¥ 183,858,000 | |
Ordinary shares | ||
Issuance of ordinary shares | ||
Shares issued (in shares) | 24,894,647 | |
Value of shares issued (in RMB or US$) | ¥ 158,044,000 | |
Ordinary shares purchased from existing shareholders (in shares) | 28,960,922 | |
Total cash consideration paid to the selling shareholders | ¥ 183,858,000 |
RESTRICTED NET ASSETS (Details)
RESTRICTED NET ASSETS (Details) | 12 Months Ended | ||
Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | |
RESTRICTED NET ASSETS | |||
Minimum percentage of after tax profits to be allocated to general reserve fund | 10.00% | 10.00% | |
Maximum threshold, expressed as a percentage of an entity's general reserve fund to its registered capital, for which allocations of after-tax profits to the general reserve fund are required | 50.00% | ||
Amount appropriated to the statutory reserve funds | $ 191,000 | ¥ 1,326,000 | ¥ 1,326,000 |
Restricted net assets of the Company's PRC subsidiaries and VIEs | $ 46,563,000 | ¥ 323,289,000 |
LOSS PER SHARE (Details)
LOSS PER SHARE (Details) ¥ / shares in Units, $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2016CNY (¥)¥ / sharesshares | Dec. 31, 2015CNY (¥)¥ / sharesshares | Dec. 31, 2014CNY (¥)¥ / sharesshares | |
Numerator: | ||||
Net loss attributable to ordinary shareholders: | $ (131,568) | ¥ (913,477,000) | ¥ (88,691,000) | ¥ (6,841,000) |
Denominator: | ||||
Number of shares outstanding, opening | 400,165,607 | 400,165,607 | 413,147,475 | 373,380,252 |
Weighted average number of shares issued | 20,702,130 | 20,702,130 | 1,423,986 | 53,904,519 |
Weighted average number of shares repurchased | (12,678,015) | (12,678,015) | (7,421,952) | (23,882,843) |
Weighted-average number of shares outstanding - Basic | 408,189,722 | 408,189,722 | 407,149,509 | 403,401,928 |
Weighted-average number of shares outstanding - Diluted | 408,189,722 | 408,189,722 | 407,149,509 | 403,401,928 |
Loss per share | ||||
-Basic (in CNY or dollars per share) | (per share) | $ (0.32) | ¥ (2.24) | ¥ (0.22) | ¥ (0.02) |
-Diluted (in CNY or dollars per share) | (per share) | $ (0.32) | ¥ (2.24) | ¥ (0.22) | ¥ (0.02) |
Options exercised (in shares) | 1,325,241 | 1,325,241 | 8,776,032 | 0 |
Restricted shares vested (in shares) | 33,762,181 | 33,762,181 | 9,291,500 | 0 |
Ordinary shares | ||||
Loss per share | ||||
Share re issued to depository bank (in shares) | 163,904 | 31,379,008 | ||
Share issued to depository bank (in shares) | 23,000,000 | 23,000,000 | ||
Consideration received from issuance of share | ¥ | ¥ 0 | ¥ 0 |
FAIR VALUE MEASUREMENT (Details
FAIR VALUE MEASUREMENT (Details) - Investee D - Level 3 - Recurring basis ¥ in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | |
Reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs | |||
Fair value at beginning of the year | ¥ 3,973 | ¥ 3,068 | |
Changes in fair value | 0 | 905 | |
Fair value at end of the year | $ 572 | ¥ 3,973 | ¥ 3,973 |
COMMITMENTS AND CONTINGENCIE101
COMMITMENTS AND CONTINGENCIES (Details) | 12 Months Ended | ||||
Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | Dec. 31, 2016CNY (¥) | |
COMMITMENTS AND CONTINGENCIES | |||||
Total rental expense under all operating leases | $ 3,163,000 | ¥ 21,962,000 | ¥ 22,100,000 | ¥ 20,568,000 | |
Future minimum lease payments under non-cancelable operating leases in relation to office premises | |||||
2,017 | 1,379,000 | ¥ 9,573,000 | |||
2,018 | 33,000 | 229,000 | |||
Total | 1,412,000 | 9,802,000 | |||
Purchase Commitments | |||||
Outstanding purchase commitments in relation to bandwidth and cloud infrastructure | $ 31,126,000 | ¥ 216,106,000 |
SUBSEQUENT EVENT (Details)
SUBSEQUENT EVENT (Details) | Oct. 30, 2017USD ($) | Oct. 20, 2017USD ($) | Oct. 17, 2017USD ($) | Sep. 30, 2017CNY (¥) | Aug. 31, 2017USD ($) | Aug. 31, 2017CNY (¥) | Jul. 31, 2017USD ($)building | Jul. 31, 2017CNY (¥)building | Feb. 29, 2016employee | Nov. 07, 2017USD ($) | Nov. 07, 2017CNY (¥) | Oct. 30, 2017CNY (¥) | Oct. 20, 2017CNY (¥) | Oct. 18, 2017USD ($) | Oct. 18, 2017CNY (¥) | Oct. 17, 2017CNY (¥) | May 31, 2017USD ($) | May 31, 2017CNY (¥) |
Xin Run, Beijing Shouming, Beijing Zhao Du and Xin Run's Tianjin Branch | Arbitration for labor dispute | ||||||||||||||||||
SUBSEQUENT EVENTS | ||||||||||||||||||
Number of employees | employee | 30 | |||||||||||||||||
Subsequent event | Commercial Bank | Two-year credit facility | ||||||||||||||||||
SUBSEQUENT EVENTS | ||||||||||||||||||
Term of debt | 2 years | |||||||||||||||||
Amount of credit facility | $ 17,284,000 | ¥ 8,120,000,000 | ||||||||||||||||
Subsequent event | Commercial Bank | Two-year credit facility | Minimum | ||||||||||||||||||
SUBSEQUENT EVENTS | ||||||||||||||||||
Interest rate (as a percent) | 150.00% | 150.00% | ||||||||||||||||
Subsequent event | Xin Run, Beijing Shouming, Beijing Zhao Du and Xin Run's Tianjin Branch | Arbitration for labor dispute | ||||||||||||||||||
SUBSEQUENT EVENTS | ||||||||||||||||||
Approximate amount of compensation or damages payable | $ 86,000 | ¥ 8,600,000 | ||||||||||||||||
Subsequent event | Xin Run | ||||||||||||||||||
SUBSEQUENT EVENTS | ||||||||||||||||||
Number of data center building sold | building | 2 | 2 | ||||||||||||||||
Subsequent event | Xin Run | Commercial Bank | Eighteen-month credit facility | ||||||||||||||||||
SUBSEQUENT EVENTS | ||||||||||||||||||
Term of debt | 18 months | |||||||||||||||||
Amount of credit facility | $ 7,201,000 | ¥ 850,000,000 | ||||||||||||||||
Interest rate (as a percent) | 10.00% | 10.00% | ||||||||||||||||
Subsequent event | Xin Run | Commercial Bank | Three-year credit facility | ||||||||||||||||||
SUBSEQUENT EVENTS | ||||||||||||||||||
Term of debt | 3 years | |||||||||||||||||
Amount of credit facility | $ 34,567,000 | ¥ 8,240,000,000 | ||||||||||||||||
Interest rate (as a percent) | 8.00% | 8.00% | ||||||||||||||||
Amount of credit facility for working capital | $ 21,604,000 | ¥ 150,000,000 | ||||||||||||||||
Amount of credit facility for capital expenditure | $ 12,963,000 | ¥ 90,000,000 | ||||||||||||||||
Amount of credit facility drawn down | $ 21,604,000 | ¥ 150,000,000 | ||||||||||||||||
Subsequent event | Xin Run | Financial Institution | ||||||||||||||||||
SUBSEQUENT EVENTS | ||||||||||||||||||
Amount of credit facility | $ 28,806,000 | ¥ 8,200,000,000 | ||||||||||||||||
Subsequent event | Xin Run | Construction company | Data center building case | ||||||||||||||||||
SUBSEQUENT EVENTS | ||||||||||||||||||
Amount of construction fees not paid | $ 10,644,000 | ¥ 873,900,000 | ||||||||||||||||
Subsequent event | Xin Run | BFSMC | Data center sale case | ||||||||||||||||||
SUBSEQUENT EVENTS | ||||||||||||||||||
Amount of sought payment | $ 15,210,000 | ¥ 8,105,600,000 | ||||||||||||||||
Amount of provision made | ¥ | ¥ 0 |
CONDENSED FINANCIAL INFORMAT103
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY - BALANCE SHEETS (Details) | Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015USD ($) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | Dec. 31, 2013CNY (¥) |
Current assets: | ||||||
Cash and cash equivalents | $ 19,433,000 | ¥ 134,924,000 | ¥ 606,796,000 | |||
Prepaid expenses and other current assets | 8,206,000 | 56,976,000 | 31,560,000 | |||
Short term investment | 26,169,000 | |||||
Total current assets | 245,735,000 | 1,706,139,000 | 1,986,857,000 | |||
Non-current assets: | ||||||
Property and equipment, net | 499,946,000 | |||||
Long term investments | 4,920,000 | 34,159,000 | 50,157,000 | |||
Total non-current assets | 10,181,000 | 70,684,000 | 631,759,000 | |||
TOTAL ASSETS | 255,916,000 | 1,776,823,000 | 2,618,616,000 | |||
Current liabilities: | ||||||
Accrued employee benefits | 6,659,000 | 46,233,000 | 44,690,000 | |||
Accrued expenses and other payables | 7,590,000 | 52,697,000 | 76,409,000 | |||
Total current liabilities | 268,499,000 | 1,864,184,000 | 1,779,700,000 | |||
Total liabilities | 276,443,000 | 1,919,343,000 | 1,896,929,000 | |||
Shareholders' equity / (deficit) | ||||||
Ordinary shares (US$0.0001 par value; 1,000,000,000 and 1,000,000,000 shares authorized; 400,069,875 and 409,339,219 shares issued and outstanding as of December 31, 2015 and 2016, respectively) | 48,000 | 334,000 | 310,000 | |||
Additional paid-in capital | 225,033,000 | 1,562,408,000 | 1,473,468,000 | |||
Treasury stock | (3,533,000) | (24,531,000) | (94,275,000) | |||
Statutory reserves | 191,000 | 1,326,000 | 1,326,000 | |||
Accumulated deficit | (242,324,000) | (1,682,459,000) | (663,506,000) | |||
Accumulated other comprehensive income | 103,000 | 717,000 | 3,903,000 | |||
Total shareholder's equity / (deficit) | (20,527,000) | (142,520,000) | 721,687,000 | ¥ 834,947,000 | ¥ 653,133,000 | |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY / (DEFICIT) | 255,916,000 | 1,776,823,000 | 2,618,616,000 | |||
Parent | ||||||
Current assets: | ||||||
Cash and cash equivalents | 3,523,000 | 24,463,000 | $ 6,678,000 | 46,363,000 | ¥ 73,408,000 | ¥ 117,626,000 |
Prepaid expenses and other current assets | 217,000 | 1,505,000 | 2,117,000 | |||
Short term investment | 26,169,000 | |||||
Total current assets | 3,740,000 | 25,968,000 | 74,649,000 | |||
Non-current assets: | ||||||
Property and equipment, net | 2,890,000 | |||||
Long term investments | 2,835,000 | 19,684,000 | 17,841,000 | |||
Investments in subsidiaries and consolidated VIEs | (26,382,000) | (183,170,000) | 629,483,000 | |||
Total non-current assets | (23,547,000) | (163,486,000) | 650,214,000 | |||
TOTAL ASSETS | (19,807,000) | (137,518,000) | 724,863,000 | |||
Current liabilities: | ||||||
Accrued expenses and other payables | 675,000 | 4,687,000 | 3,637,000 | |||
Total current liabilities | 675,000 | 4,687,000 | 3,637,000 | |||
Total liabilities | 675,000 | 4,687,000 | 3,637,000 | |||
Shareholders' equity / (deficit) | ||||||
Ordinary shares (US$0.0001 par value; 1,000,000,000 and 1,000,000,000 shares authorized; 400,069,875 and 409,339,219 shares issued and outstanding as of December 31, 2015 and 2016, respectively) | 48,000 | 334,000 | 310,000 | |||
Additional paid-in capital | 225,033,000 | 1,562,408,000 | 1,473,468,000 | |||
Treasury stock | (3,533,000) | (24,531,000) | (94,275,000) | |||
Statutory reserves | 191,000 | 1,326,000 | 1,326,000 | |||
Accumulated deficit | (242,324,000) | (1,682,459,000) | (663,506,000) | |||
Accumulated other comprehensive income | 103,000 | 717,000 | 3,903,000 | |||
Total shareholder's equity / (deficit) | (20,482,000) | (142,205,000) | 721,226,000 | |||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY / (DEFICIT) | $ (19,807,000) | ¥ (137,518,000) | ¥ 724,863,000 |
CONDENSED FINANCIAL INFORMAT104
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY BALANCE SHEETS (Parenthetical) (Details) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
CONDENSED BALANCE SHEETS | ||
Ordinary shares, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Ordinary shares, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Ordinary shares, shares issued (in shares) | 386,503,123 | 400,069,875 |
Ordinary shares, shares outstanding (in shares) | 409,339,219 | 400,069,875 |
Parent | ||
CONDENSED BALANCE SHEETS | ||
Ordinary shares, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Ordinary shares, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Ordinary shares, shares issued (in shares) | 409,339,219 | 400,069,875 |
Ordinary shares, shares outstanding (in shares) | 386,503,123 | 400,069,875 |
CONDENSED FINANCIAL INFORMAT105
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY - COMPREHENSIVE INCOME (LOSS) (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | |
CONDENSED STATEMENTS OF COMPREHENSIVE LOSS | ||||
General and administrative expenses | $ (36,872) | ¥ (256,007,000) | ¥ (202,518,000) | ¥ (144,003,000) |
Impairment of long term investments | (2,627) | (18,240,000) | 0 | 0 |
Operating loss | (132,881) | (922,591,000) | (118,964,000) | (17,489,000) |
Interest income | 672 | 4,669,000 | 4,618,000 | 5,529,000 |
Other income | 769 | 5,336,000 | 2,991,000 | 6,298,000 |
Foreign exchange gain | 2,047 | 14,209,000 | 13,164,000 | 3,944,000 |
Loss before income taxes | (131,071) | (910,024,000) | (111,349,000) | (9,938,000) |
Income tax expense | (609) | (4,229,000) | 22,614,000 | 3,097,000 |
Net loss | (131,680) | (914,253,000) | (88,735,000) | (6,841,000) |
Foreign currency translation | (42) | (293,000) | 264,000 | 46,000 |
Unrealized gain from available-for-sale investments | 95 | 659,000 | 1,853,000 | 583,000 |
Amounts reclassified from accumulated other comprehensive income | (512) | (3,552,000) | ||
Total other comprehensive income (loss), net of tax | (459) | (3,186,000) | 2,117,000 | 629,000 |
Comprehensive loss | (132,139) | (917,439,000) | (86,618,000) | (6,212,000) |
Parent | ||||
CONDENSED STATEMENTS OF COMPREHENSIVE LOSS | ||||
General and administrative expenses | (3,070) | (21,314,000) | (7,726,000) | (8,189,000) |
Impairment of long term investments | (1,763) | (12,240,000) | ||
Operating loss | (4,833) | (33,554,000) | (7,726,000) | (8,189,000) |
Interest income | 3 | 18,000 | 15,000 | 2,727,000 |
Other income | 950 | 6,593,000 | 3,376,000 | |
Foreign exchange gain | 2,046 | 14,209,000 | 13,284,000 | 8,213,000 |
Share of losses from subsidiaries and consolidated VIEs | (129,734) | (900,743,000) | (97,640,000) | (9,592,000) |
Loss before income taxes | (131,568) | (913,477,000) | (88,691,000) | (6,841,000) |
Net loss | (131,568) | (913,477,000) | (88,691,000) | (6,841,000) |
Foreign currency translation | (42) | (293,000) | 264,000 | 46,000 |
Unrealized gain from available-for-sale investments | 95 | 659,000 | 1,853,000 | 583,000 |
Amounts reclassified from accumulated other comprehensive income | (512) | (3,552,000) | ||
Total other comprehensive income (loss), net of tax | (459) | (3,186,000) | 2,117,000 | 629,000 |
Comprehensive loss | $ (132,027) | ¥ (916,663,000) | ¥ (86,574,000) | ¥ (6,212,000) |
CONDENSED FINANCIAL INFORMAT106
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY - CASH FLOWS (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | Dec. 31, 2014CNY (¥) | |
CONDENSED STATEMENTS OF CASH FLOWS | ||||
Net cash used in operating activities | $ (26,961) | ¥ (187,180) | ¥ 770,476 | ¥ 280,386 |
Cash flows from investing activities: | ||||
Cash paid for long term investments | (323) | (2,242) | (2,302) | (13,260) |
Cash received from sale of short term investment | 7,713 | 53,552 | ||
Net cash used in investing activities | (29,150) | (202,390) | (432,349) | (421,718) |
Cash flows from financing activities: | ||||
Consideration paid to selling shareholders | (183,858) | |||
Proceeds received on behalf of selling shareholders | 183,858 | |||
Proceeds from issuance of ordinary shares | 158,044 | |||
Proceeds from employee share options exercised | 1,092 | 7,579 | 16,993 | 13,975 |
Cash guaranteed as restricted cash | 68,191 | (8,191) | ||
Payment for repurchase of ordinary shares | (5,675) | (39,402) | (93,891) | |
Net cash provided by (used in) financing activities | (12,190) | (84,645) | (106,797) | 177,619 |
Net increase (decrease) in cash and cash equivalents | (68,301) | (474,215) | 231,330 | 36,287 |
Cash and cash equivalents at beginning of the year | 606,796 | |||
Effect of foreign exchange rate changes on cash | 2,105 | 14,617 | 9,009 | 1,500 |
Cash and cash equivalents at end of the year (Note 4) | 19,433 | 134,924 | 606,796 | |
Parent | ||||
CONDENSED STATEMENTS OF CASH FLOWS | ||||
Net cash used in operating activities | (2,217) | (15,395) | (4,528) | (1,120) |
Cash flows from investing activities: | ||||
Cash given to subsidiaries and consolidated VIEs | (283,068) | |||
Cash paid for long term investments | (265) | (1,842) | (1,302) | (2,692) |
Cash received from sale of short term investment | 3,864 | 26,828 | ||
Net cash used in investing activities | 3,599 | 24,986 | (1,302) | (285,760) |
Cash flows from financing activities: | ||||
Consideration paid to selling shareholders | (183,858) | |||
Proceeds received on behalf of selling shareholders | 183,858 | |||
Proceeds from issuance of ordinary shares | 158,044 | |||
Proceeds from employee share options exercised | 782 | 5,427 | 16,993 | 13,975 |
Cash guaranteed as restricted cash | 60,000 | |||
Cash received from an off-shore subsidiary | 42,946 | |||
Payment for repurchase of ordinary shares | (5,675) | (39,402) | (93,891) | |
Net cash provided by (used in) financing activities | (4,893) | (33,975) | (33,952) | 232,019 |
Net increase (decrease) in cash and cash equivalents | (3,511) | (24,384) | (39,782) | (54,861) |
Cash and cash equivalents at beginning of the year | 6,678 | 46,363 | 73,408 | 117,626 |
Effect of foreign exchange rate changes on cash | 356 | 2,484 | 12,737 | 10,643 |
Cash and cash equivalents at end of the year (Note 4) | $ 3,523 | ¥ 24,463 | ¥ 46,363 | ¥ 73,408 |