Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2019shares | |
Document and Entity Information | |
Entity Registrant Name | ChinaCache International Holdings Ltd. |
Entity Central Index Key | 0001498576 |
Document Type | 20-F |
Document Registration Statement | false |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | FY |
Document Period End Date | Dec. 31, 2019 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 436,656,529 |
Entity Interactive Data Current | Yes |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS ¥ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) |
Current assets: | |||
Cash and cash equivalents | $ 3,725 | ¥ 25,930 | ¥ 41,127 |
Restricted Cash | 2,185 | 15,214 | 5,461 |
Accounts receivable (net of allowance for doubtful accounts of RMB82,366 and RMB82,495 (US$11,850) as of December 31, 2018 and 2019, respectively) | 15,170 | 105,608 | 210,476 |
Prepaid expenses and other current assets, net | 16,937 | 117,912 | 169,635 |
Amounts due from related parties | 9 | 65 | |
Amounts due from subsidiaries held for sale | 64 | 447 | 2,698 |
Assets held for sale | 49,164 | 342,267 | 581,350 |
Total current assets | 87,254 | 607,443 | 1,010,747 |
Non-current assets: | |||
Property and equipment, net | 56,971 | 396,620 | 415,067 |
Intangible assets, net | 11 | 79 | 143 |
Land use right, net | 4,520 | 31,466 | 32,172 |
Cloud infrastructure construction in progress | 42,035 | 292,639 | 289,280 |
Long term investments | 4,327 | 30,126 | 30,148 |
Operating lease right-of-use asset | 18,876 | 131,408 | 0 |
Long term deposits and other non-current assets | 6,665 | 46,399 | 68,312 |
Total non-current assets | 133,405 | 928,737 | 835,122 |
TOTAL ASSETS | 220,659 | 1,536,180 | 1,845,869 |
Current liabilities: | |||
Accounts payable (including accounts payable of the VIEs without recourse to the Company of RMB316,963 and RMB261,502 (US$37,562) as of December 31, 2018 and 2019, respectively) | 39,977 | 278,312 | 339,263 |
Accrued employee benefits (including accrued employee benefits of the VIEs without recourse to the Company of RMB24,898 and RMB27,016 (US$3,881) as of December 31, 2018 and 2019, respectively) | 5,442 | 37,885 | 36,794 |
Accrued expenses and other current liabilities (including accrued expenses and other payables of the VIEs without recourse to the Company of RMB38,915 and RMB25,098 (US$3,605) as of December 31, 2018 and 2019, respectively) | 9,968 | 69,393 | 47,634 |
Other payables (including accrued expenses and other payables of the VIEs without recourse to the Company of RMB15,072 and RMB6,248 (US$897) as of December 31, 2018 and 2019, respectively) | 149,610 | 1,041,553 | 1,403,854 |
Income tax payable (including income taxes payable of the VIEs without recourse to the Company of RMB10,991 and RMB11,594 (US$1,665) as of December 31, 2018 and 2019, respectively) | 13,286 | 92,491 | 85,025 |
Amounts due to related parties (including amounts due to related parties of the VIEs without recourse to the Company of nil and nil as of December 31, 2018 and 2019, respectively) | 4 | 27 | 69 |
Short-term borrowings (including short-term borrowings of the VIEs without recourse to the Company of nil and nil as of December 31, 2018 and 2019, respectively) | 13,850 | ||
Current portion of long-term borrowings (including current portion of long-term borrowings of the VIEs without recourse to the Company of nil and nil as of December 31, 2018 and 2019, respectively) | 45,965 | 320,000 | 58,355 |
Current portion of finance lease obligations (including current portion of finance lease obligations of the VIEs without recourse to the Company of RMB1,284 and nil as of December 31, 2018 and 2019, respectively) | 3,743 | 26,057 | 20,299 |
Deferred government grant (including deferred government grant of the VIEs without recourse to the Company of RMB1,696 and RMB302 (US$43) as of December 31, 2018 and 2019, respectively) | 43 | 302 | 1,696 |
Amounts due to subsidiaries held for sale (including amount due to a subsidiary held for sale of the VIEs without recourse to the Company of RMB737 and nil as of December 31, 2018 and 2019, respectively) | 737 | ||
Current portion of operating lease liability (including current portion of operating lease liability of the VIEs without recourse to the Company of nil and RMB40,155 (US$5,768) as of December 31, 2018 and 2019, respectively) | 6,016 | 41,882 | 0 |
Liabilities held for sale (including liabilities held for sale of the VIEs without recourse to the Company of nil and nil as of December 31, 2018 and 2019, respectively) | 737 | 5,131 | 7,991 |
Total current liabilities | 274,791 | 1,913,033 | 2,015,567 |
Non-current liabilities: | |||
Long-term borrowings (including long-term borrowings of the VIEs without recourse to the Company of nil and nil as of December 31, 2018 and 2019, respectively) | 314,571 | ||
Non-current portion of capital lease obligations (including non-current portion of capital lease obligations of the VIEs without recourse to the Company of nil and nil as of December 31, 2018 and 2019, respectively) | 3,626 | 25,241 | 41,359 |
Non-current portion of operating lease liability (including non-current portion of operating lease liability of the VIEs without recourse to the Company of nil and RMB117,428 (US$16,867) as of December 31, 2018 and 2019, respectively) | 17,576 | 122,360 | 0 |
Deferred government grant (including deferred government grant of the VIEs without recourse to the Company of RMB14,350 and RMB14,350 (US$2,061) as of December 31, 2018 and 2019, respectively) | 2,061 | 14,350 | 14,350 |
Other non-current liability | 7,322 | 50,973 | |
Total non-current liabilities | 30,585 | 212,924 | 370,280 |
Total liabilities | 305,376 | 2,125,957 | 2,385,847 |
Commitments and contingencies | |||
Shareholders' deficit: | |||
Ordinary shares (US$0.0001 par value; 1,000,000,000 and 1,000,000,000 shares authorized; 429,404,977 and 436,656,529 shares issued and outstanding as of December 31, 2018 and 2019, respectively) | 44 | 338 | 338 |
Additional paid-in capital | 227,106 | 1,581,064 | 1,579,153 |
Treasury stock | (2,202) | (15,332) | (18,033) |
Statutory reserves | 190 | 1,326 | 1,326 |
Accumulated deficit | (309,150) | (2,152,240) | (2,100,569) |
Accumulated other comprehensive income/(loss) | (23) | (184) | 1,522 |
Total ChinaCache International Holdings Ltd. shareholders' deficit | (84,035) | (585,028) | (536,263) |
Noncontrolling interest | (682) | (4,749) | (3,715) |
Total shareholder's deficit | (84,717) | (589,777) | (539,978) |
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT | $ 220,659 | ¥ 1,536,180 | ¥ 1,845,869 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) ¥ in Thousands, $ in Thousands | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2019CNY (¥)shares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2018CNY (¥)shares | Dec. 31, 2017CNY (¥) |
Short-term loan of the VIEs without recourse to the Company | ¥ 13,850 | ||||
Accounts receivable, allowance for doubtful accounts (in CNY and dollars) | $ 11,850 | ¥ 82,495 | $ 11,832 | 82,366 | ¥ 81,301 |
Accounts payable of the VIEs without recourse to the Company | 39,977 | 278,312 | 339,263 | ||
Accrued employee benefits | 5,442 | 37,885 | 36,794 | ||
Other payables of the VIEs without recourse to the Company | 149,610 | 1,041,553 | 1,403,854 | ||
Amounts due to related parties of the VIEs without recourse to the Company | 4 | 27 | 69 | ||
Accrued expenses and other payables of the VIEs without recourse to the Company | 9,968 | 69,393 | 47,634 | ||
Income taxes payable of the VIEs without recourse to the Company | 13,286 | 92,491 | 85,025 | ||
Liabilities held for sale of the VIEs without recourse to the Company | 737 | 5,131 | 7,991 | ||
Long term borrowings of the VIEs without recourse to the Company | 314,571 | ||||
Less: current portion | 45,965 | 320,000 | 58,355 | ||
Current portion of capital lease obligations of the VIEs without recourse to the Company | 3,743 | 26,057 | 20,299 | ||
Deferred government grant | 43 | 302 | 1,696 | ||
Amount due to a subsidiary held for sale of the VIEs without recourse to the Company | 737 | ||||
Current portion of operating lease liability | 6,016 | 41,882 | 0 | ||
Non-current portion of capital lease obligations of the VIEs without recourse to the Company | 3,626 | 25,241 | 41,359 | ||
Operating lease liabilities - non-current | 17,576 | 122,360 | 0 | ||
Deferred government grant of the VIEs without recourse to the Company, non-current | $ 2,061 | ¥ 14,350 | ¥ 14,350 | ||
Ordinary shares, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | |||
Ordinary shares, shares authorized (in shares) | shares | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | |
Ordinary shares, shares issued (in shares) | shares | 429,608,977 | 429,608,977 | 429,404,977 | 429,404,977 | |
Ordinary shares, shares outstanding (in shares) | shares | 436,656,529 | 436,656,529 | 429,404,977 | 429,404,977 | |
Consolidated Variable Interest Entity (VIEs) | |||||
Short-term loan of the VIEs without recourse to the Company | ¥ 0 | ¥ 0 | |||
Accounts receivable, allowance for doubtful accounts (in CNY and dollars) | $ 11,468 | 79,839 | 80,484 | ||
Accounts payable of the VIEs without recourse to the Company | 37,562 | 261,502 | 316,963 | ||
Accrued employee benefits | 3,881 | 27,016 | 24,898 | ||
Other payables of the VIEs without recourse to the Company | 897 | 6,248 | 15,072 | ||
Amounts due to related parties of the VIEs without recourse to the Company | 0 | 0 | |||
Accrued expenses and other payables of the VIEs without recourse to the Company | 3,605 | 25,098 | 38,915 | ||
Income taxes payable of the VIEs without recourse to the Company | 1,665 | 11,594 | 10,991 | ||
Liabilities held for sale of the VIEs without recourse to the Company | 0 | 0 | |||
Long term borrowings of the VIEs without recourse to the Company | 0 | 0 | |||
Less: current portion | 0 | 0 | |||
Current portion of capital lease obligations of the VIEs without recourse to the Company | 0 | 0 | 1,284 | ||
Deferred government grant | 43 | 302 | 1,696 | ||
Amount due to a subsidiary held for sale of the VIEs without recourse to the Company | 312,018 | 0 | 737 | ||
Current portion of operating lease liability | 5,768 | 40,155 | 0 | ||
Non-current portion of capital lease obligations of the VIEs without recourse to the Company | 0 | 0 | |||
Operating lease liabilities - non-current | 16,867 | 117,428 | 0 | ||
Deferred government grant of the VIEs without recourse to the Company, non-current | $ 2,061 | ¥ 14,350 | ¥ 14,350 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2019CNY (¥)¥ / sharesshares | Dec. 31, 2018CNY (¥)¥ / sharesshares | Dec. 31, 2017CNY (¥)¥ / sharesshares | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||||
Net revenues | $ 131,953 | ¥ 918,628 | ¥ 922,591 | ¥ 852,568 |
Cost of revenues | (99,086) | (689,820) | (666,162) | (781,822) |
Gross profit | 32,867 | 228,808 | 256,429 | 70,746 |
Other operating loss, net | (4,191) | (29,176) | (27,352) | (19,483) |
Sales and marketing expenses | (5,180) | (36,059) | (36,428) | (61,770) |
General and administrative expenses | (21,856) | (152,160) | (128,331) | (142,721) |
Provision for doubtful accounts | (1,214) | (8,449) | (1,050) | (17,514) |
Research and development expenses | (7,765) | (54,059) | (68,412) | (81,748) |
Impairment of long-lived assets | (21,757) | |||
Impairment of long-term investments | 0 | 0 | (3,690) | |
Operating loss | (7,339) | (51,095) | (5,144) | (277,937) |
Interest income | 26 | 181 | 354 | 1,430 |
Interest expense | (7,171) | (49,924) | (33,543) | (18,665) |
Other (expenses)/income, net | 5,224 | 36,367 | 8,331 | (5,303) |
Gain on disposal of subsidiaries | 2,626 | 18,285 | ||
Foreign exchange (loss)/ gain | 208 | 1,448 | 4,200 | (11,043) |
Loss before income taxes | (6,426) | (44,738) | (25,802) | (311,518) |
Income tax expense | (1,144) | (7,967) | (11) | (59,648) |
Net loss | (7,570) | (52,705) | (25,813) | (371,166) |
Less: net loss attributable to noncontrolling interest | (149) | (1,034) | (1,395) | (2,005) |
Net loss attributable to the Company's shareholders | $ (7,421) | ¥ (51,671) | ¥ (24,418) | ¥ (369,161) |
Loss per share | ||||
Basic and Diluted (in CNY or dollars per share) | (per share) | $ (0.02) | ¥ (0.12) | ¥ (0.06) | ¥ (0.87) |
Shares used in loss per share computations: | ||||
Basic and Diluted | shares | 436,649,822 | 436,649,822 | 426,809,567 | 425,589,746 |
Foreign currency translation | $ (245) | ¥ (1,706) | ¥ (1,037) | ¥ 2,748 |
Unrealized holding loss on available-for-sale investments | 0 | (4,195) | ||
Amounts reclassified from accumulated other comprehensive income | 3,290 | |||
Total other comprehensive income/(loss) net of tax | (245) | (1,706) | (1,037) | 1,843 |
Comprehensive loss | (7,815) | (54,411) | (26,850) | (369,323) |
Less: comprehensive loss attributable to noncontrolling interest | (149) | (1,034) | (1,395) | (2,005) |
Comprehensive loss attributable to the Company's shareholders | $ (7,666) | ¥ (53,377) | ¥ (25,455) | ¥ (367,318) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Cash flows from operating activities: | ||||
Net loss | $ (7,570) | ¥ (52,705) | ¥ (25,813) | ¥ (371,166) |
Depreciation of property and equipment | 4,114 | 28,642 | 12,017 | 9,145 |
Amortization of intangible assets and land use right | 111 | 770 | 791 | 2,371 |
Noncash lease expense | 5,350 | 37,247 | ||
Allowance for doubtful accounts | 1,214 | 8,449 | 1,050 | 17,514 |
Impairment of long-lived assets | 21,757 | |||
Impairment of long-term investments | 0 | 0 | 3,690 | |
Loss/(gain) from disposal of property and equipment | (5,389) | (37,520) | 1,509 | (559) |
Gain from disposal of long-term investment | (7) | (50) | ||
Gain from disposal of subsidiaries | (2,626) | (18,285) | ||
Deferred tax expense | 30,220 | |||
Interest expense adjustment | 580 | 4,037 | 4,718 | 4,289 |
Foreign exchange /loss (gain) | (208) | (1,448) | (4,200) | 11,018 |
Share-based compensation | 272 | 1,891 | 4,157 | 10,936 |
Amortization of other non-current asset | 2,850 | 19,838 | 15,217 | |
Amortization of deferred government grant | (200) | (1,394) | (3,535) | (4,627) |
Changes in operating assets and liabilities: | ||||
Accounts receivable | 15,045 | 104,739 | (50,498) | 14,025 |
Prepaid expense and other current assets | 4,586 | 31,931 | (13,223) | (26,547) |
Long term deposits and other non-current assets | 298 | 2,075 | 14,413 | 58,274 |
Accounts payable | (8,755) | (60,951) | (28,661) | 60,938 |
Accrued employee benefits | 157 | 1,091 | (7,671) | (2,046) |
Accrued expenses and other payables | 4,005 | 27,882 | 31,331 | 61,443 |
Income tax payable | 2,220 | 15,459 | 6,688 | 286 |
Amounts due from a related party | (9) | (65) | ||
Amounts due to related parties | (6) | (42) | 51 | |
Operating lease liabilities | (380) | (2,647) | ||
Net cash (used in)/provided by operating activities | 15,652 | 108,944 | (41,659) | (99,039) |
Cash flows from investing activities: | ||||
Purchases of property and equipment and intangible assets | (825) | (5,742) | (39) | (15,236) |
Cash paid for long term investment | (362) | |||
Cash receipts from sales of short-term investments | 10 | 72 | ||
Cash paid for cloud infrastructure construction in progress | (7,771) | (54,097) | (161,072) | (73,697) |
Repayment of consideration refund with interest | (2,088) | (14,536) | ||
Proceeds from disposal of property and equipment | 5,548 | 38,625 | 300 | |
Net cash used in investing activities | (5,126) | (35,678) | (160,811) | (89,295) |
Cash flows from financing activities: | ||||
Proceeds from bank borrowings | 203,450 | 411,745 | ||
Payment of borrowing cost | (269) | (1,873) | (7,599) | (4,900) |
Repayment of bank borrowings | (10,608) | (73,850) | (72,771) | (183,151) |
Proceeds from employee for exercise of share options | 3 | 20 | ||
Payments of finance lease obligations | (3,727) | (25,950) | (46,484) | (74,687) |
Proceeds from sales and lease back | 2,945 | 20,500 | 64,000 | |
Proceeds from sales of ordinary shares from treasury stock | 388 | 2,701 | ||
Net cash (used in) / provided by financing activities | (11,268) | (78,452) | 140,596 | 149,007 |
Net decrease in cash and cash equivalents and restricted cash | (742) | (5,186) | (61,874) | (39,327) |
Cash and cash equivalents and restricted cash at beginning of the year | 6,692 | 46,589 | 106,709 | 156,620 |
Effect of foreign exchange rate changes on cash | (40) | (259) | 1,754 | (10,584) |
Cash, cash equivalents and restricted cash at end of the year | 5,910 | 41,144 | 46,589 | 106,709 |
Supplemental disclosures of cash flow information: | ||||
Interest paid | (5,506) | (38,339) | (16,416) | |
Interest received | 26 | 181 | 354 | 1,430 |
Income tax paid | (65) | (453) | ||
Supplemental disclosures of non-cash activities: | ||||
Acquisition of property and equipment included in accrued expenses and other payables | (50,675) | (352,786) | (393,287) | (257,375) |
Acquisition of property and equipment through finance leases | ¥ 65,824 | |||
Share settlement of individual income tax on exercise of options | ¥ 18,035 | |||
Obtaining right-of-use assets in exchange for lease liabilities | $ 234,951 | ¥ 166,745 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY/(DEFICIT) ¥ 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, 2016 | ¥ 334 | ¥ 1,562,408 | ¥ (24,531) | ¥ 1,326 | ¥ (1,682,459) | ¥ 716 | ¥ (315) | ¥ (142,521) | ||||||||
Balance at beginning of year (in shares) at Dec. 31, 2016 | shares | 409,339,219 | 409,339,219 | ||||||||||||||
Net loss | (369,161) | (2,005) | (371,166) | |||||||||||||
Other comprehensive loss | ||||||||||||||||
Foreign currency translation adjustment | 2,748 | 2,748 | ||||||||||||||
Unrealized holding gain on available-for-sale investment | (4,195) | (4,195) | ||||||||||||||
Amounts reclassified from accumulated other comprehensive income | 3,290 | 3,290 | ||||||||||||||
Share-based compensation | 10,937 | 10,937 | ||||||||||||||
Restricted shares vested | ¥ 4 | (4) | 24,531 | (24,531) | ||||||||||||
Restricted shares vested (in shares) | shares | 20,555,835 | 20,555,835 | ||||||||||||||
Settlement of restricted shares vested with shares held by depository bank (in shares) | shares | (3,627,709) | (3,627,709) | ||||||||||||||
Balance at end of year at Dec. 31, 2017 | ¥ 338 | 1,573,341 | 1,326 | (2,076,151) | 2,559 | (2,320) | (500,907) | |||||||||
Balance at end of year (in shares) at Dec. 31, 2017 | shares | 426,267,345 | 426,267,345 | ||||||||||||||
Net loss | (24,418) | (1,395) | (25,813) | |||||||||||||
Other comprehensive loss | ||||||||||||||||
Foreign currency translation adjustment | (1,037) | (1,037) | ||||||||||||||
Unrealized holding gain on available-for-sale investment | $ | $ 0 | |||||||||||||||
Share-based compensation | 4,157 | 4,157 | ||||||||||||||
Share Settlement Of Individual Income Tax On Exercise Of Options | (18,035) | (18,035) | ||||||||||||||
Exercise of employee stock options | 1,656 | 1 | 1,657 | |||||||||||||
Exercise of employee stock options (in shares) | shares | 1,096,896 | 1,096,896 | ||||||||||||||
Restricted shares vested | (1) | 1 | ||||||||||||||
Restricted shares vested (in shares) | shares | 2,040,736 | 2,040,736 | ||||||||||||||
Balance at end of year at Dec. 31, 2018 | ¥ 338 | 1,579,153 | (18,033) | 1,326 | (2,100,569) | 1,522 | (3,715) | (539,978) | ||||||||
Balance at end of year (in shares) at Dec. 31, 2018 | shares | 429,404,977 | 429,404,977 | ||||||||||||||
Net loss | (51,671) | (1,034) | (7,570,000) | (52,705) | ||||||||||||
Other comprehensive loss | ||||||||||||||||
Foreign currency translation adjustment | (1,706) | (245,000) | (1,706) | |||||||||||||
Unrealized holding gain on available-for-sale investment | $ | $ 0 | |||||||||||||||
Share-based compensation | 1,891 | 1,891 | ||||||||||||||
Proceeds from sales of treasury stock | $ 7,047,552 | 2,701 | 2,701 | |||||||||||||
Exercise of employee stock options | 20 | ¥ 20 | ||||||||||||||
Exercise of employee stock options (in shares) | shares | 44,000 | 44,000 | 44,000 | 44,000 | ||||||||||||
Restricted shares vested (in shares) | shares | 160,000 | 160,000 | 160,000 | 160,000 | ||||||||||||
Balance at end of year at Dec. 31, 2019 | $ 44,000 | ¥ 338 | $ 227,106,000 | ¥ 1,581,064 | $ (2,202,000) | ¥ (15,332) | $ 190,000 | ¥ 1,326 | $ (309,150,000) | ¥ (2,152,240) | $ (23,000) | ¥ (184) | $ (682,000) | ¥ (4,749) | $ (84,717,000) | ¥ (589,777) |
Balance at end of year (in shares) at Dec. 31, 2019 | shares | 436,656,529 | 436,656,529 |
ORGANIZATION
ORGANIZATION | 12 Months Ended |
Dec. 31, 2019 | |
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 (collectively "the Group") 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, 2019, 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 incorporation incorporation ownership Principal activities Subsidiaries ChChinaCache Network Technology (Beijing) Ltd. (“ChinaCache Beijing”) August 25, 2005 The PRC 100 % Provision of technical consultation services ChinaCache North America Inc. (“ChinaCache US”) August 16, 2007 United States of America 100 % Provision of content and application delivery services JNet Holdings Limited (“JNet Holdings”) September 27, 2007 British Virgin Islands 100 % Investment holding ChinaCache Networks Hong Kong Ltd. (“ChinaCache HK”) April 7, 2008 Hong Kong 100 % Provision of content and application delivery services ChChinaCache Xin Run Technology (Beijing) Co., Ltd. (“Xin Run”) July 18, 2011 The PRC 99 % (ii) Construction of cloud infrastructure Metasequoia Investment Inc. (“Metasequoia”) March 28, 2012 British Virgin Islands 100 % Investment holding Beijing Shou Ming Technology Co., Ltd. (“Beijing Shou Ming”) August 15, 2014 The PRC 99 % (ii) Computer hardware, technology development Beijing Zhao Du Technology Co., Ltd. (“Beijing Zhao Du”) (iii) August 15, 2014 The PRC 99 % (ii) Mechanical equipment lease ChinaCache Networks (UK) 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 Beijing Wangrun Technology Co., Ltd ("Beijing Wangrun") (iv) April 26, 2019 The PRC % Mechanical equipment lease Beijing Xiangqing Technology Co., Ltd ("Beijing Xiangqing") (iv) April 28, 2019 The PRC % Mechanical equipment lease Beijing Shuosen Technology Co., Ltd("Beijing Shuosen") (iv) April 28, 2019 The PRC % Mechanical equipment lease ChinaCache ShenRong Technology (Hongkong) Limited ("ShenRong HK") (iv) December 16,2019 Hong Kong % Mechanical equipment lease VIEs Beijing Blue I.T. Technologies Co., Ltd. (“Beijing Blue IT”) (i) June 7, 1998 The PRC — Provision of content and application delivery services Beijing Jingtian Technology Limited (“Beijing Jingtian”) (i) September 1, 2005 The PRC — Provision of content and application delivery services ChinaCache Shouming Technology (Beijing) Co., Ltd. ("ChinaCache Shouming") (i) June 6, 2018 The PRC Technology Development (i) (ii) (iii) (iv) In February 2019, one of the Company’s subsidiaries, ChinaCache Ireland Limited, which has no material operation, was deregistered. In May 2019, Xin Run transferred its 100% equity interests in Beijing Shuo Ge Technology Co., Ltd (“Beijing Shuo Ge”) to a buyer (Note 9). Through the Company's subsidiaries in the PRC, the Company signed a series of contracts with certain VIEs, specifically Beijing Blue IT in September 2005, Beijing Jingtian in July 2008, and ChinaCache Shouming September 2018. The following is a summary of the various VIE agreements: Exclusive option agreements Pursuant to the exclusive option agreement amongst the Company and the Nominal Shareholders of Beijing Blue IT in September 2005, the Nominal Shareholders of Beijing Blue IT irrevocably granted the Company or its designated party, an exclusive option to purchase all or part of the equity interests held by the Nominal 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 Nominal 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 Nominal Shareholders upon the exercise of the exclusive option is required to be remitted in full to the Company. Beijing Blue IT cannot declare any profit distributions or grant loans in any form without the prior written consent of the Company. The Nominal Shareholders of Beijing Blue IT must remit in full any funds received from Beijing Blue IT to the Company, in the event any distributions are made by the Beijing Blue IT pursuant to any written consents of the Company. Similar exclusive option agreements were signed by ChinaCache Beijing with Beijing Jingtian in July 2008, and by Xin Run with ChinaCache Shouming in September 2018. All the afore-mentioned exclusive option agreements were valid for ten years, and can be renewed for an additional ten years at the sole discretion of the Company/ ChinaCache Beijing /Xin Run, and the times of such renewals are unlimited. The agreement amongst the Company and the Nominal Shareholders of Beijing Blue IT has been renewed and will expire on January 20, 2026. The agreement amongst the ChinaCache and the Nominal Shareholders of Beijing Jingtian has been renewed and will expire on January 15, 2029. The agreement amongst the Xin Run and the Nominal Shareholders of ChinaCache Shouming will be expired on August 20, 2028. Exclusive business cooperation agreements Pursuant to the exclusive business cooperation agreement between ChinaCache Beijing/Xin Run and the VIEs, ChinaCache Beijing/Xin Run 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/Xin Run. 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, see “Exclusive technical support and service agreement/Exclusive technical consultation and training agreement/Equipment leasing agreement”. The service fees charged to Beijing Jingtian/ ChinaCache Shouming is based on 100% of their net income respectively. All the Exclusive business cooperation agreements were valid for ten years, and ChinaCache Beijing/Xin Run can at its sole discretion renew at a term of its choice through written confirmation. The agreement between ChinaCache Beijing and Beijing Blue IT has been renewed and will expire on September 23, 2025. The agreement amongst the ChinaCache and the Nominal Shareholders of Beijing Jingtian has been renewed and will expire on January 15, 2029. The agreement between Xin Run and ChinaCache Shouming was signed in September 2018, and will be expired on August 20, 2028. 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 Nominal 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 Nominal Shareholders of Beijing Blue IT 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 extended for another ten years upon mutual written consent of the Company and the Nominal Shareholders of Beijing Blue IT. On January 20, 2016, the Nominal Shareholders of Beijing Blue IT entered into another loan agreement with the Company. Pursuant to this agreement, the Company provided an interest-free loan facility of RMB10,000,000 to the Nominal 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 Nominal Shareholders of Beijing Blue IT entered into another loan agreement with the Company. Pursuant to this agreement, the Company provided an interest-free loan facility of RMB20,000,000 to the Nominal 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 Nominal 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 Nominal 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 Nominal Shareholders of Beijing Jingtian. Xin Run also provided a loan of RMB10,000,000 to the Nominal Shareholders of ChinaCache Shouming for their investment in the registered share capital. In addition, the Company, through Xin Run, agreed to provide unlimited financial support to ChinaCache Shouming 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 Xin Run and the Nominal Shareholders of ChinaCache Shouming is valid for ten years and will expire on August 20, 2028. Such agreement can be extended upon mutual written consent of Xin Run and the Nominal Shareholders of ChinaCache Shouming. Power of attorney agreements The Nominal 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/Xin Run, which includes, but are not limited to, all the shareholders’ rights and voting rights empowered to the Nominal Shareholders by the company law and the Company’s Article of Association. This agreement remains continuously valid, as long as the Nominal Shareholders continue to be the shareholders of the VIEs. Subsequently, ChinaCache Beijing/Xin Run assigned the power of attorney agreement to ChinaCache Beijing/Xin Run’s shareholders or a party designated by ChinaCache Beijing and Xin Run’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 Nominal Shareholders by the company law and the Company’s Article of Association. Share pledge agreements Pursuant to the share pledge agreement between ChinaCache Beijing/Xin Run, and the Nominal Shareholders of VIEs, the Nominal 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 and/or Xin Run, as pledgee, will be entitled to certain rights, including the right to sell the pledged equity interests. The Nominal Shareholders of VIEs 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/Xin Run. 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 Nominal 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 and/or Xin Run, 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 and/or Xin Run 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 the Company, the Group's 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 were 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 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 ChinaCache Beijing and/or Xin Run. The following tables represent the financial information of the consolidated VIEs as of December 31, 2018 and 2019 and for the years ended December 31, 2017, 2018 and 2019 before eliminating the intercompany balances and transactions between the VIEs and other entities within the Group: As of December 31, 2018 2019 RMB RMB US$ ASSETS: Current assets: Cash and cash equivalents 14,557 3,936 565 Restricted cash 3,169 12,939 1,859 Accounts receivable (net of allowance for doubtful accounts of RMB80,484 and RMB79,839 (US$11,468) as of December 31, 2018 and 2019, respectively) 72,844 47,516 6,825 Prepaid expenses and other current assets, net 12,711 13,957 2,005 Amounts due from inter-companies (1) 9,572 48,522 6,970 Total current assets 112,853 126,870 18,224 Non-current assets: Property and equipment, net 2,291 2,642 379 Intangible assets, net 35 27 4 Long term investments 10,103 10,081 1,448 Operating lease right-of-use asset — 124,502 17,884 Long term deposits and other non-current assets 4,711 2,640 379 Total non-current assets 17,140 139,892 20,094 TOTAL ASSETS 129,993 266,762 38,318 As of December 31, 2018 2019 RMB RMB US$ LIABILITIES: Current liabilities: Accounts payable 316,963 261,502 37,562 Accrued employee benefits 24,898 27,016 3,881 Accrued expenses and other current liabilities 38,915 25,098 3,605 Other payables 15,072 6,248 897 Income tax payable 10,991 11,594 1,665 Amounts due to inter-companies (1) 263,551 260,385 37,402 Amounts due to subsidiaries held for sale (2) 737 — — Current portion of finance lease obligations 1,284 — — Current portion of operating lease liabilities — 40,155 5,768 Deferred government grant 1,696 302 43 Total current liabilities 674,107 632,300 90,823 Non-current liabilities: Non-current portion of operating lease liabilities — 117,428 16,867 Deferred government grant 14,350 14,350 2,061 Total non-current liabilities 14,350 131,778 18,928 Total liabilities 688,457 764,078 109,751 (1) Amount due from/to inter-companies consist of intercompany receivables/payables to the other companies within the Group. (2) Information with respect to subsidiaries held for sale is discussed in Note 9. For the Years Ended December 31, 2017 2018 2019 RMB’000 RMB’000 RMB’000 US$’000 Net revenues -Third party customers 479,012 344,108 287,653 41,319 -Inter-companies 342,035 499,017 532,766 76,527 Net (loss)/profit (88,547) 105,324 (60,994) (8,761) |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2019 | |
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 (“U.S. GAAP”). (b) Going concern The Group experienced net loss of approximately RMB371,166,000, RMB25,813,000 and RMB52,705,000 (US$7,570,000) for the years ended December 31, 2017, 2018 and 2019, respectively. As of December 31, 2019, the Group had net current liabilities of approximately RMB1,642,726,000 (US$ 235,964,000), excluding net asset held for sale. These conditions raised substantial doubt about the Group's ability to continue as a going concern. When preparing the consolidated financial statements as of December 31, 2019 and for the year then ended, the Group ’s management concluded that a going concern basis of preparation was appropriate after analyzing the cash flow forecast for the next twelve months. In preparing the cash flow analysis, management took into account of a) estimated consideration of RMB1,830,000,000 (US$262,863,000) from planned disposal of the cloud infrastructure buildings and assets held for sale, and b) locating more domestic CDN customers from 2020 to compensate the estimated revenue decrease from US, and controlling its operating costs and negotiating with vendors for more favorable payment terms. If the Group fails to achieve these goals, the Group may need additional financing to execute its business plan. If additional financing is required, the Group cannot predict whether this additional financing will be in the form of equity, debt, or another form, and the Group may not be able to obtain the necessary additional capital on a timely basis, on acceptable terms, or at all. In the event that financing sources are not available, or that the Group is unsuccessful in increasing its gross profit margin and reducing operating losses, the Group may be unable to implement its current plans for expansion, repay debt obligations or respond to competitive pressures, any of which would have a material adverse effect on the Group's business, prospects, financial condition and results of operations. Management prepared the consolidated financial statements assuming the Group will continue as a going concern. However, there is no assurance that the measures above can be achieved as planned. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. If the Group is unable to continue as a going concern, it may have to liquidate its assets and may receive less than the value at which those assets are carried on the financial statements. (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 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 the consolidated financial statements in conformity with U.S. 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, renewal period of lease terms and incremental borrowing rate of right-of-use assets and related lease obligations, impairment of long-term investments, long-lived assets and intangible assets, allowance for doubtful accounts, accounting for deferred income taxes, and accounting for share-based compensation arrangements. The valuation of and accounting for the Group’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, ShenRong HK, ChinaCache IE, and ChinaCache UK, which are the United States dollar (“US$”), Hong Kong dollar (“HK$”), Euro (“EUR”) and Great Britain Pound (“GBP”) respectively, as determined based on the criteria of Accounting Standards Codification (“ASC”) 830 (“ASC 830”) “ Foreign Currency Matters ”. The reporting currency of the Company is also the RMB. Transactions denominated in foreign currencies are re-measured into the functional currency at the exchange rates prevailing on the transaction dates. Foreign currency denominated financial assets and liabilities are re-measured at the balance sheet date exchange rate. Exchange gains and losses are included in foreign exchange gains and losses in the consolidated statements of comprehensive loss. (f) Convenience translation Amounts in US$ are presented for the convenience of the reader and are translated at the noon buying rate of US$1.00 to RMB6.9618 on December 31, 2019 in the City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York. No representation is made that the RMB amounts could have been, or could be, converted into US$ at such rate. (g) Cash and cash equivalents Cash and cash equivalents consist 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 As of December 31, 2018 and 2019, all the restricted cash relates to cash frozen by courts order during the ongoing legal proceedings. (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 3-15 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 Building 20-40 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 amounts of interest that would be capitalized were immaterial during the years ended December 31, 2017, 2018 and 2019. (k) Land use right The land use right represents 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 groups) 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. If circumstances arise that previously were considered unlikely and, as a result, an entity decides not to sell a long-lived asset or disposal group previously classified as held for sale, the asset or disposal group would be reclassified as held and used. The Group measures long-lived assets that are reclassified on an individually basis at the lower of the following: a. Its carrying amount before the asset or disposal group was classified as held for sale, adjusted for any depreciation or amortization expense that would have been recognized had the asset or disposal group been continuously classified as held and used; and b. A disposal group qualifies as discontinued operation if it is a component of the Group 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 the Group’s operations and financial results. (n) Impairment of long-lived assets The Group 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 Group 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 Group 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 RMB21,757,000, nil and nil were recognized from properties and equipment and intangible assets for the years ended December 31, 2017, 2018 and 2019, respectively. (o) Investments 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 loss in shareholders’ deficit. Realized gains or losses are charged to earnings during the period in which the gain or loss is realized. If the Group 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 loss except for other-than-temporary impairment, which would be charged to current period earnings. Impairment of available-for-sale investments for the years ended December 31, 2017, 2018 and 2019 were RMB 3,290,000, nil and nil, respectively. Investment in limited partnerships Where consolidation is not appropriate, the Group applies the equity method of accounting that is consistent with ASC 323 “Investments - Equity Method and Joint Ventures” to limited partnerships in which the Group holds either (a) a five percent or greater interest or (b) less than a five percent interest when the Group has more than virtually no influence over the operating or financial policies of the limited partnership. The Group 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 Group applies the cost method of accounting. Cost method investment Prior to adopting ASC Topic 321 (“ASC 321”), Investments – Equity Securities, on January 1, 2018, the Group carries at cost its investments in investees that do not have readily determinable values or investments and over which the Group does not have significant influence, in accordance with ASC subtopic 325-20 (“ASC 325-20”), Investments-Other: Cost Method Investments. The Group carries the investment at cost and only adjusts for other-than-temporary declines in fair value and distributions of earnings that exceed the Group's share of earnings since its investment. Management regularly evaluates the impairment of equity investments without readily determinable fair value based on the 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, 2017, 2018 and 2019 were RMB400,000, nil and nil, respectively. The Group adopted ASC 321 on January 1, 2018 and the cumulative effect of adopting the new standard on opening accumulated deficit is nil. Pursuant to ASC 321, equity investments, except for those accounted for under the equity method and those that result in consolidation of the investee and certain other investments, are measured at fair value, and any changes in fair value are recognized in earnings. For equity securities without readily determinable fair value and do not qualify for the existing practical expedient in ASC Topic 820 (“ASC 820”), Fair Value Measurements and Disclosures, to estimate fair value using the net asset value per share (or its equivalent) of the investment, the Group elected to use the measurement alternative to measure those investments at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer, if any. Equity securities with readily determinable fair value are measured at fair values, and any changes in fair value are recognized in earnings. Pursuant to ASC 321, for equity investments measured at fair value with changes in fair value recorded in earnings, the Group does not assess whether those securities are impaired. For those equity investments that the Group elects to use the measurement alternative, the Group makes a qualitative assessment of whether the investment is impaired at each reporting date. If a qualitative assessment indicates that the investment is impaired, the entity has to estimate the investment’s fair value in accordance with the principles of ASC 820. If the fair value is less than the investment’s carrying value, the entity has to recognize an impairment loss in net income equal to the difference between the carrying value and fair value. (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 and other current assets, short-term investments, short term borrowings, accounts payables, accrued expenses, 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 borrowings approximates 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. The Group, 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 Group 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 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. On January 1, 2018, the Group adopted ASU No. 2014-09, Revenue from Contracts with Customers, (“ASC 606”), which supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition, (“ASC 605”), using the modified retrospective transition method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts have not been adjusted and continue to be reported in accordance with historic accounting under ASC 605. The impact of adopting the new revenue standard was not material to the consolidated financial statements and there was no adjustment to beginning retained earnings on January 1, 2018. Under ASC 606, an entity recognizes revenue as the Group satisfies a performance obligation when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price, including variable consideration, if any; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Group only applies the five-step model to contracts when it is probable that the entity will collect the consideration to which it is entitled in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Group reviews the contract to determine which performance obligations it must deliver and which of these performance obligations are distinct. The Group recognizes revenue based on the amount of the transaction price that is allocated to each performance obligation when that performance obligation is satisfied or as it is satisfied. The Group is a principal and records revenue on a gross basis when the Group is primarily responsible for fulfilling the service, has discretion in establish pricing and controls the promised service before transferring that service to customers. Otherwise, the Group records revenue at the net amounts as commissions. The Group generates revenue from CDN, IDC and IX services under ASC Topic 606: CDN Services CDN is a content distribution network built on the network. Relying on the edge servers deployed in various regions, through load balancing, content distribution, scheduling and other functional modules of the central platform, CDN enables users to obtain the required content nearby, reduces network congestion, and improves user access response speed and hit rate. For revenue stream of CDN, the promised service is to provide CDN service to the customer, which is qualified as a single distinct performance obligation. The unit price is fixed when contract entered with customers. CDN services are typically provided to customers over the contract service period and the related revenues are recognized based on actual usage over the term of the contract after the reconciliation with customers completed. The Group is a principal and records revenue for CDN service on a gross basis. IDC Services IDC services provide cabinet rental and bandwidth service to customer. The Group provides two promised services, cabinet rental and bandwidth service. The promise services are not distinct within the context of the contract as the goal of IDC is to combine traditional internet data center and content delivery. The reason why the customers rent the Group’s cabinet is not only to benefit from the Group’s physical hosting location and maintenance service, but also to enjoy the bandwidth service provided by the Group. It is cost efficient to consume the Group’s bandwidth service rather than to connect directly to bandwidth service provider such as China Unicom or China Mobile. Thus, these two promise services within the contract of IDC service-cabinet rental and bandwidth service are not distinct and shall be identified as one performance obligation. Typically, IDC services are provided to customers for a fixed unit price over the contract service period and the related revenues are recognized based on actual usage and unit price over the term of the contract after the reconciliation with customers completed. The Group is a principal and records revenue for IDC service on a gross basis. IX Services IX Services allow networks to interconnect directly, via the exchange, rather than through one or more third-party networks. The primary advantages of direct interconnection are cost, latency, and bandwidth. Same as IDC, there are two promised services within the contract, one is to provide a port usage and the other is to provide bandwidth. However, the service is not distinct within context of the contract as the services provided is highly integrated. Thus, only one performance obligation is identified for IX revenue stream. The unit price is fixed when contract entered with customers. IX services are provided to customers over the contract service period and the related revenues are recognized based on actual usage and unit price over the term of the contract after the reconciliation with customers completed. The Group is a principal and records revenue for IX service on a gross basis. 6% of value-added tax, or VAT are applied on all services provided by the Group’s PRC subsidiaries and VIEs and VIEs’ subsidiaries. Disaggregation of revenues The following table illustrates the disaggregation of revenue by revenue stream for the years ended December 31, 2017, 2018 and 2019. For the Years Ended December 31, 2017 2018 2019 RMB’000 RMB’000 RMB’000 US$’000 CDN Services 669,938 709,498 648,117 93,096 IDC Services 149,316 185,973 255,524 36,704 IX Services 33,314 27,120 14,987 2,153 Total 852,568 922,591 918,628 131,953 The following table provides information about accounts receivables and contract liabilities from contracts with customers: Years as of December 31, 2018 2019 RMB’000 RMB’000 US$’000 Accounts receivables 210,476 105,608 15,170 Advance from customers 18,598 15,323 2,201 (r) Cost of revenues Cost of revenue consists primarily of depreciation of the Group'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. All the services provided by the Group in the PRC, including VIEs are subject to VAT. Such 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 RMB200,000, nil and nil for the years ended December 31, 2017, 2018 and 2019, 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 Group's services and network. Costs incurred in the development of the Group'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 Group will continue to receive these government grant in the future. Government grant are recognized when it is probable that the Group 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 Group also consist of unrestricted grant which are received on an unsolicited and unconditional basis to support the growth of the Group and do not relate to the Group's operating activities. Unrestricted grant is classified as non-operating income and recorded in other income on the consolidated statements of comprehensive loss upon receipt. (v) Leases Leases are classified at the inception date as either a finance lease or an operating lease. The Group did not enter into any leases whereby it is the lessor for any of the periods presented. The Group leases equipment under finance lease agreements. As the lessee, a lease is a finance 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 for the major part of the equipment’s estimated remaining economic life, or d) the present value of the sum of the lease payments and any residual value guaranteed that is not already reflected in the lease payments equals or exceeds substantially all of the fair value of equipment, d) the equipment is of such specialized nature that is expected to have no alternative use to the lessor at the end of lease term. A lease involving integral equipment is a finance lease only if condition (a) or (b) exists. A finance 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. The Group has certain operating leases for offices and IDC buildings 3# with equipment in it. Some leases include one or more options to renew, which is typically at the Group's sole discretion. The majority of renewals to extend the lease terms are not included in our right of use assets and lease liabilities as they are not reasonably certain of exercise. The Group regularly evaluates the renewal options, and, when it is reasonably certain of exercise, it will include the renewal period in its lease term. New lease modifications result in remeasurement of the right of use asset and lease liability. The Group’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. In February 2016, the FASB issued a new standard related to leases to increase transparency and comparability among organizations by requiring the recognition of operating lease right-of-use (“ROU”) assets and lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The Group is also required to recognize and measure new leases at the adoption date and recognize a cumulative-effect adjustment in the period of adoption using a modified retrospective approach, with certain practical expedients available. On January 1, 2019, the Group adopted the new lease accounting standard using a modified retrospective transition method which allowed the Group not to recast comparative periods presented in its consolidated financial statements. Adoption of this standard resulted in the recording of operating lease ROU assets and corresponding operating lease liabilities and had no impact on accumulated deficit as of January 1, 2019. It had an impact on the Group’s consolidated balance sheets, by initial recognition of ROU assets and lease liabilities of RMB166,124,000 (US$23,862,000)and RMB164,358,000 (US$23,608,000) , respectively, for operating leases, while the Group’s accounting for finance leases remained substantially unchanged. The adoption of ASC 842 did not have a material impact on the Group’s results of operations or cash flows in the current year and prior year comparative periods and as a result, a cumulative-effect adjustment was not required.ROU assets and related lease obligations are recognized at commencement date based on the present value of remaining lease payments over the lease term, using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate for the same term as the underlying lease. (w) Income taxes The Group follows the liability method in accounting for income taxes in accordance to ASC topic 740 "Taxation" (“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 Group 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 Group 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. T |
CONCENTRATION OF RISK
CONCENTRATION OF RISK | 12 Months Ended |
Dec. 31, 2019 | |
CONCENTRATION OF RISK | |
CONCENTRATION OF RISK | 3. CONCENTRATION OF RISK (a) Credit risk Financial instruments that potentially subject the Group to significant concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable, other receivables included in prepaid expenses and other current assets, available-for-sale investments and amounts due from related parties. As of December 31, 2018 and 2019, RMB32,097,000 and RMB 28,561,000 (US$4,103,000), respectively, were deposited with major financial institutions located in the PRC, RMB8,811,000 and RMB2,525,000 (US$363,000), respectively, were deposited with in the major financial institutions located in the Hong Kong Special Administration Region, RMB2,076,000 and RMB3,649,000 (US$524,000), respectively, were deposited with major financial institutions located in the UK and RMB3,646,000 and RMB6,409,000 (US$921,000), respectively were held in major financial institutions in the United States of America. Management believes that these financial institutions are of high credit quality and continually monitor the credit worthiness of these financial institutions. Historically, deposits in Chinese banks are secure due to the state policy on protecting depositors’ interests. However, China promulgated a new Bankruptcy Law in August 2006 that came into effect on June 1, 2007, which contains a separate article expressly stating that the State Council may promulgate implementation measures for the bankruptcy of Chinese banks based on the Bankruptcy Law. Under the new Bankruptcy Law, a Chinese bank may go into bankruptcy. In addition, since China’s concession to the World Trade Organization, foreign banks have been gradually permitted to operate in China and have been significant competitors against Chinese banks in many aspects, especially since the opening of the Renminbi business to foreign banks in late 2006. Therefore, the risk of bankruptcy of those Chinese banks in which the Group has deposits has increased. In the event of bankruptcy of one of the banks which holds the Group's deposits, it is unlikely to claim its deposits back in full since it is unlikely to be classified as a secured creditor based on PRC laws. (b) Business, supplier, customer, and economic risk The Group participates in a relatively young and dynamic industry that is heavily reliant and also susceptible to complementary and/or competitive technological advancements. The Group believes that changes in any of the following areas could have a material adverse effect on the Group's future financial position, results of operations or cash flows: (i) (ii) Years as of December 31, 2017 2018 2019 RMB’000 RMB’000 RMB’000 US$’000 Supplier A 277,826 133,550 59,465 8,542 Supplier B 192,270 92,291 49,802 7,154 Supplier C * * 91,268 13,110 Details of the accounts payable for purchases accounting for 10% or more of total cost are as follow: Years as of December 31, 2018 2019 RMB’000 RMB’000 US$’000 Supplier A 114,901 48,229 6,928 Supplier B 72,896 41,104 5,904 Supplier C * 23,456 3,369 *not greater than 10% (iii) Years as of December 31, 2017 2018 2019 RMB’000 RMB’000 RMB’000 US$’000 Customer E 317,260 503,676 520,358 74,745 Customer F 118,970 * * * Details of the accounts receivables for customers accounting for 10% or more of total accounts receivable are as follows: Years as of December 31, 2018 2019 RMB’000 RMB’000 US$’000 Customer E 122,504 37,254 5,351 * not greater than 10% (iv) Emerging or unproven business models of customers. Many of the Group'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 Group's services, and the Group's growth and prospects may be materially and adversely affected. (v) Political, economic and social uncertainties. The Group'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, both the Company’s subsidiaries, ChinaCache Beijing and Xin Run are 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 Half of the Group'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 (appreciation) / depreciation of the RMB against US$ was approximately (6.3)%, 5.7% and 1.3% in the years ended December 31, 2017, 2018 and 2019, 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 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$. |
ACCOUNTS RECEIVABLE, NET
ACCOUNTS RECEIVABLE, NET | 12 Months Ended |
Dec. 31, 2019 | |
ACCOUNTS RECEIVABLE, NET | |
ACCOUNTS RECEIVABLE, NET | 4. ACCOUNTS RECEIVABLE, NET Accounts receivable and allowance for doubtful accounts consist of the following: December 31, 2018 2019 RMB’000 RMB’000 US$’000 Accounts receivable 292,842 188,103 27,020 Less: allowance for doubtful accounts (82,366) (82,495) (11,850) 210,476 105,608 15,170 As of December 31, 2018 and 2019, all accounts receivable were due from third party customers. An analysis of the allowance for doubtful accounts is as follows: December 31, 2018 2019 RMB’000 RMB’000 US$’000 Balance, beginning of year 81,301 82,366 11,832 Additions for the current year 6,719 3,066 440 Recovery (5,654) (2,937) (422) Balance, end of year 82,366 82,495 11,850 Accounts receivable with carrying amount of RMB12,989,000 was pledged by the Group to secure the finance lease (Note 17) as of December 31, 2018. No accounts receivable was pledged as of December 31, 2019. |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET | 12 Months Ended |
Dec. 31, 2019 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET | 5. PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET Prepaid expenses and other current assets consist of the following: December 31, 2018 2019 RMB’000 RMB’000 US$’000 Prepaid expense for bandwidth and servers (i) 9,491 12,109 1,739 Staff field advances 596 759 110 Finance lease deposits 1,684 — — Prepaid commission (ii) 99,700 74,520 10,704 Prepaid service fee 10,000 — — Other deposit and receivables(iii) 34,095 32,768 4,707 Prepaid income tax 14,220 6,227 895 Prepaid expense and other current assets 169,786 126,383 18,155 Provision of doubtful accounts(ii) (151) (8,471) (1,218) Prepaid expense and other current assets, net 169,635 117,912 16,937 i) ii) iii) |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2019 | |
PROPERTY AND EQUIPMENT, NET | |
PROPERTY AND EQUIPMENT, NET | 6. PROPERTY AND EQUIPMENT, NET Property and equipment, including those held under finance leases, consists of the following: December 31, 2018 2019 RMB’000 RMB’000 US$’000 At cost: Optical fibers 13,100 13,100 1,882 Computer equipment 1,004,948 869,344 124,874 Furniture and fixtures 10,218 8,389 1,205 Leasehold improvements 18,782 18,645 2,678 Motor vehicles 9,842 7,675 1,102 Buildings 324,716 313,836 45,080 Freehold land 4,517 — — 1,386,123 1,230,989 176,821 Less: accumulated depreciation (567,835) (499,235) (71,711) Less: impairment (403,221) (335,134) (48,139) 415,067 396,620 56,971 Impairment of RMB17,787,000, nil and nil were recognized for the years ended December 31, 2017, 2018 and 2019, respectively. For the years ended December 31, 2017, 2018 and 2019, depreciation expenses were RMB9,145,000, RMB12,017,000 and RMB28,642,000 (US$4,114,000), respectively, and were included in the following captions: For the years ended December 31, 2017 2018 2019 RMB’000 RMB’000 RMB’000 US$’000 Cost of revenue 8,090 11,999 28,598 4,107 Sales and marketing expenses 4 — 6 1 General and administrative expenses 1,050 9 18 3 Research and development expenses 1 9 20 3 9,145 12,017 28,642 4,114 The Group accounted for the leases of certain computer equipment and optical fibers as finance leases that transfer to the Group substantially all the benefits and risks incidental to the ownership of assets. The carrying amounts of the Group's property and equipment held under finance leases at respective balance sheet dates were as follows: December 31, 2018 2019 RMB’000 RMB’000 US$’000 At Cost: Optical fibers 13,100 13,100 1,882 Computer equipment 292,489 262,989 37,776 305,589 276,089 39,658 Less: accumulated depreciation (75,644) (82,169) (11,803) Less: impairment (166,162) (166,162) (23,868) 63,783 27,758 3,987 Depreciation of property and equipment held under finance leases were nil, RMB217,000 and RMB 6,525,000 (US$ 937,000) for the years ended December 31, 2017, 2018 and 2019, respectively. The carrying amount of buildings pledged by the Group to secure the borrowings (Note 12 (b)) and finance lease obligation (Note 17) as of December 31, 2018 and 2019 was RMB298,232,000 and RMB291,292,000(US$41,841,000), respectively. All the buildings were sealed up by the court due to the lawsuits as of December 31 , 2019 (Note 25). |
LAND USE RIGHT, NET
LAND USE RIGHT, NET | 12 Months Ended |
Dec. 31, 2019 | |
LAND USE RIGHT, NET | |
LAND USE RIGHT, NET | 7. LAND USE RIGHT, NET December 31 2018 2019 RMB’000 RMB’000 US$’000 Land use right 34,057 34,057 4,892 Less: accumulated amortization (1,885) (2,591) (372) 32,172 31,466 4,520 In 2013, the Group paid RMB51,678,000 to acquire a land use right of approximately 39,000 square meters of land in Beijing Shunyi District, on which the Group developed a cloud infrastructure. According to the land use right contract, the Group has a 50-year use right over the land, which is used as the basis for amortization. In December 2017, land use right, excluding land use right held by Beijing Shuo Ge and Beijing Zhao Du, was transferred out from the assets held for sale and re-designated as assets held for use (Note 9). The Group re-measured the amortization expense that would have been recognized had the land use right been continuously classified as held and used. Amortization expense for land use right for the years ended December 31, 2017, 2018 and 2019 was RMB1,155,000, RMB730,000 and RMB706,000 (US$101,000), respectively. The carrying amount of land use right pledged by the Group to secure the borrowings (Note 12 (b)) as of December 31, 2018 and 2019 was RMB32,172,000 and RMB31,466,000, respectively. All the land use right (excluding land use right held by Beijing Zhao Du) were sealed up by the court due to the lawsuits (Note 25) as of December 31, 2019. |
RIGHT-OF-USE ASSETS AND OPERATI
RIGHT-OF-USE ASSETS AND OPERATING LIABILITIES | 12 Months Ended |
Dec. 31, 2019 | |
RIGHT-OF-USE ASSETS AND OPERATING LIABILITIES | |
RIGHT-OF-USE ASSETS AND OPERATING LIABILITIES | 8. RIGHT-OF-USE ASSETS AND OPERATING LIABILITIES The following table presents the Group's right-of-use assets and operating lease liabilities as of the respective balance sheet dates: December 31 2018 2019 RMB’000 RMB’000 US$’000 Right-of-use assets — 131,408 18,876 Operating lease liabilities - current — 41,882 6,016 Operating lease liabilities - non-current — 122,360 17,576 Total operating lease liabilities — 164,242 23,592 The weighted average remaining lease terms and discount rates for all of operating leases were as follows as of December 31, 2019: Remaining lease term and discount rate: Weighted average remaining lease term (years) 4.0 Weighted average discount rate 6.12 % During year ended December 31, 2019, cash payment for operating leases was RMB 12,761,000 (US$1,833,000). During year ended December 31, 2017, 2018 and 2019, the Group incurred total operating lease expenses of RMB23,401,000, RMB16,997,000 and RMB 45,384,000 (US$ 6,519,000), respectively. The following is a schedule, by fiscal years, of maturities of lease liabilities as of December 31, 2019: 2020 49,949 2021 33,610 2022 37,119 2023 41,528 2024 22,601 Thereafter 736 Total lease payments 185,543 Less: imputed interest 21,301 Present value of lease liabilities 164,242 |
ASSETS HELD FOR SALE _ LIABILIT
ASSETS HELD FOR SALE / LIABILITIES HELD FOR SALE | 12 Months Ended |
Dec. 31, 2019 | |
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 December 30, 2014, Xin Run entered into a definitive sale and leaseback agreement with Beijing Federation of Supply and Marketing Cooperatives ("BFSMC"), according to which Xin Run should hand over to BFSMC two IDC buildings (5# and 6#) by September 2015 for a consideration of RMB 960 million through transferring the ownership of the two IDC buildings from Xin Run to Beijing Zhao Du, and selling all Beijing Zhao Du's equity interests to BFSMC. On February 6, 2015, Xin Run entered into a supplementary agreement with BFSMC and one subsidiary of BFSMC, Beijing Shi Xin Heng Tai Investment Co., Ltd ("SXHT"), according to which the subsidiary SXHT became the beneficiary of the original arrangement and took over the rights and obligations from February 27, 2015. Consideration of RMB 672 million was received from the subsidiary by September 2015. Starting in August 2017, Xin Run and the buyer entered into a series of lawsuits and the Beijing Zhao Du is still in the process of litigation proceeding with the buyer as of March 31, 2020 (Note 25). In April 2014, Xin Run entered into a framework agreement with a third-party company, pursuant to which Xin Run agreed to sell the IDC building 3# to it. In August 2014, the Group established Beijing Shuo Ge. The consideration of RMB 325 million was received from the third-party company by January 2015. In July 2015, Xin Run sold the total CIP along with related land use right of IDC building 3# to Beijing Shuo Ge. On December 29, 2017, Xin Run entered into an equity transfer agreement with the third-party company, under which Xin Run would transfer 100% equity interest in Beijing Shuo Ge to it before September 2018. On April 3, 2019, Xin Run entered into a definitive equity transfer agreement with the third-party company, pursuant to which, Xin Run agrees to transfer 100% equity interest in Beijing Shuo Ge to the third-party company with a reduced consideration of RMB251,800,000 (US$36,169,000) and would return the difference of RMB73,200,000 (US$10,515,000) between original and reduced consideration in 5 years from 2019 to 2024 (Note 15). The disposal of Beijing Shuo Ge was completed in May 2019, resulting a disposal gain of RMB-18,285,000 (US$2,626.000). As a result, as of December 31, 2018 all the assets and liabilities of Beijing Zhao Du and Beijing Shuo Ge were classified as assets and liabilities held for sale. As of December 31, 2019, all the assets and liabilities of Beijing Zhao Du were classified as assets and liabilities held for sale. Assets and liabilities classified as held for sale are required to be recorded at the lower of carrying value or fair value less any costs to sell. As of December 31, 2018 and 2019, the carrying value of Beijing Zhao Du and Beijing Shuo Ge’s net assets were less than fair value less costs to sell, and accordingly, no adjustment to the asset value was made necessary. Beijing Zhao Du and Beijing Shuo Ge did not meet the criteria to be classified as discontinued operations because they did not represent a strategic shift that has (or will have) a major impact on the Group’s operations and financial results to meet the criteria to be classified as discontinued operations. The major classes of assets and liabilities held for sale were as follows: December 31, 2018 2019 RMB’000 RMB'000 US$’000 Cash and cash equivalents 1 — — Prepaid expenses and other current assets 15,478 15,478 2,224 Amounts due from the Company 737 — — Property and equipment 550,225 318,143 45,698 Land use right, net 14,909 8,646 1,242 Assets held for sale 581,350 342,267 49,164 Accrued expenses and other current liabilities 5,293 4,684 673 Amounts due to the Company 2,698 447 64 Liabilities held for sale 7,991 5,131 737 The operating results of the subsidiaries held for sale during the three years ended December 31, 2019 that are not presented within discontinued operations and are summarized as follow: For the years ended December 31, 2017 2018 2019 RMB’000 RMB’000 RMB’000 US$’000 Net revenue — — — — Loss before income taxes (3,000) (3,654) (5,682) (816) Loss before income taxes attributable to the non-controlling interest from the subsidiaries held for sale for the years ended December 31, 2017, 2018 and 2019 were RMB30,000 and RMB36,000, and RMB57,000 (US$8,000), respectively. |
CLOUD INFRASTRUCTURE CONSTRUCTI
CLOUD INFRASTRUCTURE CONSTRUCTION IN PROGRESS | 12 Months Ended |
Dec. 31, 2019 | |
CLOUD INFRASTRUCTURE CONSTRUCTION IN PROGRESS | |
CLOUD INFRASTRUCTURE CONSTRUCTION IN PROGRESS | 10. CLOUD INFRASTRUCTURE CONSTRUCTION IN PROGRESS December 31, 2018 2019 RMB’000 RMB’000 US$’000 Cloud infrastructure construction in progress 289,280 292,639 42,035 As of December 31, 2017, the Group capitalized direct costs of RMB416,352,000 that were directly attributable to the development of the cloud infrastructure. During the year ended December 31, 2018, additional costs of RMB333,286,000 was capitalized for buildings completed. Costs of other completed buildings in the aggregate of RMB265,152,000 and costs of other completed equipment in the aggregate of RMB104,078,000 were transferred to property and equipment; RMB91,128,000 was transferred to other non-current assets. As of December 31, 2018, the remaining RMB289,280,000 capitalized to date for construction in progress was re-designated as cloud infrastructure construction in progress. During the year ended December 31, 2019, additional cost of RMB 12,637,000 (US$1,815,000) was capitalized for buildings completed, and among which RMB 9,278,000 (US$1,333,000) was transferred to property and equipment. All the cloud infrastructure construction in progress were pledged by the Group to secure borrowings (Note 12(b)) as of December 31, 2018 and 2019. The cloud infrastructure was sealed up by court due to litigations. (Note 25). |
LONG TERM INVESTMENTS
LONG TERM INVESTMENTS | 12 Months Ended |
Dec. 31, 2019 | |
LONG TERM INVESTMENTS | |
LONG TERM INVESTMENTS | 11. LONG TERM INVESTMENTS Long term investments consisted of the following: December 31, 2018 2019 RMB’000 RMB’000 US$’000 Cost method investments: PRC Fund 10,103 10,081 1,448 United States Fund 20,045 20,045 2,879 Investment in preferred shares of an unlisted company in PRC ("Investee A") 400 400 57 Available-for-sale investments: Investment in convertible borrowings of an unlisted company in Cayman Islands ("Investee B") 3,973 3,973 571 Less: accumulated impairment (4,373) (4,373) (628) Total 30,148 30,126 4,327 Cost method investments In 2017, the Group made an additional RMB361,000 (US$53,000) investment in the United States Fund. As of December 31, 2018 and 2019, the Group had made an accumulated investment in the United States Fund of RMB20,045,000. Given that the Group holds less than five percent interest in each fund, the Group has accounted for such investments using the cost method. In 2011, the Group made a 9-year term investment in the PRC Fund in the amount of RMB 10,103,000. Given that the Group holds less than five percent interest in each fund, the Group has accounted for such investments using the cost method. In 2019, the Group disposed a small portion of the PRC Fund amounting to RMB 22,000 (US$3,160). Investment in investee A was fully impaired in 2017. Available for sale investments On February 19, 2014, the Group entered into an agreement with a private company in Cayman Islands (“Investee B”) to issue a convertible loan of RMB3,068,000 at an interest rate of US prime rate plus 2% for 2 years. The Group 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 Group has accounted for the investment in the 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 Group 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. In 2017, the Group believed that there was a decline in value that was other than temporary, and recorded RMB3,290,000 (US$506,000) in “impairment of long-term investments” in the consolidated statement of operations and comprehensive loss. |
BORROWINGS
BORROWINGS | 12 Months Ended |
Dec. 31, 2019 | |
BORROWINGS | |
BORROWINGS | 12. BORROWINGS (a) Short-term borrowings Short-term borrowings consisted of the following: December 31, 2018 2019 RMB’000 RMB’000 US$’000 Other borrowing 13,850 — — On October 11 and December 29, 2018, the Group entered into short-term loan agreements with Third-party A in PRC for credit loan of RMB11,850,000 (US$1,723,000) and RMB500,000 (US$73,000) with an interest rate of 12% per annum and a maturity term of four months and fifteen days, respectively. Mr. Wang Song, the Co-Founder and ex-director of the Company, provided general guarantee for this short-term borrowing. On December 29, 2018, the Group entered into short-term loan agreement with Third-party B in PRC for credit loan of RMB1,500,000 (US$218,000) with an interest rate of 12% per annum and a maturity term of one month. All the short-term borrowings as of December 31, 2018 were fully repaid on due date in 2019. (b) Long-term borrowings December 31, 2018 2019 RMB’000 RMB’000 US$’000 Long-term bank loan 372,926 320,000 45,965 Less: current portion (58,355) (320,000) (45,965) Total 314,571 — — On October 30, 2017, the Group obtained a three-year credit facility of RMB240,000,000 from Bank B in PRC, at 8.00004% per annum. The credit facility includes RMB150,000,000 for working capital and RMB90,000,000 for capital expenditure. The credit facility is secured by Xin Run’s assets, while Mr. Wang Song and Ms. Kou Xiaohong, the Founders and ex- directors of the Company, take joint-and-several liability for the repayment of the loan. The Group paid RMB2,400,000 to a third-party agent in December 2017 as borrowing cost to obtained the facility. On November 7, 2017, the first RMB150,000,000 was drawn down and used as working capital. On December 13, 2017, the second RMB23,000,000 was drawn down and used for capital expenditure. On January 30, 2018, the third RMB27,000,000 (US$3,927,000) was drawn down and used for capital expenditure. The borrowing cost paid for the facility was allocated to the draw down and the remaining facility on a pro rata basis. Borrowing costs allocated to the actual draw down were presented as deductions of the loan carrying value. The borrowing costs are recognized over the lives of the term loans as interest expense, using the effective interest rate method. In October 2019, Bank B sent notice of early maturity of loan to Xin Run and asked for the early repayment of bank loans amounted to RMB170,000,000 (US$24,419,000) and related unpaid interest immediately, as the buildings and land use right that pledged to Bank B has been sealed up by the court arising from other lawsuits (Note 25), the bank account in Bank B has been frozen, and Xin Run did not make repayment of loans according to the repayment plan, which violated the bank facility agreement. In November, 2019, Bank B has filed a lawsuit against Xin Run (Note 25). As a result, the Group reclassified all carrying value of the bank loan RMB170,000,000 (US$24,419,000) to current liabilities as of December 31, 2019. On December 21, 2017, the Group obtained a five-year credit facility of RMB220,000,000 from Bank C in PRC with a floating rate of 30% above PBOC benchmark interest rate. The credit facility is for working capital and is secured by Xin Run’s assets, while Mr. Wang Song and Ms. Kou Xiaohong, the Founders and ex-directors of the Company, take joint-and-several liability for the repayment of the loan. The Group paid RMB6,775,000 as borrowing cost to obtained the facility. On December 21, 2017, the first RMB40,000,000 was drawn down and used as working capital. On January 15, 2018, the second RMB50,000,000 (US$7,272,000) was drawn down and used as working capital. On May 14, 2018, the third RMB20,000,000 (US$2,909,000) was drawn down and used as working capital. On June 15, 2018, the fourth RMB90,000,000 (US$13,090,000) was drawn down and used as working capital. The borrowing cost paid for the facility was allocated to the draw down and the remaining facility on a pro rata basis. Borrowing cost allocated to the actual draw down was presented as deduction of the loan carrying value. The borrowing cost is recognized over the life of the term loan as interest expense using the effective interest rate method. In October 2019, Bank C sent notice of early maturity of loan to Xin Run and asked for the early repayment of bank loan balance amounted to RMB160,000,000 (US$22,983,000) and related unpaid interest. As the buildings and land use right that pledged to the bank has been sealed up by the Shunyi District Court mainly due to the lawsuit with a subsidiary of BFSMC, the bank considered that Xin Run has defaulted and asked for the immediate repayment of the RMB160,000,000 (US$22,983,000) and related unpaid interest within three days. In November 2019, Bank C has filed a lawsuit against Xin Run (Note 25), and Xin Run made a repayment of RMB10,000,000(US$1,436,000) to Bank C thereafter. As a result, the Group reclassified all carrying value of the bank loan RMB150,000,000(US$21,546,000) to current liability as of December 31, 2019. The above loans from Bank B and C are secured by Xin Run's buildings and corresponding land use right in the net carrying value of RMB 581,979,000(US$83,596,000) as of December 31, 2019 and RMB 567,384,000 as of December 31, 2018 (see Note 6,7 and 10). |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2019 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 13. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consisted of the following: December 31, 2018 2019 RMB’000 RMB’000 US$’000 Advance from customers 18,598 15,323 2,201 Other accrued expenses 21,764 42,131 6,052 Other tax payables 7,272 11,939 1,715 47,634 69,393 9,968 Other accrued expenses represent accrued rental and overdue penalty interest (see Note 25). |
OTHER PAYABLES
OTHER PAYABLES | 12 Months Ended |
Dec. 31, 2019 | |
OTHER PAYABLES | |
OTHER PAYABLES | 14. OTHER PAYABLES Other payables consisted of the following: December 31, 2018 2019 RMB’000 RMB’000 US$’000 Payables for purchase of property and equipment 393,287 352,786 50,675 Consideration received for disposal of Beijing Shuo Ge (Note 9) 325,000 — — Consideration received for disposal of Beijing Zhao Du (Note 9) 672,000 672,000 96,527 Current portion of other non-current liability (Note 15) — 11,282 1,621 Other Payables 13,567 5,485 787 Total 1,403,854 1,041,553 149,610 |
OTHER NON-CURRENT LIABILITY
OTHER NON-CURRENT LIABILITY | 12 Months Ended |
Dec. 31, 2019 | |
OTHER NON-CURRENT LIABILITY | |
OTHER NON-CURRENT LIABILITY | 15. OTHER NON-CURRENT LIABILITY December 31, 2018 2019 RMB’000 RMB’000 US$’000 Consideration refund payable — 62,255 8,943 Less: current portion — (11,282) (1,621) Total — 50,973 7,322 Other non-current liability represents the difference in the consideration between original agreement and revised agreement entered in April 2019 (Note 9) relating to disposal of Beijing Shuo Ge. Pursuant to the revised agreement, Xin Run agrees to return the difference of RMB 73,200,000 (US$10,515,000) along with a total interest of RMB 13,018,000(US$1,870,000) from June 30, 2019 to December 31, 2024. The total balance to be refunded together with the interest to be paid over 1 year as of December 31, 2019 is recognized as non -current liability using the effective interest rate method. Future installment payment schedule according to the borrowing agreements are as follows: December 31, 2019 RMB’000 US$’000 2020 14,336 2,059 2021 14,336 2,059 2022 14,336 2,059 2023 14,336 2,059 2024 14,336 2,059 Total 71,682 10,295 |
DEFERRED GOVERNMENT GRANT
DEFERRED GOVERNMENT GRANT | 12 Months Ended |
Dec. 31, 2019 | |
DEFERRED GOVERNMENT GRANT | |
DEFERRED GOVERNMENT GRANT | 16.DEFERRED GOVERNMENT GRANT The following table presents the Group's deferred government grant as of the respective balance sheet dates: December 31, 2018 2019 RMB’000 RMB’000 US$’000 Beginning balance 19,580 16,046 2,304 Recognized as income during the year (3,534) (1,394) (200) Total balance of deferred government grant 16,046 14,652 2,104 Less: current portion 1,696 302 43 Balance of non-current deferred government grant 14,350 14,350 2,061 During the years ended December 31, 2017, 2018 and 2019, a certain government grants complied with the attached conditions. Hence, relevant government grants of RMB4,628,000, RMB3,534,000 and RMB1,394,000 (US$200,000) respectively, were recognized in the consolidated statements of comprehensive loss as other operating income during the years ended December 31, 2017, 2018 and 2019, respectively. |
FINANCE LEASE OBLIGATIONS
FINANCE LEASE OBLIGATIONS | 12 Months Ended |
Dec. 31, 2019 | |
FINANCE LEASE OBLIGATIONS | |
FINANCE LEASE OBLIGATIONS | 17. FINANCE LEASE OBLIGATIONS Certain computer, UPS and switch equipment were acquired through finance leases entered into by the Group. Future minimum lease payments under non-cancellable finance lease arrangements are as follows: December 31, 2018 2019 RMB’000 RMB’000 US$’000 2019 25,311 — — 2020 24,003 31,782 4,565 2021 21,503 27,027 3,882 Total minimum lease payment 70,817 58,809 8,447 Less: amount representing interest (9,159) (7,511) (1,078) Present value of remaining minimum lease payment 61,658 51,298 7,369 Less: current portion 20,299 26,057 3,743 Non-current portion 41,359 25,241 3,626 |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2019 | |
SHARE-BASED COMPENSATION | |
SHARE-BASED COMPENSATION | 18. 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 Group's business, the Group adopted a stock option plan in 2007 (the “2007 Plan”). Under the 2007 Plan, the Group may grant options to its employees, directors and consultants to purchase an aggregate of no more than 14,000,000 ordinary shares of the Group, subject to different vesting requirements. The 2007 Plan was approved by the Board of Directors and shareholders of the Group on October 16, 2008. On May 28, 2009, the Group adopted a new stock option plan (the “2008 Plan”) which allows the Group to grant options to its employees, directors and consultants to purchase an aggregate of no more than 8,600,000 ordinary shares of the Group, subject to different vesting requirements. On May 20, 2010, the Group adopted a new stock option plan (the “2010 Plan”) which allows the Group to grant options to its employees, directors and consultants to purchase an aggregate of no more than 9,000,000 ordinary shares of the Group, subject to different vesting requirements. On June 20, 2011, the Group adopted a new stock option plan (the “2011 Plan”) which allows the Group to grant options to its employees, directors and consultants to purchase an aggregate of no more than 22,000,000 ordinary shares of the Group, subject to different vesting requirements. On July 2, 2012, the Group 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 Group 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, 2017, 2018 and 2019, the Group granted 15,080,000, 17,600,000 and nil options, respectively, to a combination of employees and directors of the Group at exercise prices ranging from US$0.06 to US$0.07. As of December 31, 2019, options to purchase 31,182,205 of ordinary shares were outstanding and options to purchase 20,199,147 ordinary shares were available for future grant under the Option Plans. The binomial option pricing model was applied in determining the estimated fair value of the options granted to employees and non-employees. The model requires the input of highly subjective assumptions including the estimated expected stock price volatility, the expected price multiple at which employees are likely to exercise share options. For expected volatilities, the Group has made reference to the historical price volatilities of ordinary shares of several comparable companies in the same industry as the Group. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury Bills yield in effect at the time of grant. (a) Options Granted to Employees The following table summarized the Group's employee share option activity under the Option Plans: Weighted Weighted average average remaining Aggregate Number of Exercise contractual intrinsic options price term value (US$) (Years) (US$’000) Outstanding, January 1, 2018 25,113,357 0.14 7.26 586 Vested and expected to vest at January 1, 2018 25,113,357 0.14 7.26 586 Granted 17,600,000 0.06 Exercised (1,096,896) 0.08 Forfeited (4,247,232) 0.06 Outstanding, December 31, 2018 37,369,229 0.11 7.81 2 Vested and expected to vest at December 31, 2018 37,369,229 0.11 7.81 2 Exercisable at December 31, 2018 16,222,688 0.17 5.93 2 Granted — — Exercised (44,000) 0.08 Forfeited (6,143,024) 0.16 Outstanding, December 31, 2019 31,182,205 0.10 1.35 Vested and expected to vest at December 31, 2019 31,182,205 0.10 1.35 Exercisable at December 31, 2019 20,119,147 0.10 7.10 1.35 The aggregated intrinsic value of share options outstanding and exercisable at December 31, 2019 was calculated based on the closing price of the Group's ordinary shares on December 31, 2019 of US$0.88 per ADS (equivalent to US$0.06 per ordinary share). The total intrinsic value of share options exercised during the years ended December 31, 2017, 2018 and 2019 was nil, RMB502,000 and RMB18,000 (US$3,000), respectively. As of December 31, 2019, there was RMB875,000 (US$126,000) of unrecognized share-based compensation cost related to share options issued to employees, which are expected to be recognized following the graded vesting method over the remaining vesting periods of different tranches, ranging from 1 year to 2 years. The total fair value of options vested during the years ended December 31, 2017, 2018 and 2019 was RMB2,054,000, RMB 4,013,000 and RMB1,834,000 (US$263,000), respectively. (b) Restricted Share Units Award Granted to Employees On December 23, 2014, the Group issued 11,265,520 units of restricted share units to the employees and directors under the 2011 Plan. The restricted share units shall become vested in each year of 2014, 2015, 2016 and 2017, respectively. On December 11, 2015, the Group issued 40,106,656 units of restricted share units to the employees and directors under the 2011 Plan. The restricted share units shall become vested in each year of 2016, 2017 and 2018, respectively. On December 13, 2017, the Group issued 16,813,344 units of restricted share units to the employees and directors under the 2011 Plan. The restricted share units shall become vested in each year of 2018, 2019 and 2020, respectively. On April 9, 2018, the Group issued 480,000 units of restricted share units to the employees and directors under the 2011 Plan. The restricted share units shall become vested in each year of 2018, 2019 and 2020, respectively. As of December 31, 2019, there was RMB78,000 (US$11,000) of unrecognized share-based compensation cost, related to unvested restricted share units which is expected to be recognized over a weighted-average period of 1 year. The following table summarized the Group's restricted shares award issued under the 2011 Plan: Number of Weighted average grant ordinary shares date fair value (US$) Outstanding, January 1, 2018 2,223,468 0.14 Expected to vest at January 1, 2018 2,223,468 0.14 Granted 480,000 0.07 Vested (1,503,212) 0.35 Forfeited (560,256) 0.43 Outstanding, December 31, 2018 640,000 0.07 Expected to vest at December 31, 2018 640,000 0.07 Granted — Vested (320,000) 0.07 Forfeited (160,000) 0.07 Outstanding, December 31, 2019 160,000 0.07 Expected to vest at December 31, 2019 160,000 0.07 The cost of the restricted share units is determined using the fair value (determined based on the fair market value of the Group'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 share units for the years ended December 31, 2018 and 2019 was RMB300,000 and RMB78,000 (US$11,000), respectively. The total fair value of restricted share units vested during the years ended December 31, 2017, 2018 and 2019 was RMB8,882,000, RMB144,000 and RMB151,000 (US$22,000), respectively. A total compensation expenses relating to all options and restricted share units recognized for the years ended December 31, 2017, 2018 and 2019 are as follows: For the years ended December 31, 2017 2018 2019 (RMB)’000 (RMB)’000 (RMB)’000 (US$)’000 Cost of revenues 490 211 30 Sales and marketing expenses 254 83 12 General and administration expenses 9,630 1,114 161 Research and development expenses 562 483 69 10,936 1,891 272 |
MAINLAND CHINA EMPLOYEE CONTRIB
MAINLAND CHINA EMPLOYEE CONTRIBUTION PLAN | 12 Months Ended |
Dec. 31, 2019 | |
MAINLAND CHINA EMPLOYEE CONTRIBUTION PLAN | |
MAINLAND CHINA EMPLOYEE CONTRIBUTION PLAN | 19. MAINLAND CHINA EMPLOYEE CONTRIBUTION PLAN As stipulated by the regulations of the PRC, full-time employees of the Group 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 Group is required to make contributions to the plan based on certain percentages of employees’ salaries. The total expenses for the plan were RMB44,416,000, RMB29,288,000 and RMB28,285,000 (US$4,063,000) for the years ended December 31, 2017, 2018 and 2019, respectively. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2019 | |
INCOME TAXES | |
INCOME TAXES | 20. 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. United States of America ChinaCache North America, Inc. and CCAL was registered in California, United States of America in 2007 and 2016 respectively. For the years ended December 31, 2017, 2018 and 2019, the entity is subject to both California State Income Tax (8.84%) and Federal Income Tax (graduated income tax rate up to 34%, 21% and a flat 21% respectively) on its taxable income under the current laws of the state of California and United States of America. Hong Kong The two-tier profits tax rates system was introduced under the Inland Revenue (Amendment)(No.3) Ordinance 2018 ("the Ordinance") of Hong Kong became effective for the assessment year 2018/2019. Under the two-tier profit tax rates regime, the profits tax rate for the first HKD 2 million of assessable profits of a corporation will be subject to the lowered tax rate, 8.25% while the remaining assessable profits will be subject to the legacy tax rate, 16.5%. 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 for the years ended December 31, 2017 and 2018. For the years ended December 31, 2019, income tax rate decreased to 8.25% for profit below HKD 2 million, and 16.5% for excessive profit over HKD 2 million. 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 2016 to 2021 if it continues to qualify on an annual basis. The HNTE certificate of ChinaCache Beijing is expiring in 2022 and there exist uncertainties with the reapplication outcome. Beijing Blue IT qualifies as an HNTE and is entitled for a preferential tax rate of 15% from 2016 to 2020 if it continues to qualify on an annual basis. The HNTE certificate of ChinaCache Blue IT is expiring in 2021 and there exist uncertainties with the reapplication outcome. 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, 2019, no applicable detailed interpretation or guidance has been issued to define “place of effective management”. Furthermore, 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, 2019, 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 Group will continue to monitor its tax status. Loss before income tax expense consists of: For the years ended December 31, 2017 2018 2019 RMB’000 RMB’000 RMB’000 US$’000 Non-PRC (36,317) 21,495 (12,095) (1,737) PRC (275,201) (47,297) (32,643) (4,689) (311,518) (25,802) (44,738) (6,426) The income tax expense comprises of: For the years ended December 31, 2017 2018 2019 RMB’000 RMB’000 RMB’000 US$’000 Current 29,428 11 7,967 1,144 Deferred 30,220 — — — 59,648 11 7,967 1,144 A reconciliation of the differences between the income tax calculated using statutory tax rate and the effective tax rate for the year ended December 31, 2017, 2018 and 2019 is as follows: For the years ended December 31, 2017 2018 2019 RMB’000 RMB’000 RMB’000 US$’000 Loss before income tax expense (311,518) (25,802) (44,738) (6,426) Income tax computed at PRC statutory tax rate of 25% (77,881) (6,450) (11,184) (1,607) Preferential tax rates 15,955 (7,031) (2,737) (393) International rate differences 9,401 (4,732) 7,636 1,097 Additional 50%/75% tax deduction for qualified research and development expenses (8,795) (7,228) (9,697) (1,393) Non-deductible expenses 6,187 3,002 3,629 521 Effect of changes in tax rates on deferred taxes (33,930) 101,502 1,765 254 Changes in the valuation allowance 148,711 (79,052) 10,996 1,579 Realization gain from intercompany transaction — — 7,435 1,068 Expiration of tax loss carry forward — — 77 11 other adjustment — — 47 7 Income tax expense 59,648 11 7,967 1,144 The components of deferred taxes are as follows: For the years ended December 31, 2018 2019 (RMB’000) (RMB’000) (US$’000) Deferred tax assets: - Allowance for doubtful accounts 12,323 14,726 2,115 - Deferred revenue 2,407 2,198 316 - Accruals 25,993 16,183 2,325 - Tax losses 134,855 173,740 24,956 - Property and equipment 2,105 2,070 297 - Intangible assets 1,469 1,469 211 - Long-term investment impairment 960 960 138 - Impairment loss for long-lived assets 24,663 4,425 636 - Unrealized profit 71,868 71,868 10,323 Less: valuation allowance (276,643) (287,639) (41,317) 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. The net valuation allowance decreased by RMB79,052,000 during the year ended December 31, 2018 and increased by RMB10,996,000 (US$1,579,000) during the year ended December 31, 2019. As of December 31, 2019, the Group has net operating losses carried forward from its PRC subsidiaries of RMB965,767,000, which will expire between 2020 and 2024. As of December 31, 2019, the Group has net operating losses carried forward from its non-PRC subsidiaries of RMB25,094,000 available to offset future taxable income. Unrecognized Tax Expense A roll-forward of accrued unrecognized tax expense is as follows: December 31, 2018 2019 RMB’000 RMB’000 US$’000 Beginning balance (8,273) (8,273) (1,203) Increase based on tax positions related to the current year — — Ending balance (8,273) (8,273) (1,203) The unrecognized tax expense is mainly related to under-reported income and transfer pricing for certain subsidiaries and VIEs. The amount of unrecognized tax expense 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. For the years ended December 31, 2018 and 2019, there’s no unrecognized tax expense, if ultimately recognized, will impact the effective tax rate. The Group recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. During the years ended December 31, 2017, 2018, and 2019, the Group recognized approximately RMB 1,510,000, RMB 1,510,000 and RMB1,365,000 (US$196,000) in interest and penalties. The Group had approximately RMB 13,731,000 and RMB 15,096,000 (US$2,168,000) for the payment of interest and penalties accrued at December 31, 2018 and 2019, respectively. In accordance with PRC Tax Administration Law on the Levying and Collection of Taxes, the PRC tax authorities generally have up to five years to assess underpaid tax plus penalties and interest for PRC entities’ tax filings. The statute of limitations is ten years when the adjustment is relating to transfer pricing. In the case of tax evasion, which is not clearly defined in the law, there is no limitation on the tax years open for investigation. Accordingly, the PRC entities remain subject to examination by the tax authorities based on the above. |
RELATED PARTY BALANCES AND TRAN
RELATED PARTY BALANCES AND TRANSACTIONS | 12 Months Ended |
Dec. 31, 2019 | |
RELATED PARTY BALANCES AND TRANSACTIONS | |
RELATED PARTY BALANCES AND TRANSACTIONS | 21. RELATED PARTY BALANCES AND TRANSACTIONS In addition to the information disclosed elsewhere in the financial statements, the principal related parties with which the Group had transactions during the years presented are as follows: Name of Related Parties Relationship with the Company Mr. Wang Song The Co-Founder and Ex-director of the Company Ms. Kou Xiaohong The Co-Founder and Ex-director of the Company Mr. Xiaoqiang Wei Chief Executive Officer and Director of the Company On May 17, 2019 and June 5, 2019, Mr. Song Wang tendered his resignation as the Company’s Chief Executive Officer and the Board as Directors, respectively. The Co-founder and director Ms. Xiaohong Kong resigned from the management team and the Board on August 15, 2019. On December 15, 2019, Mr. Xiaoqiang Wei was elected as the Company’s new Chief Executive Officer. Guarantee provided by related parties to the Group Mr. Wang Song and Ms. Kou Xiaohong provided guarantee for all the bank borrowing from Bank B and Bank C during the year ended December 31, 2017 (Note 12 (b)) Mr. Wang Song provided guarantee for the finance lease from vendor A with the amount of RMB 39,000,000 and RMB 50,000,000 during the year ended December 31, 2018 and 2019, respectively. Mr. Wang Song and Ms. Kou Xiaohong provided guarantee for the finance lease from vendor B with the amount of RMB 25,000,000 and RMB 34,500,000 during the year ended December 31, 2018 and 2019, respectively. The Group had the following related party balances and related party transactions for the years presented: Amounts due from a related party Mr. Xiaoqiang Wei Total Balance as of December 31, 2018 — — Advance for the Group’s expenditure 65 65 Balance as of December 31, 2019 65 65 Balance as of December 31, 2019 (US$’000) 9 9 Amounts due to related parties Mr. Wang Ms. Kou Song Xiaohong Total Balance as of January 1, 2017, and December 31 2017 — (18) (18) Expense paid on behalf of the Group (328) — (328) Expense Reimbursement payment 277 — 277 Balance as of December 31, 2018 (51) (18) (69) Expense Reimbursement payment 51 Expense paid on behalf of the Group — (9) 42 Balance as of December 31, 2019 — (27) (27) Balance as of December 31, 2019 (US$’000) — (4) (4) |
RESTRICTED NET ASSETS
RESTRICTED NET ASSETS | 12 Months Ended |
Dec. 31, 2019 | |
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, 2018 and 2019, the Group had appropriated RMB1,326,000 and RMB1,326,000 (US$190,000), respectively in its statutory reserves. Foreign exchange and other regulations in the PRC may further restrict the Company’s PRC subsidiaries and 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, 2019, restricted net assets of the Company’s PRC subsidiaries and VIEs were RMB461,213,000 (US$66,249,000). |
LOSS PER SHARE
LOSS PER SHARE | 12 Months Ended |
Dec. 31, 2019 | |
LOSS PER SHARE | |
LOSS PER SHARE | 23. LOSS PER SHARE Basic and diluted loss per share for each of the periods presented are calculated as follows: For the Year Ended December 31, 2017 2018 2019 (RMB’000) (RMB’000) (RMB’000) (US$’000) except shares and per share data Numerator: Net loss attributable to ordinary shareholders: (369,161) (24,418) (51,671) (7,421) Denominator: Number of shares outstanding, opening 421,522,374 425,150,082 429,404,977 429,404,977 Weighted average number of shares issued 4,067,372 1,659,485 7,244,845 7,244,845 Weighted-average number of shares outstanding – Basic and diluted 425,589,746 426,809,567 436,649,822 436,649,822 Loss per share -Basic and diluted (0.87) (0.06) (0.12) (0.02) The effects of share options have been excluded from the computation of diluted loss per share for the years ended December 31, 2017, 2018 and 2019 as their effects would be anti-dilutive. Due to the Group incurred loss for each of the three years ended December 31, 2019, potential dilutive securities that were not included in the calculation of dilutive net loss per share in each year where their inclusion would be anti-dilutive include share options and restricted shares of 10,417,850, 21,786,541 and 11,223,058, for the years ended December 31, 2017, 2018, and 2019, respectively. During 2019, treasury stock was used to settle 44,000 units of share options and 160,000 units of restricted share units vested. |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | 12 Months Ended |
Dec. 31, 2019 | |
FAIR VALUE MEASUREMENT | |
FAIR VALUE MEASUREMENT | 24. FAIR VALUE MEASUREMENT The Group 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 Group 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 B 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 Investee B RMB’000 Fair value at January 1, and December 31, 2016 3,973 Other than temporary impairment (3,973) Fair value at December 31, 2017, 2018 and 2019 — Fair value at December 31, 2019 (US$’000) — The Group’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 recorded in other comprehensive loss were RMB4,195,000, nil and nil for the years ended December 31, 2017, 2018 and 2019, respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2019 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 25. COMMITMENTS AND CONTINGENCIES (a) Purchase Commitments As of December 31, 2019, the Group had outstanding purchase commitments in relation to bandwidth and cloud infrastructure of RMB187,547,000 (US$26,939,000). (b) Contingencies Litigations related with a subsidiary of BFSMC, SXHT In October 2017, SXHT filed a lawsuit against Xin Run in the Shunyi District Court of Beijing requesting Xin Run pay overdue rent and the relating interest. In June 2019, the second instance of this case has been completed. The court has sentenced in support of the plaintiff that Xin Run should pay overdue rent from October 2017 to June 2018 in an amount equal to RMB64.8 million and the relevant interest thereon. SXHT has applied to the competent court for compulsory execution of the court decision. In August 2019, the IDC buildings (1#,2#,4#,7#,8#,9#,10#) and their related land use right have been sealed up by court. Xin Run has filed an application for suspension of such compulsory execution. As of December 31, 2019, the rental has been fully recorded equal to the sentenced amount under other payables to offset consideration for disposal of Beijing Zhao Du in the expectation to net settle with SXHT. In June 2019, SXHT filed another lawsuit against Xin Run in the Shunyi District Court of Beijing requesting Xin Run pay overdue rent from July 2018 to March 2019 with total amount of RMB64.8 million and the relating interest. Xin Run has filed an application for suspension of such lawsuit. The lawsuit is still pending as of March 31, 2020. Management is of the view that it is impossible to properly evaluate the outcome. However, based on the result of similar lawsuit discussion above, the rental has been recorded in the balance sheet under other payables to offset consideration for disposal of Beijing Zhao Du as of December 31, 2019 in the expectation to net settle with SXHT. In August 2017, Xin Run, initiated a lawsuit against SXHT in Beijing. Xin Run sought the payment of remaining purchase price in the amount of RMB105.6 million and the related interest. In September 2017, SXHT filed the statement of defense and made a counterclaim, claiming, among others, the late delivery penalties and relating losses in the total amount of approximately RMB50.5 million up to September 12, 2017. In addition, Xin Run’s bank deposits and other assets in a total amount of approximately RMB50.5 million were sealed up, distrained or frozen by the court. On April 24, 2018, Xin Run amended its claim requesting, among other things, the defendant pay the additional purchase price of RMB96 million, damages for breach of contract in an amount of RMB14.4 million and the related interest of RMB8.86 million. On December 31, 2019, the court sentenced that the original equity transfer agreement with SXHT is invalid and both parties should return the money received. In January 2020, Xin Run appealed to higher court to request that a) SXHT to should pay the interest for the RMB 82.68 million rental it has received from the date such fund was paid by Xin Run at annualized interest rate of 4.35% in the amount of RMB 13.34 million up to January 17, 2020, b) SXHT should return business license of Beijing Zhao Du to Xin Run, c) the unpaid rental balance due to SXHT should be also waived, as the lease back agreement were signed based on the original equity transfer agreement, which was sentenced by court as invalid. And that the sentence, including the compulsory execution made the June 2019 relating to the overdue rental payment should also be withdrawn. In January 2020, SXHT also appealed to higher court to request Xin Run to pay interest for the RMB 672 million consideration from the date such fund was paid to Xin Run at annualized interest rate of 9%, in the total amount of RMB263.79 million up to December 31,2019. As of December 31, 2019, liabilities of RMB104.4 million has been recorded for the penalty in the balance sheet under accrued expenses and other current liabilities according to the original equity transfer agreement for the late delivery. Management is of the view that these legal proceedings are still subject to final sentence, and that it is impossible at this stage to properly evaluate the outcome. Therefore, no other provision has been made for this case. Litigations related to Bank loans In October 2019, Bank B sent notice of early maturity of loan to Xin Run and asked for the early repayment of bank loans amounted to RMB 170 million (Note 12(b)) and related unpaid interest immediately, as the buildings ( IDC Buildings 1#, 7#, and 8#) and their related land use right pledged to Bank B have been sealed up by the court in other litigation relating to SXHT, the bank account in Bank B has been frozen. and Xin Run did not made repayment of loans according to the repayment plan, which violated the bank facility agreement. In November 2019, Bank B has filed a lawsuit against Xin Run and all the seven IDC Buildings and their related land use right were sealed up by court as requested by Bank B. Xin Run did not repay the bank loan as of as of March 31, 2020. In October 2019, Bank C sent notice of early maturity of loan to Xin Run and asked for the early repayment of bank loans amounted to RMB160 million (Note 12(b)) and related unpaid interest, which originally should be due in 2022. As the buildings (IDC Buildings 4#, 9# and 10#) and land use right pledged to the bank have been sealed up by the court due to another lawsuit with SXHT, the bank considered that Xin Run has defaulted and asked for the immediate repayment of the RMB160 million and related unpaid interest within three days. Xin Run repaid RMB 10 million thereafter and did not repay the outstanding bank loan as of March 31, 2020. In November 2019, Bank C has filed a lawsuit against Xin Run and all the seven IDC Buildings and their related land use right were sealed up by court pursuant to the request by Bank C. Litigations related to Beijing Kangtuo Technologies Co., Ltd (“BJKT”) In August 2019, a building materials technology company initiated a lawsuit against Xin Run in the Beijing Shunyi District People’s Court to request payment of approximately RMB35.6 million that should be paid by Xin Run to one of the Group’s supplier BJKT, as such BJKT was obligated to pay the same amount to the building materials technology company, and the relating cost of the lawsuit. Xin Run filed a motion to dismiss the case for lack of jurisdiction, which was granted by the court and as a result, this lawsuit is still pending. The amount has been accrued as other payables under the name of BJKT. During 2019, there are other 3 suppliers of BJKT filed similar lawsuits against Xin Run to request payment of approximately RMB 14 million in total. In October 2019, BJKT filed a lawsuit against Xin Run in the Beijing Shunyi District People’s Court, requesting Xin Run to pay overdue construction fees of RMB 14 million and liquidated damage of RMB 6.5 million. Xin Run filed a motion to dismiss for lack of jurisdiction. However, Xin Run were notified by the court that its motion was rejected and certain real-property of Xin Run was sealed up by the court. The Group has accrued the amount as other payables. In December 2019, BJKT filed another lawsuit against Xin Run in the Beijing Shunyi District People’s Court, requesting Xin Run to pay overdue construction fees of RMB 69.3 million and liquidated damage of RMB 9.2 million. During the court session, BJKT agree to alter the claim to construction fees of RMB 31.3 million and liquidated damage of RMB 7.3 million, because BJKT has transfer the debt due from Xin Run of RMB 38 million to one of its equipment technology company supplier, which also filed a lawsuit to Xin Run in December 2019. In December 2019, the court rendered a judgment on the case to support plaintiff’s request, and the certain IDC building of Xin Run was sealed up by the court. Xin Run has appealed the judgment to higher court. The Group has accrued the amount as other payables. In December 2019, the aforementioned equipment technology company supplier of BJKT filed a lawsuit against Xin Run in the Beijing Shunyi District People’s Court, requesting Xin Run to repay the debt transferred from BJKT of RMB 38 million, and the related interest. Two of the IDC Buildings was sealed up by court as requested. In summary, the total effective claim arising from the lawsuits related to BJKT were construction fee of RMB 83.3 million and related liquidated damage and interest of RMB 13.8 million, resulting in RMB 97.1 million in total. The Group has accrued liability of RMB 90.2 million as other payables as of December 31, 2019. These lawsuits are still pending as of March 31, 2020. Management is of the view that these proceedings are at a preliminary stage, therefore it is impossible at this stage to properly predict the result and potential financial impact of this pending claim, if any. No further provision provided. Other litigations In May, 2019, the Group received a notice from a government prosecutors’ office in Beijing that the Group was currently under investigation for allegations of enterprise bribery. The Group has engaged a criminal defense counsel to prepare for the relevant legal proceedings. By that date, Mr. Song Wang had been arrested and was also currently under investigation for the allegations of enterprise bribery against the Group. Mr. Song Wang tendered his resignation as the Company’s Chief Executive Officer to the Board on May 17, 2019. The lawsuit is still pending as of March 31, 2020. The Company is currently unable to assess the likely outcomes of such proceedings. Therefore, no provision has been made for this case. The Company and certain of its current and former officers and directors have been named as defendants in a shareholder class action lawsuit filed in the U.S. District Court for the Central District of California (the “Central California District Court”): William Likas v. ChinaCache International Holdings Ltd. et al, Civil Action No. 2:2019-cv-06942 (C.D. Cal.) (filed on August 9, 2019). The action—purportedly brought on behalf of a class of persons who allegedly suffered damages as a result of their trading activities related to the Group’s ADSs from April 10, 2015 to May 17, 2019—alleges that certain of the Group’s public statements and filings contained materially false and misleading statements or omissions in violation of U.S. securities laws. On October 2, 2019, the Central California District Court appointed a group of two purported shareholders of the Company as the Lead Plaintiff of the class. On November 13, 2019, the Central California District Court entered an order to show cause, ordering the Lead Plaintiff to explain why this action should not be dismissed for lack of prosecution because the Lead Plaintiff had not filed a proof of service regarding any defendant. On November 20, 2019, the Lead Plaintiff submitted a response to the Court’s order to show cause and requested that the Court allow the Lead Plaintiff to serve the defendants through alternative means. On December 16, 2019, the lead plaintiff submitted a motion for alternative service, requesting the Court allow the lead plaintiff to serve two defendants, namely, the Company and Ms. Fengye Gao, the Company’s former Financial Controller, through alternative means. On January 29, 2020, the Court granted the lead plaintiff’s motion for alternative service. The lead plaintiff submitted proofs of service for completing service on the Company and Ms. Fengye Gao on February 13, 2020. On February 27, 2020, the Court issued an order as requested by the Company and lead plaintiff, which order sets the lead plaintiff’s deadline to file an amended complaint on April 17, 2020. The lawsuits is still pending, and management is of the view that these proceedings are 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. In July 2017, a claim was raised by a construction company of the cloud infrastructure against Xin Run, for the alleged non-payment of construction fees of RMB73.9 million and the relating interest. In July 2019, this construction company and Xin Run reached an agreement under the mediation of the Court of Second Instance to settle this case, which both parties agreed that Xin Run should pay RMB33.7 million to this construction company. In August 2019, Xin Run repaid RMB10 million, but it did not repay the remaining balance after that. According to the agreement, if Xin Run does not settle the payment on time, it should be doubled the relating interest for the delaying days. In November 2019, the construction company has applied to the competent court for compulsory execution. As of December 31, 2019, the Group has fully accrued the amount as other payables. In April 2019, a trading company filed a lawsuit against Xin Run for the payment of equipment purchase price and related penalty in a total amount of approximately RMB37.2 million. In June 2019, the trading company and Xin Run reached an agreement under the mediation of the court. According to the agreement, Xin Run should pay RMB20.2 million and related interest of RMB6.0 million to the trading company, among which, RMB 20.2 million should be paid by 2019 and RMB 6 million by January 2020. Both parties also agreed that if Xin Run does not settle the payment on time, it should be pay the relating interest with interest rate 2% per month for the delayed days. By 2019, Xin Run only settled RMB2.0 million, failing to repay the outstanding balance as agreement. As of December 31, 2019, the Group has fully accrued the amount as other payables. In April 2019, a technology company filed a lawsuit in Shanghai Minhang District People’s Court against Beijing Blue I.T., demanding payment of service fee and relevant liquidated damage in a total amount of approximately RMB28.3 million. The court rendered a judgment on the case on October 15, 2019, which ruled that Beijing Blue I.T. should pay relevant service fee, liquidated damage and costs of legal proceedings. Beijing Blue I.T. has appealed the judgment to higher court. Subsequently in January 2020, plaintiff and Xin Run reached an agreement under the mediation of the Court of Second Instance to settle this case. Xin Run should pay RMB27.5 million to plaintiff by October 2020. The Group has fully accrued the service fee as liability in balance sheet as of December 31, 2019. In June 2019, a computer company filed a lawsuit against Xin Run requesting for the payment of equipment purchase fee and its related interest in a total amount of RMB40.8 million. Thereafter Xin Run filed a motion to dismiss the company’s counterclaim arguing that the court does not have the jurisdiction. In November 2019, the court made judgment and agreed to transfer the case to Chaoyang District Court of Beijing. In June 2019, the computer company also filed a lawsuit against Xin Run requesting for the payment of construction service fee and its related interest in a total amount of RMB58.1 million. In September 2019, the computer company altered its request for litigation with claiming extra construction fee with the amount of RMB16.5 million. Both the lawsuits are pending as of March 31, 2020. As of December 31, 2019, the Group has accrued most of the amount as other payables of approximately RMB 90.4 million. Management is of the view that these proceedings are at preliminary stages, and it is impossible at this stage to properly evaluate the outcome. In December 2019, another technology company filed a lawsuit against Xin Run in Beijing Shunyi District People’s Court, for the alleged non-payment of construction fees of RMB65.2 million and the relating interest of RMB 7.5 million. As of December 31, 2019, The Group has accrued most of the amount as other payables amounting to approximately RMB 47.2 million. The court session has not begun, and management is of the view that the litigation is still in early stage, and that it is impossible at this stage to properly evaluate the outcome. Therefore, no other provision has been made for this case. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 12 Months Ended |
Dec. 31, 2019 | |
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 March, 2020, a new VIE structure has been established and set up within the Group. Under this new VIE agreements, there are three companies newly set-up: (i) ShenRong HK, a wholly owned subsidiary of CCIH, (ii) ChinaCache RongShen Technology (Beijing) Co., Ltd. (“RongShen Beijing”), a wholly foreign owned enterprise of ShenRong HK; (iii) ChinaCache ShenRong Technology (Beijing) Co., Limited (“ShenRong Beijing”), a domestic operation company. The establishment of new VIE structure is mainly for the purpose of developing data security, cloud serving, edge computing, and oversea CDN business services in the future years. In December 2019, novel coronavirus (COVID-19) was first reported to have surfaced in Wuhan, China. Subsequently, COVID-19 has spread rapidly to many parts of China and other parts of the world. The pandemic has resulted in quarantines, travel restrictions, and the temporary closure of stores and facilities in China and elsewhere. Substantially all of the Group’s workforce are concentrated in China. Consequently, the COVID-19 outbreak may materially adversely affect our business operations and the Group’s financial condition and operating results for 2020, including but not limited to material negative impact to the Group’s total revenues, slower collection of accounts receivables and additional allowance for doubtful accounts and significant downward adjustments or impairment to the Group’s long-lived assets. Because of the significant uncertainties surrounding the COVID-19 outbreak, the extent of the business disruption and the related financial impact cannot be reasonably estimated at this time. Subsequent events relating to litigation see Note 25. |
CONDENSED FINANCIAL INFORMATION
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | 12 Months Ended |
Dec. 31, 2019 | |
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, 2018 2019 RMB RMB US$ ASSETS: Current assets: Cash and cash equivalents 8,455 880 126 Prepaid expenses and other current assets, net 2,283 2,453 352 Total current assets 10,738 3,333 478 Non-current assets: Long term investments 20,045 20,045 2,879 Investments in subsidiaries and consolidated VIEs (565,557) (603,810) (86,732) Total non-current assets (545,512) (583,765) (83,853) TOTAL ASSETS (534,774) (580,432) (83,375) LIABILITIES AND SHAREHOLDERS’ DEFECIT: Current liabilities: Accrued employee benefits — 1,886 271 Accrued expenses and other payables 1,489 2,710 389 Total current liabilities 1,489 4,596 660 Total liabilities 1,489 4,596 660 Shareholders’ deficit: Ordinary shares (US$0.0001 par value; 1,000,000,000 and 1,000,000,000 shares authorized; 429,404,977 and 436,656,529 shares issued and outstanding as of December 31, 2018 and 2019, respectively) 338 338 44 Additional paid-in capital 1,579,153 1,581,064 227,106 Treasury stock (18,033) (15,332) (2,202) Statutory reserves 1,326 1,326 190 Accumulated deficit (2,100,569) (2,152,240) (309,150) Accumulated other comprehensive income/(loss) 1,522 (184) (23) Total shareholders’ deficit (536,263) (585,028) (84,035) TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT (534,774) (580,432) (83,375) CONDENSED STATEMENTS OF COMPREHENSIVE LOSS (Amounts in thousands of RMB and US$) For the years ended December 31, 2017 2018 2019 RMB RMB RMB US$ General and administrative expenses (10,986) (8,551) (32,232) (4,630) Impairment of long-term investments (3,290) — — — Operating loss (14,276) (8,551) (32,232) (4,630) Interest income(expense), net — 5 (3) — Other income 14,384 21,662 3,430 493 Foreign exchange (loss)/ gain (11,043) 4,200 1,448 208 Share of losses from subsidiaries and consolidated VIEs (358,226) (41,734) (24,314) (3,492) Loss before income taxes (369,161) (24,418) (51,671) (7,421) Income tax expense — — — — Net loss (369,161) (24,418) (51,671) (7,421) Foreign currency translation adjustment 2,748 (1,037) (1,706) (245) Unrealized loss from available-for-sale investments (4,195) — — — Amounts reclassified from accumulated other comprehensive income 3,290 — — — Total other comprehensive income /(loss), net of nil tax 1,843 (1,037) (1,706) (245) Comprehensive loss (367,318) (25,455) (53,377) (7,666) CONDENSED STATEMENTS OF CASH FLOWS (Amounts in thousands of RMB and US$) For the years ended December 31, 2017 2018 2019 RMB RMB RMB US$ Net cash used in operating activities (22,514) (4,151) (10,481) (1,506) Cash flows from investing activities: Net cash provided by investing activities — — — — Cash flows from financing activities: Net cash used in financing activities — — — — Net (decrease)/increase in cash and cash equivalents (22,514) 4,151 (10,481) (1,506) Cash and cash equivalents at beginning of the year 24,463 1,141 8,455 1,214 Effect of foreign exchange rate changes on cash (808) 3,163 2,906 418 Cash and cash equivalents at end of the year 1,141 8,455 880 126 (a) Basis of presentation The condensed financial information of the Company has been prepared using the same accounting policies as set out in the Group '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 ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
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 (“U.S. GAAP”). |
Going concern | (b) Going concern The Group experienced net loss of approximately RMB371,166,000, RMB25,813,000 and RMB52,705,000 (US$7,570,000) for the years ended December 31, 2017, 2018 and 2019, respectively. As of December 31, 2019, the Group had net current liabilities of approximately RMB1,642,726,000 (US$ 235,964,000), excluding net asset held for sale. These conditions raised substantial doubt about the Group's ability to continue as a going concern. When preparing the consolidated financial statements as of December 31, 2019 and for the year then ended, the Group ’s management concluded that a going concern basis of preparation was appropriate after analyzing the cash flow forecast for the next twelve months. In preparing the cash flow analysis, management took into account of a) estimated consideration of RMB1,830,000,000 (US$262,863,000) from planned disposal of the cloud infrastructure buildings and assets held for sale, and b) locating more domestic CDN customers from 2020 to compensate the estimated revenue decrease from US, and controlling its operating costs and negotiating with vendors for more favorable payment terms. If the Group fails to achieve these goals, the Group may need additional financing to execute its business plan. If additional financing is required, the Group cannot predict whether this additional financing will be in the form of equity, debt, or another form, and the Group may not be able to obtain the necessary additional capital on a timely basis, on acceptable terms, or at all. In the event that financing sources are not available, or that the Group is unsuccessful in increasing its gross profit margin and reducing operating losses, the Group may be unable to implement its current plans for expansion, repay debt obligations or respond to competitive pressures, any of which would have a material adverse effect on the Group's business, prospects, financial condition and results of operations. Management prepared the consolidated financial statements assuming the Group will continue as a going concern. However, there is no assurance that the measures above can be achieved as planned. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. If the Group is unable to continue as a going concern, it may have to liquidate its assets and may receive less than the value at which those assets are carried on the financial statements. |
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 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 the consolidated financial statements in conformity with U.S. 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, renewal period of lease terms and incremental borrowing rate of right-of-use assets and related lease obligations, impairment of long-term investments, long-lived assets and intangible assets, allowance for doubtful accounts, accounting for deferred income taxes, and accounting for share-based compensation arrangements. The valuation of and accounting for the Group’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, ShenRong HK, ChinaCache IE, and ChinaCache UK, which are the United States dollar (“US$”), Hong Kong dollar (“HK$”), Euro (“EUR”) and Great Britain Pound (“GBP”) respectively, as determined based on the criteria of Accounting Standards Codification (“ASC”) 830 (“ASC 830”) “ Foreign Currency Matters ”. The reporting currency of the Company is also the RMB. Transactions denominated in foreign currencies are re-measured into the functional currency at the exchange rates prevailing on the transaction dates. Foreign currency denominated financial assets and liabilities are re-measured at the balance sheet date exchange rate. Exchange gains and losses are included in foreign exchange gains and losses in the consolidated statements of comprehensive loss. |
Convenience translation | (f) Convenience translation Amounts in US$ are presented for the convenience of the reader and are translated at the noon buying rate of US$1.00 to RMB6.9618 on December 31, 2019 in the City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York. No representation is made that the RMB amounts could have been, or could be, converted into US$ at such rate. |
Cash and cash equivalents | (g) Cash and cash equivalents Cash and cash equivalents consist 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 As of December 31, 2018 and 2019, all the restricted cash relates to cash frozen by courts order during the ongoing legal proceedings. |
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 3-15 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 Building 20-40 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 amounts of interest that would be capitalized were immaterial during the years ended December 31, 2017, 2018 and 2019. |
Land use right | (k) Land use right The land use right represents 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 groups) 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. If circumstances arise that previously were considered unlikely and, as a result, an entity decides not to sell a long-lived asset or disposal group previously classified as held for sale, the asset or disposal group would be reclassified as held and used. The Group measures long-lived assets that are reclassified on an individually basis at the lower of the following: a. Its carrying amount before the asset or disposal group was classified as held for sale, adjusted for any depreciation or amortization expense that would have been recognized had the asset or disposal group been continuously classified as held and used; and b. A disposal group qualifies as discontinued operation if it is a component of the Group 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 the Group’s operations and financial results. |
Impairment of long-lived assets | (n) Impairment of long-lived assets The Group 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 Group 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 Group 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 RMB21,757,000, nil and nil were recognized from properties and equipment and intangible assets for the years ended December 31, 2017, 2018 and 2019, respectively. |
Investments | (o) Investments 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 loss in shareholders’ deficit. Realized gains or losses are charged to earnings during the period in which the gain or loss is realized. If the Group 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 loss except for other-than-temporary impairment, which would be charged to current period earnings. Impairment of available-for-sale investments for the years ended December 31, 2017, 2018 and 2019 were RMB 3,290,000, nil and nil, respectively. Investment in limited partnerships Where consolidation is not appropriate, the Group applies the equity method of accounting that is consistent with ASC 323 “Investments - Equity Method and Joint Ventures” to limited partnerships in which the Group holds either (a) a five percent or greater interest or (b) less than a five percent interest when the Group has more than virtually no influence over the operating or financial policies of the limited partnership. The Group 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 Group applies the cost method of accounting. Cost method investment Prior to adopting ASC Topic 321 (“ASC 321”), Investments – Equity Securities, on January 1, 2018, the Group carries at cost its investments in investees that do not have readily determinable values or investments and over which the Group does not have significant influence, in accordance with ASC subtopic 325-20 (“ASC 325-20”), Investments-Other: Cost Method Investments. The Group carries the investment at cost and only adjusts for other-than-temporary declines in fair value and distributions of earnings that exceed the Group's share of earnings since its investment. Management regularly evaluates the impairment of equity investments without readily determinable fair value based on the 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, 2017, 2018 and 2019 were RMB400,000, nil and nil, respectively. The Group adopted ASC 321 on January 1, 2018 and the cumulative effect of adopting the new standard on opening accumulated deficit is nil. Pursuant to ASC 321, equity investments, except for those accounted for under the equity method and those that result in consolidation of the investee and certain other investments, are measured at fair value, and any changes in fair value are recognized in earnings. For equity securities without readily determinable fair value and do not qualify for the existing practical expedient in ASC Topic 820 (“ASC 820”), Fair Value Measurements and Disclosures, to estimate fair value using the net asset value per share (or its equivalent) of the investment, the Group elected to use the measurement alternative to measure those investments at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer, if any. Equity securities with readily determinable fair value are measured at fair values, and any changes in fair value are recognized in earnings. Pursuant to ASC 321, for equity investments measured at fair value with changes in fair value recorded in earnings, the Group does not assess whether those securities are impaired. For those equity investments that the Group elects to use the measurement alternative, the Group makes a qualitative assessment of whether the investment is impaired at each reporting date. If a qualitative assessment indicates that the investment is impaired, the entity has to estimate the investment’s fair value in accordance with the principles of ASC 820. If the fair value is less than the investment’s carrying value, the entity has to recognize an impairment loss in net income equal to the difference between the carrying value and fair value. |
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 and other current assets, short-term investments, short term borrowings, accounts payables, accrued expenses, 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 borrowings approximates 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. The Group, 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 Group 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 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. On January 1, 2018, the Group adopted ASU No. 2014-09, Revenue from Contracts with Customers, (“ASC 606”), which supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition, (“ASC 605”), using the modified retrospective transition method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts have not been adjusted and continue to be reported in accordance with historic accounting under ASC 605. The impact of adopting the new revenue standard was not material to the consolidated financial statements and there was no adjustment to beginning retained earnings on January 1, 2018. Under ASC 606, an entity recognizes revenue as the Group satisfies a performance obligation when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price, including variable consideration, if any; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Group only applies the five-step model to contracts when it is probable that the entity will collect the consideration to which it is entitled in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Group reviews the contract to determine which performance obligations it must deliver and which of these performance obligations are distinct. The Group recognizes revenue based on the amount of the transaction price that is allocated to each performance obligation when that performance obligation is satisfied or as it is satisfied. The Group is a principal and records revenue on a gross basis when the Group is primarily responsible for fulfilling the service, has discretion in establish pricing and controls the promised service before transferring that service to customers. Otherwise, the Group records revenue at the net amounts as commissions. The Group generates revenue from CDN, IDC and IX services under ASC Topic 606: CDN Services CDN is a content distribution network built on the network. Relying on the edge servers deployed in various regions, through load balancing, content distribution, scheduling and other functional modules of the central platform, CDN enables users to obtain the required content nearby, reduces network congestion, and improves user access response speed and hit rate. For revenue stream of CDN, the promised service is to provide CDN service to the customer, which is qualified as a single distinct performance obligation. The unit price is fixed when contract entered with customers. CDN services are typically provided to customers over the contract service period and the related revenues are recognized based on actual usage over the term of the contract after the reconciliation with customers completed. The Group is a principal and records revenue for CDN service on a gross basis. IDC Services IDC services provide cabinet rental and bandwidth service to customer. The Group provides two promised services, cabinet rental and bandwidth service. The promise services are not distinct within the context of the contract as the goal of IDC is to combine traditional internet data center and content delivery. The reason why the customers rent the Group’s cabinet is not only to benefit from the Group’s physical hosting location and maintenance service, but also to enjoy the bandwidth service provided by the Group. It is cost efficient to consume the Group’s bandwidth service rather than to connect directly to bandwidth service provider such as China Unicom or China Mobile. Thus, these two promise services within the contract of IDC service-cabinet rental and bandwidth service are not distinct and shall be identified as one performance obligation. Typically, IDC services are provided to customers for a fixed unit price over the contract service period and the related revenues are recognized based on actual usage and unit price over the term of the contract after the reconciliation with customers completed. The Group is a principal and records revenue for IDC service on a gross basis. IX Services IX Services allow networks to interconnect directly, via the exchange, rather than through one or more third-party networks. The primary advantages of direct interconnection are cost, latency, and bandwidth. Same as IDC, there are two promised services within the contract, one is to provide a port usage and the other is to provide bandwidth. However, the service is not distinct within context of the contract as the services provided is highly integrated. Thus, only one performance obligation is identified for IX revenue stream. The unit price is fixed when contract entered with customers. IX services are provided to customers over the contract service period and the related revenues are recognized based on actual usage and unit price over the term of the contract after the reconciliation with customers completed. The Group is a principal and records revenue for IX service on a gross basis. 6% of value-added tax, or VAT are applied on all services provided by the Group’s PRC subsidiaries and VIEs and VIEs’ subsidiaries. Disaggregation of revenues The following table illustrates the disaggregation of revenue by revenue stream for the years ended December 31, 2017, 2018 and 2019. For the Years Ended December 31, 2017 2018 2019 RMB’000 RMB’000 RMB’000 US$’000 CDN Services 669,938 709,498 648,117 93,096 IDC Services 149,316 185,973 255,524 36,704 IX Services 33,314 27,120 14,987 2,153 Total 852,568 922,591 918,628 131,953 The following table provides information about accounts receivables and contract liabilities from contracts with customers: Years as of December 31, 2018 2019 RMB’000 RMB’000 US$’000 Accounts receivables 210,476 105,608 15,170 Advance from customers 18,598 15,323 2,201 |
Cost of revenues | (r) Cost of revenues Cost of revenue consists primarily of depreciation of the Group'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. All the services provided by the Group in the PRC, including VIEs are subject to VAT. Such 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 RMB200,000, nil and nil for the years ended December 31, 2017, 2018 and 2019, 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 Group's services and network. Costs incurred in the development of the Group's services are expensed as incurred. To date, the amount of costs qualifying for capitalization has been insignificant. |
Government grant | (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 Group will continue to receive these government grant in the future. Government grant are recognized when it is probable that the Group 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 Group also consist of unrestricted grant which are received on an unsolicited and unconditional basis to support the growth of the Group and do not relate to the Group's operating activities. Unrestricted grant is classified as non-operating income and recorded in other income on the consolidated statements of comprehensive loss upon receipt. |
Leases | (v) Leases Leases are classified at the inception date as either a finance lease or an operating lease. The Group did not enter into any leases whereby it is the lessor for any of the periods presented. The Group leases equipment under finance lease agreements. As the lessee, a lease is a finance 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 for the major part of the equipment’s estimated remaining economic life, or d) the present value of the sum of the lease payments and any residual value guaranteed that is not already reflected in the lease payments equals or exceeds substantially all of the fair value of equipment, d) the equipment is of such specialized nature that is expected to have no alternative use to the lessor at the end of lease term. A lease involving integral equipment is a finance lease only if condition (a) or (b) exists. A finance 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. The Group has certain operating leases for offices and IDC buildings 3# with equipment in it. Some leases include one or more options to renew, which is typically at the Group's sole discretion. The majority of renewals to extend the lease terms are not included in our right of use assets and lease liabilities as they are not reasonably certain of exercise. The Group regularly evaluates the renewal options, and, when it is reasonably certain of exercise, it will include the renewal period in its lease term. New lease modifications result in remeasurement of the right of use asset and lease liability. The Group’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. In February 2016, the FASB issued a new standard related to leases to increase transparency and comparability among organizations by requiring the recognition of operating lease right-of-use (“ROU”) assets and lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The Group is also required to recognize and measure new leases at the adoption date and recognize a cumulative-effect adjustment in the period of adoption using a modified retrospective approach, with certain practical expedients available. On January 1, 2019, the Group adopted the new lease accounting standard using a modified retrospective transition method which allowed the Group not to recast comparative periods presented in its consolidated financial statements. Adoption of this standard resulted in the recording of operating lease ROU assets and corresponding operating lease liabilities and had no impact on accumulated deficit as of January 1, 2019. It had an impact on the Group’s consolidated balance sheets, by initial recognition of ROU assets and lease liabilities of RMB166,124,000 (US$23,862,000)and RMB164,358,000 (US$23,608,000) , respectively, for operating leases, while the Group’s accounting for finance leases remained substantially unchanged. The adoption of ASC 842 did not have a material impact on the Group’s results of operations or cash flows in the current year and prior year comparative periods and as a result, a cumulative-effect adjustment was not required.ROU assets and related lease obligations are recognized at commencement date based on the present value of remaining lease payments over the lease term, using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate for the same term as the underlying lease. |
Income taxes | (w) Income taxes The Group follows the liability method in accounting for income taxes in accordance to ASC topic 740 "Taxation" (“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 Group 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 Group 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 Group 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 share units award granted to employees are accounted for under ASC 718 “Compensation – Stock Compensation” . In accordance with ASC 718, the Company determines whether share options or restricted share units award should be classified and accounted for as liability or equity award. All grants of share options and restricted share units 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 units 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. Forfeitures are recognized when they occur. 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. On January 1, 2018, the Company adopted ASU 2017-09 ”Compensation - Stock Compensation: Scope of Modification Accounting”, which provides clarity and reduces both (1) diversity in practice and (2) cost and complexity when applying the guidance in ASC 718 to a change to the terms or conditions of a share-based payment award. The adoption of ASU 2017-09 did not have a material impact on the Company’s consolidated financial statements. |
Comprehensive income/(loss) | (z) Comprehensive income/(loss) Comprehensive income/(loss) is defined as the increase/(decrease) in equity of the Group during a period from transactions and other events and circumstances excluding transactions resulting from investments by owners and distributions to owners. Comprehensive income/(loss) is reported in the consolidated statements of operations and comprehensive loss. Accumulated other comprehensive loss of the Group includes foreign currency translation adjustments related to ChinaCache US, CCAL, ChinaCache HK, ShenRong HK, 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 and their corresponding deferred tax impact, if any. |
Segment reporting | (aa) Segment reporting The Group follows ASC 280, “ Segment Reporting.” The Group'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 Group as a whole and hence, the Group has only one reportable segment. The Group 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 Group's long-lived assets are substantially all located in the PRC, revenues are derived from each subsidiary and most of the services are provided in PRC, no geographical segments are presented. |
Share Repurchase Program | (bb) Treasury Stock The Group accounted for shares repurchased as treasury stock at cost in accordance with ASC Subtopic 505-30 (“ASC 505-30”), “ Treasury Stock ”, and is shown separately in the shareholders’ deficit as the Group has not yet decided on the ultimate disposition of those ADSs acquired. When the Group uses the treasury stock to settle the exercise of share options and restricted share units vested, the difference between the proceeds received upon settlement and the repurchase price is debited into accumulated deficit. When the Group decides to retire the treasury stock, the difference between the par value and the repurchase price is debited into accumulated deficit. |
Recent Accounting Pronouncement | (cc) Recent accounting pronouncement 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. In November 2019, the FASB issued ASU No. 2019-10 to postpone the effective date of ASU No. 2016-13 for public business entities eligible to be smaller reporting companies defined by the SEC to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Group is currently evaluating the impact of adopting this standard on its consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13 (“ASU 2018-13”), Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in the issued update remove, modify and add disclosure requirements on fair value measurements in Topic 820 Fair Value Measurements. The amendments in this update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Certain amendments in the update should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented. Early adoption is permitted upon issuance of this update. An entity is permitted to early adopt any removed or modified disclosures upon issuance of this update and delay adoption of the additional disclosures until their effective date. The Group is currently evaluating the impact of adopting this standard on its consolidated financial statements. In October 2018, the FASB issued ASU No. 2018-17 (“ASU 2018-17”), Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities. The updated guidance requires entities to consider indirect interests held through related parties under common control on a proportional basis rather than as the equivalent of a direct interest in its entirety when determining whether a decision-making fee is a variable interest. The amendments in this update are effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. These amendments should be applied retrospectively with a cumulative-effect adjustment to retained earnings at the beginning of the earliest period presented. The Group is currently evaluating the impact of adopting this standard on its consolidated financial statements. In November 2018, the FASB issued ASU No. 2018-19 (“ASU 2018-19”), Codification Improvements to Topic 326: Financial Instruments-Credit Losses. It clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20. Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic 842, Leases. 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 Group is currently evaluating the impact of adopting this standard on its consolidated financial statements. Recently issued ASUs by the FASB, except for the ones mentioned above, have no material impact on the Group’s consolidated results of operations or financial position. |
ORGANIZATION (Tables)
ORGANIZATION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
ORGANIZATION | |
Schedule of subsidiaries of the Company and variable interest entities where the Company is the primary beneficiary | As of December 31, 2019, 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 incorporation incorporation ownership Principal activities Subsidiaries ChChinaCache Network Technology (Beijing) Ltd. (“ChinaCache Beijing”) August 25, 2005 The PRC 100 % Provision of technical consultation services ChinaCache North America Inc. (“ChinaCache US”) August 16, 2007 United States of America 100 % Provision of content and application delivery services JNet Holdings Limited (“JNet Holdings”) September 27, 2007 British Virgin Islands 100 % Investment holding ChinaCache Networks Hong Kong Ltd. (“ChinaCache HK”) April 7, 2008 Hong Kong 100 % Provision of content and application delivery services ChChinaCache Xin Run Technology (Beijing) Co., Ltd. (“Xin Run”) July 18, 2011 The PRC 99 % (ii) Construction of cloud infrastructure Metasequoia Investment Inc. (“Metasequoia”) March 28, 2012 British Virgin Islands 100 % Investment holding Beijing Shou Ming Technology Co., Ltd. (“Beijing Shou Ming”) August 15, 2014 The PRC 99 % (ii) Computer hardware, technology development Beijing Zhao Du Technology Co., Ltd. (“Beijing Zhao Du”) (iii) August 15, 2014 The PRC 99 % (ii) Mechanical equipment lease ChinaCache Networks (UK) 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 Beijing Wangrun Technology Co., Ltd ("Beijing Wangrun") (iv) April 26, 2019 The PRC % Mechanical equipment lease Beijing Xiangqing Technology Co., Ltd ("Beijing Xiangqing") (iv) April 28, 2019 The PRC % Mechanical equipment lease Beijing Shuosen Technology Co., Ltd("Beijing Shuosen") (iv) April 28, 2019 The PRC % Mechanical equipment lease ChinaCache ShenRong Technology (Hongkong) Limited ("ShenRong HK") (iv) December 16,2019 Hong Kong % Mechanical equipment lease VIEs Beijing Blue I.T. Technologies Co., Ltd. (“Beijing Blue IT”) (i) June 7, 1998 The PRC — Provision of content and application delivery services Beijing Jingtian Technology Limited (“Beijing Jingtian”) (i) September 1, 2005 The PRC — Provision of content and application delivery services ChinaCache Shouming Technology (Beijing) Co., Ltd. ("ChinaCache Shouming") (i) June 6, 2018 The PRC Technology Development (i) (ii) (iii) (iv) In February 2019, one of the Company’s subsidiaries, ChinaCache Ireland Limited, which has no material operation, was deregistered. |
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, 2018 2019 RMB RMB US$ ASSETS: Current assets: Cash and cash equivalents 14,557 3,936 565 Restricted cash 3,169 12,939 1,859 Accounts receivable (net of allowance for doubtful accounts of RMB80,484 and RMB79,839 (US$11,468) as of December 31, 2018 and 2019, respectively) 72,844 47,516 6,825 Prepaid expenses and other current assets, net 12,711 13,957 2,005 Amounts due from inter-companies (1) 9,572 48,522 6,970 Total current assets 112,853 126,870 18,224 Non-current assets: Property and equipment, net 2,291 2,642 379 Intangible assets, net 35 27 4 Long term investments 10,103 10,081 1,448 Operating lease right-of-use asset — 124,502 17,884 Long term deposits and other non-current assets 4,711 2,640 379 Total non-current assets 17,140 139,892 20,094 TOTAL ASSETS 129,993 266,762 38,318 As of December 31, 2018 2019 RMB RMB US$ LIABILITIES: Current liabilities: Accounts payable 316,963 261,502 37,562 Accrued employee benefits 24,898 27,016 3,881 Accrued expenses and other current liabilities 38,915 25,098 3,605 Other payables 15,072 6,248 897 Income tax payable 10,991 11,594 1,665 Amounts due to inter-companies (1) 263,551 260,385 37,402 Amounts due to subsidiaries held for sale (2) 737 — — Current portion of finance lease obligations 1,284 — — Current portion of operating lease liabilities — 40,155 5,768 Deferred government grant 1,696 302 43 Total current liabilities 674,107 632,300 90,823 Non-current liabilities: Non-current portion of operating lease liabilities — 117,428 16,867 Deferred government grant 14,350 14,350 2,061 Total non-current liabilities 14,350 131,778 18,928 Total liabilities 688,457 764,078 109,751 (1) Amount due from/to inter-companies consist of intercompany receivables/payables to the other companies within the Group. (2) Information with respect to subsidiaries held for sale is discussed in Note 9. For the Years Ended December 31, 2017 2018 2019 RMB’000 RMB’000 RMB’000 US$’000 Net revenues -Third party customers 479,012 344,108 287,653 41,319 -Inter-companies 342,035 499,017 532,766 76,527 Net (loss)/profit (88,547) 105,324 (60,994) (8,761) |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of estimated useful lives of property and equipment | Optical Fibers 20 years Computer equipment 3-15 years Furniture, fixtures and office equipment 5 years Motor vehicles 10 years Leasehold improvements Over the shorter of lease term or the estimated useful lives of the assets Building 20-40 years |
Schedule of estimated economic life of the intangible assets | Purchased software 5 years |
Schedule of disaggregation of revenue by revenue stream and by timing of revenue recognition from continuing operations | For the Years Ended December 31, 2017 2018 2019 RMB’000 RMB’000 RMB’000 US$’000 CDN Services 669,938 709,498 648,117 93,096 IDC Services 149,316 185,973 255,524 36,704 IX Services 33,314 27,120 14,987 2,153 Total 852,568 922,591 918,628 131,953 The following table provides information about accounts receivables and contract liabilities from contracts with customers: Years as of December 31, 2018 2019 RMB’000 RMB’000 US$’000 Accounts receivables 210,476 105,608 15,170 Advance from customers 18,598 15,323 2,201 |
CONCENTRATION OF RISK (Tables)
CONCENTRATION OF RISK (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenues | |
CONCENTRATION OF RISK | |
Schedule of concentration risk | Years as of December 31, 2017 2018 2019 RMB’000 RMB’000 RMB’000 US$’000 Customer E 317,260 503,676 520,358 74,745 Customer F 118,970 * * * |
Accounts receivables | |
CONCENTRATION OF RISK | |
Schedule of concentration risk | Years as of December 31, 2018 2019 RMB’000 RMB’000 US$’000 Customer E 122,504 37,254 5,351 |
Purchases | |
CONCENTRATION OF RISK | |
Schedule of concentration risk | Years as of December 31, 2017 2018 2019 RMB’000 RMB’000 RMB’000 US$’000 Supplier A 277,826 133,550 59,465 8,542 Supplier B 192,270 92,291 49,802 7,154 Supplier C * * 91,268 13,110 |
Accounts payable | |
CONCENTRATION OF RISK | |
Schedule of concentration risk | Years as of December 31, 2018 2019 RMB’000 RMB’000 US$’000 Supplier A 114,901 48,229 6,928 Supplier B 72,896 41,104 5,904 Supplier C * 23,456 3,369 |
ACCOUNTS RECEIVABLE, NET (Table
ACCOUNTS RECEIVABLE, NET (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
ACCOUNTS RECEIVABLE, NET | |
Schedule of accounts receivable and allowance for doubtful accounts | December 31, 2018 2019 RMB’000 RMB’000 US$’000 Accounts receivable 292,842 188,103 27,020 Less: allowance for doubtful accounts (82,366) (82,495) (11,850) 210,476 105,608 15,170 |
Schedule of analysis of the allowance for doubtful accounts | December 31, 2018 2019 RMB’000 RMB’000 US$’000 Balance, beginning of year 81,301 82,366 11,832 Additions for the current year 6,719 3,066 440 Recovery (5,654) (2,937) (422) Balance, end of year 82,366 82,495 11,850 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
PROPERTY AND EQUIPMENT, NET | |
Schedule of property and equipment, including those held under capital leases | December 31, 2018 2019 RMB’000 RMB’000 US$’000 At cost: Optical fibers 13,100 13,100 1,882 Computer equipment 1,004,948 869,344 124,874 Furniture and fixtures 10,218 8,389 1,205 Leasehold improvements 18,782 18,645 2,678 Motor vehicles 9,842 7,675 1,102 Buildings 324,716 313,836 45,080 Freehold land 4,517 — — 1,386,123 1,230,989 176,821 Less: accumulated depreciation (567,835) (499,235) (71,711) Less: impairment (403,221) (335,134) (48,139) 415,067 396,620 56,971 |
Schedule of depreciation expenses | For the years ended December 31, 2017 2018 2019 RMB’000 RMB’000 RMB’000 US$’000 Cost of revenue 8,090 11,999 28,598 4,107 Sales and marketing expenses 4 — 6 1 General and administrative expenses 1,050 9 18 3 Research and development expenses 1 9 20 3 9,145 12,017 28,642 4,114 |
Schedule of carrying amounts of the company's property and equipment held under capital leases at respective balance sheet dates | December 31, 2018 2019 RMB’000 RMB’000 US$’000 At Cost: Optical fibers 13,100 13,100 1,882 Computer equipment 292,489 262,989 37,776 305,589 276,089 39,658 Less: accumulated depreciation (75,644) (82,169) (11,803) Less: impairment (166,162) (166,162) (23,868) 63,783 27,758 3,987 |
LAND USE RIGHT, NET (Tables)
LAND USE RIGHT, NET (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
LAND USE RIGHT, NET | |
Schedule of Land Use Right | December 31 2018 2019 RMB’000 RMB’000 US$’000 Land use right 34,057 34,057 4,892 Less: accumulated amortization (1,885) (2,591) (372) 32,172 31,466 4,520 |
RIGHT-OF-USE ASSETS AND OPERA_2
RIGHT-OF-USE ASSETS AND OPERATING LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
RIGHT-OF-USE ASSETS AND OPERATING LIABILITIES | |
Schedule of right-of-use assets and operating lease liabilities as of the respective balance sheet dates. | December 31 2018 2019 RMB’000 RMB’000 US$’000 Right-of-use assets — 131,408 18,876 Operating lease liabilities - current — 41,882 6,016 Operating lease liabilities - non-current — 122,360 17,576 Total operating lease liabilities — 164,242 23,592 |
Schedule of weighted average remaining lease terms and discount rates for all of operating leases | The weighted average remaining lease terms and discount rates for all of operating leases were as follows as of December 31, 2019: Remaining lease term and discount rate: Weighted average remaining lease term (years) 4.0 Weighted average discount rate 6.12 % During year ended December 31, 2019, cash payment for operating leases was RMB 12,761,000 (US$1,833,000). |
Schedule, by fiscal years, of maturities of lease liabilities | The following is a schedule, by fiscal years, of maturities of lease liabilities as of December 31, 2019: 2020 49,949 2021 33,610 2022 37,119 2023 41,528 2024 22,601 Thereafter 736 Total lease payments 185,543 Less: imputed interest 21,301 Present value of lease liabilities 164,242 |
ASSETS HELD FOR SALE _ LIABIL_2
ASSETS HELD FOR SALE / LIABILITIES HELD FOR SALE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
ASSETS HELD FOR SALE / LIABILITIES HELD FOR SALE | |
Schedule of major classes of assets and liabilities held for sale | December 31, 2018 2019 RMB’000 RMB'000 US$’000 Cash and cash equivalents 1 — — Prepaid expenses and other current assets 15,478 15,478 2,224 Amounts due from the Company 737 — — Property and equipment 550,225 318,143 45,698 Land use right, net 14,909 8,646 1,242 Assets held for sale 581,350 342,267 49,164 Accrued expenses and other current liabilities 5,293 4,684 673 Amounts due to the Company 2,698 447 64 Liabilities held for sale 7,991 5,131 737 |
Schedule of operating results of the disposal group | For the years ended December 31, 2017 2018 2019 RMB’000 RMB’000 RMB’000 US$’000 Net revenue — — — — Loss before income taxes (3,000) (3,654) (5,682) (816) |
CLOUD INFRASTRUCTURE CONSTRUC_2
CLOUD INFRASTRUCTURE CONSTRUCTION IN PROGRESS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
CLOUD INFRASTRUCTURE CONSTRUCTION IN PROGRESS | |
Schedule of cloud infrastructure construction in progress | December 31, 2018 2019 RMB’000 RMB’000 US$’000 Cloud infrastructure construction in progress 289,280 292,639 42,035 |
LONG TERM INVESTMENTS (Tables)
LONG TERM INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
LONG TERM INVESTMENTS | |
Schedule of long term investments | December 31, 2018 2019 RMB’000 RMB’000 US$’000 Cost method investments: PRC Fund 10,103 10,081 1,448 United States Fund 20,045 20,045 2,879 Investment in preferred shares of an unlisted company in PRC ("Investee A") 400 400 57 Available-for-sale investments: Investment in convertible borrowings of an unlisted company in Cayman Islands ("Investee B") 3,973 3,973 571 Less: accumulated impairment (4,373) (4,373) (628) Total 30,148 30,126 4,327 |
BORROWINGS (Tables)
BORROWINGS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
BORROWINGS | |
Schedule of short term borrowings | December 31, 2018 2019 RMB’000 RMB’000 US$’000 Other borrowing 13,850 — — |
Schedule of long term borrowings | December 31, 2018 2019 RMB’000 RMB’000 US$’000 Long-term bank loan 372,926 320,000 45,965 Less: current portion (58,355) (320,000) (45,965) Total 314,571 — — |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
Schedule of Accrued expenses and other current liabilities | December 31, 2018 2019 RMB’000 RMB’000 US$’000 Advance from customers 18,598 15,323 2,201 Other accrued expenses 21,764 42,131 6,052 Other tax payables 7,272 11,939 1,715 47,634 69,393 9,968 |
OTHER PAYABLES (Tables)
OTHER PAYABLES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
OTHER PAYABLES | |
Schedule of Other payables | December 31, 2018 2019 RMB’000 RMB’000 US$’000 Payables for purchase of property and equipment 393,287 352,786 50,675 Consideration received for disposal of Beijing Shuo Ge (Note 9) 325,000 — — Consideration received for disposal of Beijing Zhao Du (Note 9) 672,000 672,000 96,527 Current portion of other non-current liability (Note 15) — 11,282 1,621 Other Payables 13,567 5,485 787 Total 1,403,854 1,041,553 149,610 |
OTHER NON-CURRENT LIABILITY (Ta
OTHER NON-CURRENT LIABILITY (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
OTHER NON-CURRENT LIABILITY | |
Summary of other non-current liability | December 31, 2018 2019 RMB’000 RMB’000 US$’000 Consideration refund payable — 62,255 8,943 Less: current portion — (11,282) (1,621) Total — 50,973 7,322 |
Summary of future installment payment schedule according to the borrowing agreements | December 31, 2019 RMB’000 US$’000 2020 14,336 2,059 2021 14,336 2,059 2022 14,336 2,059 2023 14,336 2,059 2024 14,336 2,059 Total 71,682 10,295 |
DEFERRED GOVERNMENT GRANT (Tabl
DEFERRED GOVERNMENT GRANT (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
DEFERRED GOVERNMENT GRANT | |
Schedule of deferred government grant | December 31, 2018 2019 RMB’000 RMB’000 US$’000 Beginning balance 19,580 16,046 2,304 Recognized as income during the year (3,534) (1,394) (200) Total balance of deferred government grant 16,046 14,652 2,104 Less: current portion 1,696 302 43 Balance of non-current deferred government grant 14,350 14,350 2,061 |
FINANCE LEASE OBLIGATIONS (Tabl
FINANCE LEASE OBLIGATIONS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
FINANCE LEASE OBLIGATIONS | |
Schedule of future minimum lease payments under non-cancellable finance lease arrangements | December 31, 2018 2019 RMB’000 RMB’000 US$’000 2019 25,311 — — 2020 24,003 31,782 4,565 2021 21,503 27,027 3,882 Total minimum lease payment 70,817 58,809 8,447 Less: amount representing interest (9,159) (7,511) (1,078) Present value of remaining minimum lease payment 61,658 51,298 7,369 Less: current portion 20,299 26,057 3,743 Non-current portion 41,359 25,241 3,626 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
SHARE-BASED COMPENSATION | |
Summary of the Company's restricted shares award ("RSUs") issued under 2011 Plan | Number of Weighted average grant ordinary shares date fair value (US$) Outstanding, January 1, 2018 2,223,468 0.14 Expected to vest at January 1, 2018 2,223,468 0.14 Granted 480,000 0.07 Vested (1,503,212) 0.35 Forfeited (560,256) 0.43 Outstanding, December 31, 2018 640,000 0.07 Expected to vest at December 31, 2018 640,000 0.07 Granted — Vested (320,000) 0.07 Forfeited (160,000) 0.07 Outstanding, December 31, 2019 160,000 0.07 Expected to vest at December 31, 2019 160,000 0.07 |
Schedule of total compensation expense relating to all options and RSUs recognized | For the years ended December 31, 2017 2018 2019 (RMB)’000 (RMB)’000 (RMB)’000 (US$)’000 Cost of revenues 490 211 30 Sales and marketing expenses 254 83 12 General and administration expenses 9,630 1,114 161 Research and development expenses 562 483 69 10,936 1,891 272 |
Employees | |
SHARE-BASED COMPENSATION | |
Summary of entity's share option activity | Weighted Weighted average average remaining Aggregate Number of Exercise contractual intrinsic options price term value (US$) (Years) (US$’000) Outstanding, January 1, 2018 25,113,357 0.14 7.26 586 Vested and expected to vest at January 1, 2018 25,113,357 0.14 7.26 586 Granted 17,600,000 0.06 Exercised (1,096,896) 0.08 Forfeited (4,247,232) 0.06 Outstanding, December 31, 2018 37,369,229 0.11 7.81 2 Vested and expected to vest at December 31, 2018 37,369,229 0.11 7.81 2 Exercisable at December 31, 2018 16,222,688 0.17 5.93 2 Granted — — Exercised (44,000) 0.08 Forfeited (6,143,024) 0.16 Outstanding, December 31, 2019 31,182,205 0.10 1.35 Vested and expected to vest at December 31, 2019 31,182,205 0.10 1.35 Exercisable at December 31, 2019 20,119,147 0.10 7.10 1.35 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
INCOME TAXES | |
Schedule of Loss from continuing operations before income tax expense | For the years ended December 31, 2017 2018 2019 RMB’000 RMB’000 RMB’000 US$’000 Non-PRC (36,317) 21,495 (12,095) (1,737) PRC (275,201) (47,297) (32,643) (4,689) (311,518) (25,802) (44,738) (6,426) |
Schedule of income tax expense | For the years ended December 31, 2017 2018 2019 RMB’000 RMB’000 RMB’000 US$’000 Current 29,428 11 7,967 1,144 Deferred 30,220 — — — 59,648 11 7,967 1,144 |
Schedule of reconciliation of tax computed by applying the statutory income tax rate to income tax (benefit) expense | For the years ended December 31, 2017 2018 2019 RMB’000 RMB’000 RMB’000 US$’000 Loss before income tax expense (311,518) (25,802) (44,738) (6,426) Income tax computed at PRC statutory tax rate of 25% (77,881) (6,450) (11,184) (1,607) Preferential tax rates 15,955 (7,031) (2,737) (393) International rate differences 9,401 (4,732) 7,636 1,097 Additional 50%/75% tax deduction for qualified research and development expenses (8,795) (7,228) (9,697) (1,393) Non-deductible expenses 6,187 3,002 3,629 521 Effect of changes in tax rates on deferred taxes (33,930) 101,502 1,765 254 Changes in the valuation allowance 148,711 (79,052) 10,996 1,579 Realization gain from intercompany transaction — — 7,435 1,068 Expiration of tax loss carry forward — — 77 11 other adjustment — — 47 7 Income tax expense 59,648 11 7,967 1,144 |
Schedule of the components of deferred tax assets and liabilities | For the years ended December 31, 2018 2019 (RMB’000) (RMB’000) (US$’000) Deferred tax assets: - Allowance for doubtful accounts 12,323 14,726 2,115 - Deferred revenue 2,407 2,198 316 - Accruals 25,993 16,183 2,325 - Tax losses 134,855 173,740 24,956 - Property and equipment 2,105 2,070 297 - Intangible assets 1,469 1,469 211 - Long-term investment impairment 960 960 138 - Impairment loss for long-lived assets 24,663 4,425 636 - Unrealized profit 71,868 71,868 10,323 Less: valuation allowance (276,643) (287,639) (41,317) Total Deferred tax assets — — — |
Schedule of roll-forward of accrued unrecognized tax expense | December 31, 2018 2019 RMB’000 RMB’000 US$’000 Beginning balance (8,273) (8,273) (1,203) Increase based on tax positions related to the current year — — Ending balance (8,273) (8,273) (1,203) |
RELATED PARTY BALANCES AND TR_2
RELATED PARTY BALANCES AND TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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 Ex-director of the Company Ms. Kou Xiaohong The Co-Founder and Ex-director of the Company Mr. Xiaoqiang Wei Chief Executive Officer and Director of the Company |
Schedule of related party balances | Amounts due from a related party Mr. Xiaoqiang Wei Total Balance as of December 31, 2018 — — Advance for the Group’s expenditure 65 65 Balance as of December 31, 2019 65 65 Balance as of December 31, 2019 (US$’000) 9 9 Amounts due to related parties Mr. Wang Ms. Kou Song Xiaohong Total Balance as of January 1, 2017, and December 31 2017 — (18) (18) Expense paid on behalf of the Group (328) — (328) Expense Reimbursement payment 277 — 277 Balance as of December 31, 2018 (51) (18) (69) Expense Reimbursement payment 51 Expense paid on behalf of the Group — (9) 42 Balance as of December 31, 2019 — (27) (27) Balance as of December 31, 2019 (US$’000) — (4) (4) |
LOSS PER SHARE (Tables)
LOSS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
LOSS PER SHARE | |
Schedule of basic and diluted loss per share | For the Year Ended December 31, 2017 2018 2019 (RMB’000) (RMB’000) (RMB’000) (US$’000) except shares and per share data Numerator: Net loss attributable to ordinary shareholders: (369,161) (24,418) (51,671) (7,421) Denominator: Number of shares outstanding, opening 421,522,374 425,150,082 429,404,977 429,404,977 Weighted average number of shares issued 4,067,372 1,659,485 7,244,845 7,244,845 Weighted-average number of shares outstanding – Basic and diluted 425,589,746 426,809,567 436,649,822 436,649,822 Loss per share -Basic and diluted (0.87) (0.06) (0.12) (0.02) |
FAIR VALUE MEASUREMENT (Tables)
FAIR VALUE MEASUREMENT (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
FAIR VALUE MEASUREMENT | |
Schedule of reconciliation of assets measured at fair value on a recurring basis using significant unobservable inputs | Investment in the Investee B RMB’000 Fair value at January 1, and December 31, 2016 3,973 Other than temporary impairment (3,973) Fair value at December 31, 2017, 2018 and 2019 — Fair value at December 31, 2019 (US$’000) — |
CONDENSED FINANCIAL INFORMATI_2
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | |
Schedule of condensed balance sheets | CONDENSED BALANCE SHEETS (Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”)) As of December 31, 2018 2019 RMB RMB US$ ASSETS: Current assets: Cash and cash equivalents 8,455 880 126 Prepaid expenses and other current assets, net 2,283 2,453 352 Total current assets 10,738 3,333 478 Non-current assets: Long term investments 20,045 20,045 2,879 Investments in subsidiaries and consolidated VIEs (565,557) (603,810) (86,732) Total non-current assets (545,512) (583,765) (83,853) TOTAL ASSETS (534,774) (580,432) (83,375) LIABILITIES AND SHAREHOLDERS’ DEFECIT: Current liabilities: Accrued employee benefits — 1,886 271 Accrued expenses and other payables 1,489 2,710 389 Total current liabilities 1,489 4,596 660 Total liabilities 1,489 4,596 660 Shareholders’ deficit: Ordinary shares (US$0.0001 par value; 1,000,000,000 and 1,000,000,000 shares authorized; 429,404,977 and 436,656,529 shares issued and outstanding as of December 31, 2018 and 2019, respectively) 338 338 44 Additional paid-in capital 1,579,153 1,581,064 227,106 Treasury stock (18,033) (15,332) (2,202) Statutory reserves 1,326 1,326 190 Accumulated deficit (2,100,569) (2,152,240) (309,150) Accumulated other comprehensive income/(loss) 1,522 (184) (23) Total shareholders’ deficit (536,263) (585,028) (84,035) TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT (534,774) (580,432) (83,375) |
Schedule of condensed statements of comprehensive loss | CONDENSED STATEMENTS OF COMPREHENSIVE LOSS (Amounts in thousands of RMB and US$) For the years ended December 31, 2017 2018 2019 RMB RMB RMB US$ General and administrative expenses (10,986) (8,551) (32,232) (4,630) Impairment of long-term investments (3,290) — — — Operating loss (14,276) (8,551) (32,232) (4,630) Interest income(expense), net — 5 (3) — Other income 14,384 21,662 3,430 493 Foreign exchange (loss)/ gain (11,043) 4,200 1,448 208 Share of losses from subsidiaries and consolidated VIEs (358,226) (41,734) (24,314) (3,492) Loss before income taxes (369,161) (24,418) (51,671) (7,421) Income tax expense — — — — Net loss (369,161) (24,418) (51,671) (7,421) Foreign currency translation adjustment 2,748 (1,037) (1,706) (245) Unrealized loss from available-for-sale investments (4,195) — — — Amounts reclassified from accumulated other comprehensive income 3,290 — — — Total other comprehensive income /(loss), net of nil tax 1,843 (1,037) (1,706) (245) Comprehensive loss (367,318) (25,455) (53,377) (7,666) |
Schedule of condensed statements of cash flows | CONDENSED STATEMENTS OF CASH FLOWS (Amounts in thousands of RMB and US$) For the years ended December 31, 2017 2018 2019 RMB RMB RMB US$ Net cash used in operating activities (22,514) (4,151) (10,481) (1,506) Cash flows from investing activities: Net cash provided by investing activities — — — — Cash flows from financing activities: Net cash used in financing activities — — — — Net (decrease)/increase in cash and cash equivalents (22,514) 4,151 (10,481) (1,506) Cash and cash equivalents at beginning of the year 24,463 1,141 8,455 1,214 Effect of foreign exchange rate changes on cash (808) 3,163 2,906 418 Cash and cash equivalents at end of the year 1,141 8,455 880 126 |
ORGANIZATION (Details)
ORGANIZATION (Details) | Dec. 19, 2016CNY (¥) | Jan. 20, 2016CNY (¥) | Nov. 16, 2015USD ($) | Nov. 16, 2015CNY (¥) | Sep. 23, 2005 | May 31, 2019 | Sep. 30, 2010 | Dec. 31, 2019CNY (¥)agreement | Dec. 31, 2018 |
Beijing Jingtian | Exclusive Business Cooperation Agreements | |||||||||
Organization | |||||||||
Service fees charged on percentage of net income | 100.00% | ||||||||
Beijing Blue IT | Exclusive technical support and service agreement/Exclusive technical consultation and training agreement/Equipment leasing agreement | |||||||||
Organization | |||||||||
Number of agreements with VIEs | agreement | 3 | ||||||||
Beijing Blue IT | Loan Agreements | |||||||||
Organization | |||||||||
Capital injection from a PRC company wholly owned by the Founders | ¥ 10,000,000 | ||||||||
Variable interest entity agreement term | 10 years | ||||||||
Variable interest entity renewed additional term | 10 years | ||||||||
ChinaCache Assets LLC ("CCAL") | |||||||||
Organization | |||||||||
Percentage of ownership | 100.00% | ||||||||
ChinaCache Networks Limited ("ChinaCache UK") | |||||||||
Organization | |||||||||
Percentage of ownership | 100.00% | ||||||||
Beijing Wangrun Technology Co.,Ltd ("Beijing Wangrun") | |||||||||
Organization | |||||||||
Percentage of ownership | 100.00% | ||||||||
Beijing Xiangqing Technology Co.,Ltd ("Beijing Xiangqing") | |||||||||
Organization | |||||||||
Percentage of ownership | 100.00% | ||||||||
Beijing Shuosen Technology Co.,Ltd("Beijing Shuosen") | |||||||||
Organization | |||||||||
Percentage of ownership | 100.00% | ||||||||
ChinaCache ShenRong Technology (Hongkong) Limited ("ShenRong HK") (iv) | |||||||||
Organization | |||||||||
Percentage of ownership | 100.00% | ||||||||
Beijing Zhao Du | |||||||||
Organization | |||||||||
Percentage of ownership | 99.00% | ||||||||
Beijing Shuo Ge | |||||||||
Organization | |||||||||
Percentage of ownership, after transfer | 100.00% | ||||||||
Beijing Shou Ming | |||||||||
Organization | |||||||||
Percentage of ownership | 99.00% | ||||||||
Metasequoia Investment Inc. ("Metasequoia") | |||||||||
Organization | |||||||||
Percentage of ownership | 100.00% | ||||||||
Xin Run | |||||||||
Organization | |||||||||
Percentage of ownership | 99.00% | ||||||||
Percentage of ownership, after transfer | 99.00% | 99.00% | |||||||
Xin Run | ChinaCache Shouming | Loan Agreements | |||||||||
Organization | |||||||||
Variable interest entity agreement term | 10 years | ||||||||
Loan facility provided to the Nominee Shareholders of the variable interest entity | ¥ 10,000,000 | ||||||||
Xin Run | Tianjin Shuishan Technology Co., Ltd | |||||||||
Organization | |||||||||
Capital injection from a PRC company wholly owned by the Founders | $ 202,000 | ¥ 1,292,000 | |||||||
ChinaCache Networks Hong Kong Ltd. ("ChinaCache HK") | |||||||||
Organization | |||||||||
Percentage of ownership | 100.00% | ||||||||
JNet Holdings Limited ("JNet Holdings") | |||||||||
Organization | |||||||||
Percentage of ownership | 100.00% | ||||||||
ChinaCache North America, Inc. | |||||||||
Organization | |||||||||
Percentage of ownership | 100.00% | ||||||||
ChinaCache Beijing | |||||||||
Organization | |||||||||
Percentage of ownership | 100.00% | ||||||||
ChinaCache Beijing | Exclusive Business Cooperation Agreements | |||||||||
Organization | |||||||||
Variable interest entity agreement 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 | |||||||
ChinaCache Beijing | 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 |
ORGANIZATION - FINANCIAL INFORM
ORGANIZATION - FINANCIAL INFORMATION (Details) $ in Thousands | 12 Months Ended | |||||||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | ||
Organization | ||||||||
Pledge or collateralization of assets | ¥ 0 | |||||||
Current assets: | ||||||||
Cash and cash equivalents | $ 3,725 | 25,930,000 | ¥ 41,127,000 | |||||
Accounts receivable (net of allowance for doubtful accounts of RMB80,612 and RMB80,484 (US$11,706) as of December 31, 2017 and 2018, respectively) | 15,170 | 105,608,000 | 210,476,000 | |||||
Accounts receivable, allowance for doubtful accounts (in CNY and dollars) | 11,850 | ¥ 81,301,000 | 82,495,000 | $ 11,832 | 82,366,000 | |||
Prepaid expenses and other current assets, net | 16,937 | 117,912,000 | 169,635,000 | |||||
Amounts due from subsidiaries held for sale | 64 | 447,000 | 2,698,000 | |||||
Total current assets | 87,254 | 607,443,000 | 1,010,747,000 | |||||
Non-current assets: | ||||||||
Property and equipment, net | 56,971 | 396,620,000 | 415,067,000 | |||||
Intangible assets, net | 11 | 79,000 | 143,000 | |||||
Long term investments | 4,327 | 30,126,000 | 30,148,000 | |||||
Operating lease right-of-use asset | 18,876 | 131,408,000 | 0 | |||||
Long term deposits and other non-current assets | 6,665 | 46,399,000 | 68,312,000 | |||||
Total non-current assets | 133,405 | 928,737,000 | 835,122,000 | |||||
TOTAL ASSETS | 220,659 | 1,536,180,000 | 1,845,869,000 | |||||
Current liabilities: | ||||||||
Accounts payable | 39,977 | 278,312,000 | 339,263,000 | |||||
Accrued employee benefits | 5,442 | 37,885,000 | 36,794,000 | |||||
Accrued expenses and other payables | 9,968 | 69,393,000 | 47,634,000 | |||||
Other payables | 149,610 | 1,041,553,000 | 1,403,854,000 | |||||
Income tax payable | 13,286 | 92,491,000 | 85,025,000 | |||||
Amounts due to subsidiaries held for sale | 737,000 | |||||||
Current portion of capital lease obligations | 3,743 | 26,057,000 | 20,299,000 | |||||
Current portion of operating lease liability | 6,016 | 41,882,000 | 0 | |||||
Deferred government grant | 43 | 302,000 | 1,696,000 | |||||
Total current liabilities | 274,791 | 1,913,033,000 | 2,015,567,000 | |||||
Non-current liabilities: | ||||||||
Non-current portion of operating lease liabilities | 17,576 | 122,360,000 | 0 | |||||
Deferred government grant | 2,061 | 14,350,000 | 14,350,000 | |||||
Total non-current liabilities | 30,585 | 212,924,000 | 370,280,000 | |||||
Total liabilities | 305,376 | 2,125,957,000 | 2,385,847,000 | |||||
Net revenues | ||||||||
-Third party customers | 2,104 | ¥ 14,652,000 | ¥ 16,046,000 | |||||
Net (loss)/profit | (7,570) | (52,705,000) | (25,813,000) | (371,166,000) | ||||
Net cash provided by /(used in) operating activities | 15,652 | 108,944,000 | (41,659,000) | (99,039,000) | ||||
Net cash used in investing activities | (5,126) | (35,678,000) | (160,811,000) | (89,295,000) | ||||
Net cash used in financing activities | (11,268) | (78,452,000) | 140,596,000 | 149,007,000 | ||||
Consolidated Variable Interest Entity (VIEs) | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | 565 | 3,936,000 | 14,557,000 | |||||
Restricted cash | 1,859 | 12,939,000 | 3,169,000 | |||||
Accounts receivable (net of allowance for doubtful accounts of RMB80,612 and RMB80,484 (US$11,706) as of December 31, 2017 and 2018, respectively) | 6,825 | 47,516,000 | 72,844,000 | |||||
Accounts receivable, allowance for doubtful accounts (in CNY and dollars) | 11,468 | 79,839,000 | 80,484,000 | |||||
Prepaid expenses and other current assets, net | 2,005 | 13,957,000 | 12,711,000 | |||||
Amounts due from inter-companies | 6,970 | 48,522,000 | 9,572,000 | |||||
Total current assets | 18,224 | 126,870,000 | 112,853,000 | |||||
Non-current assets: | ||||||||
Property and equipment, net | 379 | 2,642,000 | 2,291,000 | |||||
Intangible assets, net | 4 | 27,000 | 35,000 | |||||
Long term investments | 1,448 | 10,081,000 | 10,103,000 | |||||
Operating lease right-of-use asset | 17,884 | 124,502,000 | ||||||
Long term deposits and other non-current assets | 379 | 2,640,000 | 4,711,000 | |||||
Total non-current assets | 20,094 | 139,892,000 | 17,140,000 | |||||
TOTAL ASSETS | 38,318 | 266,762,000 | 129,993,000 | |||||
Current liabilities: | ||||||||
Accounts payable | 37,562 | 261,502,000 | 316,963,000 | |||||
Accrued employee benefits | 3,881 | 27,016,000 | 24,898,000 | |||||
Accrued expenses and other payables | 3,605 | 25,098,000 | 38,915,000 | |||||
Other payables | 897 | 6,248,000 | 15,072,000 | |||||
Income tax payable | 1,665 | 11,594,000 | 10,991,000 | |||||
Amounts due to inter-companies | [1] | 37,402 | 260,385,000 | 263,551,000 | ||||
Amounts due to subsidiaries held for sale | 312,018 | 0 | 737,000 | |||||
Current portion of capital lease obligations | 0 | 0 | 1,284,000 | |||||
Current portion of operating lease liability | 5,768 | 40,155,000 | 0 | |||||
Deferred government grant | 43 | 302,000 | 1,696,000 | |||||
Total current liabilities | 90,823 | 632,300,000 | 674,107,000 | |||||
Non-current liabilities: | ||||||||
Non-current portion of operating lease liabilities | 16,867 | 117,428,000 | 0 | |||||
Deferred government grant | 2,061 | 14,350,000 | 14,350,000 | |||||
Total non-current liabilities | 18,928 | 131,778,000 | 14,350,000 | |||||
Total liabilities | 109,751 | ¥ 764,078,000 | ¥ 688,457,000 | |||||
Net revenues | ||||||||
-Third party customers | 41,319 | 287,653,000 | 344,108,000 | 479,012,000 | ||||
-Inter-companies | 76,527 | 532,766,000 | 499,017,000 | 342,035,000 | ||||
Net (loss)/profit | $ (8,761) | ¥ (60,994,000) | ¥ 105,324,000 | ¥ (88,547,000) | ||||
[1] | Amount due from/to inter-companies consist of intercompany receivables/payables to the other companies within the Group. |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - LIQUIDITY (Details) | 12 Months Ended | ||||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2019CNY (¥) | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Net loss | $ 7,570,000 | ¥ 52,705,000 | ¥ 25,813,000 | ¥ 371,166,000 | |
Negative cash flows from operations | (15,652,000) | ¥ (108,944,000) | ¥ 41,659,000 | ¥ 99,039,000 | |
Net current liability | 235,964,000,000 | ¥ 1,642,726,000 | |||
Sales And Lease back Receivables | $ 262,863,000 | ¥ 1,830,000,000 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONVENIENCE TRANSLATION (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Convenience translation | |
Noon buying rate (in CNY per dollar) | 6.9618 |
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 | 15 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 | Minimum | |
Property and equipment | |
Estimated useful lives of the assets | 20 years |
Building | Maximum | |
Property and equipment | |
Estimated useful lives of the assets | 40 years |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - INTANGIBLE ASSETS (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Purchased software | |
Intangible assets | |
Estimated economic life of the intangible assets | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - IMPAIRMENT OF LONG-LIVED ASSETS & INVESTMENT (Details) | 12 Months Ended | |||||
Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Jan. 01, 2018USD ($) | |
Impairment of long-lived assets | ||||||
Impairment of long-lived assets | ¥ 21,757,000 | |||||
Investments | ||||||
Impairment of available-for-sale investment | ¥ 0 | ¥ 0 | 3,690,000 | |||
Impairment of cost method investment | ¥ 0 | 0 | ¥ 400,000 | |||
Accumulated deficit | ¥ (2,100,569,000) | $ (309,150,000) | ¥ (2,152,240,000) | |||
ASC 321 | ||||||
Investments | ||||||
Accumulated deficit | $ | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - REVENUE RECOGNITION (Details) ¥ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Jun. 30, 2014 | Dec. 31, 2019USD ($)class | Dec. 31, 2019CNY (¥)class | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2019CNY (¥) | |
Net revenues | ||||||
Number of class of services in a portfolio of content and application delivery to total solutions | 1 | 1 | ||||
Accounts receivables and contract liabilities | ||||||
Accounts receivables | $ 15,170 | ¥ 210,476 | ¥ 105,608 | |||
Advances from Customers | 2,201 | 18,598 | ¥ 15,323 | |||
Disaggregation of revenue | 131,953 | ¥ 918,628 | 922,591 | ¥ 852,568 | ||
CDN Services | ||||||
Accounts receivables and contract liabilities | ||||||
Disaggregation of revenue | 93,096 | 648,117 | 709,498 | 669,938 | ||
IDC Services | ||||||
Accounts receivables and contract liabilities | ||||||
Disaggregation of revenue | 36,704 | 255,524 | 185,973 | 149,316 | ||
IX Services | ||||||
Accounts receivables and contract liabilities | ||||||
Disaggregation of revenue | $ 2,153 | ¥ 14,987 | ¥ 27,120 | ¥ 33,314 | ||
Beijing Blue IT | All services | ||||||
Accounts receivables and contract liabilities | ||||||
Value-added tax | 6.00% |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - ADVERTISING, GOVERNMENT GRANT, LEASES AND SEGMENT REPORTING (Details) | 12 Months Ended | ||||||
Dec. 31, 2019USD ($)segment | Dec. 31, 2019CNY (¥)segment | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2019CNY (¥)segment | Jan. 01, 2019USD ($) | Jan. 01, 2019CNY (¥) | |
Advertising expenditures | |||||||
Advertising expenditures, included in sales and marketing expenses | ¥ | ¥ 0 | ¥ 0 | ¥ 200,000 | ||||
Government Grant | |||||||
-Third party customers | $ 2,104,000 | ¥ 14,652,000 | 16,046,000 | ||||
Leases | |||||||
Operating lease right-of-use asset | 18,876,000 | 0 | ¥ 131,408,000 | ||||
Operating lease liability | $ 23,592,000 | 0 | ¥ 164,242,000 | ||||
Segment reporting | |||||||
Number of reportable segment | 1 | 1 | |||||
Number of geographical segments | 0 | 0 | |||||
Employee benefits | |||||||
Employee benefits incurred under defined contribution plans | $ 4,063,000 | ¥ 28,285,000 | ¥ 29,288,000 | ¥ 44,416,000 | |||
ASU 842 | |||||||
Leases | |||||||
Operating lease right-of-use asset | $ 23,862,000 | ¥ 166,124,000 | |||||
Operating lease liability | $ 23,608,000 | ¥ 164,358,000 |
CONCENTRATION OF RISK (Details)
CONCENTRATION OF RISK (Details) - Credit risk | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) |
PRC | |||
CONCENTRATION OF RISK | |||
Amounts deposited with major financial institutions | $ 4,103,000 | ¥ 28,561,000 | ¥ 32,097,000 |
HK | |||
CONCENTRATION OF RISK | |||
Amounts deposited with major financial institutions | 363,000 | 2,525,000 | 8,811,000 |
United Kingdom | |||
CONCENTRATION OF RISK | |||
Amounts deposited with major financial institutions | 524,000 | 3,649,000 | 2,076,000 |
United States of America | |||
CONCENTRATION OF RISK | |||
Amounts deposited with major financial institutions | $ 921,000 | ¥ 6,409,000 | ¥ 3,646,000 |
CONCENTRATION OF RISK - TOTAL R
CONCENTRATION OF RISK - TOTAL REVENUE & TOTAL ACCOUNTS RECEIVABLE (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2019CNY (¥) | |
CONCENTRATION OF RISK | |||||
Purchase from suppliers | $ 99,086 | ¥ 689,820 | ¥ 666,162 | ¥ 781,822 | |
Total revenues | 131,953 | ¥ 918,628 | 922,591 | ¥ 852,568 | |
Accounts receivables | $ 15,170 | ¥ 210,476 | ¥ 105,608 | ||
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$ | 1.30% | 1.30% | 5.70% | (6.30%) | |
Revenues | Customer risk | Customer E | |||||
CONCENTRATION OF RISK | |||||
Total revenues | $ 74,745 | ¥ 520,358 | ¥ 503,676 | ¥ 317,260 | |
Revenues | Customer risk | Customer F | |||||
CONCENTRATION OF RISK | |||||
Total revenues | 118,970 | ||||
Accounts receivables | Customer risk | Customer E | |||||
CONCENTRATION OF RISK | |||||
Accounts receivables | 5,351 | 122,504 | 37,254 | ||
Purchases | Supplier risk | Supplier A | |||||
CONCENTRATION OF RISK | |||||
Purchase from suppliers | 8,542 | 59,465 | 133,550 | 277,826 | |
Purchases | Supplier risk | Supplier B | |||||
CONCENTRATION OF RISK | |||||
Purchase from suppliers | 7,154 | 49,802 | 92,291 | ¥ 192,270 | |
Purchases | Supplier risk | Supplier C | |||||
CONCENTRATION OF RISK | |||||
Purchase from suppliers | 13,110 | ¥ 91,268 | |||
Accounts payable | Supplier risk | Supplier A | |||||
CONCENTRATION OF RISK | |||||
Accounts payable | 6,928 | 114,901 | 48,229 | ||
Accounts payable | Supplier risk | Supplier B | |||||
CONCENTRATION OF RISK | |||||
Accounts payable | 5,904 | ¥ 72,896 | 41,104 | ||
Accounts payable | Supplier risk | Supplier C | |||||
CONCENTRATION OF RISK | |||||
Accounts payable | $ 3,369 | ¥ 23,456 |
ACCOUNTS RECEIVABLE, NET (Detai
ACCOUNTS RECEIVABLE, NET (Details) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | |
Accounts receivable and allowance for doubtful accounts | ||||||
Accounts receivable | $ 27,020 | ¥ 188,103,000 | ¥ 292,842,000 | |||
Less: allowance for doubtful accounts | $ (11,850) | ¥ (82,495,000) | ¥ (82,366,000) | (11,850) | (82,495,000) | (82,366,000) |
Accounts receivable, net | $ 15,170 | 105,608,000 | 210,476,000 | |||
Analysis of the allowance for doubtful accounts | ||||||
Balance, beginning of year | 11,832 | 82,366,000 | 81,301,000 | |||
Additions for the current year | 440 | 3,066,000 | 6,719,000 | |||
Recovery | (422) | (2,937,000) | (5,654,000) | |||
Balance, end of year | $ 11,850 | ¥ 82,495,000 | ¥ 82,366,000 | |||
Accounts receivable, pledged as collateral | ¥ 0 | ¥ 12,989,000 |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET (Details) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | |
Prepaid expenses and other current assets: | ||||
Prepaid expense for bandwidth and servers | [1] | $ 1,739,000 | ¥ 12,109,000 | ¥ 9,491,000 |
Staff field advances | 110,000 | 759,000 | 596,000 | |
Capital lease deposit | 1,684,000 | |||
Prepaid commission fee | [2] | 10,704,000 | 74,520,000 | 99,700,000 |
Prepaid service fee | 10,000,000 | |||
Other deposit and receivables | [3] | 4,707,000 | 32,768,000 | 34,095,000 |
Prepaid income tax | 895,000 | 6,227,000 | 14,220,000 | |
Prepaid expense and other current assets | 18,155,000 | 126,383,000 | 169,786,000 | |
Provision of doubtful accounts | (1,218,000) | (8,471,000) | (151,000) | |
Prepaid expenses and other current assets, net | 16,937,000 | 117,912,000 | ¥ 169,635,000 | |
Prepaid commission charge to disposal cost | 3,617,000 | 25,180,000 | ||
Full allowance of remaining balance provided | $ 1,051,000 | 7,320,000 | ||
Beijing Zhao Du | ||||
Prepaid expenses and other current assets: | ||||
Prepaid commission fee | 67,200,000 | |||
Beijing Shuo Ge | ||||
Prepaid expenses and other current assets: | ||||
Prepaid commission fee | ¥ 32,500,000 | |||
[1] | Prepaid expense for bandwidth and servers represents the unamortized portion of prepayments made to the Group's telecom operators and certain technology companies, who provide the Group with access to bandwidth and network servers. | |||
[2] | The balance represents the prepaid commission to an agent for the pending sales of certain cloud infrastructure that were held for sale (Note 10), consisting of RMB 67,200,000 related to Beijing Zhao Du and RMB 32,500,000 related to Beijing Shuo Ge. In May 2019, the disposal of Beijing Shuo Ge was completed and the prepaid commission in the amount of RMB-25,180,000 (US$3,617,000) based on the final adjusted consideration was charge to disposal cost, and full allowance of the remaining balance of RMB-7,320,000 (US$1,051,000) was provided as of December 31, 2019. | |||
[3] | Other deposit and receivables |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2019CNY (¥) | |
PROPERTY AND EQUIPMENT, NET | |||||
Property and equipment, at cost | $ 176,821 | ¥ 1,386,123,000 | ¥ 1,230,989,000 | ||
Less: accumulated depreciation | (71,711) | (567,835,000) | (499,235,000) | ||
Less: impairment | (48,139) | (403,221,000) | (335,134,000) | ||
Property and equipment, net | 56,971 | 415,067,000 | 396,620,000 | ||
Depreciation expenses | 4,114 | ¥ 28,642,000 | 12,017,000 | ¥ 9,145,000 | |
Impairment of property, plant and equipment | 0 | 0 | 17,787,000 | ||
Cost of revenues | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Depreciation expenses | 4,107 | 28,598,000 | 11,999,000 | 8,090,000 | |
Sales and marketing expenses | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Depreciation expenses | 1 | 6,000 | 4,000 | ||
General and administrative expenses | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Depreciation expenses | 3 | 18,000 | 9,000 | 1,050,000 | |
Research and development expenses | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Depreciation expenses | 3 | ¥ 20,000 | 9,000 | ¥ 1,000 | |
Optical Fibers | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Property and equipment, at cost | 1,882 | 13,100,000 | 13,100,000 | ||
Computer equipment | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Property and equipment, at cost | 124,874 | 1,004,948,000 | 869,344,000 | ||
Furniture, fixtures and office equipment | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Property and equipment, at cost | 1,205 | 10,218,000 | 8,389,000 | ||
Leasehold improvements | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Property and equipment, at cost | 2,678 | 18,782,000 | 18,645,000 | ||
Motor vehicles | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Property and equipment, at cost | 1,102 | 9,842,000 | 7,675,000 | ||
Building | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Property and equipment, at cost | $ 45,080 | 324,716,000 | ¥ 313,836,000 | ||
Freehold land | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Property and equipment, at cost | ¥ 4,517,000 |
PROPERTY AND EQUIPMENT, NET - C
PROPERTY AND EQUIPMENT, NET - CARRYING AMOUNT (Details) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017USD ($) |
PROPERTY AND EQUIPMENT, NET | |||||
Property and equipment held under capital leases, at cost | $ 39,658,000 | ¥ 276,089,000 | ¥ 305,589,000 | ||
Less: accumulated depreciation | (11,803,000) | (82,169,000) | (75,644,000) | ||
Less: impairment | (23,868,000) | (166,162,000) | (166,162,000) | ||
Property and equipment held under capital leases, net | 3,987,000 | 27,758,000 | 63,783,000 | ||
Depreciation of property and equipment held under capital leases | $ 217,000 | $ 0 | |||
Property and equipment, pledged as collateral | 41,841,000 | 291,292,000 | 298,232,000 | ||
Optical Fibers | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Property and equipment held under capital leases, at cost | 1,882,000 | 13,100,000 | 13,100,000 | ||
Computer equipment | |||||
PROPERTY AND EQUIPMENT, NET | |||||
Property and equipment held under capital leases, at cost | $ 37,776,000 | ¥ 262,989,000 | ¥ 292,489,000 |
LAND USE RIGHT, NET (Details)
LAND USE RIGHT, NET (Details) | 12 Months Ended | |||||
Dec. 31, 2019USD ($)a | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2013CNY (¥) | Dec. 31, 2019CNY (¥)a | |
LAND USE RIGHT, NET | ||||||
Land use right | $ 4,892,000 | ¥ 34,057,000 | ¥ 34,057,000 | |||
Less: accumulated amortization | (372,000) | (1,885,000) | (2,591,000) | |||
Land use right, net | $ 4,520,000 | 32,172,000 | ¥ 31,466,000 | |||
Payments to Acquire Land Held-for-use | ¥ 51,678,000 | |||||
Area of Land | a | 39,000 | 39,000 | ||||
Land use right, term of contract | 50 years | |||||
Amortization Expense for Land Use Right | $ 101,000 | ¥ 706,000 | 730,000 | ¥ 1,155,000 | ||
Land use right, pledged as collateral | ¥ 32,172,000 | ¥ 31,466,000 |
RIGHT-OF-USE ASSETS AND OPERA_3
RIGHT-OF-USE ASSETS AND OPERATING LIABILITIES (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) |
Right-of-use assets and operating lease liabilities as of the respective balance sheet | |||
Right-of-use assets | $ 18,876 | ¥ 131,408 | ¥ 0 |
Operating lease liabilities - current | 6,016 | 41,882 | 0 |
Operating lease liabilities - non-current | 17,576 | 122,360 | 0 |
Total operating lease liabilities | $ 23,592 | ¥ 164,242 | ¥ 0 |
RIGHT-OF-USE ASSETS AND OPERA_4
RIGHT-OF-USE ASSETS AND OPERATING LIABILITIES - Schedule of weighted average remaining lease terms (Details) | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
RIGHT-OF-USE ASSETS AND OPERATING LIABILITIES | ||||
Weighted average remaining lease term (years) | 4 years | 4 years | ||
Weighted average discount rate | 6.12% | 6.12% | ||
Cash payment for operating leases | $ 1,833,000 | ¥ 12,761,000 | ||
Total operating lease expenses | $ 6,519,000 | ¥ 45,384,000 | ¥ 16,997,000 | ¥ 23,401,000 |
RIGHT-OF-USE ASSETS AND OPERA_5
RIGHT-OF-USE ASSETS AND OPERATING LIABILITIES - Schedule of maturities of lease liabilities (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) |
Schedule, by fiscal years, of maturities of lease liabilities | |||
2020 | ¥ 49,949 | ||
2021 | 33,610 | ||
2022 | 37,119 | ||
2023 | 41,528 | ||
2024 | 22,601 | ||
Thereafter | 736 | ||
Total lease payments | 185,543 | ||
Less: imputed interest | 21,301 | ||
Total operating lease liabilities | $ 23,592 | ¥ 164,242 | ¥ 0 |
ASSETS HELD FOR SALE _ LIABIL_3
ASSETS HELD FOR SALE / LIABILITIES HELD FOR SALE (Details) | Apr. 03, 2019USD ($) | Apr. 03, 2019CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2019CNY (¥) | Apr. 03, 2019CNY (¥) | Sep. 30, 2015CNY (¥)building |
Major classes of assets and liabilities held for sale | |||||||||
Assets held for sale | $ 49,164,000 | ¥ 581,350,000 | ¥ 342,267,000 | ||||||
Liabilities held for sale | 737,000 | 7,991,000 | 5,131,000 | ||||||
Property and equipment, gross | 176,821,000 | 1,386,123,000 | 1,230,989,000 | ||||||
Disposal gain | 2,626,000 | ¥ 18,285,000 | |||||||
Xin Run | |||||||||
Major classes of assets and liabilities held for sale | |||||||||
Disposal gain | $ 2,626 | ¥ 18,285,000 | |||||||
Xin Run | Assets/liabilities held-for-sale | |||||||||
Major classes of assets and liabilities held for sale | |||||||||
Cash and cash equivalents | 1,000 | ||||||||
Prepaid expenses and other current assets | 2,224,000 | 15,478,000 | 15,478,000 | ||||||
Amounts due from the Company | 737,000 | ||||||||
Property and equipment | 45,698,000 | 550,225,000 | 318,143,000 | ||||||
Land use right, net | 1,242,000 | 14,909,000 | 8,646,000 | ||||||
Assets held for sale | 49,164,000 | 581,350,000 | 342,267,000 | ||||||
Accrued expenses and other current liabilities | 673,000 | 5,293,000 | 4,684,000 | ||||||
Amounts due to the Company | 64,000 | 2,698,000 | 447,000 | ||||||
Liabilities held for sale | 737,000 | 7,991,000 | ¥ 5,131,000 | ||||||
Loss before income taxes | (816,000) | (5,682,000) | (3,654,000) | ¥ (3,000,000) | |||||
Loss before income taxes attributable to the noncontrolling interest | $ 8,000 | ¥ 57,000 | ¥ 36,000 | ¥ 30,000 | |||||
Xin Run | Assets/liabilities held-for-sale | Framework agreement [Member] | |||||||||
ASSETS HELD FOR SALE / LIABILITIES HELD FOR SALE [Line Items] | |||||||||
Consideration in cash for sale of equity interest | ¥ 325,000,000 | ||||||||
Major classes of assets and liabilities held for sale | |||||||||
Consideration for disposal | 325,000,000 | ||||||||
Xin Run | Assets/liabilities held-for-sale | BFSMC | Definitive Sale and Leaseback Agreement [Member] | |||||||||
ASSETS HELD FOR SALE / LIABILITIES HELD FOR SALE [Line Items] | |||||||||
Consideration in cash for sale of equity interest | ¥ 960,000,000 | ||||||||
Major classes of assets and liabilities held for sale | |||||||||
Number of IDC buildings | building | 2 | ||||||||
Consideration for disposal | ¥ 960,000,000 | ||||||||
Xin Run | Assets/liabilities held-for-sale | BFSMC | Supplementary agreement [Member] | |||||||||
ASSETS HELD FOR SALE / LIABILITIES HELD FOR SALE [Line Items] | |||||||||
Consideration in cash for sale of equity interest | 672,000,000 | ||||||||
Major classes of assets and liabilities held for sale | |||||||||
Consideration for disposal | ¥ 672,000,000 | ||||||||
Beijing Shuo Ge | |||||||||
ASSETS HELD FOR SALE / LIABILITIES HELD FOR SALE [Line Items] | |||||||||
Consideration in cash for sale of equity interest | 36,169,000 | ¥ 251,800,000 | |||||||
Major classes of assets and liabilities held for sale | |||||||||
Consideration for disposal | 36,169,000 | 251,800,000 | |||||||
Consideration to be returned | $ 10,515,000 | ¥ 73,200,000 | |||||||
Period for returning consideration | 5 years | 5 years |
CLOUD INFRASTRUCTURE CONSTRUC_3
CLOUD INFRASTRUCTURE CONSTRUCTION IN PROGRESS (Details) | 12 Months Ended | ||||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2019CNY (¥) | Dec. 31, 2017CNY (¥) | |
Major classes of assets and liabilities held for sale | |||||
Cloud infrastructure construction in progress | $ 42,035,000 | ¥ 289,280,000 | ¥ 292,639,000 | ||
Costs capitalized | ¥ 416,352,000 | ||||
Additional investment | 1,815,000 | ¥ 12,637,000 | 333,286,000 | ||
Property, Plant and Equipment, Gross | 176,821,000 | 1,386,123,000 | 1,230,989,000 | ||
Building | |||||
Major classes of assets and liabilities held for sale | |||||
Costs capitalized | 265,152,000 | ||||
Property, Plant and Equipment, Gross | 45,080,000 | 324,716,000 | 313,836,000 | ||
Equipment | |||||
Major classes of assets and liabilities held for sale | |||||
Property, Plant and Equipment, Gross | $ 1,333,000 | 104,078,000 | ¥ 9,278,000 | ||
Other noncurrent assets | |||||
Major classes of assets and liabilities held for sale | |||||
Property, Plant and Equipment, Gross | ¥ 91,128,000 |
LONG TERM INVESTMENTS (Details)
LONG TERM INVESTMENTS (Details) | Feb. 19, 2014CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2011CNY (¥) | Dec. 31, 2019CNY (¥) | Dec. 31, 2017CNY (¥) |
LONG TERM INVESTMENTS | |||||||||
Less: accumulated impairment | $ (628,000) | ¥ (4,373,000) | ¥ (4,373,000) | ||||||
Long term Investments | 4,327,000 | 30,148,000 | 30,126,000 | ||||||
Additional investment | 1,815,000 | ¥ 12,637,000 | 333,286,000 | ||||||
PRC Fund | |||||||||
LONG TERM INVESTMENTS | |||||||||
Long term cost investments | 1,448,000 | 10,103,000 | ¥ 10,103,000 | 10,081,000 | |||||
Long term investments, number of years of investment | 9 years | ||||||||
Disposal of investment | 3,160 | ¥ 22,000 | |||||||
United States Fund | |||||||||
LONG TERM INVESTMENTS | |||||||||
Long term cost investments | 2,879,000 | 20,045,000 | 20,045,000 | ||||||
Additional investment | $ 53,000 | ¥ 361,000 | |||||||
Investment in preferred shares of an unlisted company in PRC ("Investee A") | |||||||||
LONG TERM INVESTMENTS | |||||||||
Long term cost investments | 57,000 | 400,000 | 400,000 | ||||||
Investment in convertible borrowings of an unlisted company in Cayman Islands ("Investee B") | |||||||||
LONG TERM INVESTMENTS | |||||||||
Long term available-for-sale investments, before accumulated impairment | $ 571,000 | ¥ 3,973,000 | $ 506,000 | ¥ 3,973,000 | ¥ 3,290,000 | ||||
Percentage of interest in cost method investments | 2.00% | ||||||||
Cost of available-for-sale investment | ¥ 3,068,000 | ||||||||
Term of debt | 2 years | ||||||||
Investment in convertible borrowings of an unlisted company in Cayman Islands ("Investee B") | Maximum | |||||||||
LONG TERM INVESTMENTS | |||||||||
Conversion price as a percentage of Series A financing price | 25.00% |
BORROWINGS - SHORT TERM LOAN (D
BORROWINGS - SHORT TERM LOAN (Details) | Dec. 29, 2018USD ($) | Oct. 11, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 29, 2018CNY (¥) | Oct. 11, 2018CNY (¥) |
Short-term Debt [Line Items] | |||||
Bank loan | ¥ 13,850,000 | ||||
Other borrowing | ¥ 13,850,000 | ||||
Third-party A | |||||
Short-term Debt [Line Items] | |||||
Bank loan | $ 73,000 | $ 1,723,000 | ¥ 500,000 | ¥ 11,850,000 | |
Interest rate (as a percent) | 12.00% | 12.00% | |||
Term of the short term borrowing | 15 days | 4 months | |||
Third-party B | |||||
Short-term Debt [Line Items] | |||||
Bank loan | $ 218,000 | ¥ 1,500,000 | |||
Interest rate (as a percent) | 12.00% | 12.00% | |||
Term of the short term borrowing | 1 month |
BORROWINGS - LONG TERM LOAN (De
BORROWINGS - LONG TERM LOAN (Details) | Jun. 15, 2018USD ($) | Jun. 15, 2018CNY (¥) | May 14, 2018USD ($) | May 14, 2018CNY (¥) | Jan. 15, 2018USD ($) | Jan. 15, 2018CNY (¥) | Dec. 21, 2017CNY (¥) | Dec. 14, 2017CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Nov. 30, 2019USD ($) | Nov. 30, 2019CNY (¥) | Oct. 31, 2019USD ($) | Oct. 31, 2019CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2019CNY (¥) | Jan. 30, 2018USD ($) | Jan. 30, 2018CNY (¥) | Dec. 13, 2017CNY (¥) | Nov. 07, 2017CNY (¥) | Oct. 30, 2017CNY (¥) |
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Proceeds from Bank Debt | ¥ 203,450,000 | ¥ 411,745,000 | |||||||||||||||||||||||
Long-term bank loan | $ 45,965,000 | $ 45,965,000 | 372,926,000 | ¥ 320,000,000 | |||||||||||||||||||||
Less: current portion | (45,965,000) | $ (45,965,000) | (58,355,000) | (320,000,000) | |||||||||||||||||||||
Loans Payable, Noncurrent, Total | 314,571,000 | ||||||||||||||||||||||||
Notice for early repayment of bank loans | 24,419,000 | ¥ 170,000,000 | $ 22,983,000 | ¥ 160,000,000 | ¥ 97,100,000 | ||||||||||||||||||||
Threshold period for early repayment of bank loans | 3 days | 3 days | |||||||||||||||||||||||
Early repayment of bank loans | $ 10,608,000 | ¥ 73,850,000 | 72,771,000 | 183,151,000 | |||||||||||||||||||||
Carrying value of the bank loan | 21,546,000 | 21,546,000 | 150,000,000 | ||||||||||||||||||||||
Future installment repayment | |||||||||||||||||||||||||
2020 | 2,059 | 2,059 | 14,336 | ||||||||||||||||||||||
2021 | 2,059 | 2,059 | 14,336 | ||||||||||||||||||||||
2022 | 2,059 | 2,059 | 14,336 | ||||||||||||||||||||||
2023 | 2,059 | 2,059 | 14,336 | ||||||||||||||||||||||
Total | 10,295 | 10,295 | 71,682 | ||||||||||||||||||||||
Payments of Financing Costs | 269,000 | ¥ 1,873,000 | 7,599,000 | ¥ 4,900,000 | |||||||||||||||||||||
Bank B | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Notice for early repayment of bank loans | 24,419,000 | 170,000,000 | |||||||||||||||||||||||
Bank C | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Notice for early repayment of bank loans | $ 22,983,000 | ¥ 160,000,000 | |||||||||||||||||||||||
Early repayment of bank loans | $ 1,436,000 | ¥ 10,000,000 | |||||||||||||||||||||||
Bank B and C | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Carrying value of the bank loan | $ 83,596,000 | $ 83,596,000 | ¥ 581,979,000 | ||||||||||||||||||||||
Bank B and C | Secured Debt | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Long-term bank loan | ¥ 567,384,000 | ||||||||||||||||||||||||
Bank of Fushun [Member] | Three-year credit facility | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Interest rate (as a percent) | 8.00004% | ||||||||||||||||||||||||
Long-term Line of Credit | $ 3,927,000 | ¥ 27,000,000 | ¥ 23,000,000 | ¥ 150,000,000 | ¥ 150,000,000 | ||||||||||||||||||||
Future installment repayment | |||||||||||||||||||||||||
Debt Instrument, Face Amount | 240,000,000 | ||||||||||||||||||||||||
Payments of Financing Costs | ¥ 2,400,000 | ||||||||||||||||||||||||
Line of Credit facility, Capital Expenditure | ¥ 90,000,000 | ||||||||||||||||||||||||
Shenyang Rural Commercial Bank [Member] | |||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||
Interest rate (as a percent) | 30.00% | ||||||||||||||||||||||||
Future installment repayment | |||||||||||||||||||||||||
Debt Instrument, Face Amount | ¥ 220,000,000 | ||||||||||||||||||||||||
Payments of Financing Costs | $ 13,090,000 | ¥ 90,000,000 | $ 2,909,000 | ¥ 20,000,000 | $ 7,272,000 | ¥ 50,000,000 | ¥ 40,000,000 | ¥ 6,775,000 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |||
Advance from customers | $ 2,201 | ¥ 15,323 | ¥ 18,598 |
Other accrued expenses | 6,052 | 42,131 | 21,764 |
Other tax payables | 1,715 | 11,939 | 7,272 |
Accrued expenses and other current liabilities | $ 9,968 | ¥ 69,393 | ¥ 47,634 |
OTHER PAYABLES (Details)
OTHER PAYABLES (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) |
Payables for purchase of property and equipment | $ 50,675 | ¥ 352,786 | ¥ 393,287 |
Current portion of other non-current liability | 1,621 | 11,282 | |
Other Payables | 787 | 5,485 | 13,567 |
Total | 149,610 | 1,041,553 | 1,403,854 |
Beijing Shuo Ge | |||
Other Sundry Liabilities, Current | 325,000 | ||
Beijing Zhao Du | |||
Other Sundry Liabilities, Current | $ 96,527 | ¥ 672,000 | ¥ 672,000 |
OTHER NON-CURRENT LIABILITY (De
OTHER NON-CURRENT LIABILITY (Details) - Dec. 31, 2019 ¥ in Thousands, $ in Thousands | USD ($) | CNY (¥) |
OTHER NON-CURRENT LIABILITY | ||
Consideration refund payable | $ 8,943 | ¥ 62,255 |
Less: current portion | (1,621) | (11,282) |
Total | $ 7,322 | ¥ 50,973 |
OTHER NON-CURRENT LIABILITY - D
OTHER NON-CURRENT LIABILITY - Disposal of Beijing Shuo Ge (Details) - Dec. 31, 2019 - Beijing Shuo Ge | USD ($) | CNY (¥) |
Other Liabilities, Noncurrent [Line Items] | ||
Consideration to be returned | $ 10,515,000 | ¥ 73,200,000 |
Interest on consideration to be returned | $ 1,870,000 | ¥ 13,018,000 |
OTHER NON-CURRENT LIABILITY - F
OTHER NON-CURRENT LIABILITY - Future installment payments (Details) - Dec. 31, 2019 | USD ($) | CNY (¥) |
Future installment payment schedule according to the borrowing agreements | ||
2020 | $ 2,059 | ¥ 14,336 |
2021 | 2,059 | 14,336 |
2022 | 2,059 | 14,336 |
2023 | 2,059 | 14,336 |
2024 | 2,059 | 14,336 |
Total | $ 10,295 | ¥ 71,682 |
DEFERRED GOVERNMENT GRANT (Deta
DEFERRED GOVERNMENT GRANT (Details) | 12 Months Ended | ||||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2019CNY (¥) | |
Deferred government grant | |||||
Beginning balance | $ 2,304,000 | ¥ 19,580,000 | |||
Recognized as income during the year | (200,000) | ¥ (1,394,000) | (3,534,000) | ||
Total balance of deferred government grant | 2,104,000 | 14,652,000 | 16,046,000 | ||
Less: current portion | 43,000 | 1,696,000 | ¥ 302,000 | ||
Balance of non-current deferred government grant | 2,061,000 | ¥ 14,350,000 | ¥ 19,580,000 | ||
Prepaid Discount Made to Buyer for Pending Sales of Certain Cloud Infrastructure | $ 200,000 | ¥ 3,534,000 | ¥ 4,628,000 | ¥ 1,394,000 |
FINANCE LEASE OBLIGATIONS (Deta
FINANCE LEASE OBLIGATIONS (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) |
Future minimum lease payments under non-cancellable capital lease arrangements | |||
2019 | ¥ 25,311 | ||
2020 | $ 4,565 | ¥ 31,782 | 24,003 |
2021 | 3,882 | 27,027 | 21,503 |
Total minimum lease payment | 8,447 | 58,809 | 70,817 |
Less: amount representing interest | (1,078) | (7,511) | (9,159) |
Present value of remaining minimum lease payment | 7,369 | 51,298 | 61,658 |
Current portion of capital lease obligations of the VIEs without recourse to the Company | 3,743 | 26,057 | 20,299 |
Non current portion | $ 3,626 | ¥ 25,241 | ¥ 41,359 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) | 12 Months Ended | ||||||
Dec. 31, 2019item$ / sharesshares | Dec. 31, 2018$ / sharesshares | Dec. 31, 2017$ / sharesshares | Jun. 20, 2011shares | May 20, 2010shares | May 28, 2009shares | Oct. 16, 2008shares | |
SHARE-BASED COMPENSATION | |||||||
Options granted (in shares) | 0 | 17,600,000 | 0 | ||||
Options to purchase ordinary shares, outstanding (in shares) | 31,182,205 | ||||||
Number of ordinary shares available for future grant | 20,199,147 | ||||||
Maximum | |||||||
SHARE-BASED COMPENSATION | |||||||
Exercise price (in CNY or dollars per share) | $ / shares | $ 0.07 | $ 0.07 | $ 0.07 | ||||
Minimum | |||||||
SHARE-BASED COMPENSATION | |||||||
Exercise price (in CNY or dollars per share) | $ / shares | $ 0.06 | $ 0.06 | $ 0.06 | ||||
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 | ||||||
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 | ||||||
Number of different vesting schedules | item | 4 | ||||||
2011 Plan | Maximum | |||||||
SHARE-BASED COMPENSATION | |||||||
Expiration term of options granted | 10 years | ||||||
2011 Plan | Minimum | |||||||
SHARE-BASED COMPENSATION | |||||||
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 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% | ||||||
2011 Plan | Options | Vesting schedule three | |||||||
SHARE-BASED COMPENSATION | |||||||
Percentage of options vesting each quarter for the third anniversary of the stated vesting commencement date | 6.25% | ||||||
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) | 12 Months Ended | ||||||
Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2019CNY (¥)shares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2018CNY (¥)shares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2017CNY (¥)shares | Dec. 31, 2019CNY (¥)shares | |
Number of options | |||||||
Granted (in shares) | shares | 0 | 0 | 17,600,000 | 17,600,000 | 0 | 0 | |
Exercised (in shares) | shares | (44,000) | (44,000) | |||||
Outstanding at the end of the period (in shares) | shares | 31,182,205 | 31,182,205 | |||||
Minimum | |||||||
Weighted average Exercise price | |||||||
Granted (in dollars per shares) | $ 0.06 | $ 0.06 | $ 0.06 | ||||
Aggregate intrinsic value | |||||||
Period over which unrecognized share-based compensation cost are expected to be recognized | 1 year | 1 year | |||||
Maximum | |||||||
Weighted average Exercise price | |||||||
Granted (in dollars per shares) | $ 0.07 | $ 0.07 | $ 0.07 | ||||
Aggregate intrinsic value | |||||||
Period over which unrecognized share-based compensation cost are expected to be recognized | 2 years | 2 years | |||||
ADS | |||||||
Aggregate intrinsic value | |||||||
Closing price of ordinary shares (in dollars per share) | $ 0.88 | ||||||
Ordinary shares | |||||||
Aggregate intrinsic value | |||||||
Closing price of ordinary shares (in dollars per share) | $ 0.06 | ||||||
Options | Employees | |||||||
Number of options | |||||||
Outstanding at the beginning of the period (in shares) | shares | 37,369,229 | 37,369,229 | 25,113,357 | 25,113,357 | |||
Vested and expected to vest at the beginning of the period (in shares) | shares | 37,369,229 | 37,369,229 | 25,113,357 | 25,113,357 | |||
Granted (in shares) | shares | 17,600,000 | 17,600,000 | |||||
Exercised (in shares) | shares | (44,000) | (44,000) | (1,096,896) | (1,096,896) | |||
Forfeited (in shares) | shares | (6,143,024) | (6,143,024) | (4,247,232) | (4,247,232) | |||
Outstanding at the end of the period (in shares) | shares | 31,182,205 | 31,182,205 | 37,369,229 | 37,369,229 | 25,113,357 | 25,113,357 | |
Vested and expected to vest at the end of the period (in shares) | shares | 31,182,205 | 31,182,205 | 37,369,229 | 37,369,229 | 25,113,357 | 25,113,357 | |
Exercisable at the end of the period (in shares) | shares | 20,119,147 | 16,222,688 | 20,119,147 | ||||
Weighted average Exercise price | |||||||
Outstanding at the beginning of the period (in dollars per shares) | $ 0.11 | $ 0.14 | |||||
Vested and expected to vest at the beginning of the period (in dollars per shares) | 0.11 | 0.14 | |||||
Granted (in dollars per shares) | 0.06 | ||||||
Exercised (in dollars per shares) | 0.08 | 0.08 | |||||
Forfeited (in dollars per shares) | 0.16 | 0.06 | |||||
Outstanding at the end of the period (in dollars per shares) | 0.10 | 0.11 | $ 0.14 | ||||
Vested and expected to vest at the end of the period (in dollars per shares) | 0.10 | 0.11 | $ 0.14 | ||||
Exercisable at the end of the period (in dollars per shares) | $ 0.10 | $ 0.17 | |||||
Weighted average remaining contractual term (Years) | |||||||
Outstanding at the end of the period | 7 years 2 months 23 days | 7 years 2 months 23 days | 7 years 9 months 22 days | 7 years 9 months 22 days | 7 years 3 months 4 days | 7 years 3 months 4 days | |
Vested and expected to vest at the end of the period | 7 years 2 months 23 days | 7 years 2 months 23 days | 7 years 9 months 22 days | 7 years 9 months 22 days | 7 years 3 months 4 days | 7 years 3 months 4 days | |
Exercisable at the end of the period | 7 years 1 month 6 days | 7 years 1 month 6 days | 5 years 11 months 5 days | 5 years 11 months 5 days | |||
Aggregate intrinsic value | |||||||
Outstanding at the beginning of the period (in dollars) | $ | $ 2,000 | $ 586,000 | |||||
Vested and expected to vest at the beginning of the period (in dollars) | $ | 2,000 | 586,000 | |||||
Vested and expected to vest at the end of the period (in dollars) | $ | 1.35 | 2,000 | $ 586,000 | ||||
Exercisable at the end of the period (in dollars) | $ | 1.35 | 2,000 | |||||
Outstanding at the end of the period (in dollars) | $ | 1.35 | $ 2,000 | $ 586,000 | ||||
Total intrinsic value of stock options exercised | 3,000 | ¥ 18,000 | ¥ 502,000 | ¥ 0 | |||
Unrecognized share-based compensation cost (in CNY or dollars) | 126,000 | ¥ 875,000 | |||||
Total fair value of options vested | $ 263,000 | ¥ 1,834,000 | ¥ 4,013,000 | ¥ 2,054,000 |
SHARE-BASED COMPENSATION - REST
SHARE-BASED COMPENSATION - RESTRICTED SHARES AWARD (Details) | Apr. 09, 2018shares | Dec. 13, 2017shares | Dec. 11, 2015shares | Dec. 23, 2014shares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2019CNY (¥)shares | Dec. 31, 2018$ / sharesshares | Dec. 31, 2018CNY (¥)shares | Dec. 31, 2017$ / sharesshares | Dec. 31, 2017CNY (¥)shares | Dec. 31, 2019CNY (¥)shares |
Number of ordinary shares | |||||||||||
Outstanding at the beginning of the period (in shares) | 2,223,468 | ||||||||||
Vested (in shares) | (320,000) | (320,000) | (1,503,212) | ||||||||
Forfeited (in shares) | (160,000) | (160,000) | (560,256) | ||||||||
Outstanding at the end of the period (in shares) | 160,000 | 160,000 | 2,223,468 | ||||||||
Expected to vest at the end of the period (in shares) | 160,000 | 640,000 | 2,223,468 | 160,000 | |||||||
Weighted average grant date fair value | |||||||||||
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 0.14 | ||||||||||
Vested (in dollars per share) | $ / shares | $ 0.07 | 0.35 | |||||||||
Forfeited (in dollars per share) | $ / shares | 0.07 | 0.43 | |||||||||
Outstanding at the end of the period (in dollars per share) | $ / shares | 0.07 | $ 0.14 | |||||||||
Expected to vest at the end of the period (in dollars per share) | $ / shares | $ 0.07 | 0.07 | $ 0.14 | ||||||||
Aggregate fair value of the unvested restricted shares | $ 11,000 | ¥ 78,000 | ¥ 300,000 | ||||||||
Total fair value of restricted shares vested | $ 22,000 | ¥ 151,000 | ¥ 144,000 | ¥ 8,882,000 | |||||||
Restricted shares | |||||||||||
Number of ordinary shares | |||||||||||
Outstanding at the beginning of the period (in shares) | 640,000 | 640,000 | |||||||||
Granted (in shares) | 480,000 | ||||||||||
Outstanding at the end of the period (in shares) | 640,000 | ||||||||||
Weighted average grant date fair value | |||||||||||
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 0.07 | ||||||||||
Granted (in dollars per share) | $ / shares | 0.07 | ||||||||||
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 0.07 | ||||||||||
2011 Plan | Restricted shares | Employees and directors | |||||||||||
SHARE-BASED COMPENSATION | |||||||||||
Shares issued (in shares) | 480,000 | 16,813,344 | 40,106,656 | 11,265,520 | |||||||
Unrecognized share-based compensation cost | $ 11,000 | ¥ 78,000 | |||||||||
Period over which unrecognized share-based compensation cost are expected to be recognized | 1 year | 1 year |
SHARE-BASED COMPENSATION - SHAR
SHARE-BASED COMPENSATION - SHARE OPTIONS ISSUED TO NON-EMPLOYEES (Details) | Dec. 31, 2019$ / shares |
ADS | |
SHARE-BASED COMPENSATION | |
Closing price of ordinary shares (in dollars per share) | $ 0.88 |
Ordinary shares | |
SHARE-BASED COMPENSATION | |
Closing price of ordinary shares (in dollars per share) | $ 0.06 |
SHARE-BASED COMPENSATION - RE_2
SHARE-BASED COMPENSATION - RESTRICTED SHARE AWARD GRANTED TO NON-EMPLOYEE (Details) | 12 Months Ended | |||
Dec. 31, 2019USD ($)shares | Dec. 31, 2019CNY (¥)shares | Dec. 31, 2018CNY (¥)shares | Dec. 31, 2017CNY (¥) | |
Share-based compensation | ||||
Vested (in shares) | 320,000 | 320,000 | 1,503,212 | |
Total fair value of restricted shares vested | $ 22,000 | ¥ 151,000 | ¥ 144,000 | ¥ 8,882,000 |
Total compensation expense | 272,000 | 1,891,000 | 4,157,000 | 10,936,000 |
Cost of revenues | ||||
Share-based compensation | ||||
Total compensation expense | 30,000 | 211,000 | 551,000 | 490,000 |
Sales and marketing expenses | ||||
Share-based compensation | ||||
Total compensation expense | 12,000 | 83,000 | 220,000 | 254,000 |
General and administrative expenses | ||||
Share-based compensation | ||||
Total compensation expense | 161,000 | 1,114,000 | 2,262,000 | 9,630,000 |
Research and development expenses | ||||
Share-based compensation | ||||
Total compensation expense | $ 69,000 | ¥ 483,000 | ¥ 1,124,000 | ¥ 562,000 |
MAINLAND CHINA EMPLOYEE CONTR_2
MAINLAND CHINA EMPLOYEE CONTRIBUTION PLAN (Details) | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
MAINLAND CHINA EMPLOYEE CONTRIBUTION PLAN | ||||
Total expenses for the plan | $ 4,063,000 | ¥ 28,285,000 | ¥ 29,288,000 | ¥ 44,416,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) ¥ in Thousands, $ in Thousands, $ in Millions | 12 Months Ended | ||||
Dec. 31, 2019HKD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Loss before income tax expense | |||||
Non-PRC | $ (1,737) | ¥ (12,095) | ¥ 21,495 | ¥ (36,317) | |
PRC | (4,689) | (32,643) | (47,297) | (275,201) | |
Loss before income taxes | (6,426) | (44,738) | (25,802) | (311,518) | |
Income tax expense | |||||
Current | 1,144 | 7,967 | 11 | 29,428 | |
Deferred | 0 | 0 | 30,220 | ||
Income tax expense | $ 1,144 | ¥ 7,967 | ¥ 11 | ¥ 59,648 | |
HK | |||||
Income taxes | |||||
Foreign statutory corporate income tax rate (as a percent) | 16.50% | 16.50% | 16.50% | ||
Amount of assessable profits under lowered tax rate | $ 2 | ||||
Percentage of lowered income tax rate | 8.25% | 8.25% | 8.25% | ||
PRC | |||||
Income taxes | |||||
Statutory tax rate (as a percent) | 25.00% | 25.00% | 25.00% | ||
HNTE | PRC | |||||
Income taxes | |||||
Preferential tax rate (as a percent) | 15.00% | 15.00% | 15.00% | ||
Tax Year 2016 to 2021 [Member] | HNTE | PRC | |||||
Income taxes | |||||
Preferential tax rate (as a percent) | 15.00% | 15.00% | 15.00% | ||
Tax Year 2016 to 2020 [Member] | HNTE | PRC | |||||
Income taxes | |||||
Preferential tax rate (as a percent) | 15.00% | 15.00% | 15.00% | ||
ChinaCache North America, Inc. | Maximum | United States of America | |||||
Income taxes | |||||
Foreign statutory corporate income tax rate (as a percent) | 21.00% | 21.00% | 21.00% | 21.00% | 34.00% |
ChinaCache North America, Inc. | Maximum | California | |||||
Income taxes | |||||
State Income Tax (as a percent) | 8.84% | 8.84% | 8.84% | 8.84% | 8.84% |
ChinaCache Networks Hong Kong Ltd. ("ChinaCache HK") | HK | |||||
Income taxes | |||||
Foreign statutory corporate income tax rate (as a percent) | 8.25% | 8.25% | 8.25% | 16.50% | 16.50% |
Amount of assessable profits under lowered tax rate | $ 2 |
INCOME TAXES - TAX RECONCILIATI
INCOME TAXES - TAX RECONCILIATION (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Reconciliation of tax computed by applying statutory income tax rate to the income tax expense | ||||
Loss before income tax expense | $ (6,426) | ¥ (44,738) | ¥ (25,802) | ¥ (311,518) |
Income tax computed at PRC statutory tax rate of 25% | (1,607) | (11,184) | (6,450) | (77,881) |
Preferential tax rates | (393) | (2,737) | (7,031) | 15,955 |
International rate differences | 1,097 | 7,636 | (4,732) | 9,401 |
Additional 50%/75% tax deduction for qualified research and development expenses | (1,393) | (9,697) | (7,228) | (8,795) |
Non-deductible expenses | 521 | 3,629 | 3,002 | 6,187 |
Effect of changes in tax rates on deferred taxes | 254 | 1,765 | 101,502 | (33,930) |
Changes in the valuation allowance | 1,579 | 10,996 | (79,052) | 148,711 |
Realization gain from intercompany transaction | 1,068 | 7,435 | ||
Expiration of tax loss carry forward | 11 | 77 | ||
other adjustment | 7 | 47 | ||
Income tax expense | $ 1,144 | ¥ 7,967 | ¥ 11 | ¥ 59,648 |
INCOME TAXES - COMPONENTS OF DE
INCOME TAXES - COMPONENTS OF DEFERRED TAX ASSETS (Details) | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2019CNY (¥) | |
Deferred Tax Assets, Net of Valuation Allowance [Abstract] | ||||
- Allowance for doubtful accounts | $ 2,115,000 | ¥ 12,323,000 | ¥ 14,726,000 | |
- Deferred revenue | 316,000 | 2,407,000 | 2,198,000 | |
- Accruals | 2,325,000 | 25,993,000 | 16,183,000 | |
- Tax losses | 24,956,000 | 134,855,000 | 173,740,000 | |
- Property and equipment | 297,000 | 2,105,000 | 2,070,000 | |
- Intangible assets | 211,000 | 1,469,000 | 1,469,000 | |
- Long-term investment impairment | 138,000 | 960,000 | 960,000 | |
- Impairment loss for long lived assets | 636,000 | 24,663,000 | 4,425,000 | |
- Unrealized profit | 10,323,000 | 71,868,000 | 71,868,000 | |
Less: valuation allowance | (41,317,000) | (276,643,000) | (287,639,000) | |
Total Deferred tax assets | 0 | ¥ 0 | ||
Change in the valuation allowance | $ 1,579,000 | ¥ 10,996,000 | ¥ 79,052,000 |
INCOME TAXES - OPERATING LOSS C
INCOME TAXES - OPERATING LOSS CARRYFORWARDS (Details) | Dec. 31, 2019CNY (¥) |
PRC Subsidiaries | |
Income taxes | |
Net tax operating losses | ¥ 965,767,000 |
Non PRC | |
Income taxes | |
Net tax operating losses | ¥ 25,094,000 |
INCOME TAXES - UNRECOGNIZED TAX
INCOME TAXES - UNRECOGNIZED TAX EXPENSE (Details) | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Roll-forward of accrued unrecognized tax expense | ||||
Beginning balance | $ 1,203,000 | ¥ 8,273,000 | ¥ 8,273,000 | |
Increase based on tax positions related to the current year | 0 | 0 | 0 | |
Ending balance | $ 1,203,000 | 8,273,000 | 8,273,000 | ¥ 8,273,000 |
Unrecognized tax expense | ¥ 0 | 0 | ||
Period in which the amount of unrecognized tax expense will change | 12 months | 12 months | ||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense | $ 196,000 | ¥ 1,365,000 | 1,510,000 | ¥ 1,510,000 |
Payment of interest and penalties accrued | $ 2,168,000 | ¥ 15,096,000 | ¥ 13,731,000 | |
PRC Subsidiaries | ||||
Roll-forward of accrued unrecognized tax expense | ||||
Period to assess underpaid tax plus penalties and interest | 5 years | 5 years |
RELATED PARTY BALANCES AND TR_3
RELATED PARTY BALANCES AND TRANSACTIONS - RELATIONSHIP WITH THE COMPANY (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Mr. Wang Song | |
Related party balances and transactions | |
Relationship with the Company | The Co-Founder and Ex-director of the Company |
Ms. Kou Xiaohong | |
Related party balances and transactions | |
Relationship with the Company | The Co-Founder and Ex-director of the Company |
Mr. Xiaoqiang Wei | |
Related party balances and transactions | |
Relationship with the Company | Chief Executive Officer and Director of the Company |
RELATED PARTY BALANCES AND TR_4
RELATED PARTY BALANCES AND TRANSACTIONS - GUARANTEE PROVIDED BY RELATED PARTIES TO GROUP (Details) - Capital lease ¥ in Thousands, $ in Thousands | Dec. 31, 2019HKD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) |
Mr. Wang Song | Vendor A | |||
Guarantee provided by related parties to the Group | |||
Guarantee provided | ¥ 50,000,000 | ¥ 39,000,000 | |
Wang Song and Kou Xiahong | Vendor B | |||
Guarantee provided by related parties to the Group | |||
Guarantee provided | $ 34,500,000 | ¥ 25,000,000 |
RELATED PARTY BALANCES AND TR_5
RELATED PARTY BALANCES AND TRANSACTIONS - DUE FROM RELATED PARTY (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | |
Due from Related Parties, Unclassified [Abstract] | ||||
Advance for the Group's expenditure | ¥ 65 | |||
Balance at the end | $ 9 | 65 | ||
Changes in related party balances | ||||
Balance at the beginning of the period | (69) | ¥ (18) | ||
Expense paid on behalf of the Group | 42 | (328) | ||
Expense Reimbursement payment | 277 | |||
Balance at the end of the period | (4) | (27) | (69) | |
Mr. Xiaoqiang Wei | ||||
Due from Related Parties, Unclassified [Abstract] | ||||
Advance for the Group's expenditure | 65 | |||
Balance at the end | 9 | 65 | ||
Mr. Wang Song | ||||
Changes in related party balances | ||||
Balance at the beginning of the period | (51) | |||
Expense paid on behalf of the Group | (328) | |||
Expense Reimbursement payment | $ (51) | 277 | ||
Balance at the end of the period | (51) | |||
Ms. Kou Xiaohong | ||||
Changes in related party balances | ||||
Balance at the beginning of the period | (18) | (18) | ||
Expense paid on behalf of the Group | (9) | |||
Balance at the end of the period | $ (4) | ¥ (27) | ¥ (18) |
RESTRICTED NET ASSETS (Details)
RESTRICTED NET ASSETS (Details) | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2019CNY (¥) | |
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% | 50.00% | ||
Amount appropriated to the statutory reserve funds | $ 190,000 | ¥ 1,326,000 | ¥ 1,326,000 | |
Restricted net assets of the Company's PRC subsidiaries and VIEs | $ 66,249,000 | ¥ 461,213,000 |
LOSS PER SHARE (Details)
LOSS PER SHARE (Details) ¥ / shares in Units, $ / shares in Units, ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2019CNY (¥)¥ / sharesshares | Dec. 31, 2018CNY (¥)¥ / sharesshares | Dec. 31, 2017CNY (¥)¥ / sharesshares | |
Numerator: | ||||
Net loss attributable to ordinary shareholders: | $ (7,421) | ¥ (51,671) | ¥ (24,418) | ¥ (369,161) |
Denominator: | ||||
Number of shares outstanding, opening | 429,404,977 | 429,404,977 | 425,150,082 | 421,522,374 |
Weighted average number of shares issued | 7,244,845 | 7,244,845 | 1,659,485 | 4,067,372 |
Weighted-average number of shares outstanding - Basic and diluted | 436,649,822 | 436,649,822 | 426,809,567 | 425,589,746 |
Loss per share | ||||
Basic and Diluted (in CNY or dollars per share) | (per share) | $ (0.02) | ¥ (0.12) | ¥ (0.06) | ¥ (0.87) |
Number of share options and restricted share (in shares) | 11,223,058 | 11,223,058 | 21,786,541 | 10,417,850 |
Options exercised (in shares) | 44,000 | 44,000 | ||
Restricted shares vested (in shares) | 160,000 | 160,000 |
FAIR VALUE MEASUREMENT (Details
FAIR VALUE MEASUREMENT (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs | |||||
Unrealized holding loss on available-for-sale investments | $ 0 | $ 0 | ¥ (4,195) | ||
Investment in convertible borrowings of an unlisted company in Cayman Islands ("Investee B") | Level 3 | Recurring basis | |||||
Reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs | |||||
Fair value at beginning of the year | ¥ 0 | ¥ 0 | 3,973 | ||
Other than temporary impairment | (3,973) | ||||
Fair value at end of the year | ¥ 0 | ¥ 0 | ¥ 0 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - Dec. 31, 2019 | USD ($) | CNY (¥) |
Purchase Commitments | ||
Outstanding purchase commitments in relation to bandwidth and cloud infrastructure | $ 26,939,000 | ¥ 187,547,000 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Contingencies (Details) | Apr. 24, 2018CNY (¥) | Jan. 31, 2020CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Oct. 31, 2019USD ($) | Oct. 31, 2019CNY (¥) | Aug. 31, 2017CNY (¥) | Mar. 31, 2019CNY (¥) | Jun. 30, 2018CNY (¥) | Dec. 31, 2019CNY (¥) | Sep. 30, 2017CNY (¥) | Sep. 12, 2017CNY (¥) |
Notice for early repayment of bank loans | $ 24,419,000 | ¥ 170,000,000 | $ 22,983,000 | ¥ 160,000,000 | ¥ 97,100,000 | |||||||
Litigation accrued | 90,200,000 | 90,200,000 | ||||||||||
Provision | 0 | |||||||||||
Assets/liabilities held-for-sale | ||||||||||||
Litigation accrued | ¥ 104,400,000 | 104,400,000 | ||||||||||
Xin Run | ||||||||||||
Approximate amount of compensation or damages payable | ¥ 50,500,000 | |||||||||||
Bank Deposits and Other Assets | ¥ 50,500,000 | |||||||||||
Notice for early repayment of bank loans | ¥ 14,400,000 | ¥ 20,200,000 | ||||||||||
Interest on damage sought | 8,860,000 | |||||||||||
Xin Run | BFSMC | ||||||||||||
Rental received | ¥ 64,800,000 | ¥ 64,800,000 | ||||||||||
Notice for early repayment of bank loans | ¥ 96,000,000 | ¥ 105,600,000 | ||||||||||
Subsequent event | BFSMC | ||||||||||||
Notice for early repayment of bank loans | ¥ 672,000,000 | |||||||||||
Interest rate | 9.00% | |||||||||||
Interest on damage sought | ¥ 263,790,000 | |||||||||||
Subsequent event | Xin Run | BFSMC | ||||||||||||
Notice for early repayment of bank loans | ¥ 82,680,000 | |||||||||||
Interest rate | 4.35% | |||||||||||
Interest on damage sought | ¥ 13,340,000 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Litigations related to Bank loans (Details) | Apr. 24, 2018CNY (¥) | Dec. 31, 2019USD ($)building | Dec. 31, 2019CNY (¥)building | Nov. 30, 2019USD ($)building | Nov. 30, 2019CNY (¥)building | Oct. 31, 2019USD ($) | Oct. 31, 2019CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) |
Notice for early repayment of bank loans | $ 24,419,000 | ¥ 170,000,000 | $ 22,983,000 | ¥ 160,000,000 | ¥ 97,100,000 | ||||||
Early repayment of bank loans | $ 10,608,000 | 73,850,000 | ¥ 72,771,000 | ¥ 183,151,000 | |||||||
Bank B | |||||||||||
Notice for early repayment of bank loans | 24,419,000 | 170,000,000 | |||||||||
Bank C | |||||||||||
Notice for early repayment of bank loans | $ 22,983,000 | 160,000,000 | |||||||||
Early repayment of bank loans | $ 1,436,000 | ¥ 10,000,000 | |||||||||
Xin Run | |||||||||||
Notice for early repayment of bank loans | ¥ 14,400,000 | ¥ 20,200,000 | |||||||||
Number Of IDC Buildings And Related Land Use Right Sealed Up | building | 2 | 2 | |||||||||
Xin Run | Bank B | |||||||||||
Notice for early repayment of bank loans | 170,000,000 | ||||||||||
Number Of IDC Buildings And Related Land Use Right Sealed Up | building | 7 | 7 | |||||||||
Xin Run | Bank C | |||||||||||
Notice for early repayment of bank loans | 160,000,000 | ||||||||||
Early repayment of bank loans | ¥ 10,000,000 | ||||||||||
Number Of IDC Buildings And Related Land Use Right Sealed Up | building | 7 | 7 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - Litigations related to Beijing Kangtuo Technologies Co.,Ltd ("BJKT") (Details) | Apr. 24, 2018CNY (¥) | Dec. 31, 2019USD ($)building | Dec. 31, 2019CNY (¥)building | Oct. 31, 2019USD ($) | Oct. 31, 2019CNY (¥) | Aug. 31, 2019CNY (¥) | Dec. 31, 2019CNY (¥)individual |
Damages sought value | $ 24,419,000 | ¥ 170,000,000 | $ 22,983,000 | ¥ 160,000,000 | ¥ 97,100,000 | ||
Overdue Construction Fees | 83,300,000 | ||||||
Liquidated Damage | 13,800,000 | ||||||
Accrued liability | ¥ 90,200,000 | 90,200,000 | |||||
Provision | 0 | ||||||
Xin Run | |||||||
Damages sought value | ¥ 14,400,000 | 20,200,000 | |||||
Number Of IDC Buildings And Related Land Use Right Sealed Up | building | 2 | 2 | |||||
Xin Run | BJKT | |||||||
Damages sought value | ¥ 35,600,000 | ||||||
Overdue Construction Fees | ¥ 69,300,000 | 14,000,000 | |||||
Liquidated Damage | 9,200,000 | ¥ 6,500,000 | |||||
Altered construction fees | 31,300,000 | ||||||
Altered Liquidated Damage | 7,300,000 | ||||||
Debt Due From Related Party Transferred | 38,000,000 | ||||||
Xin Run | Suppliers of BJKT | |||||||
Damages sought value | ¥ 14,000,000 | ||||||
Number of other suppliers filed similar lawsuits | individual | 3 | ||||||
Xin Run | Equipment technology company | |||||||
Debt Due From Related Party Transferred | ¥ 38,000,000 |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES - Other litigation issues (Details) | Dec. 31, 2019CNY (¥) | Apr. 24, 2018CNY (¥) | Oct. 31, 2020CNY (¥) | Jan. 31, 2020CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Oct. 31, 2019USD ($) | Oct. 31, 2019CNY (¥) | Sep. 30, 2019CNY (¥) | Aug. 31, 2019CNY (¥) | Jul. 31, 2019CNY (¥) | Jun. 30, 2019CNY (¥) | Apr. 30, 2019CNY (¥) | Jul. 31, 2017CNY (¥) | Dec. 31, 2019CNY (¥) |
Construction Fee | ¥ 83,300,000 | ||||||||||||||
Damages sought value | $ 24,419,000 | ¥ 170,000,000 | $ 22,983,000 | ¥ 160,000,000 | 97,100,000 | ||||||||||
Liquidated Damage | 13,800,000 | ||||||||||||||
Litigation accrued | ¥ 90,200,000 | 90,200,000 | 90,200,000 | ||||||||||||
Xin Run | |||||||||||||||
Damages sought value | ¥ 14,400,000 | 20,200,000 | |||||||||||||
Interest on damage sought | ¥ 8,860,000 | ||||||||||||||
Xin Run | Beijing Urban Construction | |||||||||||||||
Construction Fees Not Paid | ¥ 73,900,000 | ||||||||||||||
Construction Fee | ¥ 10,000,000 | ¥ 33,700,000 | |||||||||||||
Xin Run | Trading company | |||||||||||||||
Equipment Purchase Price And Related Penalty | ¥ 37,200,000 | ||||||||||||||
Damages sought value | ¥ 20,200,000 | ||||||||||||||
Related penalty sought value | ¥ 6,000,000 | ||||||||||||||
Interest rate | 2.00% | ||||||||||||||
Litigation Settlement, Amount Awarded from Other Party | 2,000,000 | ||||||||||||||
Xin Run | Computer Equipments [Member] | |||||||||||||||
Payment of Equipment Purchase Fee and Related Interest | ¥ 40,800,000 | ||||||||||||||
Payment of construction Service Fee and Related Interest | ¥ 58,100,000 | ||||||||||||||
Extra Construction Fee Charged | ¥ 16,500,000 | ||||||||||||||
Litigation accrued | ¥ 90,400,000 | 90,400,000 | 90,400,000 | ||||||||||||
Xin Run | Technology Company Beijing Shunyi (Member) | |||||||||||||||
Construction Fees Not Paid | 65,200,000 | ||||||||||||||
Interest on damage sought | ¥ 7,500,000 | ||||||||||||||
Other Payables | ¥ 47,200,000 | ||||||||||||||
Beijing Blue IT | Technology company | |||||||||||||||
Liquidated Damage | ¥ 28,300,000 | ||||||||||||||
Subsequent event | |||||||||||||||
Related penalty sought value | ¥ 6,000,000 | ||||||||||||||
Subsequent event | Xin Run | Technology company | |||||||||||||||
Damage awarded | ¥ 27,500,000 |
CONDENSED FINANCIAL INFORMATI_3
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY - BALANCE SHEETS (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) |
Current assets: | ||||||
Cash and cash equivalents | $ 3,725 | ¥ 25,930 | ¥ 41,127 | |||
Prepaid expenses and other current assets, net | 16,937 | 117,912 | 169,635 | |||
Total current assets | 87,254 | 607,443 | 1,010,747 | |||
Non-current assets: | ||||||
Long term investments | 4,327 | 30,126 | 30,148 | |||
Total non-current assets | 133,405 | 928,737 | 835,122 | |||
TOTAL ASSETS | 220,659 | 1,536,180 | 1,845,869 | |||
Current liabilities: | ||||||
Accrued employee benefits | 5,442 | 37,885 | 36,794 | |||
Accrued expenses and other payables | 9,968 | 69,393 | 47,634 | |||
Total current liabilities | 274,791 | 1,913,033 | 2,015,567 | |||
Total liabilities | 305,376 | 2,125,957 | 2,385,847 | |||
Shareholders' deficit: | ||||||
Ordinary shares (US$0.0001 par value; 1,000,000,000 and 1,000,000,000 shares authorized; 429,404,977 and 436,656,529 shares issued and outstanding as of December 31, 2018 and 2019, respectively) | 44 | 338 | 338 | |||
Additional paid-in capital | 227,106 | 1,581,064 | 1,579,153 | |||
Treasury stock | (2,202) | (15,332) | (18,033) | |||
Statutory reserves | 190 | 1,326 | 1,326 | |||
Accumulated deficit | (309,150) | (2,152,240) | (2,100,569) | |||
Accumulated other comprehensive income/(loss) | (23) | (184) | 1,522 | |||
Total shareholder's deficit | (84,717) | (589,777) | (539,978) | ¥ (500,907) | ¥ (142,521) | |
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT | 220,659 | 1,536,180 | 1,845,869 | |||
Parent | ||||||
Current assets: | ||||||
Cash and cash equivalents | 126 | 880 | $ 1,214 | 8,455 | ¥ 1,141 | ¥ 24,463 |
Prepaid expenses and other current assets, net | 352 | 2,453 | 2,283 | |||
Total current assets | 478 | 3,333 | 10,738 | |||
Non-current assets: | ||||||
Long term investments | 2,879 | 20,045 | 20,045 | |||
Investments in subsidiaries and consolidated VIEs | (86,732) | (603,810) | (565,557) | |||
Total non-current assets | (83,853) | (583,765) | (545,512) | |||
TOTAL ASSETS | (83,375) | (580,432) | (534,774) | |||
Current liabilities: | ||||||
Accrued employee benefits | 271 | 1,886 | ||||
Accrued expenses and other payables | 389 | 2,710 | 1,489 | |||
Total current liabilities | 660 | 4,596 | 1,489 | |||
Total liabilities | 660 | 4,596 | 1,489 | |||
Shareholders' deficit: | ||||||
Ordinary shares (US$0.0001 par value; 1,000,000,000 and 1,000,000,000 shares authorized; 429,404,977 and 436,656,529 shares issued and outstanding as of December 31, 2018 and 2019, respectively) | 44 | 338 | 338 | |||
Additional paid-in capital | 227,106 | 1,581,064 | 1,579,153 | |||
Treasury stock | (2,202) | (15,332) | (18,033) | |||
Statutory reserves | 190 | 1,326 | 1,326 | |||
Accumulated deficit | (309,150) | (2,152,240) | (2,100,569) | |||
Accumulated other comprehensive income/(loss) | (23) | (184) | 1,522 | |||
Total shareholder's deficit | (84,035) | (585,028) | (536,263) | |||
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT | $ (83,375) | ¥ (580,432) | ¥ (534,774) |
CONDENSED FINANCIAL INFORMATI_4
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY - BALANCE SHEETS (Parenthetical) (Details) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
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) | 429,608,977 | 429,404,977 |
Ordinary shares, shares outstanding (in shares) | 436,656,529 | 429,404,977 |
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) | 436,656,529 | 429,404,977 |
Ordinary shares, shares outstanding (in shares) | 429,608,977 | 429,404,977 |
CONDENSED FINANCIAL INFORMATI_5
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY - COMPREHENSIVE (LOSS) INCOME (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
CONDENSED STATEMENTS OF COMPREHENSIVE LOSS | |||||
General and administrative expenses | $ (21,856) | ¥ (152,160) | ¥ (128,331) | ¥ (142,721) | |
Impairment of long-term investments | 0 | 0 | (3,690) | ||
Operating loss | (7,339) | (51,095) | (5,144) | (277,937) | |
Interest income(expense), net | 26 | 181 | 354 | 1,430 | |
Other income | 5,224 | 36,367 | 8,331 | (5,303) | |
Foreign exchange (loss)/ gain | 208 | 1,448 | 4,200 | (11,043) | |
Loss before income taxes | (6,426) | (44,738) | (25,802) | (311,518) | |
Income tax expense | (1,144) | (7,967) | (11) | (59,648) | |
Net loss | (7,570) | (52,705) | (25,813) | (371,166) | |
Foreign currency translation | (245) | (1,706) | (1,037) | 2,748 | |
Unrealized gain/(loss) from available-for-sale investments | 0 | $ 0 | (4,195) | ||
Amounts reclassified from accumulated other comprehensive income | 3,290 | ||||
Total other comprehensive income/(loss) net of tax | (245) | (1,706) | (1,037) | 1,843 | |
Comprehensive loss | (7,815) | (54,411) | (26,850) | (369,323) | |
Parent | |||||
CONDENSED STATEMENTS OF COMPREHENSIVE LOSS | |||||
General and administrative expenses | (4,630) | (32,232) | (8,551) | (10,986) | |
Impairment of long-term investments | (3,290) | ||||
Operating loss | (4,630) | (32,232) | (8,551) | (14,276) | |
Interest income(expense), net | (3) | 5 | |||
Other income | 493 | 3,430 | 21,662 | 14,384 | |
Foreign exchange (loss)/ gain | 208 | 1,448 | 4,200 | (11,043) | |
Share of losses from subsidiaries and consolidated VIEs | (3,492) | (24,314) | (41,734) | (358,226) | |
Loss before income taxes | (7,421) | (51,671) | (24,418) | (369,161) | |
Net loss | (7,421) | (51,671) | (24,418) | (369,161) | |
Foreign currency translation | (245) | (1,706) | (1,037) | 2,748 | |
Unrealized gain/(loss) from available-for-sale investments | (4,195) | ||||
Amounts reclassified from accumulated other comprehensive income | 3,290 | ||||
Total other comprehensive income/(loss) net of tax | (245) | (1,706) | (1,037) | 1,843 | |
Comprehensive loss | $ (7,666) | ¥ (53,377) | ¥ (25,455) | ¥ (367,318) |
CONDENSED FINANCIAL INFORMATI_6
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY - CASH FLOWS (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | |
CONDENSED STATEMENTS OF CASH FLOWS | ||||||
Net cash used in operating activities | $ 15,652 | ¥ 108,944 | ¥ (41,659) | ¥ (99,039) | ||
Cash flows from investing activities: | ||||||
Net cash provided by investing activities | (5,126) | (35,678) | (160,811) | (89,295) | ||
Cash flows from financing activities: | ||||||
Net cash used in financing activities | (11,268) | (78,452) | 140,596 | 149,007 | ||
Net decrease in cash and cash equivalents and restricted cash | (742) | (5,186) | (61,874) | (39,327) | ||
Cash and cash equivalents at beginning of the year | 41,127 | |||||
Effect of foreign exchange rate changes on cash | (40) | (259) | 1,754 | (10,584) | ||
Cash and cash equivalents at end of the year | 41,127 | $ 3,725 | ¥ 25,930 | |||
Parent | ||||||
CONDENSED STATEMENTS OF CASH FLOWS | ||||||
Net cash used in operating activities | (1,506) | (10,481) | (4,151) | (22,514) | ||
Cash flows from financing activities: | ||||||
Net decrease in cash and cash equivalents and restricted cash | (1,506) | (10,481) | 4,151 | (22,514) | ||
Cash and cash equivalents at beginning of the year | 1,214 | 8,455 | 1,141 | 24,463 | ||
Effect of foreign exchange rate changes on cash | 418 | 2,906 | 3,163 | (808) | ||
Cash and cash equivalents at end of the year | $ 1,214 | ¥ 8,455 | ¥ 1,141 | ¥ 24,463 | $ 126 | ¥ 880 |