Document_and_Entity_Informatio
Document and Entity Information | 12 Months Ended |
Dec. 31, 2013 | |
Entity Registrant Name | 'YY Inc. |
Entity Central Index Key | '0001530238 |
Document Type | '20-F |
Document Period End Date | 31-Dec-13 |
Amendment Flag | 'false |
Current Fiscal Year End Date | '--12-31 |
Entity Well-known Seasoned Issuer | 'Yes |
Entity Current Reporting Status | 'Yes |
Entity Filer Category | 'Accelerated Filer |
Document Fiscal Year Focus | '2013 |
Document Fiscal Period Focus | 'FY |
Class A common shares | ' |
Entity Common Stock, Shares Outstanding | 622,658,738 |
Class B common shares | ' |
Entity Common Stock, Shares Outstanding | 485,831,386 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | USD ($) | CNY | CNY | Class A common shares | Class A common shares | Class A common shares | Class B common shares | Class B common shares | Class B common shares |
USD ($) | CNY | CNY | USD ($) | CNY | CNY | ||||
Current assets | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash and cash equivalents | $120,521 | 729,598 | 504,702 | ' | ' | ' | ' | ' | ' |
Short-term deposits | 236,692 | 1,432,863 | 897,698 | ' | ' | ' | ' | ' | ' |
Accounts receivable, net | 16,536 | 100,101 | 117,616 | ' | ' | ' | ' | ' | ' |
Amount due from a related party | 12 | 73 | 1,073 | ' | ' | ' | ' | ' | ' |
Prepayments and other current assets | 11,156 | 67,533 | 25,149 | ' | ' | ' | ' | ' | ' |
Deferred tax assets | 11,055 | 66,921 | 31,549 | ' | ' | ' | ' | ' | ' |
Total current assets | 395,972 | 2,397,089 | 1,577,787 | ' | ' | ' | ' | ' | ' |
Non-current assets | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred tax assets | 103 | 625 | 583 | ' | ' | ' | ' | ' | ' |
Investments | 10,246 | 62,029 | 2,950 | ' | ' | ' | ' | ' | ' |
Property and equipment, net | 16,954 | 102,636 | 90,299 | ' | ' | ' | ' | ' | ' |
Intangible assets, net | 4,811 | 29,127 | 19,481 | ' | ' | ' | ' | ' | ' |
Goodwill | 261 | 1,577 | 1,604 | ' | ' | ' | ' | ' | ' |
Other non-current assets | 803 | 4,864 | 3,485 | ' | ' | ' | ' | ' | ' |
Total non-current assets | 33,178 | 200,858 | 118,402 | ' | ' | ' | ' | ' | ' |
Total assets | 429,150 | 2,597,947 | 1,696,189 | ' | ' | ' | ' | ' | ' |
Current liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accounts payable (including accounts payable of the consolidated variable interest entity without recourse to the Company of RMB27,124 and RMB55,818 as of December 31, 2012 and 2013, respectively) | 9,315 | 56,391 | 28,149 | ' | ' | ' | ' | ' | ' |
Deferred revenue (including deferred revenue of the consolidated variable interest entity without recourse to the Company of RMB158,323 and RMB292,380 as of December 31, 2012 and 2013, respectively) | 48,543 | 293,866 | 159,859 | ' | ' | ' | ' | ' | ' |
Advances from customers (including advances from customers of the consolidated variable interest entity without recourse to the Company of RMB7,271 and RMB10,656 as of December 31, 2012 and 2013, respectively) | 3,229 | 19,549 | 7,515 | ' | ' | ' | ' | ' | ' |
Income taxes payable (including income taxes payable of the consolidated variable interest entity without recourse to the Company of RMB32,885 and RMB47,974 as of December 31, 2012 and 2013, respectively) | 12,902 | 78,107 | 48,001 | ' | ' | ' | ' | ' | ' |
Accrued liabilities and other current liabilities(including accrued liabilities and other current liabilities of the consolidated variable interest entity without recourse to the Company of RMB81,223 and RMB197,851 as of December 31, 2012 and 2013, respectively) | 41,423 | 250,760 | 120,289 | ' | ' | ' | ' | ' | ' |
Amounts due to related parties (including amounts due to related parties of the consolidated variable interest entity without recourse to the Company of RMB2,604 and RMB2,640 as of December 31, 2012 and 2013, respectively) | 436 | 2,640 | 2,604 | ' | ' | ' | ' | ' | ' |
Total current liabilities | 115,848 | 701,313 | 366,417 | ' | ' | ' | ' | ' | ' |
Non-current liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred revenue(including deferred revenue of the consolidated variable interest entity without recourse to the Company of RMB4,525 and RMB8,457 as of December 31, 2012 and 2013, respectively) | 1,557 | 9,425 | 6,487 | ' | ' | ' | ' | ' | ' |
Total liabilities | 117,405 | 710,738 | 372,904 | ' | ' | ' | ' | ' | ' |
Commitments and contingencies | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shareholders' equity | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common shares | ' | ' | ' | 6 | 38 | 11 | 6 | 34 | 60 |
Additional paid-in capital | 456,847 | 2,765,614 | 2,648,404 | ' | ' | ' | ' | ' | ' |
Statutory reserves | 6,716 | 40,657 | ' | ' | ' | ' | ' | ' | ' |
Accumulated deficits | -144,490 | -874,697 | -1,311,767 | ' | ' | ' | ' | ' | ' |
Accumulated other comprehensive loss | -7,340 | -44,437 | -13,423 | ' | ' | ' | ' | ' | ' |
Total shareholders' equity | 311,745 | 1,887,209 | 1,323,285 | ' | 38 | 11 | ' | 34 | 60 |
Total liabilities and shareholders' equity | $429,150 | 2,597,947 | 1,696,189 | ' | ' | ' | ' | ' | ' |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical)(Variable interest entity CNY) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | ||
Accounts payable | 55,818 | 27,124 |
Deferred revenue | 292,380 | 158,323 |
Advances from customers | 10,656 | 7,271 |
Income taxes payable | 47,974 | 32,885 |
Accrued liabilities and other current liabilities | 197,851 | 81,223 |
Amounts due to related parties | 2,640 | 2,604 |
Deferred revenue | 8,457 | 4,525 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME | 12 Months Ended | |||||||||||||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
USD ($) | CNY | CNY | CNY | Online music and entertainment | Online music and entertainment | Online music and entertainment | Online music and entertainment | Online games | Online games | Online games | Online games | Others | Others | Others | Others | Online advertising | Online advertising | Online advertising | Online advertising | |
USD ($) | CNY | CNY | CNY | USD ($) | CNY | CNY | CNY | USD ($) | CNY | CNY | CNY | USD ($) | CNY | CNY | CNY | |||||
Net revenues | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total net revenues | $301,217 | 1,823,468 | 820,031 | 319,655 | $140,887 | 852,885 | 286,446 | 52,854 | $99,462 | 602,111 | 332,287 | 165,933 | $33,899 | 205,212 | 83,655 | 13,589 | $26,969 | 163,260 | 117,643 | 87,279 |
Cost of revenues | -145,696 | -881,999 | -416,133 | -182,699 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gross profit | 155,521 | 941,469 | 403,898 | 136,956 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating expenses | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Research and development expenses | -44,106 | -267,005 | -176,725 | -106,804 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sales and marketing expenses | -4,122 | -24,955 | -16,954 | -13,381 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
General and administrative expenses | -33,129 | -200,554 | -109,788 | -118,241 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total operating expenses | -81,357 | -492,514 | -303,467 | -238,426 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other income | 4,473 | 27,078 | 2,465 | 1,982 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating (loss) income | 78,637 | 476,033 | 102,896 | -99,488 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gain on disposal of an equity investment | ' | ' | 651 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gain on disposal of a cost investment | ' | ' | 2,351 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Foreign currency exchange gains (losses), net | 4,882 | 29,555 | -4,153 | 14,143 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest income | 9,948 | 60,221 | 16,316 | 4,890 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
(Loss) income before income tax expenses | 93,467 | 565,809 | 118,061 | -80,455 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income tax expenses | -14,859 | -89,951 | -29,041 | -1,343 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
(Loss) income before share of (loss) income in equity method investments, net of income taxes | 78,608 | 475,858 | 89,020 | -81,798 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share of (loss) income in equity method investments, net of income taxes | 309 | 1,869 | 157 | -1,358 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net (loss) income attributable to YY Inc. | 78,917 | 477,727 | 89,177 | -83,156 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
(Accretion) decretion to convertible redeemable preferred shares redemption value | ' | ' | 1,293,875 | -223,663 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Allocation of net income to participating preferred shareholders | ' | ' | -478,754 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net (loss) income attributable to common shareholders | 78,917 | 477,727 | 904,298 | -306,819 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net (loss) income | 78,917 | 477,727 | 89,177 | -83,156 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other comprehensive loss: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Foreign currency translation adjustments, net of nil tax | -5,123 | -31,014 | -1,204 | -11,130 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Comprehensive (loss) income attributable to YY Inc. | $73,794 | 446,713 | 87,973 | -94,286 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net (loss) income per common share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
-Basic (in CNY/dollars per share) | $ 0.07 | 0.43 | 1.5 | -0.63 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
-Diluted (in CNY/dollars per share) | $ 0.07 | 0.4 | 0.09 | -0.63 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average number of common shares used in calculating net (loss) income per common share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
-Basic (in shares) | 1,122,475,688 | 1,122,475,688 | 604,703,810 | 485,883,845 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
-Diluted (in shares) | 1,181,121,297 | 1,181,121,297 | 992,468,836 | 485,883,845 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
CONSOLIDATED_STATEMENTS_OF_OPE1
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME (Parenthetical) | 12 Months Ended | |||||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cost of revenues | Cost of revenues | Cost of revenues | Cost of revenues | Research and development expenses | Research and development expenses | Research and development expenses | Research and development expenses | Sales and marketing expenses | Sales and marketing expenses | Sales and marketing expenses | Sales and marketing expenses | General and administrative expenses | General and administrative expenses | General and administrative expenses | General and administrative expenses | |
USD ($) | CNY | CNY | CNY | USD ($) | CNY | CNY | CNY | USD ($) | CNY | CNY | CNY | USD ($) | CNY | CNY | CNY | |
Cost of revenues | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based compensation | $1,629 | 9,860 | 8,407 | 15,449 | $6,539 | 39,587 | 35,441 | 31,672 | $218 | 1,318 | 884 | 1,336 | $10,957 | 66,331 | 55,619 | 86,544 |
CONSOLIDATED_STATEMENTS_OF_CHA
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' (DEFICITS) EQUITY | Total | Total | Series A convertible redeemable preferred shares | Series B convertible redeemable preferred shares | Series C convertible redeemable preferred shares | CEO and Chairman | Common shares | Additional paid-in capital | Additional paid-in capital | Additional paid-in capital | Additional paid-in capital | Additional paid-in capital | Statutory reserves | Accumulated deficits | Accumulated deficits | Accumulated deficits | Accumulated deficits | Accumulated other comprehensive loss | Class A common shares | Class B common shares | Class B common shares | Class B common shares | Class B common shares |
In Thousands, except Share data, unless otherwise specified | USD ($) | CNY | CNY | CNY | CNY | CNY | CNY | CNY | Series A convertible redeemable preferred shares | Series B convertible redeemable preferred shares | Series C convertible redeemable preferred shares | CEO and Chairman | CNY | CNY | Series A convertible redeemable preferred shares | Series B convertible redeemable preferred shares | Series C convertible redeemable preferred shares | CNY | CNY | CNY | Series A convertible redeemable preferred shares | Series B convertible redeemable preferred shares | Series C convertible redeemable preferred shares |
CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | ||||||||||||||
Balance at Dec. 31, 2010 | ' | -2,351,505 | ' | ' | ' | ' | 32 | ' | ' | ' | ' | ' | ' | -2,350,448 | ' | ' | ' | -1,089 | ' | ' | ' | ' | ' |
Balance (in shares) at Dec. 31, 2010 | ' | ' | ' | ' | ' | ' | 466,630,266 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Increase (decrease) in shareholders' (deficits) equity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of common shares | ' | 328,132 | ' | ' | ' | ' | 3 | 328,129 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of common shares (in shares) | ' | ' | ' | ' | ' | ' | 51,140,432 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of common shares for exercised share options | ' | 11,701 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise of warrant by an independent institutional investor | ' | 160,837 | ' | ' | ' | ' | 2 | 160,835 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise of warrant by an independent institutional investor (in shares) | ' | ' | ' | ' | ' | ' | 25,570,216 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based compensation-share options | ' | 2,219 | ' | ' | ' | ' | ' | 2,219 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share based compensation-restricted shares | ' | 57,805 | ' | ' | ' | 14,143 | ' | 57,805 | ' | ' | ' | 14,143 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share based compensation-restricted share units | ' | 9,644 | ' | ' | ' | ' | ' | 9,644 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based compensation-warrants to NeoTasks founders | ' | 3,359 | ' | ' | ' | ' | ' | 3,359 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Transferred from matured liability award for NeoTasks founders | ' | 57,692 | ' | ' | ' | ' | ' | 57,692 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reclassification of liability-classified share-based awards into equity-classified awards for warrants to NeoTasks founders | ' | 57,602 | ' | ' | ' | ' | ' | 57,602 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reclassification of liability-classified share-based awards into equity-classified awards for share options | ' | 116,328 | ' | ' | ' | ' | ' | 116,328 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
(Accretion) decretion of convertible redeemable preferred shares to their redemption value | ' | ' | -88,261 | -64,102 | -71,300 | ' | ' | ' | -88,261 | -64,102 | -71,300 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Appropriations to statutory reserves | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Components of comprehensive income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net (loss) income | ' | -83,156 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -83,156 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Foreign currency translation adjustment, net of nil tax | ' | -11,130 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -11,130 | ' | ' | ' | ' | ' |
Balance at Dec. 31, 2011 | ' | -1,861,693 | ' | ' | ' | ' | 37 | 584,093 | ' | ' | ' | ' | ' | -2,433,604 | ' | ' | ' | -12,219 | ' | 37 | ' | ' | ' |
Balance (in shares) at Dec. 31, 2011 | ' | ' | ' | ' | ' | ' | 543,340,914 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 543,340,914 | ' | ' | ' |
Increase (decrease) in shareholders' (deficits) equity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of common shares | ' | 515,720 | ' | ' | ' | ' | ' | 515,709 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11 | ' | ' | ' | ' |
Issuance of common shares (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 179,400,000 | ' | ' | ' | ' |
Issuance of common shares for vested restricted shares and restricted share units (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,068,000 | ' | ' | ' |
Share-based compensation-share options | ' | -89 | ' | ' | ' | ' | ' | -89 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share based compensation-restricted shares | ' | 36,371 | ' | ' | ' | 9,624 | ' | 36,371 | ' | ' | ' | 9,624 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share based compensation-restricted share units | ' | 54,445 | ' | ' | ' | ' | ' | 54,445 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Transferred from convertible redeemable preferred shares upon the completion of the initial public offering | ' | ' | 449,496 | 337,116 | 400,447 | ' | ' | ' | 449,487 | 337,110 | 400,439 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9 | 6 | 8 |
Transferred from convertible redeemable preferred shares upon the completion of the initial public offering (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 136,100,930 | 102,073,860 | 121,249,520 |
(Accretion) decretion of convertible redeemable preferred shares to their redemption value | ' | ' | 485,517 | 366,785 | 441,573 | ' | ' | ' | 125,813 | 64,102 | 71,300 | ' | ' | ' | 359,704 | 302,683 | 370,273 | ' | ' | ' | ' | ' | ' |
Appropriations to statutory reserves | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Components of comprehensive income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net (loss) income | ' | 89,177 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 89,177 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Foreign currency translation adjustment, net of nil tax | ' | -1,204 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -1,204 | ' | ' | ' | ' | ' |
Balance at Dec. 31, 2012 | ' | 1,323,285 | ' | ' | ' | ' | ' | 2,648,404 | ' | ' | ' | ' | ' | -1,311,767 | ' | ' | ' | -13,423 | 11 | 60 | ' | ' | ' |
Balance (in shares) at Dec. 31, 2012 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 179,400,000 | 907,833,224 | ' | ' | ' |
Increase (decrease) in shareholders' (deficits) equity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of common shares for exercised share options | ' | 115 | ' | ' | ' | ' | ' | 115 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of common shares for exercised share options (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,648,420 | ' | ' | ' | ' |
Issuance of common shares for vested restricted shares and restricted share units | ' | ' | ' | ' | ' | ' | ' | -1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' |
Issuance of common shares for vested restricted shares and restricted share units (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 16,608,480 | ' | ' | ' | ' |
Class B common shares converted to Class A common shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 26 | -26 | ' | ' | ' |
Class B common shares converted to Class A common shares (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 422,001,838 | -422,001,838 | ' | ' | ' |
Share-based compensation-share options | ' | 14,004 | ' | ' | ' | ' | ' | 14,004 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share based compensation-restricted shares | ' | 7,300 | ' | ' | ' | ' | ' | 7,300 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share based compensation-restricted share units | ' | 95,792 | ' | ' | ' | ' | ' | 95,792 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Appropriations to statutory reserves | ' | 40,657 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 40,657 | -40,657 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Components of comprehensive income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net (loss) income | 78,917 | 477,727 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 477,727 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Foreign currency translation adjustment, net of nil tax | ' | -31,014 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -31,014 | ' | ' | ' | ' | ' |
Balance at Dec. 31, 2013 | $311,745 | 1,887,209 | ' | ' | ' | ' | ' | 2,765,614 | ' | ' | ' | ' | 40,657 | -874,697 | ' | ' | ' | -44,437 | 38 | 34 | ' | ' | ' |
Balance (in shares) at Dec. 31, 2013 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 622,658,738 | 485,831,386 | ' | ' | ' |
CONSOLIDATED_STATEMENTS_OF_CHA1
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' (DEFICITS) EQUITY (Parenthetical) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
USD ($) | CNY | CNY | CNY | |
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' (DEFICITS) EQUITY | ' | ' | ' | ' |
Foreign currency translation adjustments, tax portion | $0 | 0 | 0 | 0 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
USD ($) | CNY | CNY | CNY | |
Cash flows from operating activities | ' | ' | ' | ' |
Net (loss) income | $78,917 | 477,727 | 89,177 | -83,156 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities | ' | ' | ' | ' |
Depreciation of property and equipment | 7,427 | 44,963 | 29,074 | 12,888 |
Amortization of acquired intangible assets | 777 | 4,707 | 3,369 | 1,211 |
Allowance for doubtful accounts | 5,284 | 31,987 | 6,884 | ' |
(Gain) loss on disposal of property and equipment | ' | 1 | 7 | -25 |
Impairment of equity investments | 148 | 899 | ' | ' |
Impairment of cost investments | ' | ' | 453 | 1,898 |
Impairment of intangible assets | ' | ' | 550 | ' |
Share-based compensation | 19,343 | 117,096 | 100,351 | 135,001 |
Share of (loss) income in equity method investments | -309 | -1,869 | -157 | 1,358 |
Gain on disposal of an equity investment | ' | ' | -651 | ' |
Gain on disposal of a cost investment | ' | ' | -2,351 | ' |
Deferred income taxes, net | -5,850 | -35,414 | -19,316 | -11,173 |
Foreign exchange losses (gains), net | -4,882 | -29,555 | 4,153 | -14,143 |
Changes in operating assets and liabilities, net | ' | ' | ' | ' |
Accounts receivable | -2,391 | -14,472 | -77,478 | -21,275 |
Prepayments and other current and non-current assets | -7,702 | -46,624 | -11,968 | -4,710 |
Amounts due from related parties | ' | ' | -73 | ' |
Amounts due to related parties | 6 | 36 | 1,734 | -344 |
Accounts payable | 4,351 | 26,342 | 7,214 | 11,196 |
Deferred revenue | 22,622 | 136,945 | 125,541 | 23,369 |
Advances from customers | 1,988 | 12,034 | 5,062 | 1,712 |
Income tax payable | 4,973 | 30,106 | 31,129 | 12,516 |
Accrued liabilities and other current liabilities | 22,509 | 136,264 | 64,148 | 33,494 |
Net cash provided by operating activities | 147,211 | 891,173 | 356,852 | 99,817 |
Cash flows from investing activities | ' | ' | ' | ' |
Placements of short-term deposits | -252,588 | -1,529,090 | -1,040,302 | -872,372 |
Maturities of short-term deposits | 164,527 | 995,996 | 615,259 | 399,717 |
Purchase of property and equipment | -9,185 | -55,606 | -60,881 | -46,956 |
Purchase of intangible assets | -2,417 | -14,631 | -1,920 | -274 |
Cash paid for equity investments | -1,817 | -11,000 | -1,000 | -4,500 |
Cash paid for cost investments | -7,782 | -47,110 | ' | -1,000 |
Cash received from disposal of a cost investment | 495 | 3,000 | 1,000 | ' |
Cash received from disposal of an equity investment | ' | ' | 2,000 | ' |
Consideration paid in connection with business acquisition | ' | ' | -11,722 | ' |
Loan to a related party | ' | ' | -1,200 | -500 |
Loan to a third party | ' | ' | ' | -300 |
Repayment of loan from related parties | 165 | 1,000 | 2,500 | ' |
Loans to employees | -623 | -3,770 | -2,930 | -2,770 |
Repayment of loans from employees | 258 | 1,560 | 660 | 197 |
Proceeds from disposal of property and equipment | 8 | 48 | 32 | 401 |
Net cash used in investing activities | -108,959 | -659,603 | -498,504 | -528,357 |
Cash flows from financing activities | ' | ' | ' | ' |
Proceeds from issuance of common shares, net of issuance costs | ' | ' | ' | 488,969 |
Proceeds from exercise of vested share options | 19 | 115 | ' | ' |
Proceeds from initial public offering (net of underwriters' commissions of US$ 6,593) | ' | ' | 550,555 | ' |
Payments of listing expenses | -958 | -5,802 | -27,815 | ' |
Repurchase of share options | ' | ' | ' | -11,087 |
Net cash provided by (used in) financing activities | -939 | -5,687 | 522,740 | 477,882 |
Net increase in cash and cash equivalents | 37,313 | 225,883 | 381,088 | 49,342 |
Cash and cash equivalents at the beginning of the year | 83,371 | 504,702 | 128,891 | 83,683 |
Effect of exchange rate changes on cash and cash equivalents | -163 | -987 | -5,277 | -4,134 |
Cash and cash equivalents at the end of the year | 120,521 | 729,598 | 504,702 | 128,891 |
Supplemental disclosure of cash flows information: | ' | ' | ' | ' |
-Acquisition of property and equipment in form of accounts payable | 1,264 | 7,653 | 5,911 | 1,090 |
-Income taxes paid | ($15,736) | -95,259 | -17,228 | ' |
CONSOLIDATED_STATEMENTS_OF_CAS1
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2012 |
CONSOLIDATED STATEMENTS OF CASH FLOWS | ' |
Underwriters' commission | $6,593 |
Organization_and_principal_act
Organization and principal activities | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
Organization and principal activities | ' | |||||||||
Organization and principal activities | ' | |||||||||
1. Organization and principal activities | ||||||||||
(a) Principal activities | ||||||||||
YY Inc. (the "Company"), through its subsidiaries, its variable interest entities ("VIEs") and VIE's subsidiary (collectively, the "Group") is principally engaged in operating an online social platform in the People's Republic of China (the "PRC" or "China") through its platform, YY Client and through its website YY.com and Duowan.com. | ||||||||||
(b) Reorganization | ||||||||||
The Company was incorporated in the Cayman Islands on July 22, 2011. | ||||||||||
The Group began its operations in the PRC in April 2005 through its PRC domestic company, Guangzhou Huaduo Network Technology Company Limited ("Guangzhou Huaduo"), which was directly owned by Mr. David Xueling Li (the "Founder" or the "CEO") and Mr. Jun Lei (the "Co-founder" or the "Chairman"). Guangzhou Huaduo holds the necessary licenses and approvals to operate internet-related businesses in the PRC. | ||||||||||
For the period between July 2006 and April 2007, the Group undertook a reorganization (the "First Reorganization") and established Duowan Limited ("Duowan Limited"), an investment holding company under the laws of the BVI, Duowan (Hong Kong) Limited ("Duowan (Hong Kong)"), a Hong Kong incorporated company wholly owned by Duowan Limited, and Guangzhou Duowan Information Technology Co., Ltd. ("Guangzhou Duowan"), a wholly-owned foreign enterprise ("WOFE") in the PRC owned by Duowan (Hong Kong) (collectively "Duowan Limited Group Structure"). The First Reorganization was necessary to comply with PRC laws and regulations which prohibit or restrict foreign ownership of companies that provide internet content services in the PRC where licenses are required. | ||||||||||
By entering into a series of agreements among the Founder, the Co-founder, Guangzhou Huaduo, and Guangzhou Duowan (collectively, "First VIE agreements"), Guangzhou Huaduo became a VIE of Guangzhou Duowan. Guangzhou Duowan became the primary beneficiary of Guangzhou Huaduo. | ||||||||||
In November 2007, Duowan Entertainment Corporation ("Duowan BVI") was incorporated in the British Virgin Islands. In March 2008, Duowan BVI established Duowan Entertainment Information Technology (Beijing) Company Limited ("Duowan Entertainment"), as a WOFE in the PRC and a wholly-owned subsidiary of Duowan BVI. The Group undertook a second reorganization (the "Second Reorganization") whereby the First VIE agreements among the Founder, the Co-founder, Guangzhou Huaduo and Guangzhou Duowan were terminated and a new series of VIE agreements (collectively, "Second VIE agreements") were signed among the Founder, the Co-founder, Guangzhou Huaduo and Duowan Entertainment, through which Duowan Entertainment became the primary beneficiary and exercised effective control over the operations of Guangzhou Huaduo. Duowan BVI became the then holding company of the Group. | ||||||||||
In August 2008, Duowan Entertainment purchased all the equity interests in Guangzhou Duowan from Duowan (Hong Kong). | ||||||||||
In December 2008, the Group undertook another reorganization (the "Third Reorganization") and acquired all of the equity interests of NeoTasks Inc. ("NeoTasks"), a Cayman Islands company, together with its wholly-owned subsidiary, NeoTasks Limited, its WOFE, NeoTasks International Media Technology (Beijing) Co., Ltd. ("NeoTasks Beijing"), and its VIE, Beijing Tuda Science and Technology Co., Limited ("Beijing Tuda"). | ||||||||||
In July 2009, Guangzhou Duowan was renamed as Zhuhai Duowan Information Technology Co., Ltd. ("Zhuhai Duowan"). | ||||||||||
In December 2009, another series of VIE agreements (collectively, "Third VIE agreements") were entered into amongst the legal shareholders of Beijing Tuda and Duowan Entertainment and thus completing the Third Reorganization. Through the aforementioned activities, Beijing Tuda became a VIE, whose primary beneficiary is Duowan Entertainment. | ||||||||||
In December 2010, Duowan BVI established Zhuhai Duowan Technology Company Limited ("Zhuhai Duowan Technology"), which is directly 100% owned by Duowan BVI. | ||||||||||
On September 6, 2011, pursuant to a share swap agreement, all the then existing shareholders of Duowan BVI exchanged their respective shares, including the Series A, Series B, Series C-1 and Series C-2 Preferred Shares, of Duowan BVI for equivalent classes of shares of the Company on a 1 for 1 basis. As a result, Duowan BVI became a wholly-owned subsidiary of the Company and it also became the holding company of the Group (the "Share Swap"). | ||||||||||
In May 2012, Duowan Entertainment was renamed as Huanju Shidai Technology (Beijing) Company Limited ("Beijing Huanju Shidai"). | ||||||||||
In September 2012, Zhuhai Duowan Technology was renamed as Guangzhou Huanju Shidai Information Technology Company Limited ("Guangzhou Huanju Shidai"). | ||||||||||
The First Reorganization, the Second Reorganization, the Third Reorganization and the Share Swap were all reorganization of entities under common control and have been accounted for in a manner akin to a pooling of interest as if the Company, through its wholly owned subsidiaries, had been in existence and been the primary beneficiary of the VIEs throughout the periods presented in the consolidated financial statements. As a result of these arrangements, the Company, through its wholly owned subsidiaries, is considered the primary beneficiary of two VIEs, Guangzhou Huaduo and Beijing Tuda, and accordingly, their results of operation and financial conditions are consolidated in the financial statements of the Group. | ||||||||||
(c) Initial Public Offering | ||||||||||
The Company completed its initial public offering ("IPO") on November 21, 2012 on the NASDAQ Global Market and the underwriters subsequently exercised their over-allotment option on December 5, 2012. The Company issued and sold a total of 8,970,000 American Depositary Shares ("ADSs") in these transactions, representing 179,400,000 Class A common shares. Each ADS represents twenty Class A common shares. The net proceeds received by the Company, after deducting commissions and offering expenses, amounted to approximately US$82,055. Upon the completion of the IPO, all of the Company's 359,424,310 outstanding preferred shares and 548,408,914 outstanding common shares were converted into Class B common shares immediately as of the same date. | ||||||||||
(d) Subsidiaries, VIEs and VIE's subsidiary | ||||||||||
The details of the subsidiaries, VIEs and VIE's subsidiary as of December 31, 2013 are set out below: | ||||||||||
Name | Place of incorporation | Date of incorporation | % of direct or indirect economic ownership | Principal activities | ||||||
Subsidiaries | ||||||||||
Duowan Entertainment Corporation ("Duowan BVI") | British Virgin Islands | November 6, 2007 | 100% | Investment holding | ||||||
NeoTasks Inc. ("NeoTasks") | Cayman Islands | April 26, 2006 | 100% | Investment holding | ||||||
NeoTasks Limited | Hong Kong | June 16, 2005 | 100% | Investment holding | ||||||
Huanju Shidai Technology (Beijing) Company Limited ("Beijing Huanju Shidai" or "Duowan Entertainment") | PRC | March 19, 2008 | 100% | Investment holding | ||||||
Zhuhai Duowan Information Technology Company Limited ("Zhuhai Duowan" or "Guangzhou Duowan") | PRC | April 9, 2007 | 100% | Online advertising and software development | ||||||
Guangzhou Huanju Shidai Information Technology Company Limited ("Guangzhou Huanju Shidai") | PRC | December 2, 2010 | 100% | Software development | ||||||
Zhuhai Huanju Shidai Information Technology Company Limited ("Zhuhai Huanju Shidai") | PRC | November 14, 2013 | 100% | Software development | ||||||
Variable Interest Entities ("VIEs") | ||||||||||
Guangzhou Huaduo Network Technology Company Limited ("Guangzhou Huaduo") | PRC | April 11, 2005 | 100% | Holder of internet content provider licenses and internet value added services | ||||||
Beijing Tuda Science and Technology Company Limited ("Beijing Tuda") | PRC | June 2, 2005 | 100% | Holder of internet content provider licenses | ||||||
VIE's Subsidiary | ||||||||||
Guangzhou Juhui Information Technology Company Limited | PRC | October 24, 2013 | 100% | Software development | ||||||
(e) Variable Interest Entities | ||||||||||
To comply with PRC laws and regulations that prohibit or restrict foreign ownership of companies that provide internet-content, the Group conducts substantially all its operations through Guangzhou Huaduo and Beijing Tuda, which holds the internet value-added service license and approvals to provide such internet services in the PRC. Beijing Huanju Shidai entered into a series of contractual agreements among Beijing Huanju Shidai, Guangzhou Huaduo and their legal shareholders. Beijing Huanju Shidai also entered into a series of contractual agreements among Beijing Huanju Shidai, Beijing Tuda, and Beijing Tuda's legal shareholders. | ||||||||||
Guangzhou Huaduo | ||||||||||
The Company's relationships with Guangzhou Huaduo and its shareholders are governed by the following contractual arrangements: | ||||||||||
• | ||||||||||
Exclusive Technology Support and Technology Services Agreement | ||||||||||
Under the exclusive technology support and technology services agreement between Beijing Huanju Shidai and Guangzhou Huaduo, Beijing Huanju Shidai has the exclusive right to provide to Guangzhou Huaduo technology support and technology services related to all technologies needed for its business. Beijing Huanju Shidai owns the exclusive intellectual property rights created as a result of the performance of this agreement. The service fee payable by Guangzhou Huaduo to Beijing Huanju Shidai is determined by various factors, including the expenses Beijing Huanju Shidai incurs for providing such services and Guangzhou Huaduo's revenues. The term of this agreement will expire in 2028 and may be extended with Beijing Huanju Shidai's written confirmation prior to the expiration date. Beijing Huanju Shidai is entitled to terminate the agreement at any time by providing 30 days' prior written notice to Guangzhou Huaduo. | ||||||||||
• | ||||||||||
Exclusive Business Cooperation Agreement | ||||||||||
Under the exclusive business cooperation agreement between Beijing Huanju Shidai and Guangzhou Huaduo, Beijing Huanju Shidai has the exclusive right to provide to Guangzhou Huaduo technology support, business support and consulting services related to the services provided by Guangzhou Huaduo, the scope of which is to be determined by Beijing Huanju Shidai from time to time. Beijing Huanju Shidai owns the exclusive intellectual property rights created as a result of the performance of this agreement. The service fee payable by Guangzhou Huaduo to Beijing Huanju Shidai is a certain percentage of its earnings. The term of this agreement will expire in 2039 and may be extended with Beijing Huanju Shidai's written confirmation prior to the expiration date. Beijing Huanju Shidai is entitled to terminate the agreement at any time by providing 30 days' prior written notice to Guangzhou Huaduo. | ||||||||||
• | ||||||||||
Exclusive Option Agreement | ||||||||||
The parties to the exclusive option agreement are Beijing Huanju Shidai, Guangzhou Huaduo and each of the shareholders of Guangzhou Huaduo. Under the exclusive option agreement, each of the shareholders of Guangzhou Huaduo irrevocably granted Beijing Huanju Shidai or its designated representative(s) an exclusive option to purchase, to the extent permitted under PRC law, all or part of his or its equity interests in Guangzhou Huaduo. Beijing Huanju Shidai or its designated representative(s) have sole discretion as to when to exercise such options, either in part or in full. Without Beijing Huanju Shidai's prior written consent, Guangzhou Huaduo's shareholders shall not sell, transfer, mortgage or otherwise dispose their equity interests in Guangzhou Huaduo. The term of this agreement is ten years and may be extended at Beijing Huanju Shidai's sole discretion. | ||||||||||
• | ||||||||||
Powers of Attorney | ||||||||||
Pursuant to the irrevocable power of attorney executed by each shareholder of Guangzhou Huaduo, each such shareholder appointed Beijing Huanju Shidai as its attorney-in-fact to exercise such shareholders' rights in Guangzhou Huaduo, including, without limitation, the power to vote on its behalf on all matters of Guangzhou Huaduo requiring shareholder approval under PRC laws and regulations and the articles of association of Guangzhou Huaduo. Each power of attorney will remain in force until the shareholder ceases to hold any equity interest in Guangzhou Huaduo. | ||||||||||
• | ||||||||||
Share Pledge Agreement | ||||||||||
Pursuant to the share pledge agreement between Beijing Huanju Shidai and the shareholders of Guangzhou Huaduo, the shareholders of Guangzhou Huaduo have pledged all of their equity interests in Guangzhou Huaduo to Beijing Huanju Shidai to guarantee the performance by Guangzhou Huaduo and its shareholders' performance of their respective obligations under the exclusive business cooperation agreement, exclusive option agreement, exclusive technology support and technology services agreement and powers of attorney. If Guangzhou Huaduo and/or its shareholders breach their contractual obligations under those agreements, Beijing Huanju Shidai, as pledgee, will be entitled to certain rights, including the right to sell the pledged equity interests. | ||||||||||
Beijing Tuda | ||||||||||
The Company's relationships with Beijing Tuda and its shareholders are governed by the following contractual arrangements: | ||||||||||
• | ||||||||||
Exclusive Technology Support and Technology Services Agreement | ||||||||||
Pursuant to the exclusive technology support and technology services agreement between Beijing Huanju Shidai and Beijing Tuda, Beijing Huanju Shidai has the exclusive right to provide to Beijing Tuda technology support and technology services related to all technologies needed for its business. Beijing Huanju Shidai owns the exclusive intellectual property rights created as a result of the performance of this agreement. The service fee payable by Beijing Tuda to Beijing Huanju Shidai is determined by various factors, including the expenses Beijing Huanju Shidai incurs for providing such services and Beijing Tuda's revenues. The term of this agreement will expire in 2029 and may be extended with Beijing Huanju Shidai's written confirmation prior to the expiration date. Beijing Huanju Shidai is entitled to terminate the agreement at any time by providing 30 days' prior written notice to Beijing Tuda. | ||||||||||
• | ||||||||||
Exclusive Business Cooperation Agreement | ||||||||||
Pursuant to the exclusive business cooperation agreement between Beijing Huanju Shidai and Beijing Tuda, Beijing Huanju Shidai has the exclusive right to provide to Beijing Tuda technology support, business support and consulting services related to the services provided by Beijing Tuda, the scope of which is to be determined by Beijing Huanju Shidai from time to time. Beijing Huanju Shidai owns the exclusive intellectual property rights created as a result of the performance of this agreement. The service fee payable by Beijing Tuda to Beijing Huanju Shidai is a certain percentage of its earnings. The term of this agreement will expire in 2039 and may be extended with Beijing Huanju Shidai's written confirmation prior to the expiration date. Beijing Huanju Shidai is entitled to terminate the agreement at any time by providing 30 days' prior written notice to Beijing Tuda. | ||||||||||
• | ||||||||||
Exclusive Option Agreement | ||||||||||
The parties to the exclusive option agreement are Beijing Huanju Shidai, Beijing Tuda and each of the shareholders of Beijing Tuda. Under the exclusive option agreement, each of the shareholders of Beijing Tuda irrevocably granted Beijing Huanju Shidai or its designated representative(s) an exclusive option to purchase, to the extent permitted under PRC law, all or part of his or its equity interests in Beijing Tuda. Beijing Huanju Shidai or its designated representative(s) have sole discretion as to when to exercise such options, either in part or in full. Without Beijing Huanju Shidai's prior written consent, Beijing Tuda's shareholders shall not sell, transfer, mortgage or otherwise dispose their equity interests in Beijing Tuda. The term of this agreement is ten years and may be extended at Beijing Huanju Shidai's sole discretion. | ||||||||||
• | ||||||||||
Powers of Attorney | ||||||||||
Pursuant to the irrevocable power of attorney executed by each shareholder of Beijing Tuda, each such shareholder appointed Beijing Huanju Shidai as its attorney-in-fact to exercise such shareholders' rights in Beijing Tuda, including, without limitation, the power to vote on its behalf on all matters of Beijing Tuda requiring shareholder approval under PRC laws and regulations and the articles of association of Beijing Tuda. Each power of attorney will remain in force until the shareholder ceases to hold any equity interest in Beijing Tuda. | ||||||||||
• | ||||||||||
Share Pledge Agreement | ||||||||||
Under the share pledge agreement between Beijing Huanju Shidai and the shareholders of Beijing Tuda, the shareholders of Beijing Tuda have pledged all of their equity interests in Beijing Tuda to Beijing Huanju Shidai to guarantee the performance by Beijing Tuda and its shareholders' performance of their respective obligations under the exclusive business cooperation agreement, exclusive option agreement, exclusive technology support and technology services agreement and powers of attorney. If Beijing Tuda or its shareholders breach their contractual obligations under those agreements, Beijing Huanju Shidai, as pledgee, will be entitled to certain rights, including the right to sell the pledged equity interests. | ||||||||||
Through the aforementioned contractual agreements, Guangzhou Huaduo and Beijing Tuda are considered VIEs in accordance with Generally Accepted Accounting Principles in the United States ("US GAAP") because the Company, through Beijing Huanju Shidai has the ability to: | ||||||||||
• | ||||||||||
exercise effective control over Guangzhou Huaduo or Beijing Tuda; | ||||||||||
• | ||||||||||
receive substantially all of the economic benefits and residual returns, and absorb substantially all the risks and expected losses from VIEs as if it were their sole shareholder; and | ||||||||||
• | ||||||||||
have an exclusive option to purchase all of the equity interests in the VIEs. | ||||||||||
Management evaluated the relationships among the Company, Beijing Huanju Shidai, the VIEs and concluded that Beijing Huanju Shidai is the primary beneficiary of the VIEs. As a result, the VIEs' results of operations, assets and liabilities have been included in the Company's consolidated financial statements. The adoption of the new consolidation guidance effective January 1, 2010 did not change the Group's conclusions on consolidation. | ||||||||||
As of December 31, 2013, the total assets of the consolidated VIEs and VIE's subsidiary were RMB1,443,127, mainly comprising cash and cash equivalents, short-term deposits, accounts receivable, prepayments and other current assets, investment, property and equipment, intangible assets and deferred tax assets. As of December 31, 2013, the total liabilities of the consolidated VIEs and VIE's subsidiary were RMB615,776, mainly comprising accounts payable, deferred revenue, accrued liabilities and other current liabilities, income taxes payable and advances from customers. | ||||||||||
In accordance with the aforementioned agreements, the Company has power to direct activities of the VIEs, and can have assets transferred out of the VIEs. Therefore the Company considers that there is no asset in the consolidated VIEs and VIE's subsidiary that can be used only to settle obligations of the consolidated VIEs and VIE's subsidiary, except for registered capital and PRC statutory reserves of the VIEs and VIE's subsidiary amounting to RMB241,657 as of December 31, 2013. As the consolidated VIEs and VIE's subsidiary were incorporated as limited liability companies under the PRC Company Law, the creditors do not have recourse to the general credit of the Company for all the liabilities of the consolidated VIEs and VIE's subsidiary. | ||||||||||
Currently there is no contractual arrangement that could require the Company to provide additional financial support to the VIEs. As the Company is conducting its PRC internet value-added services business through the VIEs, the Company will, if needed provide such support on a discretional basis in the future, which could expose the Company to a loss. | ||||||||||
There is no VIE where the Company has variable interest but is not the primary beneficiary. | ||||||||||
(f) Share Split | ||||||||||
On December 23, 2009, the board of directors of Duowan BVI approved a 1 to 490 share split of all of its outstanding common shares and a proportional adjustment to the existing conversion ratios for each series of preferred shares. Accordingly, all share, share option and per share amounts for all periods presented in these consolidated financial statements and notes thereto, have been adjusted retrospectively, where applicable, to reflect this share split and adjustment of the preferred shares conversion ratio. | ||||||||||
Principal_accounting_policies
Principal accounting policies | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Principal accounting policies | ' | ||||
Principal accounting policies | ' | ||||
2. Principal accounting policies | |||||
(a) Basis of presentation | |||||
The consolidated financial statements have been prepared on a historical cost basis to reflect the financial position and results of operations of the Group in accordance with the US GAAP. | |||||
(b) Consolidation | |||||
The Group's consolidated financial statements include the financial statements of the Company, its subsidiaries, and its VIEs and VIE's subsidiary for which the Company or its subsidiary is the primary beneficiary. All transactions and balances among the Company, its subsidiaries, its VIEs and VIE's subsidiary have been eliminated upon consolidation. | |||||
The First Reorganization, the Second Reorganization and the Third Reorganization, as described in Note 1 have been accounted for at historical costs. The assets and liabilities of Guangzhou Huaduo and its subsidiary, and Beijing Tuda are consolidated in the Company's financial statements at carryover basis. The accompanying consolidated statements of operations and comprehensive (loss) income and consolidated statements of cash flows include the results of operations and cash flows of the Group as if the current group structure had been in existence throughout the years ended December 31, 2011, 2012 and 2013, or since their respective dates of incorporation. The accompanying consolidated balance sheets have been prepared to present the financial position of the Group as of December 31, 2012 and 2013 as if the current group structure had been in existence as of these dates. | |||||
A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting powers; or has the power to appoint or remove the majority of the members of the board of directors; or to cast a majority of votes at the meeting of directors; or has the power to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders. | |||||
A VIE is an entity in which the Company, or its subsidiary, through contractual agreements, bears the risks of, and enjoys the rewards normally associated with ownership of the entity, and therefore the Company or its subsidiary is the primary beneficiary of the entity. In determining whether the Company or its subsidiaries are the primary beneficiary, the Company considered whether it has the power to direct activities that are significant to the VIEs economic performance, and also the Company's obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. Beijing Huanju Shidai and ultimately the Company holds all the variable interests of the VIEs and has been determined to be the primary beneficiary of the VIEs. | |||||
(c) Use of estimates | |||||
The preparation of the Company's consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from such estimates. The Company believes that lives of the game and lives of the user relationship related to online games revenue, the determination of estimated selling prices of multiple element revenue contracts, sales rebate to advertising agencies, income taxes, allowances for doubtful accounts, determination of share-based compensation expenses, impairment assessment of goodwill, long-lived assets and intangible assets, represent critical accounting policies that reflect more significant judgments and estimates used in the preparation of its consolidated financial statements. | |||||
Management bases the estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from these estimates. | |||||
(d) Foreign currency translation | |||||
The Group uses Renminbi ("RMB") as its reporting currency. The functional currency of the Company and its subsidiaries incorporated in the Cayman Islands, British Virgin Islands, and Hong Kong is United States dollar ("US$"), while the functional currency of the other entities, VIEs and VIE's subsidiary in the Group is RMB, which is their respective local currency. In the consolidated financial statements, the financial information of the Company and its subsidiaries, which use US$ as their functional currency, have been translated into RMB. Assets and liabilities are translated at the exchange rates on the balance sheet date, equity amounts are translated at historical exchange rates, and revenues, expenses, gains, and losses are translated using the average exchange rate for the period. Translation adjustments arising from these are reported as foreign currency translation adjustments and are shown as a component of other comprehensive income or loss in the statement of operations and comprehensive (loss) income. | |||||
Foreign currency transactions denominated in currencies other than functional currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are remeasured at the applicable rates of exchange in effect at that date. Foreign exchange gains and losses resulting from the settlement of such transactions and from remeasurement at year-end are recognized in foreign currency exchange gains (losses), net in the consolidated statement of operations. | |||||
(e) Convenience translation | |||||
Translations of amounts from RMB into US$ for the convenience of the reader were calculated at the noon buying rate of US$1.00 =MB6.0537 on December 31, 2013 as set forth in the H.10 statistical release of the U.S. Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted into US$ at such rate. | |||||
(f) Fair value of financial instruments | |||||
The Group's financial instruments consist principally of cash and cash equivalents, short-term deposits, accounts receivable, other receivables, amounts due from (to) related parties, accounts payable and other payables. The carrying values of these balances approximate their fair values due to the current and short-term nature of these balances. | |||||
(g) Cash and cash equivalents | |||||
Cash includes currency on hand and deposits held by financial institutions that can be added to or withdrawn without limitation. Cash equivalents represent short-term and highly liquid investments placed with banks, which have both of the following characteristics: | |||||
i) | |||||
Readily convertible to known amounts of cash throughout the maturity period; | |||||
ii) | |||||
So near their maturity that they present insignificant risk of changes in value because of changes in interest rates. | |||||
(h) Short-term deposits | |||||
Short-term deposits represent time deposits placed with banks with original maturities of less than one year. Interest earned is recorded as interest income in the consolidated statements of operations during the periods presented. | |||||
(i) Accounts receivable, net | |||||
Accounts receivable are presented net of allowance for doubtful accounts. The Group uses specific identification in providing for bad debts when facts and circumstances indicate that collection is doubtful and a loss is probable and estimable. If the financial conditions of its customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowance may be required. | |||||
The Company reviews on a periodic basis for doubtful accounts based on historical experience and information available. Additionally, the Company makes specific bad debt provisions based on (i) its specific assessment of the collectability of all significant accounts; and (ii) any specific knowledge the Company has acquired that might indicate that an account is uncollectible. The facts and circumstances of each account may require the Company to use substantial judgment in assessing its collectability. | |||||
(j) Equity investment | |||||
The equity investment is comprised of investments in privately-held companies. The Group accounts for its equity investment over which it has significant influence but does not own a majority equity interest or otherwise control using the equity method. The Group assesses its equity investment for other-than-temporary impairment by considering factors including, but not limited to, current economic and market conditions, operating performance of the companies, including current earnings trends and undiscounted cash flows, and other company-specific information. The fair value determination, particularly for investment in privately-held companies, requires judgment to determine appropriate estimates and assumptions. Changes in these estimates and assumptions could affect the calculation of the fair value of the investment and determination of whether any identified impairment is other-than-temporary. | |||||
(k) Cost investment | |||||
The cost investment is comprised of investments in privately-held companies. The Group accounts for cost investment which has no readily determinable fair value using the cost method. Under the cost method, the investment is measured initially at cost. The investment carried at cost should recognize income when dividends are received from the distribution of the investee's earnings. The Group periodically evaluates the carrying value of investments accounted for under the cost method of accounting and any impairment is included in the consolidated statements of operations. | |||||
(l) Property and equipment | |||||
Property and equipment are stated at historical cost less accumulated depreciation and impairment loss, if any. Depreciation is calculated using the straight-line method over their estimated useful lives. Residual rate is determined based on the economic value of the equipment at the end of the estimated useful lives as a percentage of the original cost. | |||||
Estimated useful lives | Residual rate | ||||
Servers, computers and equipment | 3 years | 0%-5% | |||
Furniture, fixture and office equipment | 5 years | 0%-5% | |||
Motor vehicles | 4 years | 5% | |||
Leasehold improvement | Shorter of lease term or 5 years | — | |||
Expenditures for maintenance and repairs are expensed as incurred. The gain or loss on the disposal of property and equipment is the difference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated statements of operations. | |||||
All direct and indirect costs that are related to the construction of property and equipment and incurred before the assets are ready for their intended use are capitalized as construction in progress. Construction in progress is transferred to specific property and equipment items and depreciation of these assets commences when they are ready for their intended use. | |||||
(m) Business combinations | |||||
The Group accounts for acquisitions of entities that include inputs and processes and have the ability to create outputs as business combinations. The Group allocates the purchase price of the acquisition to the tangible assets, liabilities, and identifiable intangible assets acquired based on their estimated fair values. The excess of the purchase price over those fair values is recorded as goodwill. Acquisition-related costs generally are expensed as incurred. | |||||
(n) Intangible assets, net | |||||
Intangible assets mainly consist of software and domain names purchased from third parties. Identifiable intangible assets are carried at acquisition cost less accumulated amortization and impairment loss, if any. Finite-lived intangible assets are tested for impairment if impairment indicators arise. Amortization of finite-lived intangible assets is computed using the straight-line method over the following estimated useful lives, which are as follows: | |||||
Estimated useful lives | |||||
Software | 3-5 years | ||||
Technology | 5 years | ||||
Domain name | 15 years | ||||
(o) Impairment of long-lived assets | |||||
For other long-lived assets including amortizable intangible assets and property and equipment, the Group evaluates for impairment whenever events or changes (triggering events) indicate that the carrying amount of an asset may no longer be recoverable. The Group assesses the recoverability of the long-lived assets by comparing the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to receive from use of the assets and their eventual disposition. Such assets are considered to be impaired if the sum of the expected undiscounted cash flows is less than the carrying amount of the assets. The impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. | |||||
(p) Goodwill | |||||
Goodwill represents the excess of the purchase price over the amounts assigned to the fair value of the assets acquired and the liabilities assumed of an acquired business. | |||||
(q) Annual test for impairment of goodwill | |||||
Goodwill assessment for impairment is performed on at least an annual basis on October 1 or whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. The Group performs a two-step goodwill impairment test. The first step compares the fair values of each reporting unit to its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill is not considered impaired and the second step will not be required. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of the affected reporting unit's goodwill to the carrying value of that goodwill. The implied fair value of goodwill is determined in a manner similar to accounting for a business combination with the allocation of the assessed fair value determined in the first step to the assets and liabilities of the reporting unit. The excess of the fair value of the reporting unit over the amounts assigned to the assets and liabilities is the implied fair value of goodwill. This allocation process is only performed for purposes of evaluating goodwill impairment and does not result in an entry to adjust the value of any assets or liabilities. An impairment loss is recognized for any excess in the carrying value of goodwill over the implied fair value of goodwill. The judgment in estimating the fair value of reporting units includes estimating future cash flows, determining appropriate discount rates and making other assumptions. Changes in these estimates and assumptions could materially affect the determination of the fair value of each reporting unit. | |||||
No goodwill impairment losses were recognized for the years ended December 31, 2011, 2012 and 2013. | |||||
(r) Operating leases | |||||
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating lease are charged to the consolidated statements of operations on a straight-line basis over the period of the lease. | |||||
(s) Revenue recognition | |||||
The Group generates revenues from internet value-added services ("IVAS") and online advertising. Revenues from IVAS are generated from online music and entertainment, online games, membership | |||||
subscription fees and other IVAS. Online advertising revenues are primarily generated from sales of different forms of advertising on the Group's platform. Revenue is recognized when persuasive evidence of an arrangement exists, service has been rendered, the price is fixed or determinable and collection is reasonably assured. Revenue is deferred until these criteria are met as described below. | |||||
(i) | |||||
Internet value-added services | |||||
The Group operates a virtual currency system, under which, the users can directly purchase virtual currency, virtual items on YY Client's online community channels or pay membership subscription fees via online payment systems provided by third parties including payments using mobile phone, internet debit/credit card payment and other third party payment systems. The virtual currency can be converted into game tokens that can be used to purchase virtual items in online games (both developed by third parties and self-developed), or used directly to purchase virtual items on YY Client's online community channels or used to pay membership subscription fees. Virtual currency sold but not yet consumed by the purchasers is recorded as "Advances from customers" and upon conversion or being used, is recognized as revenue according to the respective prescribed revenue recognition policies addressed below: | |||||
-1 | |||||
Online music and entertainment revenue | |||||
The Group creates and offers virtual items to be used by users on online music and entertainment channels, which the Group operates and maintains. The virtual items are offered free of charge or sold to users at different specified prices as pre-determined by the Company. Online music and entertainment revenue consists of sales of virtual items. Users purchase consumable virtual items from the Group and present them to performers to show support for their favorite performers or time-based virtual items, which provide users with recognized status, such as priority speaking rights or special symbols on the music channels for a specific period of time. In order to attract user traffic, the Group shares with certain popular performers and channel owners, who have entered into revenue sharing arrangements with the Group, a portion of the revenues the Group derives from such in-channel virtual item sales on online music and entertainment channels, which the Group accounts for as cost of revenues. Performers and channel owners, who do not have revenue sharing arrangements with the Group, are not entitled to share any revenue derived from the virtual items sold. The Group does not recognize any revenue from offering free virtual items nor share any revenue with performers or channel owners when free virtual items are presented to performers by the users. Accordingly, online music and entertainment revenue is recognized for the sale of virtual items sold in online music and entertainment channels immediately if the virtual item is a consumable or, in the case of time-based virtual items, recognized ratably over the period each virtual item is made available to the user, which does not exceed one year. The Group does not have further obligations to the user after the virtual items are consumed. Virtual items may be sold individually or bundled into one arrangement. When the Group's users purchase multiple virtual items bundled within the same arrangement, the Group evaluates such arrangements under ASC 605-25 Multiple-Element Arrangements. The Group identifies individual elements under the arrangement and determines if such elements meet the criteria to be accounted for as separate units of accounting. The Group | |||||
allocates the arrangement consideration to the separate units of accounting based on their relative selling price. The following hierarchy has been followed when determining the relative selling price for each element: (1) vendor specific objective evidence ("VSOE"), (2) third party evidence ("TPE"), and (3) best estimate of selling price ("BESP"). Given that the VSOE of the selling price cannot be determined, the Group has adopted a policy to allocate the consideration of the whole arrangement to different virtual item elements based on the TPE of selling price or the BESP for each virtual item element. The Group determines the fair values of virtual items sold in a bundle based on similar products sold separately on the YY platform based on the TPE of the selling price and determines the fair values of virtual items without similar products sold separately on the YY platform based on the BESP. The BESP is generally based on the selling prices of the various elements of a similar nature when they are sold to users on a stand-alone basis. The BESP may also be based on an estimated stand-alone pricing when the element has not previously been sold on a stand-alone basis. | |||||
These estimates are generally determined based on pricing strategies, market factors and strategic objectives. The Group recognizes revenue for each virtual item element in accordance with the applicable revenue recognition method. | |||||
-2 | |||||
Online games revenue | |||||
The Group generates revenues from offering virtual items in online games developed by third parties or the Group itself to gaming players. Historically, the majority of online games revenues for the three years ended December 31, 2011, 2012 and 2013 were derived from third parties developed games. | |||||
Users play games through the Group's platform free of charge and are charged for purchases of virtual items including consumable and perpetual items, which can be utilized in the online games to enhance their game-playing experience. Consumable items represent virtual items that can be consumed by a specific user within a specified period of time. Perpetual items represent virtual items that are accessible to the users' account over the life of the online games. | |||||
The Group recognizes revenue when recognition criteria defined under US GAAP are satisfied. For purposes of determining when the service has been provided to the paying player, the Group has determined that an implied obligation exists to the paying player to continue providing access to the games such that the users can utilize the virtual items purchased by game tokens. Game players need to log on and access the games through the Group's platform because their game tokens, virtual items, and game history are specific to the Group's game accounts and non-transferable to other platforms. To purchase in-game virtual items, players can either charge their game accounts by purchasing game tokens or virtual currency from the Group's platform, which are convertible into game tokens based on a predetermined exchange rate agreed among the Group and the relevant game developers. | |||||
The proceeds from the purchase of the Group's virtual currency is recorded as "advances from customers", representing prepayments received from users in the form of the Group's virtual currency not yet converted into game specific tokens. Upon the conversion into a game token from the Group's virtual currency or upon the direct purchase of a game token, whichever is applicable, the proceeds will be shared between the Group and the relevant game developer based on a predetermined contractual ratio. Game tokens are non-refundable and non-exchangeable among different games. The Group's portion, net of the game developer's entitled consideration, is recorded as deferred revenue and amortized according to the prescribed revenue recognition policies described below. Users typically do not convert the virtual currency into game tokens or purchase the game tokens unless they plan to purchase in-game virtual items soon. | |||||
– | |||||
Third party developed online games | |||||
Pursuant to contracts signed between the Group and the respective game developers, revenues from the sale or conversion of game tokens to be used for the purchase of in-game virtual items from online games developed by third parties are shared between the Group and the game developers based on a pre-agreed ratio for each game. These revenue-sharing contracts typically last one to two years. | |||||
The third party developed games are primarily under non-exclusive licensing contracts, maintained and updated by the game developers. The Group views the game developers to be the Group's customers and considers the Group's responsibilities under the Group's agreements with the game developers to offer certain standard promotions that include providing access to the platform, announcing the new games to users on the platform, and occasional advertising on the YY platform. The determination of whether to record these revenues using gross or net method is based on an assessment of various factors. The primary factors are whether the Group is acting as the principal in offering services to the game players or as agent in the transaction, and the specific requirement of each contract. The Group determined that for third party developed games, the third party game developers are the principal given the game developers design and develop the web-game services offered, have reasonable latitude to establish prices of game tokens, and are responsible for maintaining and upgrading the game contents and virtual items. Accordingly, the Group records online games revenue, net of the pre-agreed portion of sharing of the revenues with the game developers. | |||||
Given that third party developed games are managed and administered by the third party game developers, the Group does not have access to the data on the consumption details such as when the game token is spent on the virtual items or the types of virtual items (consumable or perpetual items) purchased by each individual game player. However, the Group maintains historical data on timing of the conversion of its virtual currency into game specific tokens and the amount of purchases of game tokens. The Group believes that its performance for, and obligation to, the game developers correspond to the game developers' services to the users. The Group has adopted a policy to recognize revenues relating to game tokens for third party developed games over the estimated user relationship with the Group on a game-by-game basis, which are approximately one to six months for the periods presented. Future usage patterns may differ from historical usage patterns and therefore the estimated user relationship with the Group may change in the future. | |||||
When the Group launches a new game, it estimates the user relationship based on other similar types of games in the market until the new game establishes its own history. The Group considers the game's profile, attributes, target audience, and its appeal to players of different demographics groups in estimating the user relationship period. | |||||
The estimated user relationship period is based on data collected from those users who have acquired game tokens. To estimate the user relationship period, the Group maintains a software system that captures the following information for each user: (a) the frequency that users log into each game via the Group's platform, and (b) the amount and the timing of when the users convert or charge his or her game tokens. The Group estimates the user relationship period for a particular game to be the date a player purchases or converts from virtual currency to a game token through the date the Group estimates the user plays the game for the last time. This computation is completed on a user by user basis. Then, the results for all analyzed users are averaged to determine an estimated end user relationship period for each game. Revenues from in-game payments of each month are recognized over the user relationship period estimated for that game. | |||||
The consideration of user relationship with each online game is based on the Group's best estimate that takes into account all known and relevant information at the time of assessment. The Group assesses the estimated user relationships on a quarterly basis. Any adjustments arising from changes in the user relationship as a result of new information will be accounted as a change in accounting estimate in accordance with ASC 250 Accounting Changes and Error Corrections. | |||||
– | |||||
Self-developed games | |||||
Revenues derived from self-developed games are recorded on a gross basis as the Group acts as a principal to fulfill all obligations. The Group does not maintain information on consumption details of in-game virtual items, and only has limited information related to the frequency of log-ons for its self-developed games. Given that certain historical data is not available, the Group uses the user relationship of third party games with similar popularity, gaming experience and sales to determine the estimated period of user relationship for its self-developed games. | |||||
(3) Other IVAS revenue | |||||
Other IVAS revenue mainly represents membership subscription revenue, revenue from sales of virtual items in various channels in YY platform, such as live game broadcasting channels etc. and other miscellaneous product sales in YY platform. | |||||
The Group operates a membership subscription program where subscription members can have enhanced user privileges when using YY Client. The membership fee is collected up-front from subscribers. The receipt of the revenue is initially recorded as deferred revenue and revenue is recognized ratably over the period of the subscription as services are rendered. Unrecognized portion beyond 12 months from balance sheet date is classified as long-term deferred revenue. Revenue from sales of virtual items in various channels is recognized on item basis, which is consistent with the revenue recognition policies in online music and entertainment revenue stream. | |||||
(ii) | |||||
Advertising revenues | |||||
Advertising revenues are derived principally from advertising arrangements where the advertisers pay to place their advertisements on the Group's platform in different formats over a particular period of time. Such formats generally include but are not limited to banners, text-links, videos, logos, and buttons. Advertisements on the Group's platform are generally charged on the basis of duration, and advertising contracts are signed to establish the fixed price and the advertising services to be provided. Where collectability is reasonably assured, advertising revenues from advertising contracts are recognized ratably over the contract period of display. | |||||
The Group enters into advertising contracts directly with advertisers or third party advertising agencies that represent advertisers. Contract terms generally range from 1 to 3 months. Both third party advertising agencies and direct advertisers are generally billed at the end of the display period and payments are due usually within 6 months. | |||||
Where customers purchase multiple advertising spaces with different display periods in the same contract, the Group allocates the total consideration to the various advertising elements based on the relative selling price method and recognizes revenue for the different elements over their respective display periods. The following hierarchy should be followed when determining the appropriate selling price for each element: (1) vendor specific objective evidence ("VSOE"), (2) third party evidence ("TPE"), and (3) best estimate of selling price ("BESP"). Given that the VSOE or TPE of the selling price cannot be determined, the Group has adopted a policy to allocate the fair values of different advertising elements based on the best estimate selling prices of each advertisement within the contract taking into consideration the standard price list and historical discounts granted. The Group recognizes revenue on the elements delivered and defers the recognition of revenue for the fair value of the undelivered elements until the remaining obligations have been satisfied. Where all of the elements within an arrangement are delivered uniformly over the agreement period, the revenues are recognized on a straight line basis over the contract period. | |||||
Transactions with third party advertising agencies | |||||
For contracts entered into with third party advertising agencies, the third party advertising agencies will in turn sell the advertising services to advertisers. Revenue is recognized ratably over the contract period of display based on the following criteria: | |||||
• | |||||
There is persuasive evidence that an arrangement exists—the Group will enter into framework and execution agreements with the advertising agencies, specifying price, advertising content, format and timing | |||||
• | |||||
Price is fixed or determinable—price charged to the advertising agencies are specified in the agreements, including relevant discount and rebate rates | |||||
• | |||||
Services are rendered—the Group recognizes revenue ratably as the element are delivered over the contract period of display | |||||
• | |||||
Collectability is reasonably assured—the Group assesses credit history of each advertising agency before entering into any framework and execution agreements. If the collectability from the agencies is assessed as not reasonably assured, the Group recognizes revenue only when the cash is received and all the other revenue criteria are met. | |||||
The Group provides sales incentives in the forms of discounts and rebates to third party advertising agencies based on purchase volume. As the advertising agencies are viewed as the customers in these transactions, revenue is recognized based on the price charged to the agencies, net of sales incentives provided to the agencies. Sales incentives are estimated and recorded at the time of revenue recognition based on the contracted rebate rates and estimated sales volume based on historical experience. | |||||
Transactions with advertisers | |||||
The Group also enters into advertisement contracts directly with advertisers. Similar to transactions with third party advertising agencies, the Group recognizes revenue ratably as the elements are delivered over the contract period of display. The terms and conditions, including price, are fixed according to the contract between the Group and the advertisers. The Group also performs a credit assessment of all advertisers prior to entering into contracts. Revenue is recognized based on the amount charged to the advertisers, net of discounts. | |||||
(t) Advances from customers and deferred revenue | |||||
Advances from customers primarily consist of (i) prepayments from users in the form of the Group's virtual currency that are not yet consumed or converted into game tokens, and upon the consumption or conversion, are recognized as revenue according to the prescribed revenue recognition policies described above, (ii) prepayments from sub-licensees for obtaining operation rights of certain online games over a period of time, and (iii) prepayments from advertising agencies and advertisers. | |||||
Deferred revenue primarily consists of the unamortized game tokens, prepaid subscriptions under the membership program and unamortized revenue from virtual items in online music and entertainment channels, where there is still an implied obligation to be provided by the Group, which will be recognized as revenue when all of the revenue recognition criteria are met. | |||||
(u) Cost of revenues | |||||
Amounts recorded as cost of revenue relate to direct expenses incurred in order to generate IVAS and advertising revenue. Such costs are recorded as incurred. Cost of revenues consists primarily of (i) revenue sharing fees and content costs, including payments to various channel owners and performers, and content providers, (ii) bandwidth costs, (iii) salary and welfare, (iv) share-based compensation, (v) business taxes and related surcharges, cultural development fee, (vi) depreciation and amortization expense for servers, other equipment and intangibles directly related to operating the platform,(vii) payment handling cost, and (viii) other costs. | |||||
In the PRC, business taxes are imposed by the government on revenues reported by any selling entity for the provision of taxable services in the PRC, transfer of intangible assets and sales of immovable properties in the PRC. The business tax rate varies depending on the nature of the revenues. The Group is also subject to cultural development fee at a tax rate of 3% on service income from provision of advertising services in the PRC. | |||||
On January 1, 2012, a pilot program (the "Pilot Program") was launched in Shanghai for a transition of imposing value-added tax ("VAT") on revenues derived from certain pilot industries (the "Pilot Industries") other than business taxes. Starting from September 1, 2012, the Pilot Program was expanded from Shanghai to eight other cities and provinces in the PRC, including Beijing and Guangdong province, where the Group's subsidiaries and VIEs are incorporated and have operations therein. The Group's advertising revenue and online games revenue are within the scope of Pilot Industries and they became subject to VAT effective from November 1, 2012 and December 1, 2012, at a rate of 6% respectively. The Group hence recognizes advertising revenue and online games revenue net of VAT thereafter. Prior to the Pilot Program's being applied to Group's revenue, the Group's advertising revenues earned from external customers were subject to business taxes at 5% for the year ended December 31, 2011, and ten months ended October 31, 2012, and the Group' IVAS revenue earned from external customers were subject to business taxes of 3% for the years ended December 31, 2011, 2012 and 2013, except that the Group's online games revenue began to be subject to VAT of 6% commencing December 2012. | |||||
The Group is subject to surcharges of business taxes and VAT, which are calculated based on 12% of the business taxes and VAT payable for the years ended December 31, 2011, 2012 and 2013. | |||||
The Group reported business taxes and surcharges, and cultural development fees incurred in cost of revenues. | |||||
Based on the Group's corporate structure and the contractual arrangements among the Group's PRC subsidiaries, the Group's VIEs and their shareholders, the Group is effectively subject to the 5% PRC business tax and generally subject to 6% VAT and related surcharges on revenues generated by the Group's subsidiaries based on the Group's contractual arrangements entered into with the Group's VIEs. | |||||
(v) Research and development expenses | |||||
Research and development expenses consist primarily of (i) salary and welfare for research and development personnel, (ii) share-based compensation for research and development personnel, (iii) rental expenses and (iv) depreciation of office premise and servers utilized by research and development personnel. Costs incurred during the research stage are expensed as incurred. Costs incurred in the development stage, prior to the establishment of technological feasibility, which is when a working model is available, are expensed when incurred. | |||||
The Company recognizes internal use software development costs in accordance with guidance on intangible assets and internal use software. This requires capitalization of qualifying costs incurred during the software's application development stage and to expense costs as they are incurred during the preliminary project and post implementation/operation stages. The Company has not capitalized any costs related to internal use software during the years ended December 31, 2011, 2012 and 2013, respectively. | |||||
(w) Sales and marketing expenses | |||||
Sales and marketing expenses consist primarily of (i) salary and welfare for sales and marketing personnel, (ii) advertising and market promotion expenses, and (iii) share-based compensation for sales and marketing personnel. The advertising and market promotion expenses amounted to approximately RMB4,234, RMB5,534 and RMB8,054 during the years ended December 31, 2011, 2012 and 2013, respectively. | |||||
(x) General and administrative expenses | |||||
General and administrative expenses consist primarily of (i) salary and welfare for general and administrative personnel, (ii) share-based compensation for management and administrative personnel, (iii) allowance for doubtful receivables, and (iv) professional service fees. | |||||
(y) Employee social security and welfare benefits | |||||
Employees of the Group in the PRC are entitled to staff welfare benefits including pension, work-related injury benefits, maternity insurance, medical insurance, unemployment benefit and housing fund plans through a PRC government-mandated multi-employer defined contribution plan. The Group is required to accrue for these benefits based on certain percentages of the employees' salaries, up to a maximum amount specified by the local government. The Group is required to make contributions to the plans out of the amounts accrued. The PRC government is responsible for the medical benefits and the pension liability to be paid to these employees and the Group's obligations are limited to the amounts contributed and no legal obligation beyond the contributions made. Employee social security and welfare benefits included as expenses in the accompanying statements of operations amounted to RMB23,657, RMB39,660 and RMB68,334 for the years ended December 31, 2011, 2012 and 2013, respectively. | |||||
(z) Share-based compensation | |||||
The Company grants stock-based award, such as, but not limited to, share options, restricted shares, restricted share units and warrants to eligible employees, officers, directors, and non-employee consultants. | |||||
Awards granted to employees, officers, and directors are initially accounted for as equity-classified awards. The related shared-based compensation expenses are measured at the grant date fair value of the award and are recognized using the graded vesting method, net of estimated forfeiture rates, over the requisite service period, which is generally the vesting period. Forfeitures are estimated at the time of grant based on historical forfeiture rates and will be revised in the subsequent periods if actual forfeitures differ from those estimates. Duowan BVI also granted share options, restricted shares and restricted share units to non-employees, which are also initially accounted for as equity-classified awards. Awards granted to non-employees are initially measured at fair value on the grant date and periodically re-measured thereafter until the earlier of the performance commitment date or the date the service is completed and recognized over the period the service is provided. Awards are re-measured at each reporting date using the fair value as at each period end until the measurement date, generally when the services are completed and share-based awards are vested. Changes in fair value between the interim reporting dates are attributed consistent with the method used in recognizing the original compensation costs. | |||||
As a result of Duowan BVI's repurchases of certain awards offered in 2009 and in 2011 (Note 19), certain initially equity classified employee and non-employee awards had been reclassified as a liability classified award, as these awards were deemed to have a substantive cash settlement feature. These awards are re-measured at the end of each reporting period until either the substantive cash settlement is terminated or the holder of the awards is exposed to the market value fluctuation of the underlying shares for a reasonable period of time (at least six months), or the awards are settled, cancelled or expire unexercised. | |||||
On September 15, 2011, the board of directors of the Company resolved not to undertake any repurchases of vested or unvested share-based compensation awards, except under those conditions specified in the relevant award scheme and grant documents. In addition, any proposed repurchase of vested or unvested share-based compensation awards should be approved by the majority votes of the board of directors. Such intention of the Company was specifically communicated to all employees with or without the awards. All the employees with vested or unvested awards also confirmed such understanding by a written confirmation. Accordingly, the classification of the liability-classified awards changed back to be equity-classified. | |||||
Prior to the initial public offering date (Note 17), the Binomial option-pricing model was used to measure the fair value of all the share options. The determination of the fair value was affected by the share price as well as assumptions regarding a number of complex and subjective variables, including the expected share price volatility, actual and projected employee and non-employee share option exercise behaviour, risk-free interest rates and expected dividends. The use of the Binomial option-pricing model requires extensive actual employee, directors, officers and non-employee exercise behaviour data for the relative probability estimation purpose, and a number of complex assumptions. | |||||
Following the listing of the Company, the grant date fair value of share-based awards is based on stock price of the Company in the NASDAQ Global Market. | |||||
(aa) Other income | |||||
Other income primarily consists of government grants which represent cash subsidies received from the PRC government by the operating subsidiaries or VIEs of the Company. Government grants are | |||||
originally recorded as deferred revenue when received upfront. After all of the conditions specified in the grants have been met, the grants are recognized as operating or non-operating income based on the nature of the government grants. | |||||
(bb) Income taxes | |||||
Current income taxes are provided on the basis of net income for financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions. Deferred income taxes are accounted for using an asset and liability method. Under this method, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The tax base of an asset or liability is the amount attributed to that asset or liability for tax purpose. The effect on deferred taxes of a change in tax rates is recognized in statement of operations and comprehensive (loss) income in the period of change. A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered more likely than not that some portion of, or all of the deferred tax assets will not be realized. | |||||
Uncertain tax positions | |||||
The guidance on accounting for uncertainties in income taxes prescribes a more likely than not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Guidance was also provided on derecognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures. Significant judgment is required in evaluating the Group's uncertain tax positions and determining its provision for income taxes. The Group recognizes interests and penalties, if any, under accrued expenses and other current liabilities on its balance sheet and under other expenses in its statements of operations. The Group did not recognize any significant interest and penalties associated with uncertain tax positions for the years ended December 31, 2011, 2012 and 2013. As of December 31, 2012 and 2013, the Group did not have any significant unrecognized uncertain tax positions. | |||||
(cc) Statutory reserves | |||||
The Group's subsidiaries, VIEs and VIE's subsidiary established in the PRC are required to make appropriations to certain non-distributable reserve funds. | |||||
In accordance with the laws applicable to China's Foreign Investment Enterprises, the Group's subsidiaries registered as wholly-owned foreign enterprises have to make appropriations from its after-tax profit (as determined under the Accounting Standards for Business Enterprises as promulgated by the Ministry of Finance of the People's Republic of China ("PRC GAAP")) to reserve funds including general reserve fund, and staff bonus and welfare fund. The appropriation to the general reserve fund must be at least 10% of the after-tax profits calculated in accordance with PRC GAAP. Appropriation is not required if the reserve fund has reached 50% of the registered capital of the company. Appropriation to the staff bonus and welfare fund is at the company's discretion. | |||||
In addition, in accordance with the Company Laws of the PRC, the VIEs and VIE's subsidiary of the Company registered as PRC domestic companies must make appropriations from its after-tax profit as determined under the PRC GAAP to non-distributable reserve funds including a statutory surplus fund and a discretionary surplus fund. The appropriation to the statutory surplus fund must be at least 10% of the after-tax profits as determined under the PRC GAAP. Appropriation is not required if the surplus fund has reached 50% of the registered capital of the company. Appropriation to the discretionary surplus fund is made at the discretion of the company. | |||||
The use of the general reserve fund, statutory surplus fund and discretionary surplus fund are restricted to the off-setting of losses or increasing capital of the respective company. The staff bonus and welfare fund is a liability in nature and is restricted to fund payments of special bonus to staff and for the collective welfare of employees. All these reserves are not allowed to be transferred to the company in terms of cash dividends, loans or advances, nor can they be distributed except under liquidation. | |||||
During the year ended December 31, 2013, appropriations to statutory reserves amounted to RMB40,657. No appropriations have been made in 2011 and 2012 since the companies were in accumulated loss positions. | |||||
(dd) Related parties | |||||
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or significant influence, such as a family member or relative, shareholder, or a related corporation. | |||||
(ee) Dividends | |||||
Dividends are recognized when declared. No dividends were declared for the years ended December 31, 2011, 2012 and 2013, respectively. The Group does not have any present plan to pay any dividends on common shares in the foreseeable future. The Group currently intends to retain the available funds and any future earnings to operate and expand its business. | |||||
(ff) (Loss) income per share | |||||
Basic (loss) income per share is computed by dividing net (loss) income attributable to common shareholders, considering the accretion or decretion of redemption feature, deemed dividend to preferred shareholders and amortization of beneficial conversion feature related to its convertible redeemable preferred shares (Note 20), by the weighted average number of common shares outstanding during the period using the two-class method. Under the two-class method, net income is allocated between common shares and other participating securities based on their participating rights. Net losses are not allocated to other participating securities if based on their contractual terms they are not obligated to share the losses. | |||||
Diluted (loss) income per share is calculated by dividing net (loss) income attributable to common shareholders, as adjusted for the effect of dilutive common equivalent shares, if any, by the weighted average number of common and dilutive common equivalent shares outstanding during the period. | |||||
Common equivalent shares consist of common shares issuable upon the conversion of the preferred shares, using the if-converted method, and shares issuable upon the exercise of share options using the treasury stock method. Common equivalent shares are not included in the denominator of the diluted loss per share calculation when inclusion of such share would be anti-dilutive. | |||||
(gg) Comprehensive (loss) income | |||||
Comprehensive (loss) income is defined as the change in equity of the Company during a period arising from transactions and other events and circumstances excluding transactions resulting from investments by shareholders and distributions to shareholders. Comprehensive (loss) income is reported in the consolidated statements of operations and comprehensive (loss) income. Accumulated other comprehensive loss of the Group includes the foreign currency translation adjustments. | |||||
(hh) Segment reporting | |||||
Operating segments are defined as components of an enterprise engaging in businesses activities for which separate financial information is available that is regularly evaluated by the Group's chief operating decision makers in deciding how to allocate resources and assess performance. The Group's chief operating decision maker has been identified as the Chief Executive Officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Group. The Group has internal reporting of cost and expenses that does not distinguish between segments, and reports costs and expenses by nature as a whole. The Group does not distinguish between markets or segments for the purpose of internal reporting. Hence, the Group has only one operating segment. As the Group's long-lived assets and revenue are substantially located in and derived from the PRC, no geographical segments are presented. | |||||
(ii) Recently issued accounting pronouncements | |||||
In February of 2013, the FASB issued ASU 2013-02, "Comprehensive Income (Topic 220), Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income". The amendments in this ASU require an entity to provide information about amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income, but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income (for example, where amounts are reclassified to inventory), an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. For public entities, the amendments are effective with prospective application for reporting periods beginning after December 15, 2012. The Group adopted this ASU beginning January 1, 2013 and the adoption of this ASU did not have a material impact on the Group's consolidated financial statements. | |||||
In March of 2013, the FASB issued ASU 2013-05, "Foreign Currency Matters (Topic 830), Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity." The amendments in this | |||||
ASU clarify the applicable guidance for the de-recognition of all or a portion of a cumulative translation adjustment when an entity ceases to have a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights) within a foreign entity or when other changes stipulated in the ASU occur and involve a foreign entity. The amendments are effective prospectively for fiscal years (and interim reporting periods within those years) beginning after December 15, 2013. The amendments should be applied prospectively to derecognition events occurring after the effective date. Prior periods should not be adjusted. Early adoption is permitted. If an entity elects to early adopt the amendments, it should apply them as of the beginning of the entity's fiscal year of adoption. The adoption of this ASU is not reasonably expected in the future to have a material impact on the Group's consolidated financial statements. | |||||
In March of 2013, the FASB issued ASU 2013-11, "Income Taxes (Topic 740)—Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists". The amendments in the ASU clarify that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss, similar tax loss, or tax credit carryforward, except as noted in the following sentence. To the extent a net operating loss, similar tax loss, or tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such a purpose, then under this exception the unrecognized tax benefit is to be presented in the financial statements as a liability and should not be combined with (netted with) the deferred tax asset(s). The assessment of whether a deferred tax asset is "available" is based on the unrecognized tax benefit and deferred tax asset amounts that exist at the reporting date and should be made presuming disallowance of the tax position at the reporting date. The amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. Early adoption is permitted. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted. The adoption of this ASU is not reasonably expected in the future to have a material impact on the Group's consolidated financial statements. | |||||
Certain_risks_and_concentratio
Certain risks and concentration | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Certain risks and concentration | ' | ||||||||||
Certain risks and concentration | ' | ||||||||||
3. Certain risks and concentration | |||||||||||
(a) PRC regulations | |||||||||||
Foreign ownership of internet-based businesses is subject to significant restrictions under the current PRC laws and regulations. The PRC government regulates internet access, the distribution of online information and the conduct of online commerce through strict business licensing requirements and other government regulations. These laws and regulations also limit foreign ownership in PRC companies that provide internet information distribution services. Specifically, foreign ownership in an internet information provider or other value-added telecommunication service providers may not exceed 50%. Foreigners or foreign invested enterprises are currently not able to apply for the required licenses for operating online games in the PRC. The Company is incorporated in the Cayman Islands and accordingly, the Company is considered as a foreign invested enterprise under PRC law. | |||||||||||
In order to comply with the PRC laws restricting foreign ownership in the online business in China, the Group operates the online business in China through contractual arrangements with Guangzhou Huaduo and Beijing Tuda, the Group's two VIEs. As of December 31, 2013, Mr. David Xueling Li, CEO, Mr. Jun Lei, Chairman of the Company, Mr. Tony Bin Zhao, Director and Chairman of Technology Committee, Mr. Jin Cao, General Manager of the Website Department, and Beijing Tuda own approximately 0.5%, 0.44%, 0.04%, 0.02% and 99% of Guangzhou Huaduo's equity interests, respectively. As of December 31, 2013, Mr. David Xueling Li, Mr. Tony Bin Zhao, and Mr. Jin Cao, own 97.7%, 1.5% and 0.8% of Beijing Tuda's equity interests, respectively. | |||||||||||
The VIEs hold the licenses and permits necessary to conduct its internet value-added services and online advertising business in the PRC. If the Company had direct ownership of the VIEs, it would be able to exercise its rights as a shareholder to effect changes in the board of directors, which in turn could affect changes at the management level, subject to any applicable fiduciary obligations. However, under the current contractual arrangements, it relies on the VIEs and its' shareholders' performance of their contractual obligations to exercise effective control. In addition, the Group's contractual agreements have terms range from 10 to 30 years, which are subject to Beijing Huanju Shidai's unilateral termination right. Under the respective service agreements, Beijing Huanju Shidai will provide services including technology support, technology services, business support and consulting services to Beijing Tuda and Guangzhou Huaduo in exchange for service fees. The amount of service fees payable is determined by various factors, including (a) a percentage of Beijing Tuda and Guangzhou Huaduo's revenues or earnings, and (b) the expenses that Beijing Huanju Shidai incurs for providing such services. Beijing Huanju Shidai may charge up to 100% of the income in Beijing Tuda and Guangzhou Huaduo and a multiple of the expenses incurred for providing such services, as determined by Beijing Huanju Shidai from time to time. The service fees payable by Beijing Tuda and Guangzhou Huaduo to Beijing Huanju Shidai are determined to be up to 100% of the profits of the Beijing Tuda and Guangzhou Huaduo, with the timing of such payment to be determined at the sole discretion of Beijing Huanju Shidai. If fees were incurred, it would be significant to the Company and the operating companies' economic performance because it will be incurred and paid at up to 100% of the earnings of the VIEs. Fees incurred would be remitted, subject to further PRC restrictions. None of the VIEs or their shareholders are entitled to terminate the contracts prior to the expiration date, unless under remote circumstances such as a material breach of agreement or bankruptcy as it pertains to the service and business operation agreements and their amendment. For the years ended December 31, 2011 and 2012, no service fees were charged by WOFEs to VIEs as both VIEs had accumulated losses since inception. For the year ended December 31, 2013, Beijing Huanju Shidai determined that service fees of RMB31,153 were charged to Guangzhou Huaduo considering it achieved accumulated profitability during the year ended December 31, 2013. The service fees are typically determined based on the costs and expenses that WOFEs incurs for providing relevant technology support to Guangzhou Huaduo, as well as the consideration of Guangzhou Huaduo's future business development plan and its increasingly growing and diverse operational needs. | |||||||||||
Further, the Group believes that the contractual arrangements among Beijing Huanju Shidai, the VIEs, and their shareholders are in compliance with PRC law and are legally enforceable. However, the PRC government may issue from time to time new laws or new interpretations on existing laws to regulate this industry. Regulatory risk also encompasses the interpretation by the tax authorities of current tax laws, and the Group's legal structure and scope of operations in the PRC, which could be subject to further restrictions resulting in limitations on the Company's ability to conduct business in the PRC. The PRC government may also require the Company to restructure the Group's operations entirely if it finds that its contractual arrangements do not comply with applicable laws and regulations. Furthermore, it could revoke the Group's business and operating licenses, require it to discontinue or restrict its operations, restrict its right to collect revenues, block its website, require it to restructure its operations, impose additional conditions or requirements with which the Group may not be able to comply, or take other regulatory or enforcement actions against the Group that could be harmful to its business. The imposition of any of these penalties may result in a material and adverse effect on the Group's ability to conduct the Group's business. In addition, if the imposition of any of these penalties causes the Group to lose the rights to direct the activities of the VIEs or the right to receive their economic benefits, the Group would no longer be able to consolidate the VIEs. The Group does not believe that any penalties imposed or actions taken by the PRC government would result in the liquidation of the Company, Beijing Huanju Shidai, and the VIEs. | |||||||||||
The following consolidated financial information of the Group's VIEs and VIE's subsidiary excluding the intercompany items with the Group's subsidiaries was included in the accompanying consolidated financial statements as of and for the years ended: | |||||||||||
December 31, | |||||||||||
2012 | 2013 | ||||||||||
RMB | RMB | ||||||||||
Assets | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | 204,606 | 575,262 | |||||||||
Short-term deposits | 90,000 | 594,000 | |||||||||
Accounts receivable, net | 41,824 | 48,329 | |||||||||
Amount due from a related party | 1,073 | 73 | |||||||||
Prepayments and other current assets | 14,897 | 29,753 | |||||||||
Deferred tax assets | 25,666 | 51,631 | |||||||||
| | | | | | | | ||||
Total current assets | 378,066 | 1,299,048 | |||||||||
| | | | | | | | ||||
Non-current assets | |||||||||||
Deferred tax assets | 92 | 383 | |||||||||
Investments | 2,950 | 33,920 | |||||||||
Property and equipment, net | 88,709 | 100,059 | |||||||||
Intangible assets, net | 3,218 | 9,717 | |||||||||
| | | | | | | | ||||
Total non-current assets | 94,969 | 144,079 | |||||||||
| | | | | | | | ||||
Total assets | 473,035 | 1,443,127 | |||||||||
| | | | | | | | ||||
| | | | | | | | ||||
Liabilities | |||||||||||
Current liabilities | |||||||||||
Accounts payable | 27,124 | 55,818 | |||||||||
Deferred revenue | 158,323 | 292,380 | |||||||||
Advances from customers | 7,271 | 10,656 | |||||||||
Income taxes payable | 32,885 | 47,974 | |||||||||
Accrued liabilities and other current liabilities | 81,223 | 197,851 | |||||||||
Amounts due to related parties | 2,604 | 2,640 | |||||||||
| | | | | | | | ||||
Total current liabilities | 309,430 | 607,319 | |||||||||
| | | | | | | | ||||
Non-current liabilities | |||||||||||
Deferred revenue | 4,525 | 8,457 | |||||||||
| | | | | | | | ||||
Total liabilities | 313,955 | 615,776 | |||||||||
| | | | | | | | ||||
| | | | | | | | ||||
For the year ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
RMB | RMB | RMB | |||||||||
Net revenues | 232,376 | 702,929 | 1,669,852 | ||||||||
Net (loss) income | (79,334 | ) | 80,071 | 486,095 | |||||||
For the year ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
RMB | RMB | RMB | |||||||||
Net cash provided by operating activities | 57,313 | 322,378 | 845,198 | ||||||||
Net cash used in investing activities | (46,475 | ) | (152,197 | ) | (592,390 | ) | |||||
| | | | | | | | | | | |
10,838 | 170,181 | 252,808 | |||||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
(b) Foreign exchange risk | |||||||||||
The revenues and expenses of the Group's subsidiaries, VIEs and VIE's subsidiary in the PRC are generally denominated in RMB and their assets and liabilities are denominated in RMB. The Group's financing activities are denominated in U.S. dollars. The RMB is not freely convertible into foreign currencies. Remittances of foreign currencies into the PRC and exchange of foreign currencies into RMB require approval by foreign exchange administrative authorities and certain supporting documentation. The State Administration for Foreign Exchange, under the authority of the People's Bank of China, controls the conversion of RMB into other currencies. | |||||||||||
(c) Concentration of risks | |||||||||||
(i) | |||||||||||
Concentration of revenue | |||||||||||
No individual customer accounted for more than 10% of net revenues for the years ended December 31, 2011, 2012 and 2013. | |||||||||||
(ii) | |||||||||||
Concentration of accounts receivable | |||||||||||
The Group collects accounts receivable for IVAS revenue from collection agencies and accounts receivable for online advertising revenue from customers. The Group depends on payments from a limited number of the collection agencies and customers. The top 10 accounts receivable accounted for 96%, 92% and 87% of the total accounts receivable as of December 31, 2011, 2012 and 2013, respectively. | |||||||||||
The following table summarizes the percentage of accounts receivable from collection agencies and customers with over 10% of total accounts receivable: | |||||||||||
For the year ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
RMB | RMB | RMB | |||||||||
Collection agencies and customers | |||||||||||
B1 | 31% | 34% | 25% | ||||||||
B2 | * | * | 12% | ||||||||
B3 | * | 16% | 11% | ||||||||
B4 | 12% | * | * | ||||||||
B5 | 12% | * | * | ||||||||
* | |||||||||||
Less than 10% | |||||||||||
(d) Credit risk | |||||||||||
As of December 31, 2012 and 2013, substantially all of the Group's cash and cash equivalents and short-term deposits were held by the PRC and international financial institutions. Management chooses these institutions because of their reputations and track records for stability, and their known large cash reserves, and management periodically reviews these institutions' reputations, track records, and reported reserves. Management expects that any additional institutions that the Group uses for its cash and bank deposits will be chosen with similar criteria for soundness. The balances in the PRC are not insured since it is not a market practice in the PRC. Nevertheless under the PRC law, it is required that a commercial bank in the PRC that holds third party cash deposits should maintain a certain percentage of total customer deposits taken in a statutory reserve fund for protecting the depositors' rights over their interests in deposited money. PRC banks are subject to a series of risk control regulatory standards; PRC bank regulatory authorities are empowered to take over the operation and management of any PRC bank that faces a material credit crisis. The Group believes that it is not exposed to unusual risks as these financial institutions are either PRC banks or international banks that carry at least 'A' credit ratings from one or more credit rating agencies. The Group had not experienced any losses on its deposits of cash and cash equivalents and term deposits during the years ended December 31, 2011, 2012 and 2013 and believes that its credit risk to be minimal. | |||||||||||
Business_combination
Business combination | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Business combination | ' | ||||
Business combination | ' | ||||
4. Business combination | |||||
On March 12, 2012, the Group acquired a majority of the assets of an internet service company, which is in the business of operating an internet platform, for cash consideration of RMB11,722. As a result of the acquisition, the Group obtained the key intellectual property to develop and expand the platform of YY Client. The acquisition was recorded using the acquisition method of accounting and the allocation of the purchase price at the date of acquisition is as follows: | |||||
RMB | |||||
Property and equipment | 128 | ||||
Intangible assets | |||||
Technology | 10,035 | ||||
Software | 660 | ||||
Goodwill | 899 | ||||
| | | | | |
Total | 11,722 | ||||
| | | | | |
| | | | | |
The business combination was completed on March 12, 2012 and there was no further adjustment to the purchase price allocation. The excess of purchase price over tangible assets and identifiable intangible assets acquired and liabilities assumed was recorded as goodwill. The acquired goodwill is not deductible for tax purposes. Acquisition related costs were immaterial and were included in general and administrative expenses for the year ended December 31, 2012. | |||||
Pro forma results of operations related to the acquisition have not been presented because they are not material to the Group's consolidated statements of operations and comprehensive (loss) income for the years ended December 31, 2011, 2012 and 2013. | |||||
Since the acquired business has been fully integrated into the Company's current business after the acquisition, it is impracticable to disclose separately its standalone revenue and earnings after the acquisition. | |||||
Cash_and_cash_equivalents
Cash and cash equivalents | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Cash and cash equivalents | ' | |||||||||||||
Cash and cash equivalents | ' | |||||||||||||
5. Cash and cash equivalents | ||||||||||||||
Cash and cash equivalents represent cash on hand and demand deposits placed with banks or other financial institutions. Cash and cash equivalents balance as of December 31, 2012 and 2013 primarily consist of the following currencies: | ||||||||||||||
December 31, 2012 | December 31, 2013 | |||||||||||||
Amount | RMB | Amount | RMB | |||||||||||
equivalent | equivalent | |||||||||||||
RMB | 460,176 | 460,176 | 715,316 | 715,316 | ||||||||||
US$ | 7,084 | 44,526 | 2,342 | 14,282 | ||||||||||
| | | | | | | | | | | | | | |
Total | 504,702 | 729,598 | ||||||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Shortterm_deposits
Short-term deposits | 12 Months Ended |
Dec. 31, 2013 | |
Short-term deposits | ' |
Short-term deposits | ' |
6. Short-term deposits | |
Short-term deposits represent time deposits placed with banks with original maturities of less than one year. Short-term deposits balance as of December 31, 2012 and 2013 were all denominated in RMB. | |
Accounts_receivable_net
Accounts receivable, net | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Accounts receivable, net | ' | ||||||||||
Accounts receivable, net | ' | ||||||||||
7. Accounts receivable, net | |||||||||||
December 31, | |||||||||||
2012 | 2013 | ||||||||||
RMB | RMB | ||||||||||
Accounts receivable, gross | 123,332 | 131,315 | |||||||||
Less: allowance for doubtful receivables | (5,716 | ) | (31,214 | ) | |||||||
| | | | | | | | ||||
Accounts receivable, net | 117,616 | 100,101 | |||||||||
| | | | | | | | ||||
| | | | | | | | ||||
The following table summarized the details of the Company's allowance for doubtful accounts: | |||||||||||
For the year ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
RMB | RMB | RMB | |||||||||
Balance at the beginning of the year | (387 | ) | — | (5,716 | ) | ||||||
Additions charged to general and administrative expenses | — | (6,884 | ) | (31,987 | ) | ||||||
Write-off during the year | 387 | 1,168 | 6,489 | ||||||||
| | | | | | | | | | | |
Balance at the end of the year | — | (5,716 | ) | (31,214 | ) | ||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Investments
Investments | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Investments | ' | |||||||
Investments | ' | |||||||
8. Investments | ||||||||
December 31 | ||||||||
2012 | 2013 | |||||||
RMB | RMB | |||||||
Cost investments (i)(ii) | — | 47,110 | ||||||
Equity investments | 2,950 | 14,919 | ||||||
| | | | | | | | |
Total | 2,950 | 62,029 | ||||||
| | | | | | | | |
| | | | | | | | |
(i) | ||||||||
In June 2013, the Company made an investment with an equity interest of 20% in a company with consideration of RMB15 million. The investment was not an investment in common stock or in-substance common stock and therefore was precluded from applying the equity method of accounting. It has been accounted for as an investment under cost method. | ||||||||
(ii) | ||||||||
In December 2013, the Company entered into agreements to acquire a minority stake of preferred shares of two companies with total consideration of approximately RMB28 million. Given the fact that the Company cannot unilaterally demand redemption of both the two preferred stocks as the Company only owns less than or equal to 10% of the two preferred stocks respectively, these investments have been accounted for as an investment in an equity security under cost method since the two equity securities do not have a readily determinable fair value. | ||||||||
Property_and_equipment_net
Property and equipment, net | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Property and equipment, net | ' | |||||||
Property and equipment, net | ' | |||||||
9. Property and equipment, net | ||||||||
Property and equipment consists of the following: | ||||||||
December 31, | ||||||||
2012 | 2013 | |||||||
RMB | RMB | |||||||
Gross carrying amount | ||||||||
Servers, computers and equipment | 103,005 | 152,404 | ||||||
Leasehold improvement | 22,831 | 23,257 | ||||||
Furniture, fixture and office equipment | 9,083 | 9,672 | ||||||
Motor vehicles | 2,999 | 5,186 | ||||||
Construction in progress | — | 4,652 | ||||||
| | | | | | | | |
Total | 137,918 | 195,171 | ||||||
Less: accumulated depreciation | (47,619 | ) | (92,535 | ) | ||||
| | | | | | | | |
Property and equipment, net | 90,299 | 102,636 | ||||||
| | | | | | | | |
| | | | | | | | |
Depreciation expense for the years ended December 31, 2011, 2012 and 2013 were RMB12,888, RMB29,074 and RMB44,963, respectively. | ||||||||
Intangible_assets_net
Intangible assets, net | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Intangible assets, net | ' | ||||||||||
Intangible assets, net | ' | ||||||||||
10. Intangible assets, net | |||||||||||
The following table summarizes the Group's intangible assets: | |||||||||||
December 31 | |||||||||||
2012 | 2013 | ||||||||||
RMB | RMB | ||||||||||
Gross carrying amount | |||||||||||
Software | 4,235 | 5,477 | |||||||||
Technology | 9,962 | 17,121 | |||||||||
Domain name | 11,477 | 17,286 | |||||||||
| | | | | | | | ||||
Total of gross carrying amount | 25,674 | 39,884 | |||||||||
| | | | | | | | ||||
Less: accumulated amortization | |||||||||||
Software | (1,808 | ) | (3,209 | ) | |||||||
Technology | (1,659 | ) | (4,054 | ) | |||||||
Domain name | (2,176 | ) | (2,944 | ) | |||||||
| | | | | | | | ||||
Total accumulated amortization | (5,643 | ) | (10,207 | ) | |||||||
| | | | | | | | ||||
Less: impairment | |||||||||||
Software | (550 | ) | (550 | ) | |||||||
| | | | | | | | ||||
Intangible assets, net | 19,481 | 29,127 | |||||||||
| | | | | | | | ||||
| | | | | | | | ||||
Amortization expense for the years ended December 31, 2011, 2012 and 2013 were RMB1,211, RMB3,369 and RMB4,707, respectively. | |||||||||||
The estimated amortization expenses for each of the following five years are as follows: | |||||||||||
Domain name | Technology | Software | |||||||||
RMB | RMB | RMB | |||||||||
2014 | 1,171 | 3,424 | 1,263 | ||||||||
2015 | 1,149 | 3,424 | 335 | ||||||||
2016 | 1,141 | 3,424 | 68 | ||||||||
2017 | 1,141 | 1,806 | 33 | ||||||||
2018 | 1,141 | 989 | 19 | ||||||||
The weighted average amortization periods of intangible assets as of December 31, 2012 and 2013 are as below: | |||||||||||
December 31, | |||||||||||
2012 | 2013 | ||||||||||
Domain name | 15 years | 15 years | |||||||||
Technology | 5 years | 5 years | |||||||||
Software | 3 years | 3 years |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2013 | |
Goodwill | ' |
Goodwill | ' |
11. Goodwill | |
Goodwill of RMB1,577 represents the excess of the purchase price over the estimated fair value of the net tangible and identifiable intangible assets acquired. Goodwill is not deductible for tax purposes. The Group performs the annual impairment tests on October 1 of each year. Based on the impairment tests performed, no impairment of goodwill was recorded for all periods presented. | |
Deferred_revenue
Deferred revenue | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Deferred revenue | ' | |||||||
Deferred revenue | ' | |||||||
12. Deferred revenue | ||||||||
December 31, | ||||||||
2012 | 2013 | |||||||
RMB | RMB | |||||||
Deferred revenue, current: | ||||||||
IVAS revenues | 157,940 | 292,184 | ||||||
Government grants | 1,919 | 1,682 | ||||||
| | | | | | | | |
Total current deferred revenue | 159,859 | 293,866 | ||||||
| | | | | | | | |
| | | | | | | | |
Deferred revenue, non-current: | ||||||||
IVAS revenues | 4,329 | 8,457 | ||||||
Government grants | 2,158 | 968 | ||||||
| | | | | | | | |
Total non-current deferred revenue | 6,487 | 9,425 | ||||||
| | | | | | | | |
| | | | | | | | |
Accrued_liabilities_and_other_
Accrued liabilities and other current liabilities | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Accrued liabilities and other current liabilities | ' | |||||||
Accrued liabilities and other current liabilities | ' | |||||||
13. Accrued liabilities and other current liabilities | ||||||||
December 31, | ||||||||
2012 | 2013 | |||||||
Accrued salaries and welfare | 54,688 | 113,302 | ||||||
Accrued revenue sharing fees | 19,504 | 66,512 | ||||||
Accrued bandwidth costs | 15,679 | 21,869 | ||||||
Business and other taxes payable | 7,422 | 14,248 | ||||||
Value added taxes payable | 8,718 | 5,291 | ||||||
Accrued technology service fee | 2,162 | 5,040 | ||||||
Others | 12,116 | 24,498 | ||||||
| | | | | | | | |
Total | 120,289 | 250,760 | ||||||
| | | | | | | | |
| | | | | | | | |
Cost_of_revenue
Cost of revenue | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Cost of revenue | ' | ||||||||||
Cost of revenue | ' | ||||||||||
14. Cost of revenue | |||||||||||
For the year ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
RMB | RMB | RMB | |||||||||
Revenue sharing fees and content costs | 6,750 | 109,273 | 444,065 | ||||||||
Bandwidth costs | 75,064 | 145,037 | 203,238 | ||||||||
Salary and welfare | 33,388 | 50,009 | 88,456 | ||||||||
Business tax and surcharges | 16,462 | 30,026 | 47,755 | ||||||||
Depreciation and amortization | 11,951 | 25,762 | 37,084 | ||||||||
Payment handling costs | 9,306 | 22,828 | 24,955 | ||||||||
Shared-based compensation | 15,449 | 8,407 | 9,860 | ||||||||
Other costs | 14,329 | 24,791 | 26,586 | ||||||||
| | | | | | | | | | | |
Total | 182,699 | 416,133 | 881,999 | ||||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Other_income
Other income | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Other income | ' | ||||||||||
Other income | ' | ||||||||||
15. Other income | |||||||||||
For the year ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
RMB | RMB | RMB | |||||||||
Government grants | 1,982 | 2,465 | 25,356 | ||||||||
Others | — | — | 1,722 | ||||||||
| | | | | | | | | | | |
Total | 1,982 | 2,465 | 27,078 | ||||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Income_tax
Income tax | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Income tax | ' | ||||||||||
Income tax | ' | ||||||||||
16. Income tax | |||||||||||
(i) Cayman Islands ("Cayman") | |||||||||||
Under the current tax laws of Cayman Islands, the Company and its subsidiaries are not subject to tax on income or capital gains. Besides, upon payment of dividends by the Company to its shareholders, no Cayman Islands withholding tax will be imposed. | |||||||||||
(ii) British Virgin Islands ("BVI") | |||||||||||
Duowan BVI is exempt from income tax on its foreign-derived income in the BVI. There are no withholding taxes in the BVI. | |||||||||||
(iii) Hong Kong profits tax | |||||||||||
Entities incorporated in Hong Kong are subject to Hong Kong profits tax at a rate of 16.5% on the estimated assessable profit for the years ended December 31, 2011, 2012 and 2013. | |||||||||||
(iv) PRC Enterprise Income Tax ("EIT") | |||||||||||
The Company's subsidiaries, VIEs and VIE's subsidiary in China are governed by the Enterprise Income Tax Law ("EIT Law"), which became effective on January 1, 2008. Pursuant to the EIT Law and its implementation rules, enterprises in China are generally subjected to tax at a statutory rate of 25%. Certified High and New Technology Enterprises ("HNTE") are entitled to a favorable statutory tax rate of 15%, and qualified software enterprises can enjoy an income tax exemption for two years beginning with their first profitable year and a 50% tax reduction to the applicable tax rate for the subsequent three years. | |||||||||||
The Group's PRC entities accrued for enterprise income tax as follows: | |||||||||||
• | |||||||||||
From 2011 to 2013, Guangzhou Huaduo accrued the EIT at a tax rate of 15% as a result of HNTE status. | |||||||||||
• | |||||||||||
Guangzhou Huanju Shidai reported tax loss from 2010 to 2013. On December 31, 2013, Guangzhou Huanju Shidai was granted the qualification as software enterprise and will enjoy the preferential tax beginning from its first profitable year. | |||||||||||
• | |||||||||||
Other PRC subsidiaries, VIE and VIE's subsidiary were subject to 25% EIT for the periods reported. | |||||||||||
According to a policy promulgated by the State Tax Bureau of the PRC and effective from 2008 onwards, enterprises engage in research and development activities are entitled to claim 150% of the research and development expenses so incurred in a year as tax deductible expenses in determining its tax assessable profits for that year ("Super Deduction"). Certain subsidiaries and VIEs of the Group successfully claimed the Super Deduction in ascertaining the tax assessable profits for the periods reported. | |||||||||||
In addition, according to the New EIT Law and its implementation rules, foreign enterprises, which have no establishment or place in the PRC but derive dividends, interest, rents, royalties and other income (including capital gains) from sources in the PRC shall be subject to PRC withholding tax ("WHT") at 10% (a further reduced WHT rate may be available according to the applicable double tax treaty or arrangement). The 10% WHT is applicable to any dividends to be distributed from the Group's PRC subsidiaries, VIEs and VIE's subsidiaries to the Group's oversea companies. | |||||||||||
Aggregate undistributed earnings of the Company's subsidiaries located in the PRC that are available for distribution to the Company as of December 31, 2012 and 2013 are approximately RMB204,960 and RMB753,975, respectively. The undistributed earnings of the Company's subsidiaries, VIEs and VIE's subsidiary located in the PRC are considered to be indefinitely reinvested, because the Group does not have any present plan to pay any cash dividends on its common shares in the foreseeable future and intends to retain most of its available funds and any future earnings for use in the operation and expansion of its business. Accordingly, no deferred tax liability has been accrued for the Chinese dividend withholding taxes that would be payable upon the distribution of those amounts to the Company as of December 31, 2012 and 2013. | |||||||||||
Composition of income tax expense | |||||||||||
The current and deferred portions of income tax expense included in the consolidated statements of operations are as follows: | |||||||||||
For the year ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
RMB | RMB | RMB | |||||||||
Current income tax expenses | (12,516 | ) | (48,357 | ) | (125,365 | ) | |||||
Deferred income tax benefits | 11,173 | 19,316 | 35,414 | ||||||||
| | | | | | | | | | | |
Income tax expense for the year | (1,343 | ) | (29,041 | ) | (89,951 | ) | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Reconciliation of the differences between statutory tax rate and the effective tax rate | |||||||||||
The reconciliation of total tax expense computed by applying the respective statutory income tax rate to pre-tax (loss) income is as follows: | |||||||||||
For the year ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
RMB | RMB | RMB | |||||||||
PRC Statutory income tax rate | (25.0% | ) | (25.0% | ) | (25.0% | ) | |||||
Effect of preferential tax rate | 8.40% | 10.40% | 10.50% | ||||||||
Effect of tax-exempt entities | (5.1% | ) | 0.20% | 2.20% | |||||||
Permanent differences(i) | 32.50% | (13.9% | ) | (4.0% | ) | ||||||
Change in valuation allowance | (7.8% | ) | (2.0% | ) | (3.0% | ) | |||||
Effect of Super Deduction available to the Group | (4.9% | ) | 5.70% | 3.40% | |||||||
Adjustments of deferred tax for changes in tax rates | 3.60% | — | — | ||||||||
| | | | | | | | | | | |
Effective income tax rate | 1.70% | (24.6% | ) | (15.9% | ) | ||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
(i) | |||||||||||
Permanent differences mainly arise from expenses not deductible for tax purposes including primarily share-based compensation costs and expenses incurred by subsidiaries and VIEs. | |||||||||||
Deferred tax assets and liabilities | |||||||||||
Deferred taxes were measured using the enacted tax rates for the periods in which they are expected to be reversed. The tax effects of temporary differences that give rise to the deferred tax asset balances as of December 31, 2012 and 2013 are as follows: | |||||||||||
December 31, | |||||||||||
2012 | 2013 | ||||||||||
RMB | RMB | ||||||||||
Deferred tax assets, current: | |||||||||||
Deferred revenue | 16,270 | 32,905 | |||||||||
Allowance for doubtful accounts receivable, accrued expense and others not currently deductible for tax purposes | 17,062 | 39,791 | |||||||||
Valuation allowance(i) | (1,783 | ) | (5,775 | ) | |||||||
| | | | | | | | ||||
Total current deferred tax assets, net | 31,549 | 66,921 | |||||||||
| | | | | | | | ||||
Deferred tax assets, non-current: | |||||||||||
Tax loss carried forward | 2,433 | 16,400 | |||||||||
Deferred revenue | 538 | 445 | |||||||||
Impairment of an equity investment | 45 | 180 | |||||||||
Valuation allowance(i) | (2,433 | ) | (16,400 | ) | |||||||
| | | | | | | | ||||
Total non-current deferred tax assets, net | 583 | 625 | |||||||||
| | | | | | | | ||||
| | | | | | | | ||||
(i) | |||||||||||
Valuation allowance is provided against deferred tax assets when the Group determines that it is more likely than not that the deferred tax assets will not be utilized in the future. In making such determination, the Group considered factors including future taxable income exclusive of reversing temporary differences and carry forwards. Valuation allowance was provided for net operating loss carry forward because it was more likely than not that such deferred tax assets will not be realized based on the Group's estimate of its future taxable income. If events occur in the future that allow the Group to realize more of its deferred income tax than the presently recorded amounts, an adjustment to the valuation allowances will result in a decrease in tax expense when those events occur. | |||||||||||
Tax loss carry forwards | |||||||||||
As of December 31, 2013, the Group had tax loss carry forwards of approximately RMB62,994, which can be carried forward to offset future taxable income. The net operating tax loss carry forwards will begin to expire as follows: | |||||||||||
Amount | |||||||||||
RMB | |||||||||||
2014 | 3,184 | ||||||||||
2015 | — | ||||||||||
2016 | 3,405 | ||||||||||
2017 | 3,034 | ||||||||||
2018 | 53,371 | ||||||||||
| | | | | |||||||
Total | 62,994 | ||||||||||
| | | | | |||||||
| | | | | |||||||
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 claw back underpaid tax plus penalties and interest for PRC entities' tax filings. 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' tax years from 2009 to 2013 remain subject to examination by the tax authorities. There were no ongoing examinations by tax authorities as of December 31, 2013. | |||||||||||
Common_shares
Common shares | 12 Months Ended |
Dec. 31, 2013 | |
Common shares | ' |
Common shares | ' |
17. Common shares | |
Common Shares | |
In January 2011, Duowan BVI entered into a common share and warrant purchase agreement with an independent institutional investor with respect to the issuance and sale of 51,140,432 common shares at an aggregate consideration of US$50,000 and a warrant to purchase up to an additional 25,570,216 common shares for an aggregate purchase price of US$25,000 ("Series D Common Share Financing"). The issuance price of each common share is US$0.9777, of which US$0.0830 per share relates to the fair value of the warrant. The related issuance costs were RMB1,208. In July 2011, the institutional investor exercised the warrant to acquire 25,570,216 common shares of Duowan BVI. | |
On October 31, 2012, several executives of the Company converted in aggregate 5,068,000 vested restricted shares into common shares. | |
Upon the completion of the Company's IPO on November 21, 2012 (Note 1(c)), the Company's shares were divided into Class A common shares and Class B common shares, par value of US$0.00001. Holders of Class A common shares and Class B common shares have the same rights, except for voting rights and conversion rights. Holders of Class A common shares are entitled to one vote per share in all shareholders' meetings, while holders of Class B common shares are entitled to ten votes per share. Each Class B common share is convertible into one Class A common share at any time at the discretion of the Class B shareholders thereof, while Class A common shares are not convertible into Class B common shares under any circumstances. The impact of dividing Class A and Class B commons shares has been retroactively reflected in the Company's capital structure in the consolidated financial statements. | |
As of December 31, 2011, nil Class A common shares and 4,640,575,690 Class B common shares had been authorized, nil Class A common shares and 543,340,914 Class B common shares had been issued and outstanding. | |
As of December 31, 2012, 10,000,000,000 Class A common shares and 1,000,000,000 Class B common shares had been authorized, 179,400,000 Class A common shares and 907,833,224 Class B common shares had been issued and outstanding, respectively. | |
During the year ended December 31, 2013, 21,256,900 Class A common shares were issued for the exercised share options, vested restricted shares and restricted share units, 422,001,838 Class B common shares were converted to Class A common shares. | |
As of December 31, 2013, 10,000,000,000 Class A common shares and 1,000,000,000 Class B common shares had been authorized, 622,658,738 Class A common shares and 485,831,386 Class B common shares had been issued and outstanding, respectively. | |
Convertible_redeemable_preferr
Convertible redeemable preferred shares | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Convertible redeemable preferred shares | ' | |||||||||||||||
Convertible redeemable preferred shares | ' | |||||||||||||||
18. Convertible redeemable preferred shares | ||||||||||||||||
During the First Reorganization, Duowan Limited issued 54,488,000 Series A convertible preferred shares ("Series A Preferred Shares") and warrant to a third party investor ("Series A Investor") in exchange for an aggregate purchase price of RMB7,720, or US$0.0184 per share. During the Second Reorganization in June 2008, Duowan BVI issued an additional 81,612,930 Series A convertible preferred shares to the Series A Investor for an aggregate purchase price of RMB13,722. The related issuance costs were RMB172. | ||||||||||||||||
In August 2008, Duowan BVI issued 102,073,860 Series B convertible redeemable preferred shares ("Series B Preferred Shares") for aggregate cash consideration of RMB34,232 and issuance costs of RMB278. | ||||||||||||||||
In November 2009, Duowan BVI issued 16,249,870 Series C-1 convertible redeemable preferred shares ("Series C-1 Preferred Shares") and 104,999,650 C-2 convertible redeemable preferred shares ("Series C-2 Preferred Shares", collectively with Series C-1 Preferred Shares, "Series C Preferred Shares"), for aggregate cash considerations of RMB8,875 and RMB71,684 respectively. Series C Preferred Shares issuance costs were RMB274. | ||||||||||||||||
Series A Preferred Shares, Series B Preferred Shares and Series C Preferred Shares are collectively referred to as the "Preferred Shares". | ||||||||||||||||
As of December 31, 2011, the Company has determined that the Preferred Shares should be classified as mezzanine equity since the Preferred Shares are contingently redeemable by the holders in the event that a qualified IPO has not occurred and the Preferred Shares have not been converted as of the redemption date. | ||||||||||||||||
The Company determined that there were no embedded derivatives requiring bifurcation as the economic characteristics and risks of the conversion feature embedded in derivative instrument are clearly and closely related to that of the convertible preferred shares, and the convertible and redeemable preferred shares are not readily convertible into cash as there is no market mechanism in place for trading its share. | ||||||||||||||||
As of December 31, 2011, the Preferred Shares comprised of the following: | ||||||||||||||||
Series | Issuance Date | Shares | Issue | Proceeds from | Carrying | |||||||||||
Issued and | Price Per | Issuance, Net | Amount (RMB) | |||||||||||||
Outstanding | Share (US$) | of Issuance | ||||||||||||||
Costs (US$) | ||||||||||||||||
A | December 1, 2006 | 54,488,000 | 0.0184 | 1,000 | 374,332 | |||||||||||
A | June 2, 2008 | 81,612,930 | 0.0245 | 1,975 | 560,681 | |||||||||||
B | August 8, 2008 | 102,073,860 | 0.049 | 4,959 | 703,901 | |||||||||||
C-1 | November 22, 2009 | 16,249,870 | 0.08 | 1,300 | 112,556 | |||||||||||
C-2 | November 22, 2009 | 104,999,650 | 0.1 | 10,460 | 729,464 | |||||||||||
All Preferred Shares' par value is US$0.00001. The rights, preferences and privileges of the Preferred Shares are as follows: | ||||||||||||||||
Conversion | ||||||||||||||||
Each Preferred Share was convertible, at the option of the holders, at any time after the date of issuance of such preferred shares into such number of common shares according to a conversion price. Each share of Series A, Series B, Series C Preferred Shares was convertible into one common share and was subject to adjustments for certain events, including but not limited to additional equity securities issuance, share dividends, subdivisions, redemptions, combinations, or consolidation of common shares. The conversion price is also subject to adjustment in the event the Company issues additional common shares at a price per share that is less than such conversion price. In such case, the conversion price shall be reduced to adjust for dilution. | ||||||||||||||||
Each Preferred Share was automatically converted into common shares at the then effective conversion price with respect to such Preferred Share (i) at the closing of a Qualified IPO, or (ii) at the election of the majority Series A, Series B, and Series C Preferred Shares holders (each voting or consenting as a separate class). As of December 31, 2010, the Qualified IPO is defined as a firm-commitment public offering of common shares of the Company in the United States that has been registered under the Securities Act and on a recognized securities exchange such as NASDAQ or the New York Stock Exchange, or in a similar public offering of common shares in a jurisdiction and on a recognized securities exchange outside of the United States, including without limitation, the Hong Kong Stock Exchange, provided that (a) the market capitalization of the Company upon completion of such initial public offering shall be no less than US$400,000 and such public offering and the aggregate proceeds (before deduction of underwriting discounts and registration expenses) is approved by majority of the board of directors (including the affirmative consent of the majority of the Series A, Series B, and Series C Preferred Shares director), or (b) such public offering and the aggregate proceeds (before deduction of underwriting discounts and registration expenses) is approved by majority of the board of directors (including the affirmative consent of each of the Preferred Shares' directors), and provided further that such public offering is made at an equivalent price and yields equivalent offering proceeds and there is regulatory approval for such offering. Subsequent to the Series D Common Share Financing in January 2011, the Qualified IPO is defined as a firm-commitment public offering of common shares of the Company in the United States that has been registered under the Securities Act and on a recognized securities exchange such as NASDAQ or the New York Stock Exchange, or in a similar public offering of common shares in a jurisdiction and on a recognized securities exchange outside of the United States, including without limitation, the Hong Kong Stock Exchange, provided that (a) the market capitalization of the Company upon completion of such initial public offering shall be no less than US$1,500,000 and such public offering and the aggregate proceeds (before deduction of underwriting discounts and registration expenses) is approved by majority of the Board of Directors (including the affirmative consent of the majority of the Series A Director, the Series B Director, the Series C Director and the Series D director), or (b) such public offering and the aggregate proceeds (before deduction of underwriting discounts and registration expenses) is approved by majority of the Board of Directors (including the affirmative consent of each of the Series A Director, the Series B Director, the Series C Director and the Series D Director, if applicable), and provided further that such public offering is made at an equivalent price and yields equivalent offering proceeds and there is regulatory approval for such offering. | ||||||||||||||||
On September 19, 2012, the board of directors of the Company resolved to approve to raise additional capital through an underwritten initial public offering of its shares in the United States of America as a Qualified IPO. | ||||||||||||||||
Upon the completion of the IPO on November 21, 2012, each Preferred Share was automatically converted into one Class B common share. As a result, 359,424,310 Class B common shares were issued, and the balance of Preferred Shares was transferred to Class B common shares and additional paid-in capital on the same day. | ||||||||||||||||
Redemption Right | ||||||||||||||||
As of December 31, 2010, at any time after the date that is the earlier of i) the date of the occurrence of a Default Redemption Event, and ii) five years following the Series C-1 original issue date and Series C-2 original issue date, at the election of the majority of Series C holders, the Company shall redeem all or any lesser portion of its then outstanding Preferred Shares. A Default Redemption Event shall be deemed to occur if the Company's corporate structure as a whole, including without limitation the VIE documents, is invalidated or otherwise challenged by any PRC governmental authority, court or other official governmental body as a result of the application of or interpretation of the PRC law. In connection with the Series D Common Share Financing in January 2011, the Default Redemption Event was removed and the redemption date was changed to any time after June 30, 2015. | ||||||||||||||||
The redemption date above is subject to postponement until the Company meets the financial thresholds of having at least US$3,000 of cash or cash equivalents on the balance sheet or the Company has generated over US$1,000 in free cash flows in the preceding twelve months. | ||||||||||||||||
The redemption price of Series A Preferred Shares is equal to (i) the fair market value of the Series A Preferred Shares as of the redemption date, or (ii) 150% of the original issue price of Series A Preferred Shares, plus all declared or accrued but unpaid dividends up until the date of redemption, plus an amount that would give the holders of the Series A Preferred Shares an internal rate of return of no less than 10% per annum. | ||||||||||||||||
The redemption price of Series B Preferred Shares is equal to (i) the fair market value of the Series B Preferred Shares as of the redemption date, or (ii) 100% original issue price of Series B Preferred Shares, plus all declared or accrued but unpaid dividends up until the date of redemption, plus an amount that would give the holders of the Preferred Shares an internal rate of return of no less than 10%. | ||||||||||||||||
The redemption price of Series C Preferred Shares is equal to (i) the fair market value of the Series C Preferred Shares as of the redemption date, or (ii) 100% original issue price of Series C-1 or C-2 Preferred Shares, plus all declared or accrued but unpaid dividends up until the date of redemption, plus an amount that would give the holders of the Series C-1 or C-2 Preferred Shares an internal rate of return of no less than 10% per annum. | ||||||||||||||||
Modification | ||||||||||||||||
Upon its issuance, Series A Preferred Shares were classified as permanent equity and were not redeemable. In association with the issuance of Series B Preferred Shares in August 2008, Series A Preferred Shares were granted redemption at the option of the holders and drag-along rights and accordingly were reclassified as mezzanine equity of the Company. The Company concluded that the addition of the redemption and drag-along rights is a modification of the terms of the Series A Preferred Shares. The incremental value received by the Series A Preferred Shareholders amounted to RMB916 which was deemed to be a wealth transfer between the preferred shareholders and the common shareholders and was charged to additional paid-in capital. | ||||||||||||||||
Upon its issuance, Series B Preferred Shares had a redemption right beginning on or after the seventh anniversary following the issuance of Series B Preferred Shares. In association of the issuance of Series C Preferred Shares, the redemption right for Series A and Series B Preferred Shares and drag along rights were amended. The Company concluded amendment of the redemption and drag-along rights is a modification of the terms of the Series A and Series B Preferred Shares. The incremental value received by Series A and Series B Preferred Shareholders amounted to RMB19 and RMB176, respectively, which were deemed to be a wealth transfer between the preferred shareholders and the common shareholders and were charged to additional paid-in capital. | ||||||||||||||||
Accretion (Decretion) | ||||||||||||||||
Due to the redemption features described above, the Company classified the Preferred Shares in the mezzanine equity section of the consolidated balance sheets. The Company recognized the changes in the redemption value immediately as they occurred and adjusted the carrying amount of the Preferred Shares to equal the redemption value at the end of each reporting period. The fair market values of the Preferred Shares as of December 31, 2010 and 2011 were greater than the redemption value as of December 31, 2009 and 2010, while the fair market value of the Preferred Shares prior to conversion on November 21, 2012 was lower than the redemption value as of December 31, 2011. As a result, the Company recorded accretion (decretion) to the redemption value immediately and adjusted the carrying amount of the instrument to equal to the redemption value at the end of each reporting period. The accretion was recorded against retained earnings, or in the absence of retained earnings, by charging against additional paid-in capital. Once additional paid-in capital has been exhausted, additional charges were recorded by increasing accumulated deficit. The decretion was recorded against the previous accretion originally recognized in retained earnings or additional paid-in capital, where applicable. | ||||||||||||||||
The following table sets forth the changes of each of the convertible redeemable preferred shares for years ended December 31, 2011, 2012 and 2013: | ||||||||||||||||
Series A Preferred Shares | ||||||||||||||||
For the year ended December 31, | ||||||||||||||||
2011 | 2012 | 2013 | ||||||||||||||
RMB | RMB | RMB | ||||||||||||||
Beginning balance | 846,752 | 935,013 | — | |||||||||||||
Accretion (decretion) to redemption value | 88,261 | (485,517 | ) | — | ||||||||||||
Conversion of convertible redeemable preferred shares into Class B common shares | — | (449,496 | ) | — | ||||||||||||
| | | | | | | | | | | ||||||
Ending balance | 935,013 | — | — | |||||||||||||
| | | | | | | | | | | ||||||
| | | | | | | | | | | ||||||
Series B Preferred Shares | ||||||||||||||||
For the year ended December 31, | ||||||||||||||||
2011 | 2012 | 2013 | ||||||||||||||
RMB | RMB | RMB | ||||||||||||||
Beginning balance | 639,799 | 703,901 | — | |||||||||||||
Accretion (decretion) to redemption value | 64,102 | (366,785 | ) | — | ||||||||||||
Conversion of convertible redeemable preferred shares into Class B common shares | — | (337,116 | ) | — | ||||||||||||
| | | | | | | | | | | ||||||
Ending balance | 703,901 | — | — | |||||||||||||
| | | | | | | | | | | ||||||
| | | | | | | | | | | ||||||
Series C Preferred Shares | ||||||||||||||||
For the year ended December 31, | ||||||||||||||||
2011 | 2012 | 2013 | ||||||||||||||
RMB | RMB | RMB | ||||||||||||||
Beginning balance | 770,720 | 842,020 | — | |||||||||||||
Accretion (decretion) to redeemable value | 71,300 | (441,573 | ) | — | ||||||||||||
Conversion of convertible redeemable preferred shares into Class B common shares | — | (400,447 | ) | — | ||||||||||||
| | | | | | | | | | | ||||||
Ending balance | 842,020 | — | — | |||||||||||||
| | | | | | | | | | | ||||||
| | | | | | | | | | | ||||||
Prior to the completion of the IPO, the Company engaged an independent valuation firm to assist them in determining the fair values of the preferred and common shares which were estimated as of the date of issuance and at each financial statement reporting date using the "Discounted Cash Flow Method" , the "Guideline Transaction Method" and the "Backsolve Method", where methodologies, approaches and assumptions are consistent with the current working draft of the American Institute of Certified Public Accountants practice aid Valuation of Privately Held Company Equity Securities Issued as Compensation. The Guideline Transaction Method is a form of market approach based on the enterprise value to revenue multiples of the Group's own equity transactions close to the valuation date. The Backsolve Method is a form of market approach to valuation that derives the implied equity value for one type of equity security (e.g. common equity) from a contemporaneous transaction involving another type of equity security (e.g., preferred share). The Discounted Cash Flow Method, a form of income approach, estimates the fair value based on projected cash flows at each of the valuation dates. The followings are assumptions in the Discounted Cash Flow Method: | ||||||||||||||||
December 31, 2011 | ||||||||||||||||
Risk-free interest rate | 2.53 | % | ||||||||||||||
Volatility | 66.1 | % | ||||||||||||||
Dividend yield | — | |||||||||||||||
Discount rate | 16 | % | ||||||||||||||
The Company estimated the risk-free interest rate based on yield-to-maturities in continuous compounding of the China Government Bond with the time to maturities similar to the Preferred Shares. The Company estimated volatility at the dates of appraisal based on average of historical volatilities of the comparable companies in the same industry. The Company has no history or expectation of paying dividend on the Preferred Shares. Discount rate is estimated by weighted average cost of capital as at each appraisal date. In addition to the above assumptions adopted, the Company's projections of future performance were also factored into the determination of the fair value of each Preferred Share. | ||||||||||||||||
Liquidity Preference | ||||||||||||||||
In the event of any liquidation, dissolution or winding up of the Company or any deemed liquidation event (e.g., change in control), the holders of Series B Preferred Shares and Series C Preferred Shares were entitled to receive an amount per share equal to 100% of the original issuance price plus all dividends accrued, or declared and unpaid. Series A Preferred Shares were entitled to receive an amount per share equal to 150% of the original issuance price plus all declared or accrued but unpaid dividends. | ||||||||||||||||
If the assets and funds distributed among the holders are insufficient to permit the payment of the full preferential amounts, then the holders of Series C Preferred Shares shall be entitled to be paid first, followed in sequence by Series B Preferred Shares, Series A Preferred Shares and common shares. After payment of the full amounts from above, the remaining assets of the Company available for distribution shall be distributed ratably among the holders of preferred shares and common shares in proportion to the number of outstanding shares held by each holder on an as converted basis. | ||||||||||||||||
Dividends | ||||||||||||||||
Each holder of Preferred Shares was entitled to receive dividends when and if declared by the Board of Directors of the Company. As long as the Preferred Shares were outstanding, the Company might not pay any dividend to common shareholders until all dividends declared and payable to the preferred shareholders had been paid. In the event the Company shall declare a dividend to the holders of common shares, then in each such case, the holders of the Preferred Shares shall be entitled to a proportionate share of such dividend on an as-converted basis. | ||||||||||||||||
Voting rights | ||||||||||||||||
Each Preferred Share conveys the right to the shareholder of one vote for each common share upon conversion. | ||||||||||||||||
Sharebased_compensation
Share-based compensation | 12 Months Ended | |||||||||||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||||||||||
Share-based compensation | ' | |||||||||||||||||||||||||||||||
Share-based compensation | ' | |||||||||||||||||||||||||||||||
19. Share-based compensation | ||||||||||||||||||||||||||||||||
(a) Share options | ||||||||||||||||||||||||||||||||
Pre-2009 Scheme Options | ||||||||||||||||||||||||||||||||
Grant of options | ||||||||||||||||||||||||||||||||
Before the adoption of the Employee Equity Incentive Scheme (the "2009 Incentive Scheme"), 12,705,700 and 8,499,050 share options were granted to employees through individually signed share option agreements, to acquire common shares of Duowan BVI on a one-to-one basis on January 1, 2008 and 2009 respectively. In addition, on January 1, 2008, 3,832,290 share options were granted to one non-employee for the provision of consulting services to the Group (collectively defined as "Pre-2009 Scheme Options"). | ||||||||||||||||||||||||||||||||
Vesting of options | ||||||||||||||||||||||||||||||||
These Pre-2009 Scheme Options will vest over a four years' service period, with 25% of the options vesting after the first anniversary of the vesting inception date and the remaining 75% in six equal installments over the following 36 months. The options may be exercised provided that both the service conditions and a performance condition are met. The performance condition is defined to be i) an initial public offering, ii) completion of a financing meeting certain criteria, iii) an internal reorganization, or iv) a voluntary winding up of Duowan BVI. The performance condition that is tied to completion of a financing fulfilling certain criteria was met in June 2008 or November 2009. | ||||||||||||||||||||||||||||||||
The following table summarizes the activities of the Pre-2009 Scheme Options for employees and non-employee for the years ended December 31, 2011, 2012 and 2013: | ||||||||||||||||||||||||||||||||
Number of | Weighted average | Weighted average | Aggregate intrinsic value | |||||||||||||||||||||||||||||
options | exercise price | remaining contractual life | (US$) | |||||||||||||||||||||||||||||
(US$) | (years) | |||||||||||||||||||||||||||||||
Outstanding, January 1, 2011 | 19,742,590 | 0.0056 | 7.39 | 18,372 | ||||||||||||||||||||||||||||
Exercised/Repurchased(1) | (1,853,055 | ) | 0.0061 | |||||||||||||||||||||||||||||
| | | | | | | | | | | | | | |||||||||||||||||||
Outstanding, December 31, 2011(2) | 17,889,535 | 0.0055 | 6.37 | 19,366 | ||||||||||||||||||||||||||||
Forfeited | (19,110 | ) | 0.0067 | 6.25 | ||||||||||||||||||||||||||||
| | | | | | | | | | | | | | |||||||||||||||||||
Outstanding, December 31, 2012 | 17,870,425 | 0.0055 | 5.37 | 12,642 | ||||||||||||||||||||||||||||
Exercised | (4,648,420 | ) | 0.0045 | 4.3 | ||||||||||||||||||||||||||||
| | | | | | | | | | | | | | |||||||||||||||||||
Outstanding, vested and exercisable December 31, 2013 | 13,222,005 | 0.0059 | 4.4 | 33,162 | ||||||||||||||||||||||||||||
| | | | | | | | | | | | | | |||||||||||||||||||
-1 | ||||||||||||||||||||||||||||||||
In connection with the Series D Common Share Financing (Note 17) in January 2011, certain employees and the non-employee were given the opportunity to cash-settle their vested options. The repurchase price of each vested option/share was the difference between the stated exercise price of the Pre-2009 Scheme Option and US$0.9777, which was the per share issuance price of common shares issued to the new investor. A total of 1,853,055 Pre-2009 Scheme Options were exercised/repurchased by Duowan BVI for cash consideration of RMB11,701. The underlying common shares were cancelled immediately after the repurchase (the "Second Repurchase"). Similar offer was made by Duowan BVI to the non-employee holding the Pre-2009 Scheme Options but that non-employee did not take up the offer. | ||||||||||||||||||||||||||||||||
-2 | ||||||||||||||||||||||||||||||||
On September 15, 2011, the board of directors of the Company resolved not to undertake any repurchases of vested or unvested share-based compensation awards, except under those conditions specified in the relevant award scheme and grant documents. In addition, any proposed repurchase of vested or unvested share-based compensation awards should be approved by the majority votes of the board of directors. Such intention of the Company was specifically communicated to all employees with or without the awards. All the employees with vested or unvested awards also confirmed such understanding by a written confirmation. Accordingly, the classification of the liability-classified awards changed back to be equity-classified, and the related liability had been reclassified to additional paid-in capital on the modification date. | ||||||||||||||||||||||||||||||||
Forfeitures are estimated at the time of grant. If necessary, forfeitures are revised in subsequent periods if actual forfeitures differ from those estimates. | ||||||||||||||||||||||||||||||||
The aggregate intrinsic value in the table above represents the difference between the Company's common shares as of December 31, 2011, 2012 and 2013 and the exercise price. | ||||||||||||||||||||||||||||||||
Prior to the completion of the IPO, the Binomial option pricing model is used to determine the fair value of the share options granted to employees and the non-employee. The fair values of share options granted or remeasured during the year ended December 31, 2011 was estimated using the following assumptions: | ||||||||||||||||||||||||||||||||
Pre-2009 Scheme Options granted to employees and a non-employee: | ||||||||||||||||||||||||||||||||
2011 | ||||||||||||||||||||||||||||||||
Risk-free interest rate(1) | 3.34%-4.01% | |||||||||||||||||||||||||||||||
Expected term(2) | 6-8 years | |||||||||||||||||||||||||||||||
Volatility rate(3) | 53.06%-55.34% | |||||||||||||||||||||||||||||||
Dividend yield(4) | — | |||||||||||||||||||||||||||||||
-1 | ||||||||||||||||||||||||||||||||
The risk-free interest rate of periods within the contractual life of the share option is based on the China Government Bond yield as at the valuation dates. | ||||||||||||||||||||||||||||||||
-2 | ||||||||||||||||||||||||||||||||
The expected term is the contract life of the option. | ||||||||||||||||||||||||||||||||
-3 | ||||||||||||||||||||||||||||||||
Expected volatility is estimated based on the average of historical volatilities of the comparable companies in the same industry as at the valuation dates. | ||||||||||||||||||||||||||||||||
-4 | ||||||||||||||||||||||||||||||||
Duowan BVI and the Company have no history or expectation of paying dividend on its common shares. The expected dividend yield was estimated based on the Company's expected dividend policy over the expected term of the option. | ||||||||||||||||||||||||||||||||
Upon the completion of the IPO, the fair value of share options granted to a non-employee with nil exercise price was assessed to be equivalent to the fair value of the Company's common share. These share options were remeasured at the stock price of the Company's common share as of December 31, 2012 and 2013. | ||||||||||||||||||||||||||||||||
The total intrinsic value of options exercised during the year ended December 31, 2011, 2012 and 2013 amounted to RMB11,912, nil and RMB64,195, respectively. For the years ended December 31, 2011, 2012 and 2013, the Company recorded share-based compensation of RMB25,683, share-based benefit of RMB89 and share-based compensation of RMB14,004, respectively, using the graded-vesting attribution method for employees and non-employee. | ||||||||||||||||||||||||||||||||
As of December 31, 2013, there was no unrecognized compensation cost and expense related to Pre-2009 Scheme Options granted to employees and non-employee. | ||||||||||||||||||||||||||||||||
(b) Restricted shares | ||||||||||||||||||||||||||||||||
Since January 1, 2010, Duowan BVI granted 61,250,677 restricted shares to employees and 100,000 restricted shares to a non-employee pursuant to the 2009 Incentive Scheme. As of December 31, 2012, the restricted shares granted to the non-employee were fully vested. | ||||||||||||||||||||||||||||||||
Vesting of restricted shares | ||||||||||||||||||||||||||||||||
The restricted shares have vesting conditions and will vest 50% after 24 months of the grant date and the remaining 50% will vest in two equal installments over the next 24 months. Under the restricted shares agreement, no shares may be sold or transferred prior to the occurrence of an exit event, as defined in the respective restricted share agreements as: i) a listing on any recognized stock exchange, ii) a sale by Duowan BVI of all or substantially all of its assets, iii) a sale of all of the issued capital of Duowan BVI, or iv) passing for court order of winding up of Duowan BVI. | ||||||||||||||||||||||||||||||||
If the employee terminates employment, the service vested portion of the restricted shares may be subject to: (i) repurchase (subject to Company's sole discretion) by Duowan BVI at fair value of common shares of Duowan BVI which is assessed by the Company with the assistance of an independent valuation firm; or (ii) be held by a person who is an existing employee of the Group and is designated by the leaving restricted share holder according to a properly signed escrow agreement to hold such shares for and on his/her behalf. If the leaving employee fails to deliver a properly signed agreement to Duowan BVI within 30 days from receipt of the notification from Duowan BVI, such service vested shares shall automatically lapse and expire. | ||||||||||||||||||||||||||||||||
The following table summarizes the restricted shares activity for the years ended December 31, 2011, 2012 and 2013: | ||||||||||||||||||||||||||||||||
Number of | Weighted average | |||||||||||||||||||||||||||||||
restricted shares | grant-date | |||||||||||||||||||||||||||||||
fair value | ||||||||||||||||||||||||||||||||
(US$) | ||||||||||||||||||||||||||||||||
Outstanding, January 1, 2011 | 48,486,036 | 0.2936 | ||||||||||||||||||||||||||||||
Granted | 10,846,800 | 0.9362 | ||||||||||||||||||||||||||||||
Forfeited | (2,726,024 | ) | 0.3917 | |||||||||||||||||||||||||||||
Vested | (13,321,711 | ) | 0.1636 | |||||||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||
Outstanding, December 31, 2011 | 43,285,101 | 0.4885 | ||||||||||||||||||||||||||||||
Forfeited | (3,673,580 | ) | 0.4945 | |||||||||||||||||||||||||||||
Vested | (21,380,720 | ) | 0.4864 | |||||||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||
Outstanding, December 31, 2012 | 18,230,801 | 0.4898 | ||||||||||||||||||||||||||||||
Forfeited | (1,581,789 | ) | 0.8726 | |||||||||||||||||||||||||||||
Vested | (11,975,287 | ) | 0.3906 | |||||||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||
Outstanding, December 31, 2013 | 4,673,725 | 0.6144 | ||||||||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||
Expected to vest at December 31, 2013 | 4,449,366 | 0.612 | ||||||||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||
Forfeitures are estimated at the time of grant. If necessary, forfeitures are revised in subsequent periods if actual forfeitures differ from those estimates. | ||||||||||||||||||||||||||||||||
For the years ended December 31, 2011, 2012 and 2013, the Company recorded share-based compensation of RMB57,805, RMB36,371 and RMB7,300, respectively, using the graded-vesting method for employees and non-employee. | ||||||||||||||||||||||||||||||||
As of December 31, 2013, total unrecognized compensation expense relating to the restricted shares was RMB5,873. The expense is expected to be recognized over a weighted average period of 0.54 years using the graded vesting attribution method. | ||||||||||||||||||||||||||||||||
(c) Share-based awards granted to CEO and Chairman of the Company | ||||||||||||||||||||||||||||||||
On February 23, 2010, the CEO and the Chairman of the Company, also directors and shareholders were granted 13,369,813 and 29,678,483 restricted shares, respectively. The Chairman's shares have a service condition that vest over a four year period (50% after the second anniversary and 25% each year thereafter). Both the CEO's and the Chairman's shares are subject to a performance condition which relates to the number of peak concurrent users on the YY Client. Such performance condition was met as of December 31, 2010. | ||||||||||||||||||||||||||||||||
Pursuant to the provisions stipulated in the grant document relating to these restricted shares grant, upon the occurrence of an Acceleration Event, the restricted shares granted to the Chairman would also become fully vested. An "Accelerated Event" is defined as (i) a Listing, (ii) a sale of all or substantially all of the issued share capital of Duowan BVI, (iii) a sale by Duowan BVI of all or substantially all of its assets, (iv) the passing of an effective resolution or the making of an order of a competent court for the winding up of Duowan BVI. | ||||||||||||||||||||||||||||||||
The following table summarizes information regarding the restricted shares granted to the CEO and the Chairman: | ||||||||||||||||||||||||||||||||
Number of | Weighted average | |||||||||||||||||||||||||||||||
restricted shares | grant-date | |||||||||||||||||||||||||||||||
fair value | ||||||||||||||||||||||||||||||||
(US$) | ||||||||||||||||||||||||||||||||
Outstanding, January 1, 2011 | 29,678,483 | 0.1875 | ||||||||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||
Outstanding, December 31, 2011 | 29,678,483 | 0.1875 | ||||||||||||||||||||||||||||||
Vested | (29,678,483 | ) | 0.1875 | |||||||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||
Outstanding, December 31, 2012 and 2013 | — | |||||||||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||
The fair value of the share-based awards above was determined at the respective grant dates by the Company with the assistance of an independent valuation firm. | ||||||||||||||||||||||||||||||||
The Company recognized these awards as employee share-based compensation awards using fair value of the awards on the grant date. As of December 31, 2010, the performance condition was met. The compensation expense for the CEO's restricted shares was fully recognized and the compensation expense for the Chairman's restricted shares is recognized over the requisite service period using the graded vesting method. Upon the completion of the IPO, the restricted shares granted to the Chairman were fully vested and all remaining compensation expenses were recognized immediately. | ||||||||||||||||||||||||||||||||
The total fair value of restricted shares vested during the year ended December 31, 2011, 2012 and 2013 amounted to nil, RMB35,924 and nil, respectively. | ||||||||||||||||||||||||||||||||
Share-based compensation expenses related to the awards granted to the CEO and Chairman of RMB14,143, RMB9,624 and nil were recognized in general and administrative expenses in the consolidated statements of operations for the years ended December 31, 2011, 2012 and 2013. | ||||||||||||||||||||||||||||||||
As of December 31, 2013, there was no unrecognized compensation cost and expense related to the restricted shares. | ||||||||||||||||||||||||||||||||
(d) Share-based awards for former NeoTasks employees | ||||||||||||||||||||||||||||||||
On December 5, 2008, Duowan BVI granted the two founders of NeoTasks, 26,873,070 warrants to acquire common shares of Duowan BVI in connection with the NeoTasks acquisition for post-combination services at an exercise price of US$0. In October 2009, the Company converted the warrants into restricted shares having the same rights and vesting conditions as the original warrant grants. Accordingly, no incremental charge was recognized in the conversion. The shares were issued to the holders and legally registered in July 2010. | ||||||||||||||||||||||||||||||||
The awards shall vest over the earlier of (i) a three-year period, with one-third of the shares vesting annually or (ii) upon any sale, merger, amalgamation, liquidation or listing of Duowan BVI or the sale by Duowan BVI of all or substantially all of its assets (the "Awards to NeoTasks Founders"). | ||||||||||||||||||||||||||||||||
The following table summarizes information regarding the share-based award granted: | ||||||||||||||||||||||||||||||||
Number of | ||||||||||||||||||||||||||||||||
restricted shares | ||||||||||||||||||||||||||||||||
Outstanding, January 1, 2011 | 8,957,690 | |||||||||||||||||||||||||||||||
Vested | (8,957,690 | ) | ||||||||||||||||||||||||||||||
| | | | | ||||||||||||||||||||||||||||
Outstanding, December 31, 2011, 2012 and 2013 | — | |||||||||||||||||||||||||||||||
| | | | | ||||||||||||||||||||||||||||
-1 | ||||||||||||||||||||||||||||||||
In connection with the First Repurchase occurred in November 2009, Duowan BVI repurchased a portion of their vested restricted shares by utilizing a portion of the proceeds obtained from the Series C preferred shares issuance. The negotiation and execution of the First Repurchase had formed an expectation to the holders of Awards to NeoTasks Founders that it was a practice of Duowan BVI to repurchase the vested restricted shares held by them. The Awards to NeoTasks Founders were deemed to be tainted and they were no longer equity-classified awards but liabilities-classified awards effective from November 2009. The awards would be re-measured at the end of each reporting period until either the repurchase obligation was extinguished or the awards holders were exposed to fluctuation of the market value of the shares for a period of at least six months, or the awards are settled, cancelled or expire unexercised. | ||||||||||||||||||||||||||||||||
The fair value of the restricted shares above was determined at the grant date. Effective from the re-designation of the award as liability-classified, it was re-measured at the end of each reporting date by the Company with the assistance of an independent valuation firm. The change in fair value was recognized in the consolidated statements of operations. After the award was changed back to equity-classified awards, it was measured based on the fair value of the awards on September 15, 2011, and the expenses to be recognized over the remaining requisite service period using the graded-vesting attribution method. | ||||||||||||||||||||||||||||||||
Share-based compensation expenses related to the above share-based award of RMB27,726 were recognized in general and administrative expenses in the consolidated statements of operations for the year ended December 31, 2011. | ||||||||||||||||||||||||||||||||
As of December 31, 2011, the compensation costs related to restricted shares for NeoTasks acquisition had been fully recognized. | ||||||||||||||||||||||||||||||||
(e) Restricted Share Units | ||||||||||||||||||||||||||||||||
On September 16, 2011, the Board of the Directors of the Company approved the 2011 Share Incentive Plan, which permits the grant of share options, restricted shares and restricted share units of up to 43,000,000 shares, to any qualified persons, as determined by the Board of the Directors of the Company. On the same date, the Company granted 9,097,000 restricted share units to employees pursuant to the 2011 Share Incentive Plan, that are subject to vesting over a four to five years' period. During the year ended December 31, 2012, the Company granted 18,295,221 restricted share units to employees pursuant to the 2011 Share Incentive Plan, which are subject to vesting over a two to four years' period. No restricted share units were granted to non-employees up to December 31, 2012. | ||||||||||||||||||||||||||||||||
In October 2012, the Board of Directors of the Company resolved that the maximum aggregate number of Class A common shares which may be issued pursuant to all awards under the 2011 Incentive Scheme shall be 43,000,000 plus an annual increase of 20,000,000 on the first day of each fiscal year, beginning from 2013, or such lesser amount of Class A common shares as determined by the Board of Directors of the Company. | ||||||||||||||||||||||||||||||||
During the year ended December 31, 2013, the Company granted 29,917,989 restricted share units to employees and 48,000 restricted share units to non-employee pursuant to the 2011 Share Incentive Plan, which are subject to vesting over a three to five years' period. | ||||||||||||||||||||||||||||||||
The following table summarizes the restricted share units activity for the years ended December 31, 2011, 2012 and 2013: | ||||||||||||||||||||||||||||||||
Number of | Weighted average | |||||||||||||||||||||||||||||||
restricted shares | grant-date | |||||||||||||||||||||||||||||||
fair value | ||||||||||||||||||||||||||||||||
(US$) | ||||||||||||||||||||||||||||||||
Outstanding, January 1, 2011 | — | |||||||||||||||||||||||||||||||
Granted | 9,097,000 | 1.063 | ||||||||||||||||||||||||||||||
Forfeited | (100,700 | ) | 1.063 | |||||||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||
Outstanding, December 31, 2011 | 8,996,300 | 1.063 | ||||||||||||||||||||||||||||||
Granted | 18,295,221 | 1.0324 | ||||||||||||||||||||||||||||||
Forfeited | (595,900 | ) | 1.0876 | |||||||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||
Outstanding, December 31, 2012 | 26,695,621 | 1.0415 | ||||||||||||||||||||||||||||||
Granted | 29,965,989 | 0.9338 | ||||||||||||||||||||||||||||||
Forfeited | (3,522,992 | ) | 1.0699 | |||||||||||||||||||||||||||||
Vested | (8,836,018 | ) | 1.0429 | |||||||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||
Outstanding, December 31, 2013 | 44,302,600 | 0.9639 | ||||||||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||
Expected to vest at December 31, 2013 | 41,581,339 | 0.9654 | ||||||||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||
For the years ended December 31, 2011, 2012 and 2013, the Company recorded share-based compensation of RMB9,644, RMB54,445 and RMB95,792, using the graded-vesting attribution method. | ||||||||||||||||||||||||||||||||
As of December 31, 2013, total unrecognized compensation expense relating to the restricted share units was RMB144,499. The expense is expected to be recognized over a weighted average period of 1.36 years using the graded-vesting attribution method. | ||||||||||||||||||||||||||||||||
(f) Movements of equity-classified and liability-classified awards | ||||||||||||||||||||||||||||||||
The table below shows the movements and details of various equity-classified and liability-classified awards granted by the Company to its employees and non-employee for the years ended December 31, 2011, 2012 and 2013: | ||||||||||||||||||||||||||||||||
Equity-classified Awards (RMB) | Liability-classified Awards (RMB) | |||||||||||||||||||||||||||||||
Pre-2009 | 2009 | 2011 | Share-based | Awards to | Sub-total | Pre-2009 | Awards to | Sub-total | Total | |||||||||||||||||||||||
Scheme | Incentive | Incentive | awards to CEO and Chairman | NeoTasks Founders | Scheme | NeoTasks Founders | ||||||||||||||||||||||||||
options | Scheme— | Scheme— | options | |||||||||||||||||||||||||||||
restricted | restricted | |||||||||||||||||||||||||||||||
shares | share units | |||||||||||||||||||||||||||||||
Balance as of January 1, 2011 | — | 24,525 | — | 30,808 | — | 55,333 | 109,035 | 94,089 | 203,124 | 258,457 | ||||||||||||||||||||||
Share-based compensation expenses | 2,219 | 57,805 | 9,644 | 14,143 | 3,359 | 87,170 | 23,464 | 24,367 | 47,831 | 135,001 | ||||||||||||||||||||||
Exercised/Repurchased | — | — | — | — | — | — | (11,701 | ) | — | (11,701 | ) | (11,701 | ) | |||||||||||||||||||
Reclassifications | ||||||||||||||||||||||||||||||||
—From liability-awards to common share* | — | — | — | — | — | — | — | (57,692 | ) | (57,692 | ) | (57,692 | ) | |||||||||||||||||||
—From liability-awards to equity awards** | 116,328 | — | — | — | 57,602 | 173,930 | (116,328 | ) | (57,602 | ) | (173,930 | ) | — | |||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | — | (4,470 | ) | (3,162 | ) | (7,632 | ) | (7,632 | ) | ||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance as of December 31, 2011 | 118,547 | 82,330 | 9,644 | 44,951 | 60,961 | 316,433 | — | — | — | 316,433 | ||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance as of January 1, 2012 | 118,547 | 82,330 | 9,644 | 44,951 | 60,961 | 316,433 | — | — | — | 316,433 | ||||||||||||||||||||||
Share-based compensation expenses | (89 | ) | 36,371 | 54,445 | 9,624 | — | 100,351 | — | — | — | 100,351 | |||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance as of December 31, 2012 | 118,458 | 118,701 | 64,089 | 54,575 | 60,961 | 416,784 | — | — | — | 416,784 | ||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance as of January 1, 2013 | 118,458 | 118,701 | 64,089 | 54,575 | 60,961 | 416,784 | — | — | — | 416,784 | ||||||||||||||||||||||
Share-based compensation expenses | 14,004 | 7,300 | 95,792 | — | — | 117,096 | — | — | — | 117,096 | ||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance as of December 31, 2013 | 132,462 | 126,001 | 159,881 | 54,575 | 60,961 | 533,880 | — | — | — | 533,880 | ||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
* | ||||||||||||||||||||||||||||||||
During the year ended December 31, 2011, the restricted shares to NeoTasks founders were held by NeoTasks Founders for more than six months, therefore, the related awards amounting to RMB57,692 were reclassified back to common share. | ||||||||||||||||||||||||||||||||
** | ||||||||||||||||||||||||||||||||
As detailed in Note 19(a) and (d), the share options and the restricted shares to NeoTasks founders were reclassified from liability-classified awards to equity-classified awards in September 2011, accordingly. | ||||||||||||||||||||||||||||||||
Basic_and_diluted_net_loss_inc
Basic and diluted net (loss) income per share | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Basic and diluted net (loss) income per share | ' | ||||||||||
Basic and diluted net (loss) income per share | ' | ||||||||||
20. Basic and diluted net (loss) income per share | |||||||||||
Basic and diluted net (loss) income per share for the years ended December 31, 2011, 2012 and 2013 are calculated as follows: | |||||||||||
For the year ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
RMB | RMB | RMB | |||||||||
Numerator: | |||||||||||
Net (loss) income attributable to the Company | (83,156 | ) | 89,177 | 477,727 | |||||||
(Accretion) decretion to convertible redeemable preferred shares redemption value | (223,663 | ) | 1,293,875 | — | |||||||
Allocation of net income to participating preferred shareholders | — | (478,754 | ) | — | |||||||
| | | | | | | | | | | |
Numerator of basic net (loss) income per share | (306,819 | ) | 904,298 | 477,727 | |||||||
Dilutive effect of preferred shares | — | (815,121 | ) | — | |||||||
| | | | | | | | | | | |
Numerator for diluted (loss) income per share | (306,819 | ) | 89,177 | 477,727 | |||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Denominator: | |||||||||||
Denominator for basic calculation—weighted average number of Class A and Class B common shares outstanding | 485,883,845 | 604,703,810 | 1,122,475,688 | ||||||||
Dilutive effect of preferred shares | — | 320,142,965 | — | ||||||||
Dilutive effect of share options | — | 17,782,885 | 16,362,048 | ||||||||
Dilutive effect of restricted shares | — | 30,594,877 | 14,400,670 | ||||||||
Dilutive effect of restricted share units | — | 4,802,491 | 27,882,891 | ||||||||
Dilutive effect of share-based awards granted to CEO and Chairman | — | 14,441,808 | — | ||||||||
| | | | | | | | | | | |
Denominator for diluted calculation | 485,883,845 | 992,468,836 | 1,181,121,297 | ||||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Basic net (loss) income per Class A and Class B common share | (0.63 | ) | 1.5 | 0.43 | |||||||
Diluted net (loss) income per Class A and Class B common share | (0.63 | ) | 0.09 | 0.4 | |||||||
Basic net (loss) income per ADS* | (12.63 | ) | 29.91 | 8.51 | |||||||
Diluted net (loss) income per ADS* | (12.63 | ) | 1.8 | 8.09 | |||||||
* | |||||||||||
The Company was listed on November 21, 2012 with issuance of a total of 8,970,000 ADS at a public offering price of US$10.50 per ADS. Each ADS represents 20 Class A common shares. The net (loss) income per ADS for the years ended December 31, 2011, 2012 and 2013 were calculated using the same conversion ratio assuming the ADSs had been in existence during these periods. | |||||||||||
The Company's preferred shares are participating securities and as such would be included in the calculation of basic earnings per share under the two-class method. According to the contractual terms of the preferred shares, the preferred shares do not have a contractual obligation to share in the losses of the Company. Therefore, no loss was allocated to the preferred shares in the computation of basic net loss per share for the year ended December 31, 2011. Net income was allocated to the preferred shares in the computation of basic net income per share for the year ended December 31, 2012. | |||||||||||
The Preferred Shares, share-based awards for former NeoTasks employees, the share-based awards granted to the CEO and Chairman, share option, restricted shares, restricted share units and warrants to an independent institutional investor were excluded from the computation of diluted net loss per common share for the year ended December 31, 2011 because including them would have had an anti-dilutive effect. The following table summarizes information regarding weighted average of common shares equivalents for the year ended December 31, 2011: | |||||||||||
For the year ended | |||||||||||
December 31, 2011 | |||||||||||
Preferred shares—weighted average | 359,424,310 | ||||||||||
Share-based awards for NeoTasks acquisition—weighted average | 8,319,608 | ||||||||||
Share-based awards granted to CEO and Chairman—weighted average | 29,678,483 | ||||||||||
Share options—weighted average | 18,488,604 | ||||||||||
Restricted shares—weighted average | 54,045,124 | ||||||||||
Restricted share units—weighted average | 2,625,039 | ||||||||||
Warrants to an independent institutional investor—weighted average | 12,609,970 |
Related_party_transactions
Related party transactions | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Related party transactions | ' | ||||||||||
Related party transactions | ' | ||||||||||
21. Related party transactions | |||||||||||
The table below sets forth the related parties and their relationships with the Group: | |||||||||||
Related Party | Relationship with the Group | ||||||||||
Zhuhai Daren Computer Technology Company Limited ("Zhuhai Daren") | Equity investment | ||||||||||
Guangzhou Shanghang Information Technical Co., Ltd. ("Shanghang") | Significant influence exercised by the Chairman | ||||||||||
Kingsoft Corporation ("Kingsoft") | Significant influence exercised by the Chairman | ||||||||||
Xiaomi Corporation ("Xiaomi") | Significant influence exercised by the Chairman | ||||||||||
Zhuhai Lequ Technology Co., Ltd. ("Zhuhai Lequ") | Equity investment | ||||||||||
Agora, Inc.(1) | Controlled by the director and the chairman of technology committee of the Group | ||||||||||
-1 | |||||||||||
In December 2013, the Group made a minority interest investment to form a new company, Agora Inc., with the director and the chairman of technology committee of the Group and other strategic investors. | |||||||||||
During the years ended December 31, 2011, 2012 and 2013, significant related party transactions were as follows: | |||||||||||
For the year ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
RMB | RMB | RMB | |||||||||
Online games revenue sharing from Zhuhai Daren | 4,451 | 7,547 | 24,452 | ||||||||
Bandwidth service provided by Shanghang | 21,985 | 11,776 | 21,272 | ||||||||
Purchase of intangible assets from Kingsoft | — | — | 6,010 | ||||||||
Online games revenue sharing from Zhuhai Lequ | — | — | 5,076 | ||||||||
Advertising revenue from Xiaomi | — | — | 1,154 | ||||||||
Repayment of interest-free loan from Zhuhai Lequ | — | 500 | 1,000 | ||||||||
Membership subscription fee revenue from Xiaomi | — | 227 | — | ||||||||
Interest-free loan to Zhuhai Daren | 500 | — | — | ||||||||
Repayment of interest-free loan from Zhuhai Daren | — | 2,000 | — | ||||||||
Interest-free loan to Zhuhai Lequ | — | 1,200 | — | ||||||||
Disposal of a cost investment to the Chairman and Co-founder, who is also a director of the Company | — | 1,000 | — | ||||||||
Disposal of an equity investment to Xiaomi | — | 2,000 | — | ||||||||
As of December 31, 2012 and 2013, the amounts due from/to related parties were as follows: | |||||||||||
December 31, | |||||||||||
2012 | 2013 | ||||||||||
RMB | RMB | ||||||||||
Amount due from a related party | |||||||||||
Other receivables from Zhuhai Lequ | 1,073 | 73 | |||||||||
| | | | | | | | ||||
Total | 1,073 | 73 | |||||||||
| | | | | | | | ||||
| | | | | | | | ||||
Amounts due to related parties | |||||||||||
Accounts payable to Zhuhai Daren | 2,362 | 1,479 | |||||||||
Other payables to Shanghang | 242 | 822 | |||||||||
Accounts payable to Zhuhai Lequ | — | 339 | |||||||||
| | | | | | | | ||||
Total | 2,604 | 2,640 | |||||||||
| | | | | | | | ||||
| | | | | | | | ||||
The other receivables/payables from/to related parties are unsecured, interest-free and payable on demand. | |||||||||||
Fair_value_measurements
Fair value measurements | 12 Months Ended |
Dec. 31, 2013 | |
Fair value measurements | ' |
Fair value measurements | ' |
22. Fair value measurements | |
Fair value reflects the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the assets or liabilities. | |
The Group applies a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. This guidance specifies a hierarchy of valuation techniques, which is based on whether the inputs into the valuation technique are observable or unobservable. The hierarchy is as follows: | |
Level 1—Valuation techniques in which all significant inputs are unadjusted quoted prices from active markets for assets or liabilities that are identical to the assets or liabilities being measured. | |
Level 2—Valuation techniques in which significant inputs include quoted prices from active markets for assets or liabilities that are similar to the assets or liabilities being measured and/or quoted prices for assets or liabilities that are identical or similar to the assets or liabilities being measured from markets that are not active. Also, model-derived valuations in which all significant inputs and significant value drivers are observable in active markets are Level 2 valuation techniques. | |
Level 3—Valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are valuation technique inputs that reflect the Group's own assumptions about the assumptions that market participants would use in pricing an asset or liability. | |
The fair value guidance describes three main approaches to measure 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. | |
When available, the Group uses quoted market prices to determine the fair value of an asset or liability. If quoted market prices are not available, the Group will measure fair value using valuation techniques that use, when possible, current market-based or independently sourced market parameters, such as interest rates and currency rates. The Group did not have any financial instruments that were required to be measured at fair value on a recurring basis as of December 31, 2012 and 2013. | |
The Group's financial instruments consist principally of cash, short-term deposits, accounts receivable, amounts due to/from related parties, accounts payable and certain accrued expenses. The recorded values of cash, accounts receivable, amounts due to/from related parties, accounts payable and certain accrued expenses are recorded at cost which approximates fair value. | |
Commitments_and_contingencies
Commitments and contingencies | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and contingencies | ' | ||||
Commitments and contingencies | ' | ||||
23. Commitments and contingencies | |||||
(a) Operating lease commitments | |||||
The Group leases facilities in the PRC under non-cancellable operating leases expiring on different dates. Payments under operating leases are expensed on a straight-line basis over the periods of the respective leases. | |||||
Total office rental expenses under all operating leases were RMB6,361, RMB16,670 and RMB19,423 for the years ended December 31, 2011, 2012 and 2013, respectively. | |||||
As of December 31, 2013, future minimum payments under non-cancellable operating leases consist of the following: | |||||
Office rental | |||||
RMB | |||||
2014 | 16,919 | ||||
2015 | 15,809 | ||||
| | | | | |
32,728 | |||||
| | | | | |
| | | | | |
(b) Capital commitment | |||||
As of December 31, 2013, the Group did not have any capital commitment. | |||||
(c) Litigation | |||||
The Group is not currently a party to, nor is aware of, any legal proceeding, investigation or claim which individually or in the aggregate is likely to have a material adverse effect on the Group's business, financial condition, results or operations, or cash flows. The Group did not record any legal contingencies as of December 31, 2013. | |||||
Subsequent_events
Subsequent events | 12 Months Ended |
Dec. 31, 2013 | |
Subsequent events | ' |
Subsequent events | ' |
24. Subsequent events | |
In February 2014, The Group has initiated a lawsuit against one of the Group's advertisement agents, claiming for the unpaid advertisement fee and liquidated damages for late payment. Management believed that the lawsuit did not have significant impact to the Group's financial statements as of December 31, 2013. | |
Restricted_net_assets
Restricted net assets | 12 Months Ended |
Dec. 31, 2013 | |
Restricted net assets | ' |
Restricted net assets | ' |
25. Restricted net assets | |
Relevant PRC laws and regulations permit payments of dividends by the Group's subsidiaries and the VIEs and VIE's subsidiary incorporated in the PRC only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. In addition, the Company's subsidiaries and the VIEs and VIE's subsidiary in the PRC are required to annually appropriate 10% of their net after-tax income to the statutory general reserve fund prior to payment of any dividends, unless such reserve funds have reached 50% of their respective registered capital. As a result of these and other restrictions under PRC laws and regulations, the Group's subsidiaries and the VIEs and VIE's subsidiary incorporated in the PRC are restricted in their ability to transfer a portion of their net assets to the Company either in the form of dividends, loans or advances, which restricted portion as calculated under US GAAP amounted to approximately RMB311,399 and RMB303,366 as of December 31, 2012 and 2013, respectively. There are no differences between US GAAP and PRC accounting standards in connection with the reported net assets of the legally owned subsidiaries in the PRC and the VIEs and VIE's subsidiary. Even though the Company currently does not require any such dividends, loans or advances from the PRC entities for working capital and other funding purposes, the Company may in the future require additional cash resources from them due to changes in business conditions, to fund future acquisitions and development, or merely to declare and pay | |
dividends or distributions to our shareholders. Except for the above, there is no other restriction on use of proceeds generated by the Group's subsidiaries and the VIEs and VIE's subsidiary to satisfy any obligations of the Company. | |
The Company performed a test on the restricted net assets of consolidated subsidiaries and VIEs in accordance with Securities and Exchange Commission Regulation S-X Rule 4-08 (e) (3), "General Notes to Financial Statements" and concluded that the restricted net assets did not exceed 25% of the consolidated net assets of the Company as of December 31, 2013 and the condensed financial information of the Company are not required to be presented. | |
Principal_accounting_policies_
Principal accounting policies (Policies) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Principal accounting policies | ' | ||||
Basis of presentation | ' | ||||
(a) Basis of presentation | |||||
The consolidated financial statements have been prepared on a historical cost basis to reflect the financial position and results of operations of the Group in accordance with the US GAAP. | |||||
Consolidation | ' | ||||
(b) Consolidation | |||||
The Group's consolidated financial statements include the financial statements of the Company, its subsidiaries, and its VIEs and VIE's subsidiary for which the Company or its subsidiary is the primary beneficiary. All transactions and balances among the Company, its subsidiaries, its VIEs and VIE's subsidiary have been eliminated upon consolidation. | |||||
The First Reorganization, the Second Reorganization and the Third Reorganization, as described in Note 1 have been accounted for at historical costs. The assets and liabilities of Guangzhou Huaduo and its subsidiary, and Beijing Tuda are consolidated in the Company's financial statements at carryover basis. The accompanying consolidated statements of operations and comprehensive (loss) income and consolidated statements of cash flows include the results of operations and cash flows of the Group as if the current group structure had been in existence throughout the years ended December 31, 2011, 2012 and 2013, or since their respective dates of incorporation. The accompanying consolidated balance sheets have been prepared to present the financial position of the Group as of December 31, 2012 and 2013 as if the current group structure had been in existence as of these dates. | |||||
A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting powers; or has the power to appoint or remove the majority of the members of the board of directors; or to cast a majority of votes at the meeting of directors; or has the power to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders. | |||||
A VIE is an entity in which the Company, or its subsidiary, through contractual agreements, bears the risks of, and enjoys the rewards normally associated with ownership of the entity, and therefore the Company or its subsidiary is the primary beneficiary of the entity. In determining whether the Company or its subsidiaries are the primary beneficiary, the Company considered whether it has the power to direct activities that are significant to the VIEs economic performance, and also the Company's obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. Beijing Huanju Shidai and ultimately the Company holds all the variable interests of the VIEs and has been determined to be the primary beneficiary of the VIEs. | |||||
Use of estimates | ' | ||||
(c) Use of estimates | |||||
The preparation of the Company's consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from such estimates. The Company believes that lives of the game and lives of the user relationship related to online games revenue, the determination of estimated selling prices of multiple element revenue contracts, sales rebate to advertising agencies, income taxes, allowances for doubtful accounts, determination of share-based compensation expenses, impairment assessment of goodwill, long-lived assets and intangible assets, represent critical accounting policies that reflect more significant judgments and estimates used in the preparation of its consolidated financial statements. | |||||
Management bases the estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from these estimates. | |||||
Foreign currency translation | ' | ||||
(d) Foreign currency translation | |||||
The Group uses Renminbi ("RMB") as its reporting currency. The functional currency of the Company and its subsidiaries incorporated in the Cayman Islands, British Virgin Islands, and Hong Kong is United States dollar ("US$"), while the functional currency of the other entities, VIEs and VIE's subsidiary in the Group is RMB, which is their respective local currency. In the consolidated financial statements, the financial information of the Company and its subsidiaries, which use US$ as their functional currency, have been translated into RMB. Assets and liabilities are translated at the exchange rates on the balance sheet date, equity amounts are translated at historical exchange rates, and revenues, expenses, gains, and losses are translated using the average exchange rate for the period. Translation adjustments arising from these are reported as foreign currency translation adjustments and are shown as a component of other comprehensive income or loss in the statement of operations and comprehensive (loss) income. | |||||
Foreign currency transactions denominated in currencies other than functional currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are remeasured at the applicable rates of exchange in effect at that date. Foreign exchange gains and losses resulting from the settlement of such transactions and from remeasurement at year-end are recognized in foreign currency exchange gains (losses), net in the consolidated statement of operations. | |||||
Convenience translation | ' | ||||
(e) Convenience translation | |||||
Translations of amounts from RMB into US$ for the convenience of the reader were calculated at the noon buying rate of US$1.00 =MB6.0537 on December 31, 2013 as set forth in the H.10 statistical release of the U.S. Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted into US$ at such rate. | |||||
Fair value of financial instruments | ' | ||||
(f) Fair value of financial instruments | |||||
The Group's financial instruments consist principally of cash and cash equivalents, short-term deposits, accounts receivable, other receivables, amounts due from (to) related parties, accounts payable and other payables. The carrying values of these balances approximate their fair values due to the current and short-term nature of these balances. | |||||
Cash and cash equivalents | ' | ||||
(g) Cash and cash equivalents | |||||
Cash includes currency on hand and deposits held by financial institutions that can be added to or withdrawn without limitation. Cash equivalents represent short-term and highly liquid investments placed with banks, which have both of the following characteristics: | |||||
i) | |||||
Readily convertible to known amounts of cash throughout the maturity period; | |||||
ii) | |||||
So near their maturity that they present insignificant risk of changes in value because of changes in interest rates. | |||||
Short-term deposits | ' | ||||
(h) Short-term deposits | |||||
Short-term deposits represent time deposits placed with banks with original maturities of less than one year. Interest earned is recorded as interest income in the consolidated statements of operations during the periods presented. | |||||
Accounts receivable, net | ' | ||||
(i) Accounts receivable, net | |||||
Accounts receivable are presented net of allowance for doubtful accounts. The Group uses specific identification in providing for bad debts when facts and circumstances indicate that collection is doubtful and a loss is probable and estimable. If the financial conditions of its customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowance may be required. | |||||
The Company reviews on a periodic basis for doubtful accounts based on historical experience and information available. Additionally, the Company makes specific bad debt provisions based on (i) its specific assessment of the collectability of all significant accounts; and (ii) any specific knowledge the Company has acquired that might indicate that an account is uncollectible. The facts and circumstances of each account may require the Company to use substantial judgment in assessing its collectability. | |||||
Equity investment | ' | ||||
(j) Equity investment | |||||
The equity investment is comprised of investments in privately-held companies. The Group accounts for its equity investment over which it has significant influence but does not own a majority equity interest or otherwise control using the equity method. The Group assesses its equity investment for other-than-temporary impairment by considering factors including, but not limited to, current economic and market conditions, operating performance of the companies, including current earnings trends and undiscounted cash flows, and other company-specific information. The fair value determination, particularly for investment in privately-held companies, requires judgment to determine appropriate estimates and assumptions. Changes in these estimates and assumptions could affect the calculation of the fair value of the investment and determination of whether any identified impairment is other-than-temporary. | |||||
Cost investment | ' | ||||
(k) Cost investment | |||||
The cost investment is comprised of investments in privately-held companies. The Group accounts for cost investment which has no readily determinable fair value using the cost method. Under the cost method, the investment is measured initially at cost. The investment carried at cost should recognize income when dividends are received from the distribution of the investee's earnings. The Group periodically evaluates the carrying value of investments accounted for under the cost method of accounting and any impairment is included in the consolidated statements of operations. | |||||
Property and equipment | ' | ||||
(l) Property and equipment | |||||
Property and equipment are stated at historical cost less accumulated depreciation and impairment loss, if any. Depreciation is calculated using the straight-line method over their estimated useful lives. Residual rate is determined based on the economic value of the equipment at the end of the estimated useful lives as a percentage of the original cost. | |||||
Estimated useful lives | Residual rate | ||||
Servers, computers and equipment | 3 years | 0%-5% | |||
Furniture, fixture and office equipment | 5 years | 0%-5% | |||
Motor vehicles | 4 years | 5% | |||
Leasehold improvement | Shorter of lease term or 5 years | — | |||
Expenditures for maintenance and repairs are expensed as incurred. The gain or loss on the disposal of property and equipment is the difference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated statements of operations. | |||||
All direct and indirect costs that are related to the construction of property and equipment and incurred before the assets are ready for their intended use are capitalized as construction in progress. Construction in progress is transferred to specific property and equipment items and depreciation of these assets commences when they are ready for their intended use. | |||||
Business combinations | ' | ||||
(m) Business combinations | |||||
The Group accounts for acquisitions of entities that include inputs and processes and have the ability to create outputs as business combinations. The Group allocates the purchase price of the acquisition to the tangible assets, liabilities, and identifiable intangible assets acquired based on their estimated fair values. The excess of the purchase price over those fair values is recorded as goodwill. Acquisition-related costs generally are expensed as incurred. | |||||
Intangible assets, net | ' | ||||
(n) Intangible assets, net | |||||
Intangible assets mainly consist of software and domain names purchased from third parties. Identifiable intangible assets are carried at acquisition cost less accumulated amortization and impairment loss, if any. Finite-lived intangible assets are tested for impairment if impairment indicators arise. Amortization of finite-lived intangible assets is computed using the straight-line method over the following estimated useful lives, which are as follows: | |||||
Estimated useful lives | |||||
Software | 3-5 years | ||||
Technology | 5 years | ||||
Domain name | 15 years | ||||
Impairment of long-lived assets | ' | ||||
(o) Impairment of long-lived assets | |||||
For other long-lived assets including amortizable intangible assets and property and equipment, the Group evaluates for impairment whenever events or changes (triggering events) indicate that the carrying amount of an asset may no longer be recoverable. The Group assesses the recoverability of the long-lived assets by comparing the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to receive from use of the assets and their eventual disposition. Such assets are considered to be impaired if the sum of the expected undiscounted cash flows is less than the carrying amount of the assets. The impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. | |||||
Goodwill | ' | ||||
(p) Goodwill | |||||
Goodwill represents the excess of the purchase price over the amounts assigned to the fair value of the assets acquired and the liabilities assumed of an acquired business. | |||||
Annual test for impairment of goodwill | ' | ||||
(q) Annual test for impairment of goodwill | |||||
Goodwill assessment for impairment is performed on at least an annual basis on October 1 or whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. The Group performs a two-step goodwill impairment test. The first step compares the fair values of each reporting unit to its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill is not considered impaired and the second step will not be required. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of the affected reporting unit's goodwill to the carrying value of that goodwill. The implied fair value of goodwill is determined in a manner similar to accounting for a business combination with the allocation of the assessed fair value determined in the first step to the assets and liabilities of the reporting unit. The excess of the fair value of the reporting unit over the amounts assigned to the assets and liabilities is the implied fair value of goodwill. This allocation process is only performed for purposes of evaluating goodwill impairment and does not result in an entry to adjust the value of any assets or liabilities. An impairment loss is recognized for any excess in the carrying value of goodwill over the implied fair value of goodwill. The judgment in estimating the fair value of reporting units includes estimating future cash flows, determining appropriate discount rates and making other assumptions. Changes in these estimates and assumptions could materially affect the determination of the fair value of each reporting unit. | |||||
No goodwill impairment losses were recognized for the years ended December 31, 2011, 2012 and 2013. | |||||
Operating leases | ' | ||||
(r) Operating leases | |||||
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating lease are charged to the consolidated statements of operations on a straight-line basis over the period of the lease. | |||||
Revenue recognition | ' | ||||
(s) Revenue recognition | |||||
The Group generates revenues from internet value-added services ("IVAS") and online advertising. Revenues from IVAS are generated from online music and entertainment, online games, membership subscription fees and other IVAS. Online advertising revenues are primarily generated from sales of different forms of advertising on the Group's platform. Revenue is recognized when persuasive evidence of an arrangement exists, service has been rendered, the price is fixed or determinable and collection is reasonably assured. Revenue is deferred until these criteria are met as described below. | |||||
(i) | |||||
Internet value-added services | |||||
The Group operates a virtual currency system, under which, the users can directly purchase virtual currency, virtual items on YY Client's online community channels or pay membership subscription fees via online payment systems provided by third parties including payments using mobile phone, internet debit/credit card payment and other third party payment systems. The virtual currency can be converted into game tokens that can be used to purchase virtual items in online games (both developed by third parties and self-developed), or used directly to purchase virtual items on YY Client's online community channels or used to pay membership subscription fees. Virtual currency sold but not yet consumed by the purchasers is recorded as "Advances from customers" and upon conversion or being used, is recognized as revenue according to the respective prescribed revenue recognition policies addressed below: | |||||
-1 | |||||
Online music and entertainment revenue | |||||
The Group creates and offers virtual items to be used by users on online music and entertainment channels, which the Group operates and maintains. The virtual items are offered free of charge or sold to users at different specified prices as pre-determined by the Company. Online music and entertainment revenue consists of sales of virtual items. Users purchase consumable virtual items from the Group and present them to performers to show support for their favorite performers or time-based virtual items, which provide users with recognized status, such as priority speaking rights or special symbols on the music channels for a specific period of time. In order to attract user traffic, the Group shares with certain popular performers and channel owners, who have entered into revenue sharing arrangements with the Group, a portion of the revenues the Group derives from such in-channel virtual item sales on online music and entertainment channels, which the Group accounts for as cost of revenues. Performers and channel owners, who do not have revenue sharing arrangements with the Group, are not entitled to share any revenue derived from the virtual items sold. The Group does not recognize any revenue from offering free virtual items nor share any revenue with performers or channel owners when free virtual items are presented to performers by the users. Accordingly, online music and entertainment revenue is recognized for the sale of virtual items sold in online music and entertainment channels immediately if the virtual item is a consumable or, in the case of time-based virtual items, recognized ratably over the period each virtual item is made available to the user, which does not exceed one year. The Group does not have further obligations to the user after the virtual items are consumed. Virtual items may be sold individually or bundled into one arrangement. When the Group's users purchase multiple virtual items bundled within the same arrangement, the Group evaluates such arrangements under ASC 605-25 Multiple-Element Arrangements. The Group identifies individual elements under the arrangement and determines if such elements meet the criteria to be accounted for as separate units of accounting. The Group allocates the arrangement consideration to the separate units of accounting based on their relative selling price. The following hierarchy has been followed when determining the relative selling price for each element: (1) vendor specific objective evidence ("VSOE"), (2) third party evidence ("TPE"), and (3) best estimate of selling price ("BESP"). Given that the VSOE of the selling price cannot be determined, the Group has adopted a policy to allocate the consideration of the whole arrangement to different virtual item elements based on the TPE of selling price or the BESP for each virtual item element. The Group determines the fair values of virtual items sold in a bundle based on similar products sold separately on the YY platform based on the TPE of the selling price and determines the fair values of virtual items without similar products sold separately on the YY platform based on the BESP. The BESP is generally based on the selling prices of the various elements of a similar nature when they are sold to users on a stand-alone basis. The BESP may also be based on an estimated stand-alone pricing when the element has not previously been sold on a stand-alone basis. | |||||
These estimates are generally determined based on pricing strategies, market factors and strategic objectives. The Group recognizes revenue for each virtual item element in accordance with the applicable revenue recognition method. | |||||
-2 | |||||
Online games revenue | |||||
The Group generates revenues from offering virtual items in online games developed by third parties or the Group itself to gaming players. Historically, the majority of online games revenues for the three years ended December 31, 2011, 2012 and 2013 were derived from third parties developed games. | |||||
Users play games through the Group's platform free of charge and are charged for purchases of virtual items including consumable and perpetual items, which can be utilized in the online games to enhance their game-playing experience. Consumable items represent virtual items that can be consumed by a specific user within a specified period of time. Perpetual items represent virtual items that are accessible to the users' account over the life of the online games. | |||||
The Group recognizes revenue when recognition criteria defined under US GAAP are satisfied. For purposes of determining when the service has been provided to the paying player, the Group has determined that an implied obligation exists to the paying player to continue providing access to the games such that the users can utilize the virtual items purchased by game tokens. Game players need to log on and access the games through the Group's platform because their game tokens, virtual items, and game history are specific to the Group's game accounts and non-transferable to other platforms. To purchase in-game virtual items, players can either charge their game accounts by purchasing game tokens or virtual currency from the Group's platform, which are convertible into game tokens based on a predetermined exchange rate agreed among the Group and the relevant game developers. | |||||
The proceeds from the purchase of the Group's virtual currency is recorded as "advances from customers", representing prepayments received from users in the form of the Group's virtual currency not yet converted into game specific tokens. Upon the conversion into a game token from the Group's virtual currency or upon the direct purchase of a game token, whichever is applicable, the proceeds will be shared between the Group and the relevant game developer based on a predetermined contractual ratio. Game tokens are non-refundable and non-exchangeable among different games. The Group's portion, net of the game developer's entitled consideration, is recorded as deferred revenue and amortized according to the prescribed revenue recognition policies described below. Users typically do not convert the virtual currency into game tokens or purchase the game tokens unless they plan to purchase in-game virtual items soon. | |||||
– | |||||
Third party developed online games | |||||
Pursuant to contracts signed between the Group and the respective game developers, revenues from the sale or conversion of game tokens to be used for the purchase of in-game virtual items from online games developed by third parties are shared between the Group and the game developers based on a pre-agreed ratio for each game. These revenue-sharing contracts typically last one to two years. | |||||
The third party developed games are primarily under non-exclusive licensing contracts, maintained and updated by the game developers. The Group views the game developers to be the Group's customers and considers the Group's responsibilities under the Group's agreements with the game developers to offer certain standard promotions that include providing access to the platform, announcing the new games to users on the platform, and occasional advertising on the YY platform. The determination of whether to record these revenues using gross or net method is based on an assessment of various factors. The primary factors are whether the Group is acting as the principal in offering services to the game players or as agent in the transaction, and the specific requirement of each contract. The Group determined that for third party developed games, the third party game developers are the principal given the game developers design and develop the web-game services offered, have reasonable latitude to establish prices of game tokens, and are responsible for maintaining and upgrading the game contents and virtual items. Accordingly, the Group records online games revenue, net of the pre-agreed portion of sharing of the revenues with the game developers. | |||||
Given that third party developed games are managed and administered by the third party game developers, the Group does not have access to the data on the consumption details such as when the game token is spent on the virtual items or the types of virtual items (consumable or perpetual items) purchased by each individual game player. However, the Group maintains historical data on timing of the conversion of its virtual currency into game specific tokens and the amount of purchases of game tokens. The Group believes that its performance for, and obligation to, the game developers correspond to the game developers' services to the users. The Group has adopted a policy to recognize revenues relating to game tokens for third party developed games over the estimated user relationship with the Group on a game-by-game basis, which are approximately one to six months for the periods presented. Future usage patterns may differ from historical usage patterns and therefore the estimated user relationship with the Group may change in the future. | |||||
When the Group launches a new game, it estimates the user relationship based on other similar types of games in the market until the new game establishes its own history. The Group considers the game's profile, attributes, target audience, and its appeal to players of different demographics groups in estimating the user relationship period. | |||||
The estimated user relationship period is based on data collected from those users who have acquired game tokens. To estimate the user relationship period, the Group maintains a software system that captures the following information for each user: (a) the frequency that users log into each game via the Group's platform, and (b) the amount and the timing of when the users convert or charge his or her game tokens. The Group estimates the user relationship period for a particular game to be the date a player purchases or converts from virtual currency to a game token through the date the Group estimates the user plays the game for the last time. This computation is completed on a user by user basis. Then, the results for all analyzed users are averaged to determine an estimated end user relationship period for each game. Revenues from in-game payments of each month are recognized over the user relationship period estimated for that game. | |||||
The consideration of user relationship with each online game is based on the Group's best estimate that takes into account all known and relevant information at the time of assessment. The Group assesses the estimated user relationships on a quarterly basis. Any adjustments arising from changes in the user relationship as a result of new information will be accounted as a change in accounting estimate in accordance with ASC 250 Accounting Changes and Error Corrections. | |||||
– | |||||
Self-developed games | |||||
Revenues derived from self-developed games are recorded on a gross basis as the Group acts as a principal to fulfill all obligations. The Group does not maintain information on consumption details of in-game virtual items, and only has limited information related to the frequency of log-ons for its self-developed games. Given that certain historical data is not available, the Group uses the user relationship of third party games with similar popularity, gaming experience and sales to determine the estimated period of user relationship for its self-developed games. | |||||
-3 | |||||
Other IVAS revenue | |||||
Other IVAS revenue mainly represents membership subscription revenue, revenue from sales of virtual items in various channels in YY platform, such as live game broadcasting channels etc. and other miscellaneous product sales in YY platform. | |||||
The Group operates a membership subscription program where subscription members can have enhanced user privileges when using YY Client. The membership fee is collected up-front from subscribers. The receipt of the revenue is initially recorded as deferred revenue and revenue is recognized ratably over the period of the subscription as services are rendered. Unrecognized portion beyond 12 months from balance sheet date is classified as long-term deferred revenue. Revenue from sales of virtual items in various channels is recognized on item basis, which is consistent with the revenue recognition policies in online music and entertainment revenue stream. | |||||
(ii) | |||||
Advertising revenues | |||||
Advertising revenues are derived principally from advertising arrangements where the advertisers pay to place their advertisements on the Group's platform in different formats over a particular period of time. Such formats generally include but are not limited to banners, text-links, videos, logos, and buttons. Advertisements on the Group's platform are generally charged on the basis of duration, and advertising contracts are signed to establish the fixed price and the advertising services to be provided. Where collectability is reasonably assured, advertising revenues from advertising contracts are recognized ratably over the contract period of display. | |||||
The Group enters into advertising contracts directly with advertisers or third party advertising agencies that represent advertisers. Contract terms generally range from 1 to 3 months. Both third party advertising agencies and direct advertisers are generally billed at the end of the display period and payments are due usually within 6 months. | |||||
Where customers purchase multiple advertising spaces with different display periods in the same contract, the Group allocates the total consideration to the various advertising elements based on the relative selling price method and recognizes revenue for the different elements over their respective display periods. The following hierarchy should be followed when determining the appropriate selling price for each element: (1) vendor specific objective evidence ("VSOE"), (2) third party evidence ("TPE"), and (3) best estimate of selling price ("BESP"). Given that the VSOE or TPE of the selling price cannot be determined, the Group has adopted a policy to allocate the fair values of different advertising elements based on the best estimate selling prices of each advertisement within the contract taking into consideration the standard price list and historical discounts granted. The Group recognizes revenue on the elements delivered and defers the recognition of revenue for the fair value of the undelivered elements until the remaining obligations have been satisfied. Where all of the elements within an arrangement are delivered uniformly over the agreement period, the revenues are recognized on a straight line basis over the contract period. | |||||
Transactions with third party advertising agencies | |||||
For contracts entered into with third party advertising agencies, the third party advertising agencies will in turn sell the advertising services to advertisers. Revenue is recognized ratably over the contract period of display based on the following criteria: | |||||
• | |||||
There is persuasive evidence that an arrangement exists—the Group will enter into framework and execution agreements with the advertising agencies, specifying price, advertising content, format and timing | |||||
• | |||||
Price is fixed or determinable—price charged to the advertising agencies are specified in the agreements, including relevant discount and rebate rates | |||||
• | |||||
Services are rendered—the Group recognizes revenue ratably as the element are delivered over the contract period of display | |||||
• | |||||
Collectability is reasonably assured—the Group assesses credit history of each advertising agency before entering into any framework and execution agreements. If the collectability from the agencies is assessed as not reasonably assured, the Group recognizes revenue only when the cash is received and all the other revenue criteria are met. | |||||
The Group provides sales incentives in the forms of discounts and rebates to third party advertising agencies based on purchase volume. As the advertising agencies are viewed as the customers in these transactions, revenue is recognized based on the price charged to the agencies, net of sales incentives provided to the agencies. Sales incentives are estimated and recorded at the time of revenue recognition based on the contracted rebate rates and estimated sales volume based on historical experience. | |||||
Transactions with advertisers | |||||
The Group also enters into advertisement contracts directly with advertisers. Similar to transactions with third party advertising agencies, the Group recognizes revenue ratably as the elements are delivered over the contract period of display. The terms and conditions, including price, are fixed according to the contract between the Group and the advertisers. The Group also performs a credit assessment of all advertisers prior to entering into contracts. Revenue is recognized based on the amount charged to the advertisers, net of discounts. | |||||
Advances from customers and deferred revenue | ' | ||||
(t) Advances from customers and deferred revenue | |||||
Advances from customers primarily consist of (i) prepayments from users in the form of the Group's virtual currency that are not yet consumed or converted into game tokens, and upon the consumption or conversion, are recognized as revenue according to the prescribed revenue recognition policies described above, (ii) prepayments from sub-licensees for obtaining operation rights of certain online games over a period of time, and (iii) prepayments from advertising agencies and advertisers. | |||||
Deferred revenue primarily consists of the unamortized game tokens, prepaid subscriptions under the membership program and unamortized revenue from virtual items in online music and entertainment channels, where there is still an implied obligation to be provided by the Group, which will be recognized as revenue when all of the revenue recognition criteria are met. | |||||
Cost of revenues | ' | ||||
(u) Cost of revenues | |||||
Amounts recorded as cost of revenue relate to direct expenses incurred in order to generate IVAS and advertising revenue. Such costs are recorded as incurred. Cost of revenues consists primarily of (i) revenue sharing fees and content costs, including payments to various channel owners and performers, and content providers, (ii) bandwidth costs, (iii) salary and welfare, (iv) share-based compensation, (v) business taxes and related surcharges, cultural development fee, (vi) depreciation and amortization expense for servers, other equipment and intangibles directly related to operating the platform,(vii) payment handling cost, and (viii) other costs. | |||||
In the PRC, business taxes are imposed by the government on revenues reported by any selling entity for the provision of taxable services in the PRC, transfer of intangible assets and sales of immovable properties in the PRC. The business tax rate varies depending on the nature of the revenues. The Group is also subject to cultural development fee at a tax rate of 3% on service income from provision of advertising services in the PRC. | |||||
On January 1, 2012, a pilot program (the "Pilot Program") was launched in Shanghai for a transition of imposing value-added tax ("VAT") on revenues derived from certain pilot industries (the "Pilot Industries") other than business taxes. Starting from September 1, 2012, the Pilot Program was expanded from Shanghai to eight other cities and provinces in the PRC, including Beijing and Guangdong province, where the Group's subsidiaries and VIEs are incorporated and have operations therein. The Group's advertising revenue and online games revenue are within the scope of Pilot Industries and they became subject to VAT effective from November 1, 2012 and December 1, 2012, at a rate of 6% respectively. The Group hence recognizes advertising revenue and online games revenue net of VAT thereafter. Prior to the Pilot Program's being applied to Group's revenue, the Group's advertising revenues earned from external customers were subject to business taxes at 5% for the year ended December 31, 2011, and ten months ended October 31, 2012, and the Group' IVAS revenue earned from external customers were subject to business taxes of 3% for the years ended December 31, 2011, 2012 and 2013, except that the Group's online games revenue began to be subject to VAT of 6% commencing December 2012. | |||||
The Group is subject to surcharges of business taxes and VAT, which are calculated based on 12% of the business taxes and VAT payable for the years ended December 31, 2011, 2012 and 2013. | |||||
The Group reported business taxes and surcharges, and cultural development fees incurred in cost of revenues. | |||||
Based on the Group's corporate structure and the contractual arrangements among the Group's PRC subsidiaries, the Group's VIEs and their shareholders, the Group is effectively subject to the 5% PRC business tax and generally subject to 6% VAT and related surcharges on revenues generated by the Group's subsidiaries based on the Group's contractual arrangements entered into with the Group's VIEs. | |||||
Research and development expenses | ' | ||||
(v) Research and development expenses | |||||
Research and development expenses consist primarily of (i) salary and welfare for research and development personnel, (ii) share-based compensation for research and development personnel, (iii) rental expenses and (iv) depreciation of office premise and servers utilized by research and development personnel. Costs incurred during the research stage are expensed as incurred. Costs incurred in the development stage, prior to the establishment of technological feasibility, which is when a working model is available, are expensed when incurred. | |||||
The Company recognizes internal use software development costs in accordance with guidance on intangible assets and internal use software. This requires capitalization of qualifying costs incurred during the software's application development stage and to expense costs as they are incurred during the preliminary project and post implementation/operation stages. The Company has not capitalized any costs related to internal use software during the years ended December 31, 2011, 2012 and 2013, respectively. | |||||
Sales and marketing expenses | ' | ||||
(w) Sales and marketing expenses | |||||
Sales and marketing expenses consist primarily of (i) salary and welfare for sales and marketing personnel, (ii) advertising and market promotion expenses, and (iii) share-based compensation for sales and marketing personnel. The advertising and market promotion expenses amounted to approximately RMB4,234, RMB5,534 and RMB8,054 during the years ended December 31, 2011, 2012 and 2013, respectively. | |||||
General and administrative expenses | ' | ||||
(x) General and administrative expenses | |||||
General and administrative expenses consist primarily of (i) salary and welfare for general and administrative personnel, (ii) share-based compensation for management and administrative personnel, (iii) allowance for doubtful receivables, and (iv) professional service fees. | |||||
Employee social security and welfare benefits | ' | ||||
(y) Employee social security and welfare benefits | |||||
Employees of the Group in the PRC are entitled to staff welfare benefits including pension, work-related injury benefits, maternity insurance, medical insurance, unemployment benefit and housing fund plans through a PRC government-mandated multi-employer defined contribution plan. The Group is required to accrue for these benefits based on certain percentages of the employees' salaries, up to a maximum amount specified by the local government. The Group is required to make contributions to the plans out of the amounts accrued. The PRC government is responsible for the medical benefits and the pension liability to be paid to these employees and the Group's obligations are limited to the amounts contributed and no legal obligation beyond the contributions made. Employee social security and welfare benefits included as expenses in the accompanying statements of operations amounted to RMB23,657, RMB39,660 and RMB68,334 for the years ended December 31, 2011, 2012 and 2013, respectively. | |||||
Share-based compensation | ' | ||||
(z) Share-based compensation | |||||
The Company grants stock-based award, such as, but not limited to, share options, restricted shares, restricted share units and warrants to eligible employees, officers, directors, and non-employee consultants. | |||||
Awards granted to employees, officers, and directors are initially accounted for as equity-classified awards. The related shared-based compensation expenses are measured at the grant date fair value of the award and are recognized using the graded vesting method, net of estimated forfeiture rates, over the requisite service period, which is generally the vesting period. Forfeitures are estimated at the time of grant based on historical forfeiture rates and will be revised in the subsequent periods if actual forfeitures differ from those estimates. Duowan BVI also granted share options, restricted shares and restricted share units to non-employees, which are also initially accounted for as equity-classified awards. Awards granted to non-employees are initially measured at fair value on the grant date and periodically re-measured thereafter until the earlier of the performance commitment date or the date the service is completed and recognized over the period the service is provided. Awards are re-measured at each reporting date using the fair value as at each period end until the measurement date, generally when the services are completed and share-based awards are vested. Changes in fair value between the interim reporting dates are attributed consistent with the method used in recognizing the original compensation costs. | |||||
As a result of Duowan BVI's repurchases of certain awards offered in 2009 and in 2011 (Note 19), certain initially equity classified employee and non-employee awards had been reclassified as a liability classified award, as these awards were deemed to have a substantive cash settlement feature. These awards are re-measured at the end of each reporting period until either the substantive cash settlement is terminated or the holder of the awards is exposed to the market value fluctuation of the underlying shares for a reasonable period of time (at least six months), or the awards are settled, cancelled or expire unexercised. | |||||
On September 15, 2011, the board of directors of the Company resolved not to undertake any repurchases of vested or unvested share-based compensation awards, except under those conditions specified in the relevant award scheme and grant documents. In addition, any proposed repurchase of vested or unvested share-based compensation awards should be approved by the majority votes of the board of directors. Such intention of the Company was specifically communicated to all employees with or without the awards. All the employees with vested or unvested awards also confirmed such understanding by a written confirmation. Accordingly, the classification of the liability-classified awards changed back to be equity-classified. | |||||
Prior to the initial public offering date (Note 17), the Binomial option-pricing model was used to measure the fair value of all the share options. The determination of the fair value was affected by the share price as well as assumptions regarding a number of complex and subjective variables, including the expected share price volatility, actual and projected employee and non-employee share option exercise behaviour, risk-free interest rates and expected dividends. The use of the Binomial option-pricing model requires extensive actual employee, directors, officers and non-employee exercise behaviour data for the relative probability estimation purpose, and a number of complex assumptions. | |||||
Following the listing of the Company, the grant date fair value of share-based awards is based on stock price of the Company in the NASDAQ Global Market. | |||||
Other income | ' | ||||
(aa) Other income | |||||
Other income primarily consists of government grants which represent cash subsidies received from the PRC government by the operating subsidiaries or VIEs of the Company. Government grants are | |||||
originally recorded as deferred revenue when received upfront. After all of the conditions specified in the grants have been met, the grants are recognized as operating or non-operating income based on the nature of the government grants. | |||||
Income taxes | ' | ||||
(bb) Income taxes | |||||
Current income taxes are provided on the basis of net income for financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions. Deferred income taxes are accounted for using an asset and liability method. Under this method, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The tax base of an asset or liability is the amount attributed to that asset or liability for tax purpose. The effect on deferred taxes of a change in tax rates is recognized in statement of operations and comprehensive (loss) income in the period of change. A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered more likely than not that some portion of, or all of the deferred tax assets will not be realized. | |||||
Uncertain tax positions | |||||
The guidance on accounting for uncertainties in income taxes prescribes a more likely than not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Guidance was also provided on derecognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods, and income tax disclosures. Significant judgment is required in evaluating the Group's uncertain tax positions and determining its provision for income taxes. The Group recognizes interests and penalties, if any, under accrued expenses and other current liabilities on its balance sheet and under other expenses in its statements of operations. The Group did not recognize any significant interest and penalties associated with uncertain tax positions for the years ended December 31, 2011, 2012 and 2013. As of December 31, 2012 and 2013, the Group did not have any significant unrecognized uncertain tax positions. | |||||
Statutory reserves | ' | ||||
(cc) Statutory reserves | |||||
The Group's subsidiaries, VIEs and VIE's subsidiary established in the PRC are required to make appropriations to certain non-distributable reserve funds. | |||||
In accordance with the laws applicable to China's Foreign Investment Enterprises, the Group's subsidiaries registered as wholly-owned foreign enterprises have to make appropriations from its after-tax profit (as determined under the Accounting Standards for Business Enterprises as promulgated by the Ministry of Finance of the People's Republic of China ("PRC GAAP")) to reserve funds including general reserve fund, and staff bonus and welfare fund. The appropriation to the general reserve fund must be at least 10% of the after-tax profits calculated in accordance with PRC GAAP. Appropriation is not required if the reserve fund has reached 50% of the registered capital of the company. Appropriation to the staff bonus and welfare fund is at the company's discretion. | |||||
In addition, in accordance with the Company Laws of the PRC, the VIEs and VIE's subsidiary of the Company registered as PRC domestic companies must make appropriations from its after-tax profit as determined under the PRC GAAP to non-distributable reserve funds including a statutory surplus fund and a discretionary surplus fund. The appropriation to the statutory surplus fund must be at least 10% of the after-tax profits as determined under the PRC GAAP. Appropriation is not required if the surplus fund has reached 50% of the registered capital of the company. Appropriation to the discretionary surplus fund is made at the discretion of the company. | |||||
The use of the general reserve fund, statutory surplus fund and discretionary surplus fund are restricted to the off-setting of losses or increasing capital of the respective company. The staff bonus and welfare fund is a liability in nature and is restricted to fund payments of special bonus to staff and for the collective welfare of employees. All these reserves are not allowed to be transferred to the company in terms of cash dividends, loans or advances, nor can they be distributed except under liquidation. | |||||
During the year ended December 31, 2013, appropriations to statutory reserves amounted to RMB40,657. No appropriations have been made in 2011 and 2012 since the companies were in accumulated loss positions. | |||||
Related parties | ' | ||||
(dd) Related parties | |||||
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or significant influence, such as a family member or relative, shareholder, or a related corporation. | |||||
Dividends | ' | ||||
(ee) Dividends | |||||
Dividends are recognized when declared. No dividends were declared for the years ended December 31, 2011, 2012 and 2013, respectively. The Group does not have any present plan to pay any dividends on common shares in the foreseeable future. The Group currently intends to retain the available funds and any future earnings to operate and expand its business. | |||||
(Loss) income per share | ' | ||||
(ff) (Loss) income per share | |||||
Basic (loss) income per share is computed by dividing net (loss) income attributable to common shareholders, considering the accretion or decretion of redemption feature, deemed dividend to preferred shareholders and amortization of beneficial conversion feature related to its convertible redeemable preferred shares (Note 20), by the weighted average number of common shares outstanding during the period using the two-class method. Under the two-class method, net income is allocated between common shares and other participating securities based on their participating rights. Net losses are not allocated to other participating securities if based on their contractual terms they are not obligated to share the losses. | |||||
Diluted (loss) income per share is calculated by dividing net (loss) income attributable to common shareholders, as adjusted for the effect of dilutive common equivalent shares, if any, by the weighted average number of common and dilutive common equivalent shares outstanding during the period. | |||||
Common equivalent shares consist of common shares issuable upon the conversion of the preferred shares, using the if-converted method, and shares issuable upon the exercise of share options using the treasury stock method. Common equivalent shares are not included in the denominator of the diluted loss per share calculation when inclusion of such share would be anti-dilutive. | |||||
Comprehensive (loss) income | ' | ||||
(gg) Comprehensive (loss) income | |||||
Comprehensive (loss) income is defined as the change in equity of the Company during a period arising from transactions and other events and circumstances excluding transactions resulting from investments by shareholders and distributions to shareholders. Comprehensive (loss) income is reported in the consolidated statements of operations and comprehensive (loss) income. Accumulated other comprehensive loss of the Group includes the foreign currency translation adjustments. | |||||
Segment reporting | ' | ||||
(hh) Segment reporting | |||||
Operating segments are defined as components of an enterprise engaging in businesses activities for which separate financial information is available that is regularly evaluated by the Group's chief operating decision makers in deciding how to allocate resources and assess performance. The Group's chief operating decision maker has been identified as the Chief Executive Officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Group. The Group has internal reporting of cost and expenses that does not distinguish between segments, and reports costs and expenses by nature as a whole. The Group does not distinguish between markets or segments for the purpose of internal reporting. Hence, the Group has only one operating segment. As the Group's long-lived assets and revenue are substantially located in and derived from the PRC, no geographical segments are presented. | |||||
Recently issued accounting pronouncements | ' | ||||
(ii) Recently issued accounting pronouncements | |||||
In February of 2013, the FASB issued ASU 2013-02, "Comprehensive Income (Topic 220), Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income". The amendments in this ASU require an entity to provide information about amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income, but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income (for example, where amounts are reclassified to inventory), an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. For public entities, the amendments are effective with prospective application for reporting periods beginning after December 15, 2012. The Group adopted this ASU beginning January 1, 2013 and the adoption of this ASU did not have a material impact on the Group's consolidated financial statements. | |||||
In March of 2013, the FASB issued ASU 2013-05, "Foreign Currency Matters (Topic 830), Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity." The amendments in this | |||||
ASU clarify the applicable guidance for the de-recognition of all or a portion of a cumulative translation adjustment when an entity ceases to have a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights) within a foreign entity or when other changes stipulated in the ASU occur and involve a foreign entity. The amendments are effective prospectively for fiscal years (and interim reporting periods within those years) beginning after December 15, 2013. The amendments should be applied prospectively to derecognition events occurring after the effective date. Prior periods should not be adjusted. Early adoption is permitted. If an entity elects to early adopt the amendments, it should apply them as of the beginning of the entity's fiscal year of adoption. The adoption of this ASU is not reasonably expected in the future to have a material impact on the Group's consolidated financial statements. | |||||
In March of 2013, the FASB issued ASU 2013-11, "Income Taxes (Topic 740)—Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists". The amendments in the ASU clarify that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss, similar tax loss, or tax credit carryforward, except as noted in the following sentence. To the extent a net operating loss, similar tax loss, or tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such a purpose, then under this exception the unrecognized tax benefit is to be presented in the financial statements as a liability and should not be combined with (netted with) the deferred tax asset(s). The assessment of whether a deferred tax asset is "available" is based on the unrecognized tax benefit and deferred tax asset amounts that exist at the reporting date and should be made presuming disallowance of the tax position at the reporting date. The amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. Early adoption is permitted. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted. The adoption of this ASU is not reasonably expected in the future to have a material impact on the Group's consolidated financial statements. | |||||
Organization_and_principal_act1
Organization and principal activities (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
Organization and principal activities | ' | |||||||||
Schedule of details of the subsidiaries, VIEs and VIE's subsidiary | ' | |||||||||
The details of the subsidiaries, VIEs and VIE's subsidiary as of December 31, 2013 are set out below: | ||||||||||
Name | Place of incorporation | Date of incorporation | % of direct or indirect economic ownership | Principal activities | ||||||
Subsidiaries | ||||||||||
Duowan Entertainment Corporation ("Duowan BVI") | British Virgin Islands | November 6, 2007 | 100% | Investment holding | ||||||
NeoTasks Inc. ("NeoTasks") | Cayman Islands | April 26, 2006 | 100% | Investment holding | ||||||
NeoTasks Limited | Hong Kong | June 16, 2005 | 100% | Investment holding | ||||||
Huanju Shidai Technology (Beijing) Company Limited ("Beijing Huanju Shidai" or "Duowan Entertainment") | PRC | March 19, 2008 | 100% | Investment holding | ||||||
Zhuhai Duowan Information Technology Company Limited ("Zhuhai Duowan" or "Guangzhou Duowan") | PRC | April 9, 2007 | 100% | Online advertising and software development | ||||||
Guangzhou Huanju Shidai Information Technology Company Limited ("Guangzhou Huanju Shidai") | PRC | December 2, 2010 | 100% | Software development | ||||||
Zhuhai Huanju Shidai Information Technology Company Limited ("Zhuhai Huanju Shidai") | PRC | November 14, 2013 | 100% | Software development | ||||||
Variable Interest Entities ("VIEs") | ||||||||||
Guangzhou Huaduo Network Technology Company Limited ("Guangzhou Huaduo") | PRC | April 11, 2005 | 100% | Holder of internet content provider licenses and internet value added services | ||||||
Beijing Tuda Science and Technology Company Limited ("Beijing Tuda") | PRC | June 2, 2005 | 100% | Holder of internet content provider licenses | ||||||
VIE's Subsidiary | ||||||||||
Guangzhou Juhui Information Technology Company Limited | PRC | October 24, 2013 | 100% | Software development |
Principal_accounting_policies_1
Principal accounting policies (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Principal accounting policies | ' | ||||
Schedule of property and equipment estimated useful lives and residual rate | ' | ||||
Estimated useful lives | Residual rate | ||||
Servers, computers and equipment | 3 years | 0%-5% | |||
Furniture, fixture and office equipment | 5 years | 0%-5% | |||
Motor vehicles | 4 years | 5% | |||
Leasehold improvement | Shorter of lease term or 5 years | — | |||
Schedule of amortization of finite-lived intangible assets is computed using the straight-line method over the following estimated useful lives | ' | ||||
Estimated useful lives | |||||
Software | 3-5 years | ||||
Technology | 5 years | ||||
Domain name | 15 years |
Certain_risks_and_concentratio1
Certain risks and concentration (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Certain risks and concentration | ' | ||||||||||
Schedule of consolidated financial information of the Group's VIEs and VIE's subsidiary excluding the inter company items with the Group's subsidiaries included in the accompanying consolidated financial statements | ' | ||||||||||
December 31, | |||||||||||
2012 | 2013 | ||||||||||
RMB | RMB | ||||||||||
Assets | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | 204,606 | 575,262 | |||||||||
Short-term deposits | 90,000 | 594,000 | |||||||||
Accounts receivable, net | 41,824 | 48,329 | |||||||||
Amount due from a related party | 1,073 | 73 | |||||||||
Prepayments and other current assets | 14,897 | 29,753 | |||||||||
Deferred tax assets | 25,666 | 51,631 | |||||||||
| | | | | | | | ||||
Total current assets | 378,066 | 1,299,048 | |||||||||
| | | | | | | | ||||
Non-current assets | |||||||||||
Deferred tax assets | 92 | 383 | |||||||||
Investments | 2,950 | 33,920 | |||||||||
Property and equipment, net | 88,709 | 100,059 | |||||||||
Intangible assets, net | 3,218 | 9,717 | |||||||||
| | | | | | | | ||||
Total non-current assets | 94,969 | 144,079 | |||||||||
| | | | | | | | ||||
Total assets | 473,035 | 1,443,127 | |||||||||
| | | | | | | | ||||
| | | | | | | | ||||
Liabilities | |||||||||||
Current liabilities | |||||||||||
Accounts payable | 27,124 | 55,818 | |||||||||
Deferred revenue | 158,323 | 292,380 | |||||||||
Advances from customers | 7,271 | 10,656 | |||||||||
Income taxes payable | 32,885 | 47,974 | |||||||||
Accrued liabilities and other current liabilities | 81,223 | 197,851 | |||||||||
Amounts due to related parties | 2,604 | 2,640 | |||||||||
| | | | | | | | ||||
Total current liabilities | 309,430 | 607,319 | |||||||||
| | | | | | | | ||||
Non-current liabilities | |||||||||||
Deferred revenue | 4,525 | 8,457 | |||||||||
| | | | | | | | ||||
Total liabilities | 313,955 | 615,776 | |||||||||
| | | | | | | | ||||
| | | | | | | | ||||
For the year ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
RMB | RMB | RMB | |||||||||
Net revenues | 232,376 | 702,929 | 1,669,852 | ||||||||
Net (loss) income | (79,334 | ) | 80,071 | 486,095 | |||||||
For the year ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
RMB | RMB | RMB | |||||||||
Net cash provided by operating activities | 57,313 | 322,378 | 845,198 | ||||||||
Net cash used in investing activities | (46,475 | ) | (152,197 | ) | (592,390 | ) | |||||
| | | | | | | | | | | |
10,838 | 170,181 | 252,808 | |||||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Summary of the percentage of accounts receivable from collection agencies and customers with over 10% of total accounts receivable | ' | ||||||||||
For the year ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
RMB | RMB | RMB | |||||||||
Collection agencies and customers | |||||||||||
B1 | 31% | 34% | 25% | ||||||||
B2 | * | * | 12% | ||||||||
B3 | * | 16% | 11% | ||||||||
B4 | 12% | * | * | ||||||||
B5 | 12% | * | * | ||||||||
* | |||||||||||
Less than 10% | |||||||||||
Business_combination_Tables
Business combination (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Business combination | ' | ||||
Schedule of allocation of the purchase price at the date of acquisition | ' | ||||
RMB | |||||
Property and equipment | 128 | ||||
Intangible assets | |||||
Technology | 10,035 | ||||
Software | 660 | ||||
Goodwill | 899 | ||||
| | | | | |
Total | 11,722 | ||||
| | | | | |
| | | | | |
Cash_and_cash_equivalents_Tabl
Cash and cash equivalents (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Cash and cash equivalents | ' | |||||||||||||
Schedule of cash and cash equivalents balance | ' | |||||||||||||
December 31, 2012 | December 31, 2013 | |||||||||||||
Amount | RMB | Amount | RMB | |||||||||||
equivalent | equivalent | |||||||||||||
RMB | 460,176 | 460,176 | 715,316 | 715,316 | ||||||||||
US$ | 7,084 | 44,526 | 2,342 | 14,282 | ||||||||||
| | | | | | | | | | | | | | |
Total | 504,702 | 729,598 | ||||||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Accounts_receivable_net_Tables
Accounts receivable, net (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Accounts receivable, net | ' | ||||||||||
Schedule of accounts receivable, net | ' | ||||||||||
December 31, | |||||||||||
2012 | 2013 | ||||||||||
RMB | RMB | ||||||||||
Accounts receivable, gross | 123,332 | 131,315 | |||||||||
Less: allowance for doubtful receivables | (5,716 | ) | (31,214 | ) | |||||||
| | | | | | | | ||||
Accounts receivable, net | 117,616 | 100,101 | |||||||||
| | | | | | | | ||||
| | | | | | | | ||||
Summary of allowance for doubtful accounts | ' | ||||||||||
For the year ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
RMB | RMB | RMB | |||||||||
Balance at the beginning of the year | (387 | ) | — | (5,716 | ) | ||||||
Additions charged to general and administrative expenses | — | (6,884 | ) | (31,987 | ) | ||||||
Write-off during the year | 387 | 1,168 | 6,489 | ||||||||
| | | | | | | | | | | |
Balance at the end of the year | — | (5,716 | ) | (31,214 | ) | ||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Investments_Tables
Investments (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Investments | ' | |||||||
Schedule of investments | ' | |||||||
December 31 | ||||||||
2012 | 2013 | |||||||
RMB | RMB | |||||||
Cost investments (i)(ii) | — | 47,110 | ||||||
Equity investments | 2,950 | 14,919 | ||||||
| | | | | | | | |
Total | 2,950 | 62,029 | ||||||
| | | | | | | | |
| | | | | | | | |
(i) | ||||||||
In June 2013, the Company made an investment with an equity interest of 20% in a company with consideration of RMB15 million. The investment was not an investment in common stock or in-substance common stock and therefore was precluded from applying the equity method of accounting. It has been accounted for as an investment under cost method. | ||||||||
(ii) | ||||||||
In December 2013, the Company entered into agreements to acquire a minority stake of preferred shares of two companies with total consideration of approximately RMB28 million. Given the fact that the Company cannot unilaterally demand redemption of both the two preferred stocks as the Company only owns less than or equal to 10% of the two preferred stocks respectively, these investments have been accounted for as an investment in an equity security under cost method since the two equity securities do not have a readily determinable fair value. | ||||||||
Property_and_equipment_net_Tab
Property and equipment, net (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Property and equipment, net | ' | |||||||
Schedule of property and equipment | ' | |||||||
December 31, | ||||||||
2012 | 2013 | |||||||
RMB | RMB | |||||||
Gross carrying amount | ||||||||
Servers, computers and equipment | 103,005 | 152,404 | ||||||
Leasehold improvement | 22,831 | 23,257 | ||||||
Furniture, fixture and office equipment | 9,083 | 9,672 | ||||||
Motor vehicles | 2,999 | 5,186 | ||||||
Construction in progress | — | 4,652 | ||||||
| | | | | | | | |
Total | 137,918 | 195,171 | ||||||
Less: accumulated depreciation | (47,619 | ) | (92,535 | ) | ||||
| | | | | | | | |
Property and equipment, net | 90,299 | 102,636 | ||||||
| | | | | | | | |
| | | | | | | | |
Intangible_assets_net_Tables
Intangible assets, net (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Intangible assets, net | ' | ||||||||||
Summary of Group's intangible assets | ' | ||||||||||
December 31 | |||||||||||
2012 | 2013 | ||||||||||
RMB | RMB | ||||||||||
Gross carrying amount | |||||||||||
Software | 4,235 | 5,477 | |||||||||
Technology | 9,962 | 17,121 | |||||||||
Domain name | 11,477 | 17,286 | |||||||||
| | | | | | | | ||||
Total of gross carrying amount | 25,674 | 39,884 | |||||||||
| | | | | | | | ||||
Less: accumulated amortization | |||||||||||
Software | (1,808 | ) | (3,209 | ) | |||||||
Technology | (1,659 | ) | (4,054 | ) | |||||||
Domain name | (2,176 | ) | (2,944 | ) | |||||||
| | | | | | | | ||||
Total accumulated amortization | (5,643 | ) | (10,207 | ) | |||||||
| | | | | | | | ||||
Less: impairment | |||||||||||
Software | (550 | ) | (550 | ) | |||||||
| | | | | | | | ||||
Intangible assets, net | 19,481 | 29,127 | |||||||||
| | | | | | | | ||||
| | | | | | | | ||||
Schedule of estimated amortization expenses | ' | ||||||||||
The estimated amortization expenses for each of the following five years are as follows: | |||||||||||
Domain name | Technology | Software | |||||||||
RMB | RMB | RMB | |||||||||
2014 | 1,171 | 3,424 | 1,263 | ||||||||
2015 | 1,149 | 3,424 | 335 | ||||||||
2016 | 1,141 | 3,424 | 68 | ||||||||
2017 | 1,141 | 1,806 | 33 | ||||||||
2018 | 1,141 | 989 | 19 | ||||||||
Schedule of weighted average amortization periods of intangible assets | ' | ||||||||||
December 31, | |||||||||||
2012 | 2013 | ||||||||||
Domain name | 15 years | 15 years | |||||||||
Technology | 5 years | 5 years | |||||||||
Software | 3 years | 3 years |
Deferred_revenue_Tables
Deferred revenue (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Deferred revenue | ' | |||||||
Schedule of deferred revenue | ' | |||||||
December 31, | ||||||||
2012 | 2013 | |||||||
RMB | RMB | |||||||
Deferred revenue, current: | ||||||||
IVAS revenues | 157,940 | 292,184 | ||||||
Government grants | 1,919 | 1,682 | ||||||
| | | | | | | | |
Total current deferred revenue | 159,859 | 293,866 | ||||||
| | | | | | | | |
| | | | | | | | |
Deferred revenue, non-current: | ||||||||
IVAS revenues | 4,329 | 8,457 | ||||||
Government grants | 2,158 | 968 | ||||||
| | | | | | | | |
Total non-current deferred revenue | 6,487 | 9,425 | ||||||
| | | | | | | | |
| | | | | | | | |
Accrued_liabilities_and_other_1
Accrued liabilities and other current liabilities (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Accrued liabilities and other current liabilities | ' | |||||||
Schedule of accrued liabilities and other current liabilities | ' | |||||||
December 31, | ||||||||
2012 | 2013 | |||||||
Accrued salaries and welfare | 54,688 | 113,302 | ||||||
Accrued revenue sharing fees | 19,504 | 66,512 | ||||||
Accrued bandwidth costs | 15,679 | 21,869 | ||||||
Business and other taxes payable | 7,422 | 14,248 | ||||||
Value added taxes payable | 8,718 | 5,291 | ||||||
Accrued technology service fee | 2,162 | 5,040 | ||||||
Others | 12,116 | 24,498 | ||||||
| | | | | | | | |
Total | 120,289 | 250,760 | ||||||
| | | | | | | | |
| | | | | | | | |
Cost_of_revenue_Tables
Cost of revenue (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Cost of revenue | ' | ||||||||||
Schedule of cost of revenue | ' | ||||||||||
For the year ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
RMB | RMB | RMB | |||||||||
Revenue sharing fees and content costs | 6,750 | 109,273 | 444,065 | ||||||||
Bandwidth costs | 75,064 | 145,037 | 203,238 | ||||||||
Salary and welfare | 33,388 | 50,009 | 88,456 | ||||||||
Business tax and surcharges | 16,462 | 30,026 | 47,755 | ||||||||
Depreciation and amortization | 11,951 | 25,762 | 37,084 | ||||||||
Payment handling costs | 9,306 | 22,828 | 24,955 | ||||||||
Shared-based compensation | 15,449 | 8,407 | 9,860 | ||||||||
Other costs | 14,329 | 24,791 | 26,586 | ||||||||
| | | | | | | | | | | |
Total | 182,699 | 416,133 | 881,999 | ||||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Other_income_Tables
Other income (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Other income | ' | ||||||||||
Schedule of other income | ' | ||||||||||
For the year ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
RMB | RMB | RMB | |||||||||
Government grants | 1,982 | 2,465 | 25,356 | ||||||||
Others | — | — | 1,722 | ||||||||
| | | | | | | | | | | |
Total | 1,982 | 2,465 | 27,078 | ||||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Income_tax_Tables
Income tax (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Income tax | ' | ||||||||||
Schedule of the current and deferred portions of income tax expense included in the consolidated statements of operations | ' | ||||||||||
For the year ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
RMB | RMB | RMB | |||||||||
Current income tax expenses | (12,516 | ) | (48,357 | ) | (125,365 | ) | |||||
Deferred income tax benefits | 11,173 | 19,316 | 35,414 | ||||||||
| | | | | | | | | | | |
Income tax expense for the year | (1,343 | ) | (29,041 | ) | (89,951 | ) | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of the reconciliation of total tax expense computed by applying the respective statutory income tax rate to pre-tax (loss) income | ' | ||||||||||
For the year ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
RMB | RMB | RMB | |||||||||
PRC Statutory income tax rate | (25.0% | ) | (25.0% | ) | (25.0% | ) | |||||
Effect of preferential tax rate | 8.40% | 10.40% | 10.50% | ||||||||
Effect of tax-exempt entities | (5.1% | ) | 0.20% | 2.20% | |||||||
Permanent differences(i) | 32.50% | (13.9% | ) | (4.0% | ) | ||||||
Change in valuation allowance | (7.8% | ) | (2.0% | ) | (3.0% | ) | |||||
Effect of Super Deduction available to the Group | (4.9% | ) | 5.70% | 3.40% | |||||||
Adjustments of deferred tax for changes in tax rates | 3.60% | — | — | ||||||||
| | | | | | | | | | | |
Effective income tax rate | 1.70% | (24.6% | ) | (15.9% | ) | ||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
(i) | |||||||||||
Permanent differences mainly arise from expenses not deductible for tax purposes including primarily share-based compensation costs and expenses incurred by subsidiaries and VIEs. | |||||||||||
Schedule of the tax effects of temporary differences that give rise to the deferred tax asset balances | ' | ||||||||||
December 31, | |||||||||||
2012 | 2013 | ||||||||||
RMB | RMB | ||||||||||
Deferred tax assets, current: | |||||||||||
Deferred revenue | 16,270 | 32,905 | |||||||||
Allowance for doubtful accounts receivable, accrued expense and others not currently deductible for tax purposes | 17,062 | 39,791 | |||||||||
Valuation allowance(i) | (1,783 | ) | (5,775 | ) | |||||||
| | | | | | | | ||||
Total current deferred tax assets, net | 31,549 | 66,921 | |||||||||
| | | | | | | | ||||
Deferred tax assets, non-current: | |||||||||||
Tax loss carried forward | 2,433 | 16,400 | |||||||||
Deferred revenue | 538 | 445 | |||||||||
Impairment of an equity investment | 45 | 180 | |||||||||
Valuation allowance(i) | (2,433 | ) | (16,400 | ) | |||||||
| | | | | | | | ||||
Total non-current deferred tax assets, net | 583 | 625 | |||||||||
| | | | | | | | ||||
| | | | | | | | ||||
(i) | |||||||||||
Valuation allowance is provided against deferred tax assets when the Group determines that it is more likely than not that the deferred tax assets will not be utilized in the future. In making such determination, the Group considered factors including future taxable income exclusive of reversing temporary differences and carry forwards. Valuation allowance was provided for net operating loss carry forward because it was more likely than not that such deferred tax assets will not be realized based on the Group's estimate of its future taxable income. If events occur in the future that allow the Group to realize more of its deferred income tax than the presently recorded amounts, an adjustment to the valuation allowances will result in a decrease in tax expense when those events occur. | |||||||||||
Schedule of the net operating tax loss carry forwards | ' | ||||||||||
Amount | |||||||||||
RMB | |||||||||||
2014 | 3,184 | ||||||||||
2015 | — | ||||||||||
2016 | 3,405 | ||||||||||
2017 | 3,034 | ||||||||||
2018 | 53,371 | ||||||||||
| | | | | |||||||
Total | 62,994 | ||||||||||
| | | | | |||||||
| | | | | |||||||
Convertible_redeemable_preferr1
Convertible redeemable preferred shares (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Convertible redeemable preferred shares | ' | |||||||||||||||
Schedule of preferred shares | ' | |||||||||||||||
As of December 31, 2011, the Preferred Shares comprised of the following: | ||||||||||||||||
Series | Issuance Date | Shares | Issue | Proceeds from | Carrying | |||||||||||
Issued and | Price Per | Issuance, Net | Amount (RMB) | |||||||||||||
Outstanding | Share (US$) | of Issuance | ||||||||||||||
Costs (US$) | ||||||||||||||||
A | December 1, 2006 | 54,488,000 | 0.0184 | 1,000 | 374,332 | |||||||||||
A | June 2, 2008 | 81,612,930 | 0.0245 | 1,975 | 560,681 | |||||||||||
B | August 8, 2008 | 102,073,860 | 0.049 | 4,959 | 703,901 | |||||||||||
C-1 | November 22, 2009 | 16,249,870 | 0.08 | 1,300 | 112,556 | |||||||||||
C-2 | November 22, 2009 | 104,999,650 | 0.1 | 10,460 | 729,464 | |||||||||||
Schedule of changes of each of the convertible redeemable preferred shares | ' | |||||||||||||||
The following table sets forth the changes of each of the convertible redeemable preferred shares for years ended December 31, 2011, 2012 and 2013: | ||||||||||||||||
Series A Preferred Shares | ||||||||||||||||
For the year ended December 31, | ||||||||||||||||
2011 | 2012 | 2013 | ||||||||||||||
RMB | RMB | RMB | ||||||||||||||
Beginning balance | 846,752 | 935,013 | — | |||||||||||||
Accretion (decretion) to redemption value | 88,261 | (485,517 | ) | — | ||||||||||||
Conversion of convertible redeemable preferred shares into Class B common shares | — | (449,496 | ) | — | ||||||||||||
| | | | | | | | | | | ||||||
Ending balance | 935,013 | — | — | |||||||||||||
| | | | | | | | | | | ||||||
| | | | | | | | | | | ||||||
Series B Preferred Shares | ||||||||||||||||
For the year ended December 31, | ||||||||||||||||
2011 | 2012 | 2013 | ||||||||||||||
RMB | RMB | RMB | ||||||||||||||
Beginning balance | 639,799 | 703,901 | — | |||||||||||||
Accretion (decretion) to redemption value | 64,102 | (366,785 | ) | — | ||||||||||||
Conversion of convertible redeemable preferred shares into Class B common shares | — | (337,116 | ) | — | ||||||||||||
| | | | | | | | | | | ||||||
Ending balance | 703,901 | — | — | |||||||||||||
| | | | | | | | | | | ||||||
| | | | | | | | | | | ||||||
Series C Preferred Shares | ||||||||||||||||
For the year ended December 31, | ||||||||||||||||
2011 | 2012 | 2013 | ||||||||||||||
RMB | RMB | RMB | ||||||||||||||
Beginning balance | 770,720 | 842,020 | — | |||||||||||||
Accretion (decretion) to redeemable value | 71,300 | (441,573 | ) | — | ||||||||||||
Conversion of convertible redeemable preferred shares into Class B common shares | — | (400,447 | ) | — | ||||||||||||
| | | | | | | | | | | ||||||
Ending balance | 842,020 | — | — | |||||||||||||
| | | | | | | | | | | ||||||
| | | | | | | | | | | ||||||
Schedule of assumptions in the Discounted Cash Flow Method | ' | |||||||||||||||
December 31, 2011 | ||||||||||||||||
Risk-free interest rate | 2.53 | % | ||||||||||||||
Volatility | 66.1 | % | ||||||||||||||
Dividend yield | — | |||||||||||||||
Discount rate | 16 | % |
Sharebased_compensation_Tables
Share-based compensation (Tables) | 12 Months Ended | |||||||||||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||||||||||
Share-based compensation | ' | |||||||||||||||||||||||||||||||
Summary of the restricted shares activity | ' | |||||||||||||||||||||||||||||||
The following table summarizes the restricted shares activity for the years ended December 31, 2011, 2012 and 2013: | ||||||||||||||||||||||||||||||||
Number of | Weighted average | |||||||||||||||||||||||||||||||
restricted shares | grant-date | |||||||||||||||||||||||||||||||
fair value | ||||||||||||||||||||||||||||||||
(US$) | ||||||||||||||||||||||||||||||||
Outstanding, January 1, 2011 | 48,486,036 | 0.2936 | ||||||||||||||||||||||||||||||
Granted | 10,846,800 | 0.9362 | ||||||||||||||||||||||||||||||
Forfeited | (2,726,024 | ) | 0.3917 | |||||||||||||||||||||||||||||
Vested | (13,321,711 | ) | 0.1636 | |||||||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||
Outstanding, December 31, 2011 | 43,285,101 | 0.4885 | ||||||||||||||||||||||||||||||
Forfeited | (3,673,580 | ) | 0.4945 | |||||||||||||||||||||||||||||
Vested | (21,380,720 | ) | 0.4864 | |||||||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||
Outstanding, December 31, 2012 | 18,230,801 | 0.4898 | ||||||||||||||||||||||||||||||
Forfeited | (1,581,789 | ) | 0.8726 | |||||||||||||||||||||||||||||
Vested | (11,975,287 | ) | 0.3906 | |||||||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||
Outstanding, December 31, 2013 | 4,673,725 | 0.6144 | ||||||||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||
Expected to vest at December 31, 2013 | 4,449,366 | 0.612 | ||||||||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||
Summary of the restricted share units activity | ' | |||||||||||||||||||||||||||||||
The following table summarizes the restricted share units activity for the years ended December 31, 2011, 2012 and 2013: | ||||||||||||||||||||||||||||||||
Number of | Weighted average | |||||||||||||||||||||||||||||||
restricted shares | grant-date | |||||||||||||||||||||||||||||||
fair value | ||||||||||||||||||||||||||||||||
(US$) | ||||||||||||||||||||||||||||||||
Outstanding, January 1, 2011 | — | |||||||||||||||||||||||||||||||
Granted | 9,097,000 | 1.063 | ||||||||||||||||||||||||||||||
Forfeited | (100,700 | ) | 1.063 | |||||||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||
Outstanding, December 31, 2011 | 8,996,300 | 1.063 | ||||||||||||||||||||||||||||||
Granted | 18,295,221 | 1.0324 | ||||||||||||||||||||||||||||||
Forfeited | (595,900 | ) | 1.0876 | |||||||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||
Outstanding, December 31, 2012 | 26,695,621 | 1.0415 | ||||||||||||||||||||||||||||||
Granted | 29,965,989 | 0.9338 | ||||||||||||||||||||||||||||||
Forfeited | (3,522,992 | ) | 1.0699 | |||||||||||||||||||||||||||||
Vested | (8,836,018 | ) | 1.0429 | |||||||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||
Outstanding, December 31, 2013 | 44,302,600 | 0.9639 | ||||||||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||
Expected to vest at December 31, 2013 | 41,581,339 | 0.9654 | ||||||||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||
Schedule of the movements and details of various equity-classified and liability-classified awards granted by the Company to its employees and non-employee | ' | |||||||||||||||||||||||||||||||
The table below shows the movements and details of various equity-classified and liability-classified awards granted by the Company to its employees and non-employee for the years ended December 31, 2011, 2012 and 2013: | ||||||||||||||||||||||||||||||||
Equity-classified Awards (RMB) | Liability-classified Awards (RMB) | |||||||||||||||||||||||||||||||
Pre-2009 | 2009 | 2011 | Share-based | Awards to | Sub-total | Pre-2009 | Awards to | Sub-total | Total | |||||||||||||||||||||||
Scheme | Incentive | Incentive | awards to CEO and Chairman | NeoTasks Founders | Scheme | NeoTasks Founders | ||||||||||||||||||||||||||
options | Scheme— | Scheme— | options | |||||||||||||||||||||||||||||
restricted | restricted | |||||||||||||||||||||||||||||||
shares | share units | |||||||||||||||||||||||||||||||
Balance as of January 1, 2011 | — | 24,525 | — | 30,808 | — | 55,333 | 109,035 | 94,089 | 203,124 | 258,457 | ||||||||||||||||||||||
Share-based compensation expenses | 2,219 | 57,805 | 9,644 | 14,143 | 3,359 | 87,170 | 23,464 | 24,367 | 47,831 | 135,001 | ||||||||||||||||||||||
Exercised/Repurchased | — | — | — | — | — | — | (11,701 | ) | — | (11,701 | ) | (11,701 | ) | |||||||||||||||||||
Reclassifications | ||||||||||||||||||||||||||||||||
—From liability-awards to common share* | — | — | — | — | — | — | — | (57,692 | ) | (57,692 | ) | (57,692 | ) | |||||||||||||||||||
—From liability-awards to equity awards** | 116,328 | — | — | — | 57,602 | 173,930 | (116,328 | ) | (57,602 | ) | (173,930 | ) | — | |||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | — | (4,470 | ) | (3,162 | ) | (7,632 | ) | (7,632 | ) | ||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance as of December 31, 2011 | 118,547 | 82,330 | 9,644 | 44,951 | 60,961 | 316,433 | — | — | — | 316,433 | ||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance as of January 1, 2012 | 118,547 | 82,330 | 9,644 | 44,951 | 60,961 | 316,433 | — | — | — | 316,433 | ||||||||||||||||||||||
Share-based compensation expenses | (89 | ) | 36,371 | 54,445 | 9,624 | — | 100,351 | — | — | — | 100,351 | |||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance as of December 31, 2012 | 118,458 | 118,701 | 64,089 | 54,575 | 60,961 | 416,784 | — | — | — | 416,784 | ||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance as of January 1, 2013 | 118,458 | 118,701 | 64,089 | 54,575 | 60,961 | 416,784 | — | — | — | 416,784 | ||||||||||||||||||||||
Share-based compensation expenses | 14,004 | 7,300 | 95,792 | — | — | 117,096 | — | — | — | 117,096 | ||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance as of December 31, 2013 | 132,462 | 126,001 | 159,881 | 54,575 | 60,961 | 533,880 | — | — | — | 533,880 | ||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
* | ||||||||||||||||||||||||||||||||
During the year ended December 31, 2011, the restricted shares to NeoTasks founders were held by NeoTasks Founders for more than six months, therefore, the related awards amounting to RMB57,692 were reclassified back to common share. | ||||||||||||||||||||||||||||||||
** | ||||||||||||||||||||||||||||||||
As detailed in Note 19(a) and (d), the share options and the restricted shares to NeoTasks founders were reclassified from liability-classified awards to equity-classified awards in September 2011, accordingly. | ||||||||||||||||||||||||||||||||
CEO and Chairman | ' | |||||||||||||||||||||||||||||||
Share-based compensation | ' | |||||||||||||||||||||||||||||||
Summary of the restricted shares activity | ' | |||||||||||||||||||||||||||||||
The following table summarizes information regarding the restricted shares granted to the CEO and the Chairman: | ||||||||||||||||||||||||||||||||
Number of | Weighted average | |||||||||||||||||||||||||||||||
restricted shares | grant-date | |||||||||||||||||||||||||||||||
fair value | ||||||||||||||||||||||||||||||||
(US$) | ||||||||||||||||||||||||||||||||
Outstanding, January 1, 2011 | 29,678,483 | 0.1875 | ||||||||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||
Outstanding, December 31, 2011 | 29,678,483 | 0.1875 | ||||||||||||||||||||||||||||||
Vested | (29,678,483 | ) | 0.1875 | |||||||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||
Outstanding, December 31, 2012 and 2013 | — | |||||||||||||||||||||||||||||||
| | | | | | | | |||||||||||||||||||||||||
NeoTasks founders | ' | |||||||||||||||||||||||||||||||
Share-based compensation | ' | |||||||||||||||||||||||||||||||
Summary of the restricted shares activity | ' | |||||||||||||||||||||||||||||||
Number of | ||||||||||||||||||||||||||||||||
restricted shares | ||||||||||||||||||||||||||||||||
Outstanding, January 1, 2011 | 8,957,690 | |||||||||||||||||||||||||||||||
Vested | (8,957,690 | ) | ||||||||||||||||||||||||||||||
| | | | | ||||||||||||||||||||||||||||
Outstanding, December 31, 2011, 2012 and 2013 | — | |||||||||||||||||||||||||||||||
| | | | | ||||||||||||||||||||||||||||
-1 | ||||||||||||||||||||||||||||||||
In connection with the First Repurchase occurred in November 2009, Duowan BVI repurchased a portion of their vested restricted shares by utilizing a portion of the proceeds obtained from the Series C preferred shares issuance. The negotiation and execution of the First Repurchase had formed an expectation to the holders of Awards to NeoTasks Founders that it was a practice of Duowan BVI to repurchase the vested restricted shares held by them. The Awards to NeoTasks Founders were deemed to be tainted and they were no longer equity-classified awards but liabilities-classified awards effective from November 2009. The awards would be re-measured at the end of each reporting period until either the repurchase obligation was extinguished or the awards holders were exposed to fluctuation of the market value of the shares for a period of at least six months, or the awards are settled, cancelled or expire unexercised. | ||||||||||||||||||||||||||||||||
Pre-2009 Scheme Options | ' | |||||||||||||||||||||||||||||||
Share-based compensation | ' | |||||||||||||||||||||||||||||||
Summary of the activities of the Pre-2009 Scheme Options for employees and non-employee | ' | |||||||||||||||||||||||||||||||
The following table summarizes the activities of the Pre-2009 Scheme Options for employees and non-employee for the years ended December 31, 2011, 2012 and 2013: | ||||||||||||||||||||||||||||||||
Number of | Weighted average | Weighted average | Aggregate intrinsic value | |||||||||||||||||||||||||||||
options | exercise price | remaining contractual life | (US$) | |||||||||||||||||||||||||||||
(US$) | (years) | |||||||||||||||||||||||||||||||
Outstanding, January 1, 2011 | 19,742,590 | 0.0056 | 7.39 | 18,372 | ||||||||||||||||||||||||||||
Exercised/Repurchased(1) | (1,853,055 | ) | 0.0061 | |||||||||||||||||||||||||||||
| | | | | | | | | | | | | | |||||||||||||||||||
Outstanding, December 31, 2011(2) | 17,889,535 | 0.0055 | 6.37 | 19,366 | ||||||||||||||||||||||||||||
Forfeited | (19,110 | ) | 0.0067 | 6.25 | ||||||||||||||||||||||||||||
| | | | | | | | | | | | | | |||||||||||||||||||
Outstanding, December 31, 2012 | 17,870,425 | 0.0055 | 5.37 | 12,642 | ||||||||||||||||||||||||||||
Exercised | (4,648,420 | ) | 0.0045 | 4.3 | ||||||||||||||||||||||||||||
| | | | | | | | | | | | | | |||||||||||||||||||
Outstanding, vested and exercisable December 31, 2013 | 13,222,005 | 0.0059 | 4.4 | 33,162 | ||||||||||||||||||||||||||||
| | | | | | | | | | | | | | |||||||||||||||||||
-1 | ||||||||||||||||||||||||||||||||
In connection with the Series D Common Share Financing (Note 17) in January 2011, certain employees and the non-employee were given the opportunity to cash-settle their vested options. The repurchase price of each vested option/share was the difference between the stated exercise price of the Pre-2009 Scheme Option and US$0.9777, which was the per share issuance price of common shares issued to the new investor. A total of 1,853,055 Pre-2009 Scheme Options were exercised/repurchased by Duowan BVI for cash consideration of RMB11,701. The underlying common shares were cancelled immediately after the repurchase (the "Second Repurchase"). Similar offer was made by Duowan BVI to the non-employee holding the Pre-2009 Scheme Options but that non-employee did not take up the offer. | ||||||||||||||||||||||||||||||||
-2 | ||||||||||||||||||||||||||||||||
On September 15, 2011, the board of directors of the Company resolved not to undertake any repurchases of vested or unvested share-based compensation awards, except under those conditions specified in the relevant award scheme and grant documents. In addition, any proposed repurchase of vested or unvested share-based compensation awards should be approved by the majority votes of the board of directors. Such intention of the Company was specifically communicated to all employees with or without the awards. All the employees with vested or unvested awards also confirmed such understanding by a written confirmation. Accordingly, the classification of the liability-classified awards changed back to be equity-classified, and the related liability had been reclassified to additional paid-in capital on the modification date. | ||||||||||||||||||||||||||||||||
Schedule of assumptions used in estimation of fair values of Pre-2009 Scheme Options granted to employees and a non-employees | ' | |||||||||||||||||||||||||||||||
Pre-2009 Scheme Options granted to employees and a non-employee: | ||||||||||||||||||||||||||||||||
2011 | ||||||||||||||||||||||||||||||||
Risk-free interest rate(1) | 3.34%-4.01% | |||||||||||||||||||||||||||||||
Expected term(2) | 6-8 years | |||||||||||||||||||||||||||||||
Volatility rate(3) | 53.06%-55.34% | |||||||||||||||||||||||||||||||
Dividend yield(4) | — | |||||||||||||||||||||||||||||||
-1 | ||||||||||||||||||||||||||||||||
The risk-free interest rate of periods within the contractual life of the share option is based on the China Government Bond yield as at the valuation dates. | ||||||||||||||||||||||||||||||||
-2 | ||||||||||||||||||||||||||||||||
The expected term is the contract life of the option. | ||||||||||||||||||||||||||||||||
-3 | ||||||||||||||||||||||||||||||||
Expected volatility is estimated based on the average of historical volatilities of the comparable companies in the same industry as at the valuation dates. | ||||||||||||||||||||||||||||||||
-4 | ||||||||||||||||||||||||||||||||
Duowan BVI and the Company have no history or expectation of paying dividend on its common shares. The expected dividend yield was estimated based on the Company's expected dividend policy over the expected term of the option. | ||||||||||||||||||||||||||||||||
Basic_and_diluted_net_loss_inc1
Basic and diluted net (loss) income per share (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Basic and diluted net (loss) income per share | ' | ||||||||||
Schedule of calculation of basic and diluted net (loss) income per share | ' | ||||||||||
Basic and diluted net (loss) income per share for the years ended December 31, 2011, 2012 and 2013 are calculated as follows: | |||||||||||
For the year ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
RMB | RMB | RMB | |||||||||
Numerator: | |||||||||||
Net (loss) income attributable to the Company | (83,156 | ) | 89,177 | 477,727 | |||||||
(Accretion) decretion to convertible redeemable preferred shares redemption value | (223,663 | ) | 1,293,875 | — | |||||||
Allocation of net income to participating preferred shareholders | — | (478,754 | ) | — | |||||||
| | | | | | | | | | | |
Numerator of basic net (loss) income per share | (306,819 | ) | 904,298 | 477,727 | |||||||
Dilutive effect of preferred shares | — | (815,121 | ) | — | |||||||
| | | | | | | | | | | |
Numerator for diluted (loss) income per share | (306,819 | ) | 89,177 | 477,727 | |||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Denominator: | |||||||||||
Denominator for basic calculation—weighted average number of Class A and Class B common shares outstanding | 485,883,845 | 604,703,810 | 1,122,475,688 | ||||||||
Dilutive effect of preferred shares | — | 320,142,965 | — | ||||||||
Dilutive effect of share options | — | 17,782,885 | 16,362,048 | ||||||||
Dilutive effect of restricted shares | — | 30,594,877 | 14,400,670 | ||||||||
Dilutive effect of restricted share units | — | 4,802,491 | 27,882,891 | ||||||||
Dilutive effect of share-based awards granted to CEO and Chairman | — | 14,441,808 | — | ||||||||
| | | | | | | | | | | |
Denominator for diluted calculation | 485,883,845 | 992,468,836 | 1,181,121,297 | ||||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Basic net (loss) income per Class A and Class B common share | (0.63 | ) | 1.5 | 0.43 | |||||||
Diluted net (loss) income per Class A and Class B common share | (0.63 | ) | 0.09 | 0.4 | |||||||
Basic net (loss) income per ADS* | (12.63 | ) | 29.91 | 8.51 | |||||||
Diluted net (loss) income per ADS* | (12.63 | ) | 1.8 | 8.09 | |||||||
* | |||||||||||
The Company was listed on November 21, 2012 with issuance of a total of 8,970,000 ADS at a public offering price of US$10.50 per ADS. Each ADS represents 20 Class A common shares. The net (loss) income per ADS for the years ended December 31, 2011, 2012 and 2013 were calculated using the same conversion ratio assuming the ADSs had been in existence during these periods. | |||||||||||
Summary of information regarding weighted average of common shares equivalents | ' | ||||||||||
The following table summarizes information regarding weighted average of common shares equivalents for the year ended December 31, 2011: | |||||||||||
For the year ended | |||||||||||
December 31, 2011 | |||||||||||
Preferred shares—weighted average | 359,424,310 | ||||||||||
Share-based awards for NeoTasks acquisition—weighted average | 8,319,608 | ||||||||||
Share-based awards granted to CEO and Chairman—weighted average | 29,678,483 | ||||||||||
Share options—weighted average | 18,488,604 | ||||||||||
Restricted shares—weighted average | 54,045,124 | ||||||||||
Restricted share units—weighted average | 2,625,039 | ||||||||||
Warrants to an independent institutional investor—weighted average | 12,609,970 |
Related_party_transactions_Tab
Related party transactions (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Related party transactions | ' | ||||||||||
Schedule of related parties and their relationships with the Group | ' | ||||||||||
Related Party | Relationship with the Group | ||||||||||
Zhuhai Daren Computer Technology Company Limited ("Zhuhai Daren") | Equity investment | ||||||||||
Guangzhou Shanghang Information Technical Co., Ltd. ("Shanghang") | Significant influence exercised by the Chairman | ||||||||||
Kingsoft Corporation ("Kingsoft") | Significant influence exercised by the Chairman | ||||||||||
Xiaomi Corporation ("Xiaomi") | Significant influence exercised by the Chairman | ||||||||||
Zhuhai Lequ Technology Co., Ltd. ("Zhuhai Lequ") | Equity investment | ||||||||||
Agora, Inc.(1) | Controlled by the director and the chairman of technology committee of the Group | ||||||||||
-1 | |||||||||||
In December 2013, the Group made a minority interest investment to form a new company, Agora Inc., with the director and the chairman of technology committee of the Group and other strategic investors. | |||||||||||
Schedule of significant related party transactions | ' | ||||||||||
During the years ended December 31, 2011, 2012 and 2013, significant related party transactions were as follows: | |||||||||||
For the year ended December 31, | |||||||||||
2011 | 2012 | 2013 | |||||||||
RMB | RMB | RMB | |||||||||
Online games revenue sharing from Zhuhai Daren | 4,451 | 7,547 | 24,452 | ||||||||
Bandwidth service provided by Shanghang | 21,985 | 11,776 | 21,272 | ||||||||
Purchase of intangible assets from Kingsoft | — | — | 6,010 | ||||||||
Online games revenue sharing from Zhuhai Lequ | — | — | 5,076 | ||||||||
Advertising revenue from Xiaomi | — | — | 1,154 | ||||||||
Repayment of interest-free loan from Zhuhai Lequ | — | 500 | 1,000 | ||||||||
Membership subscription fee revenue from Xiaomi | — | 227 | — | ||||||||
Interest-free loan to Zhuhai Daren | 500 | — | — | ||||||||
Repayment of interest-free loan from Zhuhai Daren | — | 2,000 | — | ||||||||
Interest-free loan to Zhuhai Lequ | — | 1,200 | — | ||||||||
Disposal of a cost investment to the Chairman and Co-founder, who is also a director of the Company | — | 1,000 | — | ||||||||
Disposal of an equity investment to Xiaomi | — | 2,000 | — | ||||||||
Schedule of the amounts due from/to related parties | ' | ||||||||||
As of December 31, 2012 and 2013, the amounts due from/to related parties were as follows: | |||||||||||
December 31, | |||||||||||
2012 | 2013 | ||||||||||
RMB | RMB | ||||||||||
Amount due from a related party | |||||||||||
Other receivables from Zhuhai Lequ | 1,073 | 73 | |||||||||
| | | | | | | | ||||
Total | 1,073 | 73 | |||||||||
| | | | | | | | ||||
| | | | | | | | ||||
Amounts due to related parties | |||||||||||
Accounts payable to Zhuhai Daren | 2,362 | 1,479 | |||||||||
Other payables to Shanghang | 242 | 822 | |||||||||
Accounts payable to Zhuhai Lequ | — | 339 | |||||||||
| | | | | | | | ||||
Total | 2,604 | 2,640 | |||||||||
| | | | | | | | ||||
| | | | | | | | ||||
Commitments_and_contingencies_
Commitments and contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and contingencies | ' | ||||
Schedule of future minimum payments under non-cancellable operating leases | ' | ||||
As of December 31, 2013, future minimum payments under non-cancellable operating leases consist of the following: | |||||
Office rental | |||||
RMB | |||||
2014 | 16,919 | ||||
2015 | 15,809 | ||||
| | | | | |
32,728 | |||||
| | | | | |
| | | | | |
Organization_and_principal_act2
Organization and principal activities (Details) | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | ||||
In Thousands, except Share data, unless otherwise specified | Sep. 06, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Nov. 21, 2012 | Dec. 31, 2011 | Nov. 21, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Nov. 21, 2012 | Nov. 21, 2012 | Jan. 31, 2011 | Dec. 31, 2010 |
entity | CNY | Common shares | Common shares | Class A common shares | Class A common shares | Class A common shares | ADSs | Preferred Shares | Duowan BVI | Duowan BVI | ||
USD ($) | Common shares | Zhuhai Duowan Technology | ||||||||||
Organization and principal activities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Equity interest owned (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% |
Number of shares issued in exchange for each share held by all existing shareholders of Duowan BVI pursuant to a share swap agreement | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of VIEs considered as primary beneficiary | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of ADS issued and sold in IPO (in shares) | ' | ' | ' | ' | 51,140,432 | 179,400,000 | 21,256,900 | 179,400,000 | 8,970,000 | ' | 51,140,432 | ' |
Number of common shares represented by each ADS | ' | ' | ' | ' | ' | 20 | 20 | ' | ' | ' | ' | ' |
Net proceeds received from IPO, after deducting commissions and offering expenses | ' | ' | 550,555 | ' | ' | ' | ' | ' | $82,055 | ' | ' | ' |
Number of shares converted into Class B common shares | ' | ' | ' | 548,408,914 | ' | ' | 422,001,838 | ' | ' | 359,424,310 | ' | ' |
Organization_and_principal_act3
Organization and principal activities (Details 2) (CNY) | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 23, 2009 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | Guangzhou Juhui Information Technology Company Limited | Guangzhou Huaduo | Beijing Tuda | Beijing Huanju Shidai or Duowan Entertainment | Beijing Huanju Shidai or Duowan Entertainment | Beijing Huanju Shidai or Duowan Entertainment | Beijing Huanju Shidai or Duowan Entertainment | Beijing Huanju Shidai or Duowan Entertainment | Beijing Huanju Shidai or Duowan Entertainment | Duowan BVI | Duowan BVI | NeoTasks | NeoTasks Limited | Beijing Huanju Shidai or Duowan Entertainment | Zhuhai Duowan or Guangzhou Duowan | Guangzhou Huanju Shidai | Zhuhai Huanju Shidai | |
Guangzhou Juhui Information Technology Company Limited | Guangzhou Huaduo | Guangzhou Huaduo | Guangzhou Huaduo | Beijing Tuda | Beijing Tuda | Beijing Tuda | ||||||||||||
Exclusive Technology Support and Technology Services Agreement | Exclusive Business Cooperation Agreement | Exclusive Option Agreement | Exclusive Technology Support and Technology Services Agreement | Exclusive Business Cooperation Agreement | Exclusive Option Agreement | |||||||||||||
Subsidiaries, VIEs and VIE's subsidiary | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
% of direct or indirect economic ownership | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% |
% of direct or indirect economic ownership | ' | ' | 100.00% | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
% of direct or indirect economic ownership | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period of prior written notice required to terminate the agreement | ' | ' | ' | ' | '30 days | '30 days | ' | '30 days | '30 days | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term of agreement | ' | ' | ' | ' | ' | ' | '10 years | ' | ' | '10 years | ' | ' | ' | ' | ' | ' | ' | ' |
Total assets of the consolidated VIEs and VIE's subsidiary | 1,443,127 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total liabilities of the consolidated VIEs and VIE's subsidiary | 615,776 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Registered capital and PRC statutory reserves of the VIEs and VIE's subsidiary | 241,657 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share split ratio | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.00204 | ' | ' | ' | ' | ' | ' | ' |
Principal_accounting_policies_2
Principal accounting policies (Details) | 12 Months Ended |
Dec. 31, 2013 | |
Convenience translation | ' |
Rate of translations of amounts from RMB into US$ | 6.0537 |
Servers, computers and equipment | ' |
Property and equipment | ' |
Estimated useful lives | '3 years |
Servers, computers and equipment | Minimum | ' |
Property and equipment | ' |
Residual rate (as a percent) | 0.00% |
Servers, computers and equipment | Maximum | ' |
Property and equipment | ' |
Residual rate (as a percent) | 5.00% |
Furniture, fixture and office equipment | ' |
Property and equipment | ' |
Estimated useful lives | '5 years |
Furniture, fixture and office equipment | Minimum | ' |
Property and equipment | ' |
Residual rate (as a percent) | 0.00% |
Furniture, fixture and office equipment | Maximum | ' |
Property and equipment | ' |
Residual rate (as a percent) | 5.00% |
Motor vehicles | ' |
Property and equipment | ' |
Estimated useful lives | '4 years |
Residual rate (as a percent) | 5.00% |
Leasehold improvement | Maximum | ' |
Property and equipment | ' |
Estimated useful lives | '5 years |
Principal_accounting_policies_3
Principal accounting policies (Details 2) (CNY) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Annual test for impairment of goodwill | ' | ' | ' |
Goodwill impairment losses | 0 | 0 | 0 |
Software | ' | ' | ' |
Intangible assets, net | ' | ' | ' |
Estimated useful lives | '3 years | '3 years | ' |
Software | Minimum | ' | ' | ' |
Intangible assets, net | ' | ' | ' |
Estimated useful lives | '3 years | ' | ' |
Software | Maximum | ' | ' | ' |
Intangible assets, net | ' | ' | ' |
Estimated useful lives | '5 years | ' | ' |
Technology | ' | ' | ' |
Intangible assets, net | ' | ' | ' |
Estimated useful lives | '5 years | ' | ' |
Domain name | ' | ' | ' |
Intangible assets, net | ' | ' | ' |
Estimated useful lives | '15 years | '15 years | ' |
Principal_accounting_policies_4
Principal accounting policies (Details 3) | 4 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 10 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 01, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Nov. 01, 2012 | Oct. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | |
item | IVAS revenue | IVAS revenue | IVAS revenue | Online games revenue | Third party developed online games | Third party developed online games | Online music and entertainment revenue | Advertising revenues | Advertising revenues | Advertising revenues | Advertising revenues | Advertising revenues | ||||
Minimum | Maximum | item | Minimum | Maximum | ||||||||||||
Revenue recognition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum period over which each virtual item is made available to the user | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | ' | ' | ' | ' | ' |
Number of arrangements into which virtual items may be sold individually or bundled | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' |
Period of revenue-sharing contracts | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | '2 years | ' | ' | ' | ' | ' | ' |
Estimated user relationship period | ' | ' | ' | ' | ' | ' | ' | ' | '1 month | '6 months | ' | ' | ' | ' | ' | ' |
Advertising revenues contract term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 month | '3 months |
Period over which payments are due | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '6 months |
Cost of revenues | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Tax rate on service income from provision of advertising services in the PRC (as a percent) | ' | 3.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of other cities and provinces in PRC to which the Pilot Program was expanded | 8 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
VAT (as a percent) | ' | 6.00% | ' | ' | ' | ' | ' | 6.00% | ' | ' | ' | 6.00% | ' | ' | ' | ' |
Business taxes prior to the Pilot Program's being applied (as a percent) | ' | ' | ' | ' | 3.00% | 3.00% | 3.00% | ' | ' | ' | ' | ' | 5.00% | 5.00% | ' | ' |
Surcharges on business taxes and VAT (as a percent) | ' | 12.00% | 12.00% | 12.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
PRC business taxes (as a percent) | ' | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Principal_accounting_policies_5
Principal accounting policies (Details 4) (CNY) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
item | |||
Sales and marketing expenses | ' | ' | ' |
Advertising and market promotion expenses | 8,054 | 5,534 | 4,234 |
Employee social security and welfare benefits | ' | ' | ' |
Employee social security and welfare benefits | 68,334 | 39,660 | 23,657 |
Share-based compensation | ' | ' | ' |
Minimum period for which the holder of the awards is exposed to the market value fluctuation of the underlying shares | '6 months | ' | ' |
Statutory reserves | ' | ' | ' |
Minimum percentage appropriation to general reserve fund required | 10.00% | ' | ' |
Reserve level threshold for mandatory appropriation requirement (as a percent) | 50.00% | ' | ' |
Minimum percentage appropriation to statutory surplus fund required | 10.00% | ' | ' |
Surplus fund threshold for mandatory appropriation requirement (as a percent) | 50.00% | ' | ' |
Amount appropriated to statutory reserves | 40,657 | 0 | 0 |
Dividends | ' | ' | ' |
Dividends declared | 0 | 0 | 0 |
Segment reporting | ' | ' | ' |
Number of operating segments | 1 | ' | ' |
Number of geographical segments | 0 | ' | ' |
Certain_risks_and_concentratio2
Certain risks and concentration (Details) (CNY) | 12 Months Ended | |||||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
item | Minimum | Maximum | Guangzhou Huaduo | Guangzhou Huaduo | Guangzhou Huaduo | Guangzhou Huaduo | Guangzhou Huaduo | Guangzhou Huaduo | Beijing Tuda | Beijing Tuda | Beijing Tuda | Beijing Tuda | Beijing Tuda and Guangzhou Huaduo | Beijing Tuda and Guangzhou Huaduo | Beijing Tuda and Guangzhou Huaduo | |
Beijing Huanju Shidai | Beijing Tuda | Mr. David Xueling Li, CEO | Mr. Jun Lei, Chairman of the Company | Mr. Tony Bin Zhao, Director and Chairman of Technology Committee | Mr. Jin Cao, General Manager of Website Department | Mr. David Xueling Li, CEO | Mr. Tony Bin Zhao, Director and Chairman of Technology Committee | Mr. Jin Cao, General Manager of Website Department | Beijing Huanju Shidai | WOFEs | WOFEs | |||||
Certain risks and concentration | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum foreign ownership in internet information provider or other value-added telecommunication service provider's business allowed under PRC laws and regulations | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of VIEs through which the group operates online business | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Equity interests ownership (as a percent) | ' | ' | ' | ' | 99.00% | 0.50% | 0.44% | 0.04% | 0.02% | 100.00% | 97.70% | 1.50% | 0.80% | ' | ' | ' |
Term of contractual agreements | ' | '10 years | '30 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum percentage of the income of VIEs which may be charged as service fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' |
Maximum percentage of the profits payable by VIEs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' |
Number of VIEs or their shareholders entitled to terminate the contracts prior to the expiration date | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Service fees | ' | ' | ' | 31,153 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 |
Certain_risks_and_concentratio3
Certain risks and concentration (Details 2) | 12 Months Ended | 12 Months Ended | |||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2010 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
USD ($) | CNY | CNY | CNY | USD ($) | CNY | Variable interest entity | Variable interest entity | Variable interest entity | |
CNY | CNY | CNY | |||||||
Current assets | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash and cash equivalents | $120,521 | 729,598 | 504,702 | 128,891 | $83,371 | 83,683 | 575,262 | 204,606 | ' |
Short-term deposits | 236,692 | 1,432,863 | 897,698 | ' | ' | ' | 594,000 | 90,000 | ' |
Accounts receivable, net | 16,536 | 100,101 | 117,616 | ' | ' | ' | 48,329 | 41,824 | ' |
Amount due from a related party | 12 | 73 | 1,073 | ' | ' | ' | 73 | 1,073 | ' |
Prepayments and other current assets | 11,156 | 67,533 | 25,149 | ' | ' | ' | 29,753 | 14,897 | ' |
Deferred tax assets | 11,055 | 66,921 | 31,549 | ' | ' | ' | 51,631 | 25,666 | ' |
Total current assets | 395,972 | 2,397,089 | 1,577,787 | ' | ' | ' | 1,299,048 | 378,066 | ' |
Non-current assets | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred tax assets | 103 | 625 | 583 | ' | ' | ' | 383 | 92 | ' |
Investments | 10,246 | 62,029 | 2,950 | ' | ' | ' | 33,920 | 2,950 | ' |
Property and equipment, net | 16,954 | 102,636 | 90,299 | ' | ' | ' | 100,059 | 88,709 | ' |
Intangible assets, net | 4,811 | 29,127 | 19,481 | ' | ' | ' | 9,717 | 3,218 | ' |
Total non-current assets | 33,178 | 200,858 | 118,402 | ' | ' | ' | 144,079 | 94,969 | ' |
Total assets | 429,150 | 2,597,947 | 1,696,189 | ' | ' | ' | 1,443,127 | 473,035 | ' |
Current liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accounts payable | 9,315 | 56,391 | 28,149 | ' | ' | ' | 55,818 | 27,124 | ' |
Deferred revenue | 48,543 | 293,866 | 159,859 | ' | ' | ' | 292,380 | 158,323 | ' |
Advances from customers | 3,229 | 19,549 | 7,515 | ' | ' | ' | 10,656 | 7,271 | ' |
Income taxes payable | 12,902 | 78,107 | 48,001 | ' | ' | ' | 47,974 | 32,885 | ' |
Accrued liabilities and other current liabilities | 41,423 | 250,760 | 120,289 | ' | ' | ' | 197,851 | 81,223 | ' |
Amounts due to related parties | 436 | 2,640 | 2,604 | ' | ' | ' | 2,640 | 2,604 | ' |
Total current liabilities | 115,848 | 701,313 | 366,417 | ' | ' | ' | 607,319 | 309,430 | ' |
Non-current liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred revenue | 1,557 | 9,425 | 6,487 | ' | ' | ' | 8,457 | 4,525 | ' |
Total liabilities | 117,405 | 710,738 | 372,904 | ' | ' | ' | 615,776 | 313,955 | ' |
Net revenues | 301,217 | 1,823,468 | 820,031 | 319,655 | ' | ' | 1,669,852 | 702,929 | 232,376 |
Net (loss) income | 78,917 | 477,727 | 89,177 | -83,156 | ' | ' | 486,095 | 80,071 | -79,334 |
Net cash provided by operating activities | 147,211 | 891,173 | 356,852 | 99,817 | ' | ' | 845,198 | 322,378 | 57,313 |
Net cash used in investing activities | -108,959 | -659,603 | -498,504 | -528,357 | ' | ' | -592,390 | -152,197 | -46,475 |
Net increase in cash and cash equivalents | $37,313 | 225,883 | 381,088 | 49,342 | ' | ' | 252,808 | 170,181 | 10,838 |
Certain_risks_and_concentratio4
Certain risks and concentration (Details 3) (Accounts receivable, Credit concentration) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
item | item | item | |
Top 10 accounts receivable | ' | ' | ' |
Concentration of risks | ' | ' | ' |
Number of top accounts receivable | 10 | 10 | 10 |
Concentration percentage | 87.00% | 92.00% | 96.00% |
Collection agencies and customers, B1 | ' | ' | ' |
Concentration of risks | ' | ' | ' |
Concentration percentage | 25.00% | 34.00% | 31.00% |
Collection agencies and customers, B2 | ' | ' | ' |
Concentration of risks | ' | ' | ' |
Concentration percentage | 12.00% | ' | ' |
Collection agencies and customers, B3 | ' | ' | ' |
Concentration of risks | ' | ' | ' |
Concentration percentage | 11.00% | 16.00% | ' |
Collection agencies and customers, B4 | ' | ' | ' |
Concentration of risks | ' | ' | ' |
Concentration percentage | ' | ' | 12.00% |
Collection agencies and customers, B5 | ' | ' | ' |
Concentration of risks | ' | ' | ' |
Concentration percentage | ' | ' | 12.00% |
Business_combination_Details
Business combination (Details) | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 12, 2012 | Mar. 12, 2012 | Mar. 12, 2012 |
In Thousands, unless otherwise specified | USD ($) | CNY | CNY | Internet service company | Internet service company | Internet service company |
CNY | Technology | Software | ||||
CNY | CNY | |||||
Business combination | ' | ' | ' | ' | ' | ' |
Cash consideration | ' | ' | ' | 11,722 | ' | ' |
Purchase price allocation | ' | ' | ' | ' | ' | ' |
Property and equipment | ' | ' | ' | 128 | ' | ' |
Intangible assets | ' | ' | ' | ' | 10,035 | 660 |
Goodwill | 261 | 1,577 | 1,604 | 899 | ' | ' |
Total | ' | ' | ' | 11,722 | ' | ' |
Cash_and_cash_equivalents_Deta
Cash and cash equivalents (Details) | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | USD ($) | CNY | USD ($) | CNY | CNY | CNY | RMB | RMB | US$ | US$ | US$ | US$ |
CNY | CNY | USD ($) | CNY | USD ($) | CNY | |||||||
Cash and cash equivalents | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash and cash equivalents | $120,521 | 729,598 | $83,371 | 504,702 | 128,891 | 83,683 | 715,316 | 460,176 | $2,342 | 14,282 | $7,084 | 44,526 |
Accounts_receivable_net_Detail
Accounts receivable, net (Details) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
USD ($) | CNY | CNY | CNY | |
Accounts receivable, net | ' | ' | ' | ' |
Accounts receivable, gross | ' | 131,315 | 123,332 | ' |
Less: allowance for doubtful receivables | ' | -31,214 | -5,716 | ' |
Accounts receivable, net | 16,536 | 100,101 | 117,616 | ' |
Summary of allowance for doubtful accounts | ' | ' | ' | ' |
Balance at the beginning of the year | ' | -5,716 | ' | -387 |
Additions charged to general and administrative expenses | -5,284 | -31,987 | -6,884 | ' |
Write-off during the year | ' | 6,489 | 1,168 | 387 |
Balance at the end of the year | ' | -31,214 | -5,716 | ' |
Investments_Details
Investments (Details) | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
USD ($) | CNY | CNY | Investment in an equity interest of company | Investment in preferred shares of two companies | Investment in preferred shares of company one | Investment in preferred shares of company two | |
CNY | CNY | ||||||
item | |||||||
Investments | ' | ' | ' | ' | ' | ' | ' |
Cost investments | ' | 47,110,000 | ' | ' | ' | ' | ' |
Equity investments | ' | 14,919,000 | 2,950,000 | ' | ' | ' | ' |
Total | 10,246,000 | 62,029,000 | 2,950,000 | ' | ' | ' | ' |
Investments | ' | ' | ' | ' | ' | ' | ' |
Minimum equity interest in an investee company (as a percent) | ' | ' | ' | 20.00% | ' | 10.00% | 10.00% |
Original investment | ' | ' | ' | 15,000,000 | ' | ' | ' |
Number of companies whose preferred stock is acquired by the entity under the agreement | ' | ' | ' | ' | 2 | ' | ' |
Consideration to acquire minority stake | ' | ' | ' | ' | 28,000,000 | ' | ' |
Property_and_equipment_net_Det
Property and equipment, net (Details) | 12 Months Ended | ||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 |
USD ($) | CNY | CNY | CNY | Servers, computers and equipment | Servers, computers and equipment | Leasehold improvement | Leasehold improvement | Furniture, fixture and office equipment | Furniture, fixture and office equipment | Motor vehicles | Motor vehicles | Construction in progress | |
CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | CNY | |||||
Property and equipment, net | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gross carrying amount | ' | 195,171 | 137,918 | ' | 152,404 | 103,005 | 23,257 | 22,831 | 9,672 | 9,083 | 5,186 | 2,999 | 4,652 |
Less: accumulated depreciation | ' | -92,535 | -47,619 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property and equipment, net | 16,954 | 102,636 | 90,299 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Depreciation expense | $7,427 | 44,963 | 29,074 | 12,888 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Intangible_assets_net_Details
Intangible assets, net (Details) | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
USD ($) | CNY | CNY | CNY | Software | Software | Technology | Technology | Domain name | Domain name | |
CNY | CNY | CNY | CNY | CNY | CNY | |||||
Intangible assets, net | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gross carrying amount | ' | 39,884 | 25,674 | ' | 5,477 | 4,235 | 17,121 | 9,962 | 17,286 | 11,477 |
Less: accumulated amortization | ' | -10,207 | -5,643 | ' | -3,209 | -1,808 | -4,054 | -1,659 | -2,944 | -2,176 |
Less: impairment | ' | ' | ' | ' | -550 | -550 | ' | ' | ' | ' |
Intangible assets, net | 4,811 | 29,127 | 19,481 | ' | ' | ' | ' | ' | ' | ' |
Amortization of acquired intangible assets | 777 | 4,707 | 3,369 | 1,211 | ' | ' | ' | ' | ' | ' |
Estimated amortization expenses | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2014 | ' | ' | ' | ' | 1,263 | ' | 3,424 | ' | 1,171 | ' |
2015 | ' | ' | ' | ' | 335 | ' | 3,424 | ' | 1,149 | ' |
2016 | ' | ' | ' | ' | 68 | ' | 3,424 | ' | 1,141 | ' |
2017 | ' | ' | ' | ' | 33 | ' | 1,806 | ' | 1,141 | ' |
2018 | ' | ' | ' | ' | 19 | ' | 989 | ' | 1,141 | ' |
Weighted average amortization periods of intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average amortization period | ' | ' | ' | ' | '3 years | '3 years | '5 years | '5 years | '15 years | '15 years |
Goodwill_Details
Goodwill (Details) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 |
CNY | CNY | CNY | USD ($) | |
Goodwill | ' | ' | ' | ' |
Goodwill acquired | 1,577 | 1,604 | ' | $261 |
Impairment of goodwill | 0 | 0 | 0 | ' |
Deferred_revenue_Details
Deferred revenue (Details) | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | USD ($) | CNY | CNY | IVAS revenues | IVAS revenues | Government grants | Government grants |
CNY | CNY | CNY | CNY | ||||
Deferred revenue | ' | ' | ' | ' | ' | ' | ' |
Deferred revenue, current | $48,543 | 293,866 | 159,859 | 292,184 | 157,940 | 1,682 | 1,919 |
Deferred revenue, non-current | $1,557 | 9,425 | 6,487 | 8,457 | 4,329 | 968 | 2,158 |
Accrued_liabilities_and_other_2
Accrued liabilities and other current liabilities (Details) | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | USD ($) | CNY | CNY |
Accrued liabilities and other current liabilities | ' | ' | ' |
Accrued salaries and welfare | ' | 113,302 | 54,688 |
Accrued revenue sharing fees | ' | 66,512 | 19,504 |
Accrued bandwidth costs | ' | 21,869 | 15,679 |
Business and other taxes payable | ' | 14,248 | 7,422 |
Value added taxes payable | ' | 5,291 | 8,718 |
Accrued technology service fee | ' | 5,040 | 2,162 |
Others | ' | 24,498 | 12,116 |
Total | $41,423 | 250,760 | 120,289 |
Cost_of_revenue_Details
Cost of revenue (Details) (CNY) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Shared-based compensation | 117,096 | 100,351 | 135,001 |
Cost of revenues | ' | ' | ' |
Revenue sharing fees and content costs | 444,065 | 109,273 | 6,750 |
Bandwidth costs | 203,238 | 145,037 | 75,064 |
Salary and welfare | 88,456 | 50,009 | 33,388 |
Business tax and surcharges | 47,755 | 30,026 | 16,462 |
Depreciation and amortization | 37,084 | 25,762 | 11,951 |
Payment handling costs | 24,955 | 22,828 | 9,306 |
Shared-based compensation | 9,860 | 8,407 | 15,449 |
Other costs | 26,586 | 24,791 | 14,329 |
Total | 881,999 | 416,133 | 182,699 |
Other_income_Details
Other income (Details) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
USD ($) | CNY | CNY | CNY | |
Other income | ' | ' | ' | ' |
Government grants | ' | 25,356 | 2,465 | 1,982 |
Others | ' | 1,722 | ' | ' |
Total | $4,473 | 27,078 | 2,465 | 1,982 |
Income_tax_Details
Income tax (Details) (CNY) | 12 Months Ended | 12 Months Ended | 72 Months Ended | 36 Months Ended | 12 Months Ended | ||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 |
Cayman | BVI | Hong Kong | Hong Kong | Hong Kong | PRC | PRC | PRC | Guangzhou Huaduo | Other PRC subsidiaries, VIE and VIE's subsidiary | ||||
PRC | |||||||||||||
Income tax | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Withholding income tax | ' | ' | ' | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' |
Income tax rate (as a percent) | 25.00% | 25.00% | 25.00% | ' | ' | 16.50% | 16.50% | 16.50% | ' | 25.00% | ' | ' | ' |
Preferential tax rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | 15.00% | ' | ' | 15.00% | 25.00% |
Tax exemption period following the first profitable year | ' | ' | ' | ' | ' | ' | ' | ' | '2 years | ' | ' | ' | ' |
Period for reduction in tax percentage | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | ' |
Reduction in tax rate for three years following the exemption period (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | ' | ' | ' | ' |
Percentage of research and development expenses entitled to claim by enterprise | ' | ' | ' | ' | ' | ' | ' | ' | 150.00% | ' | ' | ' | ' |
PRC withholding tax rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' |
Aggregate undistributed earnings of subsidiaries available for distribution | ' | ' | ' | ' | ' | ' | ' | ' | 753,975 | 753,975 | 204,960 | ' | ' |
Accrued deferred tax liability | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income_tax_Details_2
Income tax (Details 2) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
USD ($) | CNY | CNY | CNY | |
Current and deferred portions of income tax expense | ' | ' | ' | ' |
Current income tax expenses | ' | -125,365 | -48,357 | -12,516 |
Deferred income tax benefits | 5,850 | 35,414 | 19,316 | 11,173 |
Income tax expense for the year | ($14,859) | -89,951 | -29,041 | -1,343 |
Income_tax_Details_3
Income tax (Details 3) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Income tax | ' | ' | ' |
PRC Statutory income tax rate (as a percent) | -25.00% | -25.00% | -25.00% |
Effect of preferential tax rate (as a percent) | 10.50% | 10.40% | 8.40% |
Effect of tax-exempt entities (as a percent) | 2.20% | 0.20% | -5.10% |
Permanent differences (as a percent) | -4.00% | -13.90% | 32.50% |
Change in valuation allowance (as a percent) | -3.00% | -2.00% | -7.80% |
Effect of Super Deduction available to the Group (as a percent) | 3.40% | 5.70% | -4.90% |
Adjustments of deferred tax for changes in tax rates (as a percent) | ' | ' | 3.60% |
Effective income tax rate (as a percent) | -15.90% | -24.60% | 1.70% |
Income_tax_Details_4
Income tax (Details 4) | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | USD ($) | CNY | CNY |
Deferred tax assets, current: | ' | ' | ' |
Deferred revenue | ' | 32,905 | 16,270 |
Allowance for doubtful accounts receivable, accrued expense and others not currently deductible for tax purposes | ' | 39,791 | 17,062 |
Valuation allowance | ' | -5,775 | -1,783 |
Total current deferred tax assets, net | 11,055 | 66,921 | 31,549 |
Deferred tax assets, non-current: | ' | ' | ' |
Tax loss carried forward | ' | 16,400 | 2,433 |
Deferred revenue | ' | 445 | 538 |
Impairment of an equity investment | ' | 180 | 45 |
Valuation allowance | ' | -16,400 | -2,433 |
Total non-current deferred tax assets, net | $103 | 625 | 583 |
Income_tax_Details_5
Income tax (Details 5) (CNY) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 |
Net operating tax loss carry forwards | ' |
Operating tax loss carry forwards | 62,994 |
PRC | ' |
Net operating tax loss carry forwards | ' |
Maximum period for claw back underpaid tax plus penalties and interest by tax authorities | '5 years |
2014 | ' |
Net operating tax loss carry forwards | ' |
Operating tax loss carry forwards | 3,184 |
2016 | ' |
Net operating tax loss carry forwards | ' |
Operating tax loss carry forwards | 3,405 |
2017 | ' |
Net operating tax loss carry forwards | ' |
Operating tax loss carry forwards | 3,034 |
2018 | ' |
Net operating tax loss carry forwards | ' |
Operating tax loss carry forwards | 53,371 |
Common_shares_Details
Common shares (Details) | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 1 Months Ended | |||||||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Nov. 21, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Nov. 21, 2012 | Dec. 31, 2011 | Nov. 21, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Oct. 31, 2012 | Jul. 31, 2011 | Jan. 31, 2011 | Jan. 31, 2011 | Jan. 31, 2011 | Jan. 31, 2011 |
USD ($) | CNY | CNY | CNY | Class A common shares | Class A common shares | Class A common shares | Class A common shares | Class B common shares | Class B common shares | Class B common shares | Class B common shares | Common shares | Common shares | Common shares | Common shares | Duowan BVI | Duowan BVI | Duowan BVI | Duowan BVI | Duowan BVI | |
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | Restricted shares | Warrants to purchase common shares | Warrants to purchase common shares | Warrants to purchase common shares | Common shares | Common shares | ||||||||||
vote | vote | USD ($) | Maximum | USD ($) | CNY | ||||||||||||||||
Common shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of common shares (in shares) | ' | ' | ' | ' | 179,400,000 | 21,256,900 | 179,400,000 | ' | ' | ' | ' | ' | ' | 51,140,432 | ' | ' | ' | ' | ' | 51,140,432 | 51,140,432 |
Aggregate consideration of common shares issued and sold to an independent institutional investor | ' | ' | ' | 488,969 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $50,000 | ' |
Shares allowed to be purchased under warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,570,216 | ' | ' |
Warrant to purchase additional common shares, aggregate purchase price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,000 | ' | ' | ' |
Issue price per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.98 | ' |
Issuance price of each common share relating to fair value of warrant (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.08 | ' | ' | ' |
Issuance costs of common stock | $958 | 5,802 | 27,815 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,208 |
Warrant to acquire common stock, exercised (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,570,216 | ' | ' | ' | ' |
Conversion of Stock, Shares Converted | ' | ' | ' | ' | ' | 422,001,838 | ' | ' | ' | ' | ' | ' | 548,408,914 | ' | ' | 5,068,000 | ' | ' | ' | ' | ' |
Common stock, par value (in dollars per share) | ' | ' | ' | ' | $0.00 | $0.00 | $0.00 | ' | $0.00 | $0.00 | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Vote entitled per share | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | 10 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of Class A common shares convertible from Class B common shares | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common shares, shares authorized | ' | ' | ' | ' | ' | 10,000,000,000 | 10,000,000,000 | 0 | 1,000,000,000 | 1,000,000,000 | ' | 4,640,575,690 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common shares, shares issued | ' | ' | ' | ' | ' | 622,658,738 | 179,400,000 | 0 | 485,831,386 | 907,833,224 | ' | 543,340,914 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common shares, shares outstanding | ' | ' | ' | ' | ' | 622,658,738 | 179,400,000 | 0 | 485,831,386 | 907,833,224 | ' | 543,340,914 | ' | 543,340,914 | 466,630,266 | ' | ' | ' | ' | ' | ' |
Convertible_redeemable_preferr2
Convertible redeemable preferred shares (Details) | 12 Months Ended | 1 Months Ended | 1 Months Ended | 1 Months Ended | 1 Months Ended | ||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 30, 2008 | Dec. 31, 2006 | Dec. 01, 2006 | Aug. 31, 2008 | Aug. 08, 2008 | Nov. 30, 2009 | Nov. 30, 2009 | Nov. 22, 2009 | Nov. 30, 2009 | Nov. 22, 2009 |
USD ($) | CNY | CNY | Series A Preferred Shares | Series A Preferred Shares | Series A Preferred Shares | Series B convertible redeemable preferred shares | Series B convertible redeemable preferred shares | Series C Preferred Shares | Series C-1 Preferred Shares | Series C-1 Preferred Shares | Series C-2 Preferred Shares | Series C-2 Preferred Shares | |
CNY | CNY | USD ($) | CNY | USD ($) | CNY | CNY | USD ($) | CNY | USD ($) | ||||
Convertible redeemable preferred shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued | ' | ' | ' | 81,612,930 | 54,488,000 | ' | 102,073,860 | ' | ' | 16,249,870 | ' | 104,999,650 | ' |
Aggregate cash considerations | ' | ' | ' | 13,722 | 7,720 | ' | 34,232 | ' | ' | 8,875 | ' | 71,684 | ' |
Issue price per share | ' | ' | ' | ' | ' | $0.02 | ' | $0.05 | ' | ' | $0.08 | ' | $0.10 |
Issuance costs | $958 | 5,802 | 27,815 | 172 | ' | ' | 278 | ' | 274 | ' | ' | ' | ' |
Convertible_redeemable_preferr3
Convertible redeemable preferred shares (Details 2) | 12 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | ||||||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Jan. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2011 | Nov. 22, 2009 | Aug. 31, 2008 | Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 01, 2006 | Dec. 01, 2006 | Dec. 31, 2011 | Jun. 02, 2008 | Dec. 31, 2011 | Nov. 22, 2009 | Aug. 08, 2008 | Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2010 | Nov. 22, 2009 | Dec. 31, 2013 | Dec. 31, 2011 | Nov. 22, 2009 | Dec. 31, 2013 | Dec. 31, 2011 | Nov. 21, 2012 |
USD ($) | USD ($) | USD ($) | Preferred Shares | Series A Preferred Shares | Series A Preferred Shares | Series A Preferred Shares | Series A Preferred Shares | Series A Preferred Shares | Series A Preferred Shares | Series A Preferred Shares | Series A Preferred Shares | Series A Preferred Shares | Series A Preferred Shares | Series B convertible redeemable preferred shares | Series B convertible redeemable preferred shares | Series B convertible redeemable preferred shares | Series B convertible redeemable preferred shares | Series B convertible redeemable preferred shares | Series C Preferred Shares | Series C Preferred Shares | Series C Preferred Shares | Series C-1 Preferred Shares | Series C-1 Preferred Shares | Series C-1 Preferred Shares | Series C-2 Preferred Shares | Series C-2 Preferred Shares | Series C-2 Preferred Shares | Class B common shares | |
USD ($) | CNY | CNY | CNY | CNY | USD ($) | 1-Dec-06 | 1-Dec-06 | 2-Jun-08 | 2-Jun-08 | CNY | USD ($) | CNY | CNY | CNY | CNY | USD ($) | CNY | USD ($) | CNY | ||||||||||
USD ($) | CNY | USD ($) | CNY | ||||||||||||||||||||||||||
Convertible redeemable preferred shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance Date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1-Dec-06 | ' | 2-Jun-08 | ' | ' | ' | 8-Aug-08 | ' | ' | ' | ' | ' | ' | 22-Nov-09 | ' | ' | 22-Nov-09 | ' |
Shares issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 54,488,000 | ' | 81,612,930 | ' | ' | ' | 102,073,860 | ' | ' | ' | ' | ' | ' | 16,249,870 | ' | ' | 104,999,650 | ' |
Shares outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 54,488,000 | ' | 81,612,930 | ' | ' | ' | 102,073,860 | ' | ' | ' | ' | ' | ' | 16,249,870 | ' | ' | 104,999,650 | ' |
Issue Price Per Share | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.02 | $0.02 | ' | $0.02 | ' | ' | $0.05 | ' | ' | ' | ' | ' | ' | $0.08 | ' | ' | $0.10 | ' | ' | ' |
Proceeds from Issuance, Net of Issuance Costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1,000 | ' | $1,975 | ' | ' | $4,959 | ' | ' | ' | ' | ' | ' | $1,300 | ' | ' | $10,460 | ' | ' | ' |
Carrying Amount | ' | ' | ' | ' | ' | ' | ' | 935,013 | 846,752 | ' | ' | 374,332 | ' | 560,681 | ' | ' | ' | 703,901 | 639,799 | ' | 842,020 | 770,720 | ' | ' | 112,556 | ' | ' | 729,464 | ' |
Preferred shares, par value (in dollars per share) | ' | ' | ' | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion ratio | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum market capitalization for a Qualified IPO | ' | 1,500,000 | 400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common shares, shares issued upon conversion | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 359,424,310 |
Period following the original issue date after which shares can be redeemed by the entity, at the election of the majority of shareholders | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash or cash equivalents minimum thresholds limit | 3,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Free cash flow in preceding twelve months | 1,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period of minimum free cash flows for redemption of preferred shares | '12 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Redemption price, percentage of original issue price | ' | ' | ' | ' | ' | ' | 150.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | 100.00% | ' | ' |
Internal rate of return (as a percent) | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | 10.00% | ' | ' |
Incremental value received by preferred shareholders | ' | ' | ' | ' | 19 | 916 | ' | ' | ' | ' | ' | ' | ' | ' | 176 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible_redeemable_preferr4
Convertible redeemable preferred shares (Details 3) (CNY) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 |
Series A Preferred Shares | ' | ' |
Changes of convertible redeemable preferred shares | ' | ' |
Beginning balance | 935,013 | 846,752 |
Accretion (decretion) to redeemable value | -485,517 | 88,261 |
Conversion of convertible redeemable preferred shares into Class B common shares | -449,496 | ' |
Ending balance | ' | 935,013 |
Series B Preferred Shares | ' | ' |
Changes of convertible redeemable preferred shares | ' | ' |
Beginning balance | 703,901 | 639,799 |
Accretion (decretion) to redeemable value | -366,785 | 64,102 |
Conversion of convertible redeemable preferred shares into Class B common shares | -337,116 | ' |
Ending balance | ' | 703,901 |
Series C Preferred Shares | ' | ' |
Changes of convertible redeemable preferred shares | ' | ' |
Beginning balance | 842,020 | 770,720 |
Accretion (decretion) to redeemable value | -441,573 | 71,300 |
Conversion of convertible redeemable preferred shares into Class B common shares | -400,447 | ' |
Ending balance | ' | 842,020 |
Convertible_redeemable_preferr5
Convertible redeemable preferred shares (Details 4) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2011 | |
vote | ||
Preferred Shares | ' | ' |
Convertible redeemable preferred shares | ' | ' |
Risk-free interest rate (as a percent) | ' | 2.53% |
Volatility (as a percent) | ' | 66.10% |
Discount rate (as a percent) | ' | 16.00% |
Preferred Stock Voting Rights Per Share | 1 | ' |
Series A Preferred Shares | ' | ' |
Convertible redeemable preferred shares | ' | ' |
Percentage of the original issuance price for calculating liquidation preference | 150.00% | ' |
Series B Preferred Shares | ' | ' |
Convertible redeemable preferred shares | ' | ' |
Percentage of the original issuance price for calculating liquidation preference | 100.00% | ' |
Series C Preferred Shares | ' | ' |
Convertible redeemable preferred shares | ' | ' |
Percentage of the original issuance price for calculating liquidation preference | 100.00% | ' |
Sharebased_compensation_Detail
Share-based compensation (Details) | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | ||||||||||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jan. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Nov. 21, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2008 | Dec. 31, 2007 | Dec. 31, 2007 | Jan. 31, 2011 | Jan. 31, 2011 |
CNY | CNY | CNY | Duowan BVI | Pre-2009 Scheme Options | Pre-2009 Scheme Options | Share options | Share options | Share options | Share options | Share options | Share options | Share options | Share options | Share options | Share options | Share options | Share options | Share options | Share options | Share options | |
Common shares | Employees | Non-employee | Non-employee | Pre-2009 Scheme Options | Pre-2009 Scheme Options | Pre-2009 Scheme Options | Pre-2009 Scheme Options | Pre-2009 Scheme Options | Pre-2009 Scheme Options | Pre-2009 Scheme Options | Pre-2009 Scheme Options | Pre-2009 Scheme Options | Pre-2009 Scheme Options | Pre-2009 Scheme Options | Pre-2009 Scheme Options | Pre-2009 Scheme Options | Pre-2009 Scheme Options | ||||
USD ($) | CNY | CNY | USD ($) | USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | USD ($) | Minimum | Maximum | Employees | Employees | Non-employee | Duowan BVI | Duowan BVI | ||||
item | item | CNY | Common shares | ||||||||||||||||||
USD ($) | |||||||||||||||||||||
Share-based compensation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Awards granted (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,499,050 | 12,705,700 | 3,832,290 | ' | ' |
Number of non-employees to whom options were granted | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' |
Vesting period | ' | ' | ' | ' | ' | ' | ' | '4 years | '4 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Awards vesting after the first anniversary of the vesting inception date (as a percent) | ' | ' | ' | ' | ' | ' | ' | 25.00% | 25.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Awards vesting in six equal installments over the following 36 months (as a percent) | ' | ' | ' | ' | ' | ' | ' | 75.00% | 75.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of equal installments in which award will vest | ' | ' | ' | ' | ' | ' | ' | 6 | 6 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period over which awards will vest in six equal installments | ' | ' | ' | ' | ' | ' | ' | '36 months | '36 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of options | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the beginning of the period (in shares) | ' | ' | ' | ' | ' | ' | ' | 17,870,425 | 17,870,425 | 17,889,535 | 17,889,535 | 19,742,590 | 19,742,590 | ' | ' | ' | ' | ' | ' | ' | ' |
Exercised/Repurchased (in shares) | ' | ' | ' | ' | ' | ' | ' | -4,648,420 | -4,648,420 | ' | ' | -1,853,055 | -1,853,055 | ' | ' | ' | ' | ' | ' | ' | ' |
Forfeited (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | -19,110 | -19,110 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the end of the period (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 17,870,425 | 17,870,425 | 17,889,535 | 17,889,535 | 19,742,590 | ' | ' | ' | ' | ' | ' | ' |
Outstanding, vested and exercisable at the end of the period (in shares) | ' | ' | ' | ' | ' | ' | ' | 13,222,005 | 13,222,005 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average exercise price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the beginning of the period (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | $0.01 | ' | $0.01 | ' | $0.01 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercised/Repurchased (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | $0.00 | ' | ' | ' | $0.01 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Forfeited (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.01 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the end of the period (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.01 | ' | $0.01 | ' | $0.01 | ' | ' | ' | ' | ' | ' | ' |
Outstanding, vested and exercisable at the end of the period (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | $0.01 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average remaining contractual life | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the end of the period | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years 4 months 13 days | '5 years 4 months 13 days | '6 years 4 months 13 days | '6 years 4 months 13 days | '7 years 4 months 20 days | ' | ' | ' | ' | ' | ' | ' |
Forfeited | ' | ' | ' | ' | ' | ' | ' | ' | ' | '6 years 3 months | '6 years 3 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercised | ' | ' | ' | ' | ' | ' | ' | '4 years 3 months 18 days | '4 years 3 months 18 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding, vested and exercisable at the end of the period | ' | ' | ' | ' | ' | ' | ' | '4 years 4 months 24 days | '4 years 4 months 24 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate intrinsic value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the end of the period | ' | ' | ' | ' | ' | ' | ' | ' | ' | $12,642 | ' | $19,366 | ' | $18,372 | ' | ' | ' | ' | ' | ' | ' |
Outstanding, vested and exercisable at the end of the period | ' | ' | ' | ' | ' | ' | ' | 33,162 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issue Price Per Share | ' | ' | ' | $0.98 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.98 |
Cash consideration paid to exercise/repurchase options | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11,701 | ' |
Assumptions used in estimation of fair values of Pre-2009 Scheme Options granted to employees and a non-employees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Risk-free interest rate, Minimum (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.34% | 3.34% | ' | ' | ' | ' | ' | ' | ' | ' |
Risk-free interest rate, Maximum (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.01% | 4.01% | ' | ' | ' | ' | ' | ' | ' | ' |
Expected term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '6 years | '8 years | ' | ' | ' | ' | ' |
Volatility rate, Minimum (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 53.06% | 53.06% | ' | ' | ' | ' | ' | ' | ' | ' |
Volatility rate, Maximum (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 55.34% | 55.34% | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average exercise price of option granted (in dollars per share) | ' | ' | ' | ' | ' | ' | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total intrinsic value of options exercised | ' | ' | ' | ' | ' | ' | ' | ' | 64,195 | ' | 0 | ' | 11,912 | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based compensation (benefit) | 117,096 | 100,351 | 135,001 | ' | ' | ' | ' | ' | 14,004 | ' | -89 | ' | 25,683 | ' | ' | ' | ' | ' | ' | ' | ' |
Unrecognized compensation cost and expense | ' | ' | ' | ' | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sharebased_compensation_Detail1
Share-based compensation (Details 2) | 12 Months Ended | 12 Months Ended | 0 Months Ended | 48 Months Ended | 1 Months Ended | ||||||||||||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2013 | Dec. 31, 2011 | Feb. 23, 2010 | Feb. 23, 2010 | Dec. 05, 2008 | Dec. 31, 2013 | Dec. 31, 2013 | Oct. 31, 2009 |
CNY | CNY | CNY | Restricted shares | Restricted shares | Restricted shares | Restricted shares | Restricted shares | Restricted shares | Restricted shares | Restricted shares | Restricted shares | Restricted shares | Restricted shares | Restricted shares | Restricted shares | Restricted shares | Restricted shares | Restricted shares | Duowan BVI | Duowan BVI | Duowan BVI | Duowan BVI | |
USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | Maximum | CEO and Chairman | CEO and Chairman | CEO and Chairman | CEO and Chairman | CEO and Chairman | Founders of NeoTasks | Founders of NeoTasks | CEO | Chairman or Co-founder | Founders of NeoTasks | Restricted shares | Restricted shares | Restricted shares | ||||
item | CNY | USD ($) | CNY | CNY | USD ($) | CNY | USD ($) | Non-employee | Employees | Founders of NeoTasks | |||||||||||||
item | CNY | ||||||||||||||||||||||
Share-based compensation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Awards vesting after 24 months of the grant date (as a percent) | ' | ' | ' | 50.00% | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period after the grant date after which 50% of awards will vest | ' | ' | ' | '24 months | '24 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Awards vesting in two equal installments over the following 24 months (as a percent) | ' | ' | ' | 50.00% | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of equal installments in which award will vest | ' | ' | ' | 2 | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period over which awards will vest in two equal installments | ' | ' | ' | '24 months | '24 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period from receipt of the notification to deliver a properly signed agreement after which service vested shares held by leaving employee shall automatically lapse and expire | ' | ' | ' | ' | ' | ' | ' | ' | ' | '30 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of founders to whom warrants were granted | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' |
Warrants granted (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 26,873,070 | ' | ' | ' |
Exercise price of warrants (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0 | ' | ' | ' |
Incremental charge recognized upon conversion of warrants into restricted shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 |
Vesting period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '4 years | ' | ' | ' | '3 years |
Percentage of awards vesting after the second anniversary | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | ' | ' | ' | ' |
Percentage of awards vesting each year after the second anniversary | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25.00% | ' | ' | ' | ' |
Percentage of awards vesting annually | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.33% |
Number of restricted shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the beginning of the period (in shares) | ' | ' | ' | 18,230,801 | 18,230,801 | 43,285,101 | 43,285,101 | 48,486,036 | 48,486,036 | ' | ' | 29,678,483 | 29,678,483 | ' | 29,678,483 | ' | 8,957,690 | ' | ' | ' | ' | ' | ' |
Granted (in shares) | ' | ' | ' | ' | ' | ' | ' | 10,846,800 | 10,846,800 | ' | ' | ' | ' | ' | ' | ' | ' | 13,369,813 | 29,678,483 | ' | 100,000 | 61,250,677 | ' |
Forfeited (in shares) | ' | ' | ' | -1,581,789 | -1,581,789 | -3,673,580 | -3,673,580 | -2,726,024 | -2,726,024 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Vested (in shares) | ' | ' | ' | -11,975,287 | -11,975,287 | -21,380,720 | -21,380,720 | -13,321,711 | -13,321,711 | ' | ' | -29,678,483 | -29,678,483 | ' | ' | ' | -8,957,690 | ' | ' | ' | ' | ' | ' |
Outstanding at the end of the period (in shares) | ' | ' | ' | 4,673,725 | 4,673,725 | 18,230,801 | 18,230,801 | 43,285,101 | 43,285,101 | ' | ' | ' | ' | ' | 29,678,483 | ' | ' | ' | ' | ' | ' | ' | ' |
Expected to vest at the end of the period (in shares) | ' | ' | ' | 4,449,366 | 4,449,366 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average grant-date fair value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the beginning of the period (in dollars per share) | ' | ' | ' | $0.49 | ' | $0.49 | ' | $0.29 | ' | ' | ' | $0.19 | ' | ' | $0.19 | ' | ' | ' | ' | ' | ' | ' | ' |
Granted (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | $0.94 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Forfeited (in dollars per share) | ' | ' | ' | $0.87 | ' | $0.49 | ' | $0.39 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Vested (in dollars per share) | ' | ' | ' | $0.39 | ' | $0.49 | ' | $0.16 | ' | ' | ' | $0.19 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the end of the period (in dollars per share) | ' | ' | ' | $0.61 | ' | $0.49 | ' | $0.49 | ' | ' | ' | ' | ' | ' | $0.19 | ' | ' | ' | ' | ' | ' | ' | ' |
Expected to vest at the end of the period (in dollars per share) | ' | ' | ' | $0.61 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional disclosures | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total fair value of awards vested | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' | 35,924 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shared-based compensation | 117,096 | 100,351 | 135,001 | ' | 7,300 | ' | 36,371 | ' | 57,805 | ' | ' | ' | 9,624 | 14,143 | ' | ' | 27,726 | ' | ' | ' | ' | ' | ' |
Total unrecognized compensation expense | ' | ' | ' | ' | 5,873 | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average period over which unrecognized compensation expense is expected to be recognized | ' | ' | ' | '6 months 14 days | '6 months 14 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum period for which awards holders must be exposed to fluctuation of the market value of the shares to stop re-measured of awards at the end of each reporting period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '6 months | ' | ' | ' | ' | ' | ' | ' |
Sharebased_compensation_Detail2
Share-based compensation (Details 3) | 12 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 15 Months Ended | ||||||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Oct. 31, 2012 | Sep. 16, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 16, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 16, 2011 | Dec. 31, 2012 | Sep. 16, 2011 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
CNY | CNY | CNY | 2011 Share Incentive Plan | 2011 Share Incentive Plan | 2011 Share Incentive Plan | 2011 Share Incentive Plan | 2011 Share Incentive Plan | 2011 Share Incentive Plan | 2011 Share Incentive Plan | 2011 Share Incentive Plan | 2011 Share Incentive Plan | 2011 Share Incentive Plan | 2011 Share Incentive Plan | 2011 Share Incentive Plan | 2011 Share Incentive Plan | 2011 Share Incentive Plan | 2011 Share Incentive Plan | 2011 Share Incentive Plan | 2011 Share Incentive Plan | 2011 Share Incentive Plan | 2011 Share Incentive Plan | |
Restricted share units | Restricted share units | Restricted share units | Restricted share units | Restricted share units | Restricted share units | Restricted share units | Restricted share units | Restricted share units | Restricted share units | Restricted share units | Restricted share units | Restricted share units | Restricted share units | Restricted share units | Restricted share units | Restricted share units | ||||||
USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | Employees and Non Employees | Employees and Non Employees | Employees | Employees | Employees | Employees | Employees | Employees | Employees | Non-employee | Non-employee | ||||||
Minimum | Maximum | Minimum | Minimum | Maximum | Maximum | |||||||||||||||||
Share-based compensation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares approved for grants to qualified persons | ' | ' | ' | ' | 43,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Vesting period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | '5 years | ' | ' | ' | '4 years | '2 years | '5 years | '4 years | ' | ' |
Annual increase on the first day of each fiscal year, beginning from 2013 in maximum aggregate number of shares which may be issued pursuant to all awards under the Plan | ' | ' | ' | 20,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of restricted shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the beginning of the period (in shares) | ' | ' | ' | ' | ' | 26,695,621 | 26,695,621 | 8,996,300 | 8,996,300 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Granted (in shares) | ' | ' | ' | ' | ' | 29,965,989 | 29,965,989 | 18,295,221 | 18,295,221 | 9,097,000 | 9,097,000 | ' | ' | 9,097,000 | 29,917,989 | 18,295,221 | ' | ' | ' | ' | 48,000 | 0 |
Forfeited (in shares) | ' | ' | ' | ' | ' | -3,522,992 | -3,522,992 | -595,900 | -595,900 | -100,700 | -100,700 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Vested (in shares) | ' | ' | ' | ' | ' | -8,836,018 | -8,836,018 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the end of the period (in shares) | ' | ' | ' | ' | ' | 44,302,600 | 44,302,600 | 26,695,621 | 26,695,621 | 8,996,300 | 8,996,300 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected to vest at the end of the period (in shares) | ' | ' | ' | ' | ' | 41,581,339 | 41,581,339 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average grant-date fair value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the beginning of the period (in dollars per share) | ' | ' | ' | ' | ' | $1.04 | ' | $1.06 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Granted (in dollars per share) | ' | ' | ' | ' | ' | $0.93 | ' | $1.03 | ' | $1.06 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Forfeited (in dollars per share) | ' | ' | ' | ' | ' | $1.07 | ' | $1.09 | ' | $1.06 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Vested (in dollars per share) | ' | ' | ' | ' | ' | $1.04 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the end of the period (in dollars per share) | ' | ' | ' | ' | ' | $0.96 | ' | $1.04 | ' | $1.06 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected to vest at the end of the period (in dollars per share) | ' | ' | ' | ' | ' | $0.97 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional disclosures | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shared-based compensation | 117,096 | 100,351 | 135,001 | ' | ' | ' | 95,792 | ' | 54,445 | ' | 9,644 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total unrecognized compensation expense | ' | ' | ' | ' | ' | ' | 144,499 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average period over which unrecognized compensation expense is expected to be recognized | ' | ' | ' | ' | ' | '1 year 4 months 10 days | '1 year 4 months 10 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sharebased_compensation_Detail3
Share-based compensation (Details 4) (CNY) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Share-based compensation | ' | ' | ' |
Balance as of beginning of the period | 416,784 | 316,433 | 258,457 |
Share-based compensation expenses | 117,096 | 100,351 | 135,001 |
Exercised/Repurchased | -115 | ' | -11,701 |
Reclassifications | ' | ' | ' |
- From liability-awards to common share | ' | ' | -57,692 |
Foreign currency translation adjustment | ' | ' | -7,632 |
Balance as of end of the period | 533,880 | 416,784 | 316,433 |
Restricted shares | ' | ' | ' |
Share-based compensation | ' | ' | ' |
Share-based compensation expenses | 7,300 | 36,371 | 57,805 |
Restricted shares | CEO and Chairman | ' | ' | ' |
Share-based compensation | ' | ' | ' |
Share-based compensation expenses | ' | 9,624 | 14,143 |
Restricted shares | NeoTasks founders | ' | ' | ' |
Share-based compensation | ' | ' | ' |
Share-based compensation expenses | ' | ' | 27,726 |
Reclassifications | ' | ' | ' |
Threshold period to reclassify awards back to common share | ' | ' | '6 months |
Pre-2009 Scheme | Options | ' | ' | ' |
Share-based compensation | ' | ' | ' |
Share-based compensation expenses | 14,004 | -89 | 25,683 |
2011 Incentive Scheme | Restricted share units | ' | ' | ' |
Share-based compensation | ' | ' | ' |
Share-based compensation expenses | 95,792 | 54,445 | 9,644 |
Equity-classified Awards | ' | ' | ' |
Share-based compensation | ' | ' | ' |
Balance as of beginning of the period | 416,784 | 316,433 | 55,333 |
Share-based compensation expenses | 117,096 | 100,351 | 87,170 |
Reclassifications | ' | ' | ' |
- From liability-awards to equity awards | ' | ' | 173,930 |
Balance as of end of the period | 533,880 | 416,784 | 316,433 |
Equity-classified Awards | Restricted shares | CEO and Chairman | ' | ' | ' |
Share-based compensation | ' | ' | ' |
Balance as of beginning of the period | ' | 44,951 | 30,808 |
Share-based compensation expenses | ' | 9,624 | 14,143 |
Reclassifications | ' | ' | ' |
Balance as of end of the period | 54,575 | 54,575 | 44,951 |
Equity-classified Awards | Restricted shares | NeoTasks founders | ' | ' | ' |
Share-based compensation | ' | ' | ' |
Share-based compensation expenses | ' | ' | 3,359 |
Reclassifications | ' | ' | ' |
- From liability-awards to equity awards | ' | ' | 57,602 |
Balance as of end of the period | 60,961 | 60,961 | 60,961 |
Equity-classified Awards | Pre-2009 Scheme | Options | ' | ' | ' |
Share-based compensation | ' | ' | ' |
Balance as of beginning of the period | 118,458 | 118,547 | ' |
Share-based compensation expenses | 14,004 | -89 | 2,219 |
Reclassifications | ' | ' | ' |
- From liability-awards to equity awards | ' | ' | 116,328 |
Balance as of end of the period | 132,462 | 118,458 | 118,547 |
Equity-classified Awards | 2009 Incentive Scheme | Restricted shares | ' | ' | ' |
Share-based compensation | ' | ' | ' |
Balance as of beginning of the period | 118,701 | 82,330 | 24,525 |
Share-based compensation expenses | 7,300 | 36,371 | 57,805 |
Reclassifications | ' | ' | ' |
Balance as of end of the period | 126,001 | 118,701 | 82,330 |
Equity-classified Awards | 2011 Incentive Scheme | Restricted share units | ' | ' | ' |
Share-based compensation | ' | ' | ' |
Balance as of beginning of the period | 64,089 | 9,644 | ' |
Share-based compensation expenses | 95,792 | 54,445 | 9,644 |
Reclassifications | ' | ' | ' |
Balance as of end of the period | 159,881 | 64,089 | 9,644 |
Liability-classified Awards | ' | ' | ' |
Share-based compensation | ' | ' | ' |
Balance as of beginning of the period | ' | ' | 203,124 |
Share-based compensation expenses | ' | ' | 47,831 |
Exercised/Repurchased | ' | ' | -11,701 |
Reclassifications | ' | ' | ' |
- From liability-awards to common share | ' | ' | -57,692 |
- From liability-awards to equity awards | ' | ' | -173,930 |
Foreign currency translation adjustment | ' | ' | -7,632 |
Liability-classified Awards | Restricted shares | NeoTasks founders | ' | ' | ' |
Share-based compensation | ' | ' | ' |
Balance as of beginning of the period | ' | ' | 94,089 |
Share-based compensation expenses | ' | ' | 24,367 |
Reclassifications | ' | ' | ' |
- From liability-awards to common share | ' | ' | -57,692 |
- From liability-awards to equity awards | ' | ' | -57,602 |
Foreign currency translation adjustment | ' | ' | -3,162 |
Liability-classified Awards | Pre-2009 Scheme | Options | ' | ' | ' |
Share-based compensation | ' | ' | ' |
Balance as of beginning of the period | ' | ' | 109,035 |
Share-based compensation expenses | ' | ' | 23,464 |
Exercised/Repurchased | ' | ' | -11,701 |
Reclassifications | ' | ' | ' |
- From liability-awards to equity awards | ' | ' | -116,328 |
Foreign currency translation adjustment | ' | ' | -4,470 |
Basic_and_diluted_net_loss_inc2
Basic and diluted net (loss) income per share (Details) | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | |||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Nov. 21, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Nov. 21, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
USD ($) | CNY | CNY | CNY | Class A common shares | Class A common shares | Class A common shares | ADSs | ADSs | ADSs | ADSs | ADSs | |
USD ($) | USD ($) | CNY | CNY | CNY | ||||||||
Numerator: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net (loss) income attributable to the Company | $78,917 | 477,727 | 89,177 | -83,156 | ' | ' | ' | ' | ' | ' | ' | ' |
(Accretion) decretion to convertible redeemable preferred shares redemption value | ' | ' | 1,293,875 | -223,663 | ' | ' | ' | ' | ' | ' | ' | ' |
Allocation of net income to participating preferred shareholders | ' | ' | -478,754 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net (loss) income attributable to common shareholders | 78,917 | 477,727 | 904,298 | -306,819 | ' | ' | ' | ' | ' | ' | ' | ' |
Dilutive effect of preferred shares | ' | ' | -815,121 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Numerator for diluted (loss) income per share | ' | 477,727 | 89,177 | -306,819 | ' | ' | ' | ' | ' | ' | ' | ' |
Denominator: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Denominator for basic calculation-weighted average number of Class A and Class B common shares outstanding | 1,122,475,688 | 1,122,475,688 | 604,703,810 | 485,883,845 | ' | ' | ' | ' | 56,123,784 | 56,123,784 | 30,235,191 | 24,294,192 |
Dilutive effect of preferred shares | ' | ' | 320,142,965 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Dilutive effect of share options | 16,362,048 | 16,362,048 | 17,782,885 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Dilutive effect of restricted shares | 14,400,670 | 14,400,670 | 30,594,877 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Dilutive effect of restricted share units | 27,882,891 | 27,882,891 | 4,802,491 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Dilutive effect of share-based awards granted to CEO and Chairman (in shares) | ' | ' | 14,441,808 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Denominator for diluted calculation (in shares) | 1,181,121,297 | 1,181,121,297 | 992,468,836 | 485,883,845 | ' | ' | ' | ' | 59,056,065 | 59,056,065 | 49,623,442 | 24,294,192 |
-basic (in CNY/dollars per share) | $ 0.07 | 0.43 | 1.5 | -0.63 | ' | ' | ' | ' | $1.41 | 8.51 | 29.91 | -12.63 |
-diluted (in CNY/dollars per share) | $ 0.07 | 0.4 | 0.09 | -0.63 | ' | ' | ' | ' | $1.34 | 8.09 | 1.8 | -12.63 |
Additional Information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of ADS issued and sold in IPO (in shares) | ' | ' | ' | ' | 179,400,000 | 21,256,900 | 179,400,000 | 8,970,000 | ' | ' | ' | ' |
Public offering price per ADS (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | $10.50 | ' | ' | ' | ' |
Number of common shares represented by each ADS | ' | ' | ' | ' | 20 | 20 | ' | ' | ' | ' | ' | ' |
Basic_and_diluted_net_loss_inc3
Basic and diluted net (loss) income per share (Details 2) (Weighted average) | 12 Months Ended |
Dec. 31, 2011 | |
Preferred shares | ' |
Information regarding weighted average of common shares equivalents | ' |
Anti-dilutive securities excluded from computation of diluted net loss per common share (in shares) | 359,424,310 |
Share options | ' |
Information regarding weighted average of common shares equivalents | ' |
Anti-dilutive securities excluded from computation of diluted net loss per common share (in shares) | 18,488,604 |
Restricted shares | ' |
Information regarding weighted average of common shares equivalents | ' |
Anti-dilutive securities excluded from computation of diluted net loss per common share (in shares) | 54,045,124 |
Restricted shares | CEO and Chairman | ' |
Information regarding weighted average of common shares equivalents | ' |
Anti-dilutive securities excluded from computation of diluted net loss per common share (in shares) | 29,678,483 |
Restricted shares | NeoTasks acquisition | ' |
Information regarding weighted average of common shares equivalents | ' |
Anti-dilutive securities excluded from computation of diluted net loss per common share (in shares) | 8,319,608 |
Restricted share units | ' |
Information regarding weighted average of common shares equivalents | ' |
Anti-dilutive securities excluded from computation of diluted net loss per common share (in shares) | 2,625,039 |
Warrants to an independent institutional investor | ' |
Information regarding weighted average of common shares equivalents | ' |
Anti-dilutive securities excluded from computation of diluted net loss per common share (in shares) | 12,609,970 |
Related_party_transactions_Det
Related party transactions (Details) | 12 Months Ended | 12 Months Ended | |||||||||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 |
USD ($) | CNY | CNY | CNY | Zhuhai Daren | Zhuhai Daren | Zhuhai Daren | Zhuhai Daren | Zhuhai Daren | Zhuhai Daren | Shanghang | Shanghang | Shanghang | Kingsoft | Zhuhai Lequ | Zhuhai Lequ | Zhuhai Lequ | Xiaomi | Xiaomi | Xiaomi | Chairman and Co-founder | |
CNY | CNY | CNY | Online games revenue | Online games revenue | Online games revenue | CNY | CNY | CNY | CNY | CNY | CNY | Online games revenue | CNY | Advertising revenue | Membership subscription | CNY | |||||
CNY | CNY | CNY | CNY | CNY | CNY | ||||||||||||||||
Related party transactions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue from related party | ' | ' | ' | ' | ' | ' | ' | 24,452 | 7,547 | 4,451 | ' | ' | ' | ' | ' | ' | 5,076 | ' | 1,154 | 227 | ' |
Bandwidth service provided by related party | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 21,272 | 11,776 | 21,985 | ' | ' | ' | ' | ' | ' | ' | ' |
Purchase of intangible assets | 2,417 | 14,631 | 1,920 | 274 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,010 | ' | ' | ' | ' | ' | ' | ' |
Repayment of interest-free loan from related party | 165 | 1,000 | 2,500 | ' | 2,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000 | 500 | ' | ' | ' | ' | ' |
Interest-free loan to related party | ' | ' | 1,200 | 500 | ' | 500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,200 | ' | ' | ' | ' | ' |
Disposal of a cost investment to related party | 495 | 3,000 | 1,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000 |
Disposal of an equity investment to related party | ' | ' | 2,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,000 | ' | ' | ' |
Amount due from a related party | 12 | 73 | 1,073 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 73 | 1,073 | ' | ' | ' | ' | ' |
Amounts due to related parties | $436 | 2,640 | 2,604 | ' | 2,362 | ' | 1,479 | ' | ' | ' | 822 | 242 | ' | ' | 339 | ' | ' | ' | ' | ' | ' |
Commitments_and_contingencies_1
Commitments and contingencies (Details) (CNY) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Commitments and contingencies | ' | ' | ' |
Total office rental expenses | 19,423 | 16,670 | 6,361 |
Future minimum payments under non-cancellable operating leases | ' | ' | ' |
2014 | 16,919 | ' | ' |
2015 | 15,809 | ' | ' |
Total | 32,728 | ' | ' |
Restricted_net_assets_Details
Restricted net assets (Details) (CNY) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Restricted net assets | ' | ' |
Percentage of after-tax income required to be transferred to statutory general reserve fund | 10.00% | ' |
Reserve level threshold for mandatory appropriation requirement (as a percent) | 50.00% | ' |
Restricted net assets | 303,366 | 311,399 |